Buck Naked Politics

IG for TARP Funds Says the Treasury Abdicated Its Responsibility for Oversight of AIG

bartleby the scrivener |  There.  He said it.  I feel a little better now.

"It was a failure of oversight by Treasury" that led to the spring's bonus fiasco, watchdog Neil Barofsky told the House Oversight and Government Reform Committee this morning, a failure for which he said Treasury Secretary Tim Geithner was ultimately responsible.

Treasury essentially abdicated its oversight duties of AIG's compensation structures to the Federal Reserve Bank of New York, which was "a recipe for disastrous consequences," said Barofsky...Ultimately, Geithner did not learn about the bonuses until March 10, three days before they were paid out, despite running the Treasury Department since January and, before that, the Federal Reserve Bank of New York, where officials knew about the payments last November. At that time, both parties agreed that there was no legal grounds to stop the payments, a correct determination, according to Barofsky. (ABC News)

New FTC Advertising Guidelines Target Bloggers, Celebrities, and More

by Deb Cupples |   Yesterday, the Federal Trade Commission (FTC) announced updates to its "Guides Concerning the Use of Endorsements and Testimonials in Advertising," which address endorsements by consumers, experts, organizations, and celebrities -- and disclosure of relevant connections between advertisers and endorsers (e.g., payments compensation, and maybe conflicts of interest).  Reportedly, the Guides have not been updated since 1980. 

The FTC's press release states:

Obama Continues Invasive Search Policies for Electronic Devices of Travelers

by bartleby the scrivener |  In keeping with its habit of preserving executive powers claimed by the Bush administration, the Obama administration will continue a Bush-era policy which allows Customs  to "open your laptop and read your medical records, financial records, e-mails, work product and personal correspondence -- all without any suspicion of illegal activity,"" according to Elizabeth Gotein of the Brennan Center for Justice.  (NYT)  True, the administration has built in some new procedural safeguards.  But:  the principle that the government can search a traveler's electronic devices where there is no suspicion of any wrong-doing remains intact.

Inspector General: Banks Used TARP Funds Designed to Increase Lending to Defray Expenses, Increase Investments, Buy New Assets

by Bartleby the Scrivener | It's like that advertisement from a few years ago where the parents give the kid a credit card for "emergencies" at college, get a bill longer than their arm, and rush up to college to find him decked out in brand-new scuba gear and holding a giant pizza.  "One response, which the report described as typical, said the money had been used "to make loans to credit worthy customers, and to facilitate resolution of problem assets on our books." (New York Times)

If you give banks "no strings" money with just some vague stuff about how you hope they'll use it to increase lending, what do you expect?  And hey, it seems to have worked in a way -- it's got some of them back on their feet, even if taxpayers haven't seen any of the trickle-down benefits that we were supposed to see. And the government has rejected the I.G's insistence on greater transparency and more detailed reporting regarding use of TARP funds.  But the Treasury doesn't see the point.

FAA Cracks Down on Regional Airline Safety

by Damozel | About damn time, too.  After the jump....

Murtha's Nephew Got Defense Contracts Without Competition?

 by Damozel | Pennsylvania Representative John Murtha has -- as WaPo puts it -- "significant sway over the Defense Department's spending as chairman of the House Appropriations defense subcommittee." So the stories go on and on. (WaPo)

His nephew says that the award of defense contracts to his company (Murtec) has nothing to do with his being Murtha's nephew (he doesn't "advertise the fact") and he's sorry that the relationship (and his getting the contract with no competition) might have the appearance of impropriety.  Murtha's nephew says his company got the work because they were uniquely qualified to do it.  (WaPo)

News Round-Up: EPA Finds "Compelling and Overwhelming" Evidence that Warming Gases Threaten Public Health and Welfare

by Damozel |   Climate Progress calls it "a landmark finding for America and humanity" The New York Times reports:

The Environmental Protection Agency on Friday formally declared carbon dioxide and five other heat-trapping gases to be pollutants that threaten public health and welfare, setting in motion a process that for the first time in the United States will regulate the gases blamed for global warming. The E.P.A. said the science supporting its so-called endangerment finding was “compelling and overwhelming.”...

GAO Lists Three High Risk Areas that Government Should Address

by Deb Cupples |  Last week, the Government Accountability Office released a 99-page report discussing three "high-risk areas" that federal government officials need to address.

The GAO often has good data, but GAO report drafters tend to rely on Bureaucrat-Speak, which often dilutes the message.  I suspect they do this in order to maintain some semblance of neutrality or objectivity, because they work for both parties in Congress.

Below are three priorities that the GAO recently urged our government to focus on, each followed by my translation into Ordinary-American-Speak.

With the Economy in Free Fall, Barney Frank Wants Slacker Obama to Start Being President Now

by Damozel | Ah, the pressure of sky-high expectations.  Obama might be the first president in history to be blamed by his supporters for failing to fix the economy before he's even in office.  According to Jim Kuhnhenn at Huff Post and House Financial Services Committee Chair Barney Frank "the dodge is wearing thin." 

With Daschle at HHS, Expect Healthcare Reform Debate Early

by Bill Kavanagh:  It’s now clear that Obama isn’t considering a serious delay before pushing healthcare reform in 2009.  With Tom Daschle’s appointment to head HHS, it’s full speed ahead for Ted Kennedy and Max Baucus to put together legislation in the Senate that will finally bring universal health coverage to the United States.  Some speculate that the bill may not become effective until the Bush tax cuts for the rich expire in 2011, but the shape and scope of the new plan will likely become clear to everyone early in 2009.

This signal is obviously setting conservatives’ hair on fire, but they won’t be the biggest obstacles to passage.  The insurance industry has a huge political war chest banked and they’ll be using it to pay lobbyists and threaten legislators.  Expect to see the fruits of that spending soon enough in news coverage, think tank pronouncements, PAC formations, and industry nay-sayers appearing on the talk show circuit.  The health insurance companies are doubtless  readying a new round of scary commercials like the “Harry and Louise” series that helped kill reform in the early 1990’s— and that will just be the most public part of the effort.

Pentagon Board Says DoD's Budget is "Not Sustainable"

by Damozel | Of course, I'm sure Deb would point out that this might be less of a crisis if not for war profiteering and the diversion of resources into the pockets of private contractors.

Here's the story:

Bush Lies Low While His Administration Quietly Prepares to Inflict Even More Damage

by Blue Stockings | In the meantime, George W. Bush is still president.  But in these times of economic crisis and many little wars, where is George?  Anywhere?  Anywhere?

He's intentionally keeping out of sight, according to The New York Times---presumably because if he reminds voters of his existence, they'll never want to vote Republican again.  After all, McCain has been fighting to create and market his own "not at all like W---even nastier!" brand.

US Attorney General Mukasey Costs Taxpayers $155,800 for Personal Trips

by BN-Politics | Add Attorney General Michael Mukasey to the long list of Bush Administration officials and Republicans generally (cf.) who consider themselves entitled to use tax dollars to fund their travel expenses. (McClatchy)  We just learned that Palin had the citizens of Alaska paying to fly her family around.  Now: the Attorney General of the United States.

Attorney General Michael Mukasey has taken personal trips on government jets almost every weekend since he took office less than a year ago at a cost to taxpayers of more than $155,800, Justice Department and Federal Aviation Administration travel records show.

If Elected, Would Obama Appoint a Bipartisan Cabinet?

by Damozel | I can't imagine that progressives will jump for joy at some of the names being bruited about, but Obama's list of reported candidates seems consummately pragmatic, given the tension between Democrats and Republicans.  The pragmatism comes in when you consider McCain's---and the media's---attempts to stoke fears among their constituents and swing voters about the consequences of a Democratic landslide.

If the Democrats win sweeping majorities in the House of Representatives and the Senate as well as the White House, conservative voters could feel alienated from every branch of government. The McCain campaign is already playing up fears of a Democratic landslide to persuade Republicans and independents to back their man.(Times of London)

The Apocalypse of Banks Part ####: The Meltdown Spreads Across the Globe

by Damozel |  Apparently, only a global rescue plan can save us now---if anything can, that is. (NYT)

Government officials struggled to fashion a coordinated response to the ailing global banking system before going to Washington for annual meetings of the International Monetary Fund and World Bank.

With credit markets still frozen and stock markets around the world in a deep swoon, there is a growing consensus that the crisis is now so fast-moving and harmful to the global economy that it demands an unprecedented degree of worldwide coordination(NYT)

WSJ says that economists expect the crisis to spread.  But I'm a glass half-full, kumbaya kind of a person.  I don't see this as a crisis.  It's an opportunity for cooperation!   Look, David McCormick says so.   

“As this thing has spread, the opportunities for cooperation have risen,” David H. McCormick, the under secretary of the Treasury for international affairs, said. “We need to promote and highlight these common areas.”

Others---others who have been right for far longer, I should say--- are less sanguine and more urgent.  Permabear Nouriel Roubini, whose erstwhile doleful predictions are being vindicated by reality, bleakly sums up the situation and what needs to happen now, as in NOW. 

Brokaw on Social Security; Palin on McCain's Plans for Social Security & Health Care Reform

by Damozel | Brokaw said last night during the Obama/McCain that Social Security is going broke---as in "imminently"--- and framed a whole question to the candidates around the assumption. 

“Would you give Congress a date certain to reform Social Security and Medicare within two years after you take office? Because in a bipartisan way, everyone agrees, that's a big ticking time bomb that will eat us up maybe even more than the mortgage crisis.” (CNS)

SEC Charges 2 Wall Street Brokers

by Deb Cupples |  About 10 days ago, the U.S. Securities and Exchange Commission charged two brokers from Credit Suisse with securities fraud:

"The complaint, filed today in federal court in Manhattan, alleges that Julian Tzolov and Eric Butler misled customers into believing that auction rate securities being purchased in their accounts were backed by federally guaranteed student loans and were a safe and liquid alternative to bank deposits or money market funds.

"Instead, the securities that Tzolov and Butler purchased for their customers were backed by subprime mortgages, collateralized debt obligations (CDOs), and other non-student loan collateral." (SEC)

How many other employees of how many other companies may have committed securities fraud while sowing the seeds of the mortgage crisis?  How many execs at Bear Stearns, Lehman Brothers, Fannie and Freddie may have committed securities fraud?

Interior Dept. Corruption Investigation: Are Some Folks Being Protected?

 by D. Cupples | According to an inspector general's report, people working for the U.S. Department of Interior have been naughty. (B-N Politics and NY Times). For example, one Interior official arranged to give a big contract to an ex-employee to do basically the same job he'd done before he retired.

Interior employees also reportedly took gifts from, had sex with, and shared illegal drugs with some of the same oil-industry folks that Interior was supposed to be regulating.

Because sex and drugs are involved, most media are all ears.  What bothers me is what's being left out of (and assumed in) some media reports.

Scandal Unfolding at Dept of Interior: Not Just Incompetence, but Frat House Antics & Irresponsibility

by Damozel | Did you know that George W. Bush is still president?  It's true.  And his administration isn't about to let us go without more and skeevier scandals.  They'll keep on scandalizing us till the end!

George Bush's Department of the Interior, like so much else under his administration, is apparently rife with corruption.  The Inspector General of the Department, Earl E. Devaney says so. (NYT)  And it's quite the scandal.  "“A culture of ethical failure” pervades the agency, Mr. Devaney wrote in a cover memo." (NYT)  That will do nicely for the documentary miniseries on the Bush years that someone somewhere is planning.  Or, as Deb Cupples put it:

Administration Opposes Tougher Safety Standards for Skyscrapers

by Deb Cupples |  The General Services Administration actually opposes tougher safety standards for skyscrapers (e.g., extra fire-proofing and an extra stairwell). 

Yes, even in this post-9/11 world, some of the nation's biggest builders and landlords don't want to spend money on safer buildings -- and they've got the GSA's ear. 

The New York Times reports: