That Critical Palestinian Authority Security Training

Secretary of State Condolezza Rice noted the need for Middle East security as the surest path to peace. Her right hand man, General Jim Jones, serves as Special Envoy for Middle East Security. And a key component of this path is training Palestinian Authority Security Forces, as they protect their leader and may someday have to root out rival Hamas fighters.

PA President Mahmoud Abbas is most excited about having American security contractors guard him and train his police forces. He even told President Bush's advisers of his interest.

The sources said Abbas, opposed by several senior members of his Fatah movement, has contacted Blackwater USA, a key contractor in Iraq, for the training of a new bodyguard unit. They said Blackwater has quietly been examining the Presidential Guard and Force 17, the two units responsible for Abbas's protection.

So how's that Palestinian security force training going? It's been a struggle to say the least. A military official even got defensive over the problems to date:

"No one can deny that at the beginning there were some growing pains," said Dov Schwartz, a Defense Department official who is spokesman for the training program. "We had never done this before."

What about America's four year effort training Iraqi national police? Is that not experience? General Jim Jones led a Congressional panel on that topic just last summer. Did he not bring that knowledge to his new job? They're even using the same facility and private security contractor, DynCorp. How can they plead "no experience"? The company's website states, "DynCorp International will support projects to include training and equipping of the PA Presidential Guard (PG) and the National Security Forces (NSF)." Who knows how Defense Dept. bureaucrats get to make ridiculous claims? But nevertheless, it's the State Department's baby. In early March, Condi said:

The goal is to create "a professional and capable Palestinian security force" in part to counter Hamas, the armed Palestinian faction that controls the Gaza Strip and does not recognize Israel.

How have they performed on the task? The problems range from numerous equipment shortages to what to cover in training in light of Israel's objections. Consider this report:

Course manuals, provided by the State Department's Bureau of International Narcotics and Law Enforcement Affairs, or INL, arrived after the courses began, the Americans said. The course work is in English, program administrators acknowledged, even though most of the trainees speak only Arabic.

What makes this even more amazing is DynCorp's association with a translation contractor. They are joint venture owners of GLS, winner of a $4.6 billion translation contract from the government to support Operation Iraqi Freedom. One might expect the State Department or DynCorp to have police training manuals in Arabic. While late, the instruction books did arrive.

However, much of the State Department course material consisted of excerpts from army manuals, U.S. officials confirmed. One American said trainers had to edit out sections on how to use tanks and grenade launchers to breach buildings, among others involving offensive military tactics.

"Is that normal for training? No," said William J. Durch, a senior associate at the Henry L. Stimson Center, a Washington research group, and an expert in training international security forces. "Is that normal for a program that someone simply wanted to get going for political purposes? Yeah."

But here's the good news on this critical piece of the Middle East security situation that leads to peace.

Thomas Moselle, a State Department police adviser who is one of the program's administrators, acknowledged early problems in the program. But he denied that any curriculum or equipment shortages were hindering training.

While the politician minimizes setbacks, the people on the ground know the negative impact. One could wonder if the U.S. really wants to train a capable Palestinian force. Elements of the Washington Post piece bring this question to light:

A U.S. mission statement, dated mid-January, said Palestinian forces would receive body armor and Saudi-made light-armored personnel carriers, designed for use in riots. Israeli objections have blocked delivery of that equipment.

Israeli officials have blocked delivery of body armor to Palestinian forces of a grade capable of stopping rounds from the M-16 assault rifles used by Israeli troops, American officials said. That level of armor, however, is needed to protect against AK-47 fire from Palestinian fighters.

"You never know when these things are going to be used against you," Shlomo Dror, spokesman for the Israeli Defense Ministry, said of armor and weapons.

Haaretz reported on the start up of the new training earlier this year. The piece cited a projected 2,000 Palestinians would be trained in 2008, out of an eventual 50,000 police force.

Israeli Prime Minister Ehud Olmert insists a Palestinian state will not be established until the Palestinians rein in militants in the West Bank, where Abbas's secular Fatah faction holds sway, and the Gaza Strip, which Hamas seized in June.

If P.M. Olmert holds true to his word, it will be a long time before the establishment of a Palestinian state. There's little current capability to rein in militants and despite wonderful words, the work to date has been woefully inadequate.

I believe Eliot Abrahms called Israeli-Palestinian peace efforts "just process" not long ago. Could he be right? Or, is it more divide and conquer? But rest assured, Condi says everything is on track...

Jim Jones Plans Israeli-Palestinian Peace?

Eisenhower's feared military-industrial complex exists today in America. A retired General is helping Secretary of State Condi Rice mediate peace between Israel and the Palestinian Territories. While his name sounds similar to actor who played Darth Vader in Star Wars, it's a different James Jones, James L. Jones. Here's what the Jerusalem Post said about the General: Jones, who officially retired from active duty last year after serving as Supreme Allied Commander in Europe, was appointed by Rice at the Annapolis conference as US Special Envoy for Middle East Security. Befitting his title, he is described by one source as "the big-picture guy," advising and helping Rice to place the Israeli-Palestinian conflict in a larger regional context, a responsibility that includes engaging other Arab leaders. Jones, who also holds a senior position in the US Chamber of Commerce and sits on the corporate boards of Boeing and Chevron, is a real heavyweight, not only for his storied military past, but his possible future prospects. Last year the Wall Street Journal described him as one of "Washington's hottest political commodities," courted equally by both Republicans and Democrats. Hillary Clinton has talked of putting him in her cabinet, Barack Obama has consulted with him, and John McCain described Jones as one of his "closest and longtime friends." General Jones leads the Institute for 21st Century Energy at the U.S. Chamber of Commerce. He also led a blue ribbon panel that looked at the Iraqi National Police. After the U.S. military dedicated 2006 as "the year of the police" in Iraq , significant problems remained with sectarian elements in the national police force. Congress had General Jones look into Iraq's security forces. Shortly after submitting his report, the General got his State Department appointment. At his unveiling Jim (as Condi called him) Jones said: "I look forward to forming a team and working with both the State Department and Defense Department as the need arises to complete our task." Defense Department to mediate peace? That's odd. Well, it turns out I read it wrong. Haaretz clearly stated General Jones new position is Special U.S. envoy for Middle East Security. Condi Rice had this to say about the order of things: "Building security in the Middle East is the surest path to making peace in the Middle East," Rice said, "and General Jones is the best individual to lead our efforts in this essential endeavor." So security comes first. Does that involve the use of Boeing products to stabilize the region, making it safe for Chevron to do business? We know it involves the use of private security companies to train police. Since the Iraqi police training didn't turn out so well, how will the current training of Palestinian police be any better? It's boomeranged on us before. But that leads us to another uniquely post modern concern, private corporate armies. If Eisenhower were alive, what would he think when he saw the feared elements of the military-industrial complex hamming it up on the media's front pages? Would he be horrified to see an indifferent public and politicians who treat Jim Jones like a hot commodity? Would Dwight wonder who drank the cool aid?

 

Update 10-19-22:  Retired General James Jones is a paid advisor to Saudi Crown Prince Mohammed bin Salman, the man who ordered the death of Washington Post journalist Jamal Khashoggi.

Bush Team Proposes Financial UnPatriot Act

After 9-11 the Justice Department pushed the Patriot Act to prevent future catastrophes from happening again. It allowed the government new methods to determine if individual citizens posed a risk to our nation's safety.

After the Bear Stearns bailout on Wall Street, the Treasury Department offers the UnPatriot Act which does nothing to prevent future market meltdowns from speculative to illegal corporate behavior. However, it does allow the Feds to come to the rescue should our Wall Street icons once again paint investment pigs as high priced hookers.

While the government can scrutinize a suspected terrorists' information, it remains hands off with investment banks and other financial institutions, including hedge funds and private equity underwriters (PEU's). The NYT piece on this new non-regulatory reform closed with ex-SEC chair Arthur Levitt's saying "his first impression of the plan was positive. Even though the S.E.C.’s powers might be reduced, Mr. Levitt said, the plan would create a broader agency to regulate business conduct in all financial services."

So the government would have slightly broader breadth, but less depth than what allowed the current crisis? And who is your employer Mr. Levitt? Why it's the Carlyle Group and Arthur's just one of the PEU boys! It's all beginning to make sense...

Recent NRCC Donations Pose Audit Challenge

Rep. Mike Conaway, the Chair of the National Republican Congressional Committee has more than one challenge as head of the audit committee. Besides tracking down missing funds from dirty accounting, Mike has to contend with donations varying from the normal deposit.

The New York Times magazine article on Rep. Tom Cole, Chair of the NRCC had this to say:

Many conservative activists have become so dissatisfied with the party's heresies, particularly on immigration and government spending, that as Cole's staff took over, the committee's fund-raising pleas were being ignored and, on at least one occasion, returned in an envelope stuffed with feces.

How are these new deposits accounted for, first in, first out (dried) or last in, first out (moist)? It must be no fun to work in the NRCC's accounting department these days. But come November, the fruits of these donations will hit the airwaves via TV and radio commercials. Be sure to turn down the smell. (But don't you feel sorry for those Republican bundlers?)

It's 3:00 pm on Friday & The Phone's Ringing

The phone in the Oval Office rings at 3:00 pm on a Friday afternoon. It's the media wanting to know why another Bush official mishandled government funds. But President George W. Bush is mountain biking at Camp David and not available. So the phone just rings while his underlings play rock, paper and scissors to see who has to answer. The reporter on the other end gives up. He's used to not getting his questions answered. The story should get buried over the weekend. Welcome to Bushworld.

Carlyle's Scarbody Fair?

Are you going to Scarbody Fair? Passionate rage, weaponry, and crime...
---(sung to the tune of the Simon & Garfunkel hit song).

The predatory Carlyle Group reportedly is eyeing Reed Elsevier's trade publications division, which includes the renowned British medical journal, The Lancet. Reed also has an exhibition division specializing in weapons fairs. Physicians encouraged the company to ditch the fairs, but to no avail.

Should the Carlyle Group buy these parts of Reed, they stand to make a killing. The sale of arms isn't declining world wide, even as George W. Bush conducts his full court press to "make the world safer". Also, a proposed FDA rule change will make medical journal articles on "off label uses" for drugs quite valuable. Big Pharma would likely pay premium prices for placement and the opportunity to market non-FDA approved uses of their drugs.

I hear some Carlyle cash registers ringing. As George Bailey told Clarence in It's a Wonderful Life, "That means another angel got its wings."

Carlyle Reads the Signs

What would an enterprising private equity firm do given President Bush's proposed FDA rule relaxation allowing pharmaceutical companies to market off label uses of their drugs as long as articles on the topic have been printed in a trade magazine? Why, it would purchase a company publishing trade magazines!

The Times Online reported The Carlyle Group is interested in Reed Elsevier's trade magazines division. Elsevier Health Sciences group is a global leader in healthcare and medical publishing.

For a clue as to how this might work, a pharmaceutical company could fund a bogus study. The FDA rule relaxation doesn't require the drug maker to promise to test the drug for the new off label use. However, most doctors like a little data, so some slanted study could be done quickly and cheaply.

The next challenge is getting it into a peer reviewed clinical magazine. That's where Reed Elsevier and their 800 medical journals/yearbooks come in. I'm sure pharmaceutical companies would pay big bucks to get articles in journals that allow them to expand their marketing of off label uses for existing drugs.

For the skeptical reader, consider the case of the cancer study funded by cigarette companies. The New York Times reported on the Foundation for Lung Cancer: Early Detection, Prevention & Treatment.

A review of tax records by The NYT shows that the foundation was underwritten almost entirely by $3.6 million in grants from the parent company of the Liggett Group, maker of Liggett Select, Eve, Grand Prix, Quest and Pyramid cigarette brands.

The outcome of the company funded study was "80 percent of lung cancer deaths could be prevented through widespread use of CT scans." The New England Journal of Medicine had no clue it published a study funded by cigarette companies. But here's where it gets devilish.

In New York, a bill would create a $10 million fund “to carry out lung cancer early detection research using computer tomography (CT) scanning” at a place “that was established by the multi-institutional, multi-disciplinary research program that began at 22 sites in the state in the year 1991,” a description that could only fit Dr. Henschke’s (the author of the study) group.

Sooooo wheeeee! Someone brought home the bacon, just like Carlyle will if they buy the parent company of The Lancet. Unfortunately, something else needs to be lanced. It's the infection of our democracy by the government industrial monstrosity. All hail President George W. Bush, The Carlyle Group and their staphs. Should the FDA rule change not materialize, Carlyle could still make out like bandits from Reed Elsevier's weapons fairs, currently under protest from Lancet physicians.

Fran Townsend to Cover for Carlyle in New Role?

Will Frances Townsend help a different Carlyle division in her new role as member of the President's Intelligence Oversight Board? While the deal is yet to close, The Carlyle Group is in talks with huge intelligence contractor and government consultant, Booz, Allen, and Hamilton. BAH's federal revenue rose from just under $1 billion in 2004 to nearly $2 billion in 2007. A double in just three years? That sounds devilishly Carlylish!

But back to Fran. As a member of the oversight board, will she be in a position to steer work to a likely new Carlyle affiliate? If they mess up, will Mrs. Townsend cover for the politically connected private equity firm? That skill is already on her "robust" resume.

Frances, then White House Homeland Security Adviser, omitted any mention of Carlyle's LifeCare in her Katrina Lessons Learned Report. What kind of intelligence is required to leave out the hospital with the highest death toll in a natural disaster? LifeCare lost 24 patients in its New Orleans long term acute care hospital.

Maybe Booz Allen's Government IT division can help the White House with their missing e-mails. The two year period covers August 2005, when Hurricane Katrina struck. A Congressional Committee already got stiff armed when it asked for e-mails between Andy Card and Fran Townsend. If Carlyle wins the huge government contracting arm of Booz, don't count on anything coming out. They owe Mrs. Townsend a favor.

Carlyle to Lance "Lancet"?

Recall the controversial public health study that cited some 655,000 lives lost in Iraq as a result of the conditions of war? A politically connected private equity firm could have a say in future content published in The Lancet. The Times (London) reported the Carlyle Group as interested in Reed Elsevier's trade magazines division.

If Carlyle wins The Lancet's corporate parent, could such a story be run under their ownership? Maybe, maybe not. But I can assure you they couldn't do an unbiased examination of 24 patient deaths in LifeCare's long term acute care facility in New Orleans post Katrina. Why? Carlyle closed the purchase of LifeCare just weeks before Katrina sideswiped the Big Easy.

Funny, this potential publisher of factual information got lucky in Fran Townsend's robust investigation. The White House Lessons Learned report omitted any mention of Lifecare and their death toll, the highest of any hospital. Carlyle knows how to manage their image. How will Reed Elsevier's trade magazines help in that regard? Time will tell.

"Blowing Lid Off" NRCC Embezzlement

The Dallas Morning News went light on Republican Representative Mike Conaway of West Texas. Heck, it even made him a hero for finally exercising basic nonprofit governance oversight of the National Congressional fundraising arm of the Republican Party. Apparently newspaper reporters don't serve on many nonprofit community boards.

The NRCC's Treasurer, Christopher J. Ward fabricated audited financial reports for fiscal years 2002-2006. Recall Enron and WorldCom? That caused these same Congressional leaders in 2002 to vote for Sarbanes-Oxley, intended to prevent financial fraud from happening so easily. Audit firms changed their practices for all organizations, not just publicly traded firms. Any nonprofit board member could expect to be interviewed by a member of the audit team, but certainly the Board President and Treasurer would have face to face time with an auditor.

Then there's the five year period where Chris handed the NRCC Executive Committee the "audited" statements. This is another red flag. A partner from the accounting firm would personally present the audit results and review the management letter with the board. Reporter Todd Gillman either is unaware of this practice, or thought it not important enough to include in his piece. However, what he wrote makes no sense. Consider:

Lawyers are a dime a dozen in the halls of Congress. But a good CPA? Only four, including Midland's Mike Conaway. That eye for ledgers and balance sheets came in handy when Mr. Conaway – who used to keep the books for President Bush's oil business ­unraveled an accounting scandal that has cost House Republicans nearly $1 million.

It wasn't the financial statements or fuzzy looking numbers that tipped Mike off. It was the absence of professional auditors, as in outside reviewers with financial expertise. The Congressman had this to say of the scheme, "but this is as sophisticated as anything I've dealt with." As to the forged statements he said, "They looked very good," he said. "A typical user would not see anything that just jumped out and said there was something wrong." The Dallas Morning News piece stated:

"Had I not caught it, it would have been staggeringly embarrassing to me professionally," Mr. Conaway said the other day. It's a humble stance, considering that the alleged fraud and misappropriation at the National Republican Congressional Committee went undetected for five years, until Mr. Conaway took over the audit committee.

Sorry Todd, wrong again. The West Texas Representative was appointed in January 2007 as head of the audit committee. He found the ruse in January 2008, a full year later. Audit cycles have much activity, not just at year end and especially if the organization changed auditors on a frequent basis (another red flag). Mike likely should have caught the scheme earlier, but his peers who served on the Executive Committee over the five year milking need to hang their head in shame, especially the President and Treasurer.

These truly are audacious schemes. On the fraud Mr. Conaway said. "This guy was covering his tracks." Funny, it seems members of the NRCC Executive Committee do likewise in every news article on the major pilfering. The five year scheme is clearly the result of poor governance, inadequate oversight that doesn't meet the standards of a local nonprofit organization.

And these people are "running the country"? How can they vote for greater fiscal oversight after Enron, and then loosen the reins inside their money changing operation? Houston, we have a problem, attention must be diverted elsewhere. How many whores could Eliot Spitzer have bought with nearly $1 million?

Pace Exemplifies Dwight’s Nightmare

President Eisenhower’s dreaded military industrial complex is embodied in General Peter Pace, fresh off his service as Chairman of the Joint Chiefs of Staff. Within months after retiring last October, Peter landed a job as President of SM&A Strategic Advisers, Inc. SM&A bills the publicly traded firm as leading consultants in competitive procurement. Pete’s new company has numerous success stories in government defense. In a recent UPI interview, General Pace highlighted the current transformation of the Defense Department and how SM&A could assist companies wanting more government business.

" … It's not about problems in the past, it's about opportunities in the future and how we can help the leaders of companies understand the process and how to properly pay attention to the specifics of what the government asks for, and then help them (defense contractors) craft programs that are focused on answering the issue or requests for proposals that's before them."

What makes Peter’s new job interesting is his employment arrangement. This ex-insider doesn’t have to work full time for his $240,000 sign on bonus and $300,000 a year base salary. The SEC filing indicates a chance for significant incentive compensation and showed a 100,000 share stock option award. Also, as board member for the parent company Pace will earn $20,000 a year for his service. For that first year of non-full time work, Peter will garner $560,000. Why would a company pay that kind of money to a part timer? Could it be for insider intelligence to grow revenues at the government’s expense? As President Bush frequently says, “that’s your (taxpayer) money.”

George W. also wants Peter’s intelligence, having just appointed him to the President’s Intelligence Advisory Board. Peter's services seem to be in great demand. What kind of insider information can General Pace get in his Intelligence position that will help SM&A clients? The UPI piece mentioned a Defense Department failure, the much maligned $4 billion Future Intelligence Architecture program. What intelligence needs remain unmet given that debacle? How will the man who played a role in that failure steer work to his new firm's clients? I hope these questions aren't too critical as General Pace is sensitive to such "personal venom".

But one man's personal venom is another's person enrichment. There's influence to be bought and sold in our nation's capital. Peter Pace serves both sides of the military industrial complex (MIC), while his new company milks the even larger government industrial monstrosity (GIM). The revolving door keeps swinging and the cash register keeps ringing.

Update on Fast Lanes and Premium Medicine

Days ago I did a post on innovations in road management and health care delivery that favor the rich, those with resources to pay for premium service. Who doesn't want that shorter commute time or instant access to a doctor when sick? Flipping through web sites this afternoon, I found additional information in both areas.

The Transportation Department staffer behind pricing road congestion, Tyler Duvall (pictured above), is up for promotion. President Bush nominated him for UnderSecretary of Transportation Policy. The Washington Post highlighted Tyler''s role in privatizing public road infrastructure.

In addition to concierge medicine where the rich get catered care, I found a corporate reference to executive health benefits. It seems while employers cut insurance coverage and share a greater percent of the premiums with employees, the big dogs aren't leading by example. Consider this from SM&A's 2007 proxy mailing:

Exec-U-Care Coverage. The Executive Officers are eligible for a maximum medical benefit of $100,000 a year through the Exec-U-Care program. During 2006, five of the Executive Officers participated in this program. Exec-U-Care supplements an Executive Officer’s basic health plan by reimbursing annual expenses not covered under the basic medical and dental benefit plan that are available on a Company-wide basis. Examples of such expenses include deductibles, co-insurance amounts, special health equipment and chiropractic care. The Executive Officer is entitled to receive reimbursement for documented medical expenses of the Executive Officer and dependents.

What happens when previously public services become pay? How do those with fewer resources keep their access? As for concierge medicine and exec-u-care coverage, the wealthy and powerful keep rich health benefits while cutting it for others. Something wicked this way comes...

Tom Reynolds Retires, Free to Serve on Nonprofit Boards

Representative Tom Reynolds (R-NY) will announce his retirement from public service. Tom chaired the National Republican Congressional Committee for much of the period when Treasurer Chris Ward pilfered their treasury by as much as $1 million. Even more than that is unaccounted for, $1.73 million.

What did Tom do in his role as Chair of their governing body, the Executive Committee? He didn't once meet with an auditor, and this is after the passage of Sarbanes-Oxley. Mr. Reynolds never heard a partner from the audit firm present the financial statements and management letter. Never did Tom sign a check to pay for such a firm's services. That seems odd for a former director of a Better Business Bureau.

Tom failed to live up to a standard set by most local nonprofit boards in providing governance oversight to the NRCC. With this is the kind of national leadership, retirement surely is in order.

Chinese Substitutions Persist

It's official! Chinese blood thinner ingredient suppliers substituted a much cheaper chemical, over-sulfated chondroitin sulfate. Investigators say it could not have arisen from the manufacturing process and had to be added. What did this financial freewheeling do to heparin customers? A Washington Post report said:

The contaminant is believed to have caused more than 700 severe allergic reactions in U.S. patients, including a still undetermined number of deaths (19 estimated out of 40 reported).

The heparin case is reminiscent of the discovery last year that Chinese suppliers had been putting the compound melamine into gluten used by U.S. pet food manufacturers. Thousands of American pets became sick or died as a result.

As in the pet food case, the chondroitin sulfate is considerably cheaper than the heparin the Chinese manufacturer was making.

Recall that American companies substituted much cheaper Chinese labor for American by contracting out production of their goods to Chinese firms. The Communist country deals with its quality problems by executing bureaucrats (pictured above). In the case of Baxter Healthcare and Scientific Protein Labs, there is an unusual element other than their inability to monitor the quality of their products. SPL owns part of the Chinese firm that produced the tainted product. Also, SPL was brought out by an investment firm in 2006. How did their profit targets change behavior domestically and in the Chinese firm?

We're Carlyle, but Not That Carlyle!

It took some White House quality word bending, but The Carlyle Group's IPO of China Pacific Insurance remains on track after the liquidation of its last public offering, Carlyle Capital Corporation. After reading their defense, I stamped it Dana Perino quality:

China's third majority life insurer and second majority property insurer China Pacific Insurance (Group) Co., Ltd. confirmed that Carlyle Capital Corp. had no relationship with the insurers' two foreign shareholders. The foreign shareholders are Parallel Investors Holdings Ltd. (PIHL) and Carlyle Holdings Mauritius Ltd. (CHML), two investment entities under the wings of Carlyle Group, not Carlyle Capital. Therefore, the recent bankrupt Carlyle Capital will not trouble the Hong Kong listing of CPIC, according to people at CPIC.

The private equity firm is famous not only for its insider political influence, but for segregating corporate assets into various corporations and subcorporations. In acquiring ManorCare, the huge long term care company, Carlyle split nursing home real estate from operations. In the case of a law suit, a harmed patient or surviving family member can't get at the building and its asset value. Carlyle usually finds ways to control their affiliates, even those that have gone public. They do so via controlling interests and board appointees. Their dance away from folded CCC is priceless.

Previously, Carlyle Group announced that it was just an investment consultant for Carlyle Capital, under the agreement between them, and it did not buy any securities of Carlyle Capital, although some persons in Carlyle Group totally hold an about 15% stake in Carlyle Capital.

Those "some persons" would be the founders and executives of the Carlyle Group, also known as its main principals. Contrast this statement with last summer's Forbes' piece on CCC's public offering:

The initial offering price for shares in Guernsey-based Carlyle Capital had already been reduced to $19 a share from $20-$22 when they came up for grabs on Wednesday. The company's Washington-based parent, Carlyle Group, trimmed the price on June 29 because of "instability in the credit markets that affected investor appetite," according to spokesperson Emma Thorpe.

Isn't that like a parent to abandon their child when they get in trouble? No rescue for CCC. Instead, Carlyle co-founder David Rubenstein let Carlyle Capital sink under the rising tide of bad mortgages. I bet they're hoping for a quiet Pacific typhoon season as China Pacific Insurance goes public. Carlyle's LifeCare affiliate didn't perform very well in the aftermath of Hurricane Katrina. But that's apparently a story for another day...

Help Wanted on Pennsylvania Avenue

Newsweek published a piece titled, "Help Wanted: Why Can't the President Fill Two Top Terror Jobs?" It implies Frances Townsend's Homeland Security Adviser position is radioactive, as no candidates will touch it. I had to comment:

I'm surprised the authors had the gall to mention Hurricane Katrina and Fran Townsend in the same sentence. She was on a plane to Saudi Arabia while George W. managed the response from the White House. Then the Bush administration wouldn't turn over e-mails between Andy Card and Mrs. Townsend to a Congressional Committee doing its own Katrina investigation.

But it gets better. Fran omitted any mention of the hospital with the largest number of patient deaths post landfall. LifeCare had been purchased just weeks before by the Carlyle Group, the infamous private equity underwriter with a Pennsylvania Avenue address. Come to think of it, I can see why no one wants Fran's old job now. It comes with too much baggage, most it having not seen the light of day. But George W. just appointed Fran to his new Intelligence Oversight Board. If she didn't have the intelligence to include the hospital with the highest number of patient deaths in a "robust" investigative report, that's not a good sign.

BBC's "Body Snatching Crime Boss" is U.S. Healthcare CEO

President Bush frequently cites private healthcare as the answer to America's glaring health care problems. A CEO of one private firm. Biomedical Tissue Services, plead guilty to illegally harvesting and selling human body parts. He garnered millions from the scheme according to the BBC.

The 44-year-old former oral surgeon pleaded guilty to one count of enterprise corruption, nine counts of reckless endangerment in the first degree, and four counts of body stealing.

He said he forged documents, did not obtain consent from relatives, did not check for infectious diseases and forged documents to cover up his operations. He will be sentenced to between 18 and 54 years in jail in May.

Mastromarino reached the plea deal earlier this year, although it nearly fell apart after prosecutors discovered the extent of his crimes.

The extent of his crimes? Dr. Mastromarino was convicted in February 2006 of illegally harvesting and selling tissue which resulted in the implantation of defective, diseased tissue into patients. But BTS was a subcontractor for larger tissue firms.

This echoes Baxter Healthcare's tainted heparin. The blood thinner problem has been traced to Chinese consolidators who bundle key heparin ingredients supplied by numerous "workshops". The Chinese have blocked access to the small labs where the problem may originate. Neither the FDA or Baxter Healthcare has gotten access to Chinese heparin supplying workshops.

But someone caught on to Dr. Mastromarino's own dirty tissue workshop, which ran for years right here in the United States. Some 13,000 patients were affected by the recall of BTS products. The illegal behavior began in 2001 and involved numerous health care professionals, including nurses, until 2005, when the illegal behavior was discovered.

How does such a thing happen? Do larger companies take anything as long as the price is cheap? How could tissue and drug companies not know defective products were being shipped by suppliers? When their suppliers substituted lesser ingredients (like cancerous bones from Alistair Cooke), why didn't the private healthcare firm know? It's a question worth pondering as the private sector is bandied about as the answer to all our problems. Next time you see the media refer to a "crime boss", check to see if it's an American CEO. The BBC can't be alone in making such a characterization.

Cheney Meets with KBR Contractors?

On his family Iraqi vacation Vice President Dick Cheney ate breakfast with "some of the 20,000 U.S. troops on the base, which supplies food, fuel, bullets and other items — from toilet paper to military hardware — to all operations in Iraq."

A September 2007 Los Angeles Times article had this to say about KBR's role in Iraq. "KBR was under intense pressure from the military to deliver on its multibillion-dollar contract to transport food, fuel and other vital supplies to U.S. soldiers."

Does that mean the ex-Halliburton CEO met with employees of an ex-Halliburton subsidiary? Did they talk about the value of their stock options? My guess is Cheney's aren't underwater...

Bear Takes the Honey and Runs, Taxpayers Pay

While Wall Street investment firm Bear Stearns received a buyout/bailout courtesy of the American taxpayer, a different bear made off with the honey. A Macedonian bear was convicted in abstentia for repeatedly raiding a beekeeper's hive. The bear didn't even have the decency to package the stolen honey in a Triple A rated security. It absconded outight with the natural treat.

But the court did come to the rescue for the gyped beekeeper. It ordered the state to pay for his losses, as the bear had no owner and was a protected species. So, the moral of the story is once again, the taxpayer will bail out the bear who failed to follow the rules. But this bear remains at large in his habitat, ready to prey again. Sleep tight, little ones!

Fast Lanes and Concierge Docs for Rich

Corporations work hand in hand with the Bush administration on "innovation" in health care and transportation. The Washington Post reported on the Transportation Department's list of industry insiders driving privatization of American roads. I noted D.J. Gribben's appointment a year ago.

And what better time to introduce a new commuting expense of tolls than during a likely recession? One might expect the high cost of gas to induce behavior change. Who wants to waste that $4 a gallon gas not moving? Did the Bush transportation economists factor that into their model?

In healthcare, a different trend is sweeping the country. MDVIP, a corporation, works with doctors in offering concierge medicine. The concept involves lavish, high quality, immediate access to primary care at premium prices. A normal primary care doctor has 2,500 patients in his or her practice. At MDVIP the number is slashed to 600 patients, leaving the unlucky 1,900 with the challenge of finding a new primary care physician. But the benefits are large to the doctor and the patient who can afford the dues of $1,500 to $1,800 a year.

Guess who's helping MDVIP study the impact of preventive care on national health expenditures? That would be ex-Health and Human Services Chief Tommy Thompson. Did Tommy get any stock in the company for leading the study? The press release failed to mention compensation. My guess is Mr. Thompson expected some form of compensation, given his role in other innovative health care ventures, ranging from medical readiness/homeland security solutions to implantable medical chips.

Welcome to the United States of America, where access to the fastest commute and best healthcare are sold for premium prices. Hail the profit makers and the Bush government who greases their skids! Grab your bootstraps boys and girls, it's gonna be some ride, especially for those without the strength to pull themselves up...

Bear's Bear Market, Bare Cupboard Sale

Poor confused Uncle Billy lost Bear Stearns liquidity last week. Over the weekend Bear's wonderful life dissipated as creditors symbolically stormed the doors. Friday, the Fed announced it would give JP Morgan Chase the funds to shore up the ailing investment firm. Sunday, the same pair announced the unthinkable.

Bear Stearns, worth $160 a share a year ago, would be sold to JP Morgan for $2 a share. That's a loss of $158 per share for some folks. Talk about wringing wealth out of the system. Does that mean Mr. Potter gets to pick up Bear's assets on the cheap? Will he sell the debt associated with foreclosed homes sitting in today's version of Potterville?

How should an individual mortgage holder feel about this giant injection of Fed cash ($30 billion) to the people who created the mortgage securitization system, now a dead industry with toxic leftovers? No help for the individual, but major support for corporations. Last week Carlyle Capital's creditors pressed the foreclosure button to make major ka-ching off Uncle Sam. Carlyle co-founder David Rubenstein complained about it over the weekend. But it isn't the first time David's blamed the feds for his firm's failures.

Carlyle Blames Feds for Failure (Once Again)

The infamous Carlyle Group loves to blame the federal government for its problems. Carlyle Capital Corporation fell faster due to action by The Federal Reserve Bank. Ironically the Fed was trying to save funds like Carlyle Capital. The Financial Times reported:

This week's emergency credit market intervention by the US Federal Reserve was supposed to ease the liquidity crisis for struggling financial groups such as Carlyle Capital Corporation.

But David Rubenstein, co-founder of the Carlyle Group, said it only accelerated the demise of his group's mortgage-backed securities fund, which is being liquidated by its banks for defaulting on more than $16bn of debts only eight months after listing on Euronext Amsterdam. (Creditors wanted Carlyle's holdings so they could use them as collateral in the upcoming Fed intervention.)

It's not the first time the feds tried to save a Carlyle investment vehicle's bacon only to be blamed later. After Hurricane Katrina, patients in Carlyle's LifeCare hospital in New Orleans badly needed saving. Long term acute care patients suffered up to five days in a dead hospital. Twenty four long term acute care patients perished in Katrina's steamy, toxic aftermath. Mr. Rubenstein's firm blamed the feds for those wrongful patient deaths. LifeCare's attorneys assert that patients became wards of the federal government as soon as FEMA evacuation teams set up in New Orleans.

LifeCare argues in court documents that once the Federal Emergency Management Agency (FEMA) and the U.S. Coast Guard assumed control of evacuations and other emergency procedures in New Orleans during the flood, it was no longer responsible for the patients at Memorial.

The failure of a publicly traded investment and the deaths of 24 LTAC patients, both are the responsibility of the federal government. Carlyle might want to get Booze, Allen, Hamilton to write up such an analysis. The feds of course, would need to pay mightily for such professional consultation...

Davis Helped Taint Republican Brand

After reading the Washington Post, one could compare the Republican brand to "Made in China". Recent stories ranged from bad handling of Republican campaign donations to tainted blood thinner supplies from Chinese factories. Both groups are experts at dodging real accountability. Take Rep. Tom Davis, R-VA's words from the Post piece:

The latest blow came with the revelation that the former treasurer of the National Republican Congressional Committee (NRCC) had allegedly diverted hundreds of thousands of dollars -- and possibly as much as $1 million -- from the organization's depleted coffers to his own bank accounts.

If Republicans needed any more evidence of how difficult this fall may be, the past week had it all, analysts said. The Illinois race (special election won by a Democrat) demonstrated new levels of disaffection, the party's efforts to go on offense elsewhere were thwarted by recruiting failures, and the NRCC scandal will divert campaign resources and could frighten off badly needed contributors, they said.

"It's no mystery," said Rep. Thomas M. Davis III (R-Va.). "You have a very unhappy electorate, which is no surprise, with oil at $108 a barrel, stocks down a few thousand points, a war in Iraq with no end in sight and a president who is still very, very unpopular. He's just killed the Republican brand."

Guess who was Chair of the NRCC for the early part of the accounting/embezzlement scandal? That would be Tom Davis who served from 1998-2002. The last real financial audit was done in 2001.

Ward faked and submitted a string of bogus financial statements to Wachovia and to committee leaders from 2002 to 2006, an NRCC media statement said.

Incompetent governance allowed NRCC Treasurer Chris Ward to perpetrate his "stealthy scheme." No auditors on site, no governance interview, no partner presentation to the NRCC Executive Committee, no Q & A on the management letter and audit? These are governance basics, especially post Enron, Worldcom and the Sarbanes-Oxley Bill, which ironically, Mr. Davis signed. Tom, you've helped kill the Republican brand, and I think you know it:

But other Republicans worried that news of what could become one of the largest political frauds in recent history may dampen fundraising as donors question the committee's controls on their money.

"It's not helpful; it doesn't attract donors," Davis said.

Tainted Suppliers Still Not Identified by Baxter or FDA

Months after learning of problems with its Heparin Drug, the FDA and Baxter Healthcare continue to look clueless in their response. Consider the latest revelations:

F.D.A. officials said Friday that they had not inspected the Chinese workshops where the raw heparin ingredient originated. The workshops used pig intestines to make raw heparin, a product that eventually ended up at the Chinese plant, Changzhou SPL, which supplied the active ingredient in heparin to Baxter.

Erin Gardiner, a spokeswoman for Baxter, said the drug company had intended “to follow the supply chain as close as we could to the original source — the workshops.” But she added, “We have not been able to do so.”

Ms. Gardiner said Baxter did not have the authority to demand access to the workshops. If such access is granted, she said, Baxter stands “ready to return to China as part of our investigation.”

Quality guru Dr. Deming stressed "knowing your supplier". How can a company making critical life saving drugs not have the ability to assess the quality of its supplier's processes, that includes subcontracted work? Who came up with that purchase contract?

Baxter's supplier, Scientific Protein Labs owns part of the Chinese firm making the ingredient. SPL was purchased by an investment company in August 2006. Does American Capital Strategies not understand quality or is the barrier coming from the Chinese government? The Red Storm's suboptimal management practices, combined with American CEO's contracting obsession, ensure future quality debacles.

We now have at least six stooges trying to re-wallpaper the living room, the FDA, its Chinese counterpart, Baxter, SPL, the ingredient bundlers, the untouchable workshops, and American Capital Strategies. It's been since late last year that Baxter learned of adverse drug reactions to its heparin drug. And no one has been able to assess the source of ingredients. Amazing, and sadly so...

NRCC Tries to Defend Incompetent Governance Oversight

Just over a week ago the story broke regarding the National Republican Congressional Committee's fraudulent audits and possible embezzlement of political donations by Treasurer Christopher J. Ward. Despite suggestions that numbers wouldn't be known until after the November election (Eliot Spitzer banged a whore , possibly aided by taxpayer money?), the committee came clean and is now concerned about a missing $1.74 million. A number could now be available in coming weeks (hopefully not more than "Kristen's" movie deal compensation).

This morning's Associated Press story had Republican leadership on the defensive as to how a "lone perpetrator" could have pulled off a five year scam, especially in the wake of Enron, WorldCom, and the passage of legislation intended to prevent future financial debacles, Sarbanes-Oxley. The AP story stated:

Kelner said that in hindsight, NRCC officials wish they had been suspicious about the fact that outside auditors never visited the Capitol Hill headquarters or received payment for their supposed work. He also agreed "it's a best practice not to have any significant money-handling authority vested entirely in one person."

Rep. Tom Cole of Oklahoma, the NRCC chairman, said in a statement that he wants to assure supporters "that every effort is being made to prevent such a fraudulent act from happening again."

Sorry Tom, anyone who served on a nonprofit board doesn't buy your bull hockey. Since the passage of Sarbanes-Oxley, outside auditors interview Board members as part of the audit process. That no RNCC Executive Committee members were interviewed over a five year period should have been deeply concerning, Mr. Chairman.

Accounting firm partners love to present the audited financial statements and management letter. They would've drooled over the opportunity to present to important Congressional Republicans. That five years went by without such a presentation is more than a flapping red flag.

Apparently the skills our Republican House leaders use to run the country don't cross over well in the world of nonprofit organization governance. Sad days indeed...

Will Democratic Spitzer's Tawdry Sex Smash Republican Ward's Sleazy Embezzlement?

While the crusading Democratic Governor of New York purchased high dollar sex, the most trusted financial man in Republican fundraising made off with as much as $1 million. The Treasurer of the National Republican Congressional Committee, Chris Ward faked external financial audits for the last five years. Yet, this aroused no suspicion amongst Executive Committee member responsible for governance.

While people serving on other nonprofit boards were interviewed by members of the audit team post Sarbanes-Oxley, NRCC Executive Committee members skated. While other 527 boards heard partners from the audit firm present their audited financial statements and the management letter, NRCC governance got impressive looking "accurate balance sheets" from their Treasurer. They now know they weren't accurate. The man who outed Ward, Rep. Mike Conaway-R-TX, said this on CNN this afternoon:

CONAWAY: The last one (audit) that we're comfortable saying we had was in 2001. And that anything was given to the bank subsequent to that and anything shown to the management team in the audit -- interim audit committees -- were, in fact, you know, bogus financial statements.

TODD: Statements that Conaway says looked very sophisticated, which may explain why Ward's alleged fraud wasn't noticed for years.

Sophisticated statements? Bull hockey! It took a CPA one full year to find the hoax. Other leaders, including Tom Cole R-OK, Tom Davis-R-VA, and Eric Cantor-R-VA, bear responsibility for both management and governance failures in regard to this "one man scheme." But Republicans have more nooks and crannies to explore for Chris Ward's financial malfeasance. He served as Treasurer for more than 80 Republican fundraising committees. Some $390 million made its way through Chris Ward supported political committees.

We are witnessing a failure of leadership in the worst way. First, the board missed numerous red flags. Second, they now spin it in any direction away from them. This is part and parcel to America's current crisis in leadership

For $1 Million Either Win Lottery or Do Republican Creative Accounting

Talk about beating the clock. Last night's National Republican Congressional Committee Dinner raised $8.6 million. President Bush gave his remarks without that annoying ketchup colored stain of lost donations distracting the crowd. Today, The Washington Post reported on the unfolding NRCC accounting scandal. Treasurer Christopher J. Ward may have absconded with as much as $1 million from the Republican fundraising arm. The article stated:

The former treasurer for the National Republican Congressional Committee transferred as much as $1 million in committee funds into his personal and business accounts, officials announced today, describing a scheme that could prove to be one of the largest campaign frauds in recent history.

For at least four years, Christopher J. Ward, who is under investigation by the FBI, used wire transfers to funnel money out of the NRCC and into other political committees he controlled, then shifted the funds into his own personal accounts, the committee said.

The committee also announced that it had submitted to banks five years of audits and financial documents allegedly forged by Ward, some of which were used to secure multimillion-dollar loans. It is a violation of federal bank fraud laws to obtain loans through false statements; such crimes are punishable by up to $1 million in fines and 30 years in prison.

Five days ago I did a piece detailing the leadership failures amongst the NRCC Executive Committee, many who voted for tougher laws intended to prevent such financial malfeasance. While my Representative, Mike Conaway R-TX made the catch, it took a full year for the illicit behavior to come to light.

The article had several other interesting nuggets. As for the committee's internal controls consider this statement from the forensic auditor:

Ward had the sole power at the NRCC to use wire transfers to shift money into any accounts he wanted. "He was able to get a wire transfer without getting a second sign-off," Kelner said.

Hear are my questions. One, why didn't Republican leadership have the expectation that they would meet with auditors during the audit process? Sarbanes-Oxley changed audit practices even for non-profits, adding interviews with those responsible for governance.

Two, why didn't they receive the audit results and management letter from a full partner in the audit firm? Accepting "an audit" from the CFO at full face value is a red flag in an of itself.

Rep. Thomas Davis, R-VA who now chairs an executive committee that serves as the NRCC board, said that for several years, Ward turned over documents to lawmakers that appeared to be legitimate reviews by an outside firm. They showed accurate balance sheets. "This guy produced audits, and they looked fine," he said.

And three, why did it take a full calendar year for CPA Mike Conaway to become suspicious? He knows audit and accounting cycles. Depending on the NRCC's fiscal year, some activity between the audit firm and leadership, including governance, should have transpired before January 2008.

The first inkling of trouble came when Conaway took over the NRCC's auditing subcommittee in early 2007. A certified public accountant himself, Conaway said in interviews that he asked for something considered routine in the corporate world: an audit of NRCC books for the previous year by an outside firm and a meeting with the auditors. "My expectation was that that frank meeting would take three minutes," Conaway said.

Instead, Ward kept putting him off, he said. "Okay, we'll get it for the next meeting, we'll get it for you," Ward said, according to Conaway, who became suspicious of what he described as Ward's "passive aggressive" behavior.

He said Ward avoided the issue for months, until January, when Ward told Conaway that he and GOP lawmakers would meet with auditors. But Ward canceled the meeting 30 minutes before it was scheduled to begin.

Republicans called the outside firm and found out that no audits had been done since 2003. After looking at the documents Ward had given them for each year, they determined that he had fabricated them, according to Davis and other officials with knowledge of the matter, who spoke on the condition of anonymity.

The matter is being portrayed as an unethical individual but it is clearly a failure of Republican leadership. . I’ll bet none of them step up to the plate of governance accountability, especially those who voted for Sarbanes-Oxley in 2002. Enron, WorldCom, NRCC…

Paulson Rues Mortgage Securitization He Led

Treasury Secretary Hank Paulson spoke at a press conference this morning on the mortgage meltdown. He addressed steps the Bush administration would take to address the problem, caused by a "dramatic weakening" of standards used by the U.S. mortgage industry to evaluate and make home loans.

"We will see changes at every step of the securitization process," Paulson said at a news conference this morning, as regulators tighten standards for the people who appraise houses, originate and fund mortgages, and package them into more complex financial products.

Let's turn back the clock to say 2004, a critical time according to the President's Working Group on Financial Markets. They said that the underwriting process used by finance companies to analyze home mortgages suffered a "breakdown" late that year. This led to a proliferation of questionable deals as those involved chased the profits of a boom in real estate. That boom went until mid-2007.

The President's Working Group noted "organizations responsible for packaging mortgages into larger investments -- from the rating agencies responsible for independently assessing the investments to the banks and financial companies that sold or bought them -- failed to properly analyze the risk involved and had insufficient knowledge about the underlying mortgage assets."

Treasury Chief Hank Paulson looks to be quite the hypocrite as Goldman Sachs sold boatloads of mortgage backed securities under his eight year tenure as CEO. They went one step further than most packagers, Goldman shorted their position, i.e., bet the ranch that prices of mortgage backed securities would fall. When President Bush appointed Hank to Secretary of the Treasury in May 2006, he ensured a hands on participant in the scandal would eventually lead its assessment. I guess that "intimate knowledge" of financial markets (of which President Bush spoke) was a bit too risque to share. However, Adrian Ash of Australia's The Daily Reckoning shed ample light on the Hank led firm's tawdry dealings:

In 2006, Goldman Sachs' mortgage-bond division - Alternative Mortgage Products (known as GSAMP for short) - issued 83 home-loan-backed bonds, valued at $44.5 billion. In the subprime sector, it grew its business by 59% from 2005, unloading some $12.9 billion on to unsuspecting, stupid and/or greedy investment fund managers who thought a bond under-pinned by home-buyers with no hope of repaying might be worth having.

According to Inside Mortgage Finance, that made GSAMP the 15th biggest issuer of subprime-backed bonds in 2006. And come the start of the third quarter this year, those securities were being downgraded by the credit ratings agencies faster than anyone else's.

Research from Citigroup, dated 22nd June, found that "portions of Goldman's GSAMP-issued bonds, which include subprime loans from a variety of lenders, have been downgraded a combined 69 times by Standard & Poor's and Moody's Investors Service in the year through June 15," as Reuters reported.

"Sixty of the GSAMP downgrades refer to classes from 2006 bonds," Citigroup added, and one of Goldman's 2006 crop - the GSAMP Trust 2006- S3 - may actually be "the worst deal...floated by a top-tier firm," reckons Allan Sloane in the Washington Post.

In spring 2006, "Goldman assembled 8,274 second-mortgage loans originated by Fremont Investment & Loan, Long Beach Mortgage, and assorted other players," explains Sloane after studying the public record. "More than one-third of the loans were in California, then a hot market. It was a run-of-the-mill deal [face-value $494 million], one of the 916 residential-mortgage-backed issues totaling $592 billion that were sold last year.

"The average equity [these] borrowers had in their homes was 0.71%...[meaning] the average loan-to-value of the issue's borrowers was 99.29%.

"It gets even hinkier," Sloane goes on. "Some 58% of the loans were no- documentation or low-documentation. This means that though 98% of the borrowers said they were occupying the homes they were borrowing on - 'owner-occupied' loans are considered less risky than loans to speculators - no one knows if that was true. And no one knows whether borrowers' incomes or assets bore any serious relationship to what they told the mortgage lenders."

Should we call Hank "Moses"? The man who led us in to the valley of the shadow of ruin is expected to lead us out? He reports to our nation's CEO who has his own track record in this regard:

In 2005, a Bankruptcy Bill flew through Congress which failed to address predatory lending practices, one component of the current debacle.

President George W. Bush said at the House's passage of the bill: "I commend the House for acting in bipartisan fashion to curb abuses of the bankruptcy system. These commonsense reforms will make the system stronger and better so that more Americans - especially lower-income Americans - have greater access to credit. I look forward to signing the bill into law.

Does anyone else wonder if our leaders actually know what they're doing? Or is one big con game? While the Bush team promises to tighten standards in one imploded area, they're relaxing them like crazy elsewhere. Can we expect future debacles in foreign listed companies on American exchanges and in non-FDA approved indications for drugs? Past Bush performance suggests we just might...

Carlyle Brand Takes a Licking

Carlyle Capital Corporation declared it couldn't meet its loan obligations and will likely collapse. The publicly traded investment vehicle is comprised of U.S. backed AAA mortgage securities. The Carlyle Group lauded CCC's public offering last year on the Euronext Amsterdam exchange.

The politically connected investment firm washed it hands of its progeny in a press release issued earlier this week. The death knell came yesterday. IPO'd July 2007, DOA March 2008.

Investors stand to lose $600 million. They clearly aren't having a William Conway, "Make me money" kind of moment. How will this impact those future Carlyle public offerings frequently cited by David Rubenstein?

I would suggest a New Orleans style funeral dirge for the deceased investment vehicle, but that would be in bad taste as Carlyle's LifeCare Hospitals lost 24 patients in their Big Easy LTAC after Hurricane Katrina. Thus, it's not the first time the PEU boys on Pennsylvania Avenue couldn't ride to the rescue.

Al Gore PEU Boy

Ex-Vice President Al Gore joins the private equity underwriting boys with his soon to close $5 billion green investment fund. The fund was founded in 2004 by Al and partner David Blood, an ex-Goldman Sachs executive. "There will be green!" That could at least be the movie title...

Evidence of Cheating Governors!

First of all, let me clearly state Eliot Spitzer is responsible for his crimes (that likely won’t be prosecuted). Had he not committed them, he would not be stepping down as Governor of New York. However, the timing of this sting in conjunction with other recent news stories is most interesting. Recall the Republican operative who asserted she’d been ordered by Karl Rove to get pictures of the Governor of Alabama having an affair?

Jill Simpson said then-White House political strategist Karl Rove asked her in 2001 to find evidence that Democratic Governor Siegelman was cheating on his wife. Simpson said it wasn't the first time that Rove ' who was active in Alabama politics before going to the White House ' had asked her to find damaging information about opposing campaigns.

Mr. Rove denied the assertions. However Karl’s political dirty tricks are legendary, with denials being one blunt tool in his bag of nasty moves. Nearly as clear to the discerning public was the political nature of the Justice blade wielded by Attorney General Alberto Gonzales. The investigation of Eliot Spitzer began on loyal Quasiberto’s shift. The NYT reported:

The federal officials sought to emphasize that Mr. Spitzer, a Democrat, had not been singled out by the Republican administration, although allegations of political interference dogged the Justice Department during the tenure of the former attorney general, Alberto R. Gonzales, who left office last year after lawmakers in both parties called for his removal. The Spitzer investigation began in July and Mr. Gonzales resigned in August last year; it is not clear whether he knew about it.

On the night of February 13th Governor Spitzer somehow evaded his security detail to tap the services of a high priced call girl in the Mayflower Hotel in Washington, D.C. The next day, the venerable Washington Post ran an op-ed column by that same Mr. Spitzer, “Predatory Lenders' Partner in Crime: How the Bush Administration Stopped the States From Stepping In to Help Consumers.” It excoriated the Bush administration for its role in the subprime credit debacle and the suffering of many Americans at the hands of predatory lenders.

Is this all a tawdry coincidence or is an intelligent designer behind it all? Rove left the same time as Gonzales, two months after the ball began rolling on the Spitzer investigation. Did they give it a good nudge on their way out?