McCain's Foreign Policy Advisor and Ahmad Chalabi: How Close?

| Fri Oct. 10, 2008 10:50 AM EDT

Back in the fall of 2002, long before president Bush had told the public of his plans, the man who would become the John McCain campaign's top foreign policy advisor was tasked with a sensitive mission that had come from the White House: to set up a group to lobby for war with Iraq. The group that Randy Scheunemann subsequently set up and became president of, the Committee for the Liberation of Iraq, argued, as did Iraqi exile politician Ahmad Chalabi, that the problem with Saddam Hussein was not just his (alleged) weapons, but the nature of the regime: "We believe it is time to confront the clear and present danger posed by Saddam Hussein's regime by liberating the Iraqi people," Scheunemann said in a press release announcing the creation of the Committee on the Liberation of Iraq, which was celebrated by a party at Chalabi's Georgetown home, according to Chalabi's biographer Aram Roston.

So how close really were Scheunemann and Ahmad Chalabi? In this piece, I asked long-time Chalabi advisor Francis Brooke, among others:

Brooke says he met Scheunemann in 1996 when he and Chalabi were hitting Capitol Hill to try to drum up increased US government support for the Iraqi opposition. Brooke's pitch then was that putting pressure on Saddam Hussein was not just the right policy; it was also a vehicle for attacking Bill Clinton, then running for reelection. "I thought it was a good time to educate the Republican Congress…and give them the ammunition they needed to beat the president up." In Scheunemann and other hardliners on the Hill, Brooke says he found kindred spirits—a clique of Republicans deeply disillusioned with how George H.W. Bush had let both the Cold War and the first Iraq War end without meting out sufficient punishment to America's adversaries. "These people had a great sense of psychic loss that we had not finished the first Iraq War in the most comprehensive way. They hated George Bush the first."
Still, Scheunemann, who then worked for Senate Majority Leader Trent Lott, was initially skeptical. After he and Chalabi made their pitch, Brooke said, "Randy said, 'This is all fine but on the other hand, the CIA and other parts of the US government tell me that the Iraqi opposition is a feckless bunch of people, that can't do anything, have no support inside the country, and have probably been up to no good all over the place.'" Brooke says he encouraged Scheunemann to do his own research, and eventually convinced him.

Go read the whole piece.

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Tough Times for Conservative Philanthropist

| Fri Oct. 10, 2008 10:31 AM EDT

After taking a hit of $4 billion in the recent financial turmoil, conservative philanthropist and Freedom's Watch-backer Sheldon Adelson is no longer the third wealthiest person in the United States, according to a revised Forbes' list. Bloomberg:

Las Vegas Sands Corp. Chief Executive Officer Sheldon Adelson's net worth declined by $4 billion between Aug. 29 and Oct. 1, the steepest drop among Americans who lost $1 billion or more during the credit crisis, according to Forbes magazine.
The magazine, in its Oct. 27 issue, recalculates the effect of September's financial news on the wealthiest Americans, those who make up its Forbes 400 list. That list was published on Sept. 17.
Berkshire Hathaway Inc. Chairman Warren Buffett overtook Microsoft Corp. co-founder Bill Gates as the richest American by posting an $8 billion gain to $58 billion during the period, the magazine said. Gates's net worth declined $1.5 billion to $55.5 billion during the 33-day period. He had been first for 15 straight years.

I wrote about the right's frustration with Adelson's tendency to take a hands-on role in projects he funded back in the spring. And Peter Stone profiled the casino mogul in the magazine.

Yet More Troopergate

| Fri Oct. 10, 2008 1:52 AM EDT

YET MORE TROOPERGATE....While we're waiting for the Alaska legislature's official report on Troopergate, the New York Times offers the results of its own investigation:

In all, the [public safety] commissioner and his aides were contacted about Trooper Wooten three dozen times over 19 months by the governor, her husband and seven administration officials, interviews and documents show.

.... On Jan. 4, 2007, a month into the Palin administration and his tenure as public safety commissioner, Mr. Monegan went to the governor's Anchorage office to talk with Todd Palin, who had requested the meeting. Mr. Palin was seated at a conference table with three stacks of personnel files. That, Mr. Monegan recalled, was the first time he heard the name Mike Wooten.

"He conveyed to me," Mr. Monegan said, "that he and Sarah did not think the investigation into Wooten had been done well enough and that they were not happy with the punishment. Todd was clearly frustrated."

....Several evenings later, Mr. Monegan's cellphone rang. "Walt, it's Sarah," the governor said before echoing much of what her husband had said. Trooper Wooten, he recalls being told, was "not the kind of person we should want as a trooper." He told the governor, too, that there was no new evidence to pursue.

Soon after that, Mr. Palin and several aides began pressing the public safety agency to investigate another matter: whether Trooper Wooten was fraudulently collecting workers' compensation for a back injury he said he had suffered while helping carry a body bag.

Mr. Palin's evidence: He told Ms. Peterson, the commissioner's assistant, that he had seen the trooper riding a snowmobile while on medical leave and that he had photographs to prove it.

The Palin family really had the bug, didn't they? Definitely not people you want to get on the wrong side of.

Financial Crisis Update

| Fri Oct. 10, 2008 1:39 AM EDT

FINANCIAL CRISIS UPDATE....The latest on the financial crisis:

The U.S. is weighing two dramatic steps to repair ailing financial markets: guaranteeing billions of dollars in bank debt and temporarily insuring all U.S. bank deposits.

....Under the U.K.'s recently announced plan, which it is now pitching to the G-7 members, the British government would guarantee up to £250 billion ($432 billion) in bank debt maturing up to 36 months. The British concept to expand its proposal to other countries has a lot of support from Wall Street and is being pored over by U.S. officials, according to people familiar with the matter.

....The move to back all U.S. bank deposits, which is only in the discussion stage, would be aimed at preventing a further exodus of cash from financial institutions, including small and regional banks, some of which are buckling under the strain of nervous customers. In recent weeks, customers have pulled money out of some healthy community banks under the assumption that the government will only insure all the depositors of larger banks in the event of a failure.

Directly recapitalizing troubled banks is yet another idea under consideration, of course. Greg Mankiw comments:

That raises several questions. First, which firms? The government does not want to put taxpayer money into "zombie" firms that are in fact deeply insolvent but have not yet recognized it. Second, at what price should the government buy in? Third, isn't this, kind of, like socialism? That is, do we really want the government to start playing a large, continuing role running Wall Street and allocating capital resources? I certainly don't.

Here is an idea that might deal with these problems: The government can stand ready to be a silent partner to future Warren Buffetts.

It could work as follows. Whenever any financial institution attracts new private capital in an arms-length transaction, it can access an equal amount of public capital. The taxpayer would get the same terms as the private investor. The only difference is that government's shares would be nonvoting until the government sold the shares at a later date.

This plan would solve the three problems. The private sector rather than the government would weed out the zombie firms. The private sector rather than the government would set the price. And the private sector rather than the government would exercise corporate control.

Nouriel Roubini offers similar advice here, along with several other ideas.


| Thu Oct. 9, 2008 6:59 PM EDT

MINDGAMES....John McCain and Sarah Palin (with the help of the entire cast of characters at Fox News and NRO) have been trying over the past few days to talk up Barack Obama's ties to former 60s radical Bill Ayers. But McCain didn't bring it up directly in Tuesday's debate, and apparently the Obama campaign has now decided to start taunting him over it. Today's taunts:

Barack Obama: "Well I am surprised that — you know, we've been seeing some pretty over the top attacks coming out of the McCain campaign over the last several days — that he wasn't willing to say it to my face."

Tom Vilsack: "If John McCain were so concerned about things like Mr. Ayers, why didn't he just simply turn to Barack Obama and directly confront him?"

Joe Biden: "In my neighborhood, when you've got something to say to a guy, you look him in the eye and you say it to him."

I guess the Obama folks figure there are three things that could happen. First, McCain does nothing and ends up looking like a coward. Second, their taunts get under McCain's skin so badly that he goes over the edge and does something really stupid. Third, McCain takes the bait and decides to bring up Ayers at the next debate.

The first two possibilities are obviously good for Obama. And the third? I guess they must be really sure they have a dynamite response ready in case McCain decides to unload next Wednesday. Either that or they're trying to fake McCain into thinking they have a dynamite response, thus scaring him into not bringing it up. Or else, by being so obvious about it, they're actually trying to sell McCain on the fakeout theory — and then when he falls into the trap and brings up Ayers, they're going to crush him. get the idea. Basically, they're just playing mindgames with the old guy. I wonder if it'll work?

Jim Crow's Muslim America

| Thu Oct. 9, 2008 6:01 PM EDT

Watch this video and join me in saying: Wow.

When Andrew Sullivan posted the video above, his Atlantic colleague, Ta-Nehisi Coates (who is black) piped up to say he thinks it's unfair. Coates likens it to the dreaded media's televising of the most ignorant Negroes they can find whenever something "black" happens, so America can assume we're all that stupid. I dunno.

I think it's valid to discuss, inasmuch as folks like these are just the unvarnished versions of those who think Obama's middle name—hiss! boo! Hussein—actually tells you something about him. It might be that hideous things like this, from true cretins, are most useful in getting white folks to take a good, hard look in the mirror at themselves: Do I, deep down and with better than a fourth grade education, really agree with these morons? If so, what does that make me? There are plenty of well-educated folks happy to tell a TV camera that having a president with "Hussein" in his name is a nightmare. What's the difference, really? Classy bigotry versus ignorant bigotry isn't much of a choice.

Speaking of videos, you cannot miss Donna Brazile's impassioned appeal to America not to be distracted by race. She reminds us that we need to be proud of how far we've come on race, and proud enough to remember that we're better than Jim Crow. Because Jim Crow is all it is when we politely, or impolitely, demand that our fear of "Muslims" be accorded respect and deference. Let's call inveighing against "Muslims" (we're at war with them, you know) and "A-rab" middle names what it is: just another way to keep blacks and non-Christians at the back of the bus.

Like Brazile, I'm afraid that I'll wake up in 31 days knowing that I'll have to tell my bi-racial children their mother grew up under Jim Crow and they will, too. Vote for whoever you want, but here's the bottom line: If you care whether or not Obama "really" is a Muslim, however expansive your vocabulary, that hideous video speaks for you.

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Top McCain Aide Lobbied for Pro-Russian Foreign Politicians

| Thu Oct. 9, 2008 5:42 PM EDT

I know, I know, its hard to keep John McCain's lobbyists-turned-top-advisers straight. There's chief campaign strategist Charlie Black, who lobbied for dictators in the '80s and just about everyone else since. There's campaign manager Rick Davis, who headed a lobbying organization for Fannie Mae and Freddie Mac for years and was still on Freddie's payroll as late as August 2008. There's top foreign policy adviser Randy Scheunemann, who has lobbied for Latvia, Macedonia, Georgia, and Taiwan. (And there's 83 others who lobbied for Wall Street before and during the financial crisis.)

But National Journal has a new one for you. Christian Ferry, McCain's deputy campaign manager and Rick Davis's #2 man, has worked for some nasty characters:

Pillow Talk

| Thu Oct. 9, 2008 3:59 PM EDT

PILLOW TALK....Does the NSA intercept telephone calls between Americans? Of course not! That's against the law. Unless, of course, you happen to be an American in one of the NSA's "areas of intercept" when you call home. ABC News talks today to a couple of NSA whistleblowers who say that eavesdropping on Americans was commonplace:

"These were just really everyday, average, ordinary Americans who happened to be in the Middle East, in our area of intercept and happened to be making these phone calls on satellite phones," said Adrienne Kinne, a 31-year old US Army Reserves Arab linguist assigned to a special military program at the NSA's Back Hall at Fort Gordon from November 2001 to 2003.

...."We knew they were working for these aid organizations," Kinne told ABC News. "They were identified in our systems as 'belongs to the International Red Cross' and all these other organizations. And yet, instead of blocking these phone numbers we continued to collect on them," she told ABC News.

And there's this from a former Navy Arab linguist named David Murfee Faulk:

"Calling home to the United States, talking to their spouses, sometimes their girlfriends, sometimes one phone call following another," said Faulk.

....Faulk says he and others in his section of the NSA facility at Fort Gordon routinely shared salacious or tantalizing phone calls that had been intercepted, alerting office mates to certain time codes of "cuts" that were available on each operator's computer.

"Hey, check this out," Faulk says he would be told, "there's good phone sex or there's some pillow talk, pull up this call, it's really funny, go check it out. It would be some colonel making pillow talk and we would say, 'Wow, this was crazy'," Faulk told ABC News.

The official NSA response is to stay mum. Sen. Jay Rockefeller (D-WV) promises to investigate. Stay tuned.

Palin's Secessionists Problem

| Thu Oct. 9, 2008 3:47 PM EDT

Secessionists? Alaska wants to secede from the US (which its leadership "hates") and the Palins are hip deep in it?

She demands to see her Republican opponent's marriage license (how could he be married, as all decent people must be, if his "wife" had a different name?)—but won't release her mysterious fifth child's birth certificate?

All of this feels really smarmy, but that's because Palin feels really smarmy. We've been forced to lay down with that dog and now we're covered with fleas. How can someone so compromised stand on the threshold of the American presidency?

Slicing and Dicing

| Thu Oct. 9, 2008 3:03 PM EDT

SLICING AND DICING....The Washington Post editorializes today against John McCain's mortgage rescue plan, and among its bill of particulars it tosses in this:

At least as Mr. Holtz-Eakin described it, it lacks a clear mechanism for reassembling and extricating whole mortgages from the welter of securities "tranches" into which Wall Street slices and dices them.

As I understand things — and I might not — this is a serious problem with any plan to force noteholders to write down their losses and restructure their mortgages to help out distressed homeowners. The problem is that there's no banker to negotiate with. It's not just that mortgages today are bundled up and securitized, it's that the resulting securities are then chopped up and sold into various CDOs. These CDOs are hedged with hundreds of pages of legal covenants, and the end result is that you can't force the mortgages to be restructured unless all of the bondholders agree. And since every CDO has hundreds of bondholders, that's basically impossible.

Obviously this doesn't apply to all subprime mortgages, but I wonder how many it does apply to? And legally and administratively, what's the answer? I really haven't been able to find a coherent explanation of this stuff, but it seems like it's a pretty big deal. Anyone have any reading recommendations?