NY Times – April 2009
The inquiry into corruption at the New York State pension fund started simply enough. Alan G. Hevesi, the former comptroller, was accused of using state workers as chauffeurs for his ailing wife.But by the time Mr. Hevesi resigned his office in late 2006, investigators for the Albany County district attorney’s office were examining a more troubling problem: allegations that Mr. Hevesi’s associates had sold access to the state’s $122 billion pension fund, using one of the world’s largest pools of assets to reward friends, pay back political favors and reap millions of dollars in cash rewards for themselves. “We knew this was not going to be a case we could handle ourselves in Albany County,” recalled P. David Soares, the Albany County district attorney. In 2007, Attorney General Andrew M. Cuomo’s office and then the Securities and Exchange Commission took over the inquiry, which has ballooned into a sprawling investigation involving some of the most prominent players in New York’s political and financial worlds.

Hundreds of investment firms have been subpoenaed. Three people have been criminally charged and another has pleaded guilty to a felony. And the scandal has grabbed the attention of Wall Street, as members of the investment establishment’s top tier now face scrutiny. The Carlyle Group, the politically connected private equity firm, is among the companies whose transactions are being examined. Steven Rattner, just appointed to serve as the Obama administration’s point man in the bailout of the auto industry, has emerged as a significant figure. And an investment firm that manages money for the Hunts, the prominent Texas oil family that owns the Kansas City Chiefs football team, has already settled with the S.E.C., and one of its former executives has pleaded guilty to a felony and is cooperating with investigators.

In an interview Friday, Robert Khuzami, the S.E.C.’s enforcement director, would not discuss the specifics of the investigation but said it was a top priority of his agency to aggressively pursue “those who violate their trust to safeguard public pension funds.”
At the heart of the case are the fees paid by investment firms to associates of Mr. Hevesi as the firms sought business from the pension fund. Such fees are legal, unless they are used, either directly or indirectly, to bribe public officials. The two associates of Mr. Hevesi who have been indicted — Hank Morris, once a nationally prominent political consultant, and David Loglisci, the pension fund’s chief investment officer — are accused of encouraging investment firms to direct money to friends and allies set up as “sham” intermediaries, according to court filings.
Mr. Cuomo emphasized this week that more developments were to come. “We do expect additional charges because we have other cases that are being worked up as we speak,” he said. “The investigation is continuing.” On Friday, a White House spokesman said President Obama had full confidence in Mr. Rattner, a former New York Times reporter and a founder of the Quadrangle Group, a private equity firm. Mr. Rattner arranged to have Quadrangle pay a company that employed Mr. Morris more than $1 million as it sought business from the pension fund, a person with knowledge of the inquiry said this week. According to S.E.C. filings, the Carlyle Group and another firm paid $10 million to the company that employed Mr. Morris. Both Quadrangle and the Carlyle Group said this week that they were fully cooperating with the investigation. The inquiry has put a spotlight on not only the well-known investment bankers and firms, but more high-profile figures and unconventional business transactions. One top aide to Mr. Hevesi, Jack Chartier, was said to be so infatuated with Peggy Lipton, the former “Mod Squad” actress, that he pressured investment firms to confer benefits on her, including help with her rent. Another aide, Mr. Loglisci, had investment executives plow hundreds of thousands of dollars into “Chooch,” a low-budget movie he and his brother were producing about a lovable loser from Queens; the film also featured Mexican prostitutes and a nine-pound dachshund named Kiwi Limone. Mr. Hevesi’s aides are also accused in court filings of directing more than $800,000 in pension fees to Raymond B. Harding, a former leader of New York State’s Liberal Party, for helping to arrange for an Assembly seat in Queens to be vacated so Mr. Hevesi’s son could run for it.

Mr. Morris, once a top national political consultant, has been accused of setting himself up as the pension fund’s gatekeeper for high-flying investments — hedge funds, private equity firms and the like — while Mr. Hevesi was convincing the Legislature that the pension fund should be allowed to put ever greater amounts of money into these loosely regulated investments.
All the while, investment firms were pouring money into Mr. Hevesi’s campaign coffers.

“It goes to the heart of public integrity,” Mr. Cuomo said this week of the investigations, adding, “The more the scheme goes on, the more brazen, the more confident they become.” To be sure, Mr. Cuomo is chipping away at a mountain-size problem afflicting public pension funds across the country. Most of them outsource the work of investing their assets to professional money managers, who compete zealously for the work. The fees paid to the money managers can be very lucrative, even when there are losses, and the fees tend to be higher for riskier strategies like hedge funds.

The problems usually begin when a pension fund’s board is deciding which money managers to award its business to. Many members of these boards are elected officials, like local comptrollers and treasurers, or the appointees of mayors and governors, who also need to raise campaign cash. Money managers have repeatedly tainted the selection process by making campaign contributions to these board members, then walking away with the pension fund’s business.
Mr. Cuomo’s office is already considering proposing systemic reforms, at least in the state and possibly federally, most likely in conjunction with the S.E.C. Those reforms could include a ban on the use of intermediaries in pension transactions and stricter limits on campaign contributions made by investment firms, or their executives, to public officials overseeing public pensions. Certainly, the scandal itself is familiar.

In Connecticut, the former state treasurer Paul J. Silvester went to prison in 1999 after pleading guilty to charges of racketeering and money laundering in connection with the state pension fund. In a bid for leniency, Mr. Silvester provided detailed testimony on how he had taken money and favors in exchange for the placement of more than $500 million in state pension money with various investment firms. Connecticut, like New York, places all pension decision-making authority in the hands of a sole trustee, rather than spreading it among the members of a board. Many governance experts think the use of a sole pension trustee does not build enough checks and balances into the system. But decision-making by boards is not perfect either. California’s big public pension fund, known as Calpers, has suffered so many pay-to-play allegations that in 1997, the State Legislature passed a law barring such payments. But a member of the Calpers board, Kathleen Connell, took the matter to court and won. She argued that the law made it harder for incumbents than their challengers to raise campaign money. The law was thrown out.

April 16, 2009 — NY Post

YESTERDAY’S wide ranging indictment against former Liberal Party boss Raymond B. Harding paints a vivid portrait of ballot lines for sale in New York. The indictment alleges that, in exchange for numerous Liberal endorsements over the years, officials in the office of disgraced ex-Comptroller Alan Hevesi rewarded Harding with secret assignments on transactions in the state’s pension fund that garnered the ex-party boss hundreds of thousands of dollars in fees. The indictment is a reminder that New York’s unusual election law, which lets candidates run on multiple party lines, is an invitation to corruption and political patronage. With the growing disgust of business-as-usual in Albany, now is the time for reforms that would give New York a genuine third-party system — in which minor parties run their own candidates and compete in the marketplace of ideas for votes.

Minor parties are common in US politics, but few states afford them such an easy path to power as New York: In the Empire State a minor party can cross-endorse candidates who are also appearing on the Democratic and Republican lines. This third-party backing has become an object of intense desire among Republicans and Democrats, because it can cut down on competition and ensure that an independent candidate doesn’t siphon votes away from major-party candidates. New York law also gives minor parties incentives to cross-endorse popular candidates rather than run their own party members as contenders. For starters, a party that garners at least 50,000 votes in a gubernatorial election earns an automatic spot on the ballot for the next four years. And cross-endorsing also gives minor parties influence over the votes of Democratic or Republican office-holders whose views they normally couldn’t sway. All this electoral complexity leads to political horse-trading that gives third-parties disproportionate power without actually increasing choices for voters. In 1998, for instance, the new Working Families Party had only about 100 enrolled voters in the state. But the party endorsed Democratic gubernatorial candidate Peter Vallone, a fiscal conservative whose platform didn’t reflect the far-left WFP agenda. Vallone was desperate for a third-party line in his battle against George Pataki, who wielded both the Republican and Conservative lines; the WFP, a creature of the state’s unions, was desperate for votes. New York law allowed tens of thousands of voters, many of them union members who are enrolled Democrats, to vote for Vallone on the WFP line — giving the party a place on future ballots and hence enormous influence despite its paltry enrollments.

Harding was a master at using the power of the third-party cross-endorsement. He cross-endorsed Rudy Giuliani for mayor, thereby giving Giuliani an extra line where Democrats who wanted to vote for him could do so without pulling the Republican lever. In a city with only only about 33,000 voters enrolled as Liberals, Giuliani pulled nearly 62,000 votes on the Liberal line in his 1993 defeat of David Dinkins. With his party helping provide the margin of victory in a tight race, Harding became a powerful force in the Giuliani administration, where two of his sons and other Liberal officials gained appointments. But Harding worked with members of both major parties. He frequently cross-endorsed Alan Hevesi in the Queens Democrat’s campaigns for the state Assembly, for mayor and for state comptroller. It was in exchange for this longtime support, the indictment alleges, that officials in Hevesi’s office conspired to reward Harding by making him a party to transactions that they tried to conceal from public view. Harding, the indictment alleges, showed his gratitude and continued support by helping to find a private-sector job for then-Assemblyman Michael Cohen, clearing the way for Hevesi’s son Andrew to replace him in the Legislature.

As these examples suggest, the potential for abuse of this sort in such a system is so great that most states made the process of cross-endorsing an electoral relic in the 19th century. Only seven states still allow it, and nowhere is its practice as widespread and influential as here. New York needs to reform its election law to end the so-called “fusion politics” of cross-endorsing. This would ensure that third-parties offer voters a real choice — not just a duplication of names on other party lines. And it would force minor parties to engage in real organization building, rather than allowing groups with little membership to earn their way onto ballots on the coattails of major-party candidates, ala the Working Families Party in 1998. That practice awards too much power to narrow, special interest parties. Albany owes voters a reform that most states embraced more than a century ago.

The Fairness Doctrine was a policy of the United States Federal Communications Commission (FCC) that required the holders of broadcast licenses both to present controversial issues of public importance and to do so in a manner that was (in the Commission’s view) honest, equitable and balanced.  In 1987, the FCC abolished the Fairness Doctrine, prompting some to urge its reintroduction through either Commission policy or Congressional legislation^. Currently, there is an outcry to add “fairness” back into talk radio – which is deemed as unfair by liberals, since the radio waves are dominated by talk show conservatives.
This is a curious issue, since both liberals and conservatives have had their chance at radio. The public decides who to listen to, who has the highest ratings, hence the resulting sponsor money and potential national syndication. If your show is unpopular, it goes off the air with poor share ratings and lack of adequate sponsorship.

Whatever the reason, this medium does not work for liberals. Perhaps conservatives listen to more radio, and it is a preference issue. Maybe liberals watch more tv and do more internet surfing – who knows? Conservatives may have better hosts. Does it matter? Can / should you legislate “fairness”? Why should we? This seems to be the same thought process that condones children not having to fail, and everyone wanting to feel good about life every day.

The entire premise that we legislate and control what types of shows and how much time they receive, sends a chill up my spine. Freedom of speech is only valid when I am saying what you like to hear? My freedom is constrained to “equal time” of 3 hrs per day, for example? As a radio listener, I have a choice whether to change the station or not – let’s leave the solution to this issue there. Let the people decide with their fingers on the radio dial.

Bob Ney’s best known Congressional work was on the election reform efforts founded in the wake of the confused 2000 voting in Florida, and his support and backing for the “Stand Up For Steel” crusade and resulting laws. From 2001 to 2006, Ney was Chairman of the House Administration Committee. As chair of that committee, he oversaw operations in the Capitol complex and was sometimes known as the “Mayor of Capitol Hill”. Ney also gained notoriety when he mandated, as Chairman of the House Administration Committee, that “french fries” be renamed “freedom fries” on House of Representatives food service menus, to indicate displeasure with France’s lack of support for the 2003 invasion of Iraq.

Before he pled guilty, Ney was identified in the guilty pleas of Jack Abramoff, former Tom DeLay deputy chief of staff Tony Rudy, former DeLay press secretary Michael Scanlon and former Ney chief of staff Neil Volz for receiving lavish gifts in exchange for political favors.

On May 18, 2006, the House Ethics Committee announced an investigation into bribery allegations against Ney, and on August 7, 2006, Ney announced that he was withdrawing from the 2006 election race. On September 15, 2006, the Justice Department filed Ney’s guilty pleas to a charge of conspiracy to defraud the United States and to a charge of falsifying financial disclosure forms. Both charges are related to actions taken on behalf of Abramoff’s clients in exchange for bribes, as well as separate actions taken on behalf of a foreign businessman in exchange for over $50,000 in gambling sprees at foreign private casinos. Ney is the first member of Congress to admit to criminal charges in the Abramoff investigation, which has focused on the actions of several current and former Republican lawmakers who had been close to the former lobbyist. Ney resigned from the House of Representatives on November 3, 2006. He was sentenced to 30 months in prison. He was released on August 15, 2008 after serving 17 months.
Now? He is becoming a talkshow host…so – when all else fails in life, become a “talking head”.

Jacob Weisberg NEWSWEEK From the magazine issue dated Dec 22, 2008

Corruption in Illinois is mainly pedestrian and shameful. In Louisiana, it’s flamboyant and shameless. With the unmasking of Gov. Rod Blagojevich as a kleptocrat of Paraguayan proportion, Illinois now has a real chance—if the allegations prove true— to defeat Louisiana in the NCAA finals of American political corruption. The land of Lincoln boasts some impressive stats. Dick Simpson, a political scientist at the University of Illinois at Chicago, says more than 1,000 people have been convicted in political corruption cases since 1971, including an astonishing 30 aldermen. If Blagojevich goes to prison, he will be the fourth of the last eight governors to wear stripes, joining predecessors George Ryan (racketeering, conspiracy, obstruction), Dan Walker (bank fraud) and Otto Kerner (straight-up bribery). Should he be assigned to the U.S. penitentiary in Terre Haute, Ind., Blagojevich could become the first governor to share a cell with someone he defeated at the polls. But don’t count Louisiana out. According to the Corporate Crime Reporter, it was No. 1 for the period between 1997 and 2006 with 326 federal corruption convictions. That’s a rate of 7.67 per 100,000. Illinois had 524 convictions in the same period, but with a larger population, its rate was only 4.68, which puts it an embarrassing sixth. And Louisiana can boast some impressive streaks. In 2001 Jim Brown became the third consecutive insurance commissioner to be convicted. Rep. William Jefferson, who was just defeated for re-election following corruption charges, apparently liked cold, hard cash so much he kept bundles of it in his freezer. His brother, sister and niece recently joined him under indictment. (Jefferson, his brother and niece have pleaded not guilty; his sister has pleaded guilty.) Corruption in Illinois grows out of a tradition of patronage politics—not just the old Democratic machine in Chicago, but also a Republican machine in the suburbs. Even as old-school politics has faded, however, scandals in Illinois have retained their ward-boss flavor. They still tend to revolve around petty, methodical rake-offs from the quotidian operations of government: liquor licenses, elevator inspections, speeding tickets and, above all, hiring. The paradigmatic Illinois crook was Paul Powell, who served as secretary of state in the 1960s. When Powell died, his executor found shoeboxes filled with $800,000 in cash (along with 49 cases of whisky and two of creamed corn) in the Springfield hotel room where he lived. The money had been collected in $5 and $10 increments from applicants who wanted to make sure they passed their driving tests. Under the old Richard J. Daley machine, city workers had to kick back about 5 percent of their salaries to the political organization that guaranteed their jobs. When, on a tapped phone line, he allegedly insisted that “you don’t just give it away for nothing,” Blagojevich was applying an old precept—though possibly for the first time at a senatorial level.
The Louisiana pathology is slightly different. Wayne Parent, a professor of political science at LSU, explains that with the discovery of oil and gas around 1912, politicians in the dirt-poor state suddenly controlled a gold mine in tax revenue. “They could spend this money virtually unsupervised,” he says, “as long as they threw enough crumbs to the masses to satisfy them.” This was the formula of populist governors Huey Long; his brother, Earl Long; and Edwin Edwards. Louisiana politicians have always liked big bribes for big projects better than crooked little schemes: Edwards, for instance, is serving time for collecting a $400,000 gratuity in exchange for a casino license.
The stylistic differences between Illinois and Louisiana can be described as David Mamet vs. Walker Percy. The corruption culture in Illinois tends to be mingy, pedestrian, shameful. State legislators who sell their votes for $25 cash in an envelope (a scandal of the 1970s) do not tend toward braggadocio. When former House speaker Dan Rostenkowski was caught filching postage stamps from the House post office, he pleaded guilty and apologized.
Louisiana’s culture of corruption, by contrast, is flamboyant and shameless. Earl Long once said that Louisiana voters “don’t want good government, they want good entertainment.” He spent part of his last term in a mental hospital, where his wife had him committed after he took up with the stripper Blaze Starr. When Sen. Allen Ellender died in office in 1972, Governor Edwards didn’t try to auction off his seat. He appointed his wife, Elaine, possibly to get her out of town. When Edwards ran for governor again in 1983, he said of the incumbent, “If we don’t get Dave Treen out of office, there won’t be anything left to steal.” Raised among figures like these, Louisianans tend to accept corruption as inevitable and to forgive it easily.
In recent years, however, Illinois and Louisiana seem to be copying each other. With Blagojevich, Illinois corruption has gone carnival. And since Katrina, Louisianans seem to have lost their zest for the big heist. There’s been no sympathy for officials caught siphoning disaster funds. It’s going to be a close contest again this year, but I’m betting on the Fighting Illini to claim the national championship.

Before friendly audiences, Barack Obama speaks passionately about something called “economic justice.” He uses the term obliquely, though, speaking in code – socialist code.
By INVESTOR’S BUSINESS DAILY 6/2008

During his NAACP speech earlier this month, Sen. Obama repeated the term at least four times. “I’ve been working my entire adult life to help build an America where economic justice is being served,” he said at the group’s 99th annual convention in Cincinnati. And as president, “we’ll ensure that economic justice is served,” he asserted. “That’s what this election is about.” Obama never spelled out the meaning of the term, but he didn’t have to. His audience knew what he meant, judging from its thumping approval. It’s the rest of the public that remains in the dark. “Economic justice” simply means punishing the successful and redistributing their wealth by government fiat. It’s a euphemism for socialism.
In the past, such rhetoric was just that – rhetoric. But Obama’s positioning himself with alarming stealth to put that rhetoric into action on a scale not seen since the birth of the welfare state. In his latest memoir he shares that he’d like to “recast” the welfare net that FDR and LBJ cast while rolling back what he derisively calls the “winner-take-all” market economy that Ronald Reagan reignited (with record gains in living standards for all). Obama also talks about “restoring fairness to the economy,” code for soaking the “rich” – a segment of society he fails to understand that includes mom-and-pop businesses filing individual tax returns. It’s clear from a close reading of his two books that he’s a firm believer in class envy. He assumes the economy is a fixed pie, whereby the successful only get rich at the expense of the poor. Following this discredited Marxist model, he believes government must step in and redistribute pieces of the pie. That requires massive transfers of wealth through government taxing and spending, a return to the entitlement days of old. Of course, Obama is too smart to try to smuggle such hoary collectivist garbage through the front door. He’s disguising the wealth transfers as “investments” – “to make America more competitive,” he says, or “that give us a fighting chance,” whatever that means.

Among his proposed “investments”:

• “Universal,” “guaranteed” health care.
• “Free” college tuition.
• “Universal national service” (a la Havana).
• “Universal 401(k)s” (in which the government would match contributions made by “low- and moderate-income families”).
• “Free” job training (even for criminals).
• “Wage insurance” (to supplement dislocated union workers’ old income levels).
• “Free” child care and “universal” preschool.
• More subsidized public housing.
• A fatter earned income tax credit for “working poor.”
• And even a Global Poverty Act that amounts to a Marshall Plan for the Third World, first and foremost Africa.

The seeds of his far-left ideology were planted in his formative years as a teenager in Hawaii – and they were far more radical than any biography or profile in the media has portrayed. A careful reading of Obama’s first memoir, “Dreams From My Father,” reveals that his childhood mentor up to age 18 – a man he cryptically refers to as “Frank” – was none other than the late communist Frank Marshall Davis, who fled Chicago after the FBI and Congress opened investigations into his “subversive,” “un-American activities.”
As Obama was preparing to head off to college, he sat at Davis’ feet in his Waikiki bungalow for nightly bull sessions. Davis plied his impressionable guest with liberal doses of whiskey and advice, including: Never trust the white establishment. “They’ll train you so good,” he said, “you’ll start believing what they tell you about equal opportunity and the American way and all that sh**.” After college, where he palled around with Marxist professors and took in socialist conferences “for inspiration,” Obama followed in Davis’ footsteps, becoming a “community organizer” in Chicago. His boss there was Gerald Kellman, whose identity Obama also tries to hide in his book. Turns out Kellman’s a disciple of the late Saul “The Red” Alinsky, a hard-boiled Chicago socialist who wrote the “Rules for Radicals” and agitated for social revolution in America. The Chicago-based Woods Fund provided Kellman with his original $25,000 to hire Obama. In turn, Obama would later serve on the Woods board with terrorist Bill Ayers of the Weather Underground. Ayers was one of Obama’s early political supporters.

A perfect storm of statism is forming, and our economic freedoms are at serious risk.

Fictional corrupt politicians are a mainstay of The Wire, David Simon’s celebrated television series about life on the Baltimore streets. But the show’s creator says he fears a real-life explosion of rampant corruption in American political life if the newspaper industry, in which he worked for more than a decade, is allowed to collapse. In an exclusive interview with the Guardian, the award-winning writer and producer launches a tirade against newspaper owners who, he says, showed “contempt for their product” and are now reaping the whirlwind. But he rejects the idea that newspapers should seek ways to embrace the new world of free information, arguing that they must urgently start charging money for content distributed online. “Oh, to be a state or local official in America over the next 10 to 15 years, before somebody figures out the business model,” says Simon, a former crime reporter for the Baltimore Sun. “To gambol freely across the wastelands of an American city, as a local politician! It’s got to be one of the great dreams in the history of American corruption.” The only hope, Simon insists, is for major news outlets to find a way to collaboratively impose charges for reading online, and to demand fees from aggregators such as Google News, which profit from their journalism. “If you don’t have a product that you’re charging for, you don’t have a product,” he says. “If you think that free is going to produce something that’s as much of a cost centre as good journalism – because it costs money to do good journalism – you’re out of your mind.” The number of readers willing to pay a small fee each month might never rival the heyday of newspaper circulation, but it would attract enough “people who care what’s going on in the world” to fund crucial reporting, he maintains. “And once they do that, and go to Google and Yahoo and every other search engine and say: ‘No, ain’t no free.’” He scoffs at the notion that amateur “citizen journalism”, or new online-only outlets, might take the place of newspaper reporters: “The internet does froth and commentary very well, but you don’t meet many internet reporters down at the courthouse.”
Critics of the paid model for online news argue that it has been tried and rejected – notably at the New York Times, which abandoned its TimesSelect service in 2007 – and that those instances in which it has proved successful, including the Wall Street Journal, are exceptional cases. They say media outlets must find ways to embrace and profit from the exposure offered by aggregators such as Google News, and that walling off their material will hasten their irrelevance. Anti-trust laws also present severe legal obstacles to collaboration between news organisations. Jeff Jarvis, a new media consultant who writes a column for the Guardian, said: “The traditionalists are trying to transplant elements of the old business model into a new business reality … when you put your content behind a wall, you lose more than you gain. You lose a lot of readers and the advertising revenue associated with them, you lose the ability to be discovered by new readers, you lose out to free competitors, of whom there’ll be an unlimited supply, and you lose influence, because you’re taken out of the conversation.”

guardian.co.uk © Guardian News and Media Limited 2009

IT’S been a rotten year for Chris Dodd. Time and again, the Connecticut senator has been caught both doing favors for heavy hitters and receiving them — and then lying about it. Sometimes the mess involves a firm like AIG or Countrywide, enmeshed in the abuses that have so damaged the US economy. Sometimes Dodd’s pal is just a felon in need of a presidential pardon. But the cavalcade of scandal clearly puts the five-term senator in danger of losing his next re-election bid.
Dodd’s collapse began last June, when Conde Nast Portfolio revealed that he had gotten two cut-rate mortgages of nearly $800,000 from subprime giant Countrywide Financial in 2003. As the magazine reported, Dodd was a “Friend of Angelo” — one of several notables marked for special treatment by Countrywide co-founder Angelo Mozilo. That triggered a dizzying carnival of misleading Dodd statements. First, he issued an angry written statement denying any favorable treatment. A few days later, he told some reporters that he knew he’d been treated as a VIP by Countrywide, while the same day assuring other reporters that he hadn’t. He also promised he would release documents related to his mortgages. It took more than seven months for him to produce anything, and he still hasn’t disclosed all the paperwork. On Feb. 2, he let some Connecticut reporters look at some papers — but allowed no copies to be made and refused to list the documents provided. Dodd has promised to refinance the Countrywide deals, which would save him at least $70,000 over the life of the mortgages. But this is plainly damage control, not remorse. There’s no question why Countrywide wanted Dodd’s friendship. Dodd has long been a senior member of the Senate Banking Committee, which oversees the industry. In 2003, at the time of the first sweetheart loan, he was close to becoming chairman — and a big catch for a company that depended on government policies that encouraged lending over prudence.

Nor is this the only sweetheart deal to surface:
* He bought a Washington, DC, condo in 1986 with New York bon vivant Edward Downe Jr. Dodd lived in the unit; Downe paid half the mortgage, fees and taxes — but rarely used the apartment. The subsidy ended in 1990 as federal authorities closed in on Downe’s lucrative off-shore insider-trading scheme. In 1994, Dodd bought a waterfront home on 10 acres in County Galway, Ireland. Actually, he got a 1/3 interest: Buying the rest was William “Bucky” Kessinger, Kansas City, Mo. real-estate developer (and also a college classmate and longtime business partner of Downe, who by then had been convicted. The total purchase price was $160,000; eight years later, Dodd bought out Kessinger for only $122,351. He says he also paid the balance of the outstanding mortgage — but other records suggest that couldn’t have been much, so Dodd still realized a substantial profit on the deal. Dodd claims that price was based on an independent appraisal. If so, he owned the only piece of property in Ireland that was nearly untouched by the biggest boom in Europe. Dodd’s Irish real-estate bonanza, likely worth a couple of hundred thousand dollars in 2002, came the year after he obtained a full presidential pardon for his and Kessinger’s pal Downe. Circumventing the usual vetting process for pardons, Dodd had made his plea directly to President Bill Clinton. Downe still owed millions to the Securities and Exchange Commission.

The latest Dodd disaster, of course, involves those AIG bonuses. In February, Dodd inserted an amendment into the stimulus bill ensuring that executives of firms bailed out by the government could still collect already-contracted bonuses. When that became so controversial this month, Dodd at first denied doing the dirty work — then admitted it, but tried to blame the Obama administration. Even voters who might believe that story will also note that AIG had donated more to Dodd than to any other American politician. And now it turns out that his wife served for three years (2001-2004) on the board of a Bermuda-based company in the AIG constellation.

Polls show Dodd, long unassailable as a Democrat in Connecticut, in a close race with ex-Rep. Rob Simmons (R-Stonington). But his real danger comes from outside Connecticut. Jay Leno no longer needs much setup to skewer Dodd in his monologue. The California audience gets it, and the Connecticut one does, too.

Kevin Rennie, a lawyer and a former Republican state legislator, is a columnist for The Hartford Courant.

Posted: Friday, March 27, 2009
From NBC’s Chuck Todd

In the midst of the congressional outrage over bonuses and bailouts, many of the very firms who benefitted from TARP funds are still making political donations. And the politicians are still taking them. According to the latest F.E.C. data for February, several members of Congress who have been critical of the federal government’s bailout of U.S. companies have received campaign contributions just in the last six weeks – from the firms they bailed out. Campaign-finance-reform advocate Fred Wertheimer says the government’s been bailing out banks and other major “too-big-to-fail” firms — as these same companies continue to use their PACs to make contributions. “It all adds up to kind of a magic circle involving the government, TARP recipients, members of Congress, and campaign contributions.” The reality, of course, is that these contributions, individually, aren’t a lot of money. But many members of Congress (including Speaker Pelosi and Financial Services Chair Barney Frank) have decided against taking any of the money. The optics of this for both the banks and for the members of Congress is bad, and only feeds the credibility problems both entities have with the American public.

So who is getting money and giving it right back to the politicians? Here’s a list of companies who received at least $1 billion in TARP funds and in February alone also gave money to members of Congress or national parties: (Note: more TARP-recipients may have given money in February but not every company PAC reports their contributions monthly, some do it quarterly, meaning we won’t know until mid-April if these figures are actually higher)

Citigroup
Bank of America
Goldman Sachs
U.S. Bancorp employee PAC
Chrysler
American Express
KeyCorp
BB&T
Huntington Shares

Now here’s a list of House leadership and banking committee members who got money from these bailed-out companies:
(Note: Some members of Congress received contributions directly to their campaign accounts and some received money to their leadership PACs.)
Steve Austria, R-Ohio, $1,000 from Huntington Shares
Spencer Bachus, R-Ala., $5,000 from Bank of America
Melissa Bean, D-Ill., $5,000 from Bank of America
Roy Blunt, R-Mo., $1,500 from U.S. Bancorp employee PAC
John Boehner, R-Ohio, $5,000 from Bank of America; $5,000 from American Express; $1,500 from U.S. Bancorp employee PAC
Kevin Brady, R-Texas, $1,000 from Citigroup; $1,000 from American Express
Eric Cantor, R-Va., $2,500 from Citigroup; $5,000 from Bank of America; $1,000 from Chrysler; $2,500 from American Express
Jim Clyburn, D-S.C., $1,000 from Bank of America; $5,000 from Bank of America
Joe Crowley, D-N.Y., $5,000 from Bank of America
Joe Donnelly, D-Ind., $1,000 from Chrysler
Vern Ehlers, R-Mich., $1,200 from Huntington Shares
Jeb Hensarling, R-Texas, $1,000 from Citigroup; $5,000 from Bank of America
Steny Hoyer, D-Md., $1,500 from Bank of America; $5,000 from Bank of America
Lynn Jenkins, R-Kan., $1,000 from Citigroup; $1,000 from Bank of America; $1,000 from U.S. Bancorp
Jim Jordan, R-Ohio, $1,000 from Huntington Shares
Mary Jo Kilroy, D-Ohio, $1,000 from Huntington Shares
Leonard Lance, R-N.J., $1,000 from Citigroup; $2,000 from Goldman Sachs
Kevin McCarthy, R-Calif., $1,000 from Citigroup; $5,000 from Bank of America
Greg Meeks, D-N.Y., $5,000 from Bank of America
Gary Miller, R-Calif., $1,000 from Bank of America
Gwen Moore, D-Wis., $2,500 from Bank of America
Richard Neal, D-Mass., $4,000 from Citigroup; $5,000 from Bank of America; $1,000 from American Express
Randy Neugebauer, R-Texas, $1,000 from U.S. Bancorp employee PAC
Devin Nunes, R-Calif., $5,000 from Bank of America
Glenn Nye, D-Va., $250 from BB&T
Mike Pence, R-Ind., $1,000 from Chrysler
Earl Pomeroy, D-N.D., $1,000 from Chrysler
Mike Rogers, R-Mich., $1,000 from Chrysler
Pete Sessions, R-Texas, $5,000 from Bank of America
Lamar Smith, R-Texas, $1,000 from American Express
Pat Tiberi, R-Ohio, $1,000 from Huntington Shares
Mel Watt, D-N.C., $1,000 from Bank of America; $1,000 from BB&T; $1,000 from U.S. Bancorp employee PAC

But Senators also benefitted:
(Note: Both Reid and Shelby say they returned their checks.)

Michael Bennet, D-Colo., $1,000 from U.S. Bancorp employee PAC
Robert Bennett, R-Utah, $1,000 from Chrysler
Sherrod Brown, D-Ohio, $1,000 from Chrysler
Richard Burr, R-N.C., $5,000 from Bank of America
Tom Carper, D-Del., $620 from Citigroup; $1,000 from Bank of America; $5,000 from Bank of America
Jim DeMint, R-S.C., $2,000 from Citigroup; $1,000 from Bank of America; $2,000 from BB&T; $1,000 from U.S. Bancorp employee PAC
Johnny Isakson, R-Ga., $1,000 from Citigroup
Blanche Lincoln, D-Ark., $1,000 from Bank of America
Bob Menendez, D-N.J., $5,000 from Bank of America
Jeff Merkley, D-Ore., $2,500 from Citigroup; $4,000 from Bank of America
Harry Reid, D-Nev., $1,000 from U.S. Bancorp employee PAC
Richard Shelby, R-Ala., $5,000 from Bank of America
Arlen Specter, R-Pa., $2,000 from Chrysler
George Voinovich, R-Ohio, $5,000 from Bank of America

And so did the Parties.

The Democrats:
(Note: Both the DSCC and the DCCC say they never received the checks Bank of America reported in their March FEC report)
NDCPAC, $5,000 from Citigroup, $5,000 from Bank of America
Blue Dog PAC, $5,000 from Citigroup; $5,000 from Bank of America
DSCC , $15,000 from Bank of America
DCCC, $15,000 from Bank of America
FourOhDems, $1,000 from Huntington Shares

And the Republicans:
HouseConFund, $5,000 from Bank of America
GOP Main Street, $5,000 from Bank of America
NRSC, $15,000 from Bank of America
NRCC $15,000 from Bank of America

Interestingly, Goldman Sachs actually reported members of Congress who refused to cash their checks, including Rep. Stephanie Herseth, D-S.D., Rep. Pete DeFazio, D-Ore., and then-Congressman and now chief of staff, Rahm Emanuel.

Sen. Chris Dodd says Treasury forced him to add language to the stimulus bill last month that specifically excluded executive bonuses included in contracts signed before the bill’s passage. In a dramatic reversal Wednesday, Sen. Chris Dodd confessed to adding language to a spending cap in the stimulus bill last month that specifically excluded executive bonuses included in contracts signed before the bill’s passage. Dodd, D-Conn., told FOX News that Treasury officials forced him to make the change. “As many know, the administration was, among others, not happy with the language. They wanted some modifications to it,” he said. “They came to us, our staff, and asked for changes, and the changes at the time did not seem that obnoxious or onerous.” But the provision has become a flash point for criticism amid the controversy over $165 million in bonuses given out by AIG after securing more than $170 billion in federal aid. The language in the stimulus bill wasn’t specific to AIG, but some have expressed outrage that it appears to have created a loophole. Dodd said the argument put forward by Treasury was that a “flood of lawsuits” would come forward if the change was not made. Dodd said he was unaware of the AIG bonuses at the time the bill was being written back in early February. He also said he has no reason to believe Treasury officials making the argument knew about the AIG bonuses. When asked how administration officials have this kind of leverage over members of Congress, Dodd said, “The administration has veto power. … No one suggested a veto to me, I don’t want to imply that to you. But certainly that’s not an insignificant tool.” On Tuesday, Dodd told FOX News that he didn’t add the exemption. “When the language went to the conference and came back, there was different language,” he said then. “I can tell you this much, when my language left the Senate, it did not include it. When it came back, it did.” Dodd still thinks the Treasury can get the bonuses back, despite the inclusion of a date in the stimulus bill, and he said officials are, in fact, using his very language to claw back the money.
“There is language after that date that says explicitly that the Treasury has the right to modify, reaching back, those bonuses, compensations, if it’s inconsistent with the TARP legislation or contrary to the public interest,” he said. “In fact, it’s that phrase that the administration is relying on this evening as a means by which they can reach back and maybe get these bonuses back,” he said.
Still, Dodd has his enemies. The Senate Republican re-election campaign quickly shot out a statement on the Dodd reversal, as he is a prime target in the 2010 midterm elections and is facing a Republican opponent who, in one poll, is in a statistical tie with him.
“Senator Dodd’s reversal on this issue is both astonishing and alarming,” the National Republican Senatorial Campaign said in a written statement. “Contrary to his statements and denials over the last 24 hours, Senator Dodd has now admitted that he and his staff did in fact change the language in the stimulus bill to include a loophole for AIG executive bonuses.” The group added that Dodd had “misled voters and equivocated on his statements .”