Crossposted at
Slingshot.org, with a nice table of contents and some linkable anchors.
Fallout from the Delay indictment dominates corruption news coverage, as GOP caucus infighting plays out. They're trying to keep it under wraps, but there are too many ambitious youngsters looking to make a splash for details to stay hidden.
Much more below the fold -- enjoy.
The Big Three
Tom Delay. AP: Tom Delay is scheduled to appear in court October 21. Delay claims that Travis County prosecutor Ronnie Earle buckled to pressure from the Austin-American Statesman in bringing the suit, and is scapegoating a "runaway grand jury." Earle had subpoenaed both Terry Nelons, former political director for the RNC and the recipient of the $190,000 at the heart of the case, as well as Tom Delay's daughter, Danielle Ferro. Delay waived the statute of limitations in early 2004, mitigating against the speculation that a secret plea agreement has been reached. R. Jeffrey Smith takes a closer look at the $190,000 in today's WaPo.
Tom Hamburger and Peter Wallstein, two of the best political reporters in the country, have an excellent piece in the LA Times on Delay's role in consolidating GOP control over K Street. "The revolution in corporate behavior began with the Republican takeover of Congress in 1994, when DeLay was among the most outspoken of several GOP leaders demanding that business groups support the party -- not only by contributing to Republican campaigns but by helping GOP leaders round up voters and selecting party faithful to run trade associations."
At least one faction within the GOP caucus wants Delay to keep his influence. The AP reports that Delay and Hastert met privately yesterday, resulting in a Hastert spokesperson Ron Bonjean stating that Delay will serve as a "very powerful adviser" to the leadership. Blunt's authority is still up in the air. John Shadegg, an economic conservative, said that Delay's case may take 18 months to 3 years to work its way through the legal system.
Jim VandeHei and Amy Goldstein offer an in-depth look at the GOP's political infighting. Hastert has managed to paper over caucus differences with appeals for unity, but it may not last through January, when potentially bloody elections will take place for the new leadership.
But House conservatives, who have consolidated power through a restructured Republican Study Committee, are growing restless and talking privately of running their own candidate, possibly Pence, the leader of the RSC. They were prepared to mount a challenge if Hastert went through with a plan to put Rules Committee Chairman David Dreier (R-Calif.) in as interim leader instead of Blunt. Instead, they are holding their fire, for now.
Rep. Jeff Flake (R-Ariz.) said conservatives will accept the speaker's call for unity only so long. Unity, he said, is "not in itself a virtue," suggesting conservatives are ready to splinter if they do not get their way in policy fights.
Carl Hulse in the NYT gets more intriguing comments from Flake:
One member of the conservative wing of the House Republican conference, which has been trying to flex new muscle in recent weeks, said Mr. Blunt and others now leading the party would also be judged on how well they respond to a push for greater controls on spending in the aftermath of Hurricane Katrina.
"Unless there is a serious and sustained commitment to offset this new spending and control the growth of government, I would expect there to be a challenge," said Representative Jeff Flake, Republican of Arizona.
The AP has a nice "where are they now" look at what's befallen the 1994 Republican leadership: "Tom DeLay is the last of the "Contract With America" architects to step down from a party leadership post in the House, shadowed like most others by political clouds after the 1994 election elevated them from the House's noisy back bench."
GOP leaders from both the House and Senate met with the White House to plot political strategy, reports David Espo of the AP. The vast majority of the article, though, looks at the turmoil in which the House Leadership finds itself: "Some Republican lawmakers, who refused to be identified by name as a condition for disclosing their personal opinions, said they doubted DeLay would ever return to the leadership table. Others spoke of the possibility for political damage." Espo also has more details on the inside-the-caucus wrangling that resulted in Dreier being cast aside:
Several officials, speaking on condition of anonymity, said an aide to Hastert contacted California Rep. David Dreier on Monday about assuming the majority leader's duties in the event DeLay was indicted. Several lawmakers said such a change would have made it easier for the Texan to eventually regain his post.
But by Tuesday, as the grand jury completed its work in Austin, Texas, Blunt forcefully asserted his claim to the job in conversations with the speaker, according to several GOP officials.
Dan Balz in the Washington Post puts Delay's indictment in context of the other political challenges he's facing, including the Abramoff investigation and possible House ethics investigations. The confluence of scandals may keep Delay from returning to Leadership, even if he wins his case: "But Thomas E. Mann of the Brookings Institution said the political conditions may never be right for DeLay's return, even if he wins his case in Texas. 'I just think it's very unlikely,' he said."
Yesterday The Hill's Susan Crabtree reported more details on the GOP's offensive against Earle, including details on a memo circulated right after the indictment. The likely author of the memo, Barbara Comstock, is known for her partisan GOP research work during the Clinton administration and the 2000 campaign.
Scott Gold in the LAT reports that the success of Earle's case will depend on whether he has a TRMPAC insider that will testify. Corporations outside Texas are already lined up to testify, and they will present evidence that is politically damaging, but may not be enough to secure a conviction.
Roy Blunt. Mary Curtius in the LAT reports on Roy Blunt's own ethical problems, including his generous consulting contract with an alleged Delay co-conspirator, Jim Ellis.
Bill Frist. The SEC is now investigating HCA, as well as Frist's personal stock deal. "Documents show that while HCA insiders were selling millions of dollars of their own stock this year, they were also painting an upbeat picture of the company's outlook for investors." The SEC's board unanimously approved the investigation, though Chris Cox recused himself. The WSJ explains the meaning of the formal probe: "An upgrade to formal status can suggest that an investigation is escalating based on evidence. In this case, however, the upgrade was approved in part because Mr. Frist is a public figure and the SEC wants to formally document everything associated with the probe, according to a person familiar with the matter. The SEC must also issue subpoenas to access phone records and other documents, such as stock-trading records, that are crucial to an insider-trading probe."
The WSJ editorial board comes to Frist's defense today, claiming that it's "a case of no good deed going unpunished." "The real issue here is the modern demand that politicians abandon all acquaintance with the world of commerce when they take office, lest they have a 'conflict of interest.'"
The White House. Judith Miller was released from jail and has agreed to testify: "'My source has now voluntarily and personally released me from my promise of confidentiality regarding our conversations relating to the Wilson-Plame matter,' Miller said in a statement Thursday. Her newspaper identified Libby as the source, saying that Miller and Libby spoke in person on July 8, 2003, then talked by phone later that week."
The NYT write up, by David Johnston and Doug Jehl, is here.
FEMA, Hurricanes, and Civil Defense.
Contracting Orgy. Dem. Rep. Bennie Thompson has sent a letter to the DHS Inspector General questioning the cost os a no-bid contract for the construction of temporary classrooms in Mississippi, reports Griff Witte in the WaPo. Thompson alleges that the company awarded the contract, which has received special treatment under native-Alaskan friendly rules promoted by Senator Ted Stevens, is charging double what it should be for the schools.
The oft-ridiculed FEMA proposal to house Katrina victims in temporary housing has managed to produce only 109 trailers to date, report Eric Lipton and Leslie Eaton in the NYT. Fluor, the firm hired by FEMA to manage the project, "said getting approval to occupy land that has access to basic utilities and other infrastructure had been difficult." War profiteer Jim Woolsey's wife, Suzanne, sits on Fluor's board.
Environmental Destruction. GOP Rep. Richard Pombo has pushed through the House a bill gutting the Endangered Species Act. "The bill would require the government to compensate property owners if steps to protect species thwarted development plans. It also would make political appointees responsible for some scientific determinations and would stop the government from designating "critical habitat," which limits development." The bill text is here. The roll call is here. 36 Democrats voted for the legislation.
The WaPo's Justin Bloom writes up the Democratic proposal to establish a gas reserve similar to the Strategic Petroleum reserve. "'With the energy markets stretched to the max, Hurricanes Rita and Katrina wreaking havoc with our Gulf refiners, and greedy oil companies jacking up prices at the pump, we need to create rainy day reserves for gasoline and jet fuel,' [Sen. Chuck] Schumer said." The oil industry has come out strong against the proposal, as it would keep prices and profits low during a supply disruption.
Political News
Supreme Court. Roberts was sworn in last night, becoming the youngest Chief Justice since John Marshall in 1801. President Bush is likely to announce his second choice for the Supreme Court next week, reports AP.
George Ryan. AP: Scott Fawell, "the political strategist who helped engineer former Gov. George Ryan's rise to power," testified yesterday in the corruption trial against former Ill. Gov. George Ryan. His testimony will ring familiar to anyone following the current GOP scandals:
The witness said he compiled a master list while working in the secretary of state's office that showed how Ryan doled out jobs, special license plates, contracts and other favors.
He said he made the list because he believed it would become politically useful.
"I view everything through the eyes of politics," Fawell said.
Lester Crawford & the FDA. Sens. Mike Enzi and Ted Kennedy have asked the HHS inspector general, Daniel Levinson, to investigate last week's surprise resignation of FDA chief Lester Crawford. There is strong concern that Crawford may have retained financial interests in entities he was regulating while at FDA. This is an issue which bear watching, both as a precursor to more "cronyism" related resignations and as a sign that the administration is advancing the corporatisation of the FDA.
Larry Franklin. Larry Franklin has reached a plea agreement with the Department of Justice over charges that he shared classified information with AIPAC lobbyists. "Franklin was scheduled to go to trial with his alleged co-conspirators in January. Assuming his plea agreement with the government is approved, he is likely to emerge as a star witness for the government," reports Richard Schmitt of the LAT.
NASA's Planes. A GAO report faults NASA for overuse of government aircraft, to the tune of a loss of $20,000,000 compared to commercial travel costs.
Business News
Vioxx. Two cardiologists, including the plaintiff's treating physician, testified yesterday that the plaintiff had no other high risk factors for a heart attack, reports Reuters. Merck & Co. wants to claim that a plaque rupture caused the heart attack. The treating physician "said that would be 'total speculation,' adding, 'I am left in retrospect with a patient who had no, or minimal, coronary risk factors, who ... did not have coronary disease, who had a myocardial infarction, and who was on Vioxx.'"
KPMG. "The accounting firm KPMG and a law firm have agreed to pay $195 million to as many as 280 wealthy investors who bought four types of questionable shelters, the first major step by the two firms to deal with billions of dollars in potential civil claims," reports the NYT.
National Association of Security Dealers. The Public Investors Arbitration Bar Association wants that NASD to reduce the control Wall Street lawyers over arbitration panels that adjudicate securities issues, reports the WSJ. The three panel arbitration panels chosen by the NASD currently allow one lawyer from Wall Street and two "public" arbitrators, but the public arbitrators may receive as much as ten percent of their income from Wall Street firms. The PIABA wants that percentage reduced to zero. On Wall Street has more details on the dispute.
Citizen's Financial. The SEC has charged five people with insider trading in the 2004 Citizen's Financial acquisition of Charter One Financial, reports the WSJ. A former Citizen's Financial employee is alleged to have shared insider information with a hedge fund manager, who reaped $750,000 with the information. Citizen's Financial is cooperating in the probe.
Bayou Management. Yesterday the two founders of the now-defunct Bayou Management hedge fund pled guilty to criminal fraud charges. Reuters write up here. The SEC and Commodity Futures Trading Commission have filed civil charges.
RIAA. The Recording Industry sued 64 Internet2 users at Boston University, Columbia University and the University of California, Berkeley, accusing them of illegal music sharing.