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The 2008 Republican and Democratic conventions were underwritten by hefty contributions from the institutions and individuals at the center of the country's financial crisis, according to a report released Wednesday by the Center for Responsive Politics and the Campaign Finance Institute. Insurance giant AIG, which has since received more than $150 billion in federal money, gave $1.5 million; mortgage company Freddie Mac, now a government enterprise, donated $500,000. In all, the donations come to about $14 million. (Wall Street Journal/Politico)

The Supreme Court could hold former Attorney General John Ashcroft and FBI Director Robert Mueller responsible for abuse of Muslim and Arab detainees in the days after September 11, 2001, if Javaid Iqbal, a Pakistani Muslim held in solitary confinement in Brooklyn for 6 months, wins the case he has brought against the officials. Iqbal must prove that Ashcroft and Mueller are responsible for his treatment. On Wednesday, the justices "offered no clear indication" that it would stop Ashcroft and Mueller from being named in the suitaccording to the AP. (NYTimes/AP)

Part of the proposed auto bailout plan would reinstate a tax loophole, Silo, which allows companies to avoid paying billions of dollars in taxes. The I.R.S. outlawed the shelter in 2004. A version of the bill passed the House Wednesday, though its fate in the Senate remained uncertain. (New York Times)

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Trouble in paradise?

Pat Leahy and Arlen Specter, the ranking Democrat and Republican respectively on the Senate Judiciary committee, have had a relationship over the years that, on the whole, has been a model of bipartisan comity as they've passed the gavel back and forth.

But are they falling out over Eric Holder?

In a speech on the Senate floor today, reports The Hill, Specter expressed surprise that Leahy, the committee chair, had scheduled a January 8 kickoff for Holder's confirmation hearing for the Attorney General job. Barack Obama is scheduled to be sworn in January 20.

Specter cited concerns about Holder's role in the pardon of Marc Rich in the waning days of the Clinton administration.

"We need to be sure the attorney general does not bend his views in any way that is partisan or political," Specter said. "There are many other matters that warrant inquiry."

Given the amount of material to go through, Specter said, the hearings should not begin until January 26 at the earliest.

The speech followed a letter sent last night by Specter to Leahy.

In response, Leahy just now fired off a letter back to his longtime colleague -- "Dear Arlen", it begins -- expressing surprise at Specter's surprise.

Leahy writes:

As I have said repeatedly from the time reports of his likely designation began appearing in the press in mid-November, I thought we should move promptly. It hardly came as a surprise when the President-elect announced that Eric would be a key part of his national security team at the designation announcement on December 1. My recollection is that your initial reaction on November 18 was that you were at that time already reviewing his record. Of course, Eric is someone you and I both know well and have known and worked with for years.

Leahy also cites historical precedent to argue that the timing of the hearings is not unusual:
After the contentious 2000 presidential election, I also proceeded promptly to hold the hearing on the designation by President-elect Bush of John Ashcroft to be Attorney General. John's designation was not formally announced until December 22, but I held his hearing 25 days later. I do not think President-elect Obama should be penalized for proceeding promptly with transition and designating his Attorney General selection three weeks before President Bush had.

I am sure you recall during your first year in the Senate how promptly Chairman Thurmond proceeded on the designation of William French Smith to be Attorney General at the beginning of the Reagan administration. The Committee completed its consideration of President Reagan's lawyer to be the Attorney General of the United States with a vote on January 16, even though he was not designated until December 11. We have known about Eric's designation officially for 10 days, and unofficially for more than three weeks. The Committee would have to vote on January 6, the first day of the new Congress, to approximate that timeline.

President Carter's first Attorney General, Griffin Bell, was not designated until December 18, yet his hearing and Committee consideration were completed by January 19. Approximating that timeline would have the Committee voting before the new Congress even comes into session.

Leahy even brings up past favors he has done for Specter:
I have sought to accommodate your interests on many occasions. I scheduled field hearings for you in Pennsylvania on foreclosure and health care mergers issues, and worked hard to ensure fair treatment and confirmation for nominations in which you had a personal interest.

We'll keep you posted on how this plays out...

On CNN within the last hour, Wolf Biltzer slipped in some interesting and potentially important news about what federal prosecutors might and might not have on Jesse Jackson Jr., who today was all but confirmed by his lawyer to be Senate Candidate 5.

Talking to legal analyst Jeffrey Toobin, Blitzer said that according to law enforcement sources, Pat Fitzgerald's office does not have recordings of Jackson himself speaking to Rod Blagojevich as part of the US Attorney's investigation into the governor.

If true, that would be significant, because the indictment filed yesterday against the governor quotes him telling an aide that an "emissary" from Jackson approached the governor and proposed a "pay-to-play" deal in regard to the open US Seante seat that Blagojevich has the power to fill.

If Fitzgerald doesn't have evidence of Jackson himself talking about any such deal, it would appear to lessen the chances that Jackson will be charged.

Of course, there are some caveats here. We've been unable to get more details on Blitzer's report, and haven't seen it corroborated elsewhere.

And even if true, Blitzer's report doesn't exlcude the possibility that Fitzgerald has a recording of an aide to Jackson -- perhaps the "emissary" to whom Blagojevich referred -- talking about the alleged deal.

Still, this is worth trying to learn more about...

Elizabeth Warren, the Harvard Law professor who chairs the Congressional Oversight Panel, which is monitoring the Treasury's spending of the bailout money, appeared this afternoon before a House commmitee to testify about the report -- better characterized as a set of questions -- the panel released this morning.

And from what Warren said, it doesn't appear that oversight of the billions of dollars at stake is being treated by either Treasury or Congress as a top priority.

Warren told the committee that the panel's four members had met for the first time just two weeks ago, and were still "struggling" to find office space. She added that all the members of the panel are serving part-time.

"Well, that raises the question of whether this can really be taken seriously," said Rep. Melvin Watt (D-NC), echoing fears about the strength of the oversight mechanisms are in place.

Congress authorized the creation of a five-member panel in the Oct. 2 bailout bill, but progress has been slow-going. Appointments were not announced until Nov. 14, and the panel remains one member short. (Sen. Jud Gregg, a New Hampshire Republican who was originally named to the position, stepped down Dec. 1.) The panel has little authority to do more than request information and report back to Congress about it.

In addition to Warren the other three members of the panel are Rep. Jeb Hensarling (R-TX), Richard Nieman, the state superintendent of banks for New York, and Damon Silvers, an associate general counsel of the AFL-CIO .

Rep. Jesse Jackson Jr. just gave a press conference adamantly denying any wrongdoing in connection with the Blagojevich charges.

"I reject and denounce pay-to-play politics, and have no involvement whatsoever in any wrongdoing,"Jackson said.

He added: "I did not initiate or authorize anyone at any time to promise anything to Governor Blagojevich at any time."

Jackson continued: "I spoke to the US Attorney's office and they shared with me that ... I am not accused of any misconduct."

Jackson said he met with the governor Tuesday (he meant Monday, it appears) to discuss the Senate seat, as was reported at the time, but that he believed he was in consideration on the merits.

He closed with an effort to associate himself with civil-rights history, saying he wanted to be judged "on the content of my character."

Earlier today, Jackson's lawyer all but admitted that Jackson is Senate Candidate 5. In the indictment filed against Blagojevich, the governor claims that an "emissary" from Candidate 5 approached him about a "pay to play" deal for the open Senate seat that Blagojevich has the power to fill.

In a televised press conference this afternoon, Jesse Jackson Jr.'s lawyer all but confirmed that his client is Senate Candidate 5 -- as we suspected from the start.

Asked whether he believes that Jackson is Candidate 5, James Montgomery said: "I do." He added: "He did not specifically tell me that, but I can assume it from our conversation."

Montgomery said that Jackson is guilty of no wrongdoing, and that both Montgomery and Jackson have been told by law enforcement that Jackson is not a target of the investigation. And he said that he and Jackson are scheduled to meet with US Attorney Pat Fitzgerald on Friday or Monday.

Just to remind you, in the indictment filed against Rod Blagojevich, the governor claims that an "emissary" from Candidate 5 approached him about a "pay to play" deal for the open Senate seat that Blagojevich has the power to fill.

A four-person oversight panel for the Treasury's $700 billion bailout released a bewildered preliminary report this morning looking into how Treasury is spending its billions of dollars of taxpayer money.

U.S. stocks have declined 40 percent this year, 12 of the nation's largest financial institutions are teetering on the brink of bankruptcy, and 171 banks are on the Treasury's "problem list." Since Congress approved the bailout in October, the Treasury has allocated some $335 billion, but some of the most fundamental questions about where that money went remain unanswered.

"It is unclear" the report -- written by a panel led by Harvard Law professor and bankruptcy expert Elizabeth Warren -- says at one point, and it continues that way for some time, wondering "What is Treasury's Strategy?" "Is the Strategy Working?" What Have Financial Institutions Done with the Taxpayers' Money?" Or as Rep. Paul Kanjorski (D-PA) put it at a hearing of the House Financial Services Committee this morning: "We're like mad scientists in an economic laboratory trying to make the right potion to solve this problem."

The most strongly worded section appears on page 20, when the panel charges Treasury with administering "the TARP program without seeking to monitor the use of funds provided to specific financial institutions." It adds: "Treasury cannot simply trust that the financial institutions will act in the desired ways; it must verify."

The panel also raises questions about how Treasury is deciding which institutions get money.

Critics have repeatedly wondered how much power the Treasury's oversight mechanisms actually have -- and the report's inconclusiveness suggests that it's not sure either.

Take this excerpt, in which the panel says it will develop standards to measure the program's success, a request also put forward in the Government Accountability Office report from last week.

The Oversight panel intends over time to make its own assessment of the effectiveness of the TARP program in achieving the objectives set forth by Congress. The Oversight Panel would be greatly assisted in its effort if Treasury did the same.

Let's hope the next reports from the panel, due out Jan. 10 and 20, contain more teeth. In the meantime we await the new website for the congressional oversight panel (or in a moment of wishful thinking, COP for short) with baited breath.

ABC News is reporting that Rep. Jesse Jackson is "Senate Candidate 5". The report is attributed to "federal law enforcement sources."

The charging documents in the Rod Blagojevich case quote the governor telling an aide that an "emissary" from Candidate 5 contacted him and proposed a "pay to play" arrangement in regard to the US Senate seat left open by Barack Obama, which Blagojevich has the authority to fill.

The governor also says he thinks he might be able to get something "tangible, up front" from Candidate 5 in return for the appointment.

Jackson Jr. said this morning he was contacted by federal prosecutors who "asked me to come and share with them my insights and thoughts about the selection process."

Asked whether he was Candidate 5, Jackson Jr. said "I don't know," but added that he had been told he was not a target of the investigation.

We suggested yesterday that Jackson Jr. might be Candidate 5.

The House ethics committee will expand its investigation of New York Democratic Rep. Charles Rangel to include questions about his decision to support a controversial tax shelter. The loophole was supported by a company that donated $1 million to a project championed by the congressman. Rangel, the chairman of the powerful Ways and Means Committee, already faces questions from the committee for failing to report income on a Caribbean villa and dodgy real estate dealings in New York. The latest allegations were reported by the New York Times in November. (AP)

Troubled insurance giant American International Group, the recipient of more than $150 billion in federal bailout funds, proposed "retention payments" to 38 top executives --whose salaries already range from $160,000 to $1 million -- of up to $4 million, the company confessed Friday in a letter to Rep. Elijah Cummings (D-MD). AIG, the company that made headlines earlier this fall for a $443,344 trip to the St. Regis resort and a $343,000 hush-hush retreat to Arizona, has lost $37.6 billion this year, and owes more than $10 million, reports the Wall Street Journal. The government owns nearly 80 percent of the firm. (Bloomberg/Wall Street Journal)

The Minnesota Court of Appeals denied the appeal by Sen. Larry Craig (R-ID) to withdraw his guilty plea in a sex sting case. Craig, who is accused of soliciting sex from an undercover officer in the bathroom of the Minneapolis airport, pleaded guilty in 2007 without consulting a lawyer. He attempted to retract the claim after his arrest became public, saying his plea had simply been meant to dispose quickly of the issue. Craig will retire from the Senate in January. (CNN)

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The FBI is looking into the allegations against Nasser Kazeminy, a close friend and supporter of Minnesota senator Norm Coleman, reports the St. Paul Pioneer Press.

The paper reports: "Agents with the FBI have talked to or made efforts to talk to people in Texas familiar with the allegations, according to a source familiar with the situation."

The lawsuit, filed by the former CEO of a company owned by Kazeminy, alleges, among other things, that Kazeminy tried to use the company, Deep Marine Technologies, to pass money to Coleman via an insurance company that employed the senator's wife.

Coleman's campaign, which is in the midst of a recount against Democrat Al Franken to decide the fate of Coleman's seat, released the following statement last night:

"We are not aware of any investigation that is under way, nor have we been contacted by any agency with respect to this matter. As we have said repeatedly, we welcome any investigation of these lawsuits by the appropriate authorities to get to the bottom of these baseless, sleazy and politically inspired allegations.

That denial -- which Coleman's Senate office had declined to offer to TPMmuckraker despite repeated calls -- would appear to rule out the possibility of Coleman having been contacted by Senate ethics investigators, though there may be wiggle room in the wording. A Minnesota good government group last month called on both the FBI and the Senate to launch probes.

The FBI, contacted by the Pioneer-Press, did not confirm or deny the existence of the investigation.