Budgeting political risk helped Fannie Mae, Freddie Mac, and financial services companies avoid the kind of scrutiny they needed from Congress for the past several years. Millions of dollars in private travel, campaign contributions, and lobbyists-galore created a border wall that no regulation or reform could climb over. Florida Rep. Tim Mahoney’s hole gets deeper as a 2nd affair is revealed, the FBI opens and investigation, and the Democrats ditch him. There’s more in this round-up of today’s news:

Dave Jamieson at The New Republic looks into the lavish treatment members and staffers of the House Financial Services Committee received from Fannie Mae, Freddie Mac, and financial services companies in the years preceeding the collapse of the industry. Former chairman Mike Oxley, who now works for NASDAQ and as a lobbyist, approved a half-million dollars worth of privately paid travel, much of it offered by financial services companies. Fannie Mae and Freddie Mac had approximately one lobbyist for each member of the 70 person committee. Campaign contributions were spread around like butter on cornbread. Of course, all of this largesse eventually lured numerous staffers and committee members into the private sector and Jamieson names names:

Former Oxley adviser Carter McDowell moved on to the American Bankers Association; Karen Lynch Calton, one-time counsel to the committee, has lobbied for the Consumer Bankers Association; Greg Zerzan, an aide to Oxley, eventually went to the International Swaps and Derivatives Association; Linda Dallas Rich, a committee adviser, headed to the New York Stock Exchange; longtime Oxley aide Clinton Jones hopped to Fannie for a spell, before returning to Congress to serve Bachus on the finance committee; and even though Baker had been a perennial foe to the GSEs, the congressman’s own former chief of staff, Duane Duncan, became a star on Fannie’s lobbying team.

Rep. Tim Mahoney is in a load more trouble after the Associated Press revealed another affair and ABC News, the team that broke this story, reported that the FBI is investigating the allegations of hush money paid to the first reported mistress. It is alleged that Mahoney hired Patricia Allen, the first reported mistress, to both his campaign and congressional staffs. After things went sour (she discovered he was having another affair) Mahoney fired her and allegedly paid her $121,000 to keep her from filing a wrongful termination lawsuit. Speaker Nancy Pelosi called for an ethics committee investigation (although those haven’t really led to anything since, I don’t know, the 1990s) and House Democrats effectively abandoned the freshman Florida congressman to fend for himself in a difficult district.

The defense team in Sen. Ted Stevens’ trial for filing false statements on his personal financial disclosure forms is attempting to show that the home renovations at the center of the charges were done for VECO’s Bill Allen and not for Stevens. Stevens’ daughter, Susan Stevens Covich, testified that when she appeared at her father’s Girdwood, Alaska home to spend time while visiting Allen was present in numerous other people, often taking up all five available bedrooms leaving her to sleep on the couch. Covich said she stopped staying there after Allen’s constant presence became “creepy“. Previously, defense attorneys have shown that Stevens spends most of his time living in Washington, DC and not at the home in Girdwood. The judge presiding over the case stated that the case will likely be handed to the jury next week.

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TPM Muckraker captured some great audio of Sen. Ted Stevens lashing out at constituents asking questions about his current legal predicament. To me, the last question was by far the most interesting. There’s a transcript of the last Q&A after the video.

Q: I’ve been following the news lately and they were mentioning that you supported an ethics bill in 1989 that Congress had passed, it was an amended ethics and government bill that said that members of Congress needed to disclose their financial reports, anything exceeding $200, and now your defense team is saying that’s unconstitutional, and I’m just wondering if you can talk to us Alaskans about how that’s unconstitutional in 2008 but in 1989 that was satisfactory.
A: As I’ve said before, I haven’t seen that pleading, it was filed by my lawyers in Washington, they’ve been hired to do it-
Q: OK well why don’t you give us your opinion, aside from what your lawyers are saying-
A: I’m sorry I’m not going to give my opinion about what my lawyers have done that I haven’t read. So thank you very much, I don’t know who gave you that amendment, that question, but whoever gave you that question ask them.

That’s a pretty good question. From what I can tell, the Government Ethics Reform Act of 1989 passed the Senate by voice vote with an amendment attached. Also interesting, Sen. Stevens was an original cosponsor of the Ethics in Government Act of 1977, the law under which he is being prosecuted.

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Sen. Ted Stevens has served as senator from Alaska for most of his life and nearly all of the state’s existence. Stevens greatest accomplishments have been as a patronage chief; bringing home federal dollars for Alaska and protecting and expanding the extraction industries in the state, particularly the oil industry. In many ways, Stevens is Alaska. It comes as no surprise that Stevens would run his current reelection campaign on a message that says, “Without Ted, we’re toast.”

As some have noted already, Stevens - a “patronage-distributing warlord” - may be a dying breed of politician. There are others who still exclusively practice this kind of politics, most notably Alaska’s lone representative Don Young, but few to the degree that Stevens has over the years. Stevens’ undying support for earmarking and the oil industry may have brought on investigative scrutiny and, ultimately, an indictment. But they also appear to have muddled the water in the investigation, prompting prosecutors to charge Stevens with seemingly lesser felonies - for now. (more…)

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Michael Stern at Point of Order, one of the better blogs for legal issues in Congress, covers the legal background of the charges brought against Sen. Ted Stevens. Stevens is facing seven felony charges for deliberately filing false financial disclosure forms to the Senate Ethics Committee. Give Stern’s explanation a read; it’ll be worth it when following the Stevens trial. Steven’s trial starts on September 24.

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Sen. Ted Stevens released a statement in which he declares his innocence and vows to fight the charges. He also stepped down his posts as ranking member of both the Commerce Committee and the Appropriations Committee.

For some background on Sen. Stevens, I wanted to point out the utility of Sunlight’s Lawmaker Profile, which you can access through the front page of our web site. I was just toying around with Sen. Stevens’ profile and got this telling image of a cloud of his top ten career contributors:

$88,000 from VECO, the company that he is alleged to have received gifts from, and which he is said to have done favors for.

You can also dig into his personal finances, earmarks, and contracts through this tool.

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So, the indictment is in and the charges against Sen. Ted Stevens include seven counts of making false statements on his personal financial disclosure forms from 1999-2006. Many of these false statement counts revolve around work done on Stevens’ Girdwood, AK home courtesy of the VECO oil company. Sunlight’s Bill Allison makes the case at Real Time Investigations that if the money spent on equipment, parts, and labor did not constitute a gift, but rather a loan, then Stevens would be allowed to omit them from his disclosure forms, thereby acquitting him of several false statement charges:

[F]rom my quick read of the indictment, it appears that the government is suggesting that when Stevens says he has no liabilities of more than $10,000, that means the hundreds of thousands of dollars Stevens is alleged to have received as benefits from VECO couldn’t possibly have been loans. But if (and for the record, I doubt this is likely), if Stevens was borrowing money, labor and materials to renovate a residence from VECO rather than accepting it as a gift, I’m not sure Stevens would have to report it under current personal financial disclosure rules, which say,

property which is held or maintained solely for recreational or personal purposes does not have to be reported…. (p. 131)

and

Mortgages secured by a personal residence (including secondary residences) that are not used for rental purposes do not have to be disclosed. (p. 136)

Suppose there was some understanding Stevens would repay Veco or its CEO, Bill Allen, for the home repairs, the car swap, the furniture and so on — shouldn’t the public know of those potential conflicts of interest? The indictment reminds us,

The primary purpose of the yearly Financial Disclosure Forms is to disclose, monitor and deter conflicts of interest, thereby maintaining public confidence in the integrity of the United States Senate and its Members. Because the yearly Financial Disclosure Forms require public disclosure of financial information by each Member of the United States Senate, such as income, assets, gifts, financial interests, and liabilities, the Forms provide the public at large, including the voters of a particular state, with the information necessary to allow the public to evaluate and consider official conduct by a Member of the United States Senate in light of that Member’s private finances.

Do the current disclosure requirements adequately “deter conflicts of interest, thereby maintaining public confidence in the integrity of the United States Senate and its Members,” if they exempt personal residences, mortgages, car loans and so on from public view?

(more…)

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Rep. Don Young has been on the hot seat ever since he sponsored the infamous Bridge to Nowhere earmark. Since then he has come under investigation for more things than any other sitting member of Congress. Young faces an FBI investigation into his participation in fishing and golfing events with VECO oil executives; he is receiving scruting for the hiring of his former aide Mark Zachares, who has pled guilty, by Jack Abramoff; and fellow Republicans are seeking an investigation into his inclusion of an earmark for Coconut Road in Florida - which happens to be a long ways from Alaska. In the face of all these difficulties Young sat down with reporters to discuss his reelection campaign, but reporters wanted to talk about something else. If you want to see what an arrogant stone wall looks like, you should follow the link and watch this interview. It’s a doozy.

Don Young’s KTVA Interview Video. 

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Last Friday, PBS’ NOW with David Brancaccio covered the VECO Alaska oil corruption scandal. If you’re new to the scandal that has enveloped these non-continental politicians and is creeping up on Sen. Ted Stevens and Rep. Don Young this video is the place to start. Below is a 6 minute clip from the full video. Watch the full video here.

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Former VECO CEO Bill Allen was on the stand today in the trial of Alaska state Rep. Vic Kohring and testified that his own cousin attempted to blackmail him over VECO’s work on Sen. Ted Stevens’ Girdwood, Alaska home. The Alaska Daily News is covering the trial:

Kohring Lawyer John Henry Browne asked Veco founder Bill Allen about something that came up at the corruption trial last month of former state Rep. Pete Kott. It was regarding Allen’s nephew, Dave Anderson.

Anderson was blackmailing you and you threatened to kill him? Browne asked.

“I was not going to kill him, no,” Allen responded

But that’s the information the government had, wasn’t it? Browne asked.

Allen went back to a point he made a number of times during cross examination.

That’s just part of the story, Allen said. “You have to do the whole thing.”

Anyway, what was Anderson blackmailing him about? Browne asked.

“Ted Stevens’ house,” Allen anwered.

He was referring to a 2000 renovation that doubled the size of Stevens’ home in Girdwood. Allen testitied in the Kott trial that Veco employees worked on the renovation and he donated some materials.

Veco paid for that, correct? Browne asked Allen.

Allen said he didn’t know how much.

Browne asked him if part of his cooperation deal with the government was to help investigate Stevens and the money Veco gave for the Girdwood house?

Yes, Allen answered.

The case against Stevens continues to pile up in court records but he still sits on powerful committees with the full backing of his peers. Perhaps if he were to make a pit stop at the Minneapolis airport bathroom his stature in the Senate might change. For now though, a growing case of public corruption can be ignored.

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The bribery investigation into Sen. Ted Stevens has jumped to a whole new level. The FBI taped phone calls between Stevens and VECO executive Bill Allen in a sting operation.

Hat tip: TPM

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