Bad Deeds for 11-14-2007

Mortgage Mess: Uh-oh. It’s Enron All Over Again – Just as Enron’s off-balance-sheet vehicles were propping up its stock price by camouflaging the company’s real financial results, so structured investment vehicles were inflating the credit market by providing demand for the complex securities created out of mortgages and loans used to finance buyouts. In both cases, part of the problem was that the rating agencies, which are supposed to serve as watchdogs, were blindly optimistic, either through sheer incompetence or because of conflicts of interest. Just as Enron’s investment-grade rating — which it kept until four days before its bankruptcy — turned out to be an illusion, so did the investment-grade ratings on many mortgage-backed securities. Structured finance,” as the Street calls the black art of making one thing look like something else, couldn’t transform Enron from a money-losing company into a moneymaking one, and it couldn’t make subprime mortgages into investment-grade debt. Now the rating agencies are scrambling to explain why it isn’t a problem that they are paid by the very people they’re supposed to rate, and Congress is holding hearings. That’s exactly what happened six years ago.

Republicans and Cost of War: Uh-oh. It’s Enron All Over Again – Senior Republicans on Congress’ Joint Economic Committee, Sen. Sam Brownback (R-KN) and Rep. James Saxon (R-NJ) are calling on Democrats to retract a staff report alleging the hidden costs of the Iraq war could total more than $1.5 trillion. They want to hide the real costs. Budgeted costs turned out to be an illusion. In both cases, part of the problem was that Congress, which is supposed to serve as a watchdog, was blindly optimistic, either through sheer incompetence or because of conflicts of interest. Republicans are scrambling to explain why it isn’t a problem.

CIA Erred in Saying It Did Not Have Tapes in September 11 Conspirator Case – The CIA erred in twice telling a court in the case of September 11 conspirator Zacarias Moussaoui that it did not have any recordings of interrogations of “enemy combatants,” when in fact it had three video or audio tapes, according to a letter released on Tuesday. Prosecutors only recently learned of the tapes from the CIA, they said in the letter to the judge who presided over the case and to a U.S. appeals court that considered the Moussaoui case. Six years after 9/11, does the left-hand know what the right-hand is doing? This is more like the thumb not knowing what the index finger is doing.

Cheney and Bush Have Abused Their Powers – Source: The American People – A total of 70% of American voters say that Vice President Dick Cheney has abused his powers as vice president. Of the 70%, 13% (9% of all voters) say the abuses rise to the level of impeachable offenses, but he should not be impeached, and 61% (43% of all voters) say the abuses rise to the level of impeachable offenses and Mr. Cheney should be impeached and removed from office. A total of 64% of American voters say that President George W. Bush has abused his powers as president. Of the 64%, 33% (21% of all voters) say the abuses rise to the level of impeachable offenses, but he should not be impeached, and 53% (34% of all voters) say the abuses rise to the level of impeachable offenses and Mr. Bush should be impeached and removed from office.

Blackwater Iraq Shootings Unjustified According to FBI – According to military and civilians brief on the infamous September 16th shooting of 17 Iraqi civilians involving Blackwater employees, the F.B.I. has found that at least 14 of the shootings were unjustified and violated deadly-force rules in effect for security contractors in Iraq. Representative David E. Price, a North Carolina Democrat believes that the Justice Department must hold someone accountable for the shootings. “Just because there are deficiencies in the law, and there certainly are, that can’t serve as an excuse for criminal actions like this to be unpunished. I hope the new attorney general makes this case a top priority. He needs to announce to the American people and the world that we uphold the rule of law and we intend to pursue this,” Mr. Price said.

Bush Administration Didn’t Do Anything Right – Matthew Dowd, former Bush political strategist has decided to look back on his experience with the Bush White House and has become disillusioned with it. On the administration’s response to the Sept. 11 attacks: “I asked, ‘Why aren’t we doing bonds, war bonds? Why aren’t we asking the country to do something instead of just . . . go shopping and get back on airplanes?’ ” On the war in Iraq: “I guess somebody would make the argument, well, the Iraq war was about defending ourselves. But it seems an awfully huge stretch these days to say that.” Dowd is not the first Bush ally to part with the administration. Former Treasury Secretary Paul H. O’Neill contributed to a book that likened the president at Cabinet meetings to a “blind man in a roomful of deaf people.” John J. Dilulio Jr., who led the White House office of faith-based initiatives, left with a shot at “Mayberry Machiavellis”. Retired Army Lt. Gen. Ricardo S. Sanchez, who once led U.S. forces in Iraq, accused the administration of going to war with a “catastrophically flawed” plan.

State Department Inspector General Used Intimidation to Block the Investigation of Issues in Iraq, His Brother is on Board of Blackwater According to Letter From Blackwater President – The Oversight Committee is currently holding a hearing, “Assessing the State Department Inspector General.” Inspector General Howard J. Krongard will testify. On September 28th, Chairman Henry Waxman wrote to Krongard on allegations that he was using intimidation of employees to block the Committee’s investigation of issues in Iraq, and on October 12th Chairman Waxman was joined by several other Chairmen in a letter to Secretary Rice about endemic corruption in Iraq and the refusal of State Department officials to answer basic questions about the impact of corruption within the Maliki government on the chances of success in Iraq. Rep. Eilijah Cummings questioned Krongard on evidence that his brother is on the board of Blackwater.

Supporting the Troops, NOT! – U.S. troops return home today to find that their jobs and benefits are gone. In 1994, Congress and the White House successfully passed a law to protect veterans’ seniority, salary, and benefits when they return home, but today, the Bush administration is lax about forcing private businesses to follow the law. It’s not even adequately informing returning service members about their rights, and it’s not protecting them when their rights are violated. A study by the Government Accountability Office this year found that when the Department of Labor decided to refer federal cases for litigation, it took an average of 247 days.

Regards,

Jim