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November 14, 2008

Dennis Kucinich Investigates Treasury's Blank Check

It looks like the Bush administration can create its own reality after all. Just this week Treasury Secretary Henry Paulson turned the $700 billion bailout from a program to purchase toxic assets from troubled financial institutions to one that will invest in banks. Understandably, this abrupt change of course angered members of Congress, who were now left to wonder if they'd been led astray in supporting the stimulus package. At a hearing on Friday, convened to examine the Treasury Department's use of the bailout funds, lawmakers on both sides of the aisle vented their outrage. The question if whether their displeasure will make a dime's worth of difference.

Displaying the range of congressional discontent, both Rep. Dennis Kucinich (D-Ohio), the chair of domestic policy oversight subcommittee, and Rep. Darrell Issa (R-Calif.), its ranking member, accused the Treasury of a "bait-and-switch" and questioned Neel Kashkari, the 35-year-old former Goldman Sachs banker selected by Paulson to supervise the bailout, about the sudden reversal.

In response, Kashkari explained that Treasury had "worked very hard with Congress" to negotiate the bailout bill, but as the financial crisis worsened in the weeks following the bailout's passage, Paulson felt he "had to take very aggressive action." And Kashkari assured the committee that his boss had only decided "late last week, earlier this week," that the plan had to change. Issa, who voted against the bailout, suggested that the agency had planned all along to ignore the specific provisions of the bailout and instead wield the broad authority Paulson had originally demanded. "Congress is feeling you played a bait and switch game," Issa said.

Fuming that Treasury had ignored congressional provisions in the bailout bill to buy troubled mortgage assets and help homeowners in jeopardy of foreclosure, Kucinich charged, "The Secretary just took some scissors and cut it out." He also accused the administration of still relying on trickle-down economics to fix the financial crisis. "You have to get money into the grass roots. In your model you just have some trickle down and it never trickles down, everyone knows that."

Kashkari, the interim assistant secretary for financial stability, remained remarkably calm and painstakingly polite in the face of tough questioning, often using phrases like "with deep respect" and "I understand your concern." His demeanor won him some points—Rep. Brian Bilbray (R-Calif.) called him "probably the best spokesman the administration has." Kashkari repeatedly stressed that if Treasury had spent the entire $700 billion buying home loans, they would have been able to buy about 3 million of them—a small fraction of America's 55 million outstanding. By injecting money into the banks instead, the Treasury "influenced almost every loan in America," Kashkari claimed. But the fundamental conflict remained. Congress had mandated one bailout, and Paulson and the Treasury Department are executing a different one.

"The legislation we asked for was to prevent a complete financial collapse," Kashkari said. "We are every day trying to figure out how to stabilize the system so we can help everyone. My phone is ringing off the hook. But if we went out and helped everyone who needs it directly the $700 billion wouldn't go far enough." Kashkari said that's why Treasury has to work from the top-down, helping banks first. Kucinich, who voted against the bailout, said he was confident Congress would never have approved it if lawmakers had known Paulson would change the plan. But the fact remains: the bailout is law. Perhaps Paulson got his blank check after all.

(The House Committee on Oversight and Government Reform, which contains Kucinich's subcommittee, has been holding a series of hearings investigating the financial crisis. Mother Jones covered the hearings on Lehman Brothers, AIG, credit rating agencies, federal regulators, and hedge funds.)

This Will Not Help Saxby Chambliss in the GA Run-Off

In an interview with WGAU Athens this morning, incumbent Republican Senator Saxby Chambliss, currently locked in a run-off with Democrat Jim Martin, said that we can "trust" the "folks in the financial community" with the $700 billion being spent on the bailout. Chambliss added:

"If the smart people in the financial community think this is the best way to go, I think we have to respect that."

Could a statement be more tone-deaf? The smart people in the financial community? You mean the ones who managed to sink the global economy? Those smart people? Chambliss voted for the bailout — his opponent is calling it "disastrous" — and it's one of the main reasons why Chambliss is vulnerable in deep red Georgia. I suspect we'll see and hear Saxby's comments in an attack ad, oh, tomorrow morning.

CIA: Bin Laden Not a Factor in Al Qaeda, But We'd Still Like to Kill Him

CIA Director Michael Hayden, speaking last night at an event organized by the Atlantic Council, said that Osama Bin Laden is increasingly "isolated" and on the run. "He's putting a lot of energy into his own survival, a lot of energy into his own security," said Hayden. "In fact, he appears to be largely isolated from the day-to-day operations of the organization he nominally leads." All that said, he's still an attractive target, largely for the propaganda value of putting him out of business. "Because of his iconic stature, his death or capture clealry would have a significant impact on the confidence of his followers, both core Al Qaeda and these unaffiliated extremists," Hayden continued. "I can assure you, although there has been press speculation to the contrary, I can assure you that the hunt for Bin Laden is very much at the top of the CIA's priority list."

It's also at the top of the incoming Obama administration's list. The president-elect believes that his predecessor has not done enough to capture or kill the Al Qaeda leader. But turning things around will not be easy. As former CIA Pakistan station chief Robert Grenier told CNN, "If you think of this as sort of a combination of [the hunt for] Eric Rudolph, who was the Olympic bomber, and the movie 'Deliverance,' multiplied by a factor of 10, that's really what you're focusing on in trying to find bin Laden... What you literally need to have is an army of individual informants, hopefully focused on the areas that you think bin Laden is most likely to be hiding in. But again, you need to have a whole lot of them, because one individual who may have access to the families and the clans in a particular valley, if he goes to the valley next door and starts asking questions, he's probably gonna end up dead pretty quickly."

Photo by flickr user Toots Fontaine used under a Creative Commons license.

The Newest GOP Myth: We've Drifted from Our Principles

This was first posted at www.davidcorn.com....

In the aftermath of a decisive defeat, Republicans and conservatives are nursing their wounds and wondering what went wrong. Many have come up with an easy answer: the GOP has drifted from its core principles; consequently, the voters have handed it the pink slip.

But is the drift more to blame than the principles?

Let's look at one example of this argument. Michael Steele, the former Maryland lieutenant governor and an unsuccessful candidate for Senate in 2006, is running to become the new head of the Republican Party. In a statement he released on Thursday, he said,

The Republican Party must present a vision for the future of America that relies on our conservative values and core principles. It is wrong to believe the voters have suddenly become liberal. They have just lost any sense of confidence that the Republican Party holds the answers to their problems. We must face the fact that our party has failed in recent years to live up to our own principles -- we have failed to be ‘solutions oriented’ in addressing the concerns of all Americans.

Does Steele have it right? Has his party failed to present "solutions" in recent years? Not really. The Republicans have presented plenty of "solutions," but the voters have not cared for them.

What are the two core principles of the Republican Party? Cutting taxes (to ensure a smaller government) and swinging a big stick when it comes to national security. There's also the social issues, such as opposing abortion rights and gay rights. But those lifestyle issues have often been a second-tier matter for many Republican leaders.

Now look at the George W. Bush presidency and the John McCain campaign. The core issues were tended to by both. Bush pushed tax cuts and started two wars (one of them elective!). How loyal to the core was that? He didn't crusade against abortion rights and gay marriage, but he said the right things (from a social conservative perspective). Sure, government spending did go up on his watch--as did the deficit and the national debt (due to his tax cuts)--but much of that was attributed to increased military spending (another conservative idea) and expanding Medicare benefits. Does Steele and his fellow GOP handwringers believe they can get back to the White House by downsizing the Pentagon and undoing that Medicare expansion?

Bush has ended up an unpopular president because he was both conservative and incompetent. He launched an unnecessary war in Iraq and then mismanaged it. He lost an American city. On economic policies, he was a market-oriented fellow who snorted at regulation. For most of his presidency, his economic policy was essentially tax cuts, tax, cuts, tax cuts--and let the market sort out the rest. That conservative approach didn't work. Now he's a corporate socialist, throwing hundreds of billions of dollars at corporations that screwed up. But he had turned off the public long before making that lurch.

As for John McCain, he, too, ran on core conservative principles. He called for an across-the-board freeze on federal spending. He supported supply-side tax cuts (that he had once opposed). He called for a robust national security posture. And he did what many conservatives do: he accused the Democrats of being tax-and-spend liberals ("socialists," his running mate called them) and claimed the Ds were dangerously weak on national security. On health care, he proposed market-oriented tax credits. He and Sarah Palin opposed abortion rights.

So what was there for a voter seeking Republicans loyal to core conservative principles not to like? McCain was offering lots of solutions. He had his (erratically-derived) proposals for addressing the economic meltdown and housing crisis. He said he had a plan for nabbing Osama bin Laden.

It seems that voters just aren't keen on conservative solutions now. They do not appear to be yearning for a smaller government that does less. Many actually are hoping that the government will take steps to help them and their fellow citizens in these tough (and getting tougher) times. If conservatives are going to claim, as Palin explicitly did, that government is the problem and an obstacle to freedom, they can be credited for sticking to their ideological guns, but they're not likely to put together a governing coalition at this moment.

There certainly have been periods when the conservatives' siren song of lower taxes and less government appealed to many Americans. But it's easier for conservatives to sell those core notions either (a) during not-so-hard times or (b) after a left-of-center administration has messed up. (For the latter, think Jimmy Carter.) In a vacuum, American voters don't crave conservative solutions. For many Americans, ideology is relative. That is, what they want depends on what is happening around them.

So Steele and his comrades are stuck--with a lousy brand (thank you, President Bush) and with core principles that are not in sync with the current market demand. This is not to say that the party is dead. There are no permanent majorities in the United States. If the Democrats botch the job in the next two years, that ol' pendulum could swing back and knock them on their backsides. But for the time being, the Republicans must move beyond this return-to-core-principles line--unless they are content to tread water in a pool of self-delusion.

If Steele truly believes his back-to-the-future rhetoric, Democrats ought to be rooting for him.

Joe the Increasingly Desperate for Attention

Joe the Plumber has a website. Here's the link. There's not a whole lot you can do on it yet. You can get a free "We Are Joe" membership or, for committed JTP fans, a $14.95 "Freedom" membership. You can advance order a copy of Joe's book, which is titled "Fighting for the American Dream." Soon you'll be able to read Joe's blog and use Joe's discussion forum to talk directly to Joe. You can look at pictures of Joe.

I've never been so convinced in my life that someone is planning on running for office. Any Republican who has been building his or her resume over the course of several years with the hopes of someday representing Ohio's 9th district, just put away your power tie or pantsuit now. You're going to get steamrolled in the primary by Joe the Media Darling. See you in 2010, Joe, you living manifestation of the Republican Party's crippling anti-intellectualism!

Wanna Work for Obama? Prepare for a Strip Search

CNN has the scoop on the background check it takes even to be considered for a 'Bama job:

The Obama transition team is sending a seven-page, 63-item questionnaire to every candidate for Cabinet and other high-ranking positions in the incoming administration.

The questions cover everything from information on family members, Facebook pages, blogs and hired help to links to Fannie Mae, Freddie Mac, American International Group and troubled banks as well as lawsuits, gifts, resumes, loans and more.

...It also asks about writings, speeches, testimony, online communications and even personal diaries.

An entire section requests details on any criminal or civil legal action in which the applicant may have been involved. The last question in that 11-item section asks for details on any child support or alimony orders.

In an apparent effort to avoid the problems faced by several nominees in the last two administrations, a block of four questions is devoted to ferreting out details—including the immigration status—of any domestic help the applicant may have hired....

I include these details (follow the link for the full Monty) just to camouflage which, of many, would disqualify me. But I think this one is enough without his henchmen ever getting to that pesky marijuana farm I, or someone who bore a striking resemblance to 'me,' ran. Allegedly.

Or the 'toy boys' I've cougar-ed, er...'mentored' post-divorce. Again... allegedly. Then there was that 'freedom ride' to Canada for black market estrogen and arch supports... as the rumor mill has it. Why, oh why, did I twitter that trip?

But let me just say this about that piece so infamous and misunderstood as to have landed me on the Colbert Report: Grow up. Grapple with what I actually wrote, not what your jerking knees translated it to.

Not having a shot at working for Obama doesn't bother me anywhere near as much as being so pathetically misunderstood by a nation of kneejerks.

November 13, 2008

Hedge Fund Managers To Congress: Go Ahead, Regulate Us

What a difference two years and a financial crisis make. When Congress last floated the idea of regulating the hedge fund industry in 2006, proposing a bill that would have forced them to register with the Securities and Exchange Commission, the industry revolted and the bill died in committee. But on Thursday, in the face of growing economic tumult and an incoming pro-regulation Democratic administration, top hedge fund managers signaled they are now willing to deal on the thorny issue of oversight.

Testifying before a congressional oversight committee, fund managers Philip A. Falcone, Kenneth C. Griffin, John Paulson, James Simons, and George Soros agreed that hedge funds may require increased government regulation. Even minor regulation or increases in transparency would be a big change for the hedge fund industry. "Currently, hedge funds are virtually unregulated," said Henry Waxman (D-Calif.), who chairs the House Committee on Oversight and Government Reform, which held the hearing. (Mother Jones also covered Waxman's previous hearings on Lehman Brothers, AIG, credit rating agencies, and federal regulators.) The 1998 rescue of Long-Term Capital Management (LTCM) demonstrated that the failure of just one highly leveraged, unregulated fund could require government intervention. Because LTCM was considered "too interconnected to fail," the Clinton administration arranged for a bailout of the fund by Wall Street banks. Most of the committee members (and, naturally, the hedge fund managers) believe that hedge funds were not the cause of the financial crisis. But with the economy already in dire straits, members of Congress are determined that the hedge fund industry not produce another LTCM. "In our prior hearings, we have focused on what went wrong in the past," Waxman said. "Today's hearing lets us ask what could go wrong in the future so we can prevent damage before it occurs." With President-elect Barack Obama entering office in January, the writing is already on the wall when it comes to increased regulation of the financial sector. By demonstrating their willingness to accept some increased regulation, the hedge fund managers who testified on Thursday made the imposition of new rules on their funds' behavior almost inevitable.

Why would the most successful people in an industry that previously opposed government regulation suddenly change course? The hedge fund managers may have simply remembered the old Washington saying that "If you're not at the table, you're on the menu." With the markets in chaos and Congress desperate to take action, the no-way-no-how position the hedge fund industry originally took toward regulation is not likely to be well received. By accepting the need for modest regulation and slightly increased transparency, the hedge fund managers were showing they were willing to negotiate.

The fund managers have a lot at stake. Not only do these five men make some $5 billion a year collectively, but they also receive favorable tax treatment on some of their income. In a practice known as "carry," or carried interest, some of the cut that hedge fund managers take of their firms' profits is taxed as capital gains, rather than normal income. In theory, this is allowed because hedge funds are investment partnerships. (Long term capital gains are taxed at 15 percent and exempt from payroll tax.) According to Joseph Bankman, a professor of law and business who testified before the managers, "A fund manager who in 2007 earned $80 million paid tax at a lower average rate than a high school principal who earned $80,000."

Last year, legislation passed the house that attempted to correct this alleged loophole, but stalled in the Senate after fierce lobbying from hedge fund and private equity executives. The tax treatment of carried interest was brought up in Thursday's hearing, but in general the proceedings were remarkably non-confrontational. The hedge fund managers probably didn't want to appear uncooperative in the face of a national crisis, and the committee members may have been reluctant to anger five billionaires who have showered politicians (mostly Democrats) with nearly $400,000 in campaign contributions this election cycle alone.

The pace of congressional hearings investigating the financial crisis and the bailout doesn't seem likely to let up anytime soon. A House hearing on Friday will feature testimony from Neel Kashkari, the 35-year-old former Goldman Sachs banker who is in charge of overseeing the bailout. Check back for our coverage.

Photo from flickr user Artemuestra used under a Creative Commons license.

Will Hillary Clinton Be Taking Those 3:00 am Calls After All?

While Sen. Hillary Clinton has been discussed as a possible contender for various appointments in an Obama administration, her name didn't officially enter the short list of those reportedly under consideration to serve as Obama's secretary of state until today. The Washington Post reports:

There's increasing chatter in political circles that the Obama camp is not overly happy with the usual suspects for Secretary of State these days and that the field may be expanding somewhat beyond Sen. John Kerry (D-Mass.), Gov. Bill Richardson (D-N.M.), Sen. Chuck Hagel (R-Neb.) and maybe former Democratic senator Sam Nunn of Georgia.

There's talk, indeed, that Sen. Hillary Rodham Clinton (D-N.Y.) may now be under consideration for the post. Her office referred any questions to the Obama transition; Obama spokesman Tommy Vietor declined to comment.

The pick of the former presidential contender and Senate Armed Services Committee member would go a long way toward healing any remaining divisions within the Democratic Party after the divisive primaries. Also, Clinton has long been known for her work on international women's issues and human rights. The former first lady could also enhance Obama's efforts to restore U.S. standing amongst allies worldwide.

While the appointment might rub some Obama partisans still bitter over the prolonged nomination battle the wrong way, Hillary Clinton would have many advantages for the post. The Clintons are revered and familiar faces abroad, the appointment would please her own partisans, and one of the most coveted cabinet jobs would go to a woman.

It also would solve one possible problem. Senate staffers say if Obama picks Sen. John Kerry to be secretary of state, Sen. Russell Feingold (D-WI) would be next in line to become chairman of the Senate Foreign Relations Committee, and that might cause the new administration something of a problem, as Feingold has voted differently from Obama and Biden on key issues in the committee.

Similarly, if Obama asks Robert Gates to stay on as Secretary of Defense (for a year or more), he might not want to give a second top cabinet post to a Republican, that is, retiring Sen. Chuck Hagel. Every appointment has its repercussions.

And that sometimes makes it hard to figure out what moves are under way. But more to come as we hear it.

Of Mortgages and Macoutes

In a surprising twist in the American housing crisis, Judge Abraham Gerges in Kings County, New York, handed down a stiff sentence to Haitian-born Emanuel "Toto" Constant on October 29: 12.3 to 37 years for mortgage fraud.

If almost four decades in prison seems rather severe for white-collar crime, observers point out that, as Mother Jones wrote of Constant, he was also a violent criminal, responsible for numerous beatings, kidnappings, rapes and murders in his native Haiti during the early 1990s. Constant founded the Front for the Advancement and Progress of Haiti (FRAPH), which can be characterized as part political faction, part charity, part gang, and part terrorist organization whose goal was to intimidate supporters of Haitian president Jean-Bertrand Aristide.

Leaving Haiti when the situation became politically difficult, Constant sometimes bragged that he enjoyed a close relationship with the CIA. A federal immigration judge signed an order to deport Constant to Haiti in September 1995 but the Clinton Justice Department later ordered the INS to release Toto. After 1996 the former torturer lived openly in Queens. Many believed the American government protected Constant because of his role in suppressing supporters of Aristide. Free from legal pressure, Constant went into real esate. He also got involved in new and more complicated crimes. Apparently while working as a real estate agent in Queens, he took part in a scheme that defrauded several banks of more than $1 million.

Like Al Capone, sentenced to 11 years for tax evasion in 1931, the judicial system has now nailed Constant for the least of his crimes, but nailed him all the same. Judge Gerges reportedly took Constant’s crimes against the Haitian people into account when determining sentencing. Jennie Green of the Center for Constitutional Rights said of Constant's jail time: "One day, when the Haitian government and courts are in the position to hold him accountable, Constant will return to Haiti to be tried for murder, rape and other torture in his campaign of terror as head of a paramilitary death squad."

Anyone want to bet on when that will happen?

—Daniel Luzer

Image by flickr user CCRPics

McCaffrey Says US in The "End Game" in Iraq

mccaffrey_no.jpeg.jpg

Barry McCaffrey, a retired Army general who now teaches international relations at West Point, has made frequent fact-finding trips to Iraq in the years since the 2003 invasion. A decorated Vietnam veteran, leader of an Army division during the Gulf War, and a former top general of the US Southern Command, McCaffrey's experience has made him a respected voice in military circles, and a guy whose views on the Iraq War are not easily ignored.

Just back from his most recent trip to Iraq, McCaffrey—who in March 2007 characterized the US mission there as being in "strategic peril"—says in an "after action report" (.pdf) to his colleagues at West Point that the US military is "now clearly in the end game in Iraq to successfully achieve what should be our principle objectives." Among these, he includes withdrawing US troops within 36 months and leaving behind an Iraq that has a functioning civil state and security force that is not engaged in war, either with itself or any of the country's six neighboring states.

"The bottom line," McCaffrey writes, "is a dramatic and growing momentum for economic and security stability which is unlikely to be reversible. I would not characterize the situation as fragile. It is just beyond the tipping point." A sampling of recent successes, as McCaffrey describes them:

It is unarguable that the past 18 months have witnessed a dramatic, positive change in the Iraqi security situation.

The lawless disintegration of the state at province and municipal level which was apparent on my earlier visits has now largely abated...

Iranian intervention is relentless, lethal, and implacably hostile to US interests—but has to a great extent alienated the southern Iraqi Shia and been largely ineffective.

Turkey and the semi-independent Kurdish north (KRG) have developed enormously important and profitable mutual economic ties. [Note: This warming relationship is described in greater detail in a new report (.pdf) from the International Crisis Group, released today.]

Mr. Maliki clearly has matured and gained stature as a political leader since he assumed his very dangerous and complex leadership responsibilities.

The Ministry of Defense and the Ministry of the Interior now have moderate, comparatively apolitical, and increasingly competent senior leadership...

The Sons of Iraq Movement has absorbed more than 100,000 Sunni insurgent fighters and brought them into a neighborhood watch program which has successfully confronted the remnants of the insurgency.

All that said, McCaffrey notes that the war is not won (however that may be defined) and risks remain that things could go south. For example, if a "Status of Forces" agreement is not reached before the current UN mandate for US troops in Iraq expires at the end of December, American units will have to return to their bases and begin withdrawal, threatening Iraq's recent gains. Politicians in Baghdad have so far not agreed to US proposals, which McCaffrey says is like "holding a gun to their own head." Beyond that, Iran's covert operations in Iraq continue to be destabilizing, and if Tehran goes forward with nuclear weapons development, the inevitable US response could wreak havoc on the entire region, Iraq included. Then there's the question of Kirkuk and control of nearby oil fields. A Kurdish-Arab war over this strategic prize could still be in the cards unless an oil-sharing agreement can be struck.

McCaffrey concludes that the incoming Obama administration "will have to think through their military options in the coming six months," but that "the likely strategic outcome will be a more rapid forced drawdown than desirable in Iraq in order to enhance combat power in Afghanistan. It will be a tricky balance—but in my judgment we will pull this off successfully... As the Saudis note with great sadness—we entered Iraq uninvited... but we must not leave the same way. It is essential for both the US and Mid East security that we pull out of Iraq in a deliberate and responsible manner—and leave a stable and functioning state. This is clearly within our capabilities."

Imagining a Revitalized Public Financing System

Now that there is an Obama-sized hole in our public financing system, we need to find a new way to fund presidential elections.

The public financing system as it existed pre-Obama gave candidates tens of millions of dollars to use after the conventions (the amount went up each cycle) in exchange for halting direct fundraising (various party organs and committees could keep raking it in). But Obama opted out of that system because he had millions of small donors who could, collectively, give him much, much more than the federal government. And that's a good thing. Legions of small donors getting behind a candidate is a manifestation of democracy that shouldn't be denied. But how do we protect our elections from the influence of large donors while still allowing these small donors their voice?

Fred Wertheimer, president of Democracy 21, took a stab at figuring it out in an op-ed in the Washington Post:

Move the small donor to center stage for all candidates. Presidential primary candidates should receive a match of $4 in public funds for each dollar raised, up to a maximum of $200 per donor, with no matching funds provided for contributions from a single donor that aggregate to more than $200. This would create powerful incentives for donors to give and candidates to raise small donations online. A $200 contribution, matched 4 to 1, would become just as valuable as a $1,000 contribution, and the importance of bundlers would significantly diminish....

The spending limits in the current system should be increased for the primary and general elections from current levels -- $50 million and $84 million, respectively -- to $250 million per election. This should be accompanied by an exemption from the spending limits for aggregate contributions of $200 or less per donor to further increase the importance of small donors and to provide candidates with greater flexibility to meet the costs of their campaigns.

Reduce the individual contribution limit. A presidential candidate who participates in the primary system should have to abide by a lower contribution limit than the existing maximum, $2,300 per individual, to take effect once the candidate has raised a threshold amount of seed money to get started. Under this approach, the relative importance of $200 contributions would be further increased, and the importance of bundlers further reduced.

I like it. I've never bought the argument that the wealthy have the right to donate in huge amounts because their donations are a form of political speech. Under Wertheimer's approach, they'll have the right to donate (and "speak") just as much as everyone else. They don't get a bigger say in our democracy simply because they have more money. (By the way, it's not surprising that the only folks who ever advance the argument that money = political speech are the wealthy themselves or the political candidates in position to benefit from unchecked giving by the wealthy, i.e. Republicans.)

Wertheimer, who recently spoke to Mother Jones about the good government agenda, highlights one other egregious aspect of fundraising law in the Post:

Close the loophole for joint fundraising committees. This year, both major-party presidential nominees used candidate and party joint fundraising committees to skirt the limits on contributions to candidates. John McCain solicited contributions of as much as $70,000 per individual and Obama of as much as $30,800 per individual for these committees; they raised $177 million and $172 million, respectively, according to Public Citizen.

The joint fundraising committees are a good example of how regulating political money is like holding Jell-O. You try to squeeze it on one end and it comes out the other. Every time regulators and good government reformers put a cap on something or close a loophole somewhere, politicians and their moneymen find a new way to get around the rules. But you have to keep battling, for the sake of the system's purity. Wertheimer is fighting the good fight.

Update: More coverage of good government issues over at Drum's, where I'm pulling double duty.

Jumpstarting the Obama Administration's Web Functionality

Obama has made a lot of promises about using technology and the web to make government more transparent. Today, the founder of PoliticsTV.com put forward a number of ways the President-Elect can make good on those promises right away, using a tool as simple as web video. Here's his shorthand list:

(1) WhiteHouse.gov/TV; (2) Weekly Obama Webcast; (3) GovTube; (4) Video Content on Non-Governmental sites; (5) in every executive branch agency, create New Media, Transparency, and Technology offices; (6) have cabinet members/agency heads give monthly Webcasts; (7) Webcast the Inauguration; (8) make the State of the Union an interactive, multimedia event; (9) make the President's annual budget a digital, multimedia document; (10) enact all of this and more first by executive order, then through legislation, so future Administrations can't just hard reboot your digital legacy.

You can read about each of these ideas in detail over at the Huffington Post. Among relatively pedestrian (but useful!) ideas like streaming White House press conferences online and hosting executive department webcasts, there are some innovative ones, like turning the federal budget into a "multimedia, dynamic document with web apps, widgets, and appendices applying Quicken-style functionalities, dynamic charts, etc." Definitely worth checking out.

Blackwater To Be Fined For Illegal Weapons Shipments to Iraq

Blackwater Worldwide is facing a "multimillion-dollar" fine from the State Department for allegedly shipping illegal weapons to its contractors in Iraq, McClatchy reports. The fine could be levied in the next few days. State officials charge that Blackwater, which holds a lucrative personnel-protection contract for US diplomats in Iraq, hid the arms inside shrink-wrapped pallets that were shipped directly from the company's sprawling Moyock, North Carolina, headquarters. About 900 weapons were sent to Iraq without permits, 119 of which were especially "erroneous," says a State Department official familiar with the shipments. Some of the weapons are thought to have wound up on Iraq's thriving black market.

The illegal weapons were first discussed publicly at a September 2007 congressional hearing about State Department inspector general Howard Krongard's alleged obstruction of a Justice Department investigation of Blackwater's activities in Iraq. It was revealed at the hearing that Krongard's brother "Buzzy," a former CIA official, had recently been recruited to Blackwater's board of advisors. Since then, former Blackwater contractors Kenneth Wayne Cashwell and William Ellsworth (Max) Grumiaux have plead guilty to illegal weapons charges and are now cooperating with federal investigators.

For its part, Blackwater says its cooperating with the investigation and has even hired a "vice president of export compliance" and appointed a three-member independent oversight panel, including former Republican congressman Asa Hutchinson of Arkansas. "Our work for the US government around the world, and the nature of teh services we offer have created compliance challenges," Blackwater founder and president Erik Prince said in a statement.

Begich Opens Substanial Lead in Alaska Senate Race

"Substantial" is relative, of course. Here's Bloomberg:

Democratic challenger Mark Begich leads by 814 votes in his bid to oust incumbent Alaska Senator Ted Stevens, according to the state's elections division.

Alaska is still counting absentee ballots from the Nov. 4 election. Anchorage Mayor Begich had been trailing Stevens by 3,257 votes until state officials started counting approximately 90,000 absentee ballots yesterday... Officials counted approximately 50,000 ballots yesterday and may finish counting the remaining 40,000 tomorrow.

The upshot? The Dems could be up to 58 Senate seats as early as tomorrow.

Update: More info from AKMuckraker:

As we move forward, Alaska’s “reddest” areas have already been counted. Those outstanding districts are mainly rural and tend to go Democratic. Friday will see more than 20,000 “question ballots” (provisional ballots) counted, and the remaining absentee ballots are slated to be counted Monday.

So nothing is final yet, but the news is definitely good.

Does That Make McCain Emperor Palpatine?

Noam Scheiber highlights the familiar locution of a recent Sarah Palin sentence:

"But not me personally were those cheers for."

I always felt like the woman was something out of fiction. Turns out, she's Yoda.

Guestblogging for Drum

Howdy folks. I'll be guest-blogging for Kevin Drum today, so make sure to check this space and the one next door. (Of course, you should be doing that everyday!) We're off and running with a post about investigations of the Bush Administration and how President Obama will treat them.

November 12, 2008

Cheer Up, Californians: Same-Sex Couples Wed in Connecticut

Though many of us on the West Coast are still despondent over the passage of Prop 8, there's reason to take heart: in Connecticut this morning, the first same-sex couples took their state-sanctioned marriage vows.

The state's supreme court legalized the marriages in October, and local courts finalized the details this morning. Last week, Connecticut voters rejected a ballot measure that would have opened the way for a constitutional challenge to the marriages, even as Californians passed Prop 8.

For me, this issue hits close to home: After sixteen years in a committed relationship, my uncle and his partner got married this past summer in Los Angeles. Prop 8's victory last week was a huge emotional blow to them, and to me.

But another personal connection gives me hope. Peg Oliveira, one of the women who got married in Connecticut this morning, was my yoga teacher while I lived in New Haven. The local online daily profiled Peg and her wife today. The two had vowed to get married, she said, "when the state of Connecticut gets around to it and catches up to us." I couldn't be happier that it finally has.

Photo of Peg Oliveira (right) and her wife, Jen Vickery, courtesy New Haven Independent.

Atheists in the Military Seek Obama's Blessing

As Barack Obama prepares to take office, all sorts of advocacy groups are angling for his attention. And atheists, too, are seeking his blessing. This week the Secular Coalition for America, a national lobbying group for “atheists, humanists and freethinkers,” released its wish list. The group is not looking for Obama to remove "In God We Trust" from US currency. It has a more a modest agenda: countering what it claims is discrimination against atheists and non-Christians in the military.

The group is requesting that Obama appoint leaders who are committed to a secular military and that he issue a directive to the military that explicitly prohibits proselytization, prayers at mandatory events, and official statements endorsing a particular faith. The proposal also advocates creating a “commission for religious accommodation” within the Pentagon's Inspector General’s office.

According to the group, major news outlets have reported at least twenty incidents in which military personnel have been coercively proselytized in the past five years. In 2005, Air Force Academy alumnus Mikey Weinstein filed a lawsuit (ultimately unsuccessful) against the Colorado Springs Air Force Academy, alleging that non-Christians at the Academy faced discrimination from evangelical Christians. That same year, The New York Times quoted the Air Force Chief of Chaplains, Cecil Richardson, as saying chaplains “reserve the right to evangelize the unchurched.” Recently General David Petraeus endorsed the book Under Orders: A Spiritual Handbook for Military Personnel, which is not officially affiliated with the US military.

Surveys show that 21 percent of military personnel identify as atheists or as having “no religion." But when it comes to persuading Obama to take these protect-the-secularists steps, there's no telling if these atheists have a prayer.

— Tay Wiles

Another Indictment in Offshore UBS Shelter Case

As we reported in the current November/December 2008 issue, UBS is being pursued by the IRS and Department of Justice for helping American clients evade taxes on some $20 billion offshore assets. News today is yet another banker, Raoul Weil, has been indicted. Though the indictment does not mention UBS by name, the Washington Post reported that Weil headed UBS's wealth management department from 2002 through 2007.

UBS recently complied with IRS and Department of Justice requests for specific names of American clients with offshore accounts. It gave the names of 70 US customers (out of an estimated 20,000) to the agencies Monday, and the IRS independently found 30 more names. Though UBS has said it will no longer offer offshore accounts to US citizens, its continued pursuit by the DOJ and the IRS, along with Barack Obama's condemnation of UBS as a "tax cheat," shows some stormy skies ahead for the company's incredibly profitable wealth management division.

White House 2.0?

It's no secret that Barack Obama took the White House thanks in large part to his campaign team's Internet savvy. The interactive website, text-message organizing, YouTube channel and all the rest not only spurred people to action; they made Obama seem as accessible to them as their neighbor, their teacher, or their priest.

But campaigns are all about populism—the more people a candidate can connect with, the better. The president, by contrast, is usually cordoned off from the public and hardly ever released to take question; the Bush administration took this secrecy to an extreme. As he looks towards January, will Obama try and bridge the gap between an interactive campaign and the highly managed nature of the presidency?

Sure looks like it. Obama has already launched change.gov, a public interface for his presidency. He still has a YouTube channel, and has pledged to institute an online comment period before singing nonemergency legislation. Though Obama was less available to the press during the campaign than many reporters would have liked, as president he's pledged to put government business online. Perhaps an overhaul of whitehouse.gov is in the works?

After eight years of dealing with a secretive, inaccessible and often combative executive, it would be more than refreshing to have the exact opposite. If Obama does it right, Americans will feel like their country is theirs again; instead of an announcer for a leader, they'll have a mouthpiece.

UPDATE: A collection of over 60 open government groups has weighed in on Obama's plans for transparency, offering 69 specific policy suggestions.

Look Out for Bobby Jindal

200px-Bobby_Jindal%2C_official_109th_Congressional_photo.jpg If you know anything about the Governor from Louisiana, you know he's whip smart. Apparently, he also has some political instincts. Here's why he refused to be vetted as part of John McCain's VP search (from the WaPo via Andrew):

While the official reason that Jindal took his name out of contention was his lack of a desire to leave the Louisiana governorship, there was also real trepidation within his political inner circle that Jindal might wind up as the pick -- McCain was attracted to his comprehensive health-care knowledge -- and be caught up in what they believed to be a less-than-stellar campaign that could pin a loss on Jindal without much ability to change or control the direction of the contest.

Jindal, who is 37, was a congressman from 2004 until 2007, when he was elected governor. He was the secretary of the Louisiana Department of Health and Hospitals at 25 and president of the University of Louisiana system at 28. He turned down both Harvard Medical School and Yale Law School to pursue a Rhodes Scholarship after graduating from Brown.

Jindal has scheduled an upcoming appearance in Iowa, fueling speculation that he is considering a 2012 run for the presidency. (Jindal would be just 41.) The only question: Is Bobby Jindal too "elite" for the Republican Party?

Application for Bailout Funds Now Available Online — Go Get Some!

The Treasury Department is all about efficiency these days. The original bailout plan that Secretary Paulson proposed, which has been quietly dumped, was just three pages. I guess it's no surprise, then, that the application to get some sweet, sweet bailout bucks from the TARP Capital Purchase Program is just two pages. No joke, Taxpayers for Common Sense actually got a hold of the thing. If you're interested in landing a spare billion, give it a shot. It won't take you more than five minutes.

Wasn't one factor in the housing crisis the fact that lenders gave home loans to people without checking credit and obtaining documentation of assets, salary, and other signs of financial health? And yet you get piles of cash from the Treasury with less paperwork than what goes into car loans, student loans, and most credit cards?

Was Obama Economic Envoy Part of the Problem?

The Obama transition office announced on Wednesday that the president-elect will send two representatives to meet with delegates attending the G-20 economic summit being held this weekend: former Secretary of State Madeleine Albright, a Democrat, and former Congressman Jim Leach, a Republican. The pair, according to a press release, will hold "unofficial meetings to seek input from visiting delegations on behalf of the President-elect and Vice President-elect." Afterward, Albright and Leach will brief Barack Obama and Joe Biden.

Leach is both a curious and obvious choice. First, the obvious: he's a Republican who led the Republicans for Obama effort during the presidential campaign. By calling on Leach, who had a long career in the House as a liberal GOPer, Obama can show he does believe in bipartisanship. Now the curious: during part of his stint in Congress, Leach chaired the House banking committee and shared responsibility for passage of the Gramm-Leach-Bliley legislation, which broke down the wall between commercial banks and investment banking.

Since the current Wall Street collapse began, policy wonks have debated whether this 1999 law led to the present troubles. But let's look at an Obama campaign statement released last March (when he gave a speech on financial regulation) that referred to the Gramm-Leach-Bliley Act:

Instead of finding the right level of government oversight in a vibrant free market, we've let the special interests set the agenda. Changes in the financial landscape, driven by technology and globalization, made the 1930’s era Glass-Steagall Act--the New Deal era law that required that investment banking be kept separate from commercial banking--increasingly inefficient. While reform was desirable, the banking, insurance and securities industries spent over $300 million lobbying Congress to shape that reform to meet their own interests. In the two years before Glass-Steagall was repealed in 1999, financial service industries gave $58 million to congressional campaigns; $87 million to political parties; and spent $163 million lobbying Washington. But though the regulatory structure was outdated, the need for oversight was not. Unfortunately, in the rush to repeal the law to create immediate opportunities for certain Wall Street firms, little effort went into modernizing the government's supervision of the financial industry--to guard against the potential for conflicts of interest, to insist on transparency, or to ensure proper oversight of new and complex financial products or the dramatic rise of investment banks and non-bank financial institutions, like hedge funds and Structured Investment Vehicles. Nearly a decade later, our financial markets--and everyday Americans--are paying the price.

Paying the price--for a bill that Leach helped to usher through Congress. That's a tough critique.

Former Senator Phil Gramm, the onetime Republican chair of the Senate banking committee who now is a high-paid exec for troubled Swiss banking giant UBS, has received plenty of less-than-flattering attention this past year due to his legislative efforts to deregulate the financial industry, including his advocacy of Gramm-Leach-Bliley. (See my piece on Foreclosure Phil.) That's because Gramm was a top adviser (and close pal of) John McCain and had been mentioned as a possible Treasury Secretary in a McCain administration.

But Leach shares responsibility for some of this deregulation and for legislation that Obama has blasted as the handiwork of corporate lobbyists.

It's doubtful that Leach is in line to be Obama's Treasury secretary. Obama and his aides probably want to keep whomever that might be far away from this week's summit--in order to make sure that they are not tied to whatever comes out of the George W. Bush-brokered gathering (if anything). But Leach, who first made a national name for himself as an arms control advocate opposing Ronald Reagan's nuclear buildup, could be in line for something. After all, he was the most prominent Republican who spoke at the Democratic convention for Obama.

Whatever award awaits Leach--commission chair, ambassadorship--he ought to be kept away from financial policy. If only to show that Obama was indeed serious when he assailed the lobbyists-driven failings of Gramm-Leach-Bliley.

Treasury: We Can Haz Do-Over?

The Treasury Department will not buy any troubled assets from banks as part of the bailout, according to the Wall Street Journal, thus negating the central premise behind Secretary Paulson's original rescue plan for Wall Street. It's almost as if Paulson was unprepared for the crisis and that his three-page plan put forward to Congress wasn't particularly well thought out. Who would have expected incompetence from the Bush Administration?