OBAMALAND

NY Times editorial - [Summers and Geithner] have played central roles in policies that helped provoke today’s financial crisis. Mr. Geithner, currently the president of the Federal Reserve Bank in New York, also has helped shape the Bush administration’s erratic and often inscrutable responses to the current financial meltdown, up to and including this past weekend’s multibillion-dollar bailout of Citigroup.

Given that history, the question that most needs answering is not whether Mr. Geithner and Mr. Summers are men of talent - obviously they are - but whether they have learned from their mistakes, and if so, what.

We are not asking for moral mea culpas. But unless they recognize their past mistakes, there is little hope that they can provide the sound judgment and leadership that the country needs to dig out of this desperate mess.

As treasury secretary in 2000, Mr. Summers championed the law that deregulated derivatives, the financial instruments - aka toxic assets - that have spread the financial losses from reckless lending around the globe. He refused to heed the critics who warned of dangers to come.

That law, still on the books, reinforced the false belief that markets would self-regulate. And it gave the Bush administration cover to ignore the ever-spiraling risks posed by derivatives and inadequate supervision.

Mr. Summers now will advise a president who has promised to impose rational and essential regulations on chaotic financial markets. What has he learned?

At the New York Fed, Mr. Geithner has been one of the ringmasters of this year’s serial bailouts. His involvement includes the as-yet-unexplained flip-flop in September when a read-my-lips, no-new-bailouts policy allowed Lehman Brothers to go under - only to be followed less than two days later by the even costlier bailout of the American International Group and last weekend by the bailout of Citigroup.

It is still unclear what Mr. Geithner and other policy makers knew or did not know - or what they thought they knew but didn’t - in arriving at those decisions, including who exactly is on the receiving end of the billions of dollars of taxpayer money now flooding the system.

Confidence in the system will not be restored as long as top officials fail or refuse to fully explain their actions.

OBAMA PLANS TO NAME LAWYER FOR POLLUTERS TO ENFORCE ENVIRONMENTAL LAWS
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Think Progress - Obama "announced his intent to nominate" Ignacia S. Moreno to be Assistant Attorney General for the Environment and Natural Resources Division in the Department of Justice. Moreno, general counsel for that department during the Clinton administration, is now the corporate environmental counsel for General Electric, "America's #1 Superfund Polluter":

Number five in the Fortune 500 with revenues of $89.3 billion and earnings of $8.2 billion in 1997, General Electric has been a leader in the effort to roll back the Superfund law and stave off any requirements for full cleanup and restoration of sites they helped create.

This February, General Electric lost an eight-year battle to "prove that parts of the Superfund law are unconstitutional." One of the 600-person DOJ environmental division's "primary responsibilities is to enforce federal civil and criminal environmental laws such as" the Clean Air Act, Clean Water Act, the Safe Drinking Water Act, and the Superfund.

Before General Electric, Moreno worked as a corporate attorney at Spriggs and Hollingsworth. Moreno's name is found in the Westlaw database as an attorney defending General Motors in another Superfund case, the GM Powertrain facility in Bedford, Indiana:

Historical uses and management of PCB containing hydraulic oils and PCB impacted materials has contaminated on-site areas as well as the sediment and floodplain soil within Bailey's Branch and the Pleasant Run Creek watershed.

Although General Motors entered into an agreement in 2001 with the EPA to clean up the site, a number of local residents whose land has been contaminated by polychorinated biphenyls have sued for damages in Allgood v. GM (now Barlow v. GM), in a contentious and caustic dispute over cleanup, monitoring, and lost property values.

During the Clinton administration, Moreno was involved in another controversial case, unsuccessfully defending the Secretary of Commerce's decision to weaken the dolphin-safe tuna standard. In Brower v. Daley, Earth Island Institute, The Humane Society of the United States, and other individuals and organizations brought suit against the United States government for actions that were "arbitrary, capricious, an abuse of discretion, and contrary to law," winning their case in 2000.

DAVID AXELROD

AXELROD HAS TIES TO PHARMA LOBBY

BEN BERNANKE

BERNANKE SAYS SOCIAL SECURITY AND MEDICARE NOT MANDATORY

ELENA KAGAN

36 QUESTIONS FOR ELENA KAGAN

CONSTITUIONALLY CONTEMPTUOUS & LEGALLY INEXPERIENCED

WILLIAM DALEY

Obama hires Wall Street welfare father as chief adviser

ALAN SIMPSON

OBAMA'S 78-YEAR-OLD DEBT COMMISSION CO-CHAIR TELLS OLD PEOPLE TO SHUT UP

NANCY-ANN DEPARLE

Fred Schulte, Investigative Reporting Workshop - Nancy-Ann DeParle, President Barack Obama's health policy czar, served as a director of corporations that faced scores of federal investigations, whistleblower lawsuits and other regulatory actions, according to government records.

Several of the companies were investigated for alleged kickbacks or engaging in other illegal billing schemes, while others were accused of serious violations of federal quality standards, including one company that failed to warn patients of deadly problems with an implanted heart defibrillator. Several of the cases ended with substantial fines paid to the federal government, even though the companies admitted no wrongdoing.

Since leaving her government job running Medicare for the Clinton administration, DeParle built a lucrative private-sector career. Records show she earned more than $6.6 million since early 2001.

After leaving government, DeParle accepted director positions at half a dozen companies suspected of violating the very laws and regulations she had enforced for Medicare. Those companies got into further trouble on her watch as a director.

Now she's back in government as a leading voice in deciding the shape of health care reform. Named by Obama in March as director of the White House Office of Health Reform, making $158,000 a year, DeParle is the point person in pushing for the administration's plans for changing health care and the ways Americans pay for it - changes in which her former companies have a great deal at stake.

Among DeParle's corporate connections:

- DaVita Inc., which owns and operates kidney dialysis centers, has been the subject of several government probes into its billing and drug-prescribing practices, most recently in December by Justice Department investigators in Georgia.

- Boston Scientific Corp. reported to the SEC that it received five state or federal subpoenas during 2008, including ones from the Justice Department and Health and Human Services, which oversees the Medicare agency. In addition, Defense Department criminal investigators are looking into the company's "marketing interactions" with doctors at a U.S. Army hospital in Tacoma, Wash.

- Guidant, which already was in legal trouble for failing to disclose 12 patient deaths when DeParle joined the board in 2001, has since then faced new problems. After a college student died in 2005 when his implanted defibrillator failed on a biking trip, his doctor told Congress that Guidant officials had known of similar problems for three years, but failed to tell the public.

NY Times - In picking Nancy-Ann DeParle to champion an overhaul of the nation's health system, President Obama selected someone with deep roots in the Washington bureaucracy, an intimate familiarity with health policy and respect on both sides of the political aisle - not to mention degrees from Harvard Law School and Oxford University.

Nancy-Ann DeParle has years of experience in previous positions dealing with health care companies and agencies.

But in putting Ms. DeParle in charge of an issue that has bedeviled presidents for decades, Mr. Obama also chose to overlook Ms. DeParle's business ties to companies that have a direct stake in the health care debate. . .

Since leaving the Clinton administration, Ms. DeParle has been managing director of a private equity firm, CCMP Capital, and a board member of companies like Boston Scientific, Cerner and Medco Health Solutions. White House officials said Ms. DeParle was severing ties with those companies and would recuse herself from participating in any matter that was "directly or substantially" related to former clients or employers. . .

According to the Washington Post, Obama's healthcare czar, Nancy-Ann DeParle "has thrived in the private sector, first at J.P. Morgan Partners and then at a private-equity spinoff, CCMP Capital. She earned more than $2 million in the past two years on corporate boards such as DaVita, Boston Scientific, Cerner and Medco Health Solutions, according to public records. Her financial disclosure form is pending."

You don't get a much better conflict of interest that this. Here is are the Wikipedia summaries of her corporate connections:

Medco provides pharmacy services for private and public employers, health plans, labor unions and government agencies of all sizes, and for individuals served by Medicare Part D Prescription Drug Plans. Through its Medco Therapeutic Resource Centers and the Accredo Health Group, Medco's Specialty Pharmacy, the company provides services for the care of patients with chronic and complex conditions. Medco is a leader in the emerging field of personalized medicine and in applying evidence-based protocols to elevate the practice of pharmacy -a key element in reforming America's health care system. Medco is ranked number 51 on the Fortune 500 list, with 2008 revenues of more than $51 billion.

Medco became an independent in August 2003. As a subsidiary of Merck & Co., Inc, the company was known as Merck-Medco Managed Care. . .

Medco's mail-order business, which generated $22 billion in 2008 net revenues, is one of the largest pharmacy operations in the United States. Medco managed 586 million prescriptions in 2008, including 105.8 million prescriptions dispensed at its mail-order pharmacies - significantly more than the number of prescriptions dispensed by the mail-order operations of its two largest PBM competitors. Medco operates nine mail-order pharmacies and six call center pharmacies, and it partners with a nationwide network of approximately 60,000 retail pharmacies. Medco's automated pharmacies located in Las Vegas and Willingboro, NJ, together have the capacity to fill more than 2 million prescriptions per week. Medco commenced construction of a third, next-generation automated dispensing pharmacy in Whitestown, Indiana, which is expected to be operational by late 2009. Medco holds 27 U.S. patents for patient data management, front-end pharmacy technology and automated pharmacy technology.

In 2004 Medco settled a lawsuit brought by 20 states alleging that they failed to disclose incentives they received from drug companies and improperly switched or pressured doctors to switch patient's medication in pursuit of profit.

In 2005 Medco acquired Accredo Health for $2.2 billion[3], a large specialty pharmaceutical operation, including a division that Accredo Health purchased from Gentiva Health Services in 2002.

Cerner Corporation is an international IT corporation in the healthcare industry with more than 7,800 employees. . . Cerner has more than 6,000 clients worldwide

The Boston Scientific Corporation is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a range of interventional medical specialties, including interventional cardiology, peripheral interventions, neuromodulation, neurovascular intervention, electrophysiology, cardiac surgery, vascular surgery, endoscopy, oncology, urology and gynecology.

Boston Scientific's main competitors are Johnson & Johnson, Medtronic, and St. Jude Medical. The company recently acquired longtime competitor Guidant for approximately $27 billion. The former Guidant was split between BSC and Abbott Laboratories.

DaVita is one of the largest kidney care companies in the United States. Their offerings include in-center hemodialysis, peritoneal dialysis, home hemodialysis, vascular access management, chronic kidney disease education, and renal diet assistance.

ALDOLFO CARRION

NY Daily News - The man who is President Obama's newly minted urban czar pocketed thousands of dollars in campaign cash from city developers whose projects he approved or funded with taxpayers' money, a Daily News probe found. Bronx Borough President Adolfo Carrion often received contributions just before or after he sponsored money for projects or approved important zoning changes, records show. Most donations were organized and well-timed.

In one case, a developer became a Carrion fund-raiser two months before the borough president signed off on his project, raising more than $6,000 in campaign cash.

In another, eight Boricua College officials came up with $8,000 on the same day for Carrion three weeks before the school filed plans to build a new tower. Carrion ultimately approved the project and sponsored millions in taxpayer funds for it.

GARY LOCKE

ANOTHER SEEDY CABINET CHOICE

MORE ON LOCKE

You'd think after the Bill Richardson mess, Obama would be a bit more careful, but in naming Gary Locke as Secretary of Commerce, he's revived some old and sorry tales.

Locke was admittedly only a minor beneficiary of a major scandal of the Clinton administration: highly questionable funding of American politicians from Asian sources. He was, in fact, cleared of any wrong doing. But one of the purported prospects of an Obama administration was that the ethical bar would be raised slightly above lack of actual indictment or conviction.

Locke received funding from two of sources involved in the Clinton scandals: Ted Sioneng's family and associates, and John Huang. Here's how Wikipedia describes the context:

The 1996 United States campaign finance controversy was an alleged effort by the People's Republic of China to influence domestic American politics during the 1996 federal elections. The issue first received public attention in early 1997, with news that a Justice Department investigation had uncovered evidence that agents of China sought to direct contributions to the Democratic National Committee in violation of U.S. laws regarding foreign political contributions. The Chinese government denied all accusations. Twenty-two people were eventually convicted of fraud or for funneling Asian funds into the United States elections, and others fled U.S. jurisdiction. Several of these were associates of Bill Clinton or Al Gore.

Here are some of the characters:

Charlie Trie: The most significant activity by Trie was a $450,000 attempted donation by Yah Lin "Charlie" Trie to Clinton's legal defense fund, which Trie delivered in two envelopes each containing several checks and money orders. The fund immediately rejected $70,000 and deposited the remainder, but ordered an investigation of the source. The investigation found that some of the money orders were sequentially numbered made out in different names but with the same handwriting. The fund then rejected the donation entirely, and returned the deposited funds two months after the initial contribution. . .

Johnny Chung: Born in Taiwan, Chung went from being the owner of a "blastfaxing" business (an automated system that quickly sends out faxes to thousands of businesses) in California to being in the middle of the Washington, D.C. elite within a couple weeks of his first donations to the Democratic Party. Called a "hustler" by a U.S. National Security Council aide, . . . Chung made forty-nine separate visits to the White House between February 1994 and February 1996. . . Between 1994 and 1996, Chung donated $366,000 to the DNC. Eventually, all of the money was returned. Chung told federal investigators that $35,000 of the money he donated came from Liu Chaoying and, in turn, China's military intelligence. . . Chung was eventually convicted of bank fraud, tax evasion, and two misdemeanor counts of conspiring to violate election law. Chung asserts that, after his guilty plea, the Chinese government attempted to assassinate him with "hit squads" three times, but the efforts were foiled by the FBI.

John Huang and James Riady: John Huang [was a] former employee of the Indonesian company Lippo Group's Lippo Bank and its owners Mochtar Riady and his son James (whom Huang first met along with Bill Clinton at a financial seminar in Little Rock, Arkansas in 1980, Huang became a key fund-raiser within the DNC in 1995. While there, he raised $3.4 million for the party. Nearly half had to be returned when questions arose regarding their source during later investigations by Congress. According to U.S. Secret Service logs, Huang visited the White House 78 times while working as a DNC fund-raiser. James Riady visited the White House 20 times (including 6 personal visits to President Clinton). . . Huang eventually pleaded guilty to conspiring to reimburse Lippo Group employees' campaign contributions with corporate or foreign funds.[20] James Riady was later convicted of campaign finance violations relating to the same scheme as well.

Maria Hsia: Taiwan-born Maria Hsia, a long time fund raiser for Al Gore, California immigration consultant, and business associate of John Huang and James Riady since 1988, facilitated $100,000 in illegal campaign contributions through her efforts at Hsi Lai Temple, a Chinese Buddhist temple in Hacienda Heights, California. This money went to the DNC, to the Clington - Gore campaign, and to Patrick Kennedy. After a trial, she was convicted in March 2000. . . [A] Temple event became particularly controversial, because it was attended by the Vice President Gore. In 1997 Gore said

Ted Sioeng: Another notable figure involved in the affair was Ted Sioeng, an Indoenesian entrepreneur, who illegally donated money to both Democrats and Republicans. Suspect contributions associated with Sioeng include $250,000 to the DNC, $100,000 to Republican California State Treasurer Matt Fong, and $50,000 to a Republican think tank. All the money was eventually returned. . . Attorney General Janet Reno and the directors of the FBI, CIA and National Security Agency told members of the Senate committee they had credible intelligence information indicating Sioeng acted on behalf of China. A spokesman for Sioeng denied the allegations.

This was not insignificant stuff, especially when you add in the national security damaging transfer of advanced technology to China during the time of these shenanigans.

Locke's role in all of this was as one of the secondary American political beneficiaries, with help coming from Huang and Sioeng. Locke returned $1,000 from Sioeng's daughter funneled through an associate with Locke's spokesman explaining, "We're not saying it was improper" and "we didn't want anything to do with it."

Locke bemoaned the issue in a talk to Asian journalists: "The fund-raising scandal will have repercussions for several years. It will make our efforts doubly hard to get Asian Americans appointed to top-level positions across the United States. If they have any connection to John Huang, those individuals will face greater scrutiny and their lives will be completely opened up and examined - perhaps more than usual."

Locke got a lot more from Huang - at least $19,000 - and attended a number of occasions that Huang helped organize. Other contributions to Locke, came from a Lippo consultant, a Commerce Department official who swore in a deposition that Huang had access to most of the agency's classified information, several other Commerce Department officials who came under suspicion, and several associates of Sioeng.

Central to the role of the Commerce Department in this period was that of its then secretary, Ron Brown, who helped the Chinese get more favorable trade regulations, as well as aiding the transfer of super computers and highly sophisticated radio phones to the Chinese Peoples Armed Police.

Locke was cleared of any wrong doing by state officials. A House committee could find no wrong doing on his part. Gary Locke was apparently just one more politician basking in the ubiquitous sleaze of the Clinton years. Still, given the moral professions of our new president, his appointment seems odd at best, especially since the department he's been selected to run was once headquarters for a major piece of that sleaze.

TARA O'TOOLE

OBAMA NOMINEE TIED TO BIOTECH INDUSTRY

LEON PANETTA

PANETTA; ANOTHER CLOUDY OBAMA APPOINTMENT

CASS SUNSTEIN

Center for Progressive Reform - Barack Obama [has] selected Harvard Law Professor Cass Sunstein to direct the White House Office of Management and Budget's Office of Information and Regulatory Affairs. The job is perhaps better known by its informal title: "regulatory czar," so named because the holder is charged with signing off on all major proposed regulations. In the recent past, the OIRA has been a place where regulations to protect health, safety and the environment go to die, or at the very least be weakened.

In a report, a group of CPR member scholars expressed serious concern about Professor Sunstein's support for the very methods used to weaken and defeat badly needed regulations. Among the concerns:

- Sunstein is a stout supporter of cost-benefit analysis as a primary tool for assessing regulations, despite its imprecision and the ease with which it is manipulated to achieve preferred policy outcomes;

- He supports such cost-benefit approaches as the widely condemned "senior discount" method for undervaluing the lives of seniors in cost-benefit analyses, an approach even the Bush Administration was forced to disown;

- He rejects the "precautionary principle" as a basis for regulating, thus ensuring that dangerous pollutants and products will be given the "benefit of the doubt," rather than well-grounded concerns about health and safety;

- He supports the centralization of authority over regulatory decisions in the White House - OIRA in particular, even though Congress delegated the exercise of expert judgment to the regulatory agencies, not to OIRA's staff economists in the White House.

- He has written that the Occupational Safety and Health Administration might be unconstitutional.

CPR President Rena Steinzor, one of seven co-authors of the report, warned that "Unless he turns over a new leaf, or unless President Obama keeps a careful eye on OIRA, we fear that Cass Sunstein's reliance on cost-benefit analysis will create a regulatory fiefdom in the White House that will deal with needed regulations in very much the same way that the Bush Administration did."

Progressive Review - Obama constitutional advisor Sunstein is also opposed prosecuting Bush officials for crimes and told the NY Times, "I would be stunned to find an anti-business [Supreme Court] appointee from either [Clinton or Obama]. There's not a strong interest on the part of Obama or Clinton in demonizing business, and you wouldn't expect to see that in their Supreme Court nominees."

PETER ORSZAG

NEW BUDGET HEAD WOULD CUT SOCIAL SECURITY FOR OBAMA'S FAN BASE

RICK WARREN

REV. RICK WARREN USES HITLER YOUTH AS MODEL OF ORGANIZING MORE

RICK WARREN INVOLVED WITH RIGHT WING AFRICAN PREACHERS WHO ARE ANTI GAY AND DAMAGING AIDS EFFORTS

OBAMA PICKS ANTI-GAY, ANTI-WOMAN PREACHER FOR INVOCATION

OBAMA'S INAUGURATION PREACHER

JOHN BRENNAN

Brennan praised NYPD's spying on Muslims

The Brennan nomination

At least 20 CIA prisoners still missing

Italian ex-spy chief gets 10 years in CIA case

Intelligence journalist and author James Bamford: "Brennan was [Obama's] chief adviser when it came to intelligence issues and national security, and it shows. He's become a sort of Rasputin or whatever, the guy who's opened the door to the dark side for Obama."

Obama's CIA nominee knew torture was going on

Recovered history: Carl Bernstein's expose of the CIA in the mass media

Obama to name murder and torture expert as head of CIA

OBAMA NAMES ANOTHER CONFLICT OF INTEREST. . . AND ONE WHO BELIEVES IN TORTURE

WILLIAM LYNN

OBAMA APPOINTEE WAS PENTAGON CFO WHEN $3.4 TRILLION WENT MISSING

OBAMA'S NEW TOP PENTAGON OFFICIAL COULDN'T FIND MISSING MONEY LAST TIME HE WAS THERE

RAY LAHOOD

MEET THE TRANSPORTATION SECRETARY

NY Times - Ray LaHood, the secretary of transportation, is not one to toot his own horn over how much he knows about planes, trains and automobile bailouts. On the contrary.

"I don't think they picked me because they thought I'd be that great a transportation person," Mr. LaHood says with refreshing indifference as to how this admission might play if, say, he were ever to bungle a bridge collapse. . .

One of the astonishing things about Mr. LaHood, 63, is how limited his transportation résumé is, how little excitement he exudes on the subject (other than about high-speed rail) and how little he seems to care who knows it. So why exactly did President Obama pick this former seven-term Republican congressman from Illinois to oversee everything that moves?

Mr. LaHood posits a theory. "They picked me because of the bipartisan thing," he explained, "and the Congressional thing, and the friendship thing.". . .

"The friendship thing" perhaps most explains why Mr. LaHood is in his job. The White House chief of staff, Rahm Emanuel, is one of Mr. LaHood's closest friends, and wanted him around. Mr. Obama told Mr. LaHood as much when Mr. LaHood interviewed for the job in December. . .

As transportation secretary, Mr. LaHood leads an agency with 56,000 employees, a $70 billion budget and a huge barrel of economic stimulus money. . .

WHAT'S A MAN LIKE THIS DOING IN A DEMOCRATIC ADMINISTRATION?

LAHOOD STEERED $9 MILLION TO CAMPAIGN DONORS

Carol D. Leonnig, Washington Post - The former Republican congressman chosen by President-elect Barack Obama to direct billions in federal highway spending has been an unapologetic advocate of earmarks, a practice Obama now opposes, and has used his influence to win funding for projects pushed by some of his largest campaign contributors.

Ray LaHood, who represented Illinois in the House for seven terms, sponsored $60 million in earmarks last year, steering at least $9 million in federal money to campaign donors, a Washington Post analysis shows. An opponent of earmark reform efforts in Congress, LaHood ranks roughly among the top 10 percent in the House for sponsoring earmarks in 2008, according to a watchdog group. . .

Government watchdog groups say LaHood's selection does not bode well for Obama's pledge to return transparency to government spending. Earmarks are often last-minute insertions in federal spending bills and are not subject to normal reviews.

LaHood also has been criticized for his ties to a longtime Republican state kingmaker in Illinois, William F. Cellini Sr., who was indicted in the "pay-to-play" criminal investigation underway by the office of Northern District U.S. Attorney Patrick J. Fitzgerald. Cellini has denied wrongdoing.

"This guy has history of pork barrel spending and lot of a questionable spending linked to his friends. He's going to be in charge of funneling hundreds of billions of dollars into local projects . . . and he's not going to be suddenly changing his stripes tomorrow," said Leslie Paige of the watchdog group Citizens Against Government Waste.

LaHood's biggest campaign donor is Peoria's largest corporation: Caterpillar. The company and its workers have donated more than $190,000 to LaHood since 1998, according to the Center for Responsive Politics. Last year, LaHood secured $7.8 million to help the company and its offshoots develop technologies for potential future military contracts.

Last year, he also pushed for $333,000 to construct the new Lakeview Museum in Peoria, part of a project that will include a Caterpillar-financed museum focused on the company's history.

ARNE DUNCAN

See our schools page as well

Flunking Arnie Duncan

BLOWING THE MYTH OF ARNE DUNCAN

REPORT SUGGESTS DUNCAN'S CHICAGO SCHOOL IMPROVEMENTS A MIRAGE

WHAT DUNCAN REALLY DID TO CHICAGO SCHOOLS

DUNCAN BULLYING SCHOOL SYSTEMS INTO EXCESSIVE PAPERWORK

DUNCAN WANTS TO CUT BACK ON SUMMER VACATIONS

OBAMA CONTINUES BUSH'S DISASTROUS SCHOOL PLANS

OBAMA'S EDUCATION CHIEF PRESIDED OVER A SYSTEM WITH OVER 500 STUDENT BEATINGS BY STAFF

HOW ARNE DUNCAN THINKS ABOUT CHILDREN

I am not a manager of 600 schools. I'm a portfolio manager of 600 schools and I'm trying to improve the portfolio. - Arne Duncan, the new education secretary, speaking of the Chicago schools he ran.

OBAMA SIDES WITH WAR ON PUBLIC SCHOOLS

FOXES IN THE CHICKEN COOP: ARNE DUNCAN

MORE ON ARNE DUNCAN'S MILITARIZATION OF CHICAGO SCHOOLS

MORE ON THE ARNE DUNCAN DISASTER

FLUNKIN' DUNCAN: THE TEST RESULTS

WHY DUNCAN IS THE WRONG EDUCATION SECRETARY

FOXES IN THE CHICKEN COOP: ARNE DUNCAN

OBAMA SIDES WITH WAR ON PUBLIC SCHOOLS

WHY ARNE DUNCAN IS A TERRIBLE CHOICE FOR EDUCATION SECRETARY

JANET NAPOLITANO

USA Today - Homeland Security Secretary Janet Napolitano endorsed the use of body scanners Wednesday to screen airline passengers despite concerns that the machines create vivid images of people under their clothing. Napolitano told the House Homeland Security Committee that body scanners are "actually less intrusive and easier" than being patted down by an airport screener. . . The American Civil Liberties Union says the machines provide "a virtual strip-search" and that deploying them in airports could lead to their use at train stations, arenas and office buildings.

NAPOLITANO COVERED UP FOR NATION'S WORST SHERIFF

ROBERT RUBIN

RUBIN, TOP ADVISOR TO OBAMA, PLAYED MAJOR ROLE IN FISCAL DISASTER

Matt Cover, CNS - Robert Rubin, a key economic advisor to President-elect Barack Obama who served as Treasury secretary in the Clinton Administration, has been one of the highest paid executives at the now twice bailed-out financial giant Citigroup. Rubin, who has been associated with the bank since 1999,served as its interim chairman from November to December 2007.

Rubin's role has been described as an advisor to the company's top executives.
"It's a little like visiting Yoda, you go and get a dose of wisdom," Citigroup co-head of global investment banking Raymond J. McGuire told the Times.

McGuire, who is one of Obama's bundlers - the fundraising titans responsible for bankrolling Obama's presidential campaign - is a member with Rubin on Citigroup's Senior Leadership Committee.

Rubin has been well compensated for his advice, earning $17.3 million in 2006, according to Citigroup's SEC filings. Rubin earned $16.4 million in 2005, $16.5 million in 2004, and $16.6 million in 2003.

Rubin has also served on the executive board of the struggling Ford Motor Co. as a director until 2006, which paid him over $100,000 that year, according to Forbes.com. . .

ROBERT GATES

ROBERT GATES' URGE TO SURGE

FOXES IN THE CHICKEN COOP: ROBERT GATES

Robert Parry, Consortium News - Nearly 16 years ago, during the last transition from a President Bush to a Democrat, Moscow made an extraordinary gesture to Washington: The Kremlin supplied a summary of its intelligence information about secret U.S.-Iranian contacts in the 1980s.

The report was from a national security committee of the Russian Duma to Rep. Lee Hamilton, who had requested what might be in Moscow's files as part of a task force investigation into whether the Reagan-Bush campaign in 1980 had interfered with President Jimmy Carter's bid to free 52 American hostages then held in Iran.

The Russian report arrived late, via the U.S. Embassy in Moscow, showing up on Jan. 11, 1993, but the contents were stunning. The Russians reported that their intelligence revealed that long-rumored meetings between Republicans and Iranians in Europe during Campaign 1980 had indeed occurred.

But this information went against what Hamilton and other members of the task force had decided to conclude, that there had been no such contacts. Hamilton had already rebuffed advice from his chief counsel, Lawrence Barcella, that the investigation be extended a few months because of other late-arriving evidence of Republican guilt.

Instead, Hamilton had ordered the probe wrapped up with a conclusion of Republican innocence. The Russian report just represented another complication, especially since the task force's debunking report had already gone to the printers and was set for release two days later, on Jan. 13, 1993.

So, the Russian report - like much of the other incriminating evidence - was kept secret, unceremoniously stuck into a cardboard box and filed away in a make-shift Capitol Hill storage room.

Barcella told me later that he envisioned this evidence undergoing the fate of the crated Ark in "Raiders of the Lost Ark," lifted into a vast government warehouse in the closing scene. The Russian report, however, ended up in a less grand place, an abandoned Ladies Room off the Rayburn House Office Building's parking garage, where I discovered it in late 1994.

The reason I'm mentioning this document now is that one of the Americans implicated by the Russian report was Robert Gates, who in 1980 was a junior CIA official, who had served on Carter's National Security Council staff before returning to the CIA as executive assistant to CIA Director Stansfield Turner.

As translated by the U.S. Embassy, the Russian report stated, "[Robert] Gates, at that time a staffer of the National Security Council in the administration of Jimmy Carter, and former CIA Director George [H.W.] Bush also took part" in a meeting with Iranians in Paris in October 1980. . .

Gates has denied any role in the secret Republican-Iranian talks, and it is possible that the Russian intelligence isn't any good. . . Indirectly, well-informed Russians assured me that the report to Hamilton was based on their own intelligence data and that the information was considered reliable, not simply picked up from press articles. . .

What is clear is that after Ronald Reagan took office and sent his campaign chief William Casey over to run the CIA in 1981, Gates's career took off. Casey, who also was implicated in the October Surprise controversy, elevated Gates to be the assistant director for intelligence analysis and then to be deputy CIA director.

Later, Gates was linked to both the Iran-Contra scandal, which involved the trading of arms for hostages with Iran, and the Iraqgate controversy, the clandestine military support given to Iraq's Saddam Hussein during his eight-year war with Iran.

TOM DASCHLE

THE BOOK ON DASCHLE ISN'T PRETTY

DASCHLE TOOK A QUARTER MILLION BUCKS FROM HEALTH INDUSTRY

Tom Daschle was in line to be Secretary of Health & Human Services. Reports the LA Times: "He was the Senate Democratic leader when he was defeated in 2004 by Republican John Thune, who convinced voters back home that Daschle was more concerned with Washington than with them. In fact, Daschle stayed in the capital city after his defeat, becoming a public policy adviser and member of the legislative and public policy group at the law and lobbying firm Alston & Bird. Daschle isn't registered as a lobbyist. He advises clients on issues including health care, financial services, taxes and trade, according to the firm's Web site.

Health care interests, including CVS Caremark, the National Association for Home Care and Hospice, Abbott Laboratories and Health South, are among the firm's lobbying clients."

NY Times In a detailed list of campaign promises, Mr. Obama pledged that "no political appointees in an Obama administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years."

Although Mr. Daschle's work might not preclude his appointment, it could raise the possibility that the administration could require him to recuse himself from any matter related to either the Mayo Clinic or some of the clients he advised at Alston & Bird - a potentially broad swath of the health secretary's portfolio. . .

A spokeswoman for Alston & Bird declined to disclose which of the firm's health care industry clients Mr. Daschle had advised; the firm represents dozens of such concerns including pharmaceutical companies, health care providers, and trade groups for nurses and nursing homes.

Although not a registered lobbyist, Mr. Daschle, a South Dakota Democrat who was party leader in the Senate, provides strategic advice to the firm's clients about how to influence government policy or actions. The firm's Web site declares, "Our health care legislative and policy team has the significant advantage of including two former U.S. Senate majority leaders - Senators Bob Dole and Tom Daschle - both resident in our Washington office and champions of many health care issues in their Senate Finance Committee and leadership roles."

As examples of the firm's achievements the Web site lists matters involving Medicare and Medicaid reimbursements, approvals of federally regulated drugs and medical products, fraud investigations, medical waste disposal, privacy and other compliance issues.

The Mayo Clinic, where Mr. Daschle is on the board, is itself a major health care provider, research institution, and recipient of grants from the National Institutes of Health.

Mr. Daschle's wife, Linda Daschle, is a prominent lobbyist for aerospace and military concerns. She does not, however, represent any health care clients. Nor did Mr. Obama make specific campaign promises related to the occupation of a spouse.

RAHM EMANUEL

Rahm Emanuel's war on democracy

Chicago council passes Emanuel's protest suppression bill

EMANUEL WANTS DENIAL OF 2ND AMENDMENT RIGHTS TO THOSE ON NO FLY LIST

EMANUEL DESCRIBES THE NATIONAL DRAFT HE'S SEEKING IN 2006 AUDIO INTERVIEW

EMANUEL MADE $320K AS FREDDIE MAC BOARD MEMBER WHILE IGNORING ACCOUNTING SCANDAL

EMANUEL'S SWEETHEART DEALS RAISING QUESTIONS

NY Post - News broke last week that Rahm Emanuel, now White House chief of staff, lived rent- free for years in the home of Rep. Rosa De Lauro (D-Conn.) - and failed to disclose the gift, as congressional ethics rules mandate. But this is only the tip of Emanuel's previously undislosed ethics problems.

One issue is the work Emanuel tossed the way of De Lauro's husband. But the bigger one goes back to Emanuel's days on the board of now-bankrupt mortgage giant Freddie Mac.

Emanuel is a multimillionaire, but lived for the last five years for free in the tony Capitol Hill townhouse owned by De Lauro and her husband, Democratic pollster Stan Greenberg.

During that time, he also served as chairman of the Democratic Congressional Campaign Committee - which gave Greenberg huge polling contracts. It paid Greenberg's firm $239,996 in 2006 and $317,775 in 2008. (Emanuel's own campaign committee has also paid Greenberg more than $50,000 since 2004.)

To be fair, Greenberg had polling contracts with the DCCC before - but each new election cycle brings its own set of consultants. And Emanuel was certainly generous with his roommate.

Emanuel never declared the substantial gift of free rent on any of his financial-disclosure forms. He and De Lauro claim that it was just allowable "hospitality" between colleagues. Hospitality - for five years?

Some experts suggest that it was also taxable income: Over five years, the free rent could easily add up to more than $100,000.

Nor is this all . . . Emanuel served on the Freddie Mac board of directors during the time that the government-backed lender lied about its earnings, a leading contributor to the current economic meltdown.

The Federal Housing Enterprise Oversight Agency later singled out the Freddie Mac board as contributing to the fraud in 2000 and 2001 for "failing in its duty to follow up on matters brought to its attention." In other words, board members ignored the red flags waving in their faces.

The SEC later fined Freddie $50 million for its deliberate fraud in 2000, 2001 and 2002.

Meanwhile, Emanuel was paid more than $260,000 for his Freddie "service." Plus, after he resigned from the board to run for Congress in 2002, the troubled agency's PAC gave his campaign $25,000 - its largest single gift to a House candidate.

RAHM EMANUEL MADE $18 MILLION IN TWO AND A HALF YEARS. HOW?

BARACK BAGGAGE: RAHM EMANUEL

ERIC HOLDER

Holder: Some banks too big to prosecute

Holder explains why he & Obama can murder whom they want

Holder plans to destroy evidence in Megaupload case

Loose Lips, Washington City Paper - A week after Mayor Vince Gray won last year’s primary election, he had a meeting with U.S. Attorney General Eric Holder. After the meeting, Holder surprised reporters by telling them that he had voted for Gray. By contrast, Gray’s own attorney general, Irv Nathan, has declined on several occasions to say who he voted for (probably because he voted for the other guy).

“I’ve known the chairman for a good number of years,” Holder told reporters. “I think he’s going to be a great mayor and I look forward to continuing that relationship.”

That relationship, and one Holder has with D.C. Council Chairman Kwame Brown, could soon get awkward as everyone in District politics makes throat-clearing noises about the need to do something about the perception that the Wilson Building has seen more ethical days. Councilmembers will almost assuredly pass some sort of ethics legislation soon; they can hardly go into an election year without looking like they’ve tried. But they’re also unlikely to want to crack down aggressively on the practices that can give incumbents advantages, so don’t expect tighter campaign finance laws, or a ban on outside employment, or term limits.

What the council will most likely focus on is the requirements for disclosing, and preventing, conflicts of interest and the appearance of conflicts. Which is where Holder comes in. A former U.S. Attorney for the District, Holder has deep links with the city, and people have talked him up as a potential mayoral candidate for years. He also has ties to some of the District politicians, like Gray and Brown, who are currently being investigated by federal prosecutors—who ultimately report to Holder.

No one is suggesting that the attorney general would try to tip the scales of a federal investigation into District politics. But if you were trying to scrub the system of any and all appearances of conflicts of interest, some experts in government ethics say, you probably wouldn’t want Holder to be in charge of the people investigating his buddies.

For instance, campaign records show Holder donated $500 to Gray’s campaign two days before the primary. That campaign, we all know by now, has been subjected to what appears to be a very through investigation by federal investigators, looking into accusations by minor mayoral candidate Sulaimon Brown that Gray aides paid him cash and promised a job in return for attacking former Mayor Adrian Fenty.

Holder also has ties to Kwame Brown, whose 2008 campaign the D.C. Board of Elections and Ethics has been practically begging the feds to investigate for financial irregularities. (An audit found Brown’s campaign directed $240,000 through a third-party contractor to a firm owned by Brown’s brother, and $170,000 of that money hasn’t yet been accounted for.) BOEE Chairman Togo West, a former secretary of the Army, told reporters he believed Brown’s campaign engaged in “criminal activity.”

This January, Holder swore Brown into office. Their relationship dates to at least 2005, when Holder was part of a group of potential owners of the Washington Nationals looking for council support. Indianapolis businessman Jeffrey Smulyan was looking to overcome the stigma of being an out-of-towner and boost his chances of nabbing the Nats. So he teamed up with a group of local and minority investors, including Holder, who was in a private law practice at the time. Smulyan’s bid ultimately failed, but his move to include Holder did garner at least one councilmember’s backing.

Wayne Madsen Report - WMR has learned from a well-informed political insider that President Obama and Secretary of State Hillary Clinton have waffled on support for Egypt's pro-democracy revolution in order to safeguard a covert U.S.-Egyptian rendition and torture program that dates back to the Clinton administration. In fact, Clinton's Deputy Attorney General, Eric Holder, now Obama's Attorney General, was the first Department of Justice official to write a legal brief authorizing the rendition of alleged terrorists from third countries by the CIA to Egypt for purposes of interrogation and torture.

Holder has long been a coddler of torturous regimes. In 2004, while a partner with Covington and Burling, Holder worked out a plea agreement for his client, Chiquita Brands International, in which the firm agreed to pay a fine of $25 million for making cash payments to the Colombian right-wing death squad paramilitary force, the United Self-Defense Forces of Colombia. The AUC carried out systematic assassinations of trade union activists, peasants, politicians, and leftist guerrillas in Colombia.

In July 1998, Holder signed off on the transport of two members of the Egyptian Jihad, captured by Albanian security forces in Albania, to Cairo by the CIA on a chartered extraordinary rendition aircraft. The Egyptians were tortured and executed.

Holder and White House chief of staff Leon Panetta had signed off on the CIA's pre-9/11 rendition program with Egypt. During his confirmation hearings for Attorney General in May 2009, Holder was asked by Senators Lamar Alexander (R-TN) and Richard Shelby (R-AL) about his role in renditions as Deputy Attorney General for Clinton. Holder admitted that extraordinary renditions occurred during the Clinton administration. However, neither Alexander nor Shelby asked Holder how many individuals were renditioned during his time as Deputy Attorney General. Holder was also not asked what torture countries received the kidnapped prisoners from the United States.

WMR has learned that George W. Bush's chief policy adviser, Karl Rove, restrained Republican senators from delving into too many details with Holder at his confirmation hearing. Rove was aware that the Bush administration also used Egypt as a renditioned prisoner recipient country. But Rove was also concerned about secrets being revealed about his own deals with Sweden to turn terrorist suspects over to the CIA for subsequent torture in Egypt. Black business boom

Progressive Reivew While 50 state attorneys general - 43 of them elected by the people - have joined in an investigation of the subprime scandal (in no small part the result of the Glass-Stegel repeal), the main thing we have heard from the federal attorney general, Eric Holder, is a vague promise to look into the matter.

Aside from the fact that this strengthens the argument for an elected federal attorney general, it illustrates how indifferent the Obamites are to dealing with obvious criminal and civil offenses that have been committed in the guise of a "free market economy" by bankers and others.

Progressive Review - Holder has led a charmed life until recently. As US Attorney in DC, he was under the patronage of the Washington Post, which started boosting him as a suitably conservative black candidate for mayor. Unfortunately, despite Holder's willingness to lock up any DC miscreant for as long as anyone who offered him a job wanted, no one could point to anything that Holder had really done other than to give comforting speeches to white business groups. The Post mayoral trial balloon burst before take-off.

Holder, however, soon was given the Web Hubbell chair at Justice. Everything was rolling along just fine until scandals erupted in the DC police department and other city agencies. Now it appears that Holder was just a little lackadaisical in following important leads that might have blown the cover on wrong-doings. Even the Washington Post quotes a senior prosecutor as saying that Holder's office shelved an investigation into a $1-million-a-year corruption case in the DC Water and Sewer Authority.

One of Holder's predecessors, Joseph DiGenova, says, "When you have corruption staring you in the face, and you fail to act, you should resign. You can't worry about judgeships or your next job." And this from former city auditor Otis Troupe: "For years, in audit after audit, and in newspaper article after newspaper articles, we have established fact patterns that constitute crimes. And in all but a handful of case, nobody did anything in the prosecutor's office."

Nonetheless, Holder is still trying to stay in the establishment's good graces by chairing a sentencing commission that is expected to recommend even more severe penalties for those convicted in DC , which already locks up its violent criminals longer than anywhere else in the country. He also remains active on the local scene, helping those politicians with a punishment fetish figure out nifty new tricks. One of the latest seems to have his fingerprints on it: a measure that would take away the right of protestors on federal property to a jury trial. The gimmick: reduce the maximum penalty for the offense so it falls below DC's limit for jury trials. Then when protestors are arrested, hit them with multiple minor offenses. Result: long jail sentences but no need for a jury. Holder beta tested this constitutional assault on other sorts of cases while US Attorney. Sometimes ambition is not a pretty sight.

Progressive Review, 2011 - According to Tim Lynch of the CATO Institute, Holder was responsible for pushing several liberty-killing anti-terrorism laws after the Oklahoma bombing.

He is a drug warrior and who proposed to stiffen penalties for the possession of marijuana.

He was also involved in the federal government;s decision to seize Elian Gonzalez from his aunt's home and return him to Cuba without obtaining a court order, a terrible lapse of judgment.

There have been questions about whether he was completely upfront about the Justice Department's conduct in the Waco fiasco.

Dick Morris & Eileen McGann, June 2008 - On his first day as the presumptive Democratic presidential nominee, Barack Obama made his first clear, serious mistake: He named Eric Holder as one of three people charged with vice-presidential vetting.

As deputy attorney general, Holder was the key person who made the pardon of Marc Rich possible in the final hours of the Clinton presidency. Now, Obama will be stuck in the Marc Rich mess.

If ever there was a person who did not deserve a presidential pardon, it's Marc Rich, the fugitive billionaire who renounced his US citizenship and moved to Switzerland to avoid prosecution for racketeering, wire fraud, 51 counts of tax fraud, evading $48 million in taxes, and engaging in illegal trades with Iran in violation of the US embargo following the 1979-80 hostage crisis.

Seventeen years later, Rich wanted a pardon, and he retained Jack Quinn, former counsel to the president, to lobby his old boss. It was Holder who had originally recommended Quinn to one of Rich's advisers, although he claims that he did not know the identity of the client.

And he gave substantive advice to Quinn along the way. According to Quinn's notes that were produced to Congress, Holder told Quinn to take the pardon application "straight to the White House" because "the timing is good."

And once the pardon was granted, Holder sent his congratulations to Quinn.

Jerry Seper, Washington Times, May 2002 - Former White House Counsel Jack Quinn and former Deputy Attorney General Eric H. Holder Jr. sought to cut the Justice Department out of a decision by President Clinton to pardon fugitive financier Marc Rich, according to a congressional report. The 467-page report, to be released by the House Government Reform Committee, said Mr. Quinn and Mr. Holder "worked together" to ensure that department officials - particularly federal prosecutors in New York who handled the Rich case - "did not have the opportunity to express an opinion on the Rich pardon before it was granted . . . The evidence amassed by the committee indicates that Holder advised Quinn to file the Rich pardon petition with the White House, and leave the Justice Department out of the process," the report said."

Progressive Review 1999 - One of those testifying against the reauthorization of the independent counsel bill was Deputy Attorney General Eric Holder who is an excellent example why Justice is not up to investigating its own administration colleagues. Holder is a political appointee who demonstrated little skill as a US Attorney but nonetheless was named to the number two justice position.

Weekend All Things Considered April 25, 1999 - Deputy attorney general Eric Holder pointed to the [Columbine] boys' use of the Internet to develop their fantasies and possibly to get hold of information on how to build bombs. Holder told CBS that even though previous efforts to restrict speech on the Internet have been struck down in court, it might be time for another try.

ERIC HOLDER: The court has really struck down every government effort to try to regulate it. We tried with regard to pornography. It is gonna be a difficult thing, but it seems to me that if we can come up with reasonable restrictions, reasonable regulations in how people interact on the Internet, that is something that the Supreme Court and the courts ought to favorably look at.

Progressive Review DC News Service, 1998 - City Council chair Linda Cropp has called a special session of the council to overturn a committee's rejection of new sentencing guidelines drafted by a colonial commission headed by Eric Holder. The guidelines, for example, would send someone found with a $10 bag of cocaine to a federal gulag hundreds of miles away for thirty years with no chance of parole. . .

Stephanie Mencimer, Washington City Paper, 1997 - After three and a half years on the job, Holder is still revered in the city's halls of power and widely respected by his peers in the legal field. He is the presumptive nominee to replace outgoing U.S. Deputy Attorney General Jamie Gorelick, a major plum position. He is infinitely qualified by all accounts, and his appointment would be a historic one, since the position has never been held by an African-American. But for all the love Holder has engendered in the community as U.S. Attorney, he has had precious little impact on the city's endemic municipal corruption. Barry has returned to his old tricks, nudging contracts and city jobs to old cronies and new girlfriends. Holder is apparently leaving, and he hasn't thrown a punch.

It isn't for lack of targets. Since Holder was sworn in on Oct. 16, 1993, federal investigators have opened at least a half-dozen major probes of District government fraud and corruption, including investigations of allegations that:

Holder has not had a single high-profile D.C. public corruption case since he became U.S. Attorney. By comparison, during his 5-year tenure diGenova successfully prosecuted two deputy mayors and a dozen lower-level city officials. Holder may have had his way with the media and kept the community at bay, but now that he seems to be moving on, people are wondering why he isn't leaving behind a more honest, or at least more chaste, D.C. government. . .

Just because Holder's office hasn't produced any indictments in these cases doesn't mean they won't be coming eventually. But the lack of any visible prosecution has people wondering why Holder hasn't lived up to all the hype about his credentials. More importantly, they worry that by not prosecuting cases quickly, he has reinforced D.C. government's reputation as a culture without consequence.

Former D.C. Corporation Counsel Fred Cooke and others have suggested that Holder is running a low-key office because he wants to keep his head down so that he can get in line for a federal judgeship. While New York City mayor and former prosecutor Rudolph Giuliani used indictments as a way of getting headlines and winning voters, he never actually convicted many people in court. But Cooke says Justice Department jobs or seats on the federal bench are won by keeping an even keel, doing a respectable job, and not ruffling too many feathers by taking risks. . .

Eric Holder has said he favors secret searches of library and bookstore data files

Attorney General Eric Holder said for the first time today on ABC's "This Week" that the Obama administration is open to modifying Miranda protections to deal with the "threats that we now face."

"The [Miranda] system we have in place has proven to be effective," Holder told host Jake Tapper. "I think we also want to look and determine whether we have the necessary flexibility -- whether we have a system that deals with situations that agents now confront. ... We're now dealing with international terrorism. ... I think we have to give serious consideration to at least modifying that public-safety exception [to the Miranda protections]. And that's one of the things that I think we're going to be reaching out to Congress, to come up with a proposal that is both constitutional, but that is also relevant to our times and the threats that we now face."

HOLDER SAID GITMO PRISONER NOT COVERED BY GENEVA CONVENTION

Paula Zahn, CNN, January 2002 - There are reports that Secretary of State Powell wants the administration to state that the detainees will be treated in accordance with the provisions of the Geneva Convention. Why is that important? And what kind of line will the administration continue to hold?

Joining us now with a law enforcement perspective from Washington, former Deputy U.S. Attorney General Eric Holder . . .

ZAHN: The president will be meeting with his National Security team this morning to talk about, well, the apparent discord here. Give us a preview of what this discussion might entail. When you have Secretary of State Powell saying, "Let's abide by the Geneva Convention," and then folks on the other side, we are told, saying "Wait a minute. If we hold them to that kind of status, then all they'll be required to give us is their name, rank and file number."

HOLDER: Yes, it seems to me this is an argument that is really consequential. One of the things we clearly want to do with these prisoners is to have an ability to interrogate them and find out what their future plans might be, where other cells are located; under the Geneva Convention . . . you are really limited in the amount of information that you can elicit from people.

It seems to me that given the way in which they have conducted themselves, however, that they are not, in fact, people entitled to the protection of the Geneva Convention. They are not prisoners of war. If, for instance, Mohammed Atta had survived the attack on the World Trade Center, would we now be calling him a prisoner of war? I think not. Should Zacarias Moussaoui be called a prisoner of war? Again, I think not.

And yet, I understand what Secretary Powell is concerned about, and that is we're going to be fighting this war with people who are special forces, not people who are generally in uniform. And if unfortunately they somehow become detained, we would want them to be treated in an appropriate way consistent with the Geneva Convention.

ZAHN: So is the secretary of state walking a fine line here legally? He is not asking that the United States declare these men as prisoners of war right now. He's just saying let's abide by the Geneva Convention in the meantime.

HOLDER: Yes, and I think in a lot of ways that makes sense. I think they clearly do not fit within the prescriptions of the Geneva Convention. You have to remember that after World War II, as these protocols were being developed, there seemed to be widespread agreement that members of the French Resistance would not be considered prisoners of war if they had been captured. That being the case, it's hard for me to see how members of al Qaeda could be considered prisoners of war.

ooo

David Kopel - After the D.C. Circuit Court of Appeals ruled that the D.C. handgun ban and self-defense ban were unconstitutional in 2007, Holder complained that the decision "opens the door to more people having more access to guns and putting guns on the streets."

ERIC HOLDER, CHIQUITA & THE AND COLOMBIA DEATH SQUADS

Kevin Gray, Portfolio, October 2007 - For years, Chiquita Brands secretly paid off death squads in Colombia. Now the U.S. Congress is asking questions. . .

In northern Colombia's lush banana-growing region. . . Chiquita Brands International, the $655 million fruit giant, slipped into a blood-soaked scandal. Between 1997 and 2004, Chiquita gave $1.7 million to the A.U.C., whose death squads destroyed unions, terrorized workers, and killed thousands of civilians. Chiquita's top officials admit approving the payments but say they thought that if they didn't pay up, the A.U.C. would kill its employees and attack its facilities. Because the U.S. State Department has labeled the A.U.C. a terrorist organization, federal prosecutors charged Chiquita in March with engaging in transactions with terrorists. In an agreement with the Justice Department, Chiquita pleaded guilty and will pay a $25 million fine. . .

The firm's lawyers have struggled to explain publicly that Chiquita had to make a choice between "life and law" and that it chose the "humanitarian" route of protecting its workers. "This company was in a bad position dealing with bad guys," says Eric Holder, a Washington attorney representing Chiquita. "There's absolutely no suggestion of any personal gain here. It's not a case like Tyco, where someone is squirreling money away. No one is out buying great shower curtains."

As a corporation, though, Chiquita stood to benefit greatly from the lethal cleansing that Castano delivered. At the time, the Marxist guerrillas routinely kidnapped U.S. executives, blew up railroads, and sabotaged oil pipelines. Chiquita says it became increasingly difficult to protect its workers and their families. Castano's death squads, however, were squarely pro-business. They were not just ridding Uraba of guerrillas; they were killing leftists and eradicating unions. . .

During the A.U.C.'s reign of terror, according to the federal complaint, the region would become Chiquita's most profitable farming operation in the world.

While the A.U.C. was murdering thousands of Colombians, "to our knowledge, the paramilitaries never touched a hair on the head of a U.S. citizen or company," says Adam Isacson, director of the Colombia program at the Center for International Policy, in Washington. In fact, Isacson says, the A.U.C.'s stranglehold brought "a strange form of peace to the region through terror. It created a much more friendly business environment."

But for Eric Holder, Chiquita's lawyer, that argument falls flat. "It's like saying a shopkeeper feels safe because the Mob is extorting him for protection payments," Holder says. "You're not paying these guys to protect you from someone else; you're paying them to protect you from them."

Scott Creighton - Barack Obama, the man who spoke so eloquently in the last debate about not passing the Columbia Free Trade Agreement until more was done to bring the killers of the union workers to justice, has just announced that he is going to make the lawyer for one of the companies responsible for these killings, his Attorney General. You can't make this stuff up.

There are also allegations from a French NGO that Chiquita is exposing it's workers to a dangerous pesticide. So the workers that don't get killed by their Chiquita Death Squads, will slowly wither away from horrible illnesses.

There are also criminal charges pending facing some Chiquita executives, in Columbia.

ooo

Reason - Newsweek is reporting that President-elect Obama will install Eric Holder, deputy Attorney General in the Clinton administration, as Attorney General, provided that he passes a formal vetting process. Since Obama is vetting, here are a few things we would like to bring to his attention:

Holder has declared that the "disastrous course" set by the Bush administration in the struggle against terrorism has to be reversed by closing the detention center at Guantanamo Bay and declaring without qualification that the United States does not torture people. But Holder downplayed concerns about using "secret evidence" against suspected terrorists when he was in the Justice Department.

According to Tim Lynch of the CATO Institute, Holder was responsible for pushing several liberty-killing anti-terrorism laws after the Oklahoma bombing.

Holder played a leading role in Bill Clinton's pardon of billionaire fugitive Marc Rich. Some suspect that he might have with-held information about billionaire fugitive and tax evader, Marc Rich, to facilitate Rich's pardon by President Clinton

He is a drug warrior and who proposed to stiffen penalties for the possession of marijuana.

He was also involved in the federal government;s decision to seize Elian Gonzalez from his aunt's home and return him to Cuba without obtaining a court order, a terrible lapse of judgment.

There have been questions about whether he was completely upfront about the Justice Departmentâ€™s conduct in the Waco fiasco.

Holder's big attraction for the job apparently is that he is African American. Skin color is never a good qualification for an appointment and it speaks volumes about Obama if he made it one. That said, there were far better African American candidates for this job including former Baltimore Mayor Kurt Schmoke.

ACLU will have its work cut out for it if Holder becomes attorney general. He will replace one set of excesses with another. It would be truly disappointing pick by Obama.

As deputy attorney general, Holder was the key person who made the pardon of Marc Rich possible in the final hours of the Clinton presidency. Now, Obama will be stuck in the Marc Rich mess.

Seventeen years later, Rich wanted a pardon, and he retained Jack Quinn, former counsel to the president, to lobby his old boss.

It was Holder who had originally recommended Quinn to one of Rich's advisers, although he claims that he did not know the identity of the client.

And once the pardon was granted, Holder sent his congratulations to Quinn.

In 2002, a congressional committee reported that Holder was a "willing participant in the plan to keep the Justice Department from knowing about and opposing" the Rich pardon. . .

It couldn't be a bigger mistake.

Washington Post, 2008 - In December 2000, as Rich's lawyers were closing in on the pardon, one of them, Jack Quinn, singled out Holder in an e-mail. "The greatest danger lies with the lawyers," Quinn wrote his co-counsels. "I have worked them hard and I am hopeful that E. Holder will be helpful to us."

NY Times, 2008 - In recent years, he has worked as a partner at Covington & Burling, representing big-name clients like the National Football League, Chiquita Brands International and Merck.

Progressive Review 1999 One of those testifying against the reauthorization of the independent counsel bill was Deputy Attorney General Eric Holder who is an excellent example why Justice is not up to investigating its own administration colleagues. Holder is a political appointee who demonstrated little skill as a US Attorney but nonetheless was named to the number two justice position.

Weekend All Things Considered April 25, 1999 LARRY ABRAMSON: Deputy attorney general Eric Holder pointed to the [Columbine] boys' use of the Internet to develop their fantasies and possibly to get hold of information on how to build bombs. Holder told CBS that even though previous efforts to restrict speech on the Internet have been struck down in court, it might be time for another try.

Progressive Review DC News Service, 1998 - Eric Holder's commission on sentencing is proposing even more draconian lock-ups despite DC having some of the longest sentences in the country.

Under rules established by Congress, if the council doesn't approve the guidelines, the matter goes to the Justice Department and Congress. Cropp defends publicly capitulating on the issue with the absurdity that "I think most council member feel as if the council ought to make as many decisions as possible." Clearly, the only decision remaining for that eviscerated body is to resist the federal occupation of the city.

Progressive Review, 1998 - Eric Holder gets good national press, but some of those who know something about his activities in DC know better. As a lackluster local US Attorney, he not only sat on information concerning police and water department corruption, his staff regularly signed off on excessive police overtime to keep cops friendly to the prosecutors. Holder was also instrumental in getting law changes that made jury trials more difficult for certain defendants.

The interesting thing about the following is the connection between two of Obama's bad choices: Holder and Hillary Clinton

Sam Smith, Progressive Review, 1997 - One of the issues that came up in a lengthy suit (American Physicians and Surgeons, Inc, et al. v. Hillary Rodham Clinton, et al) was whether White House aide Ira Magaziner, speaking on behalf of Hillary Clinton's health task force, told the truth when he claimed that only federal employees were members of the group. This was found to be false and Judge Royce Lamberth issued an opinion, part of which follows:

|||| It is clear that the decisions here were made at the highest levels of government, and that the government itself is--and should be--accountable when its officials run amok. There were no rogue lawyers here misleading this court. The court agrees with plaintiffs that these were not reckless and inept errors taken by bewildered counsel. The Executive Branch of the government, working in tandem, was dishonest with this court. . . .

The Department of Justice has a long tradition of setting the highest standards of conduct for all lawyers, and it is a sad day when this court must conclude, as did the United States Attorney in his investigation, that the Department of Justice succumbed to pressure from White House attorneys and others to provide this court with "strained interpretations" that were "ultimately unconvincing."

It seems that some government officials never learn that the cover-up can be worse than the underlying conduct. Most shocking to this court, and deeply disappointing, is that the Department of Justice would participate in such conduct. This was not an issue of good faith word games being played with the Court. The United States Attorney found that the most controversial sentence of the [Ira] Magaziner declaration--"Only federal government employees serve as members of the interdepartmental working group"--could not be prosecuted under the perjury statute because the issue of "membership" within the working group was a fuzzy one, and no generally agreed upon "membership" criteria were ever written down. Therefore, the Magaziner declaration was actually false because of the implication of the declaration that "membership" was a meaningful concept and that one could determine who was and was not a "member" of the working group. This whole dishonest explanation was provided to this court in the Magaziner declaration on March 3, 1993, and this court holds that such dishonesty is sanctionable and was not good faith dealing with the court or plaintiff's counsel. It was not timely corrected or supplemented, and this type of conduct is reprehensible, and the government must be held accountable for it.||||

It was just symbolic and, in the end, the money comes out of our pockets but at least one judge has called the White House for lying, assessing a fine of over a quarter of a million dollars. As the above excerpt from Judge Lamberth's opinion indicates, this was no minor peccadillo but rather, "The Executive Branch of the government, working in tandem, was dishonest with this court." At issue was the composition of Hillary Clinton's health task force, a body stacked with those from the medical industry who would gain most from the faux reforms of the Clintonistas.

You might think a federal judge calling one of Mrs. Clinton's top aides a liar would be big news, but not in today's Washington. The Washington Post found room on its front page for "Seniors Strut Their Stuff in Pool Pageant" while burying the health care story on page 21 under a boring headline. That was nine pages better than the New York Times, which ran the story under "Judge Rules Government Covered Up Lies on Panel," hardly descriptive of the story's significance. Furthermore, the Post later attacked Lamberth editorially and defended Magaziner with sophistic arguments worthy of a White House counsel. Note to the Post: honesty is not a legal technicality.

The health care incident also sheds some interesting light on the number two official in the Justice Department, Eric Holder. Turns out it was Holder, then DC's US Attorney, who decided not to prosecute Magaziner on the grounds that no one had written down what "membership" in the task force meant -- the sort of disreputable wriggle for which DC lawyers are famous.

Holder has led a charmed life until recently. As US Attorney in DC, he was under the patronage of the Washington Post, which started boosting him as a suitably conservative black candidate for mayor. Unfortunately, despite Holder's willingness to lock up any DC miscreant for as long as anyone who offered him a job wanted, no one could point to anything that Holder had really done other than to give comforting speeches to white business groups. The Post trial balloon burst before take-off.

One of Holder's predecessors, Joseph DiGenova, says, "When you have corruption staring you in the face, and you fail to act, you should resign. You can't worry about judgeships or your next job. And this from former city auditor Otis Troupe: "For years, in audit after audit, and in newspaper article after newspaper articles, we have established fact patterns that constitute crimes. And in all but a handful of case, nobody did anything in the prosecutor's office."

Stephanie Mencimer, Washington City Paper, 1997 - After three and a half years on the job, Holder is still revered in the city's halls of power and widely respected by his peers in the legal field. He is the presumptive nominee to replace outgoing U.S. Deputy Attorney General Jamie Gorelick, a major plum position. He is infinitely qualified by all accounts, and his appointment would be a historic one, since the position has never been held by an African-American. But for all the love Holder has engendered in the community as U.S. Attorney, he has had precious little impact on the city's endemic municipal corruption. Barry has returned to his old tricks, nudging contracts and city jobs to old cronies and new girlfriends. Holder is apparently leaving, and he hasn't thrown a punch.

- in 1995 Cora Masters Barry arranged to launder campaign money through the 17-year-old son of her housekeeper to pay cash to her brother Walter;

- in 1995 Korean businessman Yong Yun performed renovation work on the Barrys' house in exchange for a sweetheart deal on a city lease;

- last year the police department subverted city procurement regulations to give former members of Barry's security detail city contracts to install a fence and security system at Barry's home;

- the directors of IPACHI, a now-defunct nonprofit group, misappropriated more than $1 million in federal and District money;

- the executive director of JMC Associates Inc., the bankrupt mental health contractor, used money from city contracts and the Social Security benefits of mentally ill clients to buy fur coats, wedding dresses, and a condo on Martha's Vineyard;

- the 27-year-old director of Kedar Day School misappropriated city money intended for educating special-education students;

- and that employees of the lottery board were running businesses out of the board's office and steering contracts to friends of the mayor.

Not one of these cases has resulted in an indictment so far. And the list doesn't reflect a sickening array of other government-related wrongdoing during Holder's watch that seems to have gone unpunished, including voter fraud, allegations of widespread corruption at the taxicab commission, allegations of rampant bribe-taking in the Department of Consumer and Regulatory Affairs, and dozens of reports of graft within the public schools.

Holder, whose sheriff's badge was forged by taking down corrupt public officials, has not had a single high-profile D.C. public corruption case since he became U.S. Attorney. By comparison, during his 5-year tenure diGenova successfully prosecuted two deputy mayors and a dozen lower-level city officials. Holder may have had his way with the media and kept the community at bay, but now that he seems to be moving on, people are wondering why he isn't leaving behind a more honest, or at least more chaste, D.C. government. . .

Former D.C. Auditor Otis Troupe is willing to wait and see, to a point: "He came into his job with a mandate for reform, and in that sense his job is unfinished. I hope he is just biding his time. He's a homeboy. He has reason to know many of the city's structural problems. If all he's doing is taking his time, more power to him. But I haven't seen too many cases.". . .

Allen St. Pierre, NORML NORML has serious concerns about the choice of Eric Holder as the next Attorney General because he has a long history of opposing drug policy reforms, perceiving cannabis smoking by adults as a public nuisance worthy of constant harassment, promoting violent governmental intervention into the private lives of citizens who consume cannabis, supporting mandatory minimum sentencing and so-called civil forfeiture laws. His attraction to the myth of 'fixing broken windows' and using law enforcement to crack down on petty crimes will swell an already overburdened, bloated, expensive and failed government prohibition against otherwise law-abiding citizens who choose to consume cannabis.

FOX NEWS LEGAL ANALYST ANDREW NAPOLITANO INTERVIEWING DEPUTY AG ERIC HOLDER, 2000 - Napolitano: Tell me, Mr. Holder, why did you not get a court order authorizing you to go in and get the boy? [Elian Gonzalez] . . . Holder: Because we didn't need a court order. INS can do this on its own . . . Napolitano: You know that a court order would have given you the cloak of respectability to have seized the boy . . . Holder: We didn't need an order . . . Napolitano: Then why did you ask the 11th Circuit Court of Appeals for such an order if you didn't need one? . . . Holder: [Silence] . . . Napolitano: The fact is, for the first time in history, you have taken a child from his residence at gun point to enforce your custody position, even though you did not have an order authorizing it.

Associated Press, 1999 - : The federal prosecutor who raised questions about a possible Justice Department cover-up in the Waco standoff was abruptly removed from the case along with his boss, according to a court filing made public today. Deputy Attorney General Eric Holder recused U.S. Attorney James W. Blagg in San Antonio and assistant U.S. Attorney Bill Johnston in Waco from any further dealings in criminal or civil proceedings related to the siege. Holder appointed the U.S. attorney in a neighboring district as a ``special attorney to the U.S. attorney general." .... Johnston wrote Reno warning that aides within her own department were misleading her about federal agents' roles. The recusal notice provides no explanation for Holder's action.

Progressive Review, 1998 - Eric Holder's commission on sentencing is proposing even more draconian lock-ups despite DC having some of the longest sentences in the country.

The guidelines, for example, would send someone found with a $10 bag of cocaine to a federal gulag hundreds of miles away for thirty years with no chance of parole.

Progressive Review, 1998 - Holder has led a charmed life until recently. As US Attorney in DC, he was under the patronage of the Washington Post, which started boosting him as a suitably conservative black candidate for mayor. Unfortunately, despite Holder's willingness to lock up any DC miscreant for as long as anyone who offered him a job wanted, no one could point to anything that Holder had really done other than to give comforting speeches to white business groups. The Post trial balloon burst before take-off.

TIM GEITHNER

Sheila Bair zaps Geithner in new book
Huffington Post - Former financial regulator Sheila Bair says that Treasury Secretary Timothy Geithner was primarily concerned with shoring up Citigroup and other banks in his response to the financial crisis, rather than holding those banks accountable. Bair went on a media tour on Tuesday to prom..

THE CASE AGAINST GEITHNER

IF PIGS COULD FLY: THE WISDOM OF TIM GEITHNER

From Eco Monitor 2006:

"If individual dealers to a very large hedge fund each operate with adequate knowledge of the risk profile of the fund, if they each make conservative judgments about their potential direct exposure to the fund in a stress scenario, if they limit the overall exposure of the firm as a whole to the broader market distress that might accompany that failure of a major hedge fund, if they compensate for the uncertainty in making these judgments by charging appropriate risk premia or building in a greater cushion against adversity, and if the supervisory constraints on the core institutions adequately offset the moral hazard that comes with that relationship, then the financial system as a whole will be less vulnerable to distress in the hedge fund sector."

Ny Times, November 8 - The main rival to Mr. Summers for the Treasury job, according to Obama advisers, is Timothy F. Geithner, president of the New York Federal Reserve Bank and a Treasury staff member under Mr. Summers when he led the agency in the final two years of the Clinton administration.

But Mr. Geithner presents a different problem for Mr. Obama, who staked his campaign on a call for change in Washington, especially in areas of economic policy.

Though a nonpartisan Federal Reserve official, Mr. Geithner is tightly linked with the policies of the current Treasury secretary, Henry M. Paulson Jr., and the Bush White House. Among the public, there remains deep skepticism over the wisdom and fairness of the bank bailouts.

Many on Wall Street still question Mr. Geithner's role in allowing the investment bank Lehman Brothers to collapse into bankruptcy, an event some believe exacerbated the financial crisis. Some also say Mr. Geithner relies too much on financial executives for guidance and, except in the Lehman case, is too quick to come to their rescue.

"He is too tied to Wall Street and too tied to this administration," said Joseph Mason, banking professor at Louisiana State University and a critic of the bailout plans. . .

Like Mr. Summers, Mr. Geithner served at the Treasury under Mr. Rubin, helping manage the Russian credit crisis in the late 1990s.

Mr. Geithner, 47, also played a role in the bailouts of Brazil, Indonesia, Korea, Mexico and Thailand. And he spent two years in Tokyo in the early 1990s, where he studied Japan's economy, later urging Mr. Rubin to assist in lifting that country out of its long financial malaise.

Gary Weiss, Portfolio, June 2008 - As president of the Federal Reserve Bank of New York, Geithner, at least at this point in early April, is the man of the moment. Credit-crunched investment bankers are calling to withdraw funds from the discount window, which the Fed uses to loan money directly to banks. Nosy politicians are trolling for scapegoats. Journalists are asking what will happen next. . .

Geithner was the central figure in that drama. It was Geithner's Federal Reserve bank, not the Treasury, that came up with the $29 billion loan that made the deal possible or, more precisely, acceptable to J.P. Morgan. Geithner brought the parties together, hashed out the details, and demanded answers when things got shaky. It was a heady role for a non-economist who has, to put it kindly, only on-the-job training in the financial markets and who relies on an A-list inner circle. Officially, his advisers include the board of the New York Fed, which counts several heads of financial institutions as members. Unofficially, he has built an impressive career with the help of a number of kingmakers, including some with a financial interest in the industry he oversees.

It was in this office, right here, where the Bear deal was done. During that time and in the weeks after, Geithner was getting two hours of sleep a night, and he still looks it. You might even say that this youthful 46-year-old is starting to look his age. The sudden fame clearly unnerves Geithner, a quiet sort who is described by people who know him as shy. "He does not try to blow you away, to overwhelm you," says Henry Kissinger, Geithner's first boss. . .

"We're going to need to change a whole bunch of aspects of our financial system," Geithner says, speaking quickly and leaning forward in his chair. "We should not have a system that's this fragile, that causes this much risk to the economy."

The reform process has started creaking forward, with a wide-ranging (and swiftly dismissed) series of proposals by Treasury Secretary Hank Paulson. Meanwhile, Geithner has begun sending teams of examiners to the major investment banks to pore over their books and risk-control policies. Since the Bear blowup, he has also been urging bankers to boost their capital levels.

It has become something of a Wall Street parlor game to try to figure out why Geithner got as involved as he did in the Bear mess and whether he was had by crafty bankers. Geithner insists that the Bear deal benefited the public and not just the other big banks, who stood to gain from their competitor's going out of business. (Granted, it did help the banks, assuaging fears of an industry wipeout.) The implicit message is, Weep not for Bear but for what could have happened to the rest of us if it hadn't been saved. Geithner is impatient with-and a bit teed off by-talk that he is pushing the Street's agenda. "The Fed's actions in this financial crisis will benefit Main Street more than they benefit Wall Street," he asserts. He is certain that calamity was averted and that the people who gain most from the deal are not bankers but "the family who needs to borrow money to finance a house or send their child to college, or the individual trying to build enough savings for retirement, or the worker worried about losing her job."

That sounds like campaign rhetoric, but Geithner is an avowedly apolitical independent-contrary to the assertion of one columnist that he was an adviser to John Kerry in 2004-and has served under both Republicans and Democrats. But he's going to have a hard time remaining above the political fray, certainly in this election year, when, given the weak federal response to the subprime-mortgage crisis, the Bear Stearns bailout may anger voters.

Questions linger as to whether Geithner, who's supposed to represent the public interest, ended up with the best possible deal. He's an experienced negotiator, having wrangled with foreign powers during his days at Treasury, but some critics contend that he may have been outmatched by Jamie Dimon, J.P. Morgan's chief executive, and Alan Schwartz, Bear's C.E.O. "He doesn't really have what you would describe as a banking or financial background. He's never taken risk, never worked as a trader or in credit, or even had operational responsibility in a bank," says Chris Whalen, a vocal critic of the Fed and a managing director of Institutional Risk Analytics, a consulting firm.

After the Bear deal, the Fed wound up with $30 billion in collateral, mostly in the form of subprime-mortgage securities. Even Paul Volcker, the former Fed chairman who served on the search committee that picked Geithner and who still holds him in high regard, has expressed queasiness about the way the deal was structured. In a speech to the Economic Club of New York, Volcker said the Fed took actions that "extend to the very edge of its lawful and implied powers, transcending certain long-embedded central-banking principles and practices." Volcker later leavened this harsh assessment a bit, telling me that the Fed's intervention "was a proper action, but it was extraordinary-something that's never been done before, in terms of calling upon that emergency power. It tells you how seriously they took it."

Still, misgivings about the deal are hard to ignore, no matter how catastrophic the consequences of not intervening might have been. It doesn't help that the deal is teeming with connections that are sure to raise questions. Dimon is one of the three class-A directors of the board of the New York Fed, and its head is Stephen Friedman, a former Goldman Sachs chairman, who still sits on the investment bank's board. The New York Fed's board also includes Richard Fuld of Lehman Brothers, a firm that is another oft-rumored potential candidate for a bailout. Fuld is a class-B director, meaning that he is elected by member banks, astoundingly, to represent the public. (Friedman is also supposed to be looking out for you: He was "appointed by the board of governors to represent the public.") Thus Geithner reports to a board that is composed of people who are not only under his purview but would also benefit from any potential bailouts. The structure of the New York Fed's board bears more than a passing resemblance to that of the New York Stock Exchange in the bad old days, when member firms, regulated by the N.Y.S.E., were heavily represented on its board.

Even more intriguing is Geithner's informal brain trust, loaded with Wall Street luminaries. Since coming to the Fed in November 2003-recruited by then-New York Fed chairman Pete Peterson, co-founder of the Blackstone Group-Geithner has learned the ways of the financial industry at the feet of some of its biggest legends. He was almost immediately taken under the wing of Gerald Corrigan, a gregarious former New York Fed chief who is now a managing director of Goldman Sachs. Corrigan describes his relationship with Geithner as close, and it has flourished since Geithner's first days at the Fed. Another frequent adviser-"you don't want those things to get too formal," Corrigan notes-is also a preeminent banker, Merrill Lynch C.E.O. John Thain, a Goldman alumnus and former head of the N.Y.S.E. Over the years, Thain has often talked to Geithner-"sometimes I talk to him multiple times a day," Thain says. GeithÂ&SHY;ner's network also includes former Fed chairman Alan Greenspan, an old acquaintance, as well as the heads of the European central banks, hedge fund managers, academics, and his immediate predecessor, William McDonough, architect of the 1998 Long-Term Capital Management bailout and now a vice chairman of Merrill.

Geithner's link to Corrigan will be especially crucial in the months ahead. Corrigan was recently asked by a presidential policy group to form a panel charged with finding ways to protect the financial system. The group is expected to release its findings by the end of July-a rapid but necessary pace if the Street is to have an effective voice in whatever may be done to tamp down risk. . .

Corrigan says that they "talk about everything under the sun," except for monetary policy. "He brings in groups of people. That includes, at times, some of his old Treasury buddies," like former secretaries Larry Summers and Robert Rubin. "As I said, he has really worked at this networking thing I keep talking about."

Of course, these aren't exactly chitchats among people who meet casually at some South Street Seaport bar after work. This is networking between a central banker and the heads of the capital-hungry investment firms over which he holds sway. You might argue that Geithner's relationship to his charges is even closer than the typical regulator's. No other regulatory agency is in a position to loan crucial billions to the entities it monitors. . .

Naked Capitalism, April 2008 - Steve Waldman, who took the trouble to read and parse an attachment to Timothy Geithner's presentation that set forth the terms and conditions for the operation of the LLC that will [manage Bear Stearns assets]., focuses on the disclosure that some of these assets included related hedges, which are derivatives. More important, Waldman concludes that the Fed isn't on the hook for just $29 billion but could wind up stumping up more:

"It's official. The LLC that the Fed and J.P. Morgan recently formed to manage $30B Bear Stearns assets has taken over a portfolio of derivative positions along with those assets. Those positions involve both rights to receive and obligations to pay whose value may depend upon both circumstance and counterparty quality. Of course, if liabilities associated with those positions ever exceed the value of the LLCs assets, the limited liability company could declare bankruptcy, so in theory, the Fed's maximum exposure is $29B. But, if, out of reputational concern or to promote systemic stability, the Fed would inject capital rather than let the LLC default, then the Fed has indeed become a counterparty of last resort."

Looking simply at the behavior of the main actors, Michael Shedlock concludes these instruments can't be all that hot. From Shedlock:

"This is galling. Everyone is praising the quality of the assets offered to the Fed as collateral, but JPMorgan would not take them outright. Why not? And while the Fed is on the hook for fallout from those assets, what about the other assets JPMorgan picked up for next to nothing? What are those worth? Was JPMorgan acting like a 'responsible corporate citizen' or a vulture financing corporation?"

. Geithner is generally very well regarded, yet I have come to the view that as head of the New York Fed, he was in a position to have seen what was going awry, yet remained blind alternative courses of action.

He gave a very long speech, parts of which seemed designed to run out the clock so as to reduce the time available for questions (does the panel really need a discussion of the history of the Fed?). Read this section, which came at the beginning:

"This was a period of rapid financial innovation-particularly in credit risk transfer instruments such as credit derivatives and securitized and structured products. There was considerable growth in leverage, greater reliance on ratings on structured credit products and a marked deterioration in underwriting standards.

"The innovation in financial products was accompanied by a dramatic increase in the amount of financial intermediation occurring outside the core banking system. The importance of securities broker-dealers, hedge funds, and mutual funds in the financial system rose steadily. Off-balance-sheet vehicles of various forms proliferated, and increased concentrations of longer-dated assets were held in funding vehicles with substantial liquidity risk."

In a speech he gave a bit more than a year ago, Geithner covered much the same ground (without the road kill details we now have) framed more positively, and pointed out that only 15% of the non-farm credit extension was via banks. We noted at the time:

"Geithner has no objective foundation for his rosy view. He has essentially admitted the Fed and other regulators lack a complete, or even good, picture of what is happening. We've had money supply growth well in excess of GDP growth, and loose monetary conditions can obscure underlying weaknesses. His argument boils down to, 'Our current structure and distribution of risks is outside the bounds of anything in financial history. We can muster some arguments as to why this should be OK, and so far, it has been OK.' I don't find that terribly convincing."

And in that speech, he in effect said it was OK for regulators to supervise only in the most minimal way: We cannot turn back the clock on innovation or reverse the increase in complexity around risk management. We do not have the capacity to monitor or control concentrations of leverage or risk outside the banking system. We cannot identify the likely sources of future stress to the system, and act preemptively to diffuse them. . .

How can you "encourage" behavior changes among parties you don't regulate? Where you don't have enough of a view of what they are doing to even suggest where they might need to trim their sails? Yet today, the Fed's and Treasury's message to Congress was: we withstood this test, the system works, butt out. They should consider the warning of General Phyrrus: "One more such victory, and we are lost."

LAWRENCE SUMMERS

How Bill Clinton and Larry Summers got this crisis going

Book on Obama admin says Summers was somewhat dysfunctional

LOOK WHO LARRY SUMMERS WORKS WITH

HOW LARRY SUMMERS HELPED TO WRECK HARVARD'S ECONOMY; NOW HE'S WORKING ON OURS

Nina Munk, Vanity Fair - It's 2001 and Larry Summers has just been named president of Harvard University. Unapologetically combative, Summers is determined to lead (or force) the university into a glorious renaissance. Gazing into the future, Summers envisions smaller class sizes, a more diverse student body, a younger and more energetic faculty, a revitalized core curriculum, cooperation among Harvard's balkanized divisions, and a greatly expanded campus. Above all, at a university best known for its focus on the humanities, business, and law, Summers hopes to make science a priority. Belatedly, Harvard will match and even surpass the lavish investments that Princeton and Stanford have plowed into the sciences.

As Summers recently remarked to one of his colleagues, "I held out the hope that Boston would be to this century what Florence was to the 15th century."

Harvard's soaring endowment was the key to Summers' blueprint for the future. Instead of promoting fiscal restraint, he argued, Harvard should loosen its purse strings. The endowment should be used for "priorities of transcendent importance," he proclaimed to The New York Times in 2008, after resigning as Harvard's 27th president. "There is a temptation to go for what is comfortable," he added, "but this would be a mistake. The universities have matchless resources that demand that they seize the moment."
Caught up in the exuberance of the new millennium, and guided by Summers's transcendent vision for the university, Harvard embarked on a plan of action. In September 2003, Summers cut a crimson ribbon marking the opening of the $260 million New Research Building, at Harvard Medical School: at 525,000 square feet, it was the largest building in Harvard's history. The previous year, construction had started on the 249,000-square-foot Center for Government and International Studies. Designed by Henry N. Cobb, architect of Boston's John Hancock Tower, CGIS, with its two identical buildings covered in fragile terra-cotta panels, ended up costing a reported $140 million, more than four times what the planners had first anticipated.

The New College Theatre came next-a beautiful 272-seat space, built on the site of the Hasty Pudding Theatre of 1888 and retaining, at great expense, the Hasty Pudding's historic façade. A few months later, in November 2007, Harvard's Laboratory for Integrated Science and Engineering was completed. Its vital stats: 137,000 square feet, an internationally esteemed architect (1996 Pritzker winner Rafael Moneo), and a $155 million price tag, funded almost entirely with debt.

To be fair, when the Laboratory for Integrated Science and Engineering was still in the planning stage, Harvard intended to defray the cost of the building by selling naming rights. Nevertheless, for some now hazy reason, construction was well under way before a willing donor had been secured, and by then it was too late to seize the moment. "It is a lot harder to raise money for a building that has already been built" is how a former dean of Harvard College explained the situation at the time.

Where in the world were the voices urging restraint? "Some people really wondered at the expanse of the new buildings and the pace at which it was happening," I was informed by Everett Mendelsohn, a professor emeritus in the Department of the History of Science, who's been at Harvard since 1960. "Periodically, discussions would take place at the Faculty Council, and one of the deans or the presidents would come, and there would be questions asked. But there wasn't a regular give-and-take... I'd say there was a sense that the critics were not being heard."

Even today construction is going on at Harvard. The polished 520,000-square-foot Northwest Science Building, designed by Skidmore, Owings & Merrill, has just opened. Over at Harvard Law School, a $250 million project, designed by the firm of Robert A. M. Stern, is a work in progress: a giant limestone building with a 700-car underground garage.

On the subject of Harvard's billion-dollar construction pit in Allston: over the years, quietly, the university had been assembling and buying hundreds of acres in the Allston-Brighton area, more land than it owns in Cambridge. Once home to slaughterhouses and stockyards and stench, Allston seemed the most likely place for Harvard to expand. In a 2006 interview with Harvard Magazine, Summers described Allston as "the launching pad for something new that reflects the dreams of the most creative young scientists in the world."

The university's master plan called for a "seminal" transformation of 220 acres in Allston over the next 50 years: in place of broken pavement and abandoned warehouses, Harvard would build new walkways and bicycle lanes. A paved piazza would be surrounded by theaters and museums. A new pedestrian bridge would span the Charles River. Here and there, landscapers would plant abundant, well-tended gardens. Small, charming shops would be adjacent to outdoor cafés. All that and more was the Utopian plan.

After decades of planning, construction began in Allston in 2007. Part one was to be the $1.2 billion Allston Science Complex. At 589,000 square feet it would include four buildings designed to house the Harvard Stem Cell Institute, the Harvard Medical School's Department of Systems Biology, the Department of Stem Cell and Regenerative Biology, and the new Wyss Institute for Biologically Inspired Engineering.

Earlier this year, however, when it became clear to everyone at Harvard that the effects of the global recession would be profound, construction at Allston was abruptly stopped. Not, mind you, that the verb "to stop" is part of Harvard's current vocabulary-the project is being "re-assessed" and "recalibrated." Once its mammoth foundation has been poured (for otherwise the unstable mud walls could cave in), the Allston Science Complex will be on hold.

Meanwhile, as Harvard pauses to recalibrate, five huge and silent cranes, like prehistoric relics, like monoliths, dominate the local skyline-or at least they did when I was there in May. Residents of Allston are furious; they think they've been double-crossed. You dirty rats, screamed a cover of the Boston Herald, referring to Allston's growing rodent problem and, subversively, to "rats" at Harvard jumping ship.

In theory, Larry Summers, who now heads the National Economic Council under Barack Obama, may have been the right person to lead Harvard into a glorious renaissance. In reality, however, when Summers was president of Harvard, he alienated just about every faculty member who crossed his path. Instead of being admired as a visionary, he was said to be arrogant. Instead of being recognized as a bold and fearless leader, he was perceived as a cerebral bully. That Summers suggested women lacked a natural ability for sciences did not help matters one bit. Nor did his very public feud with the professor of African-American studies Cornel West, who decamped for Princeton. In early 2006, anticipating a vote of no confidence by the Faculty of Arts and Sciences, Summers resigned.

SUMMERS HELPED DAMAGE TWO COUNTRIES' ECONOMIES

Mark Ames, Nation - From the start, [Lawrence] Summers has been on the wrong side of Obama's supporters. In 1982, while still a graduate student at Harvard, Summers was brought to Washington by his dissertation advisor Martin Feldstein, the supply-side economist, to serve on Ronald Reagan's Council of Economic Advisors. Those first years in the Reagan administration were crucial in the right-wing war against New Deal regulation of the banking system and financial markets -- a war that Reagan's team won, and that we're all paying for today. Although Summers eventually identified himself with the Democratic Party -- albeit the right wing of that party -- nevertheless, as the New York Times's Peter T. Kilborn wrote in 1988:

He worked for 10 months as a top analyst in President Reagan's Council of Economic Advisers when his mentor, Martin S. Feldstein, was running it, and his colleagues don't recall him venting anti-Reagan heresies then. "One of the ironies of this business is that Summers's economics are quite close to Feldstein's," said William A. Niskanen, who was a member of the Feldstein council. . .

Some fifteen years after Summers's stint in the Reaganomics war room, he reappears as one of the key villains fighting to suppress the regulatory efforts of a top official, Brooksley Born, who was trying to call attention to the dangers of the unregulated derivatives, such as credit swap defaults, which today are considered the key to the current economic crisis. . .

Progressive Review - In 1991, Larry Summers signed a memo when he was vice president and chief economist of the World Bank concerning the handling of pollution in less wealthy lands. When an excerpt of the memo was leaked, more than a few people became upset. Summers initially took responsibility for the memo but claimed it was satirical. Later, blame for writing the memo was taken by aide Lant Pritchett. Pritichett went on to lecture at the Harvard Kennedy School and Summers went on to be president of Harvard.

If the memo was in fact intended to be humorous, whoever wrote it didn't understand that humor used again the poor and defenseless is not satire but ridicule and bigotry. The fact that Summers thought it funny should disqualify him from any government position.

The excerpt:

|||| 'Dirty' Industries: Just between you and me, shouldn't the World Bank be encouraging MORE migration of the dirty industries to the LDCs [Less Developed Countries]? I can think of three reasons:

1) The measurements of the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.

2) The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost. I've always though that under-populated countries in Africa are vastly UNDER-polluted, their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world welfare enhancing trade in air pollution and waste.

3) The demand for a clean environment for aesthetic and health reasons is likely to have very high income elasticity. The concern over an agent that causes a one in a million change in the odds of prostrate cancer is obviously going to be much higher in a country where people survive to get prostrate cancer than in a country where under 5 mortality is is 200 per thousand. Also, much of the concern over industrial atmosphere discharge is about visibility impairing particulates. These discharges may have very little direct health impact. Clearly trade in goods that embody aesthetic pollution concerns could be welfare enhancing. While production is mobile the consumption of pretty air is a non-tradable.

The problem with the arguments against all of these proposals for more pollution in LDCs (intrinsic rights to certain goods, moral reasons, social concerns, lack of adequate markets, etc.) could be turned around and used more or less effectively against every Bank proposal for liberalization. ||||

While Summers and Pritchett survived the memo incident, the Brazilian secretary of the environment was not as fortunate. He was fired after writing to Summers:

"Your reasoning is perfectly logical but totally insane. . . Your thoughts [provide] a concrete example of the unbelievable alienation, reductionist thinking, social ruthlessness and the arrogant ignorance of many conventional 'economists' concerning the nature of the world we live in. . . If the World Bank keeps you as vice president it will lose all credibility."

Heidi Przybyla, Bloomberg - Summers, a Harvard economist who worked under Rubin in the Treasury before replacing him as secretary, joined his boss in defeating an effort to rein in over- the-counter derivatives in 1998.

Brooksley Born, then commissioner of the Commodity Futures Trading Commission, wanted to examine regulating the derivatives, including credit-default swaps, saying they posed "grave dangers'' to the economy. Federal Reserve Chairman Alan Greenspan and Rubin issued a rebuke, saying in a statement that they seriously questioned the scope of the CFTC's jurisdiction in this area.

Summers called Born and said he was with bank representatives in his office and they believed that the regulation would lead to an economic crisis, according to a person familiar with the situation who asked to remain anonymous. Summers declined to be interviewed for this article.

Summers and Rubin also helped secure passage of the 1999 Gramm-Leach-Bliley Act, aimed at spurring competition in banking. The law repealed the 1933 Glass-Steagall Act, which had prohibited commercial banks from offering investment and insurance services. Summers, 54, helped craft the legislation, and Rubin urged Congress to pass it and Clinton to sign it. . .

JANET NAPOLITANO

According to David Savage in the LA Times:

- As governor of Arizona, Janet Napolitano last year signed into law the nation's harshest penalty for employers who knowingly hire illegal immigrants, a measure that would take away their business licenses for a second violation.

- She signed a law that would take away the business license for the second violation of a company hiring illegal immigrants, what she called the "business death penalty." The Mexican American Legal Defense and Education Fund and the U.S. Chamber of Commerce went to court to block the measure. It has been approved by a federal judge but is under appeal.

- She opposed punishment against immigrants who are already here.

- She vetoed a bill that would have prevent illegal immigrants from getting state tuition assistance.

- She vetoes a bill that would have require the police to arrest illegal immigrants.

- She has an approval rating over 70%

- John Trazvina, president of the Mexican American Legal Defense and Education Fund: "Arizona has become one of the worst states for immigrants in this country."

- She did not support a border fence. Her reaction: "You show me a 50-foot wall, and I'll show you a 51-foot ladder," she has said.

- She favors a "temporary worker program with no amnesty."