Josh Marshall

Josh Marshall is editor and publisher of TalkingPointsMemo.com.

Articles by Josh

On Bernard Kerik, keep in mind the following. This isn't the first time the President appointed Kerik to a position of great importance. In May 2003 he sent him to Baghdad to run the Interior Ministry -- the Ministry in charge of maintaining domestic order and security in Iraq, so rather a big deal.

What did the White House find out about Kerik during his first background check? And did that have anything to do with his abrupt departure from Iraq roundabout September 1st, 2003, months earlier than he originally planned to stay?

In fact, the summer of 2003 wasn't even the first time there was a problem with Kerik and a background check.

We already know from Wednesday's piece by Elizabeth Bumiller in the Times that though he got limited CIA and FBI briefings in the aftermath of 9/11, he was also "offered a high security clearance by federal officials so he could receive classified intelligence about the city's security ... But he failed to return a questionnaire needed for the F.B.I. to conduct a background check, and he never received that clearance."

That's really a helluva thing to forget, isn't it? You're the head police officer in New York City on 9/11. And in the weeks and months after that, preventing another attack is priority numbers 1 through 100. And you don't get around to returning the form that will take care of the background check that will get you the highest level clearance possible? The access to the most detailed and most highly classified information?

Think about that. It's extraordinary.

When the Times asked him about on Tuesday, Kerik's spokesman said he didn't remember ever getting a questionaire.

Later, when he was sent out to Baghdad, says the Times, he never managed to fill out a key financial disclosure form.

On a lot of these special assignments abroad, after a certain point, if you haven't gotten your paperwork and your clearances taken care of, you have to come home -- suggesting a possible reason for Kerik's early departure.

So the White House already had experience with Kerik's resistance to any background checks. But that didn't seem to make him any less desirable as the president's choice to have him run domestic security in the United States.

Just how many forms did he lose or forget to fill out? And again, why the early trip home from Baghdad? Where the two things related? And where there forms he managed to lose in this nomination cycle?

Late Update: An article in Friday's Times retracts the claim that Kerik did not file the CPA financial disclosure form in 2003. In fact, says the Times, he did.

It turns out that there is at least one House Democrat who's coming out for ending the Social Security program. That would be Rep. Allen Boyd of Florida. He recently signed on as the cosponsor of Jim Kolbe's phase-out bill.

So, as long as we know where Boyd stands, let's find out where everyone else stands on the issue too. Where do your representatives and senators stand on phasing out or keeping Social Security? If you find out from press accounts or by calling up and asking your representative or senator, let us know what you hear.

And as long as we're on the subject let's chart out a key issue to keep in mind to make sense of who stands where. There is a key difference between having private accounts made up by carving funds out of Social Security and private accounts in addition to Social Security. The difference makes all the difference in the world. And the president wants the former, which is phase one of abolishing Social Security and replacing it with loosely-regulated private investment accounts for individuals.

So let us know what you hear. We're quite eager to know where Democrats and Republicans are coming down on this all-important issue.

For those of you who thought you might be seeing pro baseball played in Washington, a new website.

Another point to consider -- or, perhaps better to say, reconsider -- in the whole Cash-n-Kerik drama.

It's been known for a longtime that the Iraqi Interior Ministry under the CPA was rife with corruption. Lots and lots of US tax dollars went missing.

We also know, at a minimum, that Mr. Kerik really played it to the hilt mixing public service and private profit. And that's probably an understatement. As we've seen in the last few days there appear to be numerous cases where departments and organizations run by Kerik bought goods from contractors for which they seemed to have no use -- a key example being these over-priced security doors the NYPD bought from Georal. The companies often turn out to have been ones Kerik was getting money from in one fashion or another. (The Georal case is a rather complicated story, which we discussed at some length last night.)

In any case, it suggests a pattern.

And on top of that we know that when Kerik went out to Iraq he took a leave from the Homeland Security rain-making gig he'd set up with Giuliani. And after his hasty departure he went back to the same outfit.

All of this suggests that Kerik's time in country might be in store for a bit more scrutiny. And it turns out there's a decent place to start.

Go back to an article by Patrick Tyler and Raymond Bonner that ran in Times on October 4th, 2003. The headline is "Questions are Raised on Awarding of Contracts in Iraq." The central issue examined in the piece is why the Interior Ministry payed $20 million to a company in Jordan for (50,000) pistols, (20,000) Kalashnikovs and (10,000,000) rounds of ammunition for the Iraqi police when the US military was confiscating tons of weaponry every month from Iraqi military arsenals.

One governing council member said "There is mismanagement right and left, and I think we have to sit with Congress face to face to discuss this. A lot of American money is being wasted, I think. We are victims and the American taxpayers are victims." Another said, "I don't have the evidence, but I think there is corruption. This is a common grievance that people tell me ... It is totally unnecessary to buy [the guns] from outside the country."

The explanation for the purchase of the weaponry was that there would just have been too many logistical problems involved in purchasing or requisitioning the revolvers and rifles in small lots in country. And without any greater context or being able to judge the challenges the folks on the ground were facing at the time, that seems like it might be a reasonable explanation.

But it turns out there is some context. As you might have expected already, the contract was okayed on the authority of Bernard Kerik.

All the Iraqis on the Governing Council at the time seemed to think the deal stunk to high heaven, that Kerik was spending millions to bring weapons into a country that was already bursting with weapons. And when the Times wanted to talk to Kerik about the deal he didn't want to talk to them.

The Iraqis wanted Congress to investigate. Sounds like a good idea. Read the article. See what you think.

President Bush gives a thumbs-up to Al Gonzales over the Kerik vetting, say DeFrank and Bazinet in the Daily News.

"Rest assured, we did significant due diligence," says Dan Bartlett.

Come to think of it, Gonzales may have been on thin ice before this, having gone a while without a high-profile disaster.

This guy, a self-described career professional gambling cheat, notes that Bernard Kerik was a member of the New York City Gambling Control Commission.

From the post above I thought perhaps that the police commissioner served ex officio on the Commission. But not so.

According to an August 20th piece in the Bergen Record, "Giuliani appointed [Kerik] to the newly formed New York City Gambling Control Commission ... [a] five-member panel [which] is charged with establishing and enforcing regulations for shipboard gambling."

And there's more.

The Bronx DA has opened a preliminary investigation into claims that Bernard Kerik used a mobbed-up contractor to renovate an apartment he bought on West 239th Street. This was back in 1999 when Kerik was correction commissioner and was, in the Post's words, "experiencing severe financial problems."

The contractor in question is Ed Sisca, the son of a Gambino capo.

Another story in the Post reports that Kerik was not only stalking Judith Regan but her children too.

So let's sum up a bit on the Kerik matter.

Now we've got these penny-stocks and a business affiliation that Kerik was hastily unloading in the lead-up to his nomination. And he was somehow the chaperone for a marriage between that company and another one whose owner is going to be arraigned tomorrow for ripping off the city with padded contracts. And on Kerik's watch the NYPD bought a bunch of security doors they didn't have any use for from that same guy who's about to be sentenced. And if you're already having a hard time keeping up, fasten your seatbelts because another guy who's in business with the guy who's about to sentenced is Lawrence Ray, Kerik's 'financial benefactor' who worked for the allegedly mobbed up Jersey construction company and later got indicted for a mob-run stock scam.

So, without belaboring the point, let's just stipulate that there were probably some problems coming down the pike for Kerik's nomination even if he hadn't had this nanny problem come up.

And now we find out from the Times (and, truthfully, from the force of logic) that the nanny story, which has been the White House's first, second and third talking point all week, is probably totally bogus.

The Times found no evidence that such a woman ever existed. And even when pressed by people who suspect he made the whole story up, Kerik remains adamant in his refusal to provide any details whatsoever. It's very hard to read the Times story and not conclude that the whole nanny thing was a con.

So what's the White House's story? Did they just take Kerik's word for it, not ask for even the most perfunctory details and then repeat the nanny story from the press room lectern for days on end as gospel truth? Or were they in on the con too?

What's the story?

As we just noted below, it now seems much more likely than not that Kerik's "nanny" never existed. But there was some other big news today on the Kerik front that seemed to go largely unnoticed -- an article in the New York Post of all places.

There was a good deal of attention to Andrea Peyser's piece chock full of torrid and melodramatic details about the Kerik-Regan power-fling. But that's not what I'm talking about. I'm referring to the piece in the business section by Christopher Byron.

Here's the story ...

At the end of October, right about the time Kerik probably realized the DHS appointment might be coming down the pike, he resigned from the "advisory board" of a Long Island company called Defense Technology Systems, Inc. He wouldn't give any explanation to the company. And then three weeks later (about mid-November) he sent back 400,000 shares of the company's stock and coughed up a bunch of stock options they'd given him too.

Philip Rauch, who serves as the company's COO and CFO, didn't know what to make of it. And, like we said, Kerik wasn't talking. All Rauch could think of was that Kerik was trying to distance himself from Defense Systems' connections with another company called Georal Inc., a security door company in Queens. And the reason he might want to get some distance is because the head of Georal, Alan Risi, just plead guilty to padding invoices for work he'd done for the city.

(Here's a press release put out today by Defense Technology Systems, Inc., which confirms most elements of the story but seems to dispute the timing.)

So let's review. Kerik quickly cuts his ties with Company A because it does business with Company B, and the owner of Company B got caught over-charging the city and is probably going to do time.

So far so good.

But Kerik seems to have had some other connections to Georal.

When he was running the NYPD the department bought a few of Georal's security doors for pretty good money. But there was apparently no use for them; they never got installed and were eventually sent over to Riker's Island. Kerik has always insisted he had nothing to do wtih that purchase. But this summer, his successor, Ray Kelly, opened an investigation into the purchases.

And there's more.

It seems that the "advisor" who put Defense Technologies together with Georal was ... take a guess. Right: Bernard Kerik. And Rauch says he heard from folks at Georal that Kerik had a "very similar" arrangement there as he had with Defense Technologies. So, in other words, sign on as an "advisor" and get dealt in for about a kajillion shares of penny-stocks in the company.

Now, I'm just getting my footing here in the Big Apple. But I'm told by some pretty knowledgable people that big runs of penny-stocks are not infrequently used by some of your shadier business elements to cleanly move ... well, let's say 'thank you money' to politicians for services rendered. Pump the stock up a bit and there you go.

Such unfortunate manipulations of stock prices certainly do happen. Remember, for instance, that Lawrence Ray, Kerik's financial benefactor, who worked for the allegedly mobbed-up construction company in New Jersey, later got indicted in that "$40 million, mob-run, pump-and-dump stock swindle."

And the funny thing is, Mr. Ray's name comes up in this story too. According to the Post, SEC filings show that a man by the name of Lawrence Ray recently held more than 200 million shares of stocks and options in another penny-stock company called FINX Group Inc. And FINX lists Georal and our friend Mr. Risi (owner of Georal) as the sole supplier of the most of the products it sells.

Small world, isn't it?

This piece in tomorrow's Newsday has more details on Kerik and Georal, and other purchases on Kerik's watch as correction commissioner that "left [the Deputy Warden] scratching his head."