Via Atrios, people are beginning to wonder whether Jeb Bush was responsible for approving Florida's purchase of a hefty chunk of the shitpile when he was Governor.
government money market debacle unfolding in Florida is raising
questions about former governor and presidential brother Jeb Bush's
possible involvement in the mess.
Florida froze withdrawals
from a state investment fund earlier this week when local governments
withdrew billions of dollars out of concern for the fund's financial
In the past few days, municipalities have withdrawn
roughly $9 billion, nearly a third of the $28 billion fund (which is
similar to a money market fund) controlled by the Florida's State Board
of Administration (SBA). The run on the fund was triggered by worries
that a percentage of the portfolio contained debt that had defaulted.
A majority of this paper was sold to SBA by Lehman Brothers
(nyse: LEH - news - people).
Bush, as the state's top elected official, served on a three-member
board that oversaw the SBA until he retired as governor in January. In
August, Bush was hired as a consultant to the bank. Lehman spokesperson
Kerrie Cohen, speaking on behalf of Bush, said they had no comment and
would not say when the bank had sold Florida the paper. SBA did not
Which made me wonder what happened to investigations into Jeb's role in the last piece of shitpile Florida bought: Over $300 million in Enron stock, also approved while Bush was in charge of Florida's State Board of Administration.
to a report by AFSCME Florida Council 79, Inside the Florida
State Board of Administration: Mismanagement Made the Enron Loss
Inevitable, the State Board of Administration (SBA) repeatedly
engaged in poor investment practices under the watch of its Board
of Trustees, chaired by Gov. Jeb Bush. Despite warnings from inside
and outside the SBA, the trustees failed to correct these problems,
leading to a stunning loss on Enron stock nearly three times greater
than that of any other state retirement fund. The trustees failed
to act as Alliance Capital Management, one of the pension fund's
money managers, continued to invest in Enron even as its financial
instability became public and the Securities and Exchange Commission
was investigating the corporation.
Michael Froomkin has a detailed description of what this means for FL here.
The possibility that Jeb presided over not one but two massive transfers of money from Florida's government coffers into the pockets of his friends raises the possibility he'll be remembered as more corrupt than his brother, Neil. I know it's a tough contest, trying to figure out which Bush brother is the most corrupt. But Neil Bush only indirectly stole from taxpayers with his Silverado Savings & Loan. And while it's pretty clear Neil's company was shafting taxpayers to put money in Ignite's bank accounts, I'm not sure if that matches the scale of Jeb's apparent wholesale emptying of Florida's coffers into corrupt and losing business deals.
Nearly three years after Paul Wolfowitz
resigned as deputy Defense secretary and six months after his stormy
departure as president of the World Bank—amid allegations that he
improperly awarded a raise to his girlfriend—he's in line to return to
public service. Secretary of State Condoleezza Rice has offered Wolfowitz, a prime architect of the Iraq
War, a position as chairman of the International Security Advisory
Board, a prestigious State Department panel, according to two
department sources who declined to be identified discussing personnel
matters. The 18-member panel, which has access to highly classified
intelligence, advises Rice on disarmament, nuclear proliferation, WMD
issues and other matters. "We think he is well suited and will do an
excellent job," said one senior official.
They don't yet have Wolfie listed on the website, so maybe there's some time to embarrass Condi out of putting Wolfie in an advisory position again. I suggest we start an embarrassment campaign by focusing on two issues.
Condi, someone committed a security indiscretion to give Wolfie's girlfriend a job at State. Are you sure you should repeat the mistake by giving Wolfie more access to classified information?
Remember that when people started complaining that Wolfie was giving Shaha Reza preferential treatment at the World Bank, his "solution" was to set her up at State? Remember Sidney Blumenthal's description of how unusual Reza's security clearance process was?
Riza was unhappy about leaving the sinecure at the World Bank. But
in 2006 Wolfowitz made a series of calls to his friends that landed her
a job at a new think tank called Foundation for the Future that is
funded by the State Department. She was the sole employee, at least in
the beginning. The World Bank continued to pay her salary, which was
raised by $60,000 to $193,590 annually, more than the $183,500 paid to
Secretary of State Condoleezza Rice, and all of it tax-free. Moreover,
Wolfowitz got the State Department to agree that the ratings of her
performance would automatically be "outstanding." Wolfowitz insisted on
these terms himself and then misled the World Bank board about what he
Riza, who is not a U.S. citizen, had to receive a security clearance
in order to work at the State Department. Who intervened? It is not
unusual to have British or French midlevel officers at the department
on exchange programs, but they receive security clearances based on the
clearances they already have with their host governments. Granting a
foreign national who is detailed from an international organization a
security clearance, however, is extraordinary, even unprecedented. So
how could this clearance have been granted?
State Department officials familiar with the details of this matter
confirmed to me that Shaha Ali Riza was detailed to the State
Department and had unescorted access while working for Elizabeth
Cheney. Access to the building requires a national security clearance
or permanent escort by a person with such a clearance. But the State
Department has no record of having issued a national security clearance
So, after turning State Department into a scam to allow Wolfowitz to break ethical rules and expose US secrets to a foreign national with no apparent clearance, Condi now wants to use a State advisory board to give Wolfie clearance himself.
Condi, aren't you a little ashamed at the way Wolfie used your agency the last time?
I've put together an excel file listing the documents included in Friday's document dump on the communications DNI McConnell had regarding the FISA amendment. I've still got a turkey hangover, so let me know if you spot any errors.
Here's what I've noticed:
There's a weird chronology behind the response to the FOIA request
The DNI's definition of duplicative is different than my definition of duplicative
The DNI must consider Republican correspondence classified
The DNI seems to lose Democratic correspondence
First, the chronology. EFF originally FOIAed documents on August 31, asking for records on both meetings with telecoms and discussions with Congress (there were actually two separate FOIA requests--see exhibits K and L here). On both FOIA requests, EFF asked for materials dating from April 2007 to "the present." On September 10, DNI responded to EFF saying it would expedite the EFF request.
Now look at the dates on the documents included. They start with one document from before the time frame--a March 23 letter from the SSCI leadership asking for a FISA bill. It's a pretty important document because it shows Congress taking the lead on this, which may be why they included it. But then the documents go through September 26--long after the August 31 request, and more than two weeks after DNI said it was expediting the EFF request. But then, it stops short of what are likely to be some interesting events leading up the October 18 SSCI bill.
There is probably a very reasonable explanation: that DNI took "present" to mean that time when it started working on the request. Though if that's true, it suggests DNI sat on the request for almost two weeks, before it started expediting anything.
Now, when DNI explained why the review process took so long (and presumably, why they couldn't give us document through the "present" of late November), one of the things they claimed they would do is remove duplicate documents.
As the records are located and forwarded to the IMO, the FOIA analyst handling this case conducts a continual analysis and review of the documents located. During the review process the analyst handling this case first removes any non-responsive and duplicative material from the records that are received. She then creates working copies of the documents and document indexes and assesses whether there would be any necessary consultations and/or referrals with those entities maintaining equity in the documents. She also reviews the records for the application of any FOIA exemptions. [my emphasis]
Which is why I find it curious that there are two copies of McConnell's May 1 testimony before SSCI and two copies of his September 18 testimony before HJC. I'll need to go back and look closely to see if these are just two revisions. But if not, it appears that this analyst, who spent at least two months reviewing these documents, still couldn't find all the duplicative documents.
Also, what's with the date on McConnell's September testimony to SSCI? It took place on September 25, but is dated September 20.
My house guests are gone, I'm recovering from the turkey (on the heritage turkey? It is better, but I'm not sure it's enough better to justify the price tag), and now I'm wading through Friday's document dump. These are the documents the EFF forced DNI to release after he had been stalling on their release; he was supposed to provide all correspondence between Congress and DNI and between the telecoms and DNI. More on how far short he fell of compliance in another post.
A lot of the attention so far has focused on this letter from Jello Jay to Mike McConnell, rebuking him for his bait and switch during the debates over the Protect America Act.
For the moment, though, I'm just as interested in this letter, from the Blue Dogs to McConnell. It memorializes a meeting the Blue Dogs had with McConnell that same day, August 1. I find it interesting for two reasons. First, it shows that McConnell was working the faction of the Democratic Party that would most likely split from the rest to give the Administration proposal a majority without widespread support among Democrats (which, of course, is precisely what happened just two days later).
The other interesting detail is how reasonable the Blue Dog proposal was. In particular, they note that they supported a revision that required individual warrants for Americans, and one that sunsets in six months. Though--of serious concern for the upcoming FISA debate--they state,
We also agree that it is important to address the issue of retroactive liability for private sector partners.
While their stance is not terrible, their understanding only addressed one of the real issues (the sunset provision) that remained up for debate that week--the ones that McConnell baited and switched over. So we don't know whether McConnell made his agreements with Democratic leadership already having undercut them in an agreement with the Blue Dogs. So I wonder--what was said in that Blue Dog meeting on August 1?
I just turned in the paper I've been working on. Luckily I've got a couple of these stashed away in the basement.
So I'm off to clean the house--I've got house guests coming in five hours. And then, tomorrow is Turkey Day for me--an odd little custom some friends and I have adopted that makes the whole process less stressful. We got the full Heritage Turkey thing this year; I'll let you know if it's worth its considerable price tag.
All of which means there'll be light posting until Sunday (rumor has it the football has already started for the weekend, but you wouldn't know it by what's on the TV).
But keep track of the site anyway. I've got an announcement or two in the next couple of days that may be of some interest. And Monday, I get to start my blog and bill paying frenzy I've been warning you all about.
I know, I know. The indictment against Dickie Scruggs looks bad for Dickie (though not, I keep emphasizing, Zach Scruggs, whose indictment given the evidence mystifies me). But I can't help but notice a few details from the short form of Judge Lackey's tell all (I'll look up the long form after I meet my damn deadline today). First, Judge Lackey's first thoughts after Balducci broached the subject of a bribe were for Balducci's future.
“I worried what would become of this young man, his wife, his
children,” said Judge Lackey. “He was one of the brightest legal stars
on the horizon that I’d come across, and I worried a great deal about
Balducci, by all appearances, also cooperated in the investigation, though the indictment doesn't care to tell us that detail. And note, by Lackey's own admission, it took some time after he recovered from his concern for Balducci before he started cooperating with the USA office.
Also note the emphasis that Scruggs' defense attorney puts on matters, when commenting on how odd it is that a key witness would do (one whose day job is supposed to be ensuring that the accused get fair trials) is run to the press for an interview.
Scruggs’s attorney, John Keker,
said: “I find it remarkable that this high-minded government witness is
talking to the national media, and it makes me wonder if he is
interested in notoriety rather than seeing that justice is done. I’ll
say this — he sure as hell didn’t get bribed by Dick Scruggs or anyone
else in his law firm.”
Well, yeah, he got bribed--at least first-hand--by Balducci, the guy that Lackey was so concerned for. Balducci isn't a member of Scruggs' firm.
One more point. I find it interesting to note that within a day of the indictment, the other firms involved in the State Farm Katrina suits tried to oust the Scruggs firm from the team. It sure raises questions about who might benefit from Scruggs' indictment. After all, the alleged bribe pertains directly to how lawyers get paid from past insurance settlements.
I guess those Mississippians weren't kidding when they were talking about knowing where the bodies are buried. They're a cut throat bunch, these southern gentlemen.
Karl Rove asserted on the Charlie Rose show recently that it was
Congress that pushed the Bush administration into war with Iraq. “The administration was opposed” to voting for a war resolution in the fall of 2002, Rove claimed. “It seemed it make things move too fast,” he argued.
morning, former White House chief of staff at the time, Andrew Card,
appeared on MSNBC’s Morning Joe and completely discredited Rove’s
SCARBOROUGH: We have to start with something that we all are talking about a couple of days ago where Karl Rove went on Charlie Rose and he blamed the Democrats for pushing him and the president into war. Is that how it worked?
CARD: No, that’s not the way it worked.
It's a good thing Card is willing to do so--because lord knows Joe Klein wouldn't call Karl on his blatant lies.
But I doubt that Andy Card did so out of generosity or a dedication to the truth. No, I think Card just wanted credit where credit is due. You see, Card has spent much of his career in the auto industry. It's hard to have a successful product launch if you're working with the Big Three. So I rather suspect that Andy Card's roll-out of Iraq warmongering in September 2002--with the help of WHIG and Judy Miller, of course--ranks near the top of Card's lifetime successes with such things.
Far be it for Karl Rove to deprive Andy Card of his due for that particular market launch.
Whooboy. It must be Dukestir day. Seth Hettena reports that Judge Burns just signed off on Wilkes' subpoenas.
No wonder Judge Burns is pissed. Carolyn Delaney, the federal
prosecutor in Sacramento who was given the task of investigating the
pre-trial leak in the Brent Wilkes case, has filed a declaration
indicating what steps she failed to take to find out the nothing she
didn’t bother to learn.
Here’s what Delaney says:
After reviewing the foregoing materials, I concluded
that an investigation in the circumstances of this case was unlikely to
succeed in identifying the source of any improper disclosure. Leak
investigations are among the most difficult investigations to conduct.
The disclosures reported here both in press accounts and by defense
counsel lacked any signature information. In addition, several dozen
individuals were involved in the indictment review process, and months
had passed prior to my appointment, making it exceedingly unlikely that
I could determine when each person first learned of particular
information and who else knew. Experience has taught me that leak
investigations in such circumstances are rarely successful.
Hettena suggests Delaney may have judged DOJ to be really uninterested in discovering who the leakers are. Given that Hettena himself is one of the people who should expect to get his subpoena shortly, I wonder what he means by that.
I'm still trying to sort through what it might mean that, after signing an unlikely plea agreement with the government, Duke Cunningham briber Tommy K has continued to engage in mortgage fraud, at the expense of the company most deeply buried in the shitpile, Washington Mutual (WaMu).
But let's start with the description John Michael's lawyers gave of Tommy K's method.
Kontogiannis would have a loan application prepared in the name of a putative home purchaser, sometimes with the knowledge of the person (who might be paid a fee) and sometimes without the person’s knowledge, for a property that Kontogiannis either had developed or had planned to develop. Fraudulent paperwork would be prepared related to, for example, income, assets, or appraisal. (Kontogiannis presumably would pay a kickback to the individual preparing these documents.) Applications would then otherwise be submitted for approval to various financial institutions in accordance with normal industry practices. At closing, all title documentation (such as the mortgage and note, the uniform settlement statement (HUD-1 form), title-insurance paperwork, and affidavits pertaining to the purchaser’s identity and intent of occupancy) would be fraudulently executed by a loan officer controlled by Kontogiannis. The settlement agent, using money that had been forwarded by the lender and placed in escrow, would issue checks to cover mortgage taxes, transfer taxes, recording fees, title insurance, and lender fees, as well as the net proceeds (the balance of the loan money), all of which (with the exception, sometimes, of lender fees) would go to Kontogiannis-controlled entities, including companies ostensibly owned by one of Kontogiannis’s daughters and controlled by Kontogiannis. The mortgage and note, however, would never be recorded, the taxes never paid, and title insurance never purchased. Instead, the funds that had been disbursed for these purposes would eventually be steered to another company ostensibly owned by one of Kontogiannis’s daughters but controlled by Kontogiannis.
These fraudulent loans would ultimately be sold into the secondary-mortgage market to a lender who would be led to believe, based on the loan documentation provided by Kontogiannis’s agent, that the loan had been sent for recording and that all taxes and recording fees had been paid. A Kontogiannis controlled financial-services company, typically Parkview Financial, Inc. (“Parkview”), would assume responsibility for making monthly payments on the loan. So long as timely payments were made, the loan would be viewed by the new owner as performing and, consequently, never questioned.
Kontogiannis’s greed, however, did not stop there. He would then market the property to an end-user, whose financing was often out of Kontogiannis’s control. Upon closing with the end-user, Kontogiannis would take a second bite from the mortgage-fraud apple: iin light of the fact that the first mortgage on the property had never been recorded, the settlement agent would release the net proceeds of the second loan directly to a Kontogiannis-controlled company without paying off the existing loan because the latter had never been recorded. For its part, the lender who had purchased the first mortgage would not know that the property had been sold again and that, consequently, its position in the chain of title had been compromised. [my emphasis
So basically, Tommy K would double dip on mortgages on houses that no one (except for at least one corrupt Congressman) was really buying. Here's where we get into WaMu's role in this. The "one company alone" in the following paragraph must be WaMu, given the government's assertion that WaMu had purchased $50 million in Tommy K's fraudulent loans.
The volume of Kontogiannis’s fraudulent loans as of June 1995 is shown by one of Parkview’s bank-account statements. See Exhibits 12 and 13. The statement reveals mortgage payments on 140 different properties. One company alone had purchased over 100 of the loans in the secondary market, with an average loan amount of approximately $500,000. That publicly traded and federally chartered bank thus had approximately $50,000,000 in loans that were potentially worthless because, as a result of Kontogiannis’s scams, none of the mortgages were recorded in primary position as the bank had assumed. That, in turn, meant that if any of the loans defaulted, the bank would not be able to foreclose on any real property and thereby recoup any of the losses. Needless to say, the impact of such losses would be profound both on the individual bank and on the shareholders of the company. Even scarier, that bank may have since purchased many more such loans from Kontogiannis. [my emphasis]
Note, Michael's lawyers are citing how many bad mortgages WaMu had bought in 1995, not how many they bought by 2007. And, as they helpfully point out, Tommy K may well have continued this fraud after he signed his plea deal in February. That's certainly the implication of this passage from yesterday's filing.
...as a direct result of being contacted by Michael's defense
counsel, Washington Mutual contacted the government with information
regarding Mr. Kontogiannis's continued illegal activity. [my emphasis]
Michael's filing was in August, which would leave several months after Tommy K's plea deal for him to continue to sell Greek shitpile to WaMu. And of course, the government didn't bother to tell anyone that Tommy K had been selling Greek shitpile until June, which appears to have allowed WaMu to continue to buy up Tommy K's fraudulent loans. Five or seven months of Greek shitpile, depending on how you're counting--that might be a significant amount of shitpile.
Now, I might feel bad for WaMu. Except for the fact that they're pretty damned corrupt themselves, and seem to have been in the business of making sure they didn't know if they bought shitpile. Here's what Andrew Cuomo alleges them to have done.