Apparently Harry Reid and Senate Dems are going to concede Obama’s seat to the Blago/Burris dynamic duo.
My new year’s resolution for Reid and crew: calcium supplements to stiffen the spine!
Late Update: Reid and Durbin are holding presser at 11 ET. We’ll see what happens there.
Later Update: Regardless of what you think about whether Burris should be seated, seating him now just substitutes one spectacle for another: the Burris circus for another Reid capitulation.
Later Update: TPM Reader JS chimes in:
I respectfully disagree. While a little spine certainly wouldn’t hurt Sen. Reid, I would rather see the Wizard bestow on Reid and crew a little foresight. Reid and the rest were stupid to react so prematurely to the Blago tapes by denying his eventual Senate appointee. Reid had and has no legal case; Blagojevich is presumed innocent and indeed hasn’t, and won’t for some time yet, even been indicted. Reid unnecessarily painted himself into this corner and now has egg on his face. A stiffer spine in this case would only make matters worse.
Harry Reid’s office is telling us the AP story about Dems deciding to seat Burris is “wrong.”
More soon.
In his press conference just now, Barack Obama softened his approach on seating Roland Burris:
“That is a Senate matter. But I know Roland Burris, obviously he’s from my home state. I think he’s a fine public servant. If he gets seated then I’m gonna work with Roland Burris just like I work with all the other senators to make sure that the people of Illinois and the people of the country are served.”
If he gets seated, I’ll work with him? That’s different from his earlier statement that Burris shouldn’t be seated.
Late Update: The video:
The upshot of the meeting between Roland Burris and Sens. Reid and Durbin seems to be that Harry Reid finds Burris to be a nice man.
Talking it over here and seems like Reid is walking this back from the edge of the cliff a bit, hanging their legal hat on the the Illinois court case over whether the secretary of state can legitimately withhold his signature from the certification of Blago’s appointment of Burris.
Reid seems to be suggesting that the ball is in the Illinois courts, which opens the door to seating him once that legal dispute is resolved. Even the Illinois secretary of state has conceded that he can’t stop the appointment.
So it looks like just a matter of time before Burris is seated.
This is in the background. But it’s important.
As we told you last week, the Fed has initiated a program to purchase half a trillion dollars worth of mortgage debt that is purportedly clogging up the credit markets. This is essentially what the TARP program was initially supposed to do — buy back mortgage securities. But they decided not to. And now the Fed is doing something similar, though there are important differences.
They’ve contracted with four financial services firms to manage the money. Under normal circumstances the fees generated by managing that much money could be huge.
Equally important, having these firms manage this money creates huge potential conflicts of interest and opportunities for self-dealing. Just to explain this in the most general terms, the companies holding these securities are sitting on assets worth only a fraction of their presumed value as recently as six months ago. The companies now managing the buy-back are in many cases the same outfits that helped saddle these companies up with these crappy investments in the first place. And they’re the companies likely to be doing business with these companies again once this TARP thing is over. So the managers have all sorts of incentive to make these companies whole as opposed to driving a good bargain for taxpayers.
All of which makes it really important that we know how these four companies were chosen, how they’re being paid and just how the decision-making is taking place.
So with all that in mind, last week, we went to the Fed and started asking questions. A Fed representative insisted that there’d been a formal and open bidding process. He refused to divulge any information about the value of the contracts of the successful bids. But he did tentatively agree to release the original RFP (Request for Proposals). But now they seem to have changed their minds and have stopped returning our calls.
Now, here’s the key. This isn’t some remote issue of good government transparency. This is about gargantuan sums of money used in a way that makes possible all sorts of rotten insider deals. And the Fed won’t release even the most cursory information on how this is being done. That’s a big deal.
I can’t tell which is a bigger scandal — that fact that the Fed is shifting gears and stonewalling us or that we seem to be the only ones even asking the question.
Zack Roth has more at TPMMuckraker.
An earlier version of this post incorrectly stated that the Fed program is the same as the original plan for the TARP program which was designed to buy up toxic mortgage assets.
From TPM reader M.A.:
I work at an investment bank and deal with the TARP money-managers as clients. Though the Fed has apparently been unclear about the selection process, you should know that these money managers are the four biggest players in the fixed income money management industry and particularly in mortgage backed securities. As a taxpayer I feel very comfortable about the pool of portfolio mgmt talent that these guys are bringing to bear on this project. Agreed that transparency needs to be increased as to fee structures though.
Remember that these fund managers are “buy-side” firms … their interests are in a functioning and efficient marketplace for these securities while also retaining and creating value for the investor (the taxpayer in this case). Do not confuse their interests with the “sell-side” investment banks who created and sold these things in the first place, i.e. Merrill Lynch, UBS, Credit Suisse, Morgan Stanley, etc.
Apparently the RNC just booted CSpan out of today’s informal discussion/debate with the candidates vying to be elected party chair.
Perhaps they’re going to twitter it?
There’s been a lot of griping recently from the Right about how there are no web-native news outlets on the right, or that they aren’t seen as having a lot of credibility or that the people who write for them get no respect. And then you read that Pajamas Media, the right-leaning blog outfit started a few years back with a crazy amount of VC money just hired Joe the Plumber to be their new war correspondent in Israel.