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What little money I had in my 401k was taken away so that these bonuses could continue to be paid and investors could be reimbursed for making the wrong choice of stocks. They really need their millions and I am GLAD that I am able to help them maintain their lofty positions and bank accounts.
— Posted by Drayknight, The Downfall of AIG's 'Beautiful Machine'

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THE DAILY READ

Madoff Remains Free, Surreal Scene in Illinois Senate, Obama on Bush Inquiry

POSTED: 12:54 PM ET, 01/12/2009 by Amanda Zamora

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Madoff to Remain Free » A judge has rejected requests by federal prosecutors to revoke bail for Bernard Madoff, who is accused of running a $50 billion Ponzi scheme. — AP

Blago's Impeachment Trial » As lawyers for Senate appointee Roland Burris descend on Capitol Hill today, the Illinois Senate is preparing for a surreal scenario on Wednesday: Democratic Gov. Rod Blagojevich will preside over the swearing-in of the very same lawmakers whose first order of business will be to consider whether to dump him from office. — The Hill, Chicago Tribune

Bush Inquiry Under Obama? » President-elect Barack Obama signaled in an interview broadcast Sunday that he was unlikely to authorize a broad inquiry into Bush administration programs like domestic eavesdropping or the treatment of terrorism suspects, but didn't rule out prosecutions if the Justice Department uncovered wrongdoing. — New York Times

BearingPoint In Trouble » In April 2005, just days after telling investors that federal regulators were investigating its accounting practices amid a significant cash crunch, BearingPoint borrowed $200 million from a consortium of lenders. Now that deal is casting a cloud over the company. — Washington Post

SEC Nominee Sued Over Merger » Mary L. Schapiro, Obama's pick to to head the Securities and Exchange Commission, has been accused in two lawsuits of making misleading statements to quickly complete a merger of regulatory organizations after which she received a 57 percent raise in her pay. — New York Times

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WASHINGTON WATCHDOGS

U.S. Marshals Lawyer Criticized for Sports Trips

POSTED: 12:46 PM ET, 01/12/2009 by Derek Kravitz


"Washington Watchdogs," a periodic feature of the Post's Investigations blog, looks at the findings of the federal government's official investigators.

Joseph Band has been a senior attorney for the U.S. Marshals Service since 1992. He also has a passion for sports and for 37 years has worked part-time as a sports statistician for the Washington Redskins. Band has taken record-keeping assignments for Fox Sports, CBS and ESPN, working about 20 to 30 top sporting events per year, making between $35 and $125 per event.

He said the sports statistician job was always "for fun" and he never much cared about the money he made.

But Band's supervisors and co-workers complained to investigators that "Band was mixing his statistician activities with his official duties" and that he was "spending a considerable amount of time working on personal matters and conducting business for the Washington Redskins."

Federal prosecutors declined to file charges against Band. But a Justice Department inspector general's report released today accuses Band of improperly using government vehicles and agents to escort himself and TV broadcasters to and from high-profile sporting events, including the 2007 World Series, last year's Super Bowl and the NCAA college football championship.

Band allegedly asked for government agents to drive him and Fox Sports broadcasters to two World Series games at Boston's Fenway Park in October 2007 and used other vehicles for motorcade escorts following the games. He attended the 2007 World Series games as a part-time, paid sports statistician for Fox Sports.

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Dating Defense Doomed; Baltimore Mayor Indicted

POSTED: 03:37 PM ET, 01/ 9/2009 by Derek Kravitz

Apparently, the dating defense is dead.

Baltimore's popular mayor was indicted today on charges she illegally took gifts from a lobbyist ex-boyfriend, including plane tickets, fur coats and holiday gift items.

Sheila A. Dixon, a Democrat and and the basis for the shrewd and calculating character Naresse Campbell on HBO's "The Wire," was indicted by a grand jury on 12 counts, including four counts of perjury and two counts of theft over $500. She was also charged with theft under $500, fraudulent misappropriation by a fiduciary and misconduct in office.

The 55-year-old former Baltimore City councilwoman is accused of accepting gifts, including a $2,000 gift certificate at a Baltimore furrier and an airplane ticket, from her then-boyfriend, developer Ronald H. Lipscomb, whom she dated from 2003 to 2004 while he lobbied the city for millions in tax credits for development projects, the Baltimore Sun reported.

"I am being unfairly accused," Dixon said in a statement. "Time will prove that I have done nothing wrong, and I am confident that I will be found innocent of these charges."

Two of Dixon's business associates have already been indicted (Lipscomb has not been charged in connection with Dixon, but was indicted earlier this week on one count of bribery involving another Baltimore official, a council member, in the same public corruption probe.). Sun columnist Laura Vozzella noted in today's editions that "even if it was romance and not business, Dixon shouldn't have voted on her lover's projects, however awkward it might have been to announce: "Gotta recuse myself on this one; I'm sleeping with the developer."

Dixon and Lipscomb were both married, but separated from, other people at the time of their relationship. Dixon later divorced.

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HOT DOCUMENTS

Panel Releases Scathing Report on Federal Bailout

POSTED: 02:44 PM ET, 01/ 9/2009 by Derek Kravitz

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An oversight panel charged with monitoring the federal government's $700 billion bailout program released a scathing report today, accusing the Treasury Department of failing to live up to its obligations to taxpayers about disclosure and how it proposes to fix the foreclosure crisis.

The second report on the government's Troubled Asset Relief Program was authored by a five-person, bipartisan oversight panel and released by the House Financial Services Committee. In the 45-page report, panelists said the Treasury Department hadn't helped borrowers refinance or deal with over-inflated mortgages.

"The panel's initial concerns about the (program) have only grown, exacerbated by the shifting explanations of its purposes and the tools used by Treasury," the report said, faulting the Treasury Department on a variety of things, including its approach to the foreclosure crisis.

Treasury Assistant Secretary Neel Kashkari, who leads the TARP program, told the Wall Street Journal that roughly $75 billion needs to still be distributed to banks as part of its $250 billion capital-injection program. "This capital needs to get into the system before it can have the desired effect," he said.

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TOP PICKS

The Pitfalls of Private Health, Deadly Police Force and a Donor's Gift

POSTED: 12:15 PM ET, 01/ 9/2009 by Derek Kravitz

The editors at Post Investigations have scoured the nation's top in-depth and investigative reports from mid-December through the New Year and selected their most interesting finds for the past few weeks.

Agree? Disagree? See anything we've missed? Let us know.

Privatized State Programs in Texas Benefit Lobbyists, Lawmakers, Not Public » In the first part of the series, "State of Neglect," the privatization of state programs for the poor, disabled and elderly is examined. Lawmakers promised that private firms would be more efficient and save the state money. But complaints have grown, while private companies, lobbyists and ex-state officials profit. Through a database, you can check lobbyists' activity since 2001 and an interactive graph connects the dots of power and influence in Austin. Three more parts to the series are scheduled. — Dallas Morning News

Inglewood Police Resort To Deadly Force » In the past six years, police in Inglewood, Calif., have repeatedly used physical or deadly force against suspects who were unarmed or accused of minor offenses, a review of court documents, records and interviews shows. In a four-month stretch this year, officers shot and killed four people, with three of them being unarmed. Since 2003, six people have been shot who officers mistakenly thought posed a threat. — Los Angeles Times

A Donor's Gift Soon Followed Clinton's Help » Back in 2004, Sen. Hillary Rodham Clinton (D-N.Y.) helped secure a $5 million provision in a construction bill that allowed the developer, Robert J. Congel, to use tax-exempt bonds to build an entertainment and shopping mall in Syracuse. A few weeks later, the wealthy developer in upstate New York donated $100,000 to former President Bill Clinton's foundation. — New York Times

Best of the Rest

» Subprime Mortgage Lender Got Sweetheart Deal Amid Collapse (Orange County Register)
» Rangel Pushed For A Donation; Insurer Pushed For A Tax Cut (New York Times)
» Report: Athletes Score Much Lower On SATs Than Classmates (Atlanta Journal-Constitution)
» NBA Charities Are Often Mismanaged (Salt Lake Tribune)
» A Third Of Abused Children Who Died in Ohio Were Under Watch (Columbus Dispatch)

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THE DAILY READ

TARP Report Slams Treasury, China's Net Users Take Aim Online, More Ponzi Schemes

POSTED: 09:43 AM ET, 01/ 9/2009 by Amanda Zamora

See what else we're reading by subscribing to our GoogleReader feed, or following us on Twitter.

TARP Report Slams Treasury » As President-elect Barack Obama's team prepares to overhaul the U.S. Treasury's $700 billion financial-rescue package, a draft report by a five-member congressional oversight panel faults the department for failing to reveal its strategy for stabilizing the financial system, not answering questions asked by a government watchdog, and doing nothing to help struggling homeowners. — Washington Post, Wall Street Journal

China's Net Users Take Aim Online » When vigilant Internet users spotted photos of a housing official, they posted heated online discussions about his $15,000 Swiss watch and $22-a-pack cigarettes. Two weeks later, the official was fired. The case demonstrates how China's Internet users seek to expose people they suspect of wrongdoing. — USA Today

More Ponzi Schemes » Just weeks after the arrest of investor Bernard Madoff stunned Wall Street, federal authorities announced yesterday two new cases of alleged Ponzi schemes out of Pennsylvania and New York. — USA Today

Gotti Murder Mystery » Court papers filed in the upcoming trial of reputed Gambino soldier Charles Carneglia suggest that the corpse of John Gotti's neighbor -- murdered after he accidentally killed the gangster's 12-year-old son in a traffic accident -- was dissolved in a barrel of acid. — New York Daily News, Newsday

Holder Pushed for Controversial Clemency » Attorney general nominee Eric H. Holder Jr. repeatedly pushed some of his subordinates at the Clinton Justice Department to drop their opposition to a controversial 1999 grant of clemency to 16 members of two violent Puerto Rican nationalist organizations, according to interviews and documents. — Los Angeles Times

Ala. Sheriff Pocketed Prisoner Funds » The prisoners in the Morgan County, Ala., jail here were always hungry. The sheriff, meanwhile, was getting a little richer. Alabama law allowed it: the chief lawman could go light on prisoners' meals and pocket the leftover change. — New York Times

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WASHINGTON WATCHDOGS

Flushing Out Interior's Bathroom Spending

POSTED: 06:06 PM ET, 01/ 8/2009 by Derek Kravitz


"Washington Watchdogs," a periodic feature of the Post's Investigations blog, looks at the findings of the federal government's official investigators.

By Derek Kravitz
Washington Post Staff Writer

Does outgoing Interior Secretary Dirk Kempthorne need a $236,000 bathroom? Or is some of that money going down the drain?

That's what Interior Department investigators are determined to find out. Today, Inspector General Earl Devaney said his office has launched a probe into the bathroom project and "still have plenty of facts to flush out." (Pun intended.)

Kempthorne spent $236,000 in taxpayer funds renovating his office bathroom last fall, installing a new shower, a refrigerator and freezer and wainscot wood panelling, department officials say. Questions from The Post sparked the interest of the inspector general.

Shane Wolfe, a spokesman for Kempthorne's office, said the new 100-square-foot bathroom will replace an older washroom being removed to make way for an emergency stairwell. Aside from asbestos abatement and electrical and plumbing upgrades, the bathroom was constructed, in part, to preserve the office's "storied history," Wolfe said. At Interior, he said, "Preserving historic structures is part of what we do."

As for the refrigerator and freezer, Wolfe said that Interior secretaries hold meetings in the office and could potentially serve guests a cold beverage, such as "Diet Coke," Wolfe said. "That seems reasonable," he said.

The project was approved and partially funded by the General Services Administration, which owns the Interior Department's Northwest Washington headquarters at 18th and C streets. GSA officials agreed to pay for about half of the project's cost, as part of a $243 mllion remodeling of the historic, 72-year-old building. The project, which is scheduled to be completed in 2013, was overseen by the Interior Department's National Business Center.

The $236,000 cost came in $26,000 under the approved estimate. But the amount has struck some as excessive. "At a cost that exceeds the late 2008 median price of a Boise home ($187,300), Kempthorne's bathroom is bound to become as notable as the legendary $600 paid by the Pentagon for a military toilet and the Minneapolis bathroom stall where Sen. Craig was arrested," the Idaho Mountain Express and Guide opined.

Kempthorne, 57, took office in May 2006 after former Secretary Gale Norton resigned. He had served as the mayor of Boise, Idaho, U.S. senator and two terms as governor of Idaho before being tapped to lead the Interior Department by President Bush, a friend from when the pair were both governors.

Kempthorne was probably well qualified to assess the remodeling of his 1,120-square-foot office, designed by former Secretary Harold Ickes; Before his political career started, he served as executive vice president for the Idaho Home Builders Association.

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The Fallout From 'India's Enron'

POSTED: 02:30 PM ET, 01/ 8/2009 by Derek Kravitz


B. Ramalinga Raju

He's not Bernard Madoff, but B. Ramalinga Raju has some explaining of his own to do.

Raju, the founder of one of India's largest outsourcing companies, Satyam, revealed yesterday in an emotional, 4-1/2-page letter (copy) to investors that he basically made up accounting figures for his firm, to the tune of $1 billion.

He likened it "riding a tiger, not knowing how to get off without being eaten." Every attempt to eliminate gaps in the balance sheet and fill the "fictitious assets with real ones" and "non-existent cash" failed, he said.

Investors are understandably upset and ready to take Satyam to court (although the International Herald-Tribune reports that investors are more inclined to go after the firm's "deep-pocketed" auditor, PricewaterhouseCoopers, instead of the "cash-strapped" Satyam.)

India's stock market is shuttered today for a public holiday but the New York Stock Exchange has stopped trading on Satyam's American depository receipts, Forbes reports, and several banks, including HSBC Investment Bank and Goldman Sachs, have suspended their coverage of the firm.

Indian officials are trying to reassure investors that everything will be fine but experts are holding little hope that Satyam will recover. Reuters reports that outsourcing rivals Tata Consultancy Services and Infosys Technologies "could pick up defecting Satyam clients."

And what of Raju?

The 53-year-old son of a southern Indian grape farmer, Raju is now being investigated by the Securities and Exchange Board of India, the market regulator, according to The Associated Press.

But Raju said he personally has taken no money from the company. "Not one rupee," he wrote.

"I am now prepared to subject myself to the laws of the land and face the consequences thereof."

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