Archive for category: emptywheel

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

Weird Chronology

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.

"Duplicative"

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.

Read more →

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, hischildren,” said Judge Lackey. “He was one of the brightest legal starson the horizon that I’d come across, and I worried a great deal aboutthe consequences.”

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 istalking to the national media, and Read more →

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 defensecounsel, Washington Mutual contacted the government with informationregarding 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.

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Tommy K says he shouldn’t go to jail because he has a bad ticker (h/t chrisc). But it sounds like going to jail in the first place may be the least of his worries. According to a filing submitted yesterday, it appears that John Michael’s earlier allegations were correct, and that Tommy K violated his plea agreement by continuing his bank fraud after the plea deal.

(4) During the pre-trial proceedings of coconspirators Brent Wilkes and John Michael, the government first received information suggesting that defendant Kontogiannis was, in fact, still committing federal criminal offenses, including, but not limited to bank fraud in violation of Title 18, United States Code, Section 1344.

(5) As part of these proceedings, defense counsel for John Michael obtained various financial documents indicating that Mr. Kontogiannis was–unbenknownst to the government–still continuing his illegal mortgage fraud scheme. In addition, Michael’s defense counsel contacted Washington Mutual to obtain information regarding the fraudulent mortgages that they had purchased from Mr. Kontogiannis.

[snip]

…as a direct result of being contracted by Michael’s defense counsel, Washington Mutual contacted the government with information regarding Mr. Kontogiannis’s continued illegal activity.

(8) Within the past two weeks, we obtained clearer indications that Mr. Kontogiannis was engaged in post-plea illegal activity.

About this, a couple points.

First, this filing suggests that "the government" had no clue that Kontogiannis continued to Read more →

Perhaps it was just a confluence of events that convinced Trent now was the time to quit.

After Senate Minority Whip Trent Lott (R-MS) announced his resignation this week, it was widely speculatedthat Lott was quitting in order to dodge Senate ethics standards thattake effect next year. The new rules require senators to wait two yearsbefore entering “the lucrative world” of lobbying Congress. Lott deniedthe rumor at a press conference, saying the new law “didn’t have a big role” in his decision.

Atthe same press conference, Lott was also asked about Senate ethicsrules regarding “negotiating with a future employer,” to which hereplied that he’s “not really involved in negotiation,” but that “thereare some opportunities out there” that he wants “to be able toconsider”:

QUESTION: Senator, I understand there’s arule in the Senate that if you’re negotiating with a future employer,that you must register with the Ethics Committee. Have you been down tothat committee yet?

LOTT: Well, I have not yet, but I’mnot really involved in negotiation. I’ve tried to stay away from that.There are some opportunities out there that I want to be able toconsider, but I have nothing that we’ve agreed to or lined up.

One of the “opportunities” that Lott is considering, according to his son, Chester Lott — who is also a lobbyist — is “a partnership” with former Sen. John Breaux Read more →