Mojo - May 2010

Mollohan: A Danger Sign for Bart Stupak Dems?

| Wed May. 12, 2010 8:29 AM PDT

Last night, Rep. Alan Mollohan (D-WV) became one of the first House Democrats to be defeated at the ballot box. Losing his primary race by 12 points to state senator Mike Oliverio, an extremely conservative Democrat, Mollohan was hammered during the campaign for supporting the health care reform bill, among other issues. As part of the Bart Stupak bloc of anti-abortion Democrats, Mollohan had threatened to vote against health-care reform over its abortion provisions before capitulating in the eleventh hour. The ire of anti-abortion advocates first came down on Stupak himself, helping to drive him into retirement just weeks after the bill passed. They've vowed to take out the other members of the Stupak bloc—did they just claim their first scalp?

The Susan B. Anthony List, an anti-choice political action committee, spent $78,000 running attack ads against Mollohan in his district, accusing him of supporting federal funding of abortions by backing the reform law. The group is now claiming victory for his defeat:

"We promised Rep. Mollohan and the other 'pro-life' Democrats that we would make their re-election incredibly painful if they voted 'yes' on the healthcare bill. Tonight, the Susan B. Anthony List followed through on that promise, and Rep. Mollohan is the second member of that coalition to see those consequences.

"This should be just another sign to 'pro-life' Democrats that voted for the healthcare bill that they will face the same consequences as Stupak and Mollohan."

There were certainly other factors contributing to Mollohan’s defeat. As Marc Ambinder explains, the coal-mining district representative waited until the last minute to come out against the House climate bill, was dogged by ethics charges, and underestimated the primary threat leveled against him. But his loss is certainly a warning sign for other Stupak Dems. The Susan B. Anthony List is now going after other members of the bloc—including Brad Ellsworth (D-Ind.), Steve Driehaus (D-Ohio) and Kathy Dahlkemper (D-Penn.)—and has dedicated $1 million to taking them down. Having slammed the Stupak Democrats for threatening reproductive rights and empowering the anti-abortion camp, the abortion rights lobby will hardly act as a counterweight. And whether the Democratic Party’s national campaign machine or its health-care allies will invest heavily in protecting these seats remains to be seen.

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Chamber Cheers Derivatives Loophole

| Wed May. 12, 2010 7:38 AM PDT

As the battle over financial regulatory reform continues on Capitol Hill, the US Chamber of Commerce is rallying behind an amendment to the Senate's bill—one of more than 125 proposed amendments—that would exempt a large chunk of companies who use derivatives, the complex financial products used to hedge risk but also to recklessly gamble on fluctuations in, say, the housing market. Yesterday, the Chamber sent a letter, cosigned by trade groups from the oil, manufacturing, financial services, and real estate industries, backing an amendment offered by Sen. Saxby Chambliss (R-Ga.) exempting from regulation "end-users" of derivatives—the utilities, farmers, oil titans (like BP), airlines, and other companies who use derivatives to hedge risk. The letter claims that between 100,000 and 120,000 jobs could be lost because, as the bill looks now, it would require these end-users to set aside cash and other collateral for trading through the more transparent, safer derivatives clearinghouse proposed by Senate lawmakers.

That end-user exemption is opposed by the Senate's architect of financial reform, Sen Blanche Lincoln (D-Ark.), by many Senate Democrats, and by top administration officials like Gary Gensler, chairman of the Commodity Futures Trading Commission, who says (pdf) there should be no exemptions in derivatives regulation. Supporters of complete derivatives transparency cite reports like this one (pdf), from the Congressional Research Service, which says that a broad end-user exemption could essentially gut new regulations altogether. CRS found that nearly two-thirds of derivatives trades involve an end-user, and "[i]f all end users are exempted from the requirement that OTC swaps be cleared, the market structure problems raised by AIG still remain." In other words, it would be the loophole that ate the rule.

The job losses figure cited by the Chamber is undoubtedly cause for concern; no one wants to proactively cut jobs, especially with the 9.9 percent unemployment rate we have now. (An aside: I'm trying to track down the actual report on job losses used by the Chamber to make sure it's been cited accurately—and not twisted to fit an agenda. I haven't found it yet, but rest assured I am digging into this.) Then again, the out of control over-the-counter derivatives market played a huge role in the financial crisis—a meltdown that's caused millions of Americans to lose their jobs and their homes. A record 6.72 million workers who want to work have been unemployed for 26 weeks or more, the highest since the government started counting this figure in 1948; that number began its vertiginous climb in—you guessed it—the fall of 2008, when Wall Street crumbled.

Even if the Chamber is right to say tough derivatives regulation will result in the loss of jobs, you have to look at the bigger picture and broader gains here. 100,000 jobs is tough to swallow. But tougher still is not fixing the derivatives markets and setting the stage for the next meltdown—and the millions of job losses that come with it.

Kagan's Not Gay, Friends Say

| Wed May. 12, 2010 5:23 AM PDT

Elena Kagan's close friends are starting to talk to reporters about the rumors that the Supreme Court nominee is a lesbian. The verdict? She's not. Politico's Ben Smith interviewed Kagan's law school roommate, who told him:

“I’ve known her for most of her adult life and I know she’s straight,” said Sarah Walzer, Kagan’s roommate in law school and a close friend since then. “She dated men when we were in law school, we talked about men — who in our class was cute, who she would like to date, all of those things. She definitely dated when she was in D.C. after law school, when she was in Chicago – and she just didn’t find the right person.”

Other friends coming forward to speak on the record about Kagan included former New York Governor Eliot Spitzer, who went to college with Kagan. He told Politico, "I did not go out with her but other guys did." Clearly the White House is hoping that such endorsements testimonials will finally put the rumors to rest. At least it seems to have settled the issue for Andrew Sullivan. Whether the homophobes in the religious right will be satisfied remains to be seen.

 

We're Still at War: Photo of the Day for May 12, 2010

Wed May. 12, 2010 4:53 AM PDT

 

US Army members with 782nd Alpha Company make their way around gigantic improvised explosive device blast holes that were created just a few hours prior to their convoy passing through on April 30 in Southern Afghanistan. Photo via the US Army.

Watchdog Sues Over John Yoo Emails

| Tue May. 11, 2010 1:06 PM PDT

In February, the Justice Department finally released the details of its investigation into whether Bush lawyers John Yoo and Jay Bybee violated ethics rules when they composed the "torture memos" that provided the legal justification for the Bush administration's detention and interrogation program.

The report by DOJ's in-house watchdog, the Office of Professional Responsibility (OPR), found that Yoo and Bybee were guilty of "professional misconduct." But the OPR investigators were overruled by David Margolis, a career Justice Department official, and the Bush lawyers faced no consequences for their actions.

Still, the OPR report included a number of interesting details about how the detention and interrogation program was constructed—and how DOJ went about looking into it. Perhaps the most salient tidbit concerned John Yoo's emails, which OPR lawyers couldn't locate. "It became apparent" during the investigation "that relevant documents were missing," the OPR investigators wrote. Among the missing items were "most" of Yoo's emails, which "had been deleted and were not recoverable."

Federal officials are generally required to preserve their emails. So Citizens for Responsibility and Ethics in Washington (CREW), a government watchdog group, asked the DOJ to determine whether a crime had been committed. CREW, which sued the Bush administration over missing White House emails, soon followed-up with a series of Freedom of Information Act requests attempting to determine the scope of the DOJ's recordkeeping problems. On Tuesday, the non-profit announced that it's suing. "The public deserves to know the truth behind the... torture memos," Melanie Sloan, CREW's executive director, said in a statement. "The Obama administration faces a choice: it can cover-up the Bush administration’s misdeeds or allow the truth to come out and help the country confront and move past this shameful episode."

Kagan's Late-Term Abortion Memo: Pure Obamaism?

| Tue May. 11, 2010 11:27 AM PDT

As a top White House adviser to Bill Clinton in 1997, Elena Kagan pressed the former president to support a ban on a late-term abortion procedure as a political compromise. Though the memo that Kagan co-authored with her boss, Bruce Reed, is more indicative of a political strategy than a legal argument, the revelation is worrying some abortion-rights activists, particularly given Kagan’s thin paper trail on the issue. Nancy Keenan, president of NARAL, issued a cautious statement on Kagan’s nomination. “[We] look forward to learning more about her views on the right to privacy and the landmark Roe v. Wade decision,” Keenan said, adding that the group “will work to ensure Americans receive clear answers” on the issue during her confirmation proceedings.

But if Kagan’s memo on late-term abortion speaks more to her political instincts than her legal reasoning, her strategy might have actually appealed to President Obama. Kagan, along with Rahm Emanuel and other top advisers, had urged Clinton to support a compromise bill in order to prevent a congressional override of a veto on a more extreme Republican proposal that banned the procedure without any health exceptions. Clinton decided to follow Kagan’s advice and support a ban on a late-term procedure called intact dilation and extraction that provided exceptions when the mother’s life or health were at risk.

The compromise that Kagan championed assumed the necessity of consensus building and realpolitik—a strategy that’s also guided Obama’s own legislative strategy, in no small part because of Emanuel’s imprint. The proposal would have “largely put an end to the decades-old trench warfare over abortion, marginalizing conservatives who favor a total ban,” writes Amy Sullivan, a former Senate staffer who worked on the compromise. Though there were some concerns about whether the alternative would be constitutional—Kagan’s memo cites the Justice Department’s own doubts about its viability—political pragmatists viewed the proposal as the lesser of two evils.

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Fed Audit Scores Resounding Victory

| Tue May. 11, 2010 10:44 AM PDT

An amendment mandating an audit this year of the Federal Reserve and its multitrillion-dollar bailout resoundingly passed the Senate today, in a 96-0 vote. The audit, to be conducted by the Government Accountability Office (GAO), the non-partisan investigatory arm of Congress, will dig into the Fed's decision-making and actions since the onset of the financial crisis in 2007. To date, the Fed has spent nearly $3.5 trillion trying to backstop teetering megabanks, housing giants Fannie Mae and Freddie Mac, and the secondary mortgage markets as a whole. Nearly all of these actions have taken place in almost complete secrecy, with little disclosure of who's received the Fed's extraordinary support and why.

The Fed audit approved today, authored by Sen. Bernie Sanders (I-Vt.), would require that the GAO post online a report by December 1 of this year outlining all of the Fed's rescue measures. The GAO, Sanders has said, would also shed light on meetings between Fed officials and Wall Street CEOs which took place with alarming frequency in late 2008 and 2009. Those meetings posed serious conflict of interest issues when Fed officials like Stephen Friedman, head of the New York Fed, met with top brass from Goldman Sachs about converting the firm into a bank holding company; Friedman happens to be a Goldman Sachs board member as well. "This amendment begins the process of lifting the veil of secrecy at perhaps the most powerful federal agency there is," Sanders told reporters today. 

Originally, Sanders' amendment called for periodic audits of the Fed by the GAO. But after facing considerable pressure from Senate Democratic leaders, like Chris Dodd (D-Conn.), and the White House, Sanders agreed to limit the amendment to one audit of the Fed's bailouts, beginning in 2007. Asked whether he felt his amendment had been fundamentally weakened by limiting the number of audits, Sanders said he was optimistic that a successful initial investigation could spur the public to demand new audits. Sanders said, "They're going to say, 'You know what? We want more. We want more transparency.'"

Conservative Email Blast: "Obama Nominates Lesbian Elena Kagan"

| Tue May. 11, 2010 9:22 AM PDT

The Obama White House says Supreme Court nominee Elena Kagan isn't gay. But one conservative email fundraiser isn't buying it. Vision to America, a conservative email list, blasted out a message to its subscribers on Monday: "CBS: Obama nominates Lesbian Elena Kagan to Supreme Court." The headline refers to a blog post that CBS was forced to retract after the White House complained. The Washington Post's Howard Kurtz explained at the time:

Ben Domenech, a former Bush administration aide and Republican Senate staffer, wrote that President Obama would "please" much of his base by picking the "first openly gay justice." An administration official, who asked not to be identified discussing personal matters, said Kagan is not a lesbian.

CBS initially refused to pull the posting, prompting Anita Dunn, a former White House communications director who is working with the administration on the high court vacancy, to say: "The fact that they've chosen to become enablers of people posting lies on their site tells us where the journalistic standards of CBS are in 2010." She said the network was giving a platform to a blogger "with a history of plagiarism" who was "applying old stereotypes to single women with successful careers."

The network deleted the posting Thursday night after Domenech said he was merely repeating a rumor.

Domenech, as you may remember, was a colleague of Kurtz's at the Post for three days in 2006 before he resigned after being accused of plagiarism. But that hasn't stopped Vision to America from allowing its advertiser—the "Pray in Jesus Name Project"—from citing Domenech's CBS "reporting" while trying to sucker conservatives out of their money with the usual "pay $17 to fax 17 senators" scam. Anyway, Stephanie Mencimer has a great piece with a lot more on the claims that Kagan is gay—including details about "Pray in Jesus Name" and the guy behind it. Check it out.

Inventing Disease to Sell Drugs

| Tue May. 11, 2010 9:15 AM PDT

Pharmaceutical companies are ingenious in all the different ways they pump drugs into the system.The best known techniques include buying medical experts to put their names on articles written by the drug companies which can then be placed in medical journals; or  hosting small casual dinners of docs to tell them about supposedly new and proven but still off-label uses for drugs. Docs get asked to come along for wonderful vacations with the dealers. They get great money making speeches.

Adriane Fugh-Berman, a Georgetown University doctor and colleague of mine on Pharmedout.org, drives the pushers nuts with her research and writing exposing their underworld. She has published a new article in the Boston Review setting out a basically unknown and genius way that Big Pharma makes a killing. In addition to buying docs, the drugsters invent or exaggerate diseases. They then pump knowledge about the creepy new condition into the medical world through a process known as Continuing Medical Education, or CME. This is how docs and health care professionals are supposed to keep abreast of new developments in their field. It works like this:

Exposing the Big Bank Lobby

| Tue May. 11, 2010 8:41 AM PDT

There's plenty in the news about the latest push by the financial industry's formidable lobbying armada, a coalition of banks' own outfits, ad hoc front groups, and powerful advocacy organizations speaking for all of Big Finance. It's also pretty well-known that many of these influence peddlers are well-connected to very people they're now lobbying. Even so, a new report from the Public Accountability Initiative, "Big Bank Takeover," uncovers some pretty startling statistics about the finance lobby, a powerful force that's shaped financial regulation for decades and, more recently, has spent $600 million on lobbying since early 2008.

For instance, the report (pdf), released today, says that 243 lobbyists for the six biggest banks—Bank of America, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, and Citigroup—and their trade groups used to work in either Congress, the White House, the Treasury, or another federal agency. That comes out to 40 lobbyists per bank who've spun through the Wall Street-Washington revolving door. And those 243 lobbyists weren't paper pushers or interns, either: 33 are former chiefs of staff; 54 used to work for the House financial services committee, which led the House's effort to write new financial regulation; and 28 were legislative directors for members of Congress. Citigroup, the report states, leads the biggest bank with 55 lobbyists that once worked for the government.