TPM News


The White House dispatched Vice President Dick Cheney to Capitol Hill Tuesday morning to help shore up support for the financial bailout of Wall Street.

. . . House conservatives are seething about the "big government" approach that they say President Bush is taking in the financial crisis. They don't like how much power it cedes to the Treasury or the price tag.

"[Cheney] is going to walk into a firing squad. I hope he brought his hunting rifle," an aide to one House conservative told FOX News.

With Congress working around the clock to stave off the collapse of the U.S. financial market, indicted Sen. Ted Stevens (R-AK) doesn't want his constituents to think he's not representing them in the midst of crisis.

So even though Stevens is in a crisis of his own -- the federal trial to determine whether he failed to report over $250,000 in gifts and home repairs on his financial disclosure forms began yesterday -- he asked permission from the judge to be excused from courtroom appearances so he can attend to Senate business on the bailout.

Judge Emmet Sullivan warned Stevens and his attorneys that this might give the jurors the idea that Stevens didn't care about his trial.

"We don't want to have any negative impressions going on," Sullivan told Stevens, according to an article by The Hill. "People reach the wrong impressions for the wrong reasons."

From the AP:

Being absent as Congress considers a historic $700 billion bailout of the financial market could make it look like the corruption charges have made it impossible for Stevens to do his job.

Prosecutors didn't oppose Stevens' plan to leave court but they said Stevens shouldn't be able to use the crisis to cast himself as a dedicated senator in front of jurors. The judge said Stevens could leave court but jurors would not be told why.

Former acquaintances of Veco CEO Bill Allen came up yesterday as possible witnesses in Sen. Ted Stevens (R-AK) federal trial. The witnesses, one of whom is an underage woman alleged by some to have had a sexual affair with Bill Allen, are intended to diminish Allen's credibility as a witness against Stevens. Stevens' lawyers have also been able to successfully acquire Allen's medical records in hopes of further undermining Allen's testimony. (McClatchy/AP)

Over $13 billion dollars from the American government meant for Iraqi reconstruction projects has been wasted or stolen according to a former Iraqi official. The former official told the Senate Democratic Policy Committee yesterday that although a report on the subject was sent to Iraqi Prime Minister Nouri al-Maliki, there was never any follow up. A separate Iraqi agency has estimated that $9 billion has gone missing. (Washington Post)

Political contributions from the financial sector have the potential to shape the final bailout plan, the L.A. Times reports this morning. Gifts from financial companies outstrip donations by other groups, including lobbyists, by nearly a factor of two. In addition to contributions to the presidential candidates -- $22.5 million to Obama and $19.6 million to McCain -- the industry has given heavily to members on the committees in charge of the legislation. (LA Times)

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According to a senior House staffer, Speaker Nancy Pelosi is likely to insist that any Wall Street bailout bill contain two specific items from the Democrats' wish-list: limits on executive compensation, and a measure to protect homeowners by allowing mortgages to be renegotiated in bankruptcy proceedings.

Things may not go smoothly on those fronts, however. House Republicans have signaled their firm opposition to executive pay limits. And the Blue Dogs, a faction of fiscally conservative Democrats, may be "uncomfortable" with changing bankruptcy laws, said the staffer.

There are a number of Democratic proposals circulating right now aiming to attach strings to the Treasury Department's $700 billion Wall Street package.

In the Senate, the draft legislation being offered by Banking Committee chair Chris Dodd appears, which would give the federal government an equity stake when it helps banks with debt, (and which Paul Krugman describes as "a big step in the right direction) appears to be the most prominent.

But in the House, things are a bit more chaotic. Rep. Barney Frank, who chairs the Financial Services committee, has circulated his own proposal, which is slightly closer to the Treasury Department's own, though, like Dodd's, it aims to limit executive pay.

Rep. Brad Sherman this afternoon released to TPMmuckraker an outline of his own plan, which goes further than either Dodd's or Frank's.

And an unlikely coalition of conservative deficit hawks and liberal populists may be taking shape to oppose any bailout at all.

Pelosi's office did not immediately respond to a request for further information.

There are various plans being circulated right now by Hill Democrats, laying out alternative frameworks for a Wall Street bailout.

We just obtained one from Rep. Brad Sherman (D-CA), a member of the House Financial Services Committee. According to Sherman's press secretary, the congressman just presented this proposal at a meeting with other members.

Sherman's plan covers all of the major points that Democrats have been insisting on -- strong Congressional oversight of any agreement, limits on executive pay, protection for homeowners. It also adds some more provisions, including an economic stimulus, and a measure to make it easier and quicker for Congress to enact future corporate governance reform.

This morning, Rep. Sherman told The Hill, referring to the Bush administration's bailout proposal: "This is a bill for Wall Street, not a bill for Main Street."

He added: "Wall Street and the administration are going all out to tell constituents, 'Make your congressman vote for our bill, or your 401(k) [retirement plan] is toast.' "

Sherman's complete proposal follows after the jump...

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Rep. Scott Garrett (R-NJ), a member of the House Financial Services and Budget Committees, is strongly opposed to the administration's plans to bail out Wall Street an aide confirmed to TPMmuckraker.

"There aren't any amendments that I have heard of that would make him turn around and support it," said Erica Elliott, Garrett's press secretary.

As Congress struggles to understand the implications of the Treasury Department's $700 billion bail-out solution proposed last Friday, there is considerable uncertainly on Capitol Hill about the alternative measures that will be proposed and where individual lawmakers stand.

"It really is a big ongoing conversation with a lot of different members," Elliott added. "Trying to get everyone together who says 'We don't like the $700 billion bailout, what do we like in place of that.'"

This afternoon, the House Republican Study Committee, of which Garrett is a member, held an emergency meeting to discuss alternative plans to the administration's proposal.

Earlier this morning, Garrett also stepped into the fray currently overtaking Capitol Hill, circulating an email with three attached articles by economists with bailout alternatives.

Last week, Garrett and Rep. Marcy Kaptur (D-OH) came across the aisle to call for the formation of a bi-partisan Select Committee on Bailouts to investigate the actions taken by the Federal Reserve and Treasury Department with regard to bailouts.

The trial of Alaskan Sen. Ted Stevens on seven counts of false statements begins today in Washington, D.C. Stevens, a seven term Republican, arrived in court this morning for jury selection. Opening statements are expected to begin either Tuesday afternoon or Wednesday morning.

The trial, which Stevens requested be as speedy as possible, is expected to last a month, ending shortly before the election. Originally, Stevens attempted to have the trial moved to Alaska, to accommodate his campaign for re-election. The motion was overruled, but the judge has stated that the trial will recess for Fridays, to allow the sitting Republican time to return to the campaign trail in Alaska.

Potential witnesses in the trial include Stevens himself, as well as former-VECO executive Bill Allen. Democratic Senators Ted Kennedy (MA), Patrick Leahy (VT) and Daniel Inouye (HI), as well as Sen. Orrin Hatch (R-UT) and former Secretary of State Colin Powell were also listed to jurors as possible witnesses this morning.

Stevens pleaded not guilty to making false statements on his financial disclosure forms relating to gifts he received from Allen for renovations on his home in Girdwood, Alaska, among others. Between 1999-2006 he accepted gifts from VECO, include substantial amounts of material and labor in his private residence. These allegations include addition of new first floor, new bedrooms and bathrooms, a grill, as well as failing to report other gifts, such as a $29,000 bronze statue of a fish. The total amount of gifts is valued at over $250,000.

As the flurry of news breaks over the Trooper-Gate investigation slows, at least for the time being, it's worth making a point that may have gotten lost in the shuffle:

The McCain-Palin camp appears to have been successful in its all-out effort to stifle the probe at any cost.

By preventing Steve Branchflower, the independent investigator in the case, from speaking with many of the key witnesses -- including Sarah and Todd Palin, and several of the governor's top aides -- the McCain campaign has severely limited the amount of information the investigation will have access to.

In the view of the Associated Press: "Although the Legislature's investigator still plans to issue a report in October, the probe is effectively killed until January, when Sarah Palin will either be vice president or return to the governor's mansion in Juneau."

That assessment may turn out to go too far. Branchflower has succeeded in questioning several of the witnesses, including Walt Monegan, the former public safety commissioner whose firing is at the center of the case, and John Bitney, formerly a top Palin aide. Branchflower also has access to the cell phone records of Frank Bailey, the Palin aide who earlier this year was recorded pressuring a trooper official about Mike Wooten. So it's possible that his report, even lacking input from crucial players, may yet prove damaging.

Palin may also pay a political price for her abrupt shift from pledging co-operation to out-and-out stonewalling. Over the weekend, the LA Times reported that Palin's "political capital at home is eroding," as a result of the hardball tactics used to stop the probe -- a subject we got into on Friday. If nothing else, her stonewalling -- along with the slew of reports about Palin's checkered record on seeking federal earmarks -- has significantly complicated the McCain-Palin campaign's effort to present her as a reformer who will help bring a more accountable form of government to Washington.

Still, it's hard not to conclude, at least for now, that the McCain camp has used its muscle to significantly limit the damage that Trooper-Gate could do to Palin. Which doesn't exactly bode well when it comes to the approach a McCain White House might take on issues of openness and transparency.

An Alaskan road that would have connected the small Gravina Island to the infamous and non-existent Bridge to Nowhere has been opened. The road, built with $25 million in federal tax dollars, was pushed by Gov. Sarah Palin's (R-AK) administration despite sizable opposition. Palin has highlighted her supposed opposition to the Bridge to Nowhere on the campaign trail for the vice presidency. (AP, Pro Publica)

Vice President Dick Cheney was ordered by a federal judge Saturday to preserve records of his time in office. Lawyers for the Bush administration had attempted to curtail Cheney's responsibilities under the Presidential Records Act, arguing in part that Cheney is not covered by the law as he is not in the executive branch. The decision follows a suit filed by Citizens for Responsibility and Ethics in Washington. (AP)

Sen. Ted Stevens' (R-AK) federal corruption trial begins this week with jury selection starting today. On Friday, Stevens said that he plans on testifying at his trial if his lawyers approve. Stevens also has a busy week ahead of him in Congress where he will have to defend his roughly $215 million in earmarks in the new defense bill. (Anchorage Daily News)

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Despite Republican stonewalling, the Alaska legislature will release its report on Trooper-Gate on time, Sen. Hollis French, the Democrat overseeing the investigation, said today. The report is scheduled to be completed October 10th.

None of the subpoenaed witnesses showed up to testify at a legislative hearing today. The McCain-Palin campaign, which has challenged the legitimacy of the investigation, had been actively working to ensure that the witnesses did not testify.

Steven Branchflower, the independent investigator conducting the probe, has already spoken with several witnesses. But it remains to be seen whether his report will be able to reach any definite conclusions without access to testimony by key players like the Palins and several top gubernatorial aides.