Jeb Bush, Worse than Neil?

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.

Agovernment money market debacle unfolding in Florida is raisingquestions about former governor and presidential brother Jeb Bush’spossible involvement in the mess.

Florida froze withdrawalsfrom a state investment fund earlier this week when local governmentswithdrew billions of dollars out of concern for the fund’s financialstability.

In the past few days, municipalities have withdrawnroughly $9 billion, nearly a third of the $28 billion fund (which issimilar to a money market fund) controlled by the Florida’s State Boardof Administration (SBA). The run on the fund was triggered by worriesthat 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-memberboard that oversaw the SBA until he retired as governor in January. InAugust, Bush was hired as a consultant to the bank. Lehman spokespersonKerrie Cohen, speaking on behalf of Bush, said they had no comment andwould not say when the bank had sold Florida the paper. SBA did notreturn calls.

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, Read more

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Wolfie’s Back?

Bmaz sent me Isikoff’s latest, which thankfully does more than report on events from his past as if they were news. It reports the frightening news that Condi’s about to appoint Paul Wolfowitz to an advisory position at State.

Nearly three years after Paul Wolfowitzresigned as deputy Defense secretary and six months after his stormydeparture as president of the World Bank—amid allegations that heimproperly awarded a raise to his girlfriend—he’s in line to return topublic service. Secretary of State Condoleezza Rice has offered Wolfowitz, a prime architect of the IraqWar, a position as chairman of the International Security AdvisoryBoard, a prestigious State Department panel, according to twodepartment sources who declined to be identified discussing personnelmatters. The 18-member panel, which has access to highly classifiedintelligence, advises Rice on disarmament, nuclear proliferation, WMDissues and other matters. "We think he is well suited and will do anexcellent 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. Butin 2006 Wolfowitz made a series of calls to his friends that landed hera job at a new think tank called Foundation for the Future that isfunded by the State Department. She was the sole employee, at least inthe beginning. The World Bank continued to pay her salary, which wasraised by $60,000 to $193,590 annually, more than the $183,500 paid toSecretary of State Condoleezza Rice, and all of it tax-free. Moreover,Wolfowitz got the State Department to agree that the ratings of herperformance would automatically be "outstanding." Wolfowitz insisted onthese terms himself and then misled the World Bank board about what hehad done.

[snip]

Riza, who is not a U.S. citizen, had to receive a security clearancein order to work at the State Department. Who intervened? It is notunusual to have British or French midlevel officers at the departmenton exchange programs, but they receive security clearances based on theclearances they already have with their host governments. Granting aforeign national who is detailed from an international organization asecurity clearance, however, is extraordinary, even unprecedented. Sohow could this clearance have been granted?

State Department officials familiar with the details of this matterconfirmed to me that Shaha Ali Riza was detailed to the StateDepartment and had unescorted access while working for ElizabethCheney. Access to the building requires a national security clearanceor permanent escort by a person with such a clearance. But the StateDepartment has no record of having issued a national security clearanceto Riza.

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?

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The FISA Document Dump, An Inventory

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.

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What Did the Blue Dogs Promise to DNI McConnell?

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 Read more

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Lackey and Katrina Kash

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

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Wilkes Gets His Subpoenas

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 federalprosecutor in Sacramento who was given the task of investigating thepre-trial leak in the Brent Wilkes case, has filed a declarationindicating what steps she failed to take to find out the nothing shedidn’t bother to learn.

Here’s what Delaney says:

After reviewing the foregoing materials, I concludedthat an investigation in the circumstances of this case was unlikely tosucceed in identifying the source of any improper disclosure. Leakinvestigations are among the most difficult investigations to conduct.The disclosures reported here both in press accounts and by defensecounsel lacked any signature information. In addition, several dozenindividuals were involved in the indictment review process, and monthshad passed prior to my appointment, making it exceedingly unlikely thatI could determine when each person first learned of particularinformation and who else knew. Experience has taught me that leakinvestigations 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.

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Tommy K and the Shitpile

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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Joe Klein, Do You Really Think Crazy Pete Is Credible?!?!?!

Mr. emptywheel and I have a running joke about "English Day"–where your dog, for one day only out of his entire life, can speak and understand English. What would we learn in that one day, we speculate, when McCaffrey the MilleniaLab could tell us precisely what he was thinking?

Which gives me another cool idea–"Source Day"–where for one day, we can see all of the sources that journalists use and consider credible. Because there’s nothing that would damage journalists’ credibility further than to discover that they consider certifiable loons like Pete Hoekstra credible.

But that’s just what–thanks to Christy–Joe Klein apparently believes. From Crazy Pete’s column in NRO:

As one of Klein’s sources for the complex technical and legal pointsthat seem to be in contention — and because Klein, his critics, andDemocrats in Congress have accused Republicans of trying to“misrepresent” these issues — it is important to correct and clarifythe record on three critical points, which also bear heavily on thebroader debate currently at hand.

Crazy Pete’s column, btw, is no more coherent than Joe Klein’s articles on the topic, so I guess we can surmise where Klein borrowed his abysmal logic from.

But here’s the thing. Crazy Pete is, well, crazy. He’s one of the guys who still believes that Iraq had WMDs. He’s the guy who thought it’d be a good idea to Read more

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Tommy K Apparently Violated His Plea Agreement

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

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Scruggs and Lott

Lotus is right–the indictment against Dickie Scruggs is pretty damning. Here’s the bit everyone is keying on, from a conversation between Timothy Balducci and Judge Lackey:

"my relationship with Dick [Scruggs] is such that he and I can talk very private [sic] about these kinds of matters and I have the fullest confidence that if the court, you know, is inclined to rule … in favor … everything will be good…" "The only person in the world outside of me and you that has discussed this is me and Dick [Scruggs]." "…We, uh, like I say, it ain’t but three people in the world that know anything about this … and two of them are sitting here and the other one … the other one, uh, being Scruggs … he and I, um, how shall I say, for over the last five or six years there, there are bodies buried that, that you know, that he and I know where … where are, and, and, my, my trust in his, mine in him and his in mine, in me, I am sure are the same."

We are talking Mississippi, I guess.

That said, I’ve got a couple of questions.

First, why was Zach Scruggs indicted? Best as I can tell, his involvement in this amounts to receiving the order they allegedly bribed Judge Read more

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