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Yesterday, we revealed how a bill that might have sought to close off-shore tax loopholes -- and which might have helped catch Allen Stanford -- died in Max Baucus' Senate Finance committee in 2007.

Now, a Finance committee aide has provided an emailed statement to TPMmuckraker, making the case that the committee didn't take up the bill, sponsored by Carl Levin, because Baucus differed with some aspects of the bill's approach, and noting that Baucus is working on a separate bill to address the problem.

In a nutshell, according to the statement, Baucus favors an approach more targeted at giving the IRS the necessary tools to detect tax cheats than was the Levin bill, which took a broader tack.

The Chairman announced in 2008 that he is writing legislation to address the use of tax havens by individuals. In particular, Senator Baucus and his staff are working with Treasury and the IRS to give them the right tools to detect the tax abuse we are all concerned about. Senator Baucus's goal is to move the sharpest possible bill that will give the IRS tools -- including additional reporting requirements -- to determine when a taxpayer uses a tax haven and the identity of the user.

It will be important to move legislation that gives the IRS the best chance to find abusers in the first place, in order to apply certain rebuttable presumptions that would make income US-sourced income on which US taxes should be paid.

The bill you mention is quite broad, and while it creates a series of changes to the burden of proof, that only helps once the IRS has detected the use of a tax haven.

The Finance Committee actively fights offshore tax havens - in the JOBS bill with inversions policy, tax shelter penalties, and increased transparency with regard to tax shelter promoters; in last year's military bill, with provisions to stop US companies with Federal contracts from setting up entities in tax havens to run employees through in order to avoid employment taxes. FOGEI/FORI in the energy bill tightened up a bit the way oil and gas pay US tax on foreign-earned income. Other proposals have been made public as well, particularly with regard to Bermuda reinsurance. The Committee also sent the GAO to Ugland House in the Cayman Islands to investigate one of the most notorious suspected tax havens in the world. And the Committee will take this issue up again at a hearing in March.

In other words, according to the aide, this was an issue of legitimate policy differences -- not an effort by Baucus to kill legislation opposed by a contributor.

We'll be watching for those hearings in March.

The Wall St. Journal reports that John Boehner made an interesting observation about the Republican Party's problems: It's simply harder to sell their own ideas to the public, compared to the easy answers offered by the Democrats.

"We have a tougher job than our friends across the aisle. They've been offering Americans a free lunch for the last 80 years, rather successfully," Boehner said, at a lunch hosted by the Christian Science Monitor. "Those of us that believe in a smaller, more accountable government, we have a tougher time making our principles relevant to the American people. But it's our challenge, and we've got to do it."

A note about free lunches and small government: Boehner voted in 2003 for the Medicare drug bill, a mega-expensive expansion of entitlement spending with no method laid out on how to pay for it. And the modern GOP's platform is based largely on tax cuts, with the constant claim that they'll result in even more revenue.

Norm Coleman's lawyers just had a very awkward moment in court, in their attempt to prove that absentee ballots were double-counted -- it turns out they've failed to share evidence with the Franken camp, involving a key witness.

The Coleman camp called Pamela Howell, a Republican election worker in Minneapolis, who said she heard another election judge exclaim that they had forgotten to properly label duplicates of absentee ballots that had been too damaged for the machines to count. She also said she did not recall whether they had made a note of this in the precinct incident logs.

Franken lawyer David Lillehaug then got up, setting out to impugn Howell as an unreliable, partisan witness. She admitted that she called up Coleman's legal team during the recount, informing them of the problem. Lillehaug then asked her if she'd spoken to the lawyers before her testimony today. "Not today," she said. He then asked if she ever spoke to them about her testimony. Yes, she did.

It was then revealed that several weeks ago she made notes on her computer, taking down the information she would need to know for her testimony. She gave a copy to the Coleman side -- and the Franken camp had never received it.

(By the way, this exchange included a fun bit where Lillehaug asked if her notes had a file name, and she said no. After some more direct questions, she said it was saved on her machine under the name "testimony.")

There then followed a contentious sidebar, after which Judge Elizabeth Hayden confirmed with lead Coleman lawyer Joe Friedberg that he would be willing to serve a copy to Franken. They then went into a brief recess.

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Also in the appendix to the Dusty Foggo sentencing memo: former CIA director Porter Goss offers a pretty lame justification for how he came to appoint a crook like Foggo to the agency's number 3 post:

Says Goss:

Due to public criticism of the CIA after the attacks of September 11, 2001, and criticism of my office after the prior candidate for the Executive Director's position was withdrawn, it was imperative to me that the selection of the Executive Director position be someone whose personal and professional conduct was beyond reproach. When Mr. Foggo came to speak with me about the Executive Director position in late 2004, I conveyed this requirement to him. I asked him directly whether there was anything I needed to know about his candidacy that would reflect poorly upon the Director's office or upon the CIA. He denied that there was anything. In reliance upon Mr. Foggo's assurances, and upon his having cleared the inter-agency vetting process, I selected him to be my Executive Director in 2004.
Later, Goss continues:
Had I known at the time that I was considering Mr. Foggo to be my Executive Director that he had engaged in the conduct he has admitted in his Plea Agreement and Statement of Facts, I absolutely would not have selected him to be my Executive Director nor would I have approved him for the Employee Performance Award that he received in August 2005."

I was flabbergasted when Mr. Foggo was selected as the Executive Director. I found Director Goss's selection to be quite revealing, that Mr. Goss would be taken in by a "con man" like Mr. Foggo.

That's the view, as reflected in the appendix to the government's sentencing memo, of Jim Olson, a former CIA chief of counter-intelligence, who also served as CIA's chief of station at several different overseas locations, and supervised Foggo. (Olson is identified only as "John Doe #2", but details of his career and current employment make clear that it's him.)

That sounds like an indictment of Porter Goss, who has already taken his fair share of lumps in the Foggo matter, after appointing Foggo to be the agency's number 3 man.

But it's also worth considering that Olson admits in the memo that he too was impressed by Foggo, recommending him for continued employment -- even though he knew about the incident in which Foggo assaulted a pedestrian, and about the fact that Foggo had failed to report contacts with numerous foreign women, as CIA rules require (for good reason.)

Says Olson:
As a result of his police encounter and his failure to report contacts with foreign nationals as required, I considered Mr. Foggo to be morally suspect at that point. Despite my misgivings, I recognized that Mr. Foggo was talented at his job as a Chief of Support, and I recommended him for continued employment with the Agency.

Sounds like either Foggo was exceptionally good at winning people over, or his supervisors were a little to easy-going.

Olson, who now teaches at Texas A&M's Bush School of Government and Public Service as a "CIA-Officer-in-Residence" didn't immediately respond to TPMmuckraker's request for comment.

After a series of rulings that have seriously hurt his ability to get new votes into the count, the Coleman campaign is now trying to pull off something of a Hail Mary pass to get ballots in -- and of course, the Franken camp wants to stop them.

Yesterday, the Coleman camp sent e-mails to county officials, asking them to certify that selected absentee voters whose ballots have been rejected did in fact meet all the legal requirements pertaining to voter-registration. The Franken campaign jumped on this immediately, sending messages to the counties to not respond, and filing a motion with the court to forbid it.

This morning's arguments got pretty heated. Franken lawyer Kevin Hamilton argued that this violated all the basic rules of evidence -- officials are being asked to phone it in, rather than testify in court and be subject to cross-examination.

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The appendix to the Dusty Foggo sentencing memo also contains some fascinating information abut Foggo's plans to run for Duke Cunningham's congressional seat (when the Dukester stepped down) -- and to commit immigration fraud as a favor for a potential political supporter...

Foggo maintained these ambitions after becoming Executive Director, and was very specific that he was considering running for Congress only in San Diego, for Cunningham's seat, and not in Virginia or anywhere else in California. Nowhere else, of course, could Foggo tap into the network and funding that his best friend Wilkes offered in San Diego. As Foggo admitted to a confidant, Wilkes was to be a "key partner" in Foggo's Congressional plans. Motivated by money, Foggo wrote to Wilkes from the Overseas Location:

"I met a very interesting guy here a few months ago. Major money. He has a son that ran into problems with INS. Absolutly [sic] no crime stuff, just stupid 20-year old stuff. We need someone up high in the INS food chain or it will not get fixed for 5-6 years. If Ben is not with INS anymore, then maybe we can get [Congressman] Duke [Cunningham] to write a joint letter with Cong. Bono. They have contacts with Bono and we could get a letter from her no question. Do you think Duke would join? It would be worth a little campaign help, I'm sure."

In addition to his penchant for road rage, Dusty Foggo certainly seems to have known how to treat a lady.

The sentencing memo tells how, after Foggo moved from overseas to the CIA's headquarters -- leaving his wife and family behind -- he managed to get a Langley job for his mistress too. Then, when the mistress's performance was criticized by a highly-decorated supervisor, Foggo got the supervisor fired, telling his mistress she could "thank him later."

Since at least mid-2004, Foggo had had his eyes on ER, a woman he met at the Overseas Location. When Foggo returned to Headquarters in November 2004, his family remained overseas. With his family far away, he moved quickly to bring ER much closer by recruiting her to the CIA. Foggo brought ER to headquarters in November 2004 and introduced her to several officials, effectively endorsing her as a candidate for employment. Shortly thereafter, ER applied for a position with the CIA's Office of General Counsel ("OGC"). She was interviewed later that month.

As CIA hiring officials began to investigate ER's background, however, they learned of problems in her previous government employment that precluded her from employment with the CIA: she had engaged in improper conduct with a superior and had impeded the Inspector General's investigation of the conduct by destroying evidence. As a result, on or about February 28, 2005, a CIA official sent ER a rejection letter.

In the meantime, Foggo had arranged for his family to remain overseas - at the public's expense - and his relationship with ER had become sexual in nature. The rejection of her employment application infuriated Foggo. He summoned the Managing Associate General Counsel (the "MAGC"), to his office, where Foggo insisted that ER was vital to TK. When the MAGC raised his concerns about the Inspector General's report regarding ER's conduct, Foggo twice warned him to be careful how he referred to ER.

Far from debunking the IG's report of ER's conduct, Foggo was actively engaged in the same type of relationship with her. Nevertheless, Foggo forced OGC to hire ER. After OGC relented, Foggo pressured CIA employees to expedite the completion of ER's vetting, including having her paperwork tagged as an "ExDir Interest."

ER began her employment with the OGC's Administrative Law Division in July 2005. Although she was new to the Agency, ER made very little effort to perform the work required of her at an acceptable level. She resisted her supervisor's feedback and outright refused requests that she redo work that was sub-par. Instead of being receptive to her supervisor's critiques and suggestions, ER made it clear that she had influence with Foggo. Indeed, she did. Her supervisor had been an attorney with the OGC for 20 years, during which time she received numerous performance awards and even the Career Intelligence Medal, which rewards "exceptional achievements that substantially contributed to the mission of the Agency" over the course of a career. Within a month of crossing Foggo's mistress, however, she suffered a humiliating firing by Foggo. Foggo took credit, reminding ER that she could thank him later.

As Henry Kissinger may or may not have put it: Power is the ultimate aphrodisiac.

Reuters picked up TPMDC's story from yesterday on the union federation Change to Win's request to deny bailout money to Principal Financial Group.

Curiously, Principal executives told Reuters that they have "not taken a position on the Employee Free Choice Act, nor do we plan to take such a position."

The company did not deny lobbying on the union-organizing legislation in its statement, so we can only presume that spent money last year to tell Congress it took no position on the Secret Ballot Protection Act, which appears on its public disclosure reports. That Secret Ballot plan was intended as a direct counter-attack on the union-backed Employee Free Choice push, as this statement from a supportive conservative group makes clear.

A response to Principal from Change to Win's Michael Garland, director of value strategies for the union's investment group, follows after the jump.

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At the request of House Speaker Nancy Pelosi (D-CA), the non-partisan Congressional Budget Office (CBO) recently examined the impact of three alternative "policy scenarios" on our current budget deficit, expected to hit $1.5 trillion for 2009. Their conclusions were fascinating -- or troubling, depending on your degree of fiscal hawkishness.

Pelosi Scenario One can be defined as the nation's real status quo, assuming that the stimulus bill remains a one-off law that does not change future budgetary estimates. The alternative minimum tax is also assumed to be indexed for inflation every year -- something Congress never fails to do -- and current spending on Medicare doctors' fees as well as the wars in Iraq and Afghanistan are assumed to continue at their current rates. The result is unnerving:

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