Sports are a fickle thing, they bring out the best and the worst of people. Professional sports franchises often come, in a way, to define their cities. Pittsburgh, home of the Steelers. Boston, home of the Red Sox. Detroit, home of the Red Wings. But what is their intrinsic value? What does it mean when they leave? The City of Phoenix may be about to find out:

Less than an hour before the National Hockey League commissioner planned to broker a deal to sell the Phoenix Coyotes and strip team owner Jerry Moyes of his duties Tuesday, Moyes filed for bankruptcy to sell to his own buyer.

Moyes, as part of a Chapter 11 reorganization filing, agreed to sell the team for $212.5 million to a BlackBerry wireless magnate who plans to move the team to a yet-to-be determined location in southern Ontario, Canada.

The move is not a certainty. Already, the NHL and Glendale, which leases Jobing.com Arena to the Coyotes, have objected to Moyes’ tactics. And other investors could outbid BlackBerry executive Jim Balsillie’s PSE Sports & Entertainment LP.

But the Coyotes, who have played in metro Phoenix since 1996, habitually have lost money in the desert, first when they shared an arena with the Phoenix Suns in downtown Phoenix and most recently in Glendale.

Moyes, who since 2001 has invested more than $310 million in the team, declined to be interviewed. Earl Scudder, his financial and legal adviser, said Moyes had no option but to file for bankruptcy because that was the only way to void the team’s lease with Glendale.

There are so many threads here it is hard to know where to start. The arrogance of an owner. The bankrupt state of a national sports franchise. And not just any hockey franchise either, one run by the Great One, the greatest hockey player ever, Wayne Gretzky and playing in one of the newest most state of the art single sport dedicated stadium in the league. Oh, and hey, does the line "no option but to file for bankruptcy because that was the only way to void the team’s lease with Glendale" not sound an awful lot like the mantra of the Obama Administration and the auto manufacturers trying to shed those pesky dealership agreements?

So, apparently the market value of the Phoenix Coyotes is 212.5 million – if the team is shipped off to somewhere in southern Ontario, Canada. I don’t know the value if they stay in Phoenix, we may find that out soon. What is the value of the team to the city above and beyond that and how should it play into consideration in BK Court? Now, with the Coyotes and Phoenix, this is somewhat of a theoretical exercise compared to big time franchises like the Steelers, Red Sox etc., but there is some value there. Should that be considered?

What do you do about the stadium lease? The presumption is that can be blithely voided. This stadium is a huge issue:

The move shocked Glendale, which contributed $180 million for the $220 million arena that opened in 2003. For the city’s hefty investment, the team signed a 30-year agreement with an early-termination penalty of more than $700 million.

There are only so many ice capades shows and big enough concert acts to fill a joint the size of Jobbing.com Arena. What becomes of the city’s investment and the property that resulted? What about the fans that have been loyal to the Coyotes, are they owed anything. In all honesty, Phoenix is a Suns, D’Backs, Sun Devils and, for the time being anyway, Cardinals town. The Coyotes were always an afterthought, but still, there are more than a few. This has happened to more established franchises to a degree before, to wit the Seattle SuperSonics most recently.

I fully understand that I have asked more questions than I have answered, but there are some perplexing ones in play here. I am interested in the thoughts of people from different regions and perspectives. Oh, and hey, to our Canadian friends, do you really want the Coyotes back? After all, Phoenix stole them from Winnipeg to start with. What comes around goes around, eh?

graphic by allthingscahill

Sometimes tectonic shifts are underfoot and society fails to recognize the acts and effects. Such is the case with journalism and its daily outlets, newspapers and television. Newspapers are dying left and right, those that are not are struggling to stay alive and relevant. The most recent glaring example is the Boston Globe.

The Boston Globe has been published for over 137 years and, over that period, became one of the grand ladies of the news press. You would think that the purchase of, and partnership with, the Globe in 1993 by the New York Times would place the Globe in a position of strength in even these perilous times. Not so. From Eugene Robinson in today’s Washington Post:

Despite the whole Red Sox vs. Yankees thing, employees of the Boston Globe were mostly relieved in 1993 when the paper was bought by the New York Times Co. for an astounding $1.1 billion. If the era of local family ownership had to end, nestling beneath the wing of one of the world’s great newspapers seemed the best alternative. And if the Times was willing to pay so much, it must have been serious about putting quality ahead of the bottom line.

That was then. Now, after several rounds of painful cutbacks and layoffs at the Globe, the Times is squeezing a further $20 million in savings from the Boston newspaper’s unions — and threatening to shut down the paper if the demand is not fully met. The economics of our industry are cruel and remorseless, but still it’s alarming to witness what looks like an act of cannibalism.

To be fair, the Globe is reportedly on pace to lose about $85 million this year. The New York Times Co. is hardly in a position to swallow a loss of that magnitude, given that the company’s flagship newspaper is waging its own fight against a rising tide of red ink.

So that is the background for the discussion I want to have. My proposition is that it is not just the financial status of the major newspapers in decline, it is also, and even more significantly, the quality of content. Quite frankly, the traditional press has become deficient in both content and quality. I am not sure that it has ever been so apparent as in the last two to three weeks on the issue of the complicity of the United States government in a demented torture regime.

We started this discussion in earnest a little over two weeks ago when Marcy Wheeler scooped the world by revealing that Khalid Sheikh Mohammed Was Waterboarded 183 Times in One Month and Abu-Zubaydah 83 times. Marcy didn’t get handed the information by a governmental press flack and she didn’t print it as a result of a leak from some coddled and conflicted secret source with an agenda. Nope, she did it the old fashioned way, she earned it by doing the tedious grunt work of reading the memos and documents. The very work the traditional press shirked. Perhaps they couldn’t fit it in between their martinis and cocktail weenies.

Marcy’s scoop out in front of the rest of the media world was not isolated; she did it again yesterday in relation to John Conyers, head of the House Judiciary Committee, along with Jerry Nadler, Howard Berman and Bill Delahunt writing to the National Archives to demand Zelikow’s dissenting memoranda and related material. In fact, the only two news sources even close to Emptywheel on the story were Spencer Ackerman at the Washington Independent and Zach Roth at TPM Muckraker, two other internet based sources. And Emptywheel not only reported the letter and contents, she was spot on with the legal analysis of what it really meant:

That’s because if the memo isn’t there, then not only is it suggestive of criminal intent, but it also violates the Presidential Records Act.

That is precisely right, and precisely what wasn’t reported by our old friends the traditional press, who were late on the story and lame on the analysis. The first main paper to hit the story, the Washington Post, finally got something up on their website last night and datelined for today, May 5. The Post came in long after Ms. Wheeler had posted, and published an article containing no cogent analysis and rehashed from months ago tidbits that the coming OPR report may make discipinary referrals for Yoo and Bybee. Thanks for nothing WaPo, we already knew that. This is the same sugar coated type of nothing I commented on in relation to the secret source love poem Mark Mazzetti and Scott Shane wrote Sunday to assist the Condi Rice/Porter Goss rehabilitation tour:

I am a little disturbed by the sanitary descriptions and deference Mazzetti gives it even now. The stories of “the dispute and concern” in the Bush administration are left standing as some kind of reasonable discourse. It wasn’t. It was the discussion of a group of children that murdered the neighbor’s dog for kicks and didn’t want to admit it. It should be treated as what it is, not sugar coated and given the patina of reasonable discourse.

The reporters have become the village they were designed to report on. Self puffed on their own importance and place. The working press is a critical part of society and a necessary hedge on government. The fourth estate is important; they better wake up and get their butt in gear, because right now they are just getting it kicked.

So the new paradigm involves dedicated and dogged blogger journalists competing head to head with the biggest, best and brightest of the traditional press. It is not an unusual occurrence when a blogger like Marcy Wheeler takes the old newsers to the cleaners, it is now such an everyday event that we no longer even notice. Pretty soon they will even be winning the Pulitzers and other lofty prizes of journalism, and rightly so.

All of the foregoing having been said, I want to remind people of the effort we have underway to gear up the work, effectiveness and exposure of Marcy Wheeler. Two weeks ago, Jane Hamsher started the Organic Blogging Project to do just that. The folks that read here have been nothing short of remarkable in their response, having raised in excess of $64,000 to date. But I want to renew the call to action at this point and make sure that everybody knows this is not just another standard (even if laudable) "pledge week" effort to help pitch in for a blogger. This effort has as its goal to create a new working investigative dynamic to pick up where the normal pros have dropped off.

Marcy Wheeler, Emptywheel and Firedoglake are The New Journalism. Support the future and start something new. This is an opportunity to invest in the startup and be a part of something transformational. As Muhammed Ali would say, shock the world!

Get in on the action here.

graphic by BobsViews

It was late and welcome news Friday afternoon when Judge Vaughn Walker’s decision came in. Marcy already gave some cogent analysis on where the punches were pulled in the decision and where they landed. I actually think (yes, yes, I know I am usually the voice of pessimism) that the punches landing will prove to far outweigh those pulled.

First, and foremost, Judge Walker has kept the suit alive in the face of all the adversity thrown in his path by both the Bush/Cheney Administration and, now, that of Obama. This fact alone entitles Judge Walker to a king’s ransom of gratitude from anybody that gives a tinker’s damn about the rule of law and the Fourth Amendment, because Obama has been following Bush in pulling every stunt in the bag out to defeat the right of citizens to hold their government accountable for the illegal and unconstitutional acts it perpetrates on them. Take the recent unconscionable assertion of sovereign immunity for instance. Please.

The seminal importance of Walker’s decision to proceed simply cannot be overstated. It is, quite simply, a ruling by a Federal court, albeit it a preliminary one, that the "Bush Program" was illegal. And keep in mind that it is not just the al-Haramain case that hangs in the balance of this determination, but potentially all the consolidated cases, including Jewell, too. As Marcy has explained, the ability of the of the plaintiffs in the remaining consolidated cases to establish the existence of illegal surveillance, separate and distinct from al-Haramain, may be effectively non-existent due to the state secrets assertion (even discounting the heinously bogus sovereign immunity assertion) made by Bush/Cheney and now Obama. In the face of the state secrets claim there is no way for the plaintiffs to establish standing as plaintiffs having been illegally surveilled. Because of "the sealed document", in the form of a surveillance log that was inappropriately forwarded to al-Haramain’s attorneys, the plaintiffs in al-Haramain have the ability to establish directly illegal surveillance.

So there is that, but there is also the process that Judge Walker has laid out in order to carry the action forward down the tracks. Having reviewed the sealed document, and the other filings made under seal (including those detailing the notorious "inaccurate information" previously lodged by the Bush administration), and determined that the case will proceed, there has to be a path crafted to allow the case to proceed and still protect the secrecy of information that is legitimately national security protected. As Marcy said:

In other words, Walker has said, "I’ve read the secret evidence in this case and now I want you guys to figure out how to move foward with this case."

Which pretty much implies that, having read the evidence, Walker believes it will move forward.

Oh yeah, this case is moving forward alright, and Walker has point blankedly reminded that neither he nor the 9th Circuit will permit any further interlocutory appeals (interim appeals before the case has reached a final judgment) on the core issues of his jurisdiction over the case and the sufficiency of the claim going forward. The judge has read the secret evidence and is letting the world know that he has found it compelling enough to establish, in at least a prima facie manner, that illegal surveillance has occurred. Not a kook, not dirty left wing bloggers, a real live federal jurist believes that George Bush and Dick Cheney committed illegal acts with their surveillance program. It can no longer ever be called a baseless allegation anymore; in fact, the presumption from now on should be that their program was illegal and unconstitutional.

So, what happens now? Walker reiterates that he will go forward with litigation of standing (and it is crystal clear that Walker believes standing exists). The DOJ is ordered to meet and confer with the plaintiffs, with the goal of submitting to Walker, by May 8, a stipulated protective order establishing protocols for litigating standing under secure conditions for the sealed documents and sensitive information. Don’t let the droll legal language and brevity of the order fool you, this is huge; and hugely problematic for the government and their reliance on the FISA Amendments Act retroactive immunity provisions.

Walker’s order is also crafted so narrowly as to make it pretty much non-appealable. The DOJ will have to decide whether to continue stonewalling Walker, now that the DOJ has no recourse to the Ninth Circuit. You have to wonder what Walker will do if the DOJ continues to stonewall him. No doubt the DOJ is wondering the very same thing. I have an inkling that he is loaded for bear and ready for their intransigence. Planning and thinking two steps ahead of the DOJ has become Vaughn Walker’s hallmark. And keep in mind that Federal judges have been getting very testy with the DOJ in this area lately, witness Judge Emmett Sullivan in the Stevens case:

"How can this court have any confidence whatsoever in the United States government to comply with its obligations and to be truthful to the court?"

The DOJ’s chickens of perfidy have come home to roost in a hornet’s nest. How tragic; how deserved.

Now, I want to address one other aspect of Walker’s order that I think has been overlooked in the early analysis. Walker has not just told the respective parties to get together and determine how to move forward, he has given them a specific path to do so. And it is a path that is already established and accepted by the DC Federal Court in a case with certain national security implications:

The United States District Court for the District of Columbia has successfully employed protective orders in the In Re Guantánamo Bay Detainee Litigation, D DC No Misc 08-0442 TFH, even providing for the use of top secret/sensitive compartmented information (TS/SCI). See, for example, the documents at docket numbers 409 and 1481 in that matter. The United States has advanced no argument that would suggest a reason why the court’s use of a protective order in instant matter modeled on those in use in the Guantánamo Bay would not adequately protect the classified information at issue here.

Interesting that the courts are doing what the Congress is too lame to get accomplished. It is long past time that a process similar to the Classified Information Procedures Act (CIPA) be devised for civil cases in addition to criminal, and Judge Walker has clearly taken it upon himself to forge his own.

It could be argued that Judge Walker engaged in a bit of a punt in ordering the parties to attempt to form an agreement on how to proceed when they have been at diametrical loggerheads on the issue from the get go. That said, I think it was a necessary step for the sake of the record going forward. If the court had not given the parties an opportunity to negotiate and fashion a stipulation, that may well have created a sore spot as far as the appearance of fairness when the case really is viewed from the vantage of appeal after it truly is done and over. It may be tedious and time consuming to the rest of us, but Judge Walker is, as he has been all along, setting this up masterfully.

Lastly, note that Judge Walker gave the return date for a stipulation to protect sensitive evidence and information, and put the parties on a relative short leash:

The parties shall submit to the court a stipulated protective order on or before May 8, 2009. If the parties are unable to agree on all terms, they shall jointly submit a document containing all agreed terms together with a document setting forth the terms about which they are unable to reach agreement and the respective positions of the parties with regard to each such term.

Marcy was, I believe, dead on when she opined that Walker was setting the various "interlocking" cases that comprise the consolidated cases lodged in Judge Walker’s court up to be managed as a whole. Just so that it is clear, al-Haramain, as a case, exists in its own cause of action and as part of the "consolidated cases" docket. Yesterday’s order was captioned in the consolidated cases docket initially (although I suspect it will eventually be docketed under the separate al-Haramain cause as well). At any rate here is another recent scheduling docket entry under the consolidated cases:

Set Schedule/Time for Hearing: Opposition to the United States’ motion for summary judgment in the State Cases – 3/20/2009. United States Replies in support or its motion and Telecomm carrier defendants Respond to the govt’s motion and any Responses thereto – 4/9/2009. Sur-reply of the State Officials – 4/23/2009. Hearing on the United States’ Motion set for 5/7/2009 at 10:30 AM in Courtroom 6, 17th Floor, San Francisco. (cgk, COURT STAFF) (Filed on 3/3/2009)

So Vaughn Walker has given the al-Haramain litigants 24 hours after the threshold hearings on the consolidated cases to come up with a stipulation. Yeah, I would say he is lining his ducks up; you betcha. It has been a wonderful thing to watch Judge Vaughn Walker ride herd on this the various consolidated cases and be the sole and silent sentry protecting the rule of law and the Constitution for the people.

As a parting shot, remember the title to the post? The al-Haramain Case Stays On Track. Just like a train. Atrios would love this, al-Haramain really has, or is, a modern train. Go figure.

The AP reports that along with John Deutsch and Michael Hayden, George Tenet and Porter Goss have criticized Obama’s release of the torture memos.

Of course Tenet and Goss would criticize Obama’s decision. Both of them are personally implicated by revelations in the memos.

As I noted (as did William Ockham–I stole his transcription), the May 30, 2005 memo makes it clear that people at CIA Headquarters ordered Abu Zubaydah to be waterboarded additional time(s)–for the 83rd time, perhaps?–even after interrogators working with him directly believed he was complying with their demands.

This is not to say that the interrogation program has worked perfectly. According to the IG Report, the CIA, at least initially, could not always distinguish detainees who had information but were successfully resisting interrogation from those who did not actually have the information. See IG report at 83-85. On at least one occasion, this may have resulted in what might be deemed in retrospect to have been the unnecessary use of enhanced techniques. On that occasion, although the on-scene interrogation team judged Zubaydah to be compliant, elements with CIA Headquarters still believed he was withholding information. [Redaction of more than one full line] See id, at 84. At the direction of CIA Headquarters interrogators, therefore used the waterboard one more time on Zubaydah. [Redaction of ~3/4 of a line] See id, at 84-85.

We can’t pin this on Tenet directly, though we do know Bush was pressuring Tenet at the time to deliver some kind of intelligence that would substantiate Bush’s public assertions that Abu Zubaydah was important within the Al Qaeda ranks.

"I said he was important," Bush reportedly told Tenet at one of their daily meetings. "You’re not going to let me lose face on this, are you?" "No sir, Mr. President," Tenet replied. Bush "was fixated on how to get Zubaydah to tell us the truth,"

And in any case, we know that the one time when even the CIA agrees Abu Zubaydah was waterboarded "needlessly," it was done on the order of CIA headquarters under Tenet’s leadership.

Also as I noted, the May 10, 2005 "Techniques" memo reveals that Abu Zubaydah’s interrogator far exceeding OLC guidlines on how to administer waterboarding. 

The IG Report noted that in some cases the waterboard was used with far greater frequency than initially indicated, see IG Report at 5, 44, 46, 103-04, and also that it was used in a different manner. See id. at 37 ("[T]he waterboard technique  … was different from the technique described in the DoJ opinion and used in the SERE training. The difference was the manner in which the detainee’s breathing was obstructed. At the SERE school and in the DoJ opinion, the subject’s airflow is disrupted by the firm application of a damp cloth over the air passages; the interrogator applies a small amount of water to the cloth in a controlled manner. By contrast, the Agency Interrogator …  applied large volumes of water to a cloth that covered the detainee’s mouth and nose. One of the psychologists/interrogators acknowledged that the Agency’s use of the technique is different from that used in SERE training because it is "for real–and is more poignant and convincing.") see also id. at 14 n14.[my emphasis]

Not only does this implicate Tenet–who was DCI at the time–for further mismanagement, but it implicates his successor Porter Goss.

Goss was in charge when the CIA–having been warned not to destroy the torture tapes–did so anyway. And this OLC memo provides proof that CIA had more to worry about than just that the identities of those depicted administering torture on the tapes would be revealed. We know that the tapes were clear evidence that the interrogators were breaking the law–exceeding even the expansive guidelines laid out in the Bybee Memo on how waterboarding should be used. This memo, in other words, proves what we already suspected–that the torture tape destruction served to obstruct justice. 

And that destruction happened on Portor Goss’ watch, even after he had been warned not to let the tapes be destroyed.

So its no wonder that Tenet and Goss would object to the release of these memos. 

What is surprising, though, is that journalists wouldn’t begin to explore why Tenet and Goss feel so strongly about it. 

graphic by politicalbase

The decision just came to me hot from a source involved in the case. Judge Walker has entered his order on al-Haramain. [pdf]

The court has, in keeping with its orders dated January 5 (Doc #537/57), February 13 (Doc #562/71) and February 19 (Doc #566/75), reviewed the Sealed Document and the parties’ various submissions on the subject of appropriate measures to prevent disclosure of classified information while allowing “both parties [] access to the material upon which the court makes a decision.” RT, Hearing held January 23, 2009 (Doc #532/67) at 34 and Doc #562/71 at 2,3.

The United States, in response to the court’s directive to “inform the court how it intends to comply with the January 5 order” (Doc #562/71 at 3) has offered up three similar-sounding alternatives all of which appear geared toward obtaining a stay of this court’s proceedings and review by the court of appeals, even though its simultaneous attempts to obtain review as of right and by means of an interlocutory appeal of the January 5 order failed in February (Doc #562/71 and Al-Haramain Islamic Foundation, Inc v Obama, No 09-15266 (9th Cir February 27, 2009)). As both this court and the court of appeals have determined that this matter is properly before the court, the United States should now comply with the court’s orders.

Accordingly, the parties are hereby ordered to meet and confer regarding the entry of an appropriate protective order which shall be entered herein before the court rules on the merits. The United States District Court for the District of Columbia has successfully employed protective orders in the In Re Guantánamo Bay Detainee Litigation, D DC No Misc 08-0442 TFH, even providing for the use of top secret/sensitive compartmented information (TS/SCI). See, for example, the documents at docket numbers 409 and 1481 in that matter. The United States has advanced no argument that would suggest a reason why the court’s use of a protective order in instant matter modeled on those in use in the Guantánamo Bay would not adequately protect the classified information at issue here.

The parties shall submit to the court a stipulated protective order on or before May 8, 2009. If the parties are unable to agree on all terms, they shall jointly submit a document containing all agreed terms together with a document setting forth the terms about which they are unable to reach agreement and the respective positions of the parties with regard to each such term.

The court will then consider the submissions and enter a protective order under which this case may resume forward progress.

IT IS SO ORDERED.

Bottom line folks, the case is going to proceed and Walker is not going to sanction the matter being taken to the Ninth Circuit on another interlocutory appeal. All outstanding news!

TPMM has two posts noting that DOJ has been reluctant to turn over to the Oversight Committee the documents pertaining to its Delayed Prosecution Agreement with AIG, whereas SEC has been more forthcoming.

Last month, as we noted at the time, House Oversight committee chair Ed Towns formally asked the Justice Department for records kept by a government monitor, who since 2004 has had access to high-level internal deliberations at AIG.

But DOJ seems to be dragging its heels.

Today — 15 days after Towns made his legally binding request, and 13 days after the deadline he set for Justice to respond — department spokesman Ian McCaleb told TPMmuckraker: "We’re working on submitting a response." Asked what was causing the hold up, McCaleb declined to elaborate.

At issue is information compiled by James Cole, a lawyer with Bryan Cave, who was placed as a government monitor inside AIG, as part of a 2004 deferred prosecution agreement after AIG had been charged with helping clients avoid taxes. As Towns put it in his letter, Cole "had a seat at the table" for the string of cataclysmic developments at AIG over the last few years. Whatever reports or other information he compiled could therefore be of great value to investigators, like Towns, who are probing the causes of last fall’s financial collapse, which was triggered by the failure of AIG’s Financial Products unit.

There are a couple of data points that might begin to explain DOJ’s reluctance to turn over what it has received from Cole.

First, DOJ signed not one, but two deferred prosecution agreements with AIG. The first, in 2004, pertained to a scheme AIG-FP engaged in with PNC to shift assets off its books. The second, in 2006, pertained to a deal with Gen Re, again to shift assets around to hide risk. Now, both these schemes go back to 2000 and 2001; the actions AIG took did not take place while Cole was monitoring it. Nevertheless, AIG got two bites at the Delayed Prosecution Agreement, which does not appear to be true for any other corporations as of May of last year.  And, as this article on these early scams make clear, the intent was largely the same with both: to hide risk. So you might think AIG’s failure to admit to the second scheme until 2005 would undermine its claim to be cooperating in good faith with the DPA in 2004.

More interesting, though, is the squabble that the Fraud section at DOJ had with the US Attorney’s office in CT a few weeks back.  In the last year, DOJ has won convictions of five of the executives involved in the Gen Re scheme (that is, prosecutions that arose out of the second DPA). Yet the judge in the case actually awarded all the defendants shorter prison terms than federal guidelines suggest. And since then, prosecutors from CT and Fraud seem to have disagreed whether to force the defendants to remain in custody pending appeal.

In December prosecutors from DOJ in D.C. and the U.S. attorney’s office in Connecticut, which handled the case together, filed a motion against giving GenRe’s former CEO bail pending an appeal of his conviction. (The defendant, Ron Ferguson (pictured, left), was later sentenced to two years in prison.) Then in January the government withdrew its motion, and he was granted bail.

Prosecutors repeated the dance in February, when they filed a 25-page motion opposing bail pending appeal for another defendant, a former AIG executive, who had been sentenced to four years in prison. Two weeks ago, prosecutors withdrew the objection. The defendant, Christian Milton (pictured, second from right), and the others will now almost certainly remain free.

Apparently in response to the most recent of these head fakes, the prosecutors from DOJ’s Fraud section withdrew from the case.

After the second about-face by the government, two prosecutors from DOJ’s fraud section, Principal Deputy Chief Paul E. Pelletier and Assistant Chief Adam G. Safwat, withdrew from the case, signaling that there was a spat between Washington and Connecticut prosecutors over the bail issue.

I’m particularly interested in Pelletier’s withdrawal from the case. His name was on the DPAs in both 2004 and 2006, and appears to be the one person who has been involved in the AIG cases from the start. (Note, too, that the several AIG cases involve several jurisdictions, including at least ED VA, Indiana, and CT, so the federal focus seems key to the case.) And of course, Hank Greenberg is understood to be one of the unindicted co-conspirators in this case. Just as significant, I think, the defendants in this case repeatedly tried to get evidence that might have shown how widespread the practices they were indicted for were in AIG–and that various law firms involved should have or did discover the schemes earlier on. In some cases, the defendants asked for materials right up through the restatement of earnings in this case in 2005–that is, for a time when Cole was already monitoring AIG. For the most part, these requests for discovery were denied.

Now, none of this explains why DOJ would be squeamish about what it got from Cole. It may be they’re still protecting a case against Greenberg. It may be DOJ’s own turmoil with regards to AIG, particularly with Pelletier having withdrawn from at least this case against AIG.

But it seems there are a number of potential reasons why DOJ would want to shield what they should have known about AIG going back five years. 

Many of you who kept linking to the news on the cable cuts in CA’s South Bay were pointing in this direction. (h/t Susie)

This week in the San Francisco Bay Area, the fiber-optic cable network was purposely sliced at four distinct locations. Where a hacker cannot succeed, bolt cutters will do. Read more in The Wall Street Journal’s Digits blog. Once the cables were cut, Internet service was flaky for the region and completely out for 50,000 customers. On top of that, the landlines would not work and the cell-phone towers in the area went dead.  [snip] How much work would it take to find some choke points that you could cut for the purposes of disrupting data communications in an area? How would this affect the so-called smart grid? The peculiar nature of the four cuts around the Bay Area indicated to me that someone was mapping how they would affect the region, keeping in mind that by cutting the cable in key areas you might be able to take down half the country. If more cuts are made in the future, then someone is trying to reverse-engineer the network to find the most vulnerable points of disruption.

The MarketWatch article speculates that the intentional cuts were an attempt to map how to shut off parts of the system. But what it doesn’t question–but a lot of you already had–was whether these intentional cuts had anything to do with the cable cuts made in the Middle East last year, which took down Egypt and Pakistan, and much of the rest of the Middle East.

We know whoever cut the cables last year (intentionally or not or some combination thereof) demonstrated clear choke points in international internet traffic. Now is someone trying to do the same within the US?

There’s an aspect of the Louis Freeh interview on Frontline I find fascinating.

In defense of his client, Saudi Prince Bandar, on allegations that Bandar received billions in bribes associated with a huge BAE defense contract, Freeh mostly tries to pretend there’s a meaningful distinction between the Saudi family and high government officials in it. Thus, the plane and estate that Bandar got in connection with the BAE deal are actually government-owned facilities he has use of.

And conveniently, Freeh hasn’t looked at the Swiss Bank Accounts or the Yamamah contract, so he can’t comment on their legality.

But I’m also fascinated by a more subtle tactic Freeh uses–to implicate high ranking Americans (and Brits) in the use of the funds. 

He explains away that structure of the al Yamamah contract to Congressional intransigence during the Reagan Administration. Congress wouldn’t let the Administration sell planes to Saudi Arabia, so what was Reagan to do except encourage Margaret Thatcher to set up a big corrupt contract to bypass this restriction?

Freeh: In other words, the United States, was not able to sell the Saudis F15s, and I think you understand the origin to this contract. The King sent Prince Bandar, my client, to President Reagan with very specific instructions, “Buy F15s.” And of course the United States had armed the Saudi armed forces for the last 20 years before that.

President Reagan said to my client, “Congress will never approve the sale of F15s.” My client then went up to the hill, spoke to senior leadership on both sides of the aisle, and they said, “We can’t authorize the purchase of F15s by the King of Saudi Arabia.” He went back to President Reagan who said, “Go talk to Maggie Thatcher,” which my client did. That’s how Tornados and the treaty, not the contract but the treaty between the two countries, was originated.

He wanted to buy the planes in the United States.

[snip]

So there was only one bidder here by default and that was the British Aerospace Systems and the Toranado, at least as the contract began. So the way the treaty was set up, if the Ministry of Defense and Aviation wanted to purchase U.S. arms, U.S. arms could be purchased through BAE and DESO, which was the U.K. Ministry that did the purchasing, and that was sort of a way to purchase arms, transparent way to purchase arms, but in a way that did not deal with the objection of the U.S. Congress to the selling of American equipment to the Saudis.

While we knew that was the purpose of the contract, I still find it galling that Freeh dismisses Reagan’s effort to bypass Congressional restrictions so easily.

And then Freeh makes a point of listing the Presidents who flew on Bandar’s plane the plane the Saudi government allowed Bandar to paint and use almost exclusively. 

Louis Freeh: No, absolutely not, absolutely not. The plane was assigned to him. He traveled more than the Minister of Foreign Affairs because of the intricate relationship he had between three United States presidents, Lowell, and the King of Saudi Arabia. But the king used the plane, three of our U.S. presidents used the plane, prime ministers used the plane. The fact of the matter is, you know, whatever arguments and inferences you want to make, he did not own the plane.

I’m assuming the three Presidents were Bush I, Clinton, and Bush II. But is this news? I mean, last I checked, the President–whichever one you’re talking about–has his own plane, Air Force One. But apparently all our presidents make a habit of flying around on Bandar’s own plane.

Why?

In any case, I find Freeh’s inclusion of those two details rather curious. At one level, he spends a lot of time excusing the Brits for dismissing the investigation after Bandar threatened to stop cooperating on terrorism.

Louis Freeh: No, not necessarily. If the President of the United States told the FBI, maybe this former supervisor’s equivalent, “Look, I know this is an important criminal investigation but for political reasons and for foreign policy reasons, we don’t want the Department of Justice to continue the investigation because there are very dangerous and impactful consequences that will flow from that investigation” the prosecutor is required to close that investigation.

The prosecutor can’t conduct totally unrestricted inquiries particularly if it impacts on the national security or the foreign relations of a country. So I think that’s what happened in England, not in the United States by the way, and I don’t find that to be unusual, given my experience and given the sensitive issues that were involved in this case. 

At the same time, neither Lowell Bergman nor Freeh mentions the allegations that this contract created a slush fund used to fund covert operations.

Freeh seems intent in raising details of those ops–and implicating all our recent presidents in them–along with his more general defense of Prince Bandar.

Image by isiria/Melange

Pirates! Arrrr, they’re teh new sharks matey. Scary! And we should rightly be worried about this pirate problem, because CNN, MSNBC and the print have been relentlessly telling us so. First it was the seizure of the quasi American flagged cargo ship Maersk Alabama, and now the pesky pirates have snared an Italian tugboat too.

Sara related some fascinating background on Maersk and its business:

…. part of Public Law 480 requires that food relief from US Agricultural surpluses, be carried in “American Bottoms” — and US Flagged and owned ships, all have union crews. This ship is owned by Moller/Maersk, which is a vast international Danish Company, but which bought an American Shipping Company, and thus is a bi-national corporation. When it carries American Humanitarian Relief Supplies, they must use a ship chartered in the US, US Flagged, and American Crew. Moller/Maersk is perfectly capable of changing the charter, flag, and crew if it is hired to deliver a non-restricted cargo. For instance, this is the Danish Shipping Company that “sold” Ollie North his ship for shipping the anti-tank weapons to Iran back in the middle of Iran Contra — the ship he took back to Denmark and parked once the story broke, and left the crew without paying their wages. Not covered in the US Press at all — the Danes had a nice little trial in a public court on the Island of Fyn, and took public testimony of all the seamen (all Danes) who were unpaid, and out spilled all the cargo’s they had hauled, and all their ports of Call. Not sure whether North ever paid his fines and got right with the Danish Seaman’s court. Moller/Maersk also was the primary contractor hauling arms to Central America back in the Reagan Days. They’ve done covert stuff for CIA for years.

Shipping, even through troubled waters like those near Somalia, is big business. Isn’t everything these days? Which brings me to the knee jerk question, one I am sure many have asked, of why these big global business ships do not simply arm themselves sufficiently to repel the rag tag Somali pirates? Seriously, the Maersk Alabama is 508 feet long and staffed by a trained and unionized crew, why can’t they fight off these pirates with AK-47s in rinky dink junks and skiffs? Insurance and regulatory liability concerns; and, it turns out, that appears to be a pretty valid explanation.

The Maersk Alabama is, as previously described, a 508 foot vessel, yet it is manned by a crew of only twenty. Between standing watch, operating the ship, and rotating downtime, there is not much capacity for defensive prowess. Even if the crew members were trained for armed confrontation, which they are not, there are not enough of them. Above and beyond that, however, are a broad range of issues militating against allowing a ship’s crew to fight back with arms:

…most companies fear crew arguments that turn heated would end in gunshot deaths. Furthermore, captured ships would yield more arms and ammunition for the pirates. Most crews would realize that deaths suffered by the pirates as they took a ship would cause retribution once the merchant ship was boarded. Moreover, port authorities do not want weapons aboard while in their territorial waters. If weapons are permitted on board (and that is extremely rare) then not just ammunition but also the firing pins have to be kept in three separate and locked locations. Thus reassembling and loading such weapons at sea would take so much time, the pirates might well have already taken the ship anyway.

All good points, but you know the international shipping business isn’t really worried about the health of its seamen. It is a risk management decision. When you take a look at the numbers, that is pretty defensible actually. Such was the basis of my use of the "sharks" analogy at the top of the post. It all sounds so alarming, and it is nice and shiny for news networks, Larry King and the like; but, all told, there is not that much "there" there. As an article from the US Naval Institute, discussing both piracy and terrorism, cogently states:

It is a nasty headache where it occurs, but its real effects on world trade and the movement of people are negligible.

That strikes me as about right. Of course, the flip side of that coin is that the insurance industry, which as we know is tethered to the Master Of The Universe financial industry, is likely getting rich off this. Of course they are:

Munich Reinsurance Co. expects insurance premiums against high sea piracy to rise, as well as the risk of piracy spreading in the world, the German company’s head of marine insurance Dieter Berg said.
…
At the moment the need from shipping companies for hijacking insurance is mainly because of the exposure to Somalia and Nigeria, he said.

Redirecting ships to pass by the Cape of Good Hope could cost a big container ship about $1 million more in costs compared with going through the Suez Canal, he said. The additional premium for every voyage though the Gulf of Aden is worth a couple of hundred thousand dollars, he said.

A U.N. source, speaking to Reuters before the conference, said the increase in the costs of ship insurance could reach 0.5% of ship values, which are typically between $10 million and $100 million.

Insurance has yet to show any sign of falling despite January’s easing in hijacking numbers, Mr. Mukandan said.

No. I don’t suspect the insurance is going down. It never does. Hmmmm, pirates or the bottom scraping scavengers that run the insurance and international risk conglomerates? Man, that is a tough call. Almost makes you want to sympathize with the pirates.

Michael Moore–who’s utterly swamped doing his next film on the Wall Street meltdown–did take time away from his campaign to endorse FireDogLake’s and Progress Michigan‘s boycott of Chase. 

I guess Moore is yet another Michigander who recognizes how a Chrysler bankruptcy will devastate the state and country.