Please remember that anything you see here on this page is NOT OFFICIAL...opinions expressed are those of the "About Weston" website manager

CONTENTS OF THIS PAGE:  News of a non-technical nature about early stage of Obama administration here.
  1. NEWS;
  2. ELECTION OVER?
  3. Government shutdown?  Cabinet and its turnover news here.
  4. OFFICIAL OBAMA ADMINISTRATION WEBPAGE AND WEB LINKS HERE
  5. A VIEW INTO THE BUDGET;  and how about this blast from the past?
  6. New websites of government here;  cover story in the last version of the LWVUS quarterly "The National Voter" was about redistribution of the wealth.
  7. CABINET OFFICIALS,  NOW ALL CONFIRMED BY THE SENATE;  OTHER TOP POSITIONS , NOT CABINET LEVEL;  AND THEN THERE IS THE NEW NOBILITY -  "CZARS"; 
  8. TEAM CONCEPT; 
  9. NEW JOBS CREATED; 
  10. West Wing operation, including press team;  TWO YEARS ON, CHANGES MADE IN SEVERAL AREAS.
  11. CONSIDER THE ISSUES HERE;
  12. NYTimes graphic on Cabinet.  Also includes non-Cabinet positions.  Washington Times summary is excellent (gives the right flavor to all of this stuff)!
  13. FROM ACROSS THE POND:  http://news.bbc.co.uk/2/hi/americas/us_elections_2008/7716467.stm
  14. Incoming administration has New York City connections.


It's a deal: Obama, Congress will avert default
CT POST
DAVID ESPO, AP Special Correspondent
Updated 10:01 p.m., Sunday, July 31, 2011

WASHINGTON (AP) — Ending a perilous stalemate, President Barack Obama and congressional leaders announced historic agreement Sunday night on emergency legislation to avert the nation's first-ever financial default. The dramatic resolution lifted a cloud that had threatened the still-fragile economic recovery and rattled global markets.

The agreement would slice at least $2.4 trillion from federal spending over a decade, a steep price for many Democrats, too little for many Republicans.

The deal, with scant time remaining before Tuesday's deadline for paying government bills, "will allow us to avoid default and end the crisis that Washington imposed on the rest of America," Obama said.

Not just America. World markets showed their relief immediately. Japan's benchmark Nikkei index, opening Monday morning — at 8 p.m. Sunday on America's East Coast — was up 1.7 percent in early trading. On Wall Street, U.S. stock futures surged.

Default, Obama said at the White House, "would have had a devastating effect on our economy."

House Speaker John Boehner telephoned Obama at mid-evening to say the agreement had been struck, then immediately began pitching the deal to his fractious rank and file.

"It isn't the greatest deal in the world, but it shows how much we've changed the terms of the debate in this town," he said on a conference call, according to GOP officials. He added the agreement was "all spending cuts. The White House bid to raise taxes has been shut down."

No votes were scheduled in either house of Congress before Monday, to give rank and file lawmakers time to review the package.

Without legislation in place by Tuesday, the Treasury would not be able to pay all its bills, raising the threat of a default that administration officials say could inflict catastrophic damage on the economy.

If approved, though, a compromise would presumably preserve America's sterling credit rating, reassure investors in financial markets across the globe and possibly reverse the losses that spread across Wall Street in recent days as the threat of a default grew.

Even word of an impending deal earlier in the day by Senate Republican Leader Mitch McConnell of Kentucky sent U.S. stock future upward.

Pending final passage, the agreement marked a dramatic reach across party lines that played out over six months and several rounds of negotiating, interspersed by periods of intense partisanship.

"Sometimes it seems our two sides disagree on almost everything," Senate Majority Leader Harry Reid said in floor remarks.

"But in the end, reasonable people were able to agree on this: The United States could not take the chance of defaulting on our debt, risking a United States financial collapse and a world-wide depression."

Across the weeks, Boehner emerged as Obama's principal Republican antagonist in a new contentious era of divided government, yet struggled to corral his own rank and file at times.

At the end, though, McConnell and Vice President Joe Biden provided a negotiating channel to get the deal completed, including a last-minute standoff over the impact of spending cuts on the Pentagon budget.



Netanyahu at White House after Obama challenge
YAHOO
By ERICA WERNER, Associated Press
20 May 2011

WASHINGTON – President Barack Obama and Israeli Prime Minister Benjamin Netanyahu were sharply at odds over terms for Middle East peace ahead of a highly anticipated Oval Office meeting Friday.

In a speech Thursday on U.S. policy in the Mideast, Obama for the first time endorsed the Palestinians' demand that their eventual state be based on borders that existed before the 1967 Six Day War in which Israel forces occupied east Jerusalem, the West Bank and Gaza.

From Jerusalem, Netanyahu dismissed the position as "indefensible," saying it would leave major Jewish settlements outside Israel. Then he boarded a plane for his long-scheduled visit to Washington, vowing to seek clarifications in his meeting with Obama at the White House. He arrived in Washington early Friday.

The encounter will pit a president deeply frustrated with a peace effort in shambles against an Israeli leader confronted by a Palestinian government he says he cannot do business with. International pressure is growing on both to answer the demands of the Palestinian people as the revolts sweeping the Arab world crest against Israel itself. Palestinian protesters emboldened by the winds of change marched on the Jewish state's borders this week and at least 15 people were killed.

Against that backdrop, Obama is aiming "to try to convince Netanyahu and the Israelis that there's a greater urgency in reaching agreement with the Palestinians because of the dramatic changes under way in the region and greater diplomatic pressures and efforts to isolate Israel and delegitimize its existence," said Haim Malka, deputy director of the Middle East program at the Center for Strategic and International Studies.

"So he was speaking to both the Israelis and the Palestinians and trying to urge them to move forward and conveying a sense of urgency and risk in the status quo," Malka said.

Netanyahu's tough response to Obama's speech "expresses disappointment at the absence of central items that Israel had demanded, primarily the (Palestinian) refugees," a senior Israeli official, speaking on condition of anonymity because he was not free to discuss U.S. policy on the record, told reporters traveling with the prime minister.

The official said Netanyahu was disappointed the speech did not address the Palestinian demand to repatriate to Israel millions of Palestinians, most descendants of people who were driven from or fled homes in the war over the Jewish state's 1948 creation.

"There is a feeling that Washington does not understand the reality, Washington does not understand what we face," the official said.

Obama's stance on the 1967 borders was not a major policy change, since the U.S — along with the international community and even past Israeli governments — previously endorsed an agreement building on the 1967 lines.

But it was the first time he'd explicitly endorsed those borders as a starting point, a position Netanyahu rejects. Obama said Israel can never be a truly peaceful Jewish state if it insists on "permanent occupation." But he did say the 1967 borders should be accompanied by land swaps agreed to by both sides, which could accommodate existing Jewish settlements.

Obama was unsparing, too, in his words for the Palestinian leadership, repudiating its pursuit of unilateral statehood through the United Nations and questioning its alliance with a Hamas faction bent on Israel's destruction. It was not immediately clear, however, whether Obama's statement on the 1967 borders as the basis for negotiations — something the Palestinians have long sought — would be sufficient to persuade the Palestinians to drop their quest for U.N. recognition.

Obama's blunt attempt to steer the peace effort was a major change in tactics from a president who has avoided imposing any U.S. plan but is now running out of patience and reasons to be subtle. Seeking to shake up a dynamic of mutual blame for the stalled peace talks, Obama pushed both sides to accept his starting point — borders for Palestine, security for Israel — and get back to solving a stalemate "that has grinded on and on and on."

"The international community is tired of an endless process that never produces an outcome," the president said Thursday at the State Department. "At a time when the people of the Middle East and North Africa are casting off the burdens of the past, the drive for a lasting peace that ends the conflict and resolves all claims is more urgent than ever."

That doesn't mean resolution is anywhere in sight.

Ahead of his trip to Washington, Netanyahu delivered a speech to his parliament in which he made clear his opposition to talks with a newly constituted Palestinian government that shares power between the mainstream Palestinian Fatah faction led by Mahmoud Abbas and the radical Hamas movement that rules Gaza. He also made a series of demands that the Palestinians — and especially Hamas — are not likely to meet. Among them were dropping their claim to east Jerusalem, their would-be capital, and recognizing Israel as the Jewish homeland.

Palestinians, for their part, refuse to negotiate while Israel continues to expand Jewish enclaves in the West Bank and east Jerusalem, which the Palestinians want to be part of an eventual state. Israel refuses to freeze settlement construction, saying the matter should be resolved through negotiations.

With talks at a standstill, the Palestinians are planning to unilaterally take their bid for statehood to the United Nations in September, a step Obama rejected Thursday, saying, "Symbolic actions to isolate Israel at the United Nations in September won't create an independent state."

But Obama had no solution to the question of Hamas, and no blueprint for how to solve enormous conflicts over the status of Jerusalem and the fate of Palestinian refugees. The border issue, he conceded, was just a start.
Netanyahu: 1967 borders can't be defended
YAHOO
19 May 2011

JERUSALEM – Israel's prime minister has rejected a key aspect of President Barack Obama's policy speech, saying that a return to his country's 1967 borders would spell disaster for the Jewish state.

In a statement released late Thursday, Benjamin Netanyahu called the 1967 lines "indefensible."

The tough stand could set the stage for a tense meeting Friday when Netanyahu goes to the White House.

In his speech, Obama said a future Palestinian state must be based in territories captured by Israel in the 1967 Mideast war, with minor adjustments reached through negotiations.

Netanyahu said such a withdrawal would jeopardize Israel's security and leave major West Bank settlements outside Israeli borders.
Obama tells Israel: Go back to 1967 borders
Ben Feller, AP White House Correspondent
Publication: theday.com
Published 05/19/2011 12:00 AM
Updated 05/19/2011 01:20 PM

WASHINGTON — Trying to advance debate in the explosive Middle East, President Barack Obama on Thursday endorsed a key Palestinian demand for the borders of its future state and prodded Israel to accept that it can never have a truly peaceful nation that is based on "permanent occupation."

Obama's urging that a Palestinian state be based on 1967 borders — those that existed before the Six Day War in which Israel occupied East Jerusalem, the West Bank and Gaza — was a significant shift in U.S. policy and seemed certain to anger Israel.

Israel has said an endorsement of the 1967 borders would prejudge negotiations. Obama will meet at the White House on Friday with Israeli President Benjamin Netanyahu.


NOT A GAME, NOT A PARTY

After Bin Laden: A Stronger America
YAHOO
By DAVID VON DREHLE
2 May 2011

President Obama walked down an empty corridor to the East Room of the White House on Sunday night to announce the killing of Osama bin Laden. It was like he was walking out of a forgotten dream. Remember that quest we began nearly 10 years ago? Remember "dead or alive"?

Obama spoke quickly, recalling the trauma of 9/11 and the unity. "We went to war against al-Qaeda," he said - waking a memory. That's right. That's the enemy.

Al-Qaeda is vague and formless and dispersed. The U.S. never waged such a war against such an enemy before. "We went to war against al-Qaeda," Obama said, and with nearly 10 years of struggle under our belts we realize now what a weighty declaration that is.

He spoke of "tireless work" over many years all around the world. But he also took credit - in the form of a half-hinted mystery story that will trickle out over hours and days and years and decades. Among other things, Obama's announcement of bin Laden's death will surely be the opening lines of a great historical drama.

"Shortly after taking office, " Obama said, he told CIA Director Leon Panetta to make bin Laden Job One. By last August, the CIA had "a possible lead." A world of excitement in three words - "it took many months to run this lead to ground."

By now you could feel the clock ticking on justice. Bin Laden's time was running out. "Finally last month" … "today at my direction" … "killed Osama bin Laden and took custody of his body."

The fact that "no Americans were harmed" closed the loop in cinematic perfection. The world will greet the killing of bin Laden with a mixture of delight, fatigue and cynical objection. Even at home, some may ask how much it matters.

Sure, bin Laden was alive, but he wasn't doing much damage - not compared to the parade of horrors he unfolded in the late 1990s and, worst of all, on Sept. 11, 2001. Why does it matter that he's gone?

It matters because the U.S. put a marker down. "Dead or alive," in the words of President George W. Bush, when the smell of smoke was still acrid in the nostrils of the nation. This was cowboy rhetoric, the critics later said - but when the President said it, nearly everyone in the country was feeling pretty damn cowboy.

It matters because it took a long time. How many distractions have blown past our gaze since bin Laden was Public Enemy No. 1? From the invasion of Iraq to the bombing of Libya; from Somali pirates to the rise of China; from Pelosi to Boehner - the public gaze whipped back and forth like eyeballs at a tennis match. But this tells us that the U.S. can set a goal and reach it.

It matters because people had begun to doubt whether American power was truly power; and to ask whether its day was past. In that equation, Osama bin Laden was a unsettling factor, even though his own power was diminished. As long as he was free, the U.S. was failing. It was that simple.

Remember bin Laden's own mathematics: "When people see a strong horse and a weak horse, by nature, they will like the strong horse," he said in the aftermath of his attack on the U.S. As long as he was out there, people would see a strong horse.

It matters because the more we learn about bin Laden's story, the better we understand how hard it is to find one human being on a planet of 6 or 7 billion human beings. This was not an easy thing. It's not surprising that it took 10 years.

Most of all, it matters because we have other big, difficult, long-range problems to solve, and we were running out of role models. The fact that this country can still fix a bulls-eye on a difficult target and stay on it for a long, frustrating decade - and win when no one expects it - is big stuff.

Maybe that weak horse isn't so weak after all. Maybe that weak horse is built for the long run.

That was the note President Obama sounded at the end of his speech. "America can do whatever we set our mind to. That is the story of our history."

He continued: We can do these things not just because of our wealth or our power, but because of who we are: one nation, under God, indivisible, with liberty and justice for all."

Then he turned and walked back down the empty corridor, a stronger President of a stronger nation.


Connecticut's new DC lobbyist plans to 'ramp up' state's presence
Deirdre Shesgreen, CT MIRROR
March 2, 2011

WASHINGTON--The state of Connecticut has had a lobbyist in Washington for years. But she hasn't exactly had a high-profile on Capitol Hill.

"I very briefly met a woman who was [former Gov. Jodi] Rell's person, but I never got to know her at all," said Rep. Jim Himes, D-4th District. "There was very little interaction between the delegation and [Connecticut's Washington] office."

Gov. Dannel Malloy hopes to change that. On Wednesday, he tapped a new advocate to head the state's D.C. office, Dan DeSimone. In an interview, the 40-year-old Washington native said he has a very clear mandate from Connecticut's governor.

"One is to really ramp up the operations of the Washington office," DeSimone said, "to have the presence of the Washington office working not just with the delegation, but with congressional leadership and especially with the Administration."

The goal, he said, is "to really make sure that Connecticut, as a donor state, begins to close that gap" between what its residents pay in federal taxes and what the state gets back in federal aid.

Malloy said in his announcement that DeSimone, whose salary will be $105,000, has the right mix of professional experience and political know-how for the job. "His expertise will help Connecticut aggressively re-position itself and ensure we are taking every opportunity to make Connecticut strong again," he said.

Malloy's office has signaled that for now, DeSimone will be a one-man operation. But they've left open the possibility of hiring outside firms to help with targeted advocacy efforts, DeSimone said.

He will officially start on March 14, working from Connecticut's current D.C. office, just a few blocks from the U.S. Capitol. He comes to the job well-versed in state-federal advocacy, as he spent the last two years heading the state of Oregon's Washington office.

In that job, he worked on everything from the stimulus bill to transportation issues, trying to make sure Oregon benefited, in terms of policy and dollars, from decisions made in Washington.

DeSimone, a rail-thin father of three (including a 2 ½ week old baby), has politics in his DNA. His mother was a former aide to Sen. Paul Douglas, the Illinois Democrat and civil-rights crusader. His father, Daniel V. DeSimone, led the federal Office of Invention and Innovation, and authored the 1971 report calling on the U.S. to move to the metric system.

The youngest of three, Dan DeSimone said he's the only one of his siblings who caught the political "bug" from his parents and stayed in Washington. Just out of college, he took a low-level job as a congressional aide with then-Rep. Jill Long, a Democrat from Indiana, and eventually became her legislative aide for budget, tax, and other issues.

Long was swept out in the 1994 Republican revolution, and DeSimone too. He's worked in a variety of political and policy jobs since, including a stint as the top lobbyist for the National Association for State Treasurers.

But it's his job as Oregon's lobbyist that has the most relevance now as he prepares to work for Malloy's office. DeSimone noted that the congressional delegations are similar--small and almost all Democratic.

To be sure, his biggest challenge will probably not be learning a new region or new political faces.

"It's the economic climate," said Julie Williams, the current director of Connecticut's Washington office. Williams, hired eight years ago by then-Gov. John Rowland, is now winding down her tenure.

She defended the state's Washington advocacy efforts under the previous GOP governors. She said Rell just had "different priorities" in Washington than Malloy, who she said wants to be "really aggressive" when it comes to federal funding.

Williams said the crop of new governors elected last year seem to be divided into two camps when it comes to Washington: those who are pulling away and even rejecting federal funds, and those who are doubling their efforts to get their piece of a shrinking pie.

Malloy falls into the latter camp. "I will not hide the fact that I intend to be a player in Washington in these very difficult times," Malloy said last week during a visit to D.C. for a meeting of the National Governors' Association. "I hope to have people scouring every part of the budget to see where we can get money."

He's taking that stance even as the main focus in Congress is on cutting the federal budget, with aid to states a key target. Plus, lawmakers in both chambers have sworn off earmarks, the special funding provisions that allow lawmakers to channel federal dollars to home-state projects.

"The environment's going to be ugly, but we should still fight for our share," said Himes.

Himes and others in the delegation said they were cheered by Malloy's aggressive approach.

"I've met more times with Dan Malloy in two months than I did with the previous governor in 4 years," said Rep. Chris Murphy, D-5th District. "I'm ecstatic at the focus that Governor Malloy has put on selling Connecticut in Washington."

Rep. Joe Courtney, D-2nd District, said it was "very realistic" for Malloy to try to get more money from Washington despite the fiscal belt-tightening.

"It's true that this is a time of retrenchment and control of the Congress is now divided," Courtney said. "But that doesn't mean that individual programs' spending decisions still don't have a lot of latitude... So I think it would be a mistake to view this place as closed for business."

DeSimone said there's no question that a key part of his job will be making Connecticut's case with the Executive Branch, seeking grant opportunities and the like. In Congress, he conceded, "it's going to be a lot of defense."

Shutdown’s ‘essential’ question: Which workers are indispensable?
By Sean Lengell, The Washington Times
9:00 p.m., Thursday, February 24, 2011

As Washington and the nation brace for a possible government shutdown next week, federal agencies are scrambling to determine how many "essential" workers will stay on the job.

In Oklahoma, a federal employees union has notified the government that it wants its civilian workers at a military base deemed essential, given that the country is fighting two wars. In the District of Columbia, Delegate Eleanor Holmes Norton has crafted legislation to make sure a shutdown won't halt city services.  Across the government, bureaucrats are trying to decide just who qualifies as essential personnel, earning the right to continue working even as the rest of the government gets furloughed.

During the most recent federal shutdowns, some agencies kept more than half their staffs on the job.  The federal government is funded through March 4, and congressional Democrats and Republicans have failed to reach an agreement on an extension.  The standoff raises echoes of the 1995-96 government shutdown that cost newly ascendant congressional Republicans dearly.

However, the public of 2011 is closely divided on who is trying to avoid a government shutdown.

According to a Gallup poll taken Tuesday and released Thursday, Republicans have an edge — albeit a statistically insignificant one — over President Obama and congressional Democrats on the matter of which party is "doing the better job in the current efforts to agree on a new federal budget."

Among the 1,004 adults surveyed, 42 percent said Republicans are doing better, compared with 39 percent for Democrats, though that edge is within the poll's error margin of 4 percentage points.  If a deal isn't struck by the deadline, thousands of government employees throughout the nation — including National Park Service rangers and Washington bureaucrats — could be told to stay home.  Essential services such as air traffic control and overseas combat would continue in full operating mode, but just what else is "essential" is a matter of debate.

The American Federation of Government Employees has asked the government to exclude its civilian workers at Oklahoma's Tinker Air Force Base from any furloughs resulting from a shutdown, saying its members are vital to national security.

"The difference between the government shutdown of 1995-96 and now is that our country is fighting in two wars," said AFGE Local 916 Legislative Director R. Bryan Jackson. "The mission for all Tinker employees is to maintain war-fighter readiness. We cannot let a funding issue jeopardize the safety of the men and women fighting overseas."

The Defense Department, like other agencies, did not comment specifically on how many of its personnel would continue working worldwide during a shutdown. But a spokesman said the department would "do everything we have to do to continue to support the deployed troops."

"The department must also continue many other operations necessary for the safety of human life and protection of property," said spokeswoman Cmdr. Kathleen Kesler. "These types of activities will be 'exempt' from cessation. All other activities would need to be shut down in an orderly and deliberate fashion."

In the nation's capital, Mrs. Norton on Thursday submitted a bill to House and Senate leaders to allow the District to spend its local taxpayer-raised funds if the federal government shuts down.  Mrs. Norton said most members of Congress are "completely unaware" that the D.C. government would shut down if the federal government closes. D.C. workers would be affected because the city's affairs are administered under federal authority.

"We are sure there is no congressional intention to close down the District's local government because of congressional disagreement over the federal budget," the Democrat said.

Mrs. Norton said she and city leaders are looking into other ways to keep the D.C. government operating in the event of a federal shutdown.

"This is not the District's fight, and there is nothing the District could do to resolve a disagreement over federal spending," she said.

The federal government was shut down for five days in late 1995 and 21 days in 1995 and early 1996. On Jan. 2, 1996, the estimate of furloughed federal employees was 284,000. Another 475,000 federal employees, rated "essential," continued to work in a nonpayment status.

Federal agencies are required to submit plans to the White House Office of Management and Budget (OMB) regarding how they would operate under a shutdown, including the number of employees to be retained. Although OMB hasn't released details of those plans, agency contingency plans from 1995 give an indication as to what could be expected.  In a 1995 report prepared by the U.S. Government Accountability Office, the Commerce, Justice and State departments collectively were set to retain 63.8 percent of their workers, with 36.2 percent subjected to furloughs.

The report also showed 52.7 percent of Interior Department workers would stay on the job, while the Health and Human Services Department would keep 42.4 percent of its workers active.  A whopping 78.1 percent of employees collectively would be retained from the Veterans Affairs and Housing and Urban Development departments, as well as independent regulatory agencies, the 1995 report said.

The Obama administration says it's hopeful a shutdown can be averted but is preparing for the worst.

"We're confident that we can find the common ground that we need to find in order to avoid a government shutdown, and that [congressional] leaders in both parties agree that that's what we need to do," White House press secretary Jay Carney told reporters Thursday.

The White House has said some recent retirees may not receive their Social Security payments if operations shut down.  Mr. Carney added that such a move would hurt the nation's fragile economy.

"The broader point is that the uncertainty created by this, the number of consequences that could unfold if this does happen, would create the kind of environment that would be harmful to the economy overall," he said.

One agency that wouldn't be affected by a shutdown is the Postal Service, which is a self-sufficient entity of the U.S. government that doesn't directly receive taxpayer dollars.

© Copyright 2011 The Washington Times, LLC. Click here for reprint permission.

WHO HAS LEFT SO FAR (Oct. 2010)?
ASSEMBLING A GOVERNMENT:  The Executive Branch is the new President's first responsibility...Treasury building looks like Supreme Court!

There are three branches of government in the United States of America...Executive Branch (White House); Legislative Branch (Congress ); Judicial Branch (Supreme Court)



EXECUTIVE BRANCH:  The Cabinet and links to the department webpages


The rest of the team...and their webpages.



NOW ALL CONFIRMED BY THE SENATE (APRIL28, 2009)
OBAMA CABINET:  Other offices, too (some still open);  As it was being assembled, news reports and "teams" concept played out, some had problems with taxes;  and that story is here. Or just click on picture of Cabinet Officers below and go directly to their story.



The Cabinet: 

Agriculture
Attorney General
Commerce
Defense
Education
Energy
Health and Human Services
Housing and Urban Development
Interior
Labor
State
Transportation
Treasury
Veterans Affairs
and
United Nations Representative

Plus (click here for photos): Highlight on Health Care :  Medicare and Medicade Office recess appointment story - warning: opinion not necessarily that of this website


U.S. Trade Representative
Office of Management and the Budget (O.M.B.)
Environmental Protection Agency (E.P.A.)
NASA
F.E.R.C.
C.I.A.
Federal Communications Commission (F.C.C.)
Federal Trade Commission (F.T.C.)
Drug Control
CENTER FOR DISEASE CONTROL(C.D.C.)
Food and Drug Administration (F.D.A.)
Security and Exchange Commission (S.E.C.)
Commodities Futures Trading Commission
Small Business Administration
National Security Advisor (center)
Solicitor General
Surgeon General


New posts: 

Dodging a health-care fight
NYPOST
By JOHN PODHORETZ
Last Updated: 5:03 AM, July 8, 2010
Posted: 1:07 AM, July 8, 2010

On Tuesday, the Obama ad ministration decided to do something rather peculiar, somewhat shocking and politically fascinating: It circumvented the process by which the Senate advises and consents on executive-branch nominees.

The move, which seems unprecedented in subtle but important ways, promises increased chaos in Washington -- but also hope on health care.

President Obama wants a distinguished doctor named Donald Berwick to head up the office that administers Medicare and Medicaid -- two of the most expensive programs in the federal government. Ordinarily, the nomination would have gone through the process known as "confirmation," with a hearing before the Senate Finance Committee followed by a full vote of all 99 senators. (One seat is vacant due to the death of West Virginia's Robert Byrd.)

Instead, Obama decided to invoke his constitutional authority to appoint Berwick (and two other officials of lesser moment) to his post without having to be confirmed by the Senate. This is possible only when Congress is not in session, as is the case right now, and it's called a "recess appointment." It is designed to be temporary; it is valid only until that session of the Congress adjourns, which in this case will come at year's end.

Past presidents have resorted to recess appointments when they believe a nominee's appointment has been subjected to unjust political and ideological gamesmanship. And the White House said it was resorting to the recess appointment because of Republican recalcitrance.

"Many Republicans in Congress have made it clear in recent weeks that they were going to stall the nomination as long as they could, solely to score political points," Communications Director Dan Pfeiffer said on the White House blog Tuesday.

That was astoundingly untrue. The only way Republicans, who have 41 votes in the Senate compared to 58 for the Democrats, could have "stalled" the nomination would have been to organize a filibuster, and that would happen only when the nomination came to the Senate floor.

They couldn't have blocked a favorable vote on Berwick's nomination from the Senate Finance Committee, which has 13 Democrats and 10 Republicans.

As ABC's Jake Tapper reported yesterday, "Republicans were not delaying or stalling Berwick's nomination. Indeed, they were eager for his hearing, hoping to assail Berwick's past statements about health-

care rationing and his praise for the British health-care system."

Democrats in charge of the Senate could have scheduled hearings at any time since the administration sent his nomination to the Capitol in April. But, Tapper reported, "neither Senate Majority Leader Harry Reid (D-Nev.) nor Sen. Max Baucus (D-Mont.), the chair of the Senate Finance Committee, were eager" to hold them.

That's what makes the administration's decision unprecedented in my nearly 30 years of closely following politics: I can't recall a preemptive decision to make a recess appointment ab sent a controversy, ugly political battle or contentious confirmation hearing.

And that's especially true when there's no indication there will be an effort to filibuster, which Democrats would likely have been able to override. (Berwick's credentials as a Harvard muckety-muck would have given the two Maine Republican moderate senators more than enough leeway to let him pass.)

So what's going on here?

First, it appears Obama likes to muscle things through. It makes him feel like he's cutting through the nonsense and getting things done.

This unorthodox and questionable move is of a piece with his administration's bullying of Chrysler creditors last year --

insisting, in contravention of eight centuries of common law, that the contracts those creditors signed with Chrysler should simply be ignored so as to get the United Auto Workers the deal it wanted.

But procedure, precedent and tradition exist for good reason; ignoring and undermining them blazes a path to political disorder.

Second, this is as glaring an admission as there is that Obama and his people know they've lost the public on health care. Rather than using these hearings to bolster popular support for the landmark legislation they rammed through in the spring, they can't bear to submit to public questioning about it.

By running away from this fight, Obama is signaling that the possibility of repealing the health-care monstrosity before it really begins to sink its teeth into the American system by 2014 is very real indeed.
United States of Czars
NYTIMES "week in review" staff borrowed this from...
Associated Press
May 25, 2009, 5:01 am

Today’s idea: Czars, czars — everywhere we have government czars. But of course, the term doesn’t quite describe technocrats who do little more than convey the aura of can-do urgent reform.

Nicholas II of Russia: Now there was a czar.Politics | Let’s see, there’s the energy czar, the border czar, the regulatory czar, the green czar, the car czar, the tech czar, the Guantánamo closure czar, the TARP czar, the stimulus czar …

Yes, “President Barack Obama is taking the practice of naming czars to new heights.” writes Katherine Mengu-Ward in Reason magazine — 18 by her count, in fewer than 100 days.

To be fair, the term “czar” is often just media shorthand for all the high-level brainiac specialization that the President feels needs to be focused pronto on the nation’s challenges. But what’s behind this activist, “best and the brightest” impulse?

“The appeal of the czar rests on the belief that if we could just figure out the right smart, competent, well-intentioned person to put charge, everything would go more smoothly,” Mengu-Ward writes. Which might be true if a czar were truly a czar instead of simply an impressive technocrat hemmed in by the usual forces, she adds.

“Rather than solving the problems they are appointed to grapple with,” she writes, “czars tend to wind up building or restructuring bureaucratic agencies, issuing a bunch of suggestions that may or may not be considered given the political climate, and then taking the blame when the problem isn’t solved by the end of their stint as a czar.”

Still, the term works for headline writers: It’s a four-letter word.
--------------
Safe Schools Czar
Manufacturing Czar from the union side...Green Czar out because he signed (although now decries), a pro-nonbelief 9-11 petition (no photo) - oops!
Regulatory Czar
White House coordinator for energy and climate (picture of Carol Browner)
Maybe not a new post, but an important one!
 White House Office of Health Reform (Tom Daschle) - oops!  He is now a Kitchen Cabinet Czar (our term).
Pay-Czar
And more appointees to new and old spots...

Fox in the chicken coop?  And we don't mean FOXnews!
White House Names Manufacturing Adviser
NYTIMES
By Derrick Henry
September 6, 2009, 11:37 pm

President Obama has named Ron Bloom as the administration’s senior counselor for manufacturing policy, the White House said Sunday night. The announcement came ahead of Mr. Obama’s planned remarks at the A.F.L.-C.I.O.’s annual Labor Day picnic in Cincinnati.

Since February, Mr. Bloom has been a senior adviser to Treasury Secretary Timothy F. Geithner. He sits on the president’s automotive industry task force. The White House said Mr. Bloom would continue that position and would expand his role to coordinate the administration’s manufacturing policy with the Commerce, Treasury, Energy and Labor departments.

The White House said Mr. Bloom would work with the National Economic Council to help lead policy development and strategic planning for “the president’s agenda to revitalize the manufacturing sector.”

“Ron has the knowledge and experience necessary to lead the way in creating the good-paying manufacturing jobs of the future,” Mr. Obama said in a statement released Sunday night. He cited the first expansion in the country’s manufacturing sector in 18 months as an early sign of economic recovery and part of his reasoning in naming Mr. Bloom to his new position.

The Institute for Supply Management’s survey of factories and industry had been edging higher this spring, as the pace of economic declines began to level off. In August, the group’s manufacturing index turned positive, rising to 52.9, from 48.9 in July.

A reading above 50 indicates expansion and growth; a number below 50 means economic contraction.

Before he joined the Treasury Department, Mr. Bloom was a special assistant to the president of the United Steelworkers union. Before that, he was a founding partner in Keilin and Bloom, an investment banking firm.

Mr. Bloom is traveling to Cincinnati with Mr. Obama, who is expected to talk at the picnic about Mr. Bloom’s position as well as the health care issue. Organized labor is an important constituency for Mr. Obama.

On Wednesday, Mr. Obama is scheduled to deliver a speech to Congress and the nation about his efforts to overhaul health care.


New post for ex-"green czar" - revising the tax code?

Embattled Obama Adviser Resigns
DAY
By JOHN M. BRODER , New York Times News Service
Published on 9/7/2009

Washington - White House officials on Sunday tersely accepted the resignation of Van Jones, the administration's special adviser for environmental jobs, after a number of his past statements became fodder for conservative critics and Republican officials.

Jones, a controversial and charismatic community organizer and “green jobs” advocate from the San Francisco Bay Area, signed a petition in 2004 questioning whether President George W. Bush's administration had allowed the terrorist attacks of September 2001 to provide a pretext for war in the Middle East.

He also used a vulgarity to refer to Republicans just before being appointed to his White House post early this year, and he has publicly supported Mumia Abu-Jamal, who is on death row for the murder of a Philadelphia police officer.

Jones was a relatively minor figure in the administration, in charge of a small White House program advocating for jobs in energy-efficient industries. But he threatened to become a significant distraction as President Barack Obama is planning a prime-time address on health care to a joint session of Congress on Wednesday night in an effort to regain traction on the issue.

Jones' hiring and departure raised questions about the quality of the White House personnel vetting process and the proliferation of so-called policy czars who are not subject to Senate confirmation or legislative oversight.

The Obama administration entered office promising the most thorough scrutiny ever of candidates for senior jobs, including an extensive questionnaire and time-consuming background checks that have left many senior posts vacant for months. But the process seems to have missed Jones' most inflammatory comments and associations, as well as the tax problems that scuttled the nominations of former Sen. Tom Daschle to two top health policy posts and Nancy Killefer as chief performance officer.

A White House official suggested that Jones' post was not seen as senior enough to warrant the full vetting given other officials. The official spoke on condition of anonymity because the authorized White House account was delivered by administration officials in televised interviews on Sunday.
The Radicalization of Obama's 'Green Czar'
Van Jones was arrested in San Francisco in 1992 for participating in a demonstration following the acquittal of four LA police officers accused of beating Rodney King.
FOXNews.com
Friday, September 04, 2009

The political radicalization of Van Jones, President Obama's "green jobs" adviser, dates back to 1992, when he and hundreds of others took their anger to the streets of San Francisco in the infamous Rodney King protests.

Jones, a Yale Law School student who was working in the Bay Area as an intern, was part of a mob that stormed the city following the acquittal in Los Angeles of four white police officers who had been charged with beating King, who is black, after a car chase.

In an essay he wrote soon after the rioting and republished in The Huffington Post in May 2007, Jones said he "just marched around and chanted slogans" as other protesters set trash cans afire, smashed car windows and threw rocks at passing motorists. But he clearly reveled in the protest.

"Our moment had finally come! We were righteous, fired up, weren't takin' no more!" Jones wrote. "We were one thousand strong on Market Street, with the Bay Bridge shut down in rush hour traffic and the grounds around the state building swarming with angry mobs! Our rallying cry was for justice; our demand was that the System be changed!"

Jones continued, "Yes, the Great Revolutionary Moment had at long last come. And the time, clearly, was ours! So we stole stuff. Y'know, stole stuff. Radios, tennis shoes. Well, not everybody, of course."

Days after he wrote the essay, Jones was arrested along with hundreds of participants in a "peaceful protest" march.

Charges against him ultimately were dropped, and he says he received a "small" settlement.

"I was arrested simply for being a police observer," he later said.

Jones, in the piece he wrote for The Huffington Post, said his essay "captures the pain, frustration and aspirations of a much younger person. But I think it speaks well to the thought process of many young activists at the time."

"But the incident deepened my disaffection with the system and accelerated my political radicalization," he wrote. "The political agenda I articulated for myself and my generation in this essay remains largely undone and incomplete."

Indeed, Jones' "disaffection with the system" appeared to continue. In a June 2008 speech to the National Conference for Media Reform, Jones blasted a proposed prison in Memphis that he compared to a "huge slave ship on dry land."

"You don't have to call somebody the n-word if you can call them a felon," Jones said in the speech, which can be seen on YouTube . "The fight against this new Jim Crow, this punishment industry, where for-profit prison companies are now being traded on the stock exchange ... that struggle is being met as it was 40 years ago."

In his 2007 reflection on the aftermath of King's beating, Jones said he was among those who chanted "no justice, no peace" during the "understandable, unavoidable, even necessary" riots.

"These riots were not revolution; without revolutionary values and revolutionary organization, they were merely sharp outcroppings of the systemic chaos that social injustice breeds," Jones wrote. "But flashpoints of rage can never substitute for radical social vision or grassroots coordination."

Jones, the founder of Green for All, which focuses on creating environmentally friendly jobs in poor areas, continues to be a focus of President Obama's critics after video surfaced of him referring to Republicans as "assholes" and it was revealed that he once joined the "9/11 truther" movement, which contended that the Sept. 11, 2001, terror attacks might have been an inside job by the Bush administration.

In 2004 Jones signed a statement calling for then-New York Attorney General Eliot Spitzer and others to launch an investigation into evidence that suggests "people within the current administration may indeed have deliberately allowed 9/11 to happen, perhaps as a pretext for war."

The statement asked a series of critical questions hinting at Bush administration involvement in the attacks and called for "deeper inquiry." It was also signed by former Georgia Rep. Cynthia McKinney and Code Pink co-founder Jodie Evans.

Jones distanced himself from the position on Thursday, saying, "In recent days some in the news media have reported on past statements I made before I joined the administration -- some of which were made years ago. If I have offended anyone with statements I made in the past, I apologize. As for the petition [9/11 statement] that was circulated today, I do not agree with this statement and it certainly does not reflect my views now or ever."

An aide to Jones told FOX News he "did not carefully review the language in the petition." The aide did not say when Jones signed the petition or when he became aware of the controversy.

Thursday's apology followed Jones' mea culpa on Wednesday, when he expressed his remorse for "offensive words" he uttered in February, when he called Republicans "assholes." He said those remarks "do not reflect the views of this administration" and its bipartisan aims.

White House Press Secretary Robert Gibbs limited his remarks about Jones on Friday, saying only that he "continues to work in this administration." As to the Sept. 11 conspiracy theorists, Gibbs said, "It's not something the president agrees with."

At least one congressman, U.S. Rep. Mike Pence, R-Ind., has called for Jones' resignation.

Democratic strategist and FOX News contributor Bob Beckel predicted that Jones would be out of a job by Labor Day, and he wondered how Jones got the "czar" post in the first place.

"He's got every right in the world to be a self-avowed communist, but the Secret Service would no more allow a self-avowed communist into the White House as they would Charlie Manson, so that's what I don't get," Beckel said.

"There's something more in here about the breakdown of the system. Yes, it broke down with the Obama administration, but it also broke down with those people who are responsible for doing the background check," he added.


TEST:  Have you been paying attention to the news re:  sub-cabinet spots?
Appointments at lesser than Cabinet status, but really, really important!  And stories that went along with the appointments.
Which one is gone now, less than three years on?

Which ones changed jobs, moving up?

Brain trust above, in order...click on photo (or separate link in those cases):
Sub-cabinet appointments of importance: S.E.C., Federal Reserve Board seat, Commodities Futures Trading Commission, Small Business Administration, head of the FCC, Director - Office of Science and Technology, NOAA. Then we have the appointees with Doctorates (besides Dr. Chu of Energy) Co-Chair, Council of Advisors on Science and Technology (and a Nobel Prize winner), genome man.  C.I.A. Director Panetta?  (Note the trench coat!)  Solicitor General Elena Kagan (Harvard Law School Dean).  Climate Change Envoy (from State Department) Stern (any relation to this one?).  And most recently, appointment of Commissioner Liebowitz of the F.T.C. as its Chair.  And here is the Drug Czar (Seattle Police Chief);  CT DEP Commissioner to Washington!  And the FDA chief, from N.Y.C., and CT's own DEP Commissioner to EPA staff position.  C.D.C. head also from N.Y.C.  Dr. Benjamin (Regina, from Alabama) named Surgeon General;  Manufacturing Czar and departed "green" czar story.  F.E.R.C. gets new chief, too!  (a group with power over L.I.S.!

Power grid chief touts electric-car payback
YAHOO
By Steve Gelsi, MarketWatch
Sept. 24, 2009, 11:02 a.m. EDT

NEW YORK (MarketWatch) -- U.S. power grid chief Jon Wellinghoff is touting the long-term cost savings of electric cars, saying the vehicles could earn $1,500 a year in paybacks for their owners when their batteries are connected to the power grid.

While electric cars planned for U.S. market in the next few years will likely carry heftier price tags than many gas-powered cars, Wellinghoff agued at an investor conference this week that owners of plug-in vehicles will benefit from much lower costs for filling up, cutting down the long term cost of operation.

On top of saving at least $3 or $4 a gallon on gasoline, Wellinghoff, chairman of the Federal Energy Regulatory Commission, said grid operators and power companies could reimburse car owners for the battery storage offered by the roughly 22 hours a day that electric cars would be connected to the nation's power system.

"Plug-in hybrids could help stabilize the grid and make money for their owners," said Wellinghoff, who spoke at Knight Capital Group's "Electrifying Transportation" conference for institutional investors on Wednesday.

Wellinghoff, a lawyer who specializes in energy issues before becoming FERC chairman earlier this year, cited positive moves into green energy under President Barack Obama, who addressed climate change in a major United Nations speech this week. Obama elevated Wellinghoff to the FERC chairmanship.

The Obama administration awarded a $529 million government loan to Fisker Automotive to build electric cars earlier this week. Tesla Automotive and others have also received hundreds of millions of dollars under government stimulus programs.

On the heels of other government subsidies, lithium-ion battery maker A123 Systems Inc. drew strong interest in its initial public offering on Thursday. See full story.

While the electric car industry remains in its infancy today, proponents of plug-in vehicles expect millions of models on the road in the next 10 years that could collectively add to the nation's power storage capabilities.

Sharing the main points of his chapter in the book "Plug-In Electric Vehicles," edited by David Sandalow, Wellinghoff said growth of solar and wind energy in the U.S. will create a greater need for storage capacity on the grid to smooth out surges in power.

Electric car batteries could help take up the storage slack, along with flywheel systems.

Wellinghoff was joined at the conference by Knight Capital CEO Tom Joyce, who said he drove an electric-powered Tesla before the meeting and it was "possibly the coolest car I've ever been in."

Other speakers included venture capitalists Chelsea Sexton of VantagePoint Venture Partners and Dhiraj Malkani of RockPort Capital.

Speakers at the conference were bullish on investments in the electric-car sector.

Sexton said electric cars are "cool, fast and fun" and that gasoline hybrid cars have managed to capture about 3% of the car market.

Malkani said most U.S. consumers adopted quickly to cell phones and GPS systems and that electric vehicles will offer the benefit of avoiding gas stations and fueling at home. "We all could be pleasantly surprised," Malkani said.

Alabama Physician Chosen as Surgeon General
NYTIMES
By Gardiner Harris
July 13, 2009, 11:11 am

President Barack Obama has selected Dr. Regina Benjamin, an Alabama family physician, as the U.S. surgeon general, two administration officials said on Monday.

Mr. Obama will announce his selection officially at a Rose Garden ceremony at 11:40 a.m.

An African-American, Dr. Benjamin is nationally known for establishing a rural health clinic in Bayou La Batre, Ala. — a small, medically underserved shrimping village along the Gulf Coast. Hurricana Katrina destroyed the clinic in 2005, and then when it was rebuilt, the clinic burned down on the eve of re-opening.

In 2002, she became the president of the Alabama Medical Association, making her the first African-American woman to be president of a state medical society in the United States. In September, she was one of 25 recipients of the $500,000 “genius awards,” awarded by the John D. and Catherine T. MacArthur Foundation.

She completed her residency in family medicine at the Medical Center of Central Georgia. She is a graduate of Xavier University, Morehouse School of Medicine and the University of Alabama School of Medicine.

The titular head of the U.S. Public Health Service, the surgeon general is a largely ceremonial post used by numerous administrations to communicate important health messages to the public. The office itself has only a handful of staff and must rely for research and support on the National Institutes of Health and the Centers for Disease Control and Prevention.

But the uniform of the surgeon general invests its wearer with credibility in the public’s eyes and has often led the wearer to distance themselves from the political priorities of the administration.


CFTC Chair. Gary Gensler illustration the game of chicken being played with the economy.

Appeals court dismisses suit over new CFTC rule
YAHOO
21 Jan. 2012

WASHINGTON (Reuters) - An appeals court has dismissed a lawsuit by the financial industry challenging new federal regulations aimed at cracking down on speculation in commodities markets, a move that will likely delay a decision over whether the rules pass muster.

The Securities Industry and Financial Markets Association and the International Swaps and Derivatives Association in December filed challenges to the regulations adopted last year by the Commodity Futures Trading Commission.

The U.S. Court of Appeals for the District of Columbia Circuit dismissed the lawsuit saying that the case must first be heard by a lower court, an argument advanced by the CFTC.

"There is no express congressional authorization of direct appellate review applicable to the petition for review in this case," the three-judge panel said in a brief order issued late on Friday.

They said that federal laws provided for appellate review for other agency action but not the challenged regulation.

The CFTC voted 3-2 in October to set "position limits" on the number of commodity futures and swaps contracts that a trader could hold. It has been decried by traders as a politically motivated effort to cap prices that will make markets less liquid and more volatile.

The two trade groups sued to block the new rules arguing that the CFTC exceeded its authority and that the regulations were not adequately justified.

The CFTC had argued that the case should first be heard by the U.S. District Court for the District of Columbia. Once that court hears the case, whatever decision reached there can be challenged at the appeals court, a lengthier process.

The industry groups already have filed a challenge at the district court, but it was put on hold pending a decision by the appeals court on whether it would hear the case.

Representatives for the industry and the CFTC were not immediately available for comment.

Still Writing, Regulators Delay Rules
NYTIMES
By LOUISE STORY
June 15, 2011

Regulators overseeing financial reform are delaying many of the planned changes in the immense market for complex securities known as derivatives because they are running drastically behind schedule in writing their new rules.

The Securities and Exchange Commission said on Wednesday that market participants would not have to comply with many aspects of derivatives reform scheduled to take effect in mid-July. It declined to specify how long the delay would be in the equity derivatives it oversees.

The announcement follows a similar statement on Tuesday from the Commodity Futures Trading Commission, although that agency imposed a year-end deadline for many of the changes in the derivatives it oversees.

The idea of changing the deadline had been divisive at the commodities commission. The two Republicans on the five-commissioner board had wanted to create an extension without a deadline. The Democrats, however, wanted a specific date to keep some pressure on the group to complete the rule writing, according to three participants in the meeting.

The commissioners ultimately agreed unanimously on the extension, but the dispute illustrates the political divide that has been brewing in Washington for months as regulators work to roll out hundreds of rules required by the Dodd-Frank financial reform legislation of last summer.

Though the Dodd-Frank measure was passed with bipartisan support, it has come under fierce criticism from many Republicans as well as some Democrats with financial constituents, who have urged regulators to slow the rule writing. Republicans are also trying to shave financing from agencies like the Securities and Exchange Commission and the Commodity Futures Trading Commission, which now have a larger workload in writing and enforcing scores of new rules.

Gary Gensler, the Democratic chairman of the trading commission, testified in Congress on Wednesday about the agency’s limited resources. In an interview, he pointed out that the derivatives market is seven times the size of the futures market, which his agency has long overseen.

“This agency has been asked to take on a very expanded mission,” he said. The decision this week to push back the derivatives deadline, he added, “was not about delay. It was just giving the market the certainty while we’re completing the rules.”

Regulators have missed more than two dozen deadlines for new Dodd-Frank rules, which cover a swath of topics, be it consumer protections in mortgage lending, bank responsibilities for dealing with city governments, or future resolution powers for troubled financial institutions. The legislation was the government’s main response to the financial crisis, and it is supposed to rein in Wall Street and reduce the kind of risk that led to the market implosion three years ago.

Observers say that the two delays this week make sense: with regulators so behind schedule, putting some of the rules into effect could be problematic. Still, regulatory experts warned that delays could be dangerous.

“Sounds like common sense to me,” said James J. Angel, a professor at the McDonough School of Business at Georgetown. “The regulators have this tsunami of work dumped on them, and it’s important to get it right.”

Still, he said, it is unclear whether the banks calling for a slowdown have legitimate concerns.

“You don’t know whether they’re just whining because they’re trying to get a few more pennies or if this is really Armageddon to them,” he said.

At hearings, bank officials have urged regulators to move slowly, saying that the rules will be better if created with greater care and consideration. The industry also has warned against what its officials call the “big bang” approach, under which many rules would take effect at once.

One difficulty is that many rules are related, and some rules drive others. Nowhere is this more true than in the derivatives market, where financial insurance contracts are written to protect against many different risks.

For instance, the rules to impose position limits in some commodities derivatives, like oil contracts, may depend in part on how much money financial players hold in different investments. But the commodities commission has been unable to demand all the data on these holdings — and the banks have not been volunteering — until it has written certain other rules and passed the one-year mark on the law.

The law specified that some derivatives rules would go into effect next month, no matter the status of rule writing, and those are what both financial commissions voted to delay this week.

At the commodities commission, Democrats and Republicans agreed that the July deadline for many rules was untenable because its staffers had not even finished defining terms like “swaps dealer” — an entity that buys and sells a type of derivative.

Jill Sommers, one of the Republican commissioners at the commodities regulator, said in an interview that she absolutely wants the rules to go into effect. But the commission needs to take its time, she said. “We didn’t want a date,” Ms. Sommers said. “We’re trying to makes sure we don’t miss anything. I think we need to be very deliberate.”

One of her opponents in the meeting was Bart Chilton, a Democrat. He said in an e-mail on Wednesday that he worried that having no deadline would take away much needed urgency. “We should be putting the hammer down and making up for lost time,” he wrote. “That means doing what the agency has done: given us a time certain — the end of the year — in which to complete our work.”

The commission has three Democrats, but one, Michael Dunn, has his term expiring this summer. He can stay on beyond that date, but if he chooses to leave, a successor is sure to face fierce confirmation questions in the Senate, where lawmakers are heavily divided on the new rules.

Ex-Physicist Leads Flash Crash Inquiry
By GRAHAM BOWLEY

WASHINGTON — As a doctoral candidate in physics at Princeton two decades ago, Gregg E. Berman spent a year and a half in a laboratory searching through subatomic data for an elusive particle called the heavy neutrino.

Now, from his small office at the Securities and Exchange Commission here, the former physicist is busy completing a similarly painstaking task, supervising a team of more than 20 investigators who have spent the last five months scrutinizing reams of stock-trading data and hundreds of interview transcripts in an effort to figure out why stock prices went into free fall for 20 terrifying minutes on May 6.

Their long-awaited report on the so-called flash crash, in partnership with the Commodity Futures Trading Commission, is due to be published in the next two weeks.

Mr. Berman, 44, will not say exactly what will be in the report, but he says that it will not simply restate what regulators have already said — that markets were volatile because of worries over the debt crisis in Europe, causing some computerized trading programs to stop trading, and finally causing computers on other exchanges to misread the pullback as a rapid bidding down of stock prices.

Instead, he says, the report will zero in on a specific sequence of events that preceded the crash. He says it will tell a clear story about what happened in the markets on that stomach-churning day, beyond simply pointing a finger at the perils of the kind of high-speed computer trading that dominates today’s markets.

“The report will clearly demonstrate how market conditions and events prior to the flash crash led to the extreme price moves,” he said.

When pressed, he added, notably, that he had found no evidence of a deliberate attempt by anybody to disrupt markets.

The implications of the report are not merely academic. Ordinary investors, shaken by the brief stock plunge and the lack of an official explanation, have withdrawn money from stock mutual funds every week since the crash. Market analysts say investors want to be reassured about the integrity of the nation’s markets so they can be confident that a nose dive will not happen again.

The Berman report will not be the final word on the matter. Its findings will be used by a group of advisers to the S.E.C. and the commodity futures commission, which will make policy recommendations.

Still, some analysts question whether the report can deliver a simple answer that will satisfy everyone eager for reassurance.

“What everybody would love to hear from the S.E.C. is XYZ trader blew up the market and made a gazillion dollars and is now in jail,” said Larry Tabb, chief executive of the Tabb Group, a specialist on the markets. “The answer, I think, is much more complicated and nuanced and has to do with a lot of different things. I am not sure that everybody outside the industry is going to have the patience to understand that.”

Mr. Berman acknowledges that his team’s explanation will involve a number of things happening at once. It may strike many people as painfully complex, but that is an undeniable result of the byzantine nature of today’s disparate electronic markets and the many players who take part in them.

The report’s conclusions will involve “market participants doing very different things and for very, very different reasons,” he said.

Central to all of this is the fact that stock trading is no longer centralized but instead takes place on dozens of exchanges, all with varying policies and procedures. For example, the New York Stock Exchange has circuit breakers that prevent stocks from rising or falling so quickly that they disrupt the broader market.

Trading was slowed on several listings on that exchange on May 6, while other markets kept trading lower. That lack of coordination created confusion during the flash crash. Since then, the S.E.C. has extended circuit breakers for individual stocks across all markets.

In investigating the crash, Mr. Berman says he finds himself in a position similar to his physics work 20 years ago, when he was collecting huge amounts of data and comparing the competing views of many laboratories on a question dividing particle physics — whether the neutrino, one of the least known and most common elementary particles, actually had mass.

Today he finds himself in familiar territory, sifting through huge amounts of messy and disjointed data, and at the same time reading blogs and e-mails from a wide range of observers, each with a theory about what happened on May 6.

Despite his formal training as a physicist, Mr. Berman is no stranger to stock markets. After academia, he spent 16 years on Wall Street, first devising algorithmic trading strategies for hedge funds, then working for RiskMetrics Group, where he created software and dispensed risk-management advice to asset managers, banks and hedge funds.

Having worked with hedge funds and high-frequency traders, Mr. Berman came to his current job a year ago with practical market knowledge and a familiarity with the world of stock trading. Several prominent market players say they found Mr. Berman’s rare combination of experiences refreshing — and reassuring.

“He had a sense that actions in markets provoke reactions and they are done for reasons, benign or not benign,” said Frank Hatheway, chief economist at Nasdaq, one of the exchanges that provided data for the inquiry.

Even though Mr. Berman’s Wall Street background was paramount, S.E.C. officials said his measured communication skills were also important. They have helped him in the complex task of coordinating the commission’s cross-divisional flash crash investigation team and presenting a clear narrative about what happened.

“He can analyze the data in a way that tells a story,” said Robert W. Cook, Mr. Berman’s boss and the director of the S.E.C.’s trading and markets division.

The investigation has had two prongs. One strategy has been to collect all kinds of market data from May 6 and analyze it for patterns.

“They must be completely awash with data on their spreadsheets, a trove of data,” said Lawrence Leibowitz, chief operating officer of NYSE Euronext, another exchange that provided information for the investigation. “We sent them over raw data with analysis on top of it.”

The second line of investigation has involved “many dozens” of interviews with people involved in the markets on May 6, including market makers, the exchanges, high-frequency traders, banks and fund managers, to ask what they did on May 6 and why.

More than one interviewee was surprised to find Mr. Berman and 10 more S.E.C. officials on one conference call to discuss the crash — their number was a sign of how badly the commission, after a few difficult years, wants to get this investigation right.

“Many market participants told us, ‘We’re not quite sure what happened over all, but this is what my firm saw and the actions we took,’ ” Mr. Berman said. “It was like ‘C.S.I.’ We wanted to interview everyone around.”

Mr. Berman said the level of detail gleaned from his investigation will help provide the explanation for what occurred on May 6, even if it may not deliver the simple answer that many people would like.

“This level of fact proved to be very, very telling,” he said. “We started to build up a complete picture.”

Regulator faults Wall Street banks on derivatives
YAHOO
By MARCY GORDON, AP Business Writer
March 11, 2010

WASHINGTON – Wall Street banks are seeking exemptions to proposed new financial derivatives rules that could shield more than half the trades that should be subject to disclosure, a federal regulator said Thursday.

The chairman of the Commodity Futures Trading Commission, Gary Gensler, criticized Wall Street's stance on proposed new oversight for the shadowy $600 trillion derivatives market. Derivatives have been blamed for hastening the 2008 financial crisis.

Gensler told a financial industry gathering that Wall Street has not been "enthusiastic" about the proposed new regulations now before Congress...full story here.

SEC, CFTC mull joint enforcement squad: sources
YAHOO
October 15, 2009
 
WASHINGTON (Reuters) – U.S. securities and futures regulators are considering creating a joint enforcement squad to investigate and root out fraud in the markets, two sources familiar with the matter said on Thursday.

The new squad would be made up of staff from the Securities and Exchange Commission and the Commodity Futures Trading Commission, who would come together to coordinate and manage joint investigations, the sources said.

The "task force" is one of the recommendations being considered by SEC and CFTC commissioners in an effort to end a turf fight over market jurisdiction.

The Obama administration has pressured the agencies to resolve long-standing conflicts and come up with recommendations for Congress to align their rules.

The recommendations are expected to be released on Thursday upon receiving the approvals of the SEC and CFTC commissioners.

Others being considered include the creation of a joint training program that may go beyond training for enforcement staff, one source said. The sources requested anonymity because the recommendations have not been made public.

Regulatory disputes have consumed the SEC and CFTC resources and created uncertainty in the marketplace as to how products will be regulated and laws enforced.

Regulatory lapses has been blamed for the global credit crisis and economic fallout, triggering calls for a sweeping overhaul of the country's financial regulatory system and intensifying demands for the agencies to stop fighting.
CFTC Poised to Move Aggressively on Position Limits
NYTIMES
By REUTERS
July 28, 2009, Filed at 3:14 p.m. ET

WASHINGTON (Reuters) - The Commodity Futures Trading Commission will consider "every option" to clampdown on excessive speculation in energy markets, the head of the agency said on Tuesday.

The CFTC, regulator of U.S. futures markets, is reviewing how to limit how many futures contracts can he held, so-called position limits, and if some traders should be allowed to exceed those limits.  The agency held its first hearing on Tuesday to study proposed changes. Meetings continue on Wednesday and August 5.

"I believe we must seriously consider setting strict position limits in the energy markets," said CFTC Chairman Gary Gensler. "Every option must be on the table."

Officials from the IntercontinentalExchange Inc, or ICE, and the Chicago Mercantile Exchange, the world's largest exchange, urged the CFTC to beware of potential unintended consequences of efforts to curb speculation.  The exchanges said the CFTC risks increasing volatility, distorting pricing functions and pushing traders to less regulated offshore markets.

"While well intentioned, these measures often fail to achieve their desired objectives or, worse yet, lead to unintended consequences ... that would otherwise be discovered in properly operating markets," said Jeffrey Sprecher, chief executive of ICE.

Gensler said several questions remain that the CFTC must still answer, including what the position limits should be; who should set them, the CFTC or the exchange; and if exemptions should be allowed for traders to manage purely financial risk, rather than accepting the delivery of the actual commodity.

Several commissioners warned the CFTC must be cautious. But, at the same time, Commissioner Bart Chilton said the "unprecedented volatility" over the past year had increased the urgency for the CFTC to make changes. "Whatever manner the agency proceeds, 'going slow' is not an option," he said.

U.S. futures markets said supply-and-demand factors, not speculation, were responsible for the increased volatility.  Sprecher of ICE complained the position limits, currently set by ICE rival CME Group Inc, lack transparency. He said ICE supports having the CFTC take over that authority. 

Craig Donohue, the head of CME, countered ICE on setting rules for the market. "To say you are dependent on our limits is ridiculous. Adopt your own limits," he said.

During this testimony, Donohue said the CME has the authority to administer position limits and hedge exemptions for energy commodities. He supported a hard limit regime, including single-month and all-month combined limits, to complement the existing measures that are in place.

"We're trying to address the perception issues out there even though I think it's been abundantly clear that there is no evidence" of speculation driving up oil prices, said Donohue.

Currently, exchanges try to prevent manipulation and congestion by imposing limits on energy products in the last three trading days before a contract expires. The exchanges have accountability levels that trigger additional oversight tools, if a position exceeds a certain size.

Gensler estimated 70 parties exceeded accountability levels on the four major energy contracts during the last year.  To protect against market manipulation, the CFTC sets limits on the amount of contracts each investor can hold in some agricultural commodities. But the futures exchanges set limits for energy products such as oil futures.  The move to toughen oversight marks a turnaround for the CFTC, whose hands-off approach toward regulation drew criticism last year when commodity prices rocketed to record highs.

"We and our consumers cannot continue down the same path," said Sean Cota, testifying on behalf of the Petroleum Marketers Association of America. "It is time for a concerted effort toward meaningful reform to restore stability and confidence in these markets."

With a number of anti-speculation bills pending in Congress, the CFTC's actions have been praised by some lawmakers, especially Democrats.
CFTC May Restrict Trades Over Wheat Price Concerns
NYTIMES
By THE ASSOCIATED PRESS
Filed at 6:32 p.m. ET
July 21, 2009

WASHINGTON (AP) -- Federal regulators are ''seriously considering'' restrictions in the wheat futures market being urged by lawmakers concerned over speculation they say has artificially inflated prices, hampering risk management by farmers and grain processors.

A yearlong investigation by the investigative panel of the Senate Homeland Security and Governmental Affairs Committee found that the disconnect between the wheat futures and cash markets can mean higher prices for consumers. Several senators have called on the Commodity Futures Trading Commission to restrict the volume of index trading in the wheat futures market on the Chicago Board of Trade.

The agency ''is seriously considering this recommendation ... (and) will continue to closely monitor the performance of the wheat futures contract,'' CFTC Chairman Gary Gensler told the Senate subcommittee at a hearing Tuesday.

Panel chairman Sen. Carl Levin, D-Mich., said such a review ''is badly needed.'' Several other members of the committee, representing farm states, voiced concern about the impact of market problems on wheat producers in those states.

But an official of the company that operates the Chicago Board of Trade, where wheat futures are traded, opposed such constraints and disputed the Senate probe's findings.

Charles Carey, vice chairman of CBOT owner CME Group Inc., said new restrictions on index trading ''are more likely to be harmful to the functioning of our markets than helpful.''

Commodity indexes are made up of futures contracts for delivery in different months. Commodity index traders sell financial instruments whose values rise and fall along with the value of the index on which they are based.

Commodity index traders buy wheat futures to help offset their risk from selling the instruments to third parties. That pumps billions of dollars into the market and lifts demand and prices for wheat futures, the Senate investigation found. The trend has been especially pronounced since 2005.

The trading volume in wheat futures has created a large gap between prices in the futures and spot, or cash, markets. It has prevented the normal convergence between the two at the time when the futures contract expires and delivery is due, the subcommittee's report found.

Speculation in the wheat futures market has disrupted normal price patterns and hurt the ability of farmers, grain processors and others to hedge against risk, according to the report released last month.

In his testimony prepared for the hearing, Carey said the Senate report's findings ''are based on faulty economic analysis and a misunderstanding of basic market economics.''

Carey agreed that there is lack of convergence between wheat spot and futures prices -- which he said the exchange is committed to solve. However, he rejected the notion that such ''temporary order imbalances'' have a lasting effect on prices.

The CBOT has been working to resolve the problem and is prepared to make further changes to the wheat futures contract if needed, Carey said. The exchange already has added new delivery points and increased the storage fee, he noted.

Some analysts and lawmakers also blame the surge in popularity of commodity index funds for artificially boosting the prices of oil, gasoline, corn and other commodities.

The CFTC also announced Tuesday that it will hold the first of three public hearings next week to gather views on whether the government should impose limits on the number of futures contracts in oil and other energy commodities held by speculative traders.

The possible CFTC action take on added significance as Congress crafts sweeping new rules for financial markets.
CFTC Asks Authority Over OTC Market, Dealers
NYTMIES
By REUTERS
Filed at 5:35 p.m. ETJune 4, 2009

WASHINGTON (Reuters) - The U.S. regulator of the futures industry proposed a package of reforms for the first comprehensive regulation of over-the-counter derivatives and the dealers who handle the exotic instruments on Thursday.

Derivatives such as credit default swaps were blamed for amplifying last fall's economic crisis. Trading runs in the trillions of dollars for derivatives, contracts whose value is based on the price for another item.

"Many of these (reforms) will require statutory changes, of course," said Gary Gensler, chairman of the Commodity Futures Trading Commission, at a Senate hearing. For the second time this week, he said broad reform is urgent this year.

"Such reforms must comprehensively regulate both derivative dealers and the markets in which derivatives trade."

His package expanded on a May 13 outline by the Obama administration to require standardized OTC derivatives to go through clearinghouses and move standardized derivatives onto public exchanges. Reporting and record-keeping rules would apply to standard and customized contracts to assure fair trading.

Gensler said the federal regulation must apply to all dealers and all types of derivatives. He suggested two sets of rules: one covering markets, including regulated exchanges, electronic trading and clearinghouses, and the other governing dealers. The plan includes position limits on holdings.

"These two regimes should apply no matter which type of firm, method of trading or type of derivative swap is involved," Gensler told the Senate Agriculture Committee, which oversees the CFTC and writes futures market law.

Agriculture Committee chairman Tom Harkin is sponsoring a bill to move all OTC derivatives onto regulated exchanges in order to increase liquidity, reduce risk and make terms of trade public. U.S. Sen. Saxby Chambliss of Georgia said banning OTC derivatives "is unrealistic" and the wrong answer to the financial crisis.

Two trade groups, the Business Roundtable and the U.S. Chamber of Commerce, said in a letter to Senate leaders that OTC derivatives were a vital tool. They said the administration's May 13 plan "is a positive catalyst" for reform.

"There's got to be some fundamental change in the way we do things. We'll be developing this legislation sometime this year, probably not until this fall," Harkin said at the end of the hearing.

Under the CFTC proposal, dealers would be subject to capital requirements, initial margining requirements, business conduct rules, and reporting and record-keeping rules. The CFTC would have power to set position limits, including aggregate limits, on OTC derivatives that affect prices on futures exchanges.

"We should require that all derivatives that can be moved into central clearing be required to be cleared through central clearing houses and brought on to regulated exchanges or regulated electronic trading systems," said the CFTC chairman.

Regulators would monitor contracts to make sure dealers do not try wrongly to label a derivative as customized.

The CFTC and the Securities and Exchange Commission would share regulatory duties for the OTC system, Gensler said.

"Position limits should be applied consistently across all trading platforms and exemptions should be limited and well-defined," said Gensler. The CFTC is reviewing exemptions now in force.

"The term OTC derivative should be defined and CFTC should be given clear authority over all such instruments," said Gensler in discussing changes in law.
Editorial: New Rules for Derivatives
NYTIMES
May 15, 2009

President Obama’s new proposal to regulate derivatives would go a long way toward reining in the complex products and reckless practices that have been a big factor in the financial crisis. But it would not go far enough. In apparent deference to those who have made major profits from unfettered derivatives trading, the proposal stops shy of creating a fully transparent market.

Transparency is the best way to avoid a repeat of the disaster triggered in recent years by these unregulated financial products, which are supposed to help investors manage risks, like the possibility of default or of interest-rate swings. As the financial bubble burst mid-decade, many of these derivatives didn’t work as advertised. Rather than reduce risk, they created or amplified it, to the point — as in the case of the American International Group — that the failure of one party to various derivatives contracts threatened to topple the entire system.

Worse still, the debacle caught regulators flat-footed — and taxpayers have been paying for bailouts ever since. The tab for A.I.G. alone, so far, is some $180 billion, and there are trillions of dollars more for which taxpayers are on the hook. Derivatives are not entirely to blame for the fiasco, but they are implicated in much of it.

The administration’s proposal rightly seeks to repeal much of a law from 2000, the Commodity Futures Modernization Act. It put derivatives beyond the reach of federal regulators. It calls for certain derivative trades, though not all, to be handled through clearinghouses. It also requires that derivatives be backed by collateral, ensuring that a trader is able to make good if called upon to pay up. It would allow federal regulators to police the market for fraud and manipulation — basic safeguards missing from current law.

In a far-reaching change, the proposal also would subject participants in the derivatives market to capital requirements and to record-keeping and reporting requirements. These would allow regulators to track their activities, presumably intervening as necessary to avert systemwide problems.

For all that, the proposal pulls its punches. It does not call for trading derivatives on fully regulated exchanges, the most visible and reliable way of reining them in. It also makes a distinction between standardized and customized derivatives and proposes a lighter regulatory touch for the custom variety. That could open the door to gaming the new system, a door that would be shut if all derivative contracts were traded on exchanges. In some important respects, it appears to give regulators the discretion, though not the duty, to police markets more closely.

The proposal also seems to invite tension between the Securities and Exchange Commission and the Commodity Futures Trading Commission, the main regulators that would oversee derivatives. Regulatory jurisdiction must be clarified if the new rules are to have any teeth.

Another tension is that, in carrying out the new rules, President Obama’s nominee to lead the Commodity Futures Trading Commission, Gary Gensler, has a credibility problem. During the Clinton administration, Mr. Gensler — along with Lawrence Summers, Mr. Obama’s top economic adviser — championed derivatives’ deregulation. That caused two senators to place a hold on his confirmation, even though Mr. Gensler supported greater regulation during his confirmation hearing. They released the hold on Thursday only after the new regulatory proposal was made public.

The Obama proposal starts off in the right direction. It is up to Congress to shore up its protections and provide regulators with the resources and political support they would need to carry out their new mandate.

New York City Official Is Obama Pick for C.D.C.
NYTIMES
By GARDINER HARRIS and ANEMONA HARTOCOLLIS
May 15, 2009

WASHINGTON — President Obama will announce on Friday that he has chosen Dr. Thomas R. Frieden, the New York City health commissioner, as the next director of the Centers for Disease Control and Prevention, administration officials said Thursday.

Dr. Frieden, a 48-year-old infectious disease specialist, has cut a high and sometimes contentious profile in his seven years as New York’s top health official under Mayor Michael R. Bloomberg. He led the crusade to ban smoking in restaurants and bars, pushed to make H.I.V. testing a routine part of medical exams, and defended a program that passes out more than 35 million condoms a year.

At the C.D.C., he will inherit a host of immediate and long-term problems, including a looming decision about whether and how to produce a swine flu vaccine. Health experts say the agency must resolve serious morale and organizational issues even as the administration struggles to overhaul the nation’s health care system.

“I think the administration selected Tom Frieden because he can take public health to a new place,” said Jeffrey Levi, executive director of Trust for America’s Health, a nonprofit public health advocacy organization. “He’s a transformational leader.”

Dr. Frieden is expected to take office next month. With his appointment, which does not require Senate confirmation, New York City will have former commissioners in two of the nation’s most visible health positions; Dr. Margaret A. Hamburg, who held the job in the 1990s, is nearing confirmation as commissioner of the Food and Drug Administration.

Dr. Frieden has long been expected to be Mr. Obama’s choice, and although he is widely admired in the public health community, some C.D.C. veterans began lobbying in recent weeks on behalf of the agency’s acting director, Dr. Richard E. Besser.

Dr. Besser has been the government’s chief scientific spokesman during the swine flu epidemic, winning rave reviews for his confident performance. He will return to his post as head of the agency’s coordinating office for terrorism preparedness and emergency response.

Dr. Frieden has won positive reviews himself for his televised swine flu updates, and he will take some of his own advantages to his new role, including his long and close relationship with Dr. Hamburg.

The two worked together for years in New York City and were critical players in an effective campaign to stop a growing epidemic of drug-resistant tuberculosis infections. Dr. Frieden and Dr. Hamburg will play important roles in how the government decides to fight swine flu next fall if the virus returns with a vengeance.

Their relationship will also be tested in the effort to improve the safety of the nation’s food supply, in which both agencies play crucial parts. Mr. Obama has made food safety a top health priority; a government working group that includes the food and drug agency, the Department of Agriculture and other agencies is already at work on the problem; and Congress has proposed a variety of legislative fixes.

Any changes are likely to affect the disease centers, which play a central role in monitoring and solving outbreaks of food-related illnesses.

Also facing Dr. Frieden will be a set of decisions about how to organize the agency. Dr. Julie L. Gerberding, who left in January as the agency’s director, undertook a reorganization that lasted years and has been widely criticized as overly bureaucratic and the cause of a raft of top staff departures. But still another administrative overhaul would create its own set of headaches.

“Morale is the weakest thing at the agency right now,” said Dr. James M. Hughes, former director of the C.D.C.’s National Center for Infectious Diseases. “He has to really listen to people, and I think there are too many bureaucratic layers.”

Like other federal agencies, the disease centers added thousands of contract employees during the Bush administration. Deciding which functions are best fulfilled by contractors and which should be brought back inside the agency is another delicate problem for Dr. Frieden.

“Health care reform also needs to be on his plate,” said Dr. Jeffrey P. Koplan, who served as the centers’ director from 1998 to 2002. “There is a huge opportunity there to improve public health, and it’s one in which any C.D.C. director will want to be a player.”

However he decides these questions, Dr. Frieden is bound to kick up controversy, say those who know him.

“I found he’s willing to challenge the status quo in an effort to make a difference,” said Dennis deLeon, president of the Latino Commission on AIDS in New York City.

Dr. Frieden has a history of focusing on health threats that endanger large numbers of people, sometimes at the expense of more popular causes. This put him in marked opposition to the Bush administration, which spent more than $50 billion on bioterrorism initiatives and paid far less attention to problems like smoking.

Dr. Alfred Sommer, emeritus dean of the Johns Hopkins Bloomberg School of Public Health, who was on the team that recommended Dr. Frieden as New York’s health chief in 2002, recalled interviewing him shortly after the Sept. 11 attacks. Dr. Frieden had flown to New York from India, where he was living and working on tuberculosis control.

Before he left India, he was asked about his top priority, Dr. Sommer said. “Oh, well, that’s easy, Al,” Dr. Sommer recalled him replying. “Tobacco. Tobacco is killing more people, and that’s my top priority.”

“Tom, I don’t disagree that tobacco is a real scourge, but have you heard of 9/11?” Dr. Sommer said he countered.

“Of course I know about that, but bioterrorists are not going to kill more New Yorkers than tobacco is,” Dr. Frieden said.

Obama taps McCarthy for EPA post 
DAY
By Judy Benson   
Published on 3/13/2009

State Department of Environmental Protection Commissioner Gina McCarthy, known for her accessible, pragmatic and plainspoken leadership in her four years heading the agency, has been nominated by President Barack Obama for a key post at the Environmental Protection Agency.

McCarthy, 54, has been chosen to be the assistant administrator for air and radiation at the EPA, a post in which she will oversee initiatives to reduce air pollution and combat climate change, among other areas. She was named late Thursday afternoon along with three other nominees for key administration posts.

During her time at the DEP, McCarthy launched initiatives such as “No Child Left Inside,” intended to encourage children and families to spend more time enjoying the outdoors; and those aimed at fostering better stewardship of the land, addressing climate change, and the role of individuals in environmental quality, among others. In a statement, said said she is honored to be nominated and “would be thrilled” to work for EPA Administrator Lisa Jackson.

”Much work needs to be done to address the nation's air pollution and climate change challenges and I would very much like to play a part in shaping these efforts,” she said. She also thanked Gov. M. Jodi Rell for choosing her to head the DEP and said efforts by the governor and DEP staff have “put Connecticut on the map as an environmental leader, pushing the envelope on so many issues of regional, national and international concern.”

A native of Massachusetts who maintains a home in Canton, Mass., and another in Hartford, McCarthy spent 25 years at various environmental posts in that state before coming to Connecticut to head the DEP. She and her husband have three children. During her time at the DEP, McCarthy was one of the state's most visible commissioners, attending many local and statewide events. Most recently, she attended an event in Stonington last month celebrating the addition of the Crowley family property to the Barn Island Wildlife Management Area.

DEP spokesman Dennis Schain said the timing of congressional confirmation hearings is not yet known. McCar-thy will remain as DEP commissioner until the confirmation and approval process is completed, he said.

The Obama administration has been in contact with McCarthy about the nomination “going back several weeks,” he said. She told DEP staff she was being considered for the EPA post several weeks ago.

During her career in Massachusetts, McCarthy worked for both Democratic and Republican administrations. Now, after four years in the Republican administration of Gov. M. Jodi Rell, McCarthy will work for a Democratic one.

Rell issued a statement late Thursday afternoon calling McCarthy “a public servant with tremendous talent and passion” who did “an outstanding job for the citizens of Connecticut.

”Her leadership on climate issues is nationally respected, so it comes as no surprise that the Obama administration would reach out to Commissioner McCarthy,” Rell said. “While we certainly would hate to lose her in Connecticut, it is reassuring to know she would be working to preserve and improve the environment for all Americans.” 


Former New York Health Commissioner Picked to Lead F.D.A.
NYTIMES
By GARDINER HARRIS
March 12, 2009

WASHINGTON — President Obama intends to nominate Dr. Margaret A. Hamburg, a former New York City health commissioner, to lead the Food and Drug Administration, sidestepping a battle between drug safety advocates and the drug industry, according to people briefed on the decision.

The administration is likely to announce the decision this week, these people said. Dr. Joshua Sharfstein, the health commissioner of Baltimore, who led the Obama administration’s transition team for the F.D.A., will become Dr. Hamburg’s chief deputy, these people said.

Dr. Hamburg, 53, succeeds Dr. Andrew C. von Eschenbach, who led the beleaguered agency from 2005 until last January and often had to deflect critics who accused the Bush administration of letting politics play too forceful a role in science policy.

Her selection, first reported Wednesday on the The Wall Street Journal’s Web site, was hailed by top public health officials and experts.

“Peggy has a deep commitment to the public health and, while she appreciates the vital role of industry, will surely focus on what is best for the public,” said Dr. Harvey V. Fineberg, president of the Institute of Medicine, the medical arm of the National Academy of Sciences.

Dr. Hamburg, who was appointed by Mayor David N. Dinkins as acting commissioner in 1991 and became commissioner the following year, was one of the few top officials asked to remain when Mayor Rudolph W. Giuliani took office in 1994. She was best known for developing a tuberculosis control program that produced sharp declines in the incidence of the disease in New York. Under her tenure, child immunization rates rose in the city.

She left New York in 1997 to become assistant secretary for planning and evaluation at the Department of Health and Human Services, where she created a bioterrorism initiative and led planning for pandemic flu response.

That background makes her a more obvious candidate to lead the Centers for Disease Control and Prevention than the F.D.A.

Indeed, the Obama administration considered experts more steeped in the kind of drug safety issues that the food and drug agency confronts daily, including Dr. Steven E. Nissen, a cardiologist from the Cleveland Clinic, and Dr. Robert M. Califf, a cardiologist from Duke University.

But Dr. Nissen and Dr. Califf would have been divisive candidates, with rival supporting camps. Dr. Hamburg’s selection avoids the usual debate between industry and consumer advocates.

“She has the personal skills to collaborate with the pharmaceutical industry and the science community in a way that isn’t confrontational,” said Dr. Georges C. Benjamin, executive director of the American Public Health Association.

Jeffrey Levi, executive director of Trust for America’s Health, a nonprofit public health organization, said Dr. Hamburg had revived a demoralized and cash-starved agency in New York and could do the same at the F.D.A., which faces similar problems.

“Right now,” he said, “the F.D.A. needs a strong leader with a clear sense of mission who can fight for the resources that the agency needs and do it in a bipartisan manner.”

Dr. Hamburg is the daughter of Dr. David A. Hamburg, a former president of the Institute of Medicine and a longtime force in public health. She has two teenage children and serves on the board of the Sidwell Friends School.

Mr. Dinkins recalled that Dr. Hamburg forced him to take a tuberculosis test after he spoke at a disaster scene with someone who later tested positive for the disease.

“She took care of me like a newborn,” he said. “She’s the kind of person you figure can do almost anything.”

Seattle Police Chief Selected as Drug Czar
NYTIMES
By David Stout
J. Scott Applewhite/Associated Press
March 11, 2009, 1:35 pm

Vice President Biden announced that Seattle Police Chief R. Gil Kerlikowske will head the Office of National Drug Control Policy.
R. Gil Kerlikowske, the police chief of Seattle, was chosen on Wednesday to be the White House “drug czar,” signaling a shift in emphasis from arrest and prosecution to intervention and treatment.

The selection of Mr. Kerlikowske, which had been expected, was announced by Vice President Joseph R. Biden Jr., who said Mr. Kerlikowske understands that “combating drugs requires a comprehensive approach that includes enforcement, prevention and treatment.”

If confirmed by the Senate, Mr. Kerlikowske, 59, will become director of the Office of National Drug Control Policy, as the drug czar is formally known. “The success of our efforts to reduce the flow of drugs is largely dependent on our ability to reduce demand for them,” Mr. Kerlikowske said in a ceremony at the Eisenhower Executive Office Building.

“Our nation’s drug problem is one of human suffering,” Mr. Kerlikowske said. “And as a police officer, but also in my own family, I have experienced the effects that drugs can have on our youth, our families and our communities.” Mr. Kerlikowske’s stepson, Jeffrey Kerlikowske, 39, has had several drug-related brushes with the law.

The nominee said that illicit drug use is “an incredibly complex problem,” requiring cooperation among prosecutors, treatment providers and others. “I am absolutely committed to this task,” he said.
Mr. Kerlikowske has been Seattle police chief since 2000. He was previously the police chief in Buffalo and in Fort Myers and Port St. Lucie in Florida.

“Gil Kerlikowske is the perfect person for this job,” John F. Timoney, the police chief of Miami and former first deputy commissioner in New York City, said in a statement released by the White House.

When John P. Walters was drug czar under President George W. Bush, the office focused on tough enforcement of drug laws and on the use of marijuana and other drugs by young people. While not against leniency for first-time drug users, Mr. Walters disdained what he called the “therapy-only lobby” in Washington, and said that prison sentences, combined with therapy, were crucial in reducing drug use.



Obama to Nominate Jon Leibowitz as FTC Chairman
NYTIMES
By THE ASSOCIATED PRESS
Filed at 2:34 p.m. ET
February 27, 2009

WASHINGTON (AP) -- President Barack Obama is choosing a member of the Federal Trade Commission to become its chairman.

The White House said Friday that Obama intends to nominate commissioner Jon Leibowitz to lead the agency.

Leibowitz is the only Democrat among the five commissioners responsible for policing the business industry for anticompetitive practices and enforcing consumer protection laws. A lawyer, Leibowitz became a commissioner in September 2004.

The commission currently has one vacancy.

Before joining the FTC, Leibowitz was vice president of congressional affairs for the Motion Picture Association of America.


US Officials: Clinton to Name Climate Change Envoy
NYTIMES
By THE ASSOCIATED PRESS
Filed at 10:12 a.m. ET
January 26, 2009

WASHINGTON (AP) -- U.S. officials say Secretary of State Hillary Rodham Clinton plans to name a special envoy for climate change.

Clinton has picked Todd Stern, a former White House assistant who was the chief U.S. negotiator at the Kyoto Protocol talks in her husband's administration, the officials said Monday. They spoke on condition of anonymity ahead of a planned midday State Department ceremony where Clinton will announce the appointment.

Stern served in the Clinton administration from 1993 to 2001, first in the White House, where he worked on the Kyoto Protocol and coordinated the president's Initiative on Global Climate Change and then at Treasury, where he was a senior adviser to the secretary.

Source: Obama to Name Sunstein His Regulatory Czar
NYTIMES
By THE ASSOCIATED PRESS
Filed at 9:59 p.m. ET
January 16, 2009

WASHINGTON (AP) -- President-elect Barack Obama has tapped legal scholar Cass Sunstein as his administration's regulatory czar, a Democratic source said Friday.

Obama hired the Harvard law professor to run the White House's Office of Information and Regulatory Affairs, the administration's central approver of rules that has say over environmental policy, workplace safety issues and federal health care policies. All major agencies' rules will pass across Sunstein's desk, giving him great influence in the new administration.

His appointment was disclosed by a Democratic source who spoke on the condition of anonymnity to discuss personnel decisions.

Sunstein's office would be the main place Obama's new administration would look to reverse executive orders issued by President George W. Bush, who leaves office Tuesday. Obama aides and advisers have their eyes on Bush's policies on stem cell research and reproductive rights, but advisers have combed Bush's record and found more than 200 rules they would like to see reversed.

Independent and advocacy groups have been lobbying Obama aides aggressively to move quickly on the policies, perhaps as early as his first full day in office, Jan. 21.

Sunstein could be the face of that effort. He's a much-quoted expert on regulation and has testified about Supreme Court nominees; Harvard touted him as the most cited law professor in the country when officials hired him last year.

Harvard Law Dean Elena Kagan -- who is set to become Obama's solicitor general -- called him the ''pre-eminent legal scholar of our time'' and an ''individual superstar'' in her February 2008 announcement that he would join the faculty. Aside from a short stint at the Justice Department, he has never worked in government.

Sunstein previously taught at the University of Chicago, where Obama also taught law part time.

He is married to Samantha Power, a Pulitzer Prize-winning foreign policy adviser who was forced to resign from the campaign when she called Hillary Rodham Clinton, who was then an Obama rival, ''a monster.'' Power has since rejoined Obama's circle, helping his transition team assess the State Department that Clinton would lead as secretary.

Sunstein earned two degrees from Harvard and clerked for Supreme Court Justice Thurgood Marshall. He also advised constitution writers in Poland, South Africa and Russia.



Obama to Tap Tech Adviser as FCC Chief Article
By AMY SCHATZ and LAURA MECKLER
JANUARY 13, 2009

WASHINGTON -- President-elect Barack Obama intends to nominate his technology adviser, Julius Genachowski, to head the Federal Communications Commission, a Democratic source close to the Obama transition team said.

Mr. Genachowski, 46 years old, is a former Harvard Law School classmate of Mr. Obama. He previously worked at the FCC during the Clinton administration. More recently, he co-founded LaunchBox Digital, a Washington, D.C.-based venture capital firm. He worked at Barry Diller's IAC/InterActive Corp. in various executive positions for eight years after leaving the FCC.

Mr. Genachowski couldn't be reached for comment. A spokeswoman for the Obama transition team declined to comment.

During the campaign, Mr. Genachowski served as the top technology adviser to Mr. Obama, putting together a detailed technology and innovation plan that expressed support for open Internet or "net neutrality" protections; media-ownership rules that encourage more diversity; and expansion of affordable broadband access across the country.

Obama's Advisers

See who else is expected to join the administration.

An early supporter of the president-elect, Mr. Genachowski also served as a bundler for the campaign, raising more than $500,000 in donations.

If confirmed, Mr. Genachowski will take over an agency that has had rocky relations with Congress and major companies in the telecommunications industry under current FCC Chairman Kevin Martin. The agency may also still be coping with the U.S.'s transition to digital-only television, which is scheduled to take place Feb. 17 but could be pushed back to the summer.

While at IAC, Mr. Genachowski served several roles at the media and e-commerce conglomerate, first as general counsel and later as head of business development and part of the top core of executives.

—Shira Ovide contributed to this article.
Obama confuses Harvard lawyer for tech guy
By Paul Boutin, 5:00 PM on Thu Nov 6 2008, 6,099 views

I'm from MIT, so I'm hardwired to hate on Harvard Law grad Julius Genachowski, the so-called technology guy newly named to our Internet President's transition team. His company, LaunchBox, helps Web and mobile entrepreneurs pitch their ideas to get seed funding. That makes him a Paul Graham wannabe to me. He spent eight years working for Barry Diller at IAC as general counsel. Is that a plus or a minus?

To be fair, Genachowski is said to be a clear thinker, and he hasn't yet locked up Barry O's slot for America's CTO. Insider gossip says he's eyeing the FCC instead, where he previously served under Reed Hundt. Fine with me — Genachowski is a lawyer who I'm sure can grasp net neutrality. But if this turns out to be Obama's idea of a technologist, I'm going home to cling bitterly to my guns and religion.
Obama to Select Genachowski to Lead F.C.C.
NYTIMES
By Stephen Labaton
January 13, 2009, 8:59 am

President-elect Barack Obama intends to nominate Julius Genachowski , an adviser on technology issues and longtime friend, to become the next chairman of the Federal Communications Commission, advisers to Mr. Obama said.

Mr. Genachowski, 46, was a major fund-raiser for the Obama campaign who also played a leading role in the campaign’s highly successful online strategy. He remains very close to Mr. Obama—both men went to Columbia College and Harvard Law School and the two served together on the Harvard Law Review. They also were basketball buddies.

During the campaign, Mr. Genachowski shaped many of Mr. Obama’s telecom policies. He advocated an open Internet in the debate over so-called “net neutrality,’’ and media-ownership rules that promote a diversity of voices on the airwaves.

People involved in the transition said that Mr. Genachowski was a top candidate for both the chairmanship and a new White House position overseeing technology issues that has not been fully defined yet.

If confirmed, one of his first challenges at the commission will be what to do about the problems plaguing the conversion to digital television. The Obama transition team has asked Congress to delay the conversion, set for Feb. 17, because millions of viewers have been unable to obtain coupons to pay for converter boxes that would enable their sets to receive signals once all broadcasters lose their analog signal. (The conversion will not affect viewers who subscribe to cable or satellite television services.)

The chairmanship of the F.C.C. has played a more expansive role in regulating the economy, particularly with the rise of the Internet and wireless communications over the last 20 years. Now, as the new administration plans to make the expansion of broadband and Internet services a significant part of its stimulus package, Mr. Genachowski, with his close ties to Mr. Obama, could wind up with an even bigger role than his predecessors in shaping economic policy.

After graduating from law school, Mr. Genachowski clerked for federal appeals court judge Abner J. Mikva after Mr. Obama turned down the same job. Mr. Genachowski then clerked for Supreme Court Justice David H. Souter. He was chief counsel to Reed Hundt, a chairman of the Federal Communications Commission, during the Clinton administration. He then worked for eight years as a senior executive at Barry Diller’s IAC/Interactive Corporation. He also founded an investment and advisory firm for digital media companies and co-founded the country’s first commercial “green’’ bank.

Panetta to Be Named C.I.A. Director
NYTIMES
By Carl Hulse AND Mark Mazzetti
January 5, 2009, 2:30 pm

Leon E. Panetta, the former congressman and White House chief of staff. (Kevin Wolf/Associated Press)President-elect Barack Obama has selected Leon E. Panetta, the former congressman and White House chief of staff, to take over the Central Intelligence Agency, an organization that Mr. Obama criticized during the campaign for using interrogation methods he decried as torture, Democratic officials said Monday.

Mr. Panetta has a reputation in Washington as a competent manager with strong background in budget issues, but has little hands-on intelligence experience. If confirmed by the Senate, he will take control of the agency most directly responsible for hunting senior Al Qaeda leaders around the globe, but one that has been buffeted since the Sept. 11 attacks by leadership changes and morale problems.  Given his background, Mr. Panetta is a somewhat unusual choice to lead the C.I.A., an agency that has been unwelcoming to previous directors perceived as outsiders, such as Stansfield M. Turner and John M. Deutch. But his selection points up the difficulty Mr. Obama had in finding a C.I.A. director with no connection to controversial counterterrorism programs of the Bush era...full story here.

See Jane’s Big Carbon Footprint:  Before they boss us around, shouldn’t Obama’s science team act like they believe in global warming?
National Review
By David Freddoso
December 22, 2008, 7:00 a.m.

What’s your carbon footprint? Next year, it will probably be much smaller than that of Jane Lubchenco. The renowned climate-change crusader and professor of marine biology is Obama’s choice for administrator of the National Oceanic and Atmospheric Administration (NOAA).

National Review Online has obtained an e-mail from Lubchenco’s husband, Oregon State University professor Bruce Menge, suggesting that the couple will contribute mightily to global warming next year after she takes the job by making frequent cross-country plane trips.

In the e-mail, Menge is enthusiastic about the appointment, but he also mentions the “the hardships it will impose on us and our academic family.” Their solution? “The plan is for her to be in WDC and me to remain in Oregon at OSU, with frequent weekend trips back and forth,” Menge writes. For the record: A single roundtrip between Portland, Ore., and Washington, D.C., emits just under a ton of carbon, and a bit more than a ton if there is a layover in between. The roundtrip from the university to the airport is another 185 miles by car.

One could end there by acknowledging how understandable this is — after all, conservatives are not the only ones who place greater stock in familial bliss and human comfort than in fears of climate change and the alleged havoc it will wreak. Even a liberal marine biologist who has written extensively on the effect of global warming on marine life is not willing to let such truths inconvenience or harm her family.

But Menge also writes of the appointment that “this opportunity could have major positive impacts on fisheries management, marine reserves, and PISCO’s future among many other things.” PISCO is the Partnership for Interdisciplinary Studies of Coastal Oceans, the very research program under which Menge and Lubchenco currently work as principal investigators at Oregon State University.

Most of PISCO’s funding is private, but some of it comes from NOAA, according to the project’s website, suggesting that Menge is correct. Even if it is all in the interest of science, it is a valid question whether it would be right for a NOAA administrator to use her government position to advance her husband’s academic research. It is a question Lubchenco may face before she takes that carbon-heavy flight to Washington for her confirmation hearing.
4 Top Science Advisers Are Named by Obama
NYTIMES
By GARDINER HARRIS
December 21, 2008

WASHINGTON — In his selection of four top scientific advisers, President-elect Barack Obama has signaled what are likely to be significant changes in policies governing global warming, ocean protections and stem cell research.

“It’s time we once again put science at the top of our agenda and worked to restore America’s place as the world leader in science and technology,” Mr. Obama said in a radio address on Saturday, when he announced the appointments.

John P. Holdren, a physicist and environmental policy professor at Harvard, will serve as the president’s science adviser as director of the White House Office of Science and Technology. Jane Lubchenco, a marine biologist from Oregon State University, will lead the National Oceanic and Atmospheric Administration, which overseas ocean and atmospheric studies and performs much of the government’s research on global warming.

Dr. Holdren will also be a co-chairman the President’s Council of Advisers on Science and Technology along with the Nobel Prize-winning cancer research Dr. Harold Varmus, a former director of the National Institutes of Health, and Eric S. Lander, a genomic researcher.

“Whether it’s the science to slow global warming; the technology to protect our troops and confront bioterror and weapons of mass destruction; the research to find life-saving cures; or the innovations to remake our industries and create 21st century jobs — today more than ever, science holds the key to our survival as a planet and our security and prosperity as a nation,” Mr. Obama said.

Like Steven Chu, the energy secretary-designate, Drs. Holdren and Lubchenco advocate mandatory limits on greenhouse gas emissions, which the Bush administration opposed. Both served as president of the American Association for the Advancement of Science. Dr. Holdren said last year that the world needed to undertake “a massive effort to slow the pace of global climatic disruption before intolerable consequences become inevitable.”

Dr. Lubchenco has documented enormous dead zones in oceans that have resulted from climate change and has advocated placing vast ocean areas off-limits to fishing and mineral exploitation. In an e-mail message on Saturday, she wrote: “NOAA will play a central role in addressing pressing challenges of our time — stabilizing the climate, restoring ocean health and coastal vitality. Jobs and a healthy environment go hand in hand — and both are enabled by good science.”

Dr. Varmus is president of Memorial Sloan-Kettering Cancer Center in New York. Dr. Lander is a professor of biology at M.I.T. and helped lead the effort to sequence the human genome.

Obama Appoints Climate Change Experts
NYTIMES
By THE ASSOCIATED PRESS
Filed at 8:02 a.m. ET
December 20, 2008

WASHINGTON (AP) -- President-elect Barack Obama on Saturday named Harvard physicist John Holdren and marine biologist Jane Lubchenco to top science posts, signaling a change from Bush administration policies on global warming that were criticized for putting politics over science.

Both Holdren and Lubchenco are leading experts on climate change who have advocated forceful government response. Holdren will become Obama's science adviser as director of the White House Office of Science and Technology Policy; Lubchenco will lead the National Oceanic and Atmospheric Administration, which oversees ocean and atmospheric studies and does much of the government's research on global warming.

Holdren also will direct the president's Council of Advisers on Science and Technology. Joining him as co-chairs will be Nobel Prize-winning scientist Harold Varmus, a former director of the National Institutes of Health, and Massachusetts Institute of Technology professor Eric Lander, a specialist in human genome research.

''From landing on the moon, to sequencing the human genome, to inventing the Internet, America has been the first to cross that new frontier because we had leaders who paved the way,'' Obama said in announcing his selections in his weekly radio address. ''Leaders who not only invested in our scientists, but who respected the integrity of the scientific process.''

''Because the truth is that promoting science isn't just about providing resources -- it's about protecting free and open inquiry. It's about ensuring that facts and evidence are never twisted or obscured by politics or ideology,'' he said. ''I could not have a better team to guide me in this work.''

In their posts, the four scientists will confront challenges in global warming after years of inaction by the Bush administration, which opposed mandatory cuts of greenhouse gas pollution. Last year, former Surgeon General Richard Carmona testified to Congress that top Bush administration officials often dismissed global warming as a ''liberal cause'' and sought to play down public health reports out of political considerations.

Since 1993, summer Arctic sea ice has lost the equivalent of Alaska, California and Texas, and global warming is accelerating. The amount of carbon dioxide in Earth's atmosphere has already pushed past the level some scientists say is safe.

Holdren, 64, is a former president of the American Association for the Advancement of Science in Washington who has pushed for more urgent action on global warming. As Obama's top science adviser, he would manage about 40 Ph.D-level experts who help shape and communicate science and technology policy.

Colleagues say the post is well-suited for Holdren, who at Harvard went from battling the spread of nuclear weapons to tackling the threat of global warming. He's an award-laden scientist comfortable in many different fields.

''Global warming is a misnomer. It implies something gradual, something uniform, something quite possibly benign, and what we're experiencing is none of those,'' Holdren said a year ago in a speech at Harvard. ''There is already widespread harm ... occurring from climate change. This is not just a problem for our children and our grandchildren.''

Lubchenco, an Oregon State University professor specializing in overfishing and climate change, will be the first woman to head NOAA. A member of the Pew Oceans Commission, Lubchenco has recommended steps to overcome crippling damage to the world's oceans from overfishing and pollution and has expressed optimism for change once President George W. Bush leaves office.

''The Bush administration has not been respectful of the science,'' she said earlier this year. ''But I think that's not true of Republicans in general. I know it's not. I am very much looking forward to a new administration that does respect scientific information and that considers it very seriously in making environmental policies.''

Varmus, who was a co-recipient of the Nobel Prize for his research on the causes of cancer, served as National Institutes of Health director during the Clinton administration. A former medical professor at the University of California, San Francisco, he helped found the Ralph Lauren Center for Cancer Care and Prevention and chairs a scientific board at the Bill and Melinda Gates Foundation.

Lander, who teaches at both MIT and Harvard, founded the Whitehead Institute-MIT Center for Genome Research in 1990, which became part of the Broad Institute in 2003. A leading researcher in the Human Genome Project, he and his colleagues are using the findings to explore the molecular mechanisms behind human disease.

In his radio address, Obama said he planned early next year to more closely address the issue of engaging the nation's technology community to ''harness technology and innovation to create jobs, enhance America's competitiveness and advance our national priorities.''

''It's time we once again put science at the top of our agenda and worked to restore America's place as the world leader in science and technology,'' he said.
Obama's Cabinet Lineup Is Set; White House advisers may see enhanced role 
DAY
By New York Times News Service    
Published on 12/20/2008 
 
Washington - President-elect Barack Obama finished building a Cabinet of prominent and strong-willed players on Friday, but he is putting together a governing structure that will concentrate more decision-making over his top domestic priorities in the White House.

With new offices in the White House to coordinate health care, urban policy and energy initiatives, Obama has signaled that he intends to keep real power over domestic issues close at hand. The collective moves shift the political center of gravity farther away from the Cabinet, a trend that has accelerated under presidents of both parties.

At the same time, Obama's reorganization suggests a willingness to tolerate, and even encourage, competing power centers within his administration, but it is unclear how that will work in practice. Not only is he creating new positions with authority over key areas, he is filling his West Wing with people of stature equal to or even greater than the members of his Cabinet, including two former Cabinet officers and a former Senate majority leader.

David Axelrod, Obama's senior adviser, said issues like health care and energy “are so fundamental to our ability to right the economy in the long term that he knows he's going to have to drive a lot of that,” adding, “and he wants a high-powered staff in the White House to help him do that.”

While there may be some push-and-pull between the White House and Cabinet departments, Axelrod said the president-elect had emphasized during job interviews his insistence on cohesion. “He encourages debate,” Axelrod said. “He doesn't tolerate factionalism.”

The revamped arrangement indicates a shift in priorities away from those of President Bush, who spent much of his tenure fashioning a new national security apparatus in a time of war and terrorist threats. Obama's transition team is even considering undoing some of what Bush built in terms of security structures in the White House.

Obama completed his Cabinet choices on Friday before heading off for nearly two weeks of vacation in Hawaii, where he grew up. At a news conference in Chicago, he confirmed he would nominate Rep. Hilda L. Solis of California as labor secretary, Rep. Ray LaHood of Illinois as transportation secretary and former Mayor Ron Kirk of Dallas as U.S. trade representative.

He also announced that he would make Karen Mills, a venture capitalist from Maine, the head of the Small Business Administration.

With that, Obama has finished selecting his core team faster than any president-elect in decades. In trying to balance various constituencies and backgrounds, he assembled a 15-member Cabinet that includes six current or former members of Congress, three current or former governors and two Republicans.



SEC boss: Agency examining companies
By MARCY GORDON, AP Business Writer Marcy Gordon, Ap Business Writer 33 mins ago

WASHINGTON – The head of the Securities and Exchange Commission confirmed Wednesday the agency is investigating several companies' actions in the run-up to the financial crisis of 2008.

SEC Chairman Mary Schapiro said "it would be safe to assume" that the agency is looking very closely at the conduct of a number of firms during this time. She did not name the companies.

Schapiro spoke in testimony to a House Appropriations subcommittee weighing the agency's request for about $1.3 billion for the budget year starting Oct. 1, a 12 percent increase from the current year.

Lawmakers want to know if the sort of accounting gimmick recently uncovered that was used by the collapsed investment firm Lehman Brothers to mask billions in debt was widely deployed on Wall Street.

The SEC's review of the Lehman Brothers disaster "has taken us down a path where we're looking broadly," Schapiro told reporters following her testimony.

The implosion of Lehman Brothers Holdings Inc. into the biggest bankruptcy in U.S. history in September 2008 precipitated the financial meltdown that plunged the economy into the most severe recession since the 1930s.

After saddling itself with tens of billions of troubled assets that couldn't easily be sold, Lehman masked $50 billion in debt and its perilous financial condition by using the so-called Repo 105 accounting gimmick, an examiner appointed by the bankruptcy court found in an extensive report issued last week.

"This cannot be tolerated again," said Rep. Jose Serrano, D-N.Y., chairman of the appropriations panel.

The Lehman collapse "could be an even greater tragedy" than the multibillion-dollar swindle by money manager Bernard Madoff, Serrano suggested, because it ignited a chain of events that threw millions of Americans out of work and brought hardship.

Questions have been raised about the supervision of Lehman by the SEC and the Federal Reserve in the months before its collapse.

"The culture of the agency is changing. It doesn't happen overnight," Schapiro told the lawmakers.

In the meltdown's wake, the SEC and the Justice Department launched wide-ranging investigations of companies across the financial services industry, believed to include insurer American International Group Inc. and mortgage giants Fannie Mae and Freddie Mac as well as Lehman. A year and a half after the financial crisis struck, charges haven't yet come in most of the probes.

The autopsy of Lehman issued last week by bankruptcy examiner Anton Valukas could serve as a valuable road map to the two agencies in their investigations, experts say.

Schapiro said Wednesday the report raised "some very interesting points" and would be "helpful."

SEC reins in short sellers with new restrictions
YAHOO
By Rachelle Younglai
Feb. 25, 2010

WASHINGTON (Reuters) – U.S. securities regulators adopted a new rule to restrict short selling more than a year after the financial crisis provoked cries to rein in investors who bet on a stock's decline.

The Securities and Exchange Commission voted 3-2 on Wednesday to approve a rule designed to put the brakes on a stock that is falling precipitously.  The new rule attempts to bridge the divide between those who argued a market-wide curb was needed to protect stocks from short sellers and others who said that restrictions would hurt market liquidity.

"The commission was cognizant of the benefits that short selling can provide to the markets," SEC Chairman Mary Schapiro said at a public agency meeting.

However, Schapiro said the SEC was also concerned that excessive downward pressure, accompanied by fear of unconstrained short selling, can destabilize markets and undermine investor confidence.  The SEC's actions drew a quick rebuke from famed short seller James Chanos, who said the new rule will harm investors' interests through higher transaction costs and missed opportunities.  Under the SEC's rule, if a stock fell by more than 10 percent in a day, a curb would kick in, allowing short selling only above the national best bid.

That restriction would last for the day the stock dropped and the day after.

Short-sellers bet on a stock's decline. In a short-sale, an investor borrows stock and sells it in the hope that its price will drop. When it does, the seller profits by buying back the stock at the lower price and returning the borrowed shares.

REPUBLICANS DISSENT

During the worst of the financial crisis, lawmakers and companies begged the SEC to clamp down on the short-sellers and said the uptick rule should be reinstated.

First adopted after the 1929 market crash, the uptick rule allowed shorting only if the last sale price was higher than the previous price. But the SEC abolished it in 2007 after concluding that it was no longer effective in modern markets.

The two Republican commissioners, Kathleen Casey and Troy Paredes, dissented and said there was no firm foundation for adopting the new short sale rule.  Paredes said there was no way to know whether implementation of the rule would boost investor confidence. "Human psychology is difficult to predict," he said.

Casey suggested that those who have been clamoring for the old uptick rule will not be satisfied until the SEC reinstated the Depression-era rule.  Casey and Paredes both raised concerns over potential compliance costs that are estimated to be in the billions of dollars. Paredes questioned the logic behind the 10 percent threshold and said there was no empirical data or analysis to support this.

The new SEC rule goes into effect 60 days after it is published in the government's official federal register. The market will then have six months to comply with requirements.
SEC Chief Backs 'Systemic Risk Council' Idea
NYTIMES
By THE ASSOCIATED PRESS
Filed at 9:23 a.m. ET
May 8, 2009

WASHINGTON (AP) -- The head of the Securities and Exchange Commission favors a new proposal for federal regulators sharing oversight of companies that pose financial risks to the economy.

SEC Chairman Mary Schapiro said she's ''inclined toward'' the idea floated this week by the head of the Federal Deposit Insurance Corp. for a new ''systemic risk council'' to monitor large institutions against financial threats. The council would include the Treasury Department, Federal Reserve, FDIC and SEC.

Congress is working to craft an overhaul of U.S. financial rules to prevent a repeat of the crisis that plunged markets worldwide into distress.

Speaking to the Investment Company Institute, the mutual fund industry's biggest trade group, Schapiro says she is concerned about an ''excessive concentration of power'' over financial risk in a single agency.
SEC Chief Says New Short-Selling Rules a Priority
By THE ASSOCIATED PRESS
Filed at 11:32 a.m. ET
May 5, 2009

WASHINGTON (AP) -- The head of the Securities and Exchange Commission said Tuesday she is making the issue of new rules restricting short-selling a priority as the agency hears from an array of interests about ways to limit trades that bet against a stock.

Investors and lawmakers have been clamoring for the SEC to put new brakes on trading moves they say worsened the market's downturn.

''I have made it a priority to evaluate the issue of short-selling regulation, and ensure that any future policies in this area are the result of a deliberate and thoughtful process,'' SEC Chairman Mary Schapiro said at the start of a public ''round-table'' meeting organized by the agency.

Schapiro has said the SEC must evaluate the costs and benefits of new restrictions.

Representatives of companies including General Electric Co., Credit Suisse, JPMorgan Chase & Co., Charles Schwab Corp. and Fidelity Investments, as well as the New York Stock Exchange, the Nasdaq Stock Market and several universities are participating in the forum.

One option the SEC has advanced is restoring a Depression-era rule that prohibits short sellers from making their trades until a stock ticks at least one penny above its previous trading price. The goal of the so-called uptick rule is to prevent selling sprees that feed upon themselves -- actions that battered the stocks of banks and other companies over the last year.

Another approach would ban short-selling for the rest of the trading session in a stock that declines by 10 percent or more.

Schapiro and the other four SEC commissioners voted unanimously last month to put forward five alternative short-selling plans. They could settle on one and formally approve it sometime after the 60-day public comment period that began in early April.

Short-selling involves borrowing a company's shares, selling them, then buying them back when the stock falls and returning them to the lender. The short seller pockets the difference in price.

Many financial and some other company stocks were targeted by short sellers in the market turmoil that began in mid-2008. GE was among 870 U.S. companies, mostly financial institutions, whose stock was subject to an unprecedented ban against all short-selling put in effect by the SEC last fall. The ban remained in place for several weeks until Congress enacted the $700 billion financial bailout plan.

Short-selling is legal and widely used on Wall Street. But as the market has plunged, investors and lawmakers have pressed the SEC to reinstate the uptick rule. They say its absence since mid-2007 fanned market volatility, prompting bands of hedge funds and other investors to target weak companies with an avalanche of short-selling.

Although many in the public blame short-selling for enflaming market volatility over the past 18 months, Schapiro has noted there is no ''specific empirical evidence'' that the absence of the uptick rule fueled it. Schapiro has acknowledged the SEC's difficult task in striking a balance between stemming market abuses to bolster investors' confidence and stifling the legitimate benefits of short-selling.

Proponents of short-selling say it can make markets more efficient, bring in more capital and raise warning signs about weak or badly managed companies. Professional short sellers and some analysts also have warned that restricting short-selling could distort edgy markets.

But companies and regulators maintain that the practice widened the scope of the financial crisis and contributed to the collapse in value last fall of many bank stocks and the demise of Lehman Brothers.

Another option floated by the SEC, is a ''circuit breaker'' for stock prices. That approach, in three variations, either bans short-selling outright for the rest of the trading session in a stock that declines 10 percent or more, or restricts short-selling of the stock for the rest of the session based on its previous sale price or highest bid.

The fifth alternative, known as an upbid rule, would allow short sellers to come in only at a price above the highest current bid for the stock.

SEC Chief Speeding Penalty Process for Violations
By THE ASSOCIATED PRESS
Filed at 1:12 p.m. ET
February 6, 2009

WASHINGTON (AP) -- The new head of the Securities and Exchange Commission is ending a practice that she said had slowed the agency's enforcement efforts against corporate wrongdoing.

In her first public address as SEC chairman, Mary Schapiro said Friday that she was ending a two-year policy requiring agency enforcement attorneys to get approval from the commissioners before negotiating fines and penalties with companies accused of violations.

That practice ''just sends the wrong message'' and has caused delays, Schapiro said. It is among the steps she said she is taking to revitalize the SEC's enforcement efforts and bolster investor protection.

But the private sector also has to do its part to help restore investor confidence, she told a gathering of securities lawyers and SEC staff members.

''There needs to be a new era of responsibility on Wall Street and throughout our markets to ensure that wrongs don't occur in the first place,'' Schapiro said. ''The sooner that Wall Street works to repair its own problems, the sooner investors will once again find the confidence to invest in what should be the finest markets in the world.''

Schapiro, named by President Barack Obama in December to head the SEC, took the agency's helm at a time when it is being called on to help restore investor confidence shattered by the worst financial crisis in more than 70 years. The SEC has faced heavy and unrelenting criticism over its failure to discover the $50 billion Ponzi scheme allegedly run by money manager Bernard Madoff -- despite credible allegations against him being brought to the agency over the course of a decade.

Five high-ranking SEC officials, including the agency's enforcement director Linda Thomsen, received a tongue-lashing from lawmakers this week who accused them of impeding their inquiry into the SEC's breakdown over the Madoff affair.

It was a far friendlier reception Friday for officials such as Thomsen, who cited a list of recent high-profile enforcement cases by the agency.

Schapiro's announcement that the more formal approval process for penalties is being shelved drew applause from the audience. She outlined other steps to speed enforcement efforts at the agency. Those include changes to the process for issuing subpoenas in investigations, and improvements in the handling of tips and whistleblower complaints regarding fraudulent activity.

''Anything you do to quicken the process should be good for investors,'' Larry Ellsworth, an attorney at Jenner & Block who formerly worked in the SEC's enforcement trial division, said during a break in the conference.

Schapiro also said she will work to improve the effectiveness of the SEC's process for inspecting brokerage and investment firms.

The agency likely will take further action to address the conflicts of interest among the big credit-rating agencies and to give shareholders a greater say in who sits on company boards. A new investor advisory committee will be formed to gather views from parties outside the traditional power corridors of Wall Street and Washington, Schapiro said.

Asked about speculation that current rules requiring banks to mark down assets could be suspended as a form of relief in the financial crisis, Schapiro noted the SEC had recently recommended the so-called ''mark-to-market'' accounting requirements be retained with only possible revisions ''around the margins.''

The accounting standard requires banks to carry assets, such as mortgage-backed securities, on their books at how they are valued currently. Critics contend that has made the financial crisis worse by forcing banks to slash the value of assets depressed because of market conditions.

Schapiro announced separately Friday that David Becker, who had been the SEC's general counsel from 2000 to mid-2002, is returning to the agency in that position and as senior policy director. Becker has been in private law practice.

Regulators on defensive over Madoff 
DAY
By MARCY GORDON, AP Business Writer 
Posted on Jan 27, 4:39 PM EST

WASHINGTON (AP) -- Government and industry regulators were put sharply on the defensive Tuesday at a Senate hearing over their failure to uncover the more than a decade-long, multibillion-dollar fraud scheme allegedly carried out under their noses by Bernard Madoff.

With charities and residents in their states ruined by losses from Madoff, members of the Senate Banking Committee demanded answers and accountability. They were scarcely satisfied with explanations given by two high-ranking officials of the Securities and Exchange Commission and the interim CEO of the securities industry's self-policing organization.

And they said the Madoff affair clearly showed the need for an overhaul of the patchwork system governing regulation of the financial markets - something the new Congress appears to be moving toward.

"Madoff's fraud was so immense and obvious, and took place over such a long period of time, it is simply inexplicable how the SEC missed it," declared Sen. Charles Schumer, D-N.Y. "It's as if there was a giant elephant standing next to the SEC in a rather small room for 25 years, and the SEC never noticed the elephant or even the smell of peanuts on its breath."

Schumer wants the SEC to get more funding from Congress to hire 100 new enforcement staff members and to move its inspections office from Washington headquarters to Wall Street.

The Banking Committee chairman, Sen. Christopher Dodd, D-Conn., demanded of SEC Enforcement Director Linda Thomsen and the other regulators, "What's happened here?"

"We want some action very quickly in this area," Dodd told them, saying he spoke for the whole committee. He asked the regulators to report to the committee every three months on progress they were making in improving their processes for detecting fraud.

Thomsen said the SEC is committed to finding ways to bolster fraud detection after its breakdown in the Madoff case. While the agency needs to improve its internal processes for pursuing cases, she said the SEC also needs authority to regulate parts of the financial system that escape oversight and more funding to carry out more investigations.

"... If we had more resources, we could clearly do more," Thomsen testified.

Thomsen faced grilling along with Lori Richards, who heads the SEC's inspections division, and Stephen Luparello, the interim chief executive of the Financial Industry Regulatory Authority. FINRA, the industry regulator, was headed until last month by Mary Schapiro, President Barack Obama's new SEC chairman.

Luparello was quick to say that Madoff carried out the scheme through his investment business and FINRA, the industry regulator, was empowered to inspect only the brokerage operation. He also said the SEC didn't share with FINRA the tips it received from outsiders on Madoff's operation.

The hearing provided a fresh volley of criticism of the SEC over its failure to discover the $50 billion Ponzi scheme allegedly run by Madoff, the prominent Wall Street figure and money manager now fallen into disgrace - despite credible allegations against him that were brought to the agency over the course of a decade. Against the backdrop of the worst financial crisis since the 1930s, the SEC also is accused of contributing to that disaster with lax oversight of Wall Street and the markets.

Shortly before senators began questioning the regulators on Capitol Hill, Schapiro was sworn in at SEC headquarters. She pledged commitment "to reinvigorating a financial regulatory system that must protect investors and vigorously enforce the rules."

"We will work to deepen the SEC's commitment to transparency, accountability and disclosure while always keeping the needs and concerns of investors front and center," Schapiro said.

Christopher Cox, then the SEC chairman, last month pinned the blame on the agency's career staff for the failure since at least 1999 to detect what Madoff was doing. He ordered the SEC's inspector general, H. David Kotz, to determine what went wrong. Kotz told a House hearing recently that he was expanding the inquiry to examine the operations of the divisions led by Thomsen, who has been the enforcement chief since mid-2005, and Richards, who has held that position since mid-1995.

Kotz has also been examining the relationship between a former SEC attorney, Eric Swanson, and Madoff's niece, Shana, who are now married. As an SEC attorney, Swanson was part of a team that examined Madoff's brokerage operation in 1999 and 2004. Neither review resulted in any action against Madoff, a former chairman of the Nasdaq Stock Market who was a member of SEC advisory committees.

Lawmakers say Madoff's alleged fraud, which caused massive damage to investors large and small around the world and may be the largest pyramid scam in history, reflects deep, systemic problems at the SEC.

Six weeks after Madoff's arrest in New York, thousands of victims who lost money investing with him have been identified - including ordinary people and Hollywood celebrities - as well as big hedge funds, international banks and charities in the U.S., Europe and Asia.
S.E.C. Choice Is Sued Over a Merger of Regulators
NYTIMES
By STEPHEN LABATON
January 12, 2009

WASHINGTON — Mary L. Schapiro, who appears this week at a confirmation hearing on her selection 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 that resulted in a 57 percent raise in her pay.

The merger involved the regulatory units of the New York Stock Exchange and the NASD two years ago. Ms. Schapiro was then head of the NASD, and she spent months traveling the country to persuade its 5,100 members to support it. The merger created a new self-regulatory organization, the Financial Industry Regulatory Authority, or Finra, where Ms. Schapiro is the chief executive. The Securities and Exchange Commission relies on Finra to police Wall Street.

Among the misstatements that she is accused of making is that the Internal Revenue Service had prohibited the NASD from paying each member more than $35,000 as part of the merger deal. Although an NASD proxy statement issued while the deal was pending said that the I.R.S. would not permit the organization to give more compensation to members, the I.R.S. did not actually issue a ruling on the matter until March 2007, long after the deal closed and three months after the members voted to approve it.

Lawyers representing Ms. Schapiro, Finra and other senior executives have fought vigorously to keep the I.R.S. ruling — and court references to details of that ruling — under seal. Last January, a federal judge in New York denied a request by The New York Times to unseal the ruling and other documents in the case.

Ms. Schapiro’s lawyer has denied the lawsuits’ allegations and, in a recent interview said that the second suit, filed shortly after her selection, is an opportunistic effort to pressure the defendants to settle. The first, dismissed by a federal district judge in New York, is on appeal.

At the S.E.C., Ms. Schapiro would be leading a government regulator that has been battered by setbacks, including its failure to uncover the apparent long-running fraud at Bernard L. Madoff Investment Securities. A recent report by the S.E.C.’s own inspector general said the agency had failed to adequately police the markets and regulate Wall Street’s largest investment banks. Congressional critics have said that the S.E.C.’s shortcomings contributed to the financial crisis.

The strongest proponents of the merger that created Finra were the more than 200 firms that were members of both the NASD and the New York Stock Exchange. The merger significantly lowered their regulatory expenses, but many of the smaller members were concerned about what benefits they might receive from it.

In an effort to get enough votes from the smaller firms, NASD offered each member $35,000, for a total of about $178 million, and a smaller commitment to reduce future assessments.

Executives said that amount was derived from a calculation of efficiencies from the consolidation of the organizations. NASD listed its total outstanding equity in an annual report of more than $1.6 billion. NASD officials, including Ms. Schapiro, said at the time that the organization could not make a greater payment because the I.R.S. had opposed it because the NASD is a nonprofit organization.

The lawsuits challenge that assertion, saying that evidence that remains sealed undermines the NASD’s description of the I.R.S. ruling. Also sealed is an independent fairness opinion on the merger by the investment bank Houlihan Lokey Howard and Zukin Financial Advisors.

“Our cases raise questions about the transparency, truthfulness and candor of the NASD and its leadership in a major financial transaction with its own members,” said Jonathan W. Cuneo, the lead lawyer in both cases for the member firms. “It’s certainly ironic that the case involves the NASD, which is charged with policing those values in others.”

Defense lawyers said in court papers and an interview that no material misrepresentations were made. They assert that the top executives of the organization, as regulators, are entitled to absolute immunity from lawsuits. They say that the members of the NASD were not entitled to greater compensation because they do not have the same rights as shareholders of a corporation.

“These lawsuits are meritless, and the second suit is just a dressed-up version of the first one that was rejected by a federal judge,” said F. Joseph Warin, a lawyer representing Finra and Ms. Schapiro. “The lawyers are the same, and the arguments are virtually identical. The second suit was filed days after Ms. Schapiro was nominated to become chairman of the S.E.C. It looks to me like a desperate effort to leverage Mary’s nomination to squeeze money out of Finra before her confirmation vote — a last-second Hail Mary pass.”

Mr. Cuneo said that the second lawsuit was in the works long before the announcement of Ms. Schapiro’s appointment and that its filing had nothing to do with her selection.

Herb Perone, a spokesman at Finra, said that following the customary practice of presidential appointees, Ms. Schapiro would not comment about the case while her confirmation proceedings were pending. The Senate banking committee is to consider her appointment on Thursday.

Lawyers involved in the proceeding say they have not been asked about the lawsuits by either the Obama transition team or the Senate banking committee.

An official at the Obama transition said that the lawsuit had been examined during the vetting process and that Ms. Schapiro would not have been selected if the lawsuit were viewed as a problem.

Kate Szostak, a spokeswoman for the Senate banking committee, said it would be examining Ms. Schapiro’s record as a regulator, including Finra’s supervision of the Madoff firm and her role in the merger of the NASD and the New York Stock Exchange. Ms. Schapiro has extensive regulatory experience. She served for six years as a commissioner at the S.E.C. before becoming chairwoman of the Commodity Futures Trading Commission in 1994. She arrived at the NASD in 1996 to be president of its regulatory arm.

Both lawsuits were filed as class actions on behalf of most of the members of Finra. The first was filed by Standard Investment Chartered. Federal District Judge Shirley Wohl Kram of New York dismissed that suit a year later without addressing the underlying allegations. Judge Kram’s dismissal has been appealed to the United States Court of Appeals for the Second Circuit, in New York.

A second lawsuit by Benchmark Financial Services, was filed three weeks ago in federal district court in New York. Benchmark was founded by Edward A. H. Siedle, a former lawyer at the S.E.C. who investigates pension fraud and other financial abuses. Mr. Siedle has been a plaintiff against other companies over the years and sued the NASD in 2002 after it blocked him from publishing a book about disciplinary proceedings against member firms.

“This case is about a corporate transaction effectuated by deception,” the complaint in the latest case said. “The officer defendants stood to gain substantially by the transaction, in terms of enormously higher compensation and benefits, vastly elevated prestige and powers resulting from the virtual monopoly regulatory authority created by the transaction, and the higher degree of control over the board of the consolidated entity.”

After the merger was completed, Ms. Schapiro’s total compensation rose to more than $3.1 million, from almost $2 million. The pay package, while not outsize by Wall Street standards, is large for a nonprofit organization. Other top executives at the new entity received pay increases of around 20 percent after the merger was completed.
SEC's Enforcement Accountant to Leave Next Month
NYTIMES
By THE ASSOCIATED PRESS
Filed at 4:01 p.m. ET
December 30, 2008

WASHINGTON (AP) -- The top accountant in the Securities and Exchange Commission's enforcement branch is leaving for a private sector job next month, in what could herald a wave of departures from the embattled agency.

The SEC said Tuesday that Susan Markel, chief accountant in the agency's division of enforcement, is taking a job in the corporate investigations practice of AlixPartners LLP, a turnaround consulting firm.  Her departure comes as President-elect Barack Obama's SEC chairman-designate, Mary Schapiro, is likely to face tremendous pressure to bring sweeping changes to the agency, said James Cox, a Duke University law professor and securities law expert.

The SEC has come under fire for failing to detect signs that major Wall Street firms were in trouble. It also has been criticized for ignoring allegations brought to SEC staff about Wall Street money manager Bernard Madoff's businesses. Madoff has been accused of engaging in a massive fraud that may end up costing investors $50 billion.

With the SEC under intense scrutiny from the incoming administration and lawmakers a Capitol Hill, more high-level staff changes could be in the works, Cox said.  For current staffers, it is often better ''to leave on your own accord than to face the awkwardness of being asked to leave,'' he said.

Markel has been at the SEC since 1994, working on the agency's inquiries into Xerox Corp., Cendant, WorldCom and Cardinal Health Inc.

Linda Chatman Thomsen, director of the SEC's Division of Enforcement, praised Markel saying in a statement that ''her instincts are superb and her investigative abilities are unparalleled''

Obama has promised a tougher regulatory and enforcement approach after he takes office on Jan. 20.

''Instead of appointing people with disdain for regulation, I will ensure that our regulatory agencies are led by individuals who are ready and willing to enforce the law,'' Obama said earlier this month.

Meanwhile, the SEC also said Tuesday it obtained a court order to halt an alleged Ponzi scheme that collected more than $23 million from Haitian-American investors.  The SEC said investors in the scheme were promised a 100 percent return on their investments within 90 days. In reality, the Florida-based operator of the alleged fraud had lost at least $18 million over the past year and siphoned off at least $3.8 million for personal use, the SEC said in court documents.


Daniel Sutherland for The New York Times
In Nantucket, Mass., sits one of Frank Avellino’s homes. His dealings with Bernard L. Madoff, which began decades ago, are drawing scrutiny in the wake of the government’s Madoff investigation.

’92 Ponzi Case Missed Signals About Madoff
NYTIMES
By ALEX BERENSON
January 17, 2009

Seventeen years ago, federal investigators questioned for the first time whether Bernard L. Madoff was connected to a Ponzi scheme. Their inquiry centered on Frank Avellino, an accountant who had been funneling investors to Mr. Madoff since the 1960s.  The investigators did not get far. Within days, Mr. Avellino agreed to return to investors the money he and his partner had raised and to pay a small fine to the Securities and Exchange Commission. The inquiry petered out, and Mr. Avellino — represented in the case by Ira Lee Sorkin, the same lawyer who now represents Mr. Madoff — kept sending money to Mr. Madoff...full story here.
Obama Names Regulator Schapiro to Lead SEC
By REUTERS
Filed at 10:53 a.m. ET
December 18, 2008

CHICAGO (Reuters) - President-elect Barack Obama on Thursday named longtime financial industry regulator Mary Schapiro to head the Securities and Exchange Commission amid calls for reform of the agency in the wake of a massive investment fraud scandal.

Obama also named Georgetown University law professor Daniel Tarullo to fill one of two vacancies on the seven-seat Federal Reserve Board, which is battling to ease a credit crisis and fend off a deepening recession.

And he picked former Treasury official Gary Gensler to head the Commodities Futures Trading Commission, which regulates the U.S. commodity futures and options market.


N E W    A D M I N I S T R A T I O N   N E W S

District Welcomes Obama as One of the Capital’s Own
NYTIMES
By IAN URBINA
January 3, 2009

WASHINGTON — Presidents come and go from this city. Hosting inaugurations is nothing new. But for residents here, over 92 percent of whom voted for President-elect Barack Obama, his inauguration this month is special.  The day ushers in hopes and expectations for a president who speaks to local residents and brings with it the excitement of a predominantly black city welcoming the nation’s first black president.  With the inauguration scheduled for the day after the Martin Luther King Jr. holiday weekend, the timing also strikes a chord for a city that was racked by riots after Dr. King’s assassination.

“For D.C., this inauguration is less like hosting a visiting official and more like throwing a homecoming party for a family member,” said Ronald Walters, professor of government and politics at the University of Maryland.

He added that normally, the inauguration is an exclusive black-tie affair. “This time,” he said, “it feels like the city has taken ownership of what is becoming a people’s party.”

At Ben’s Chili Bowl, one of the city’s oldest and most famous restaurants, the inauguration offers a certain historical reconciliation.

“It took about 40 years,” said Kamal Ali, the owner and son of the restaurant’s founder, Ben Ali. “But in terms of race relations, the celebration that day will bring this neighborhood, this city, full circle.”

In April 1968, four days of race riots after the King assassination left 12 people dead here. Huge swaths of what was then called Black Broadway for its concentration of black-owned clubs and theaters were destroyed. Ben’s Chili Bowl was one of the only restaurants along U Street that was not burned or ransacked.

“What happened here along U Street on election night when Obama won was the exact inverse of those race riots,” said Mr. Ali, recounting how on Nov. 4 the streets filled with racially diverse crowds who were initially kept out of traffic by a large and somewhat jittery police force. Eventually, the police opted to close down the area and let the partiers celebrate freely, he said.  Across the Anacostia River, in one of the city’s poorest sections, Thomas Thorton, 82, sat waiting for a bus.

“For us, for this side of the river, the inauguration is personal,” he said, standing in front of the hilltop Washington View Apartments, not far from the home of the abolitionist Frederick Douglass.

Mr. Obama’s message of renewed possibility resonates in Washington, he said, because this city, like few others, embodies extremes within inner-city and black America.  Washington has some of the highest incarceration and infant mortality rates in the country, yet it also has one of the largest populations of college-educated and upper-income African- Americans of any large city.

“It’s one day when all the folks in this city really can really come together and share something,” Mr. Thorton said of the inauguration. “We can think about how much has changed.”

Washington’s mayor, Adrian M. Fenty, reflects that change.  In choosing Mr. Fenty two years ago, residents here bucked the candidate selected by the party machine and opted instead for a younger, more liberal bi-racial candidate who relied on a populist message and a massive grass-roots effort to straddle the city’s racial and class divides.

“Voters are not looking for categories,” said Mr. Fenty, who, like Mr. Obama, is the child of a black father and a white mother. “They’re looking for results.”

Mr. Fenty added that the city was especially hopeful that Mr. Obama would help deliver voting rights for the city’s nearly 600,000 residents, who have no voting representation in Congress.  More than any prior presidential candidate, Mr. Obama has supported changing that, and with a Democratic majority in Congress, there is a real chance the city could win those rights.  Mr. Fenty said that early in Mr. Obama’s candidacy, he told Mr. Obama that he wanted to support him but that voting rights was one issue Mr. Obama needed to get firmly behind.

“He promised he would,” Mr. Fenty said.

In an early test of Mr. Obama’s commitment to follow through on that promise, the City Council last month sent him a letter asking him to put district license plates that bear the phrase “Taxation Without Representation” on the presidential motorcade. President Bill Clinton used the plates. President Bush did not, opting for different district plates without the phrase.  Asked if she thought this inauguration would be different than previous ones, Alice Mukabane, the co-owner of Safari DC, a Kenyan restaurant on Georgia Avenue, laughed.

“Of course, and not because of race,” she said.

Behind her a collection of posters and photographs of Barack and Michelle Obama hung on a wall in an area she calls the “Obama Corner.”

“Obama came from a home with just one parent,” Ms. Mukabane said. “He worked as a community organizer. He has ties to inner-city Chicago. He can relate to real people like those who live here.”

Like so many tourists, foreign dignitaries and Capitol Hill staffers, presidents are transients here. To them, the city consists only of an eight-block radius around the White House. Beyond that is hostile territory.  The hope among residents, however, is that Mr. Obama, already at ease in big cities from his years in Chicago, will get out more than Mr. Bush, who rarely ventured beyond official Washington.

“This city considers Obama as one of our own, and I think that will show on inauguration,” Ms. Mukabane said. “But after the inauguration, we’re also hoping he will see the city as his own.”

From the ceiling of her restaurant hung a large white banner filled with well-wishes written by customers. Four squares remained empty, reserved for the first family’s signatures.
Aretha Franklin to Participate in Inaugural Ceremony
NYTIMES
By Katharine Q. Seelye
December 17, 2008, 1:02 pm

Aretha Franklin and Dr. Rick Warren, an evangelical minister of the Saddleback Church, are among the select group of people who will participate in Barack Obama’s inaugural swearing-in ceremony on Jan. 20.

Mr. Obama has also chosen Elizabeth Alexander, an African-American poet at Yale University, and some of the world’s premier musicians, including Itzhak Perlman and Yo-Yo Ma, to share the podium with him.

In honoring the civil rights movement, Mr. Obama has asked the Rev. Dr. Joseph E. Lowery, dean of the civil rights movement and co-founder with the Rev. Dr. Martin Luther King, Jr. of the Southern Christian Leadership Conference, to deliver the benediction.

The inaugural program, which begins about 10 a.m. on the West Front of the Capitol, is an historic ritual that is both an intensely personal statement by the new president and a way for him to set the tone of his new administration.

The program was announced today by the Joint Congressional Committee on Inaugural Ceremonies, chaired by Senator Dianne Feinstein, Democrat of California.

The program opens with musical selections by the United States Marine Band, followed by the San Francisco Boys Chorus and the San Francisco Girls Chorus. Ms. Feinstein will call the gathering to order about 11:30 and deliver opening remarks.

Dr. Warren, author of “The Purpose Driven Life,” will deliver the invocation. He will be followed by Aretha Franklin, the Queen of Soul, who sang “Someday We’ll All Be Free” and “Respect” at a concert for Bill Clinton in 1993, but not at the inaugural ceremony.

Justice John Paul Stevens will then administer the oath of office to Vice President-elect Joseph R. Biden, Jr.

John Williams, the composer whose music was heard at Mr. Obama’s victory party on election night in Grant Park, will compose a new piece to be played for the incoming president.

His new piece will be played by Mr. Perlman on violin, Mr. Ma on cello, Gabriela Montero on piano and Anthony McGill on clarinet. (Usually at this juncture in previous inaugurations an operatic soloist performs.)

Chief Justice John G. Roberts will administer the oath of office will then be administered to President-elect Obama.

At that point, Mr. Obama will deliver his inaugural address.

He will be followed by Ms. Alexander, who will read a poem, and Dr. Lowery’s benediction...

The ceremony will close with the United States Navy Band “Sea Chanters” singing the National Anthem...

Every four year the government issues this report (for the incoming President...)
COMING SOON...CLICK ON WHITE HOUSE (immediately below) to hear brief statement about prospects for "change."  Presidents do lunch (below, right).


Is this related?
Obama Team Urges Delay in Digital TV Transition
NYTIMES
By THE ASSOCIATED PRESS
Filed at 2:51 p.m. ET
January 8, 2009 WASHINGTON (AP) -- President-elect Barack Obama is urging Congress to postpone the Feb. 17 switch from analog to digital television broadcasting.

In a letter to key lawmakers, transition team co-chair John Podesta warned Thursday that too many Americans who rely on analog TV sets to pick up over-the-air broadcasts won't be ready.

The incoming administration is pushing for a delay in part because the Commerce Department has run out of money for the coupons that subsidize digital TV converter boxes for consumers. People who don't have cable or satellite TV or a new TV with a digital tuner will need the converter boxes to keep their analog TVs working.

Obama officials are also concerned that the government is not giving consumers enough help with the TV transition.
Presidents Past, Present and Future
By The New York Times
January 7, 2009, 12:31 pm

President-elect Barack Obama met in the Oval Office today with President Bush and three former occupants of the White House: former Presidents Bill Clinton, George H.W. Bush and Jimmy Carter.

Mr. Obama called the meeting an “extraordinary gathering” and thanked President Bush for hosting the group.

“All the gentlemen here understand both the pressures and possibilities of this office, and for me to have the opportunity to get advice, good counsel and fellowship with these individuals is extraordinary and I’m very grateful to all of them. But again thank you, Mr. President, for hosting.”

This is it now for me...so President Obama would like to do what about this kind of "boot"?  How about our image in non-Muslim world?

Obama wants to 'reboot America's image' 
DAY
By JENNIFER LOVEN, AP White House Correspondent 
Posted on Dec 10, 11:45 AM EST

WASHINGTON (AP) -- President-elect Barack Obama says he will try to "reboot America's image" among the world's Muslims and will follow tradition by using his entire name - Barack Hussein Obama - in his swearing-in ceremony.

The U.S. image globally has taken a deep hit during President George W. Bush's two terms in office, primarily because of opposition to the U.S.-led invasion of Iraq, harsh interrogation of prisoners, the indefinite detention of terrorist suspects at Guantanamo Bay, Cuba, and mistreatment of inmates at the Abu Ghraib prison in Iraq.

Obama promised during his campaign that one of his top priorities would be to work to repair America's reputation worldwide, and that one element of that effort would be a speech delivered in a Muslim capital.

He pledged anew to give such a speech, though he declined to say whether it would happen during his first year in office.

"It's something I intend to follow through on," Obama said in an interview published Wednesday in the Chicago Tribune and the Los Angeles Times. "We've got a unique opportunity to reboot America's image around the world and also in the Muslim world in particular. So we need to take advantage of that."

Obama said his message would be twofold: that his administration will be unyielding in stamping out terrorist extremism but also "unrelenting in our desire to create a relationship of mutual respect and partnership with countries."

"I think the world is ready for that message," he said in the interview, conducted Tuesday.

During the campaign, Obama repeatedly faced questions about whether he is a Muslim, particularly in whisper campaigns that noted his middle name, that his father is Kenyan, and that he lived for a time as a child in Indonesia. Obama is a practicing Christian.

Asked if he would drop his middle name during his inauguration on Jan. 20, the president-elect said he would not.

"The tradition is that they use all three names and I will follow the tradition, not trying to make a statement on way or another," he said.

Obama also talked about the spiritual support he sought during his White House bid, particularly since he and his family left Chicago's Trinity United Church of Christ after inflammatory comments by its pastor, the Rev. Jeremiah Wright, became a campaign issue.

Obama said he set up a "sort of prayer circle across the country" of pastors who would pray for him every morning on a conference call. Obama said he sometimes joined the call, which involved leaders from various Christian denominations and other religious faiths.

"I'm not even sure that all of them voted for me," Obama said. "But they were willing to pray for me, and that's something that was wonderful."

On other topics:

-Obama would not put a timetable on issues important to organized labor, what he called his promise to "put an end to the kinds of barriers and roadblocks that are in the way of workers legitimately coming together in order to form a union and bargain collectively." Among other things, he has promised support for a card-check system for unions trying to organize a new workplace and for adding labor and environmental protections to the North American Free Trade Agreement. "I don't want to anticipate right now what sequences will be on these issues," Obama said.

-The man about to be the nation's first black president said he will make enforcing civil rights laws and making the criminal justice system color-blind top priorities for his administration. The Justice Department's Civil Rights Division "over the last eight years has had a lot of problems and really declining morale," he said.

-Obama said he, his wife Michelle and their two young daughters will make frequent visits during his presidency back to their home in Chicago, perhaps as often as every six weeks. "My Kennebunkport is on the South Side of Chicago," he said. "Our friends are here. Our family is here. And so we are going to try to come back here as often as possible."
Obama Unveils Team to Tackle ‘Historic’ Crisis
NYTIMES
By JEFF ZELENY
November 25, 2008

CHICAGO — With the financial crisis looming as a priority of his term, President-elect Barack Obama sought to put his imprint on efforts to stem the turmoil as he introduced his economic team on Monday, nominating Timothy F. Geithner as Treasury secretary and Lawrence H. Summers to head the White House Economic Council.

By naming a team deeply experienced in dealing with financial crises — Mr. Geithner was heavily involved over the weekend in the efforts to stabilize Citigroup — Mr. Obama underscored his determination to assure Americans and foreign investors that he would aggressively step into a leadership vacuum in Washington during the transition.

Moreover, by pledging that his economic team would begin work “today” on recommendations to help middle-class families as well as the financial markets, the president-elect sought to convey an impression of continuity and coordination, so that his administration can “hit the ground running.”

The president-elect also announced that he had chosen Christina D. Romer to head his Council of Economic Advisers and Melody Barnes as director of his White House Domestic Policy Council. Ms. Romer is an economics professor at the University of California, Berkeley, while Ms. Barnes is a longtime aide to Senator Edward M. Kennedy of Massachusetts.

The recent economic news, capped by the Citigroup effort, “has made it even more clear that we are facing an economic crisis of historic proportions,” Mr. Obama said at a news conference. He listed the drop in new home purchases, the surge in unemployment claims to an 18-year high and the likelihood of up to a million further job losses in the coming year.

“While we can’t underestimate the challenges we face,” he said, “we also can’t underestimate our capacity to overcome them to summon that spirit of determination and optimism that has always defined us, and move forward in a new direction to create new jobs, reform our financial system and fuel long-term economic growth.”

Responding to questions, Mr. Obama said that the struggling automobile industry could not be allowed “simply to vanish,” but that the companies should not get “a blank check” from taxpayers. And he said he was surprised that the auto companies’ chief executives were not better prepared with specific recovery proposals in their appearances last week on Capitol Hill. He also all but promised that the tax cuts pushed through Congress by President Bush would be repealed, or at least not renewed when they are scheduled to expire in 2010.

In an effort to inject confidence into the quavering financial markets, Mr. Obama made certain that his first formal cabinet announcement dealt with the economy, not, as is often the case, with national security or diplomacy.

In announcing the nominations of Mr. Geithner, president of the Federal Reserve Bank in New York, and Mr. Summers, a Harvard economist, Mr. Obama sent a signal that he was set to pursue aggressive, yet centrist policies, in devising moves to help jump-start the economy. He stretched his economic announcement into a two-day affair, planning another news conference on Tuesday to present the rest of his team.

The televised news conference, which came shortly after President Bush made brief remarks at the Treasury Department with Secretary Henry M. Paulson Jr., created a stark image of the transfer of power that is under way in Washington. Mr. Obama and his new team arrived in a room of dozens of reporters, while Mr. Bush stood nearly alone on the steps of the Treasury Department.

“This is a tough situation for America,” Mr. Bush said, adding that he had spoken to Mr. Paulson by phone Sunday while returning from an economic summit meeting in Peru. He said that he would keep Mr. Obama and his team informed of any major decisions, and added that Mr. Paulson was working in “close cooperation” with the Obama team.

Mr. Bush spoke to Mr. Obama on Monday about the rescue plan for Citigroup. Mr. Obama said he had also spoken Monday to Ben S. Bernanke, the chairman of the Federal Reserve.

“The truth is, we do not have a minute to waste,” Mr. Obama said. “These extraordinary stresses on our financial system require extraordinary policy responses.”

But he also sought to emphasize the sort of continuity that the markets can find comforting, vowing to “honor the public commitments made by the current administration.” He said his economic team would consult regularly with Congress and the current administration during the transition. Earlier in the day he spoke to President Bush about Citigroup.

Mr. Geithner worked through the weekend on the plan to stabilize Citigroup. Earlier, he was deeply involved in the bailout of American International Group. So he is intimately familiar with the developing crisis — and the controversial efforts so far to stanch it.

Mr. Obama has said repeatedly that there is “only one president at a time,” but the markets’ apparent concerns at the specter of a do-nothing transition — with neither President Bush nor Mr. Obama seeming to aggressively steer recovery efforts — has forced him into a more active role.

The Dow Jones industrial average soared Friday by nearly 500 points on word of the Geithner appointment and markets were up again by more than 200 points at midday Monday.
Obama Proposes New Economic Stimulus Plan
NYTIMES
By JEFF ZELENY
November 23, 2008

CHICAGO — President-elect Barack Obama on Saturday proposed an economic recovery plan designed to create or salvage 2.5 million jobs over the next two years, calling for “a plan big enough to meet the challenges we face.”

Mr. Obama, speaking in the weekly Democratic radio address, said he had directed his advisers to put together a two-year stimulus plan intended to jumpstart the economy and ease the financial crisis in the United States. The plan is larger than any initiatives he proposed during the presidential campaign.

“There are no quick or easy fixes to this crisis, which has been many years in the making, and it’s likely to get worse before it gets better,” Mr. Obama said. “But January 20th is our chance to begin anew, with a new direction, new ideas, and new reforms that will create jobs and fuel long-term economic growth.”

Mr. Obama said he would outline specific details of the proposal in the coming weeks, offering only a broad sketch of the plan on Saturday. He said the two-year effort would put Americans back to work through infrastructure and energy projects.

“These aren’t just steps to pull ourselves out of this immediate crisis, these are the long-term investments in our economic future that have been ignored for far too long,” Mr. Obama said. “And they represent an early down payment on the type of reform my administration will bring to Washington.”

For the second week in a row, Mr. Obama also recorded the radio address on video, which will be placed on YouTube to increase the audience. When he is sworn into office, he also intends to distribute his weekly radio address on the Internet.  In the address, Mr. Obama praised Congress for passing a provision to extend unemployment benefits, but said an economic stimulus plan was urgently needed and would be among the first orders of business when he becomes president.

“I know that passing this plan won’t be easy,” Mr. Obama said. “I will need and seek support from Republicans and Democrats, and I’ll be welcome to ideas and suggestions from both sides of the aisle.”

The message from the president-elect was, in effect, competing with President Bush’s weekly radio address, yet their approaches were different.  Mr. Obama did not mention the controversial proposal to rescue the auto industry. Mr. Bush, who is traveling in Peru, made that the centerpiece of his message and criticized Democratic leaders for adjourning without reaching agreement.

“If the automakers are willing to make the hard decisions needed to become viable, they should be able to receive the funds Congress already allotted to them for other purposes,” Mr. Bush said. “This is a critical issue for our economy and our country.”

TEAM (S) OBAMA:
Our question - with this concept, where does the telephone booth Superman always used come in?

Captain of each of the teams is President-Elect Obama?  Do responsibilities cross over departments by "dotted line" depending on the crisis or issue...then what?



IN-THE-IN BETWEEN-MONTHS...PLANNED-NEXT-CABINET:  Photo gallary from Hartford Courant; (?) = name mentioned in NYTIMES
AGRICULTURE - ATTORNEY GENERAL - COMMERCE - DEFENSE - EDUCATION - ENERGY - HEALTH AND HUMAN SERVICES - HOUSING - INTERIOR - LABOR - STATE - TRANSPORTATION - TREASURY - VETERANS' AFFAIRS - HOMELAND SECURITY;  REST OF THE TEAM:  CHIEF OF STAFF - UNITED NATIONS REPRESENTATIVE - TRADE REPRESENTATIVE - OFFICE OF MANAGEMENT AND THE BUDGET - ENVIRONMENTAL PROTECTION AGENCY - NASA - FCC - DRUG CONTROL



Agriculture
Jim McGovern of Massachusetts(?) - nope.  Former Governor Tom Vilsack

Agriculture Dept. Nominee to Push Food for Poor
By THE ASSOCIATED PRESS
Filed at 11:01 a.m. ET
January 14, 2009

WASHINGTON (AP) -- President-elect Barack Obama's nominee for secretary of agriculture said Wednesday that if he is confirmed he will work to boost the economies of farm communities, promote nutritious foods and help poor families put meals on the table.

Former Iowa Gov. Tom Vilsack, who has won wide support from farm groups and farm-state members of Congress, told the panel that the Agriculture Department faces ''historic challenges,'' mostly brought on by economic woes.

''Farmers and ranchers experience volatile markets while credit tightens,'' Vilsack said. ''Small towns and rural communities continue to lose people and jobs while critical infrastructure crumbles. These towns and communities find it increasingly difficult to keep pace with the ever-changing national and global economy.''

If confirmed, Vilsack would oversee the nation's nutrition programs, including food stamps, which make up a large part of the department's budget. Those programs are facing increased need in recent months as the economy has stumbled.

Despite problems in rural communities, the agricultural sector has fared better than many industries in recent years as the demand for renewable fuels has helped fuel record crop prices. But those prices have dropped in recent months.

''All of these are serious challenges that require a compelling new vision for the department,'' Vilsack said.

The farm-friendly panel has had few qualms with Vilsack, who was chief executive of one of the country's largest crop-producing states for eight years. The Democratic chairman of the panel is Iowa Sen. Tom Harkin, one of Vilsack's biggest supporters.

Vilsack has been friendly with corporate agriculture and was a mainstream choice for the post. But his nomination disappointed some activists who would like to overhaul the way the government's agricultural programs are run.

One of Vilsack's first priorities as secretary would likely be putting a $290 billion farm bill, enacted last year, into place. President George W. Bush, backed by fiscal conservatives, said the bill was wasteful and too costly. He vetoed the bill but Congress, with Obama's support, overrode the veto.

Vilsack has been a champion of corn-based ethanol, a central part of his short-lived campaign for president in 2007, and endorsed tax breaks for the ethanol industry. Renewable fuels policy, along with subsidies for that industry, is expected to be a top issue for the incoming secretary.

The former governor also made an overture to a growing number of food groups that have pushed for government support of more locally grown, environmentally friendly and nutritious foods, saying he will seek to work ''with those who seek programs and practices that lead to more nutritious food produced in a sustainable way.''

Vilsack is expected to push Obama's pledge to trim some wasteful farm subsidies, a position that Harkin and many other Midwestern members have endorsed. Southern lawmakers have long blocked lowering subsidy limits, however, as Southern rice and cotton crops require more investment.

The top Republican on the panel, Sen. Saxby Chambliss of Georgia, has said he hopes that Vilsack will listen to concerns from all parts of the country in his tenure at Agriculture but has otherwise voiced no objections to his nomination, saying at the hearing that he hopes it moves quickly.
Obama picks Vilsack, Salazar for Cabinet 
DAY 
Posted on Dec 17, 6:37 AM EST

CHICAGO (AP) -- Barack Obama is on a pre-holiday roll to fill his Cabinet, with two more nominations in former Iowa Gov. Tom Vilsack for agriculture secretary and Colorado Sen. Ken Salazar to lead the Interior Department.

Obama was appearing with his latest picks Wednesday, his third news conference in as many days to announce Cabinet appointments. Transition officials said more announcements were likely this week, before Obama planned to head to Hawaii for Christmas vacation with his family.

Democratic officials familiar with the selection process discussed Obama's plans with The Associated Press, speaking on condition of anonymity because a formal announcement had not yet been made.

Vilsack will be the fourth former opponent of Obama in the campaign for the 2008 Democratic presidential nomination to join his administration. Others include Vice President-elect Joe Biden, Sen. Hillary Rodham Clinton, who has been tapped for secretary of state, and New Mexico Gov. Bill Richardson, selected to head the Commerce Department.

Vilsack announced his presidential candidacy in late 2006, positioning himself as a Washington outsider with heartland appeal, but he dropped out before the primaries because he had trouble raising money. He endorsed Clinton and campaigned actively for her in the long primary campaign against Obama. After Obama defeated Clinton, Vilsack endorsed him.

First elected governor in 1998, Vilsack, 58, carved out a reputation as a political centrist. He balanced Iowa's budget and resisted raising taxes, but was willing to spend on such priorities as education and health. He argued that pushing alternative energy sources was key to bolstering rural sections of the nation that are struggling economically and with vanishing populations.

Salazar will head a department that oversees oil and gas drilling on public lands and manages the nation's parks and wildlife refuges. Salazar is expected to try to balance the protection of natural resources while tapping the nation's energy potential - an approach Obama has said he wants.

Salazar co-sponsored a bill in Congress to create a new land conservation system under the Interior Department's Bureau of Land Management for permanently protecting 26 million acres of national monuments, wilderness areas and wild and scenic rivers. The legislation died during the lame-duck session of Congress after the November election.

The Colorado senator opposed drilling in Alaska's Arctic National Wildlife Refuge and objected to the Bush administration's efforts to lease Western lands for oil shale development. It will be up to the Obama administration whether to go ahead with leasing.

If Salazar is confirmed as interior secretary, Colorado Gov. Bill Ritter, a Democrat, will name a replacement to serve out the final two years of Salazar's term. Before being elected to the Senate in 2004, Salazar was Colorado's attorney general. He also headed the state's Natural Resources Department from 1990-1994.

Still on the job.

Attorney General
Eric Holder, 2nd at Justice during Clinton Administration
 

U.S. Is a ‘Nation of Cowards’ on Race, Says Holder
NYTIMES
By Bernie Becker
February 18, 2009, 2:03 pm
 
Attorney General Eric H. Holder Jr. told Justice Department employees that “this nation has still not come to grips with its racial past.”

In a speech marking Black History Month, Attorney General Eric H. Holder Jr. on Wednesday labeled the United States “essentially a nation of cowards” when it comes to race relations.

Mr. Holder, the first black attorney general, told Justice Department employees that “this nation has still not come to grips with its racial past” and suggested Black History Month could be used to spark more candid discussion of racial issues.

“This will be, at first, a process that is both awkward and painful, but the rewards are, I believe, potentially great,” Mr. Holder said. “The alternative is to allow to continue the polite, restrained mixing that now passes as meaningful interaction but that in reality accomplishes very little.”

Mr. Holder noted that increased dialogue would help advance what should be “nuanced, principled and spirited” debate on topics such as affirmative action.
Holder Sworn In as Attorney General
NYTIMES
By THE ASSOCIATED PRESS
Filed at 10:33 a.m. ET
February 3, 2009

WASHINGTON (AP) -- Eric Holder, sworn in Tuesday as attorney general, promised a clean break with the past policies of the Bush administration, saying the Justice Department will be ''no place for political favoritism.''

''I am determined to ensure that this shall be a new day for the dedicated career professionals that I am so honored to call my colleagues,'' Holder told various employees and dignitaries gathered for the ceremony. He said he was committed to remaking the department ''into what it once was and what is always should be.''

Vice President Joe Biden administered the oath to President Barack Obama's pick for the nation's top law enforcement officer, the first African-American to hold the post.

Biden said the department, under Holder, would return to a past standard of ''no politics, no ideology. Only a clear assessment of facts and law.''

Hundreds of department employees packed the hallways and stairways to welcome Holder. To loud cheers and applause, he pledged to remake the department by ''taking it back to what it once was and always has to be.''

Holder was confirmed Monday evening by a 75-21 Senate vote, with all the opposition coming from Republicans.

Holder takes over a department wracked by Bush administration scandals over politically motivated hirings and firings. He has pledged to restore its reputation.

For starters, the new attorney general will learn the secrets of the Office of Legal Counsel, whose lawyers justified the use of controversial interrogation tactics and even declined to provide Bush administration documents to internal Justice Department investigators.

Holder also will play a major role in the future of terrorism detainees.

Obama, in a major policy shift, signed an executive order to close the U.S. detention center at Guantanamo Bay, Cuba, within a year. He also created a special task force to review detainee policy; Holder and Defense Secretary Robert Gates will serve as co-chairs.

That panel will look at options for apprehension, detention, trial, transfer or release of detainees and report to the president within 180 days.

Holder promised senators he would review why career prosecutors in Washington decided not to prosecute the former head of the department's Civil Rights Division. An inspector general's report last month found that Bradley Schlozman, the former head of the division, misled lawmakers about whether he politicized hiring decisions.

Another key question facing Holder is whether to reverse former President George W. Bush's order that three of his former top aides -- Karl Rove, Harriet Miers and Josh Bolten -- should not testify before Congress about firings of U.S. attorneys. Rove and Miers were former aides when Bush gave his order.

If Obama reverses Bush's policy, it would create a new legal issue: whether a former president's order against testifying would still be valid.

The Bush administration's warrantless surveillance program is certain to come under Holder's scrutiny.

After a lengthy and heated debate that pitted privacy and civil liberties concerns against the desire to prevent terrorist attacks, Congress last year eased the rules under which the government could wiretap American phone and computer lines to listen for terrorists and spies.

Holder promised one senator that he would re-examine a ruling by former Attorney General Michael Mukasey that immigrants facing deportation do not have a right to government-provided lawyers. Holder said he understands the desire to expedite immigration court proceedings, but added that the Constitution also requires that proceedings be fair.

Holder's chief supporter, Sen. Patrick Leahy, D-Vt., said the confirmation was a fulfillment of Martin Luther King's dream that everyone would be judged by the content of their character.

''Come on the right side of history,'' said Leahy, chairman of the Senate Judiciary Committee.
A Public Servant’s Private Stint Clouds His Cabinet Prospects
NYTIMES
By ERIC LICHTBLAU
January 11, 2009

WASHINGTON — Chiquita was facing the prospect of federal charges for paying protection money to Colombian terrorists to safeguard its banana crops, and the company needed help. It turned to Eric Holder, an elite Washington lawyer well versed in the ways of the Justice Department.

“We were in an extraordinarily difficult position,” James E. Thompson, the general counsel for Chiquita, recalled in an interview. As a former prosecutor, Mr. Holder “carries a level of credibility with him, and that’s a valuable commodity,” he said.

Mr. Holder, now President-elect Barack Obama’s pick for attorney general, made his name publicly during a quarter-century in government service, first as a corruption prosecutor, then as a judge, and finally as the second-ranking official in the Clinton Justice Department. But it is as a power lawyer in Washington over the last eight years — billing up to a reported $1,000 an hour as a partner at the blue-chip firm of Covington & Burling — that Mr. Holder, 57, has made his wealth, as well as a reputation as a legal fixer for clients in crisis.

The Senate Judiciary Committee is to begin confirmation hearings on Mr. Holder on Thursday and if he is confirmed he will take over at the Justice Department with perhaps the most extensive private practice of any attorney general in modern times. Colleagues and admirers see his impressive range of work as a sign of a lawyer who has seen the law from all sides.  But some Republicans plan to press Mr. Holder about what they view as the potential conflicts of interest posed by his client list and how he would go about deciding whether to bow out of issues that come before him involving past clients, staff members said. Others question how his corporate ties will affect his work at the Justice Department.

“We’ve had eight years of an administration that turned a blind eye to corporate criminals,” said Terry Collingworth, a Washington lawyer who is suing Chiquita over the Colombian protection money and is facing Mr. Holder in the case. “We need someone with his level of experience and cachet to clean up the Justice Department. Yet I do have a concern and I sure hope that he doesn’t carry over his corporate defense practice into his approach to the job and how he handles these types of cases.”

When the National Football League was facing a legal and public-relations disaster in 2007 over a dogfighting scandal involving the Falcons quarterback Michael Vick, it turned to Mr. Holder to help navigate the maelstrom and represent the league. The pharmaceutical giant Merck, tapped him as its lawyer in a Medicaid overbilling case that ended in a $671 million civil settlement. And Rod R. Blagojevich, the now-impeached governor of Illinois, picked him, albeit briefly, to investigate a controversy over a casino development and possible ties to organized crime.

Already, Mr. Holder’s brief association with Mr. Blagojevich has drawn scrutiny from Republicans, who are waging a more spirited campaign against Mr. Holder’s nomination than many had anticipated. Until now, most of the scrutiny has focused on controversies during the nominee’s time as deputy attorney general at the end of the Clinton administration, particularly his role in the pardon of the fugitive financier Marc Rich. 

Link to a story we saved from the Wall Street Journal from 2001...do folks remember things exactly the way they saw them in 2001?

In responding to written questions from the Senate Judiciary Committee, Mr. Holder made no mention of a 2004 announcement in which Mr. Blagojevich introduced him as a “special investigator” under a $300,000 contract with the state.

The appointment fell through, and Mr. Holder’s aides said his failure to mention the episode had been an oversight that was soon corrected. But some Republicans said they were troubled by the omission. Three Republican senators on the Judiciary Committee — Tom Coburn of Oklahoma, John Cornyn of Texas and Charles E. Grassley of Iowa — sent the governor’s office a Freedom of Information Act request last week seeking documents on the aborted agreement.

Senator Arlen Specter of Pennsylvania, the ranking Republican on the Judiciary Committee, sharply questioned Mr. Holder’s character and political independence in a speech last week on the Senate floor. Mr. Specter told reporters Friday that he wanted to see more information about Mr. Holder’s private practice, to assess whether he was up to the job of attorney general.

“Covington & Burling is a very prominent, prestigious firm,” Mr. Specter said. He said Republican investigators had not yet found anything untoward in Mr. Holder’s private practice, but added, “We’re looking through all his records.”

Mr. Holder’s record in private practice has received much less attention than his earlier work at the Justice Department, particularly his role in Mr. Clinton’s 2001 pardon of Mr. Rich. Mr. Holder is being scrutinized as well over his role in other Clinton-era controversies, including clemency granted by Mr. Clinton for 16 members of a militant Puerto Rican nationalist group and the Justice Department’s refusal to appoint an independent counsel to examine possible campaign finance abuses by the White House.

With Senate Republicans challenging Mr. Holder’s nomination, a string of well-known lawyers from both parties have come to his defense with testimonials in recent days, citing both his record at the Justice Department and in private practice as evidence of his strong qualifications. In a letter of support to the Judiciary Committee last Wednesday Louis J. Freeh, who was director of the Federal Bureau of Investigation before becoming general counsel of MBNA America Bank, told of hiring Mr. Holder as the trial counsel on a complicated case that he won for Mr. Freeh’s company.

“I could have engaged any lawyer in America to represent our bank,” Mr. Freeh wrote. He said, “I chose Eric” because of “his excellent legal skills, complete integrity, sense of fairness, courage and, most importantly, my confidence that he would provide me with his independent judgment without fear or favor.”

Those skills have paid off handsomely for Mr. Holder and his law firm. He has done extensive pro bono work for crime victims, inmates who say they were wrongly convicted and others, and he is well known in Washington for his charitable work and deep roots in the community. At the same time, he has entered a group of A-list lawyers in the capital who reportedly earn $800 to $1,000 an hour. (Covington & Burling would not comment on Mr. Holder’s fees.)

Last spring, when Mr. Holder was traveling extensively to campaign for Mr. Obama, he joked to The American Lawyer magazine, “I hope the management committee is going to be real understanding when they see my billable hours this year.”

Not that the absences appear to have hurt his bottom line. In his disclosure statement to the Judiciary Committee, Mr. Holder said he expected to earn more than $2.5 million from the law firm in 2008, from $2.15 million the year before. That total includes an expected separation payment of $1.3 million to be paid upon his resignation from the firm, if he is confirmed as attorney general.  Kathryn King, a spokeswoman for Covington & Burling, said the separation agreement was a result of a standard procedure at the firm. “The methodology has been established and applied by our firm for many years and was in place well before the parties knew that Mr. Holder was being considered for a federal appointment,” she said.

For all his recent prominence as a lawyer in private practice, friends say that Mr. Holder has been itching to return to the place where he first made his name.

“Eric truly loved his days at the Department of Justice,” said Billy Martin, a prominent Washington lawyer and longtime friend of Mr. Holder’s who worked opposite him as Mr. Vick’s defense lawyer in the dogfighting prosecution. “He was very good at being a public servant in a position of leadership, and I think he missed it.”

Obama team fills top Justice Department posts
Hartford Courant
By Josh Meyer, Washington Bureau
1:39 PM EST, January 5, 2009

WASHINGTON

President-elect Barack Obama has named four former Clinton administration officials as part of his new team at the Justice Department, including David Ogden as deputy attorney general and Harvard Law School Dean Elena Kagan as solicitor general, the White House's lawyer before the Supreme Court.

Kagan, the first female dean at Harvard Law, reportedly met Obama when the two worked on the University of Chicago Law School faculty in the 1990s. Ogden is heading Obama's Justice Department transition team, and his deputy on the team, Tom Perelli, was tapped Monday to be as associate attorney general. Obama also nominated Dawn Johnsen to be assistant attorney general for the Office of Legal Counsel.

There was no mention of whether Obama and his nominee for attorney general, Eric Holder, intend to replace those heading the key posts at the Justice Department's Civil, Criminal and National Security Divisions that oversee most of its high-profile prosecutions.

"These individuals bring the integrity, depth of experience and tenacity that the Department of Justice demands in these uncertain times," Obama said in a statement released by the transition team in Chicago. ``I have the fullest confidence that they will ensure that the Department of Justice once again fulfills its highest purpose: to uphold the Constitution and protect the American people. I look forward to working with them in the months and years ahead."

Holder's confirmation hearing is set for Jan. 15 before the Senate Judiciary Committee. And while there were early indications that he would be confirmed swiftly and with little if any opposition, Holder has more recently come under fire for his role in some controversial pardons and commutations of prison sentences issued by President Bill Clinton.

``The new attorney general, the department, and the nation will be well-served by this leadership team," Sen. Patrick Leahy (D-Vt.), chairman of the Senate Judiciary Committee, said in a statement about Obama's picks.

``Just as Senators on both sides of the aisle moved quickly in the last Congress to confirm nominees for the top positions at the Justice Department that were emptied by scandals, the Judiciary Committee will move forward promptly with confirmation proceedings for these nominees, beginning with Mr. Holder's hearing on Jan. 15," Leahy said.

``The need to have the new leadership team at the department up and running without delay could not be greater in light of the department's vital missions and the unprecedented politicization that has weakened morale throughout the department and dealt a blow to the country's confidence in the nation's top law-enforcement agency."

Ogden is currently a partner at Wilmer Cutler Pickering Hale and Dorr and serves as the Department of Justice Agency Review lead for the Obama-Biden Transition Project. He was nominated by Clinton, and served as assistant attorney general overseeing the Civil Division from 1999 until 2001. Before that, he served as chief of staff to Atty. Gen. Janet Reno and as counselor to the attorney general, associate deputy attorney general and as deputy general counsel at the Department of Defense's Office of Legal Counsel.

Ogden also was a partner at Jenner and Block in Washington, D.C., worked at the law firm of Ennis Friedman & Bersoff and clerked for Supreme Court Justice Harry Blackmun from 1982-1983. He received his BA in English literature from the University of Pennsylvania in 1976, summa cum laude, and his law degree from Harvard Law School in 1981, magna cum laude, where he also served on the Harvard Law Review.

Kagan has been teaching law at Harvard since leaving the Clinton administration in 1999, becoming a professor in 2001 and dean in 2003. She has taught administrative law, constitutional law, civil procedure, and seminars on issues involving the separation of powers.

From 1995 to 1999, Kagan served in the White House, first as associate counsel to the president and then as deputy assistant to the president for domestic policy and deputy director of the Domestic Policy Council. In those positions she played a key role in the executive branch's formulation, advocacy, and implementation of law and policy in areas ranging from education to crime to public health.

Kagan also taught at the University of Chicago Law School, and clerked for Supreme Court Justice Thurgood Marshall. She then worked as an associate in the Washington law firm of Williams & Connolly from 1989 to 1991. Kagan received her bachelor's degree from Princeton in 1981 (summa cum laude)and attended Harvard Law School, where she was supervising editor of the Harvard Law Review, graduating magna cum laude in 1986.

Perrelli, currently managing partner of Jenner & Block's Washington office, was counsel to Atty. Gen. Reno from 1997 to 1999, supervising a variety of civil matters at the Department of Justice. He later became deputy assistant attorney general, supervising the Federal Programs Branch of the Civil Division. Perrelli also graduated from Harvard Law School, magna cum laude, in 1991, where he was managing editor of the Harvard Law Review.

Johnsen, tapped for the Office of Legal Counsel, is currently a law professor at the Indiana University School of Law, Bloomington, where she teaches and writes about issues of constitutional law. She served in the Justice Department's Office of Legal Counsel as the acting assistant attorney general heading that office from 1997 to 1998 and as a deputy assistant attorney general before that. She received a BA from Yale University in 1983 and a JD from Yale Law School in 1986.
The Next Attorney General
NYTIMES Editorial
December 3, 2008

If he is confirmed by the Senate as attorney general, Eric Holder, President-elect Barack Obama’s choice for the job, will inherit a Justice Department that has been mired in scandal and that has seriously lost its way in critical areas. Under President Bush, the department has been used to defend the indefensible, like indefinite detention and torture of prisoners, and to undermine rather than protect Americans’ cherished rights. Mr. Holder could be an exemplary choice to face this daunting agenda, but he must answer serious questions before the Senate votes on his confirmation.

Mr. Holder, who would be the first African-American attorney general, has a particularly good record of public service for this job. He has been a United States attorney for the District of Columbia, a prosecutor in the Justice Department’s public integrity section and a deputy attorney general under President Bill Clinton.

He has been outspoken on the most critical issue facing the department: restoring the rule of law. In a speech in June, he described the Bush administration’s anti-terrorism policies as “excessive and unlawful.” And he has called for closing the prison in Guantánamo Bay, Cuba.

But senators should ask Mr. Holder to square those views with comments he made after the Sept. 11 attacks when he defended the Bush administration’s prisoner policies by declaring that “you can think of these people as combatants and we are in the middle of a war.”

Americans need to know that Mr. Holder does not believe that detainees can be held indefinitely without being brought before a judge — and that he would stand up for the Constitution when times are tough.

There are other aspects of Mr. Holder’s record that are of concern, starting with his role in Mr. Clinton’s pardon of Marc Rich, a billionaire financier who had fled the country rather than face federal tax-evasion charges whose ex-wife, Denise Rich, had contributed heavily to the Clinton presidential library and the Democratic Party.

The Senate needs to probe that serious lapse in judgment closely to seek assurances that Mr. Holder will be unyielding about keeping political influence out of the Justice Department, which was shamefully politicized under Alberto Gonzales.

In addition to signing off on torture memos and depriving detainees of basic rights, the Bush Justice Department adopted legal positions that greatly expanded executive power. These policies must be quickly undone. The next attorney general also will have to get to the bottom of the department’s disgraceful record of politicized hiring and firing. The attorney general will need to ensure that the investigation of the firings of United States attorneys for what appear to be partisan reasons is thorough and credible, and that witnesses who have been defying subpoenas, including Karl Rove and Harriet Miers, the former White House counsel, testify under oath.

There already are people — mainly Republicans — who say investigating these matters would be divisive. But the department’s integrity cannot be restored until the truth comes out and any wrongdoers are punished.

Many parts of the Justice Department must be pointed in a new direction. In the Bush years, the voting rights section worked against voting rights. The civil rights division too often sat idly by, or supported the wrong side, when rights were infringed. The antitrust division all but abandoned its responsibility to protect the public from the harm of monopoly power.

The attorney general is the nation’s top law enforcement official. The Senate must make sure that Mr. Holder is committed to the right kind of change in that job.


Pardon Is Back in Focus for the Justice Nominee
NYTIMES
By ERIC LICHTBLAU and DAVID JOHNSTON
December 2, 2008

WASHINGTON — In the much praised career of Eric H. Holder Jr., President-elect Barack Obama’s choice to be attorney general, there is one notable blemish: Mr. Holder’s complicated role in the 2001 pardon of Marc Rich, a billionaire financier who had fled the country rather than face federal tax evasion charges.

Mr. Holder’s supporters portray him as having been a relatively uninvolved bystander caught in a Clinton-era controversy, the remarkable granting of a last-minute pardon by President Bill Clinton to a fugitive from justice. But interviews and an examination of Congressional records show that Mr. Holder, who at the time of the pardon was the deputy attorney general, was more deeply involved in the Rich pardon than his supporters acknowledge.

Mr. Holder had more than a half-dozen contacts with Mr. Rich’s lawyers over 15 months, including phone calls, e-mail and memorandums that helped keep alive Mr. Rich’s prospects for a legal resolution to his case. And Mr. Holder’s final opinion on the matter — a recommendation to the White House on the eve of the pardon that he was “neutral, leaning toward” favorable — helped ensure that Mr. Clinton signed the pardon despite objections from other senior staff members, participants said.

At the same time, Mr. Holder was not the sinister deal maker that his critics made him out to be. He let himself be drawn into the case by politically influential advocates, the review of the case shows, bypassing the usual Justice Department channels for reviewing pardon applications and infuriating prosecutors in New York who had brought the initial charges against Mr. Rich and his business partner.

Most perplexing to Justice Department allies was that Mr. Holder, by his own admission, involved himself in the discussions without a full briefing from his own prosecutors about the facts of the case, according to an associate of Mr. Holder who spoke on condition of anonymity.

Reid Weingarten, a lawyer for Mr. Holder, said that Mr. Holder had done nothing improper in his handling of the Rich matter and that conversations about it were routine and largely insignificant, in part because he assumed that Mr. Rich’s lawyer, Jack Quinn, was going through normal pardon channels.

“Mr. Holder assumed that this was all being handled in the normal course,” Mr. Weingarten said. He added that “there’s no question that Quinn played him, and it was astute by Quinn because he did catch Eric unawares.”

By all accounts, Mr. Holder’s role in the affair represents the biggest misstep of his career, and Mr. Obama’s aides focused on the issue before Mr. Holder was selected. Republicans on the Senate Judiciary Committee were consulted to gauge whether the pardon will prove an insurmountable hurdle.

Some Republicans in Congress are eager to revisit the Rich pardon, which was investigated at length in 2001 both by Congress and by a grand jury amid a public clamor that was fueled by hefty donations that Mr. Rich’s former wife had made to Mr. Clinton’s presidential library and to Democratic causes. Critics of the pardon also seized on reports from American intelligence officials that Mr. Rich’s oil-and-commodities company had done business with Iran, Iraq and other so-called rogue states.

“Marc Rich was a fugitive for nearly two decades, wanted by the federal government for fraud and tax evasion,” Representative Lamar Smith of Texas, the ranking Republican on the House Judiciary Committee, said Monday after the nomination was announced. “If a Republican official had engaged in this kind of activity, he would never receive Senate confirmation.”

Senator Arlen Specter of Pennsylvania, the ranking Republican on the Judiciary Committee, said in an interview on Monday that Mr. Holder’s role in the Rich pardon would be “a big question” at his Senate confirmation hearing.

A longtime prosecutor and a former judge, Mr. Holder remains a popular figure at the Justice Department eight years after he left, and his supporters insist he was made the “fall guy” for a controversy mainly of Mr. Clinton’s making.

Both Republican and Democratic admirers say Mr. Holder’s handing of the Rich affair, which he has acknowledged was flawed, should be balanced against the bulk of his law enforcement career.

“There’s no way you can have a high-profile job in Washington like the deputy attorney general without attracting some kind of controversy,” Larry Thompson, who succeeded Mr. Holder in that post in the Bush administration, said before Monday’s announcement. “That matter has been fully investigated, and it should be put behind him.”

Janet Reno, the former attorney general who was Mr. Holder’s boss, attributes the episode in part to the fast pace of pardon requests at the end of the Clinton administration. “There wasn’t much time to vet anybody,” Ms. Reno said in an interview.

But for Mr. Holder, his role in the Rich issue actually began more than two years before the end of the Clinton administration, almost by happenstance. At a corporate dinner in November 1998, Mr. Holder was seated at a table with a public-relations executive named Gershon Kekst, who had been trying to help Mr. Rich resolve his legal troubles.

When Mr. Kekst learned that his dinner companion was the deputy attorney general, he proceeded to bring up the case of an unnamed acquaintance who had been “improperly indicted by an overzealous prosecutor,” according to the Congressional inquiry.

A person in that situation, Mr. Holder advised, should “hire a lawyer who knows the process, he comes to me, we work it out.” Mr. Kekst wanted to know if Mr. Holder could suggest a lawyer. Mr. Holder pointed to a former White House counsel sitting nearby. “There’s Jack Quinn,” he said. “He’s a perfect example.”

Months later, Mr. Rich’s advisers settled on Mr. Quinn to lead the legal efforts, which stemmed from Mr. Rich’s indictment in 1983 on charges that he evaded taxes on tens of millions of dollars in revenue. At the time, it was the biggest tax fraud case in American history. He fled to Switzerland while the investigation against him was pending.

Mr. Quinn and his legal team sought to make the case that Mr. Rich and his partner, Pincus Green, had been wrongly prosecuted by the office of Rudolph W. Giuliani, who was the United States attorney in Manhattan at the time of the indictment, and that the charges against them should best have been treated as a civil matter, not a criminal one.

One of the first people Mr. Quinn contacted was Mr. Holder, his former colleague. Mr. Quinn wanted his help in interceding with prosecutors in Manhattan, and the two men had several conversations about the topic beginning in October 1999.

Federal prosecutors in the Southern District of New York were unwilling to negotiate with Mr. Rich’s lawyers while he remained a fugitive. Mr. Holder told Mr. Quinn in one phone call in November 1999 that he believed the prosecutors’ refusal to meet with the Rich lawyer was “ridiculous,” according to notes by Mr. Quinn obtained by House government reform committee investigators as part of a three-volume report on Mr. Clinton’s pardons.

In February 2000, Mr. Quinn sent Mr. Holder a memorandum entitled “Why D.O.J. Should Review the Marc Rich Indictment.” About a month later, Mr. Holder spoke with Mr. Quinn again and told him that “we’re all sympathetic” and that the legal “equities” in the issue were “on your side.” Pressed to explain the remark when he appeared before Congress a year later, Mr. Holder said that he meant only that he thought it was “unreasonable” for prosecutors in Manhattan not to meet with Mr. Rich’s lawyers and that he was not intending to assess the merits of the case.

By the fall of 2000, efforts to re-open the criminal case were dead, and Mr. Rich’s lawyers had moved on to the idea of a pardon.

Again, Mr. Quinn turned to Mr. Holder. On Nov. 21, 2000, at the close of a meeting on a separate topic, Mr. Quinn took Mr. Holder aside, told him he was planning on filing a lengthy pardon petition with the White House and asked whether the White House should contact Mr. Holder for his opinion, according to Mr. Quinn’s account. (Mr. Holder said he did not remember the conversation but did not dispute the account.)

In a separate e-mail message that Mr. Quinn sent three days before that to other members of the Rich team, under the topic “Eric,” he wrote: “Spoke to him last evening. Says to go straight to W.H. Also says timing is good.”

For the next months, Mr. Rich’s team pressed ahead with the pardon, soliciting foreign leaders from Spain, Israel and elsewhere to speak to the White House about Mr. Rich’s philanthropic work.

Still, many White House officials remained opposed to the idea because of the precedent it would set to pardon a fugitive. Prosecutors in New York would “howl,” Mr. Holder told Mr. Quinn.

On Jan. 19, 2001, Mr. Quinn called Mr. Holder and let him know that the White House would be contacting him for his recommendation on the pardon, which he said was receiving “serious consideration.” Mr. Holder told him that he did not have a personal problem with the pardon, and Mr. Quinn quickly passed on the gist of the conversation to the White House.

A few minutes later, Mr. Holder got a call from Beth Nolan, the White House counsel, who had opposed the pardon idea and was now surprised to hear that Mr. Holder apparently felt differently.

Mr. Holder, according to Ms. Nolan’s testimony, told her that if the Israelis were in fact pushing for the pardon, he would find that “persuasive” and would be “neutral leaning toward” favorable.

Mr. Holder told Congressional investigators that he assumed the pardon was going to be rejected and that his comments were not intended to push it through. “I was ‘neutral’ because I didn’t have a basis to make a determination,” he testified.

But investigators for the House government reform committee, in a final report in 2002, concluded that Mr. Holder’s input on Jan. 19, 2001, had a “significant impact” in giving the Justice Department’s imprimatur, even though no formal review was conducted by the department’s pardon office, which normally reviews all clemency applications. The next day, Mr. Clinton signed the pardon, setting off the final scandal of his terms.

After Mr. Clinton left office, a federal grand jury investigation was eventually closed with a finding that no criminal wrongdoing had occurred.

Holder Is Poised to Scale New Heights
NYTIMES
By JAVIER C. HERNANDEZ
December 1, 2008

Nine-year-old Eric Holder sat in the basement of his family’s house in Queens, enraptured by the inaugural words of the fresh-faced president from Massachusetts. The broadcast on the tiny television set faded in and out, muffled by the steady roar of jetliners at nearby La Guardia Airport, but John F. Kennedy’s call for hope and change was enough to stir the boy’s desire to serve.

By ninth grade, Ricky, as he was known to his friends, was standing before his peers in the auditorium making his case for student body president. In high school, towering above his classmates and teachers at 6 feet 3 inches tall, he passionately debated how to rid African-Americans of their second-class status.

Now, four decades later, Eric Himpton Holder Jr., 57, the Bronx-born son of Miriam, an Episcopal church secretary from New Jersey, and Eric Sr., a real estate broker from Barbados, is expected to be nominated on Monday by President-elect Barack Obama to become the attorney general of the United States. He would be the first black person to do so.

“I didn’t have any idea what I would be when I grew up,” Mr. Holder said in an interview last week, his first public comments since reports of his selection emerged in November. Attorney general, he added, was “not on the radar.”

Growing up in East Elmhurst, Queens, Mr. Holder lived in two worlds. There was the neighborhood kid, a basketball addict who drew smiles from girls and once cut class to watch the Mets. Then there was the overachiever, a history scholar who buried himself in books and newspapers and was plucked from his local public elementary school to attend a program for gifted students at another school.

“I had this dual existence,” he said. “I wanted to hang. I was still one of the guys. I tried to convince them that I was still cool.”

In his classes, he was one of only a few black students, but even as sit-ins and freedom rides in the South roiled the debate on civil rights, school life remained mostly free of racial tension. His classmates were more concerned with who was free to play softball after school than the color of anyone’s skin, he said.

It was not until he started middle school in 1963, when clashes over integration at the University of Alabama captured the national spotlight and President Kennedy was assassinated, that he grew conscious of the racial complexities of American society, he said.

“That clicked the switch in me,” Mr. Holder said. He began to read book after book on World War II and biographies of public servants, drawing inspiration from the story of redemption he saw in “The Autobiography of Malcolm X.”

He soon sought leadership roles himself. As a ninth grader running for student body president on the Patriot Party ticket, he cut up and rearranged magazine ads into “Vote for Holder” insignia.

His victory showed him that his intellectual gifts and witty, down-to-earth demeanor could propel him to high places, his classmates said.

That same year, his high score on a grueling city test earned him a seat at Stuyvesant High School, where the prom was sometimes canceled because of a lack of interest and students had a penchant for reciting class rankings (Mr. Holder graduated 363rd in a class of 721 boys).

“We didn’t know if a black student was going to get admitted,” recalled his younger brother, William Holder, a retired Port Authority police lieutenant. “When he got in, it was huge.”

At Stuyvesant, whose students were primarily white and Jewish, Mr. Holder said his first year was one of the most difficult periods of his life, as he adjusted to a hefty workload and an hour-and-a-half commute. When the stress of taking biology and chemistry at the same time grew overwhelming, he turned to his mother for advice. She told him to stick it out, he said.

It was a refrain Mr. Holder had heard before. His parents made clear the importance of education and told their children they could achieve anything. “We weren’t taught limits,” his brother said.

Eric Sr., who is no longer alive, and Miriam Holder kept a close watch on their two children. They knew at whose house they could be found on any given night. On Sundays, if the children tried to feign illness to get out of going to church, it took only the rumble of their father marching down the hallway to rouse them, William Holder said.

At Stuyvesant, Eric joined the Afro-American Society and became co-captain of the basketball team, the Peglegs, helping to lead his peers to 2 wins and 12 losses. “When you’re on a team that doesn’t win very much, you can either get angry at teammates or bond,” said Paul Grayson, a former Pegleg who is now a Manhattan accountant. “He bonded.”

Mr. Holder’s years at Stuyvesant progressed as opposition to the Vietnam War escalated, but though he opposed the war, he did not actively protest it.

When he arrived at Columbia in 1969 as a boyish-looking freshman, he was recruited by upperclassmen to help take over the R.O.T.C. office. Armed with pillowcases and sheets, he joined several dozen students and christened the office as a student center named for Malcolm X.

Steven Sims, a close college friend, said, “It was very galvanizing because, for many of us, it allowed us to further develop and embrace our black consciousness.”

In school, Mr. Holder said, he chose to major in American history as a means to explore his own heritage and to use as a prism through which to examine current events.

Longing to escape the elite world at Columbia, he spent Saturdays taking underprivileged teenagers around New York City. He tried to expose the poor and predominantly black children living near campus to the cosmopolitan richness that had informed his own worldview.

“It just seemed incumbent on me, and many of us, that as students of color, we had to be engaged in this community of color that surrounded our campus,” he said.

Some weekends, a group of friends would pile into his 1971 blue Plymouth Duster and head to East Elmhurst for home-cooked meals — macaroni, fish cakes, pepper pot soup. At night, they went to parties or to women’s colleges in search of dates.

Still, Mr. Holder’s behavior hewed to his parents’ principles. “Even in our wildest moments,” Mr. Sims said, “you didn’t want to embarrass Mother Holder.”

Mr. Holder’s attraction to public service pleased his parents. “He was always interested in being able to maybe change things, help those folks that needed it,” said Ms. Holder, 84.

As history unfolded around him — the shootings of students at Kent State and Jackson State — Mr. Holder saw the law as an instrument of change. “The law inevitably is wound up with some great political movements, social movements,” he said. “I wanted to be a part of that.”

He attended law school at Columbia, becoming a role model to black students pursuing public service, his classmates said. He clerked for the NAACP Legal Defense and Educational Fund and joined the Justice Department after graduation, working his way up to deputy attorney general under Bill Clinton.

But he always made time for basketball, the game that had grounded him since his days on the cracked courts in East Elmhurst, where, his friends said, he received jealous glances for his good aim and easy dunk.

“When I was on that court, that was it,” he said. “I loved the competition.”

Mr. Holder said he took with him many of the lessons he learned on the court — the art of preparation, discipline and hard work. But as he is about to ascend to the top of the American legal system, there is one opponent he has yet to take on: his future boss, Mr. Obama, himself a devotee of pickup basketball.

Mr. Holder said the soon-to-be president had an advantage in age (Mr. Obama is 10 years younger). And Mr. Holder’s knees are not what they used to be. Still, he said, he is skeptical of Mr. Obama’s chances: “I’m not sure he’s ready for my New York game.”
A Pardon to Remember
NYTIMES
November 22, 2008
By GEORGE LARDNER Jr.

WHEN President Bill Clinton pardoned a billionaire fugitive from justice on his last day in office, even usually loyal Democrats were dismayed. Representative Henry Waxman of California called it “bad precedent” and “an end run around the judicial process.” He said it appeared to set a double standard for the wealthy and powerful.

The billionaire was Marc Rich, a commodities trader, and his pardon is a subject of discussion again because Eric Holder, Mr. Clinton’s deputy attorney general at the time and a key figure in the clemency process, is reported to be Barack Obama’s choice for attorney general. In the years since the Rich pardon, Mr. Holder has said he “never devoted a great deal of time to this matter.” He also told an interviewer that, in hindsight, he wished that the Justice Department had been “more fully informed” about the case. As someone who helped cover the story for The Washington Post, I think the issue is far more complicated and deserves more scrutiny if Mr. Holder is to become our top law-enforcement official.

A little history first. In 1983, Marc Rich was indicted along with his partner, Pincus Green, and their companies on 65 counts of defrauding the I.R.S., mail fraud, tax evasion, racketeering, defrauding the Treasury and trading with the enemy. (The last of these was for an oil deal with Iran while it held American hostages.) On hearing that they were about to be prosecuted, they fled to Switzerland. For the next 17 years, Mr. Rich ducked extradition requests as well as attempts by federal marshals to arrest him in France, England, Finland and elsewhere.

Mr. Rich’s lawyers tried repeatedly to reach a deal with federal prosecutors in New York that would keep him out of jail if he returned. Though his companies pleaded guilty and paid $200 million in fines and other penalties, Mr. Rich insisted that the case against him was weak. The prosecutors offered to drop the racketeering charges and to let Mr. Rich free on bail (without a passport) if he would return. Mr. Rich refused.

The story of how the fugitive came to be pardoned by President Clinton was the subject of a painstaking study by the House Government Reform Committee. While the committee’s report is the subject of some controversy — its Republican chairman, Dan Burton of Indiana, was accused of partisanship — the staff that compiled the documentation was thoroughly professional. All the citations and facts that follow are supported by testimony before the committee or its staff’s documentary evidence.

In 1999, Mr. Rich hired Jack Quinn, who had been Mr. Clinton’s White House counsel from 1995 to 1996, to help him advance his cause. The Rich team was still hoping to strike a deal with federal prosecutors in New York, who were in charge of the case. An e-mail message to Mr. Rich from one of his New York lawyers said that Mr. Quinn felt “he could convince Eric that it made sense to listen to the professors and that he could convince Eric to encourage Mary Jo to do the same.” The “professors” were two tax experts paid more than $96,000 for a study based solely on statements provided them by the Rich legal team; “Mary Jo” was Mary Jo White, the United States attorney in New York.

Mr. Holder was not unsympathetic. He told Mr. Quinn in November of 1999 that he considered the New York prosecutor’s persistent refusal of a meeting “ridiculous” and that “the equities” were on Mr. Rich’s side. Mr. Holder told Mr. Quinn to write a letter to Ms. White with a copy to him, and promised to call her when it arrived. Mr. Holder then called Ms. White personally and, after that conversation, told Mr. Quinn she “didn’t sound like her guard was up.” But New York stood firm.

On Nov. 18, 2000, Mr. Quinn told Mr. Holder that Mr. Rich was going to go for a pardon, a step his team had been contemplating for months. After the conversation, Mr. Quinn told colleagues that Mr. Holder had advised him to “go straight to” the White House and that the “timing is good.” On Dec. 11, just over a month before Mr. Clinton was to leave office, Mr. Quinn delivered the pardon papers to the White House. “The greatest danger lies with the lawyers,” Mr. Quinn wrote in an e-mail message to an aide to Mr. Rich, referring to the prosecutors in New York. “I have worked them hard and I am hopeful that E. Holder will be helpful to us.”

Under the rules governing pardon petitions — rules that were approved by Mr. Holder’s office — the views of United States attorneys “are given considerable weight” because of the “valuable insights” they have. And yet Mr. Holder did not consult Ms. White and her colleagues about the Rich pardon petition; they did not know of it until it had been granted.

Then, on Jan. 19, 2001, Mr. Holder delivered his pardon assessment to the White House, telling Beth Nolan, the White House counsel, that he was “neutral leaning favorable” on the Rich pardon. His decision, he added, was influenced by the support of Ehud Barak, the Israeli prime minister.

The people in the United States attorney’s office in New York weren’t the only ones surprised by Mr. Holder’s decision. Deborah Smolover, his top deputy for pardon cases, did not find out about the pardon for Mr. Rich until the White House called to inform her of it after midnight on Jan. 20. (Mr. Green won a pardon, too.) After the pardon was signed, Mr. Quinn has testified, Mr. Holder called him to commend him on “a very good job.” Mr. Holder also asked Mr. Quinn to consider hiring two former aides, one of whom had already contacted Mr. Quinn on Jan. 2 “at Holder’s suggestion.”

The precedent against pardons for fugitives was set more than 200 years ago by President John Adams. The charge, brought in 1799, was murder on the high seas against a ship’s captain who was clearly trying to put down a mutiny. But the mutineers made it back to the States, ready to testify against the captain, while his supporters were still at sea. The captain was afraid to return. Asked to approve a nolle prosequi (a notice that prosecution won’t be pursued, a procedure then treated as part of the pardon power), the president consulted his cabinet, which concluded that a trial should come first and a pardon, if justified, after that. Clemency, wrote Secretary of War James McHenry, should be exercised only with “great caution and on the fullest information.”

Mr. Holder never came close to meeting that standard. He had the last word at Justice on clemency petitions and he saw to it that he had the only word. He brokered one of the most unjustifiable pardons that an American president has ever granted.

New

Commerce

Following next is John Bryson, Energy Executive, Director of Walt Disney.  Former Governor of  Washington, Hon. Gary Locke, latest name for Commerce post.   Senator Gregg of New Hampshire thinks it over and withdraws, too.   Gov. Bill Richardson, candidate for the Democratic nomination last year, original Commerce Secretary designee, withdraws. 



Obama to Name Bryson Commerce Secretary
The Caucus - The Politics and Government blog of The New York Times
By JACKIE CALMES
May 31, 2011, 11:41 am

President Obama will name a California utility and energy executive, John E. Bryson, as his second secretary of commerce in a Rose Garden announcement on Tuesday afternoon, ending a search for an executive to add a business outlook to his economic team.

Mr. Bryson was chairman and chief executive of Edison International, parent company of Southern California Edison and Edison Mission Group, for nearly two decades until 2008. If confirmed by the Senate, he would replace Gary Locke, a former governor of Washington who is Mr. Obama’s choice to be ambassador to China now that Jon M. Huntsman Jr. has left to weigh a Republican presidential candidacy.

“I am pleased to nominate John Bryson to be our nation’s secretary of commerce, as he understands what it takes for America to succeed in a 21st century global economy,” Mr. Obama said in a statement. “John will be an important part of my economic team, working with the business community, fostering growth and helping open up new markets abroad to promote jobs and opportunities here at home.”

According to his biography released by the White House, Mr. Bryson is also a director of several major corporations, including Boeing, Walt Disney and Coda Automotive, and is a senior adviser to Kohlberg Kravis Roberts. He is chairman of the board of BrightSource Energy, the Public Policy Institute of California and the Keck School of Medicine of the University of Southern California Board of Overseers. He also serves as co-chairman of the Pacific Council on International Policy.

He is a trustee of the California Institute of Technology, a director of the California Endowment and the W. M. Keck Foundation, and serves on the advisory board of Deutsche Bank Americas. Previously Mr. Bryson served on educational, energy and environmental boards, including as a trustee of Stanford University, a member of a United Nations advisory group on energy and climate change, and head of California’s Public Utilities Commission and its State Water Resources Control Board. Early in his career, Mr. Bryson was a founder of the national environmental group the Natural Resources Defense Council.

Among those Mr. Obama was said to be interested in for the commerce job was Eric Schmidt, chairman of Google.

Democrats Vow Swift Passage of Obama’s Ambitious Agenda
NYTIMES
By CARL HULSE
February 26, 2009

WASHINGTON — Senate Democratic leaders pledged Wednesday to move quickly to enact the ambitious policy agenda outlined by President Obama in his speech before Congress on Tuesday night, with Senator Harry Reid, the majority leader, saying he hoped to achieve a health care overhaul this year.

“By the end of this year, I want to do something significant dealing with health care,” Mr. Reid, a Nevada Democrat, told reporters as he and fellow Democrats hailed what they saw as a successful address by the new president.

In the aftermath of Mr. Obama’s first speech to a joint session, Mr. Reid and fellow members of the Democratic leadership also called on Republicans in Congress to join them in pursuing the president’s initiatives not only on health care but on energy, education and stabilizing the economy and housing markets.

Senator Charles E. Schumer of New York, the No. 3 Senate Democrat, said Republicans cannot praise Mr. Obama, who retains a high level of popularity in the early days of his presidency, but then continue to attack his policy proposals.

“Our Republican colleagues have tried to act like they’re cheering for the quarterback, and then nitpick his play calling,” Mr. Schumer said. “Well, President Obama and his agenda are one and the same. You can’t separate the man from the agenda.”

In an interview on National Public Radio Wednesday morning, Representative Eric Cantor of Virginia, the second-ranking Republican in the House who helped engineer united party opposition to Mr. Obama’s economic stimulus plan, said his colleagues remain willing to work with the president on policy goals they share.

“That debate is behind us,” Mr. Cantor said of the stimulus fight. “We’ve got to go forward. We have to tackle these very difficult situations, starting with our banking system. We’ve got to get credit flowing again. The president was very definite in his commitment to make sure that happens, and I believe that we will have some ability to work together to produce results.”

Mr. Reid’s commitment to a health care overhaul this year could be considered ambitious, given the difficulty Congress has had in the past in taking on the complex issue of how to deliver affordable health care to most Americans combined with the partisanship that has gripped the House and Senate.

In addition, Senator Edward M. Kennedy, the Massachusetts Democrat who heads the Health, Education, Labor and Pensions Committee, is absent from Washington most of the time because he is receiving treatment for brain cancer.

But Mr. Reid said significant progress has been already been made in meetings among lawmakers and staff members, and he maintained that the schedule could be met.

“I think we’re doing quite well,” he said. “I’m satisfied with our progress on this.”

In the next few weeks, Mr. Reid said he would like to push forward with energy legislation, which has broad Democratic support, to clear the way for the climate change bill sought by the new administration. He also dismissed criticism that the federal government was engaged in a spending spree at a time when Mr. Obama was also talking about reducing the deficit during his term.

He said lawmakers “recognize that we’re going to have to spend some money to get out of this hole,” adding, “This isn’t the time to talk about balancing the budget.”

At the White House Mr. Obama, Vice President Joseph R. Biden Jr. and their top aides continued on Wednesday to emphasize the need for moving ahead briskly with the $787 billion stimulus package that Congress recently approved and promised both to rush money through the federal bureaucracy and to exercise as much control as possible so that haste does not lead to wasteful spending.

Mr. Biden, still beaming at the president’s description of him the night before as the tough enforcer of efficiency, introduced himself at a staff meeting as “the guy to don’t mess with” and urged everybody involved in the stimulus program to make sure that the money is “actually getting out there and working.”

The twin message — spend it fast, but spend it smartly — is crucial to the Administration’s attempt to make it easier to win Congressional passage of the rest of their program this year and to avoid the pitfalls of waste, fraud and abuse that could derail progress.

On Thursday, the White House is to begin presenting details of its spending proposals for the fiscal year that begins in October, and in the next few weeks Congress must pass omnibus spending legislation to keep this year’s programs running for the next several months.

Mr. Obama, officially naming former Gov. Gary Locke of Washington his latest choice to head the Commerce Department — after his two earlier nominees fell by the wayside — said the task of the department was, like that of the rest of the government, “to help create conditions in which our workers can prosper, our businesses can thrive and our economy can grow.”

Former Governor Locke Is Latest Choice for Commerce
NYTIMES
By Peter Baker
February 23, 2009, 5:33 pm

WASHINGTON – President Obama has settled on former Gov. Gary Locke of Washington state as his top choice for commerce secretary as he tries for a third time to fill a cabinet position that has bedeviled his administration, a White House official said Monday.

The official described Mr. Locke as the “likely” nominee, a formulation the Obama team has used in the past for a candidate on the verge of being nominated pending final vetting checks.

Mr. Locke would be the third choice for the Commerce Department after Gov. Bill Richardson of New Mexico dropped out because of a federal investigation into state contracting and Senator Judd Gregg, a Republican from New Hampshire, withdrew his nomination citing philosophical differences with the president.

Mr. Locke’s election in 1996 made him the first Chinese American governor in the United States and he served two terms before stepping down after the 2004 election, citing a desire to spend more time with his family. Born into an immigrant family living in public housing, Mr. Locke, 59, made it to Yale University and served as a prosecutor, state legislator and King County executive before his election as governor.


Judd Gregg Withdraws as Commerce Nominee
NYTIMES
By JEFF ZELENY
February 12, 2009

WASHINGTON — President Obama’s choice for commerce secretary, Senator Judd Gregg, withdrew his nomination on Thursday, saying there were “irresolvable conflicts” between him and the administration.

“It has become apparent during this process that this will not work for me as I have found that on issues such as the stimulus package and the Census there are irresolvable conflicts for me,” Mr. Gregg said in a statement. “Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns. We are functioning from a different set of views on many critical items of policy.”

At a Washington news conference soon after his statement was issued, Mr. Gregg said it had become clear that he had made a mistake in accepting the president’s offer to join the cabinet. “That was my mistake, not his,” the senator said, adding that he admired President Obama and the team he has assembled.

“Bottom line,” he concluded, “this is simply a bridge too far for me.”

Mr. Gregg said that the Census had been “only a slight issue” in his decision to withdraw. Nevertheless, the Census has been a big issue between Republicans and Democrats for years, and Mr. Gregg has been involved in the dispute. A decade ago, he resisted efforts by President Bill Clinton to increase financing for the 2000 Census.The abrupt withdrawal comes one week after Mr. Gregg was selected to be the third Republican member of the Obama cabinet. And he is the second nominee for commerce secretary to withdraw.

Moments after the stunning announcement, Robert Gibbs, the White House press secretary, issued a statement that Mr. Gregg had “reached out to the president and offered his name for secretary of commerce.”

“He was very clear throughout the interviewing process that despite past disagreements about policies, he would support, embrace, and move forward with the President’s agenda,” Mr. Gibbs said. “Once it became clear after his nomination that Senator Gregg was not going to be supporting some of President Obama’s key economic priorities, it became necessary for Senator Gregg and the Obama administration to part ways.”

Although Mr. Gregg, a Republican of New Hampshire, had not resigned his Senate seat, he has been away from the Senate floor this week — presumably preparing for his confirmation hearings — and he did not vote on the administration’s $789 billion economic stimulus plan agreed on by the House and Senate.

Last Tuesday during a brief ceremony at the White House, Mr. Gregg stood Mr. Obama as the president touted his nominee as a fiscal conservative who could help “shore up our financial system and revitalize our economy.”

The president selected Mr. Gregg exactly two months after he nominated his first choice for commerce secretary, Gov. Bill Richardson of New Mexico, who withdrew from consideration because of a federal investigation into state contracts. It was the first of several controversies surrounding the president’s top nominees.

In announcing his withdrawal, Mr. Gregg released a statement through his Senate office. The surprising move was not announced by the White House, although aides said the president had been informed of Mr. Gregg’s decision.

“Obviously the President requires a team that is fully supportive of all his initiatives,” Mr. Gregg said in a statement. “I greatly admire President Obama and know our country will benefit from his leadership, but at this time I must withdraw my name from consideration for this position.”

He added: “As a further matter of clarification, nothing about the vetting process played any role in this decision. I will continue to represent the people of New Hampshire in the United States Senate.”

The once-a-decade Census has enormous implications, both social and political. It is used to distribute federal money to states and cities based on population, and it is used to redraw Congressional districts — determining how many seats in the House of Representatives that growing states like California and Florida will pick up at the expense of states whose populations are relatively stagnant.

The Commerce Department under the Clinton administration wanted to use statistical sampling in the 2000 to arrive at population figures on which Congressional districting would be based. Republicans resisted furiously, arguing that only a true head count was proper. Political analysts believed that statistical sampling would help Democrats by adding more urban and minority people to the totals.

In early 1999, the Supreme Court ruled that the 2000 census had to be done by traditional head count as far as redistricting was concerned, but that sampling could be used for other purposes, like the distribution of federal money.

In recent days, Republicans have been upset by suspicions that the Obama White House might try to assert more direct control over the Census, a prospect they find troubling, given that the president’s chief of staff, Rahm Emanuel, is a former Democratic Congressman from Chicago.

Mr. Gregg’s withdrawal was the latest blow for the White House, which has seen three cabinet nominees withdraw from consideration. In addition to the withdrawal of Mr. Richardson, former Senator Tom Daschle took his name from consideration to lead the Health and Human Services Department last week amid questions about his tax returns.

David Stout contributed reporting.

Former Gregg Staffer Caught Up in Corruption Probe
NYTIMES
By THE ASSOCIATED PRESS
Filed at 2:22 p.m. ET
February 4, 2009

WASHINGTON (AP) -- A former congressional aide to Commerce Secretary-nominee Judd Gregg has been caught up in a long-running investigation into a Capitol Hill lobbying scandal.

A person familiar with the case confirmed Wednesday that ''Staffer F'' in court documents is Kevin Koonce, who worked as legislative director in Gregg's Senate office from 2002-04. The person spoke on condition of anonymity because the case is still under investigation.

Staffer F was cited in a guilty plea last week by Todd Boulanger, a former deputy to disgraced lobbyist Jack Abramoff. In federal court, Boulanger admitted he plied the staffer with front-row tickets to a hockey game, meals and drinks and other tickets to a baseball game, and in exchange received favors in spending legislation.

The total value of the gifts Staffer F took from Boulanger exceeded $10,000, court papers said.

The biographical details about Staffer F contained in court documents -- his job title at the time in the Senate office -- correspond to Koonce's.

Koonce has not been charged with any crime. He now works at a private firm, Sorini Samet & Associates LLP.

After several attempts by The Associated Press to reach him, Koonce replied to an e-mail Wednesday, saying only that he was on personal leave.

A spokesman for President Barack Obama, who on Tuesday appointed Sen. Gregg, R-N.H., to serve as Commerce secretary, declined to comment. Gregg's spokeswoman, Andrea Wuebker, had no immediate comment.

Abramoff, once a top GOP lobbyist, is now in prison and has cooperated with the Justice Department to help convict more than a dozen people, including former Rep. Bob Ney, R-Ohio, former Deputy Interior Secretary J. Steven Griles, and a number of former lobbyists and Capitol Hill aides.

Boulanger was the most recent ex-lobbyist to fall, pleading guilty Friday to lavishing a number of congressional staffers with gifts similar to those he gave Staffer F, including an all-expense-paid trip to the World Series.

As part of the plea documents, prosecutors said Staffer F tried to help insert spending measures and add other amendments to legislation for Boulanger's clients. Later, the staffer asked Boulanger if he could ''score some hockey tickets,'' and Boulanger got him front-row seats.

Boulanger later got the staffer box tickets to see the Baltimore Orioles, but Staffer F wanted more.

''Could you make sure there's beer this time,'' he wrote in an e-mail. I ''mean, the red sox, crab cakes, and fillet mignon's were nice but ... haha.''

Later, Boulanger sent an e-mail to Abramoff expressing confidence that the senator for whom the staffer worked would give them a favor. ''Easy money,'' Boulanger wrote, adding that the aide ''practically lives in our various suites. We are shady.''

According to his biography on the Web site of Sorini Samet & Associates, Koonce was a negotiator for the U.S. trade representative prior to working for Gregg. Koonce also worked for six years as a legislative assistant to former Sen. Jesse Helms, R-N.C., in the 1990s. Koonce graduated from Denison University and received a law degree from Catholic University.


NOTE:  Tom Daschle withdrew from HHS posts
Gregg Nominated for Commerce Post
NYTIMES
By JEFF ZELENY
February 4, 2009

WASHINGTON — As the White House grappled with fresh revelations about tax problems among its political appointees, President Obama on Tuesday nominated Senator Judd Gregg, Republican of New Hampshire, to help “shore up our financial system and revitalize our economy” by serving as commerce secretary.

“With the stakes this high, we cannot afford to get trapped in the same old partisan gridlock,” Mr. Obama said as he named the third Republican nominee to his cabinet. He added, “Judd is a master of reaching across the aisle to get things done.”

The president made the announcement exactly two months after he nominated his first choice for commerce secretary, Gov. Bill Richardson of New Mexico. He withdrew his name from consideration because of a federal investigation into state contracts, the first of several controversies surrounding the president’s top nominees.

As Mr. Obama stood in the Grand Foyer of the White House with Mr. Gregg, the president’s nominee for chief White House performance officer withdrew her name from consideration, citing concerns over unpaid unemployment taxes in the District of Columbia. The nominee, Nancy Killefer, said her confirmation would create a “distraction” and delay the urgent agenda facing the administration.

Mr. Obama declined to take questions from reporters about Ms. Killefer or Tom Daschle, the president’s choice for Health and Human Services Secretary, who is fighting through tax concerns of his own. A senior administration official said on Tuesday that the president remains committed to seeing that Mr. Daschle is confirmed.

The president is seeking to advance his economic recovery plan through the Senate, dispatching his top advisers to Capitol Hill to answer questions and make changes to the legislation. Mr. Obama is taking the unusual step of inviting the top anchors from the five broadcast and cable television networks to the Oval Office on Tuesday afternoon to speak about the urgency of his proposal.

“By now, our economic crisis is well known, and our economy’s shrinking, unemployment rolls are growing, businesses and families can’t get credit, and small businesses can’t secure the loans they need to create jobs and get their products to market,” Mr. Obama said Tuesday. “Now’s the time for Washington to act with the same sense of urgency that Americans all across the country feel every single day.”

In naming Mr. Gregg to the post of Commerce Secretary, which requires Senate confirmation, the president is seeking to win more bipartisan support for the plan. Mr. Obama said that Mr. Gregg would be a key member of his economic team.

“Judd is famous or infamous, depending on your perspective, on Capitol Hill, for his strict fiscal discipline,” Mr. Obama said. “It’s not that he enjoys saying no, although if it’s directed at your bill, you might feel that way. It’s that he shares my deep-seated commitment to guaranteeing that our children inherit a future they can afford.”

The president added: “Clearly Judd and I don’t agree on every issue, most notably who should have won the election. But we do agree on the urgent need to get American businesses and families back on their feet.”

Mr. Gregg, who is in the middle of his third Senate term, said he agreed to answer the president’s call to serve because of the enormity of the nation’s economic crisis.

“This is not a time for partisanship,” Mr. Gregg said. “This is not a time when we should stand in our ideological corners and shout at each other. This is a time to govern and govern well.”

Part of the agreement of nominating Mr. Gregg pertained to who would fill his Senate seat. The Democratic governor of New Hampshire, John Lynch, agreed to appoint a Republican to succeed Mr. Gregg. Advisers to Mr. Lynch said Tuesday that he would name Bonnie Newman, a Republican fixture in New Hampshire who has served in the administrations of Presidents Ronald Reagan and George H.W. Bush.

“I also want to thank the governor of New Hampshire for his courtesy and courage in being willing to make this possible through the agreement that we have relative to my successor in the Senate,” Mr. Gregg said.

Obama Names Judd Gregg Commerce Secretary
NYTIMES
By THE ASSOCIATED PRESS
Filed at 11:21 a.m. ET
February 3, 2009

WASHINGTON (AP) -- President Barack Obama has nominated Republican Sen. Judd Gregg to be Commerce secretary. Obama announced the nomination at the White House.

If confirmed, Gregg would be the third Republican in the Democrat's Cabinet, joining Defense Secretary Robert Gates and Transportation Secretary Ray LaHood.

It was the last open spot in the senior ranks of the Obama administration.

Obama initially had tapped New Mexico Gov. Bill Richardson for the Commerce job, but he withdrew his nomination amid a grand jury investigation into a state contract awarded to his political donors.

New Hampshire Gov. John Lynch, a Democrat, will appoint a Senate successor. Officials in the state say he will tap Bonnie Newman.


GOP Leader: Sen. Gregg Departure Won't Shift Power
NYTIMES
By THE ASSOCIATED PRESS
Filed at 10:58 a.m. ET
February 1, 2009

WASHINGTON (AP) -- No change in the Senate's balance of power if New Hampshire Republican Judd Gregg leaves to become commerce secretary.

That's the word from the Senate's top Republican, Mitch McConnell. He says Gregg has assured fellow GOP senators of that.  McConnell says Gregg has promised he would be replaced by someone who would affiliate with other Republicans in the Senate.

McConnell's comments suggest Gregg has negotiated a deal that would allow New Hampshire's Democratic governor to name either a Republican or Republican-leaning replacement. That would leave Senate Democrats short of a 60-member, fillibuster-proof majority.

Officials say Obama is set to make Gregg his third Republican Cabinet official as early as Monday.

McConnell spoke on CBS' ''Face the Nation.''

Obama Ready to Pick Republican Senator for Commerce Post
NYTIMES
By SHERYL GAY STOLBERG
February 1, 2009 - another day early...

WASHINGTON — The White House on Saturday confirmed the widespread speculation that President Obama is set to pick Senator Judd Gregg, Republican of New Hampshire, as his nominee for commerce secretary.

“Senator Gregg is now the leading candidate for commerce and a pick that could come as early as Monday,” a senior administration official said, speaking on condition of anonymity because a formal announcement has not yet been made.

Mr. Gregg’s name has been circulated for several days as Mr. Obama tries to replace his previous nominee for commerce secretary, Gov. Bill Richardson of New Mexico, who withdrew amid revelations that a grand jury is investigating how he awarded state government contracts. Mr. Gregg himself said on Friday that he was under consideration.

If the senator accepts and is confirmed, he would be the third Republican appointee in Mr. Obama’s cabinet, after Secretary of Defense Robert M. Gates, who also served under former President George W. Bush, and Transportation Secretary Ray LaHood, a former Republican congressman from Mr. Obama’s home state of Illinois.

Mr. Gregg’s selection could also open the door to a significant shift in the balance of power in Congress. There are currently 58 Democrats in the Senate; the number would rise to 59 if Al Franken of Minnesota is seated after the court challenge to his race is completed.

If Gov. John Lynch of New Hampshire, a Democrat, replaced Mr. Gregg with a member of his own party, that would put the Democratic majority at 60 — a magic number in the Senate, because 60 is the number of votes needed to control the legislative agenda and block a Republican filibuster.

But there are no guarantees that Mr. Lynch will pick a Democrat: New Hampshire is a state that prizes its political independence, and Mr. Lynch is a moderate. Some analysts say the governor could turn to a well-regarded Republican — the name of Warren Rudman, a former senator from New Hampshire, has been mentioned — to serve as a kind of “caretaker senator” to fill out the remainder of Mr. Gregg’s term, which expires at the end of 2010.

Mr. Gregg was not particularly close to Mr. Obama when they were senators together. But the New Hampshire senator did have a close relationship with Mr. Obama’s predecessor, former President George W. Bush, a friendship stretching back two decades to when Mr. Gregg’s father, Hugh Gregg, a former New Hampshire governor, worked to help elect Mr. Bush’s father, the first President Bush.

But Mr. Gregg has been complementing Mr. Obama of late. Earlier this week, the senator was quoted as calling the president a “tour de force.”


NYTIMES Sunday, January 4, 2009 - Update | 2:28 p.m.

Gov. Bill Richardson of New Mexico confirmed in a statement released Sunday afternoon that he has withdrawn his name as the commerce secretary nominee, citing a pending “investigation of a company that has done business with New Mexico state government.”

Mr. Richardson says in the statement that he and his administration “have acted properly in all matters,” but that the “ongoing investigation also would have forced an untenable delay in the confirmation process.”

On Dec. 19, The Times published an article stating that a federal grand jury in New Mexico was looking into accusations that Governor Richardson’s administration gave lucrative contracts to a California financier because he contributed heavily to the governor’s political action committees.

The article, citing a person familiar with the grand jury proceedings, stated that since August, federal investigators have been examining how CDR Financial Products Inc., of Beverly Hills, Calif., got two consulting contracts in 2004 worth about $1.4 million to advise the state on a large bond issue for building infrastructure, one of Mr. Richardson’s initiatives.

The investigation was first reported in The Albuquerque Journal...

Official: Richardson to Be Commerce Secretary
NYTIMES
By THE ASSOCIATED PRESS
Filed at 10:38 a.m. ET
November 23, 2008

NEW YORK (AP) -- A Democratic official says President-elect Barack Obama will name New Mexico Gov. Bill Richardson as commerce secretary.  The official says Obama plans to announce Richardson's selection after Thanksgiving. The official spoke on condition of anonymity because the official was not authorized to speak publicly about the negotiations.  Richardson was energy secretary and U.N. ambassador under President Bill Clinton. Richardson would be the most visible Hispanic named to Obama's Cabinet.  Richardson dropped out of the Democratic presidential contest in January and endorsed Obama.
-----------------------------

Penny Pritzker, national finance chair. for Obama


Obama advisers push oil pipelines for jobs
House has acted on ideas in report
The Washington Times
By Dave Boyer
Tuesday, January 17, 2012

President Obama's jobs council endorsed a wide range of pro-growth proposals Tuesday that includes building oil pipelines and expanding drilling in the U.S., steps that House Republicans promptly noted are being blocked by Senate Democrats.

"The Road Map to Renewal" submitted to Mr. Obama by his team of industry leaders embraces more domestic production of fossil fuels. The report doesn't specifically mention the Canada-to-Texas Keystone XL oil pipeline on which the Obama administration has delayed a decision, but it does advocate building more domestic pipelines.

"Policies that facilitate the safe, thoughtful and timely development of pipeline, transmission and distribution projects are necessary to facilitate the delivery of America's fuel and electricity and maintain the reliability of our nation's energy system," the report says.

White House press secretary Jay Carney said the report wasn't referring to Keystone, which environmental groups are pressuring the administration to reject.

"The jobs council wasn't talking about Keystone specifically," Mr. Carney said. "The jobs council was talking about the importance of expanding domestic oil and gas production, a goal this president shares."

House Speaker John A. Boehner, Ohio Republican, said the presidential jobs council's recommendations for expanding domestic energy production, cutting government red tape and overhauling business taxes are exactly the policies passed by the House in the past year. Most of those bills have stalled in the Senate.

Late last year, GOP lawmakers approved legislation forcing the administration to make a decision on the Keystone pipeline, which could create 20,000 jobs, by the end of February.

"Nearly 30 House-passed job bills are awaiting action in the Senate, most of which address the recommendations made today," Mr. Boehner said. "With American small businesses still suffering from the misguided policies implemented by the president, there is no excuse for these pro-growth bills to collect dust any longer."

Among the council's other recommendations that Republican lawmakers have supported:

• Lower corporate tax rates to "internationally competitive levels" while eliminating deductions and loopholes.

• Streamline government rules and regulations to reduce the financial burdens on businesses.

• Take more aggressive action to promote American manufacturing.

• Adopt an "all in" strategy on energy to reduce reliance on foreign oil and move toward cleaner fuel sources.

At a meeting at the White House on Tuesday morning, Mr. Obama cautioned that Congress might block the council's legislative proposals to create jobs this year.

"I want you to know that obviously this year is an election year, and so getting Congress focused on some of these issues may be difficult," said Mr. Obama, adding that he would keep pursuing some recommendations "administratively."

The president's regulatory czar, Cass Sunstein, reported to the council that the administration's efforts to cut needless rules and regulations in its first three years are resulting in a much greater benefit to industry than the same period during the administration of President George W. Bush.

"The bulk of regulatory costs in the last five years have been from the previous administration," Mr. Sunstein said.

Last week, U.S. Chamber of Commerce President Thomas J. Donohue said an "avalanche" of new regulations, including more than 200 in the works at the Environmental Protection Agency and 447 rules from the Dodd-Frank financial overhaul, caused "a big drag on our economy."

A review of the Obama administration's first 33 months found that the number of significant federal rules, defined as those costing industry more than $100 million, rose to 129, compared with 90 under Mr. Bush during the same time frame.

Council member Brian Roberts, CEO of Comcast Corp. and a wealthy donor who hosted Mr. Obama at his home on Martha's Vineyard last summer, told the president he must do a better job of convincing the public that he has succeeded at cutting red tape.

"Brian, that's music to my ears," Mr. Obama said. "The gap between perception and practice on this is probably greater than any other area."

Other members of the jobs council include Steve Case, former chairman of AOL; Jeffrey R. Immelt, chairman and CEO of General Electric Co.; Kenneth I. Chenault, chairman and CEO of American Express Co.; Ellen Kullman, chairman and CEO of DuPont Co.; Paul S. Otellini, president and CEO of Intel Corp.; Penny Pritzker, chairwoman of Pritzker Realty Group; Sheryl Sandberg, chief operating officer of Facebook; Laura D. Tyson, a former Clinton administration official on the faculty of the University of California, Berkeley; and Robert Wolf, president of UBS Investment Bank.

Several council members are big-money donors to Mr. Obama's re-election campaign. Ms. Pritzker served as national finance chairwoman for the Obama campaign in 2008. She and Mr. Wolfe are "bundlers" who have raised at least $2.7 million for Mr. Obama in 2008 and this election cycle.

The president congratulated the council, which he appointed a year ago, for its hard work.

"This has not been a show council," Mr. Obama said. "This has been a work council."

The panel has generated dozens of mostly modest proposals since its inception. Mr. Obama has acted or begun to act on 33 of 35 recommendations that can be accomplished by executive action. Another 17 proposals would require congressional action.

© Copyright 2012 The Washington Times, LLC. Click here for reprint permission.
Obama Fund-Raiser Knocks Down Cabinet Rumors
NYTIMES
By CHARLIE SAVAGE
November 21, 2008

WASHINGTON — When Barack Obama was looking for an entree into Chicago’s elite business community, he had the perfect door-opener: Penny S. Pritzker, a billionaire from one of the city’s dynasties.

Ms. Pritzker, 49, went on to become the Obama presidential campaign’s national finance chairwoman, raising record-breaking sums. And after Mr. Obama won the election, she was widely reported to be a leading contender for commerce secretary.

But the same business holdings and connections that made Ms. Pritzker so vital to Mr. Obama’s ability to raise campaign money also came under sharp scrutiny. On Thursday, she released a statement declaring that she would not be a candidate for the job.

“I think I can best serve our nation in my current capacity: building businesses, creating jobs and working to strengthen our economy,” Ms. Pritzker said. “It has been my great privilege to serve in the Obama campaign. I look forward to helping our new president in every way possible and am excited about the future under his leadership.”

Ms. Pritzker is one of three cousins who manage their family’s fortune, which includes Hyatt hotels, casinos and other ventures. She oversees a chain of luxury retirement communities, an airport parking company, a realty group and the credit-rating agency TransUnion.

The talk of a cabinet post, which would require Senate confirmation, had cast a spotlight on her secretive family’s empire and her past business dealings, including episodes that might prove politically embarrassing.

Earlier in her career, Ms. Pritzker was involved in running and overseeing Superior Bank, in a Chicago suburb, which focused on bundling subprime mortgages into securities, the practice that later helped set off the current financial crisis. The institution collapsed in 2001.

Moreover, Ms. Pritzker’s family is renowned for finding ways to avoid paying taxes on its wealth. The Pritzkers were pioneers in using tax loopholes to shelter their holdings from the Internal Revenue Service, and many of their dealings have never been made public.

It was not clear why she put out the statement on Thursday, but some news outlets, including The New York Times, reported late Wednesday night that she was in the final stages of being vetted. An Obama transition spokesman said Thursday that those accounts were incorrect.

Burt Ely, a banking consultant who testified at a 2001 Senate committee hearing about the failure of Superior Bank, said it had never made sense for Ms. Pritzker to become a nominee. “The confirmation hearing could have been quite ugly for all that would have been dredged up about Superior as well as possibly other Pritzker dealings,” Mr. Ely said Thursday.

In 1988, the Pritzker family and another wealthy investor took over a failing savings and loan and turned it into Superior Bank. Ms. Pritzker was its chairwoman from 1991 to 1994, after which she sat on the board of the bank’s holding company.

In 1993, the bank began a strategy of concentrating on packaging subprime mortgages into securities. At first, the bank flourished. But regulators later discovered accounting irregularities that overstated the value of its assets. The bank was forced to write down huge losses, leaving it without adequate capital in the spring of 2001.

In May 2001, Ms. Pritzker wrote a letter to bank employees assuring them that her family would put more cash in to save the bank, and declaring that “our commitment to subprime lending has never been stronger.” But the Pritzker family did not carry out the plan, and the bank was shut down in July 2001.

A 2002 report by the inspector general of the Federal Deposit Insurance Corporation concluded that “the failure of Superior Bank was directly attributable to bank management and the board of directors ignoring sound risk management principles and failing to adequately oversee Superior operations.”

The Pritzkers agreed in 2001 to pay the F.D.I.C. $460 million over 15 years to cover claims by depositors. Still, more than 1,400 depositors who had more than $100,000 in their savings accounts — the maximum the government then insured — were left short about $10 million, said Clint Krislov, a lawyer for several of them. “Why the Pritzkers wouldn’t do the right thing and just make these people whole for the small amount of money that it would take, I still cannot understand,” he said.

In a written response to questions by The Times on Thursday, Ms. Pritzker said, “I sincerely regret the closing of Superior Bank.” She said that she did not personally own any of the bank, but that her trusts had contributed to the “large amount of money” that her family paid to the F.D.I.C.

The Pritzker clan’s fortune traces back to a Chicago law firm run by Ms. Pritzker’s grandfather, who bought up property during the Depression and became an investor. His sons expanded the empire, establishing the Hyatt chain.

The family also increased its wealth by exploiting loopholes in the tax code, including setting up a series of offshore trusts that sheltered their assets from taxes.

The I.R.S. fought several battles with the Pritzkers over the arrangements. But the agency was hindered by foreign bank secrecy laws that concealed what the Pritzkers owned.

In 2002, a few cracks appeared in the wall of secrecy when two young Pritzker heirs filed a lawsuit claiming their older relatives had looted their trusts. The litigation revealed that the family was worth at least $15 billion, that it was held in some 950 trusts, and that they were trying to split it up among 11 heirs by 2011.

One Democrat familiar with the transition said Thursday that Ms. Pritzker initially believed she could weather questions about Superior Bank, but her family resisted because their assets are so entangled.

The transition team’s vetting form, which she never filled out, required disclosing all property owned in the past decade, including “held in trust” or “held in combination with others.”
-------------------------
Pritzker Withdraws From Cabinet Consideration
NYTIMES
By Brian Knowlton
November 20, 2008, 2:08 pm

Penny Pritzker, the Chicago businesswoman, longtime friend of Barack Obama’s, and national finance chairman of his presidential campaign, has withdrawn from consideration as commerce secretary.

Ms. Pritzker issued the following statement on Thursday: “Speculation has grown that I am a candidate for secretary of commerce. I am not. I think I can best serve our nation in my current capacity: building businesses, creating jobs and working to strengthen our economy. It has been my great privilege to serve in the Obama campaign.”

Ms. Pritzker was a chief architect of Mr. Obama’s record-breaking fund-raising efforts, and speculation had grown in recent days that she would be offered the commerce post.

But some of her vast business dealings – her family’s financial empire includes the Hyatt hotel chain and many other ventures — seemed likely to raise obstacles to any confirmation process. Among other things, she helped run and oversee an Illinois bank involved in turning subprime loans into securities. The bank collapsed after regulators discovered accounting irregularities


NEW

Defense

Robert Gates leaves, Leon Panetta (l) in.


EXCLUSIVE: Obama wants Bush war team to stay
Washington Times
Bill Gertz (Contact)
Tuesday, December 23, 2008

EXCLUSIVE:

Defense Secretary Robert M. Gates is asking many of the Bush administration's 250 Pentagon political appointees to remain on the job until the incoming Obama administration finds replacements -- a move designed to prevent a leadership vacuum with U.S. troops engaged in wars in Iraq and Afghanistan.

The unusual request by Mr. Gates, whom President-elect Barack Obama has asked to continue in his Cabinet post, ensures that key policy positions will not be left to "acting" subordinates as typically occurs when political appointees are directed to resign during a presidential transition.

"I have received authorization from the president-elect's transition team to extend a number of Department of Defense political appointees an invitation to voluntarily remain in their current positions until replaced," Mr. Gates said in a Friday e-mail.

The chance to stay is "available to all willing political appointees with the exception of those who are contacted individually and told otherwise," he said.

Geoff Morrell, Pentagon press secretary, confirmed that Mr. Gates wants to retain temporarily most political appointees, saying nearly all of the service secretaries and undersecretaries will remain until Senate confirmation of their successors, which can take months. He declined to identify who will be asked to leave.

"It is his top priority to ensure a smooth transition," said Mr. Morrell, who is also staying on.

Other federal agencies, including state, justice and homeland security are not keeping political appointees.

The Pentagon was scheduled to notify those it would ask to leave at the close of business Monday. At least three officials were notified Monday in an e-mail that they had to vacate their offices by Jan. 20. Deputy of Defense Secretary Gordon England and Undersecretary of Defense for Policy Eric S. Edelman already have announced that they plan to depart by Jan. 20.  Two senior officials expected to stay are John Young, undersecretary of defense for acquisition, technology and logistics, and James R. Clapper, undersecretary of defense for intelligence.

Mr. Gates said he could not provide "more clarity and guidance" on how long those who wish to become holdovers will be allowed to stay.

"To the extent you are willing and in a position to continue to serve, I am deeply appreciative," Mr. Gates said in the e-mail. "However, I encourage you to continue to prudently plan for the transition from DOD employment, as the pace of personnel decisions by the incoming administration is likely to accelerate."

About 40 Pentagon positions require Senate confirmation, including the undersecretaries, assistant secretaries and some deputies. The rest do not require a formal presidential nomination and Senate approval and can be made by the defense secretary.  Senate confirmation in some cases can take months and require hearings. In other cases, nominees can be approved within a few weeks of nomination.

The secretary said he appreciated the appointees' willingness to continue "in the interest of providing continuity for this department and for its critical mission to the nation in a time of war," and he promised to thank each appointee personally in January.

"But I still want to take advantage of this note to thank you collectively for all you have done for our country. I wish you and yours happy holidays," he said.

The note was signed "Bob Gates" and sent by Mr. Gates' chief of staff, Robert Rangel.
FROM THE I-BBC:  US Defence Secretary Robert Gates is reported to have agreed to remain in charge of the Pentagon when Barack Obama takes office, at least for the first year of his administration.  

Robert Gates, 65, is a former director of the CIA and was appointed Defence Secretary by President Bush in 2006. He has promoted the military surge in Iraq that has been credited with stemming violence there.  Mr Obama opposed the surge but both men are agreed on a greater focus on Afghanistan.  Mr Gates is seen as a moderate and is widely respected among both Democrats and Republicans in Congress.

His appointment would also fulfil Mr Obama's pledge to include a Republican in his Cabinet.
         
SECURITY TEAM:  Secretary of Defense, State and National Security Advisor heading this up...including, so far...

       







Obama choice helped Fannie block oversight
National security adviser tied to discrediting of probe
By Jim McElhatton, The Washington Times
8:58 p.m., Wednesday, October 13, 2010

Years before Fannie Mae foundered amid a massive accounting scandal, President Obama's choice for national security adviser oversaw an office inside the mortgage giant that orchestrated a negative publicity blitz to fight attempts by Congress to increase government oversight, records show.

Thomas E. Donilon, who won the job as national security adviser this month, worked as a registered lobbyist for Fannie Mae from 1999 to 2005 at a time the company's officials insisted finances were sound. He also earned more than $1.8 million in bonuses before the government took over the troubled company in the wake of an accounting scandal.

Vice President Joseph R. Biden Jr. and Mr. Obama, who railed against lobbyists on the campaign trail, hailed Mr. Donilon's appointment last week, but made no mention of his time as a registered lobbyist.

Mr. Donilon's work came under scrutiny in a 2006 report by the Office of Federal Housing Enterprise Oversight (OFHEO), which found that Fannie Mae lobbyists - working in an office overseen by Mr. Donilon - parlayed their ties to members of Congress to try to discredit federal regulators looking into the finances of the company.

"Thus, Fannie Mae succeeded in creating a large volume of negative publicity about the OFHEO examination report, in an effort to distract attention from its multibillion-dollar accounting errors," the OFHEO report concluded.

In addition, the report noted that the publicity campaign, which included leaking nonpublic information, was conceived and executed by Fannie Mae's government and industry relations department, but was still "well known" to Mr. Donilon and other senior executives.

Mr. Donilon was never accused of being complicit in accounting irregularities that prompted federal regulators to seek more than $100 million paid out to Fannie Mae's former chairman and chief executive, Franklin D. Raines, along with two other executives.

Still, Mr. Donilon was sued in federal court and later dropped from a pair of shareholder lawsuits filed by retirement plans that accused Fannie Mae executives of earning millions of dollars in salary, bonuses and stock compensation based on improper financial results.

The Washington Times reported on Mr. Donilon's ties to Fannie Mae in 2008, when he was named as an adviser to Mr. Obama's presidential transition team.

At the time, Obama aides noted that as a former official at the State Department, Mr. Donilon was providing valuable input in foreign-affairs issues, but added that he would have no say in housing matters, given his previous work at Fannie Mae.

Obama National Security Adviser Gen Jones 'resigning'
 8 October 2010 Last updated at 11:17 ET

National Security Adviser Gen James Jones is stepping down and will be replaced by his deputy, Tom Donilon.  President Barack Obama is to announce the high-level staff changes at the White House on Friday, officials said.  Gen Jones's announcement had been widely expected as Mr Obama nears two years in the White House.

It follows news of the departure of several other senior White House advisers, including political staff and top economic adviser Larry Summers.  Gen Jones, a former Marine Corps general, is the first high-level member of Mr Obama's national security team to depart.

In recent weeks, Mr Obama's chief of staff Rahm Emanuel left to run for mayor of Chicago and senior political adviser David Axelrod departed to begin planning the president's 2012 re-election bid.Mr Summers, Mr Obama's top economic adviser, announced last month he would leave at the end of the year to return to Harvard University.

Staff departures are not unusual at this point in a president's term, nearly halfway through the four years.

Gen Jones is seen as close to the president, while Mr Donilon, a veteran Democratic political hand and former chief of staff to Bill Clinton's Secretary of State Warren Christopher, is not seen as part of Mr Obama's inner circle, analysts say.  A recent book by veteran reporter Bob Woodward of the Washington Post quoted Defence Secretary Robert Gates as saying Mr Donilon would be "a disaster" as a national security adviser.

Gen Jones retired from the Marine Corps in 2007 after more than 40 years, taking a position as the State Department's Special Envoy for Middle East Regional Security.  He was commissioned as a Marine Corps officer in 1967, and was sent to Vietnam. He later served in command and staff positions all over the world.

Analysis
Kevin Connolly BBC News, Washington

As a 2m-tall, crop-headed military veteran with 40 years' service in the Marine Corps, Gen James Jones had little in common with the slick political professionals who got Mr Obama to the White House. A recent book quoted his descriptions of them as "the water bugs", "the mafia" and "the campaign set".

That may have speeded up his departure, but it was widely known that Gen Jones was preparing to leave his job.

His importance to the White House team may have been limited by the closeness to the president of cabinet ministers like Robert Gates and Hillary Clinton and by the direct line that General David Petraeus can command from Afghanistan.

Nonetheless, this is the latest in a string of high-profile departures including budget director Peter Orszag and White House chief of staff Rahm Emanuel. Some turnover is to be expected two years into the gruelling grind of a presidential term, but if the exodus continues it may create the impression of a team that is growing weaker.

First woman to head major US intelligence agency
YAHOO
By KIMBERLY DOZIER, Associated Press Writer
9 Aug. 2010

FORT BELVOIR, Va. – The United States has had three female secretaries of state — but until now has never had a woman lead one of its 16 major intelligence agencies.

Letitia A. Long, 51, was praised by Defense Secretary Robert Gates, as the right person for the job, as she took up her post as director of the National Geospatial-Intelligence Agency in a ceremony Monday at the agency's half-built, high-tech campus in Springfield, Va.

Long, in turn, saluted what the NGA work force has already accomplished, from aiding troops on the battlefield, to helping draw together intelligence from across the national security spectrum.

"I have never seen an agency as young as the NGA do so much in so little time," she said of the organization, which was established in 1996.

She spoke before several hundred VIPs from the intelligence and special ops community on the roof of a parking garage next to her future offices. The "Jetsons"-style rounded wedge of buildings is rising from a vast construction site at Fort Belvoir. The NGA's staff, now spread among several sites across the Washington metropolitan area, is slated to relocate there by fall 2011.

Long's 32-year career has led to a series of senior management positions: deputy director of Naval Intelligence, deputy undersecretary of defense for intelligence and, most recently, second in command at the Defense Intelligence Agency.

Long's old boss and mentor, James R. Clapper, newly confirmed as director of national intelligence, noted her 32 years of service, with 16 of them often working in agencies under his purview. Clapper warned her that as soon as he is sworn in as DNI, his "meddling" would continue in her next mission.

Long thanked him for "taking a chance on a young executive, way back when," and said she welcomed the meddling to come.

Long represents the vanguard of women in the intelligence community.

Women represent 38 percent of total intelligence work force, according to Wendy Morigi, DNI spokeswoman. In six of the most prominent agencies, 27 percent of senior intelligence positions are held by women.

Long has taken over one of the "top computer geek shops" in the national security world. The NGA synthesizes satellite imagery, using everything from the number of electric lines a city has to the density of the soil, to create three-dimensional, interactive maps of every spot on the planet. They're used by everyone from invading troops gauging whether a country's roads or deserts can handle tank tracks, to oil spill cleanup crews trying to decide where to deploy resources.

Long has the science-and-technology credentials to do it, with a degree in electrical engineering from Virginia Tech, and a masters in mechanical engineering from the Catholic University of America. Together with those high powered jobs, Annapolis-born Long and her husband have raised three daughters.

Rep. Anna Eshoo, D-Calif., said Long's "experience and position make her an important role model for all the women in the intelligence community." Eshoo is a member of the House intelligence committee and a longtime proponent of women in top intelligence roles.

Some of Long's new women staffers at the NGA say her example will surely change how the largely male-dominated work force sees them. However, women in their thirties and forties at these agencies say the climb they face is small compared to Long's fight, against an older generation that hadn't yet witnessed women in combat or a woman come so close to capturing the nomination for U.S. president.

Yet some of those women out in the national security trenches say the fight's far from over.

Intelligence executive Carrie Bachner, a former Air Force officer, worked as the legislative adviser to Charles Allen when he was the Department of Homeland Security's top intelligence official.

That meant she advised him daily on how to deal with the 86 congressional committees responsible for DHS oversight.

Still Bachner says, when she'd walk into a room of intelligence officials or congressional staff with Allen, "they'd automatically ignore me, assuming I was the executive assistant or a note taker until they'd realize, 'Oh, wow, she's the person we're supposed to talk to.'"

Bachner is also Indonesian, which she believes is another reason she is often overlooked.

"I still get it, even though I'm the president of my company," she says. Her firm, Mission Concepts Inc., specializes in information sharing and serves the Pentagon and most of the intelligence agencies. "They are taken aback when I introduce myself. They're looking for the real president, and well, that's me."

And now, when "they" look for the director of the NGA, that will be Letitia Long.

_______________________________________________________________________________________________________________________________
         
The Adviser at the Heart of National Security
NYTIMES
By HELENE COOPER
July 9, 2010

WASHINGTON

SOME of President Obama’s top national security advisers believed late last year that they had reached consensus on an aspect of Afghanistan strategy after meeting with Gen. James L. Jones, the national security adviser.

They should have checked first with Denis McDonough, the National Security Council’s chief of staff. “I don’t think that’s where the president is on that,” Mr. McDonough informed his higher-ups, according to two administration officials.

A couple of months later, when state officials in Florida tried to halt medical evacuation flights from Haiti, Mr. McDonough, on the ground in earthquake-stunned Port-au-Prince, got on his BlackBerry, which is never far from his side. Within a few hours, as other officials tell it, Homeland Security Secretary Janet Napolitano acted to keep the airspace open.

Forget Secretary of State Hillary Rodham Clinton or Defense Secretary Robert M. Gates. When it comes to national security, Mr. Obama’s inner circle is so tight it largely consists of Mr. McDonough, a 40-year-old from Minnesota who is unknown to most Americans but who is so close to the president that his colleagues — including his superiors — often will not make a move on big issues without checking with him first.

“He is the keeper of the president’s flame,” said Cheryl Mills, Mrs. Clinton’s chief of staff. Brian Katulis, a foreign policy expert who is a good friend of Mr. McDonough, said, “When the president needs to pick up the phone and call someone on national security, that someone is Denis.”

When Mr. Obama got word of the Rolling Stone article that would lead to his firing of Gen. Stanley A. McChrystal as the top commander in Afghanistan, Mr. McDonough was one of about a half-dozen people he immediately summoned to the Oval Office.

Mr. McDonough is intensively protective of the president, and is well known for picking up the phone — or his BlackBerry — to take people to task, from reporters to Washington talking heads to other Obama officials who go off message. He spent the entirety of his bike ride home to Takoma Park, Md., from the White House late one recent night arguing on the cellphone with a reporter who he believed had mischaracterized an internal administration debate over Iraq policy.

He has berated some of the Democratic Party’s most distinguished foreign policy dignitaries when they have dared to critique Mr. Obama publicly, leaving a miffed Washington establishment in his wake muttering — off the record, of course — about just who this guy thinks he is.

His e-mail messages are legendary across Washington, and usually appear right after a critique hits the Web. When David Rothkopf, a national security expert and Commerce Department official in the Clinton administration, wrote a column for The Washington Post last August that praised Mrs. Clinton — and notably, not Mr. Obama — as overseeing “profound changes” to American foreign policy, the first e-mail message Mr. Rothkopf received came from you-know-who.

“Interesting choice for a profile,” Mr. McDonough wrote.

“Political figures like to have people who are watching their back,” Mr. Rothkopf said in an interview. “I understand why people are bugged by McDonough; they’re jealous of his access to the president. But the president deserves to have someone like him.”

Mr. McDonough declined to be interviewed for this article.

Mr. Obama arrived in Washington six years ago as a political outsider, a Chicago novice with no historical ties to the Democratic foreign policy establishment. Early on in the presidential campaign, Mr. McDonough signed up with Mr. Obama.

A foreign policy adviser to Senator Tom Daschle before Mr. Daschle’s 2004 election defeat, Mr. McDonough was then at the Center for American Progress, a liberal research organization.

HE was all over the country for Mr. Obama during the campaign. Mr. McDonough shoveled the driveway and sidewalk of a Davenport, Iowa, couple as part of an unsuccessful effort to woo them into caucusing for Mr. Obama instead of Mrs. Clinton. He spent so much time canvassing his assigned precinct that by the night of the Iowa caucuses he was greeting most of the caucusgoers by name, prompting his colleagues to start calling him the town mayor. (Mr. Obama won five of the seven delegates in the precinct.)

Mr. McDonough looks more like a Town & Country cover model than a Washington foreign policy wonk. At 6-foot-3, he weighs himself regularly in the White House doctor’s office to make sure he does not go above 200 pounds.

But early on during the campaign, Mr. McDonough took on the role of Mr. Obama’s foreign policy guru. “Foreign policy was always the high wire for us on the campaign,” one administration official said. President Obama, he said, “trusted Denis to get the job done but not sand down his views.”

After the Democratic debate in South Carolina in 2007, when Mr. Obama called “ridiculous” the notion of not talking to America’s enemies, Mr. McDonough and Mr. Obama mulled the ensuing furor in the candidate’s bare Massachusetts Avenue campaign office. Mr. McDonough, according to a former campaign official, “told the president, ‘You have nothing to walk back on your position. You don’t need lectures on foreign policy from the Democratic foreign policy establishment.’ ”

The bond they forged during the campaign sealed Mr. McDonough’s role as Mr. Obama’s most trusted foreign policy aide in the White House. Today, many of the old Democratic rivals are in the Obama cabinet, deciding Afghanistan, Iraq and Iran policy. And Mr. McDonough is far closer to the president than they are.

AT both the Pentagon and the State Department, officials report being chewed out by Mr. McDonough when he believes they have leaked something before the White House is ready. In recent months, Mr. McDonough has mellowed, his colleagues say. In fact, he began 2010 telling reporters that he was going to make an effort to be nice, and now routinely mentions that he will not blow up during his almost nightly phone calls to dispute articles.

At the White House, Mr. McDonough presses the East Wing to make sure that junior members of the National Security Council staff are invited to receptions and parties.

In an interview, General Jones said he could not recall when Mr. McDonough told him and other officials that their evolving consensus on Afghanistan policy was not where Mr. Obama wanted to go. But “as a generic anecdote, I’m not bothered by that; it’s what I expect him to do,” he said.

“It’s a big asset for all of us to have Denis, who has known the president for so long,” General Jones said. “He knows how he thinks about issues.”

A Concession Wrapped in an Acceptance
NYTIMES
By ALESSANDRA STANLEY
December 2, 2008

Presentations of presidential appointees can be important, but they are rarely interesting. Usually, the men and women chosen for top cabinet roles are not well known to the public; if there is drama behind the scenes, most in the audience are blind to it.

That was hardly the case on Monday when President-elect Barack Obama introduced his national security team. Senator Hillary Rodham Clinton’s speech was no ordinary public-service pledge; for plenty of viewers, it was the moment when Mrs. Clinton finally conceded the election for real.

The occasion was solemn, but like a wedding where the parents are divorced, the ceremony was carefully choreographed to avert awkward moments and camouflage past unpleasantness.

When Mr. Obama unveiled his economic team last week, he alone made a speech. In this more delicate selection, it was decided that Mrs. Clinton, his pick for secretary of state, should also speak. But that might look suspect — or too political — unless the five other appointees also said a word, and that, in turn, required a few words from Vice President-elect Joseph R. Biden Jr., who had yet to make public statements of any consequence since the election. (He spoke last, spiritedly, and at some length.)

Not all the staging was designed to address Mrs. Clinton’s sensibilities. She and the five other appointees walked out on stage and stood in line, almost as if at attention, waiting for the president-elect to walk in. He did so briskly, with Mr. Biden at his heels.

Mr. Obama introduced his former rival as “my dear friend,” and promised that his new team would forge “a new dawn of American leadership.”

Mrs. Clinton, who has mostly stayed out of public view since the election, opened on a valedictory note, telling the audience that leaving the Senate would be “very difficult for me.” She attributed her sense of loss, or surrender, to ending her service to her New York constituents, but those who watched her struggle for the Democratic nomination with such ferocity for the past two years were reminded that she was also forswearing her independent campaign identity.

And there was a fleeting flashback to her primary season gamesmanship when she listed representing New York as a foreign policy credential. “You’ve also helped prepare me well for this new role,” she told her Senate constituents. “After all, New Yorkers aren’t afraid to speak their minds and do so in every language.”

Her husband certainly was not letting anyone forget the campaign: as the ceremony was taking place, former President Bill Clinton issued a long statement extolling his wife’s qualifications (“as her husband, I am deeply proud”) and briefly praised Mr. Obama, not for his vision, but for his good sense in choosing Mrs. Clinton.

The topic at hand was national security, and five other appointments were announced, but reporters were mostly interested in exploring how secure Mr. Obama felt about his new secretary of state’s loyalty. A reporter asked Mr. Obama whether there was any lingering internal disagreement given that “some people up there on the stage” had previously attacked his argument that the United States has a right to attack terrorist targets in Pakistan without Pakistani government permission.

“I did not ask for assurances from these individuals that they would agree with me at all times,” Mr. Obama said calmly. “I think they understand and would not be joining this team unless they understood and were prepared to carry out the decisions that have been made by me after full discussion.”

When another reporter asked Mr. Obama about the “evolution” of his views since those times in the campaign when he dismissed Mrs. Clinton’s foreign policy experience as a series of “teas” with foreign leaders, Mr. Obama took it lightly. “Well, I mean, I think — this is fun for the press to try to stir up whatever quotes were generated during the course of the campaign.” he said with a grin. “No, I understand. And you’re having fun, and there’s nothing wrong with that. I’m not — I’m not faulting it.”

Mrs. Clinton had greeted the question somewhat grimly, but as Mr. Obama answered, she slowly unfurled a smile. By the end, she managed to look almost as amused by the question as her new boss was.

Obama Unveils His National Security Team
NYTIMES
By DAVID STOUT
December 1, 2008

WASHINGTON — President-elect Barack Obama called for “a new dawn of American leadership” on Monday as he formally introduced his national security team, led by Senator Hillary Rodham Clinton as his nominee for secretary of state.

“We will strengthen our capacity to defeat our enemies and support our friends,” Mr. Obama said in Chicago. “We will renew old alliances and forge new and enduring partnerships.”

The new president said he was sticking to his goal of removing American combat troops from Iraq within 16 months, which he called “the right time frame,” and that this would be accomplished with safety for the troops and security for the Iraqi people.

He introduced his team one by one, starting with Senator Clinton, his former bitter rival for the Democratic presidential nomination; then Defense Secretary Robert M. Gates, who will stay on, at least for a time, in the new administration; Gen. James L. Jones, the former NATO commander, to be national security adviser; Gov. Janet Napolitano of Arizona to be secretary of homeland security: Susan E. Rice to be ambassador to the United Nations, and Eric H. Holder Jr. to be attorney general.

All of the nominations had been expected, and the president-elect’s announcement contained no surprises. It did, however, contain some not very thinly veiled criticism of the Bush administration.

“Hillary’s appointment is a sign to friend and foe of the seriousness of my commitment to renew American diplomacy and restore our alliances,” Mr. Obama said, apparently alluding to the effects of President Bush’s Iraq policy — which the president-elect has bitterly criticized — on America’s international relationships.

And when the new president introduced Mr. Holder, he said: “Let me be clear: The attorney general serves the American people, and I have every expectation that Eric will protect our people, uphold the public trust and adhere to our Constitution.”

President Bush’s handling of the Justice Department has often been criticized, with much of the denunciation focused on former Attorney General Alberto R. Gonzales, who was portrayed by many Democrats and some Republicans on Capitol Hill as little more than Mr. Bush’s personal lawyer.

The choice of Senator Clinton to be the country’s top diplomat has drawn the most attention in recent weeks, in part because of the months-long duel between her and Mr. Obama for the nomination that once was viewed as all but certain to go to her. But the bitterness of their contest seemed all but forgotten on Monday.

“Mr. President-elect, thank you for this honor,” Senator Clinton said. “If confirmed, I will give this assignment, your administration and our country my all.”

Barring extraordinary surprises, the confirmation of Mr. Obama’s choices seems assured. For one thing, there is a tradition of giving a new president his own team of Cabinet-level advisers. Then, too, senators from both parties who will vote on whether to confirm the nominees offered warm praise in advance.

“President-elect Obama has chosen a terrific national security team to protect our security and help restore America’s rightful place in the world,” said Senator John Kerry, the Massachusetts Democrat who will become chairman of the Senate Foreign Relations Committee. He promised a “swift and fair confirmation process.”

The foreign relations committee’s leading Republican, Senator Richard G. Lugar of Indiana, described the president-elect’s choices as “excellent” in a Sunday interview on ABC. “I look forward to working with each one of them,” Mr. Lugar said.


FROM THE I-BBC:  General James Jones is a former Marine commandant and commander of US and NATO forces in Europe. 

Gen Jones, 64, has been a critic of some of the Bush administration's war strategy, especially in Afghanistan.  The retired general is a decorated Vietnam veteran and is admired by both Republicans and Democrats on Capitol Hill.   He served as a special Middle East peace adviser for the Bush administration.

National Security Pick: From a Marine to a Mediator
NYTIMES
By HELENE COOPER
November 29, 2008

WASHINGTON — James L. Jones, a retired four-star general, was among a mostly Republican crowd watching a presidential debate in October when Barack Obama casually mentioned that he got a lot of his advice on foreign policy from General Jones.

“Explain yourself!” some of the Republicans demanded, as General Jones later recalled it.

He did not. A 6-foot-5 Marine Corps commandant with the looks of John Wayne, General Jones is not given to talking about his political bent, be it Republican or Democrat. And yet, he is Mr. Obama’s choice for national security adviser, a job that will make him the main foreign policy sounding board and sage to a president with relatively little foreign policy experience.

The selection of General Jones will elevate another foreign policy moderate to a team that will include Robert M. Gates, a carry-over from the Bush administration, as defense secretary and Hillary Rodham Clinton as secretary of state. By bringing a military man to the White House, Mr. Obama may be trying to cement an early bond with military leaders who regard him with some uneasiness, particularly over his call for rapid troop reductions in Iraq.

But General Jones will also be expected to mediate between rivals, particularly in dealing with Mr. Gates, who has his own power base at the Pentagon, and with Mrs. Clinton, who has told friends that she does not expect the national security adviser to stand between her and the president.

And while other generals, including Colin L. Powell and Brent Scowcroft, have successfully made the transition to national security adviser, the experience has sometimes been rocky, as in the career of John M. Poindexter, a retired admiral who fought an uphill battle during the Reagan administration to mediate between George P. Shultz at the State Department and Caspar W. Weinberger at the Pentagon before finding himself caught up in the Iran-contra affair.

Mr. Obama is expected to announce his national security team on Monday in Chicago, with Mr. Gates at the Pentagon, Mrs. Clinton at the State Department, General Jones at the White House and possibly Adm. Dennis C. Blair, who is retired, as director of national intelligence. What is notable is that none of them have a long history with Mr. Obama, and none are known to be particularly close to him.

Among Mr. Obama’s previous inner circle of foreign policy advisers, both Susan E. Rice and Gregory Craig crossed swords with Mrs. Clinton during the presidential campaign. Ms. Rice may end up as ambassador to the United Nations, but Mr. Craig will become White House counsel. Two others, Anthony Lake, a national security adviser under President Bill Clinton, and Samantha Power, a Harvard scholar and author who left the campaign after she was quoted as making remarks critical of Mrs. Clinton, appear unlikely to end up with top jobs.

At the time of that presidential debate in October, General Jones had spoken only twice to Senator Obama, most recently to brief him on Afghanistan before the candidate made his first trip there. By contrast, he had worked since 1979 with Senator John McCain, the Republican nominee, and regarded him as a friend. On the night of the debate he had just given a speech to a mostly Republican group in Pebble Beach, Calif.

But General Jones has long been respected and admired by both Republicans and Democrats. He is fluent in French, which he once spoke better than he spoke English after living in Paris from age 2 to 17. He played basketball at Georgetown University, served in Vietnam and has received all manner of decorations as a marine, including the Defense Distinguished Service Medal with two oak leaf clusters and the Bronze Star Medal with Combat “V.”

At 64, General Jones bicycles from home to work twice each week, riding the nine miles from McLean, Va., to the offices of the U.S. Chamber of Commerce, two blocks from the White House, where he runs a task force on energy. Friends say he is a fan of Toby Keith, the country-music singer and songwriter.

In selecting General Jones, Mr. Obama has also picked a former supreme allied commander in Europe, a man who, at NATO, had to cajole, prod and bully recalcitrant nations. At NATO, he led the American operation in Kosovo. He served as the Bush administration’s envoy to set up an Israeli-Palestinian security model in the West Bank city of Jenin and has traveled to Afghanistan and Iraq on fact-finding missions for the Pentagon.

He has said the war in Iraq has caused the nation to “take its eye off the ball” in Afghanistan and warned that the consequences of a failure there were just as serious as in Iraq.

“Jones brings the same balance that Scowcroft did to the job,” said David Rothkopf, author of “Running the World: The Inside Story of the National Security Council and the Architects of American Power” (PublicAffairs). “Not only does he know how to work the Washington system,” Mr. Rothkopf said, but “he’s deeply steeped in Afghanistan, which is going to be a central front for us.”

But what is unclear, Mr. Rothkopf said, is how quickly General Jones can develop a close relationship with Mr. Obama and how successfully he, Mrs. Clinton and Mr. Gates can define their roles on issues like Iraq, Afghanistan, Russia and terrorism.

Because of his physical proximity — the national security adviser works in the West Wing of the White House and consults with the president several times a day — General Jones will automatically serve as a counter to the State Department. But a State Department that is at war with the White House is the last thing that General Jones wants, his friends and associates say.

“He’s not the sort of person who is going to be chasing down whether Hillary went through him or not,” said one of General Jones’s friends, who spoke on condition of anonymity. “He doesn’t have that kind of an ego.”

General Jones, friends say, gets along well with Mrs. Clinton and has even hired some of her former staff members to work for him on the energy task force.

General Jones approaches things in a “get it done” fashion, associates say, with a propensity to think tactically. Sometimes, that can rub people the wrong way. When he began working on the security proposal for Jenin, some Israeli military officials grumbled that he thought he knew Israel’s security requirements better than they did. Israelis also worried that he would seek to impose an international force on the ground to maintain security, an idea favored by many in the international community but that still leaves some Israeli hawks queasy.

But things have changed in Jenin, much of it thanks to General Jones, both Israeli and Palestinian officials say. The city that once sent waves of suicide bombers into Israel now has Palestinian security officials who have restored order.

“He was able to force all of the different parts of the U.S. government to work together to make Jenin a model of economic hope, despite a very dreary past, and so far, so good,” said David Makovsky, an analyst with the Washington Institute for Near East Policy. “He brought clarity to a messy situation.”

Eric Holder, Att'y General, also to be a member of the Security Team.


Purifier Deputy John Brennan;  Ret. Adm. Dennis Blair, selected to be national intelligence director by incoming administration, now removed.

Detention-less
From the new anthology Confronting Terror: 9/11 and the Future of American National Security.
National Review
Michael B. Mukasey
September 2, 2011 4:00 A.M.

Notwithstanding the dozens of Islamist plots uncovered in the United States since 9/11, the criminal-law paradigm is again limiting the U.S. response. Abd al-Rahim al-Nashiri, the alleged mastermind of the USS Cole bombing, was supposed to be tried before a military commission at Guantanamo last summer. Instead, on a summer Friday afternoon, the Justice Department filed a brief in another case disclosing that there are no charges pending against al-Nashiri, which is to say the military commission proceedings against him have been halted.

Although the White House promised to disclose the forum in which Khalid Sheikh Mohammed and other 9/11 plotters would be tried, after their initial choice of New York was hooted down, subsequent announcements remained inconsistent for a time.  Faced with legislation that barred the use of federal funds to try Guantanamo detainees in the United States, Attorney General Holder announced reluctantly on April 4, 2011, that KSM and others would be tried by military commission after all. However, in July 2011, he disclosed that a Somali suspect, Ahmed Abdulkadir Warsame, who had been captured abroad and held on naval vessels rather than at Guantanamo, would be brought to the United States and tried in a civilian court. Notably, Warsame, unlike Shahzad and Abdulmutallab, was reportedly debriefed extensively following his capture by the high-value interrogation team promised at the time the CIA interrogation program was abandoned in 2008. The interrogation techniques, however, are still limited by the Army Field Manual.

Moreover, military officials have conceded candidly that we have no detention program; we simply improvise from one capture to the next. It is true that Guantanamo remains open, but it is also true that President Obama remains as committed as ever to closing it. He seems determined to figure out a way to release those detained there despite a growing body of evidence that alumni of Guantanamo have returned to terrorism. A recent example is an interview with Sheikh Abu Sufyan al-Azdi, deputy commander of al-Qaeda in the Arabian Peninsula, a group based in Yemen, published in the October 2010 issue of that organization’s English-language magazine. Abu Sufyan was released from Guantanamo and turned over to the Saudis for participation in their vaunted reeducation program, but made his way to Yemen to resume his jihadi activities. In the interview, he urges Muslims to emulate Nidal Hasan, the Fort Hood shooter, and Abdulmutallab, the airplane bomber.

Abu Sufyan is by no means the first alumnus of Guantanamo to return to the battlefield. In March 2010, the supreme leader of the Afghan Taliban announced that he was promoting mullah Abdul Qayyum Zakir to replace a top deputy captured  by U.S. forces; Zakir had also been in detention at Guantanamo, and was released to the Afghanis. In fact, more than 20 percent of those released from Guantanamo have returned to the battlefield and, of course, those are only the ones we know about because they have been recaptured or killed. How many others remain in the fight is anyone’s guess.

It has become increasingly obvious since 2009 that the administration is resolutely opposed to looking at militant Islamism squarely, whether in its terrorist manifestation or otherwise. For example, in 2010 at the Center for Strategic and International Studies, deputy national security adviser John Brennan said that this talk of a war on terrorism or on terror is highly misleading, because terrorism is simply a tactic and terror is a state of mind. Brennan cautioned against describing our enemies as jihadists because jihad, as he put it, “is a holy struggle, a legitimate tenet of Islam.” And then, just so no one missed the point, he said that jihad actually means something innocuous. It means simply, as he put it, “to purify oneself or one’s community.”

Brennan, by the way, believes that the 20 percent–plus recidivism rate for those released from Guantanamo is not bad because it compares favorably with the rate of U.S. prisons.

Keep America Safe:  Steps to reforming intelligence.
BY Stephen F. Hayes, Weekly Standard
June 7, 2010, Vol. 15, No. 36

Two weeks ago President Obama fired his top intelligence adviser—or at least the man who held the title.

In the six months before Dennis Blair was relieved of his duties as director of national intelligence, there were three attacks on U.S. soil, each one with troubling details. After Fort Hood, we learned that the FBI knew before the attack about email correspondence between the shooter, Major Nidal Malik Hasan, and al Qaeda cleric Anwar al Awlaki and did nothing. We know that the Christmas Day bomber, Umar Farouk Abdulmutallab, stopped talking to his interrogators after he was read his Miranda rights and that, moreover, the interrogation was conducted without the benefit of the dossier the CIA had compiled on Abdulmutallab. And the would-be Times Square bomber, Faisal Shahzad, almost escaped after leaks about his identity appeared in the press. There is much more.

We were told by the administration that the system worked when it had not. We were told that the attackers had no connections to the international jihadist networks when they had many. We were told the high-value interrogation group was operational, and it wasn’t. We were told that 50 minutes was enough to learn everything knowable about a would-be attacker and his al Qaeda connections, a claim that was quickly discarded when he resumed cooperating and the administration wanted to let us know how much additional intelligence he was providing.

So someone had to go. Eric Holder and Janet Napolitano would have been better choices than Blair. But the decision to fire him suggests that the Obama administration has finally recognized that things had to change.

There have been other indications, too. After initially downplaying Faisal Shahzad’s ties to international terrorism, the administration swiftly and decisively corrected itself. Three months after arguing in a letter to Congress that the U.S. government had no choice but to quickly mirandize detained terrorists, Holder said that the administration would work with lawmakers to give interrogators more flexibility in their efforts to obtain intelligence.

These are good signs. But Obama needs to go further.

His first step is to end the investigation of CIA interrogators by the Justice Department. The repercussions have been severe. CIA operators, already risk averse, are today far less willing to take risks in the field out of fear that a wrong decision, even a legal one that produced crucial intelligence, could send them to jail. Obama should also insist that the Justice Department aggressively investigate the alleged exposure of CIA officials by lawyers representing Guantánamo detainees. Photographs of officials were discovered in the cell of Mustafa Ahmed al Hawsawi and were reportedly provided by investigators working for the ACLU and the National Association of Criminal Defense Lawyers. John Rizzo, former CIA general counsel and a 30-year intelligence veteran, said that the breach was far graver than the leak of Valerie Plame’s name.

Another crucial step: Move the day-to-day direction of intelligence policy out of the West Wing. President Obama wanted to nominate John Brennan to run the CIA, but the left protested, pointing to Brennan’s high-ranking positions at the agency during the Bush administration. But as White House “intelligence czar,” Brennan occupies a position of far more influence—proximity to the president is power. Brennan works for the administration; he is not an independent voice on intelligence matters. He has repeatedly shown himself willing to make political arguments in defense of the White House. It was a problem that Blair noted in congressional testimony after the Christmas Day attack. “The political dimension of what ought to me to be a national security issue has been quite high. I don’t think it has been particularly good, I will tell you, from the inside, in terms of us trying to get the right job done to protect the United States.”

Nothing is more important, however, than a rethinking of interrogation policy. Obama ran on a promise to end “torture.” Most everyone understood him to mean “waterboarding,” but Obama has gone much further. By restricting interrogators to the techniques in the Army Field Manual he has chosen to take away valuable interrogation techniques—enhanced means that do not constitute “torture” and that have proven effective. Furthermore most of the interrogations of high-value terrorists captured overseas have been outsourced to liaison services. We are choosing to know less about our enemies.

Finally, the president needs to provide the intelligence community with a clear mission. We are at war. We are fighting the adherents of radical Islam—non-state terrorist groups and the states that support them. This is the central fact of this war, and the president should not be shy about saying so.

While these steps don’t go far enough, they would, without question, make us safer.

—Stephen F. Hayes
US Official: Intelligence Director Resigns
By THE ASSOCIATED PRESS
Filed at 12:53 p.m. ET
January 27, 2009

WASHINGTON (AP) -- A U.S. official says National Intelligence Director Michael McConnell has resigned his post.

The official, who asked not to be named because the resignation has not been announced, said Lt. Gen. Ronald L. Burgess, Jr. is temporarily serving as acting national intelligence director.

President Barack Obama has nominated retired Adm. Dennis Blair to be the next intelligence director. He would oversee a budget of nearly $50 billion and a work force of more than 100,000 spread across 16 agencies.

Obama has asked McConnell to serve on the President's Intelligence Advisory Board. McConnell was the nation's second national intelligence director and has served in the job for nearly two years. The position was created in 2004.
From the NYTIMES Dec. 1
...He (President-Elect Obama) will not announce any of the top intelligence appointments on Monday, but the Democrats said they expected him soon to name Adm. Dennis C. Blair, a retired Pacific Fleet commander, as director of national intelligence.
From the DAY Jan. 10, 2009
...He (Sen. Ron Wyden, D-Ore.) added there is little appetite in Congress to prosecute government employees who engaged in "enhanced" interrogations authorized by the White House. The Detainee Treatment Act of 2005, which prohibited cruel, inhuman and degrading treatment of prisoners, also called for the protection of those employees from civil lawsuits or criminal prosecutions if they believed in good faith they were acting on lawfully. The bill passed with an overwhelming majority.

Obama pledged Friday that Leon Panetta, his nominee to head the CIA, would be a strong advocate for the agency's interest inside the White House, and his selection for national intelligence director, retired Adm. Dennis Blair, would continue "the good work that is being done..."


CABINET POST FOR OBAMA
Susan Rice, United Nations Representative, on the Security Team as well - that post made Cabinet level for the Obama administration.

Choice for U.N. Backs Strong Action Against Mass Killings
NYTIMES
By PETER BAKER
December 1, 2008

CHICAGO — President-elect Barack Obama has chosen his foreign policy adviser, Susan E. Rice, to be ambassador to the United Nations, picking an advocate of “dramatic action” against genocide as he rounds out his national security team, Democrats close to the transition said Sunday.

Mr. Obama intends to announce Ms. Rice’s selection at a news conference here Monday along with his previously reported decisions to nominate Senator Hillary Rodham Clinton for secretary of state, keep Robert M. Gates as defense secretary and appoint Gen. James L. Jones, a retired Marine commandant, his national security adviser, the Democrats said.

The choice of Ms. Rice to represent the United States before the United Nations will make her one of the most visible faces of the Obama administration to the outside world aside from Mrs. Clinton. It will also send to the world organization a prominent and forceful advocate of stronger action, including military force if necessary, to stop mass killings like those in the Darfur region of Sudan in recent years.

To reinforce his intention to work more closely with the United Nations after the tensions of President Bush’s tenure, Mr. Obama plans to restore the ambassador’s post to cabinet rank, as it was under President Bill Clinton, according to Democrats close to the transition.

While the cabinet consists of 15 department heads, a president can give other positions the same rank for the duration of his administration.

“She’s obviously one of Obama’s closest advisers, so it underscores how much of a priority he’s making the position,” said Nancy Soderberg, a senior United States diplomat at the United Nations under Mr. Clinton. “If you look at the last eight years, we obviously need to be more engaged at the U.N. and realistic about what the U.N. can do.”

At Monday’s announcement, the president-elect will also formally unveil his nominations of Eric H. Holder Jr. to be attorney general and Gov. Janet Napolitano of Arizona to be secretary of homeland security, the Democrats said. He will not announce any of the top intelligence appointments on Monday, but the Democrats said they expected him soon to name Adm. Dennis C. Blair, a retired Pacific Fleet commander, as director of national intelligence.

If confirmed, Ms. Rice at 44 would be the second-youngest ambassador to the United Nations. A Rhodes scholar who earned a doctorate in international relations at Oxford University, she joined Mr. Clinton’s National Security Council staff in 1993 before rising to assistant secretary of state for African affairs at age 32. When Mr. Obama decided to run for president, she signed up as one of his top advisers, much to the consternation of the Clinton camp, which resented what it saw as a defection.

As the ambassador at the United Nations, Ms. Rice will have to coordinate with Mrs. Clinton, but will not be in the White House or at State Department headquarters on a daily basis as major policies are formulated. One person close to Mrs. Clinton said the senator did not object to Ms. Rice serving at the United Nations.

Some colleagues from her Clinton and Obama days said Ms. Rice can be blunt and unafraid to “mix it up,” as one put it, on behalf of issues she cares about. Ms. Rice herself acknowledges a certain impatience at times.

Admirers said she is a good listener and able to stand up to strong personalities, including foreign autocrats and militants in volatile regions of the world.

“Susan certainly is tough, and she’s tough in exactly the right way,” said Strobe Talbott, a former deputy secretary of state and now president of the Brookings Institution, where Ms. Rice has worked in recent years. “She’s intellectually tough, she’s tough in her approach to how the policymaking process should work and she will be very effective as a diplomat.”

John R. Bolton, who was one of Mr. Bush’s ambassadors at the United Nations, would not discuss Ms. Rice’s selection, but said it was unwise to elevate the position to the cabinet again.

“One, it overstates the role and importance the U.N. should have in U.S. foreign policy,” Mr. Bolton said. “Second, you shouldn’t have two secretaries in the same department.”

During her first run at the State Department, Ms. Rice was a point person in responding to Al Qaeda’s 1998 bombing of United States Embassies in Kenya and Tanzania. But her most searing experience was visiting Rwanda after the 1994 genocide when she was still on the N.S.C. staff.

As she later described the scene, the hundreds, if not thousands, of decomposing, hacked up bodies that she saw haunted her and fueled a desire to never let it happen again.

“I swore to myself that if I ever faced such a crisis again, I would come down on the side of dramatic action, going down in flames if that was required,” she told The Atlantic Monthly in 2001. She eventually became a sharp critic of the Bush administration’s handling of the Darfur killings and last year testified before Congress on behalf of an American-led bombing campaign or naval blockade to force a recalcitrant Sudanese government to stop the slaughter.

Jerry Fowler, president of the Save Darfur Coalition, praised the pending Rice nomination on Sunday, calling it a powerful sign of the new president’s interest in the issue. The coalition is urging Mr. Obama to begin a “peace surge” of sustained diplomacy to address the continuing problems in Sudan.

“It sends a very strong signal about his approach to the issue of Sudan and Africa in general,” Mr. Fowler said. Ms. Rice will be joining a high-powered team on stage with Mr. Obama on Monday, most notably Mrs. Clinton.

The two rivals from the polarizing battle for the Democratic presidential nomination will seal their reconciliation with Mrs. Clinton’s nomination to head the State Department.

At a time when the country remains engaged in two wars and still faces the threat of international terrorism, Mrs. Clinton will anchor a national security team with more of a centrist character than some of Mr. Obama’s liberal supporters once hoped to see.

Some critics have pointed out that the team represents experience rather than the change Mr. Obama promised. But it also drew praise from across the aisle.

“The triumvirate of Gates, Clinton and Jones to lead Obama’s national security team instills great confidence at home and abroad and further strengthens the growing respect for the president-elect’s courage and ability to exercise sound judgment in selecting the best and the brightest to implement our nation’s security policies,” said Senator John W. Warner of Virginia, a former chairman of the Armed Services Committee.

Janet Napolitano, Homeland Security
"About Town" notes that one of Governor Napolitano's strengths is that she is from a state where you can see the border with...Mexico, and potential illegal entry into the USA.

Nominee Would Lead ID Program She Opposed
NYTIMES
By MATTHEW L. WALD
December 2, 2008

WASHINGTON — As governor of Arizona, Janet Napolitano, President-elect Barack Obama’s choice for homeland security secretary, pledged that her state would not cooperate with a major domestic security initiative, the Real ID drivers’ license program.

The program, which she would direct if confirmed as secretary, imposes stringent requirements on states for confirming the identity and legal residency of people who want drivers’ licenses. Ms. Napolitano said the law would impose huge costs on the states without reimbursement from Washington.  In June, she signed into law a bill that forbids Arizona from cooperating with the federal requirements. The state law had no immediate effect, because Arizona already had a federal waiver allowing it to delay enactment until 2009.

Last year, as the chairwoman of the National Governors Association, Ms. Napolitano testified before a Senate committee that the program would cost the states $11 billion. Since then, Congress has appropriated $100 million to meet some of the costs.

Real ID follows the recommendations of the 9/11 Commission; it was passed without hearings or debate, attached to a mostly unrelated bill.  Janice L. Kephart, a staff member for the 9/11 Commission, said, “I’m hoping she will see this program from the federal government side and see it with new eyes.”

A stronger national driver’s license system would help the states improve highway safety by assuring that drivers do not obtain more than one license, Ms. Kephart said, and it could cut Medicare and Medicaid fraud.

Hani Hanjour, the hijacker flew the plane that crashed into the Pentagon on Sept. 11, 2001, had an Arizona license, she said.

The federal government has said that people carrying drivers’ licenses that do not comply with its requirements will not be allowed into federal buildings and will have difficulty boarding planes. The American Civil Liberties Union and some state legislators say that the program amounts to a national identification card, with civil liberties and privacy implications. Ms. Napolitano, however, has mostly focused on the cost. Mr. Obama, as a candidate, did the same.

The rules issued by the Bush administration require each state to verify the authenticity of an applicant’s documents and keep copies, along with digital photos, so the information can be shared with other states. The department issued the regulations so late that nearly all the deadlines fall after Mr. Bush leaves office.
ANSWERS TO MY QUESTION:  (The Obama Administration is turning out to be "team play" - our question--where does each member of the Cabinet get his or her authority?  After all, the "captain" of each of the teams is responsible for their performance...or am I missing something here?  Or is President-Elect Obama the "captain" of each team?)

Clinton to Be Introduced as Part of Obama Security Team
NYTIMES
By PETER BAKER
December 1, 2008

CHICAGO — President-elect Barack Obama and Senator Hillary Rodham Clinton on Monday will seal their rapprochement when he announces her nomination as his secretary of state, Democrats close to the process said Sunday.

Mrs. Clinton, once considered the Democratic frontrunner for president, is flying to Chicago to appear together with the man who beat her for the nomination, a person close to Mrs. Clinton said. The sight of them together, as she joins his administration, would have been thought unlikely just weeks ago, but Mr. Obama concluded she would strengthen his team.

At a time when the country remains engaged in two wars and still faces the threat of international terrorism, Mrs. Clinton will anchor a national security team with more of a centrist character than some of Mr. Obama’s liberal supporters once hoped to see. In addition to her, Democrats said, Mr. Obama plans to announce that he is keeping Defense Secretary Robert M. Gates, who has run the Pentagon for the last two years, and will appoint Gen. James L. Jones, a retired Marine commandant, as national security adviser.

Rounding out his national security team, Mr. Obama will name former Deputy Attorney General Eric H. Holder Jr. as his choice for attorney general and Governor Janet Napolitano of Arizona as secretary of homeland security, the Democrats said. Mr. Obama also will nominate Susan E. Rice, his foreign policy adviser and a former assistant secretary of state, as ambassador to the United Nations, a job that will be given cabinet rank, as it had under President Bill Clinton.

The Obama and Clinton teams have been preparing the ground for this announcement for days. Mr. Clinton, who has extensive business and philanthropic interests around the world, agreed to a nine-point plan covering disclosure, vetting and other areas to avoid potential conflicts of interest, including for the first time the release of more than 200,000 donors to his foundation by the end of the year. That goes beyond the requirements of existing law.

The Obama team has planned for a while to unveil the national security team after the Thanksgiving holiday, but the timing took on additional urgency after the terrorist attacks in Mumbai. The attacks, which killed at least 180, including six Americans, offered a stark reminder that for all of Mr. Obama’s focus on fixing the economy, national security can capture a president’s attention at any moment.

Reports of the selections drew praise from a retiring Republican elder. “The triumvirate of Gates, Clinton and Jones to lead Obama’s national security team instills great confidence at home and abroad,” said Senator John W. Warner of Virginia, a former chairman of the Armed Services Committee, “and further strengthens the growing respect for the president-elect’s courage and ability to exercise sound judgment in selecting the best and the brightest to implement our nation’s security policies.”.

While the choices have generated praise across the aisle, some critics have pointed out that the team represents experience rather than the change Mr. Obama promised on the campaign trail. All of his top choices served in either the Clinton or Bush administration.

At a news conference last week, Mr. Obama said he was trying to “combine experience with fresh thinking” an added that “the vision for change comes” from him.


Education

Arne Duncan

Duncan: Smart Is Cooler Than Ever
NYTIMES
By Sam Dillon
January 13, 2009, 11:21 am

Arne Duncan, the Chicago schools chief, told the Senate on Tuesday that he would work for “real and meaningful change” in the nation’s schools if confirmed as education secretary, and he said he hoped president-elect Barack Obama’s own example as a model student could inspire millions of American children.

“Never before has being smart been so cool,” Mr. Duncan said.

But Mr. Duncan did little to resolve the curiosities of educators and policymakers about how he and Mr. Obama intend to bring about change in American education, which over the next year is likely to include an attempt to the rewrite the Bush-era No Child Left Behind law, the most important statement of federal policy on public schools.

“I have seen the law’s power and its limitations,” Mr. Duncan said, but he provided no examples of concrete changes he will seek. “I agree with the president-elect that we should neither bury NCLB nor praise it without reservation.”

In a confirmation hearing before the Senate educaiton committee, Mr. Duncan laid out a thoroughly pragmatic and non-ideological educational agenda, vowing to do “anything that works” to raise achievement in public schools.

The Obama Administration intends to expand early childhood programs, foster the opening of more charter schools, improve teacher training and recruitment, and increase access to college for low-income students, Mr. Duncan said.

Mr. Duncan, who is 44, walked a careful line among rival factions of the nation’s educational reform movement, neither fully endorsing nor rejecting those who want to squeeze teachers and administrators harder to raise student achievement, nor a rival faction that contends schools alone are not capable of closing achievement gaps between poor and affluent students without broader federal investments in school-based health clinics and other social programs.

The Senate appeared likely to give quick approval to Mr. Duncan nomination.

“I think you’re the best,” said Senator Lamar Alexander, one of several Republican senators who praised Mr. Duncan’s record as chief executive of the nation’s third largest school district. “I hope I still think that a year from now.”

Sen. Tom Harkin, Democrat of Iowa, chaired the hearing in place of Senator Edward M. Kennedy, the committee chairman.
Obama Names Education Chief
NYTIMES
By REUTERS
Filed at 3:12 p.m. ET
December 16, 2008

CHICAGO (Reuters) - U.S. President-elect Barack Obama on Tuesday called the high U.S. school dropout rate "economically untenable" and said making U.S. schools more competitive would be a top job of his education secretary.  Saying the road to jobs and growth begins in the classroom, Obama announced Chicago schools chief Arne Duncan -- a longtime basketball partner and friend -- as his choice for education secretary. He charged Duncan with improving America's teachers and schools to help the United States become more competitive.

"If we want to out-compete the world tomorrow, then we're going to have to out-educate the world today," Obama told a news conference at an elementary school.  Obama, who takes office on January 20, noted that the U.S. high school dropout rate is one of the highest in the industrialized world and many young American children cannot even do basic math.

"We can't continue like this," he said. "It's morally unacceptable for our children and economically untenable for America."

After the news conference Obama held a meeting of the key members of his economic team amid continuing bleak news on the U.S. economy, with consumer prices plunging at a record pace and housing starts falling to a new low.  They meet as the Federal Reserve cut its benchmark U.S. interest rate to a range of 0 to 0.25 percent, a record low that underscored the worst economic turmoil since the Great Depression.

In his news conference before the Fed move, Obama warned the central bank's traditional tools for fighting recession were running out.

"We are running out of the traditional ammunition that is used in a recession, which is to lower interest rates. They are getting to be about as low as they can go," he said.  He said other branches of government needed to step up to help. "That's why the economic recovery plan is so absolutely critical," he said.

Obama has promised to create at least 2.5 million jobs by 2011 and launch a major infrastructure improvement drive along with reforming the nation's health care system, but questions over how to pay for it all remain.  Obama is scheduled to hold another in a series of news conferences on Wednesday at which he is expected to formally unveil his pick for interior secretary.

BEGIN IN THE SCHOOLS

As they introduced Duncan, both Obama and Vice President-elect Joe Biden said the choice for education secretary was the person who could raise standards and help reform schools.

"We have to have an education system that's second to none in the world. That's the only way our children and our nation are going to be able to compete in today's global economy," said Biden.

Duncan has been chief executive of Chicago Public Schools, the nation's third-largest school district, since 2001. The current education secretary, Margaret Spelling, has called Duncan a "visionary" leader and reformer who would be a great choice to run the Department of Education.

"He's championed good charter schools, even when it was controversial. He's shut down failing schools and replaced their entire staffs, even when it was unpopular," Obama said.

Duncan, who was co-captain of Harvard University's basketball team, played professional basketball in Australia after he graduated from the university. He returned to Chicago in 1992 to direct a program to create educational opportunities for inner city children on the city's South Side.  Duncan spearheaded a movement to create smaller, community schools and has been successful at coping with dwindling resources. He favors opening the schools up to the community to get people to invest in them.

"While many issues will demand your attention, I am convinced that no issue, no issue is more pressing than education," Duncan said at the news conference. "Whether it's fighting poverty, strengthening our economy or promoting opportunity, education is the common thread."
FROM THE NYTIMES:
Arne Duncan is President-elect Barack Obama’s choice as secretary of education. Mr. Duncan has seven years’ experience as chief executive of the Chicago Public Schools, the nation’s third-largest school district, where he has earned a solid reputation for confronting pressing issues in public education, like how to raise teacher quality, how to transform weak schools and when to shutter those that are irredeemably failing.

He and President-elect Obama have played pickup basketball games together in Chicago since they met in the early 1990s through Michelle Obama’s brother. Mr. Duncan was a co-captain of the basketball team at Harvard. His sports friendship with Mr. Obama evolved into a shared interest in the problems of urban education, and they have visited Chicago schools together to examine questions like how best to train teachers. Mr. Duncan helped shape Mr. Obama’s education program.

He played professional basketball in Australia from 1987 to 1991 (he is 6 foot 5); then, from 1991 to 1998, he directed the Ariel Education Initiative, a philanthropic effort with a small staff that seeks to create better schooling opportunities for poor children on the South Side of Chicago. He was director of magnet schools and deputy chief of staff to the Chicago schools chief, Paul G. Vallas, from 1998 to 2001.

Mr. Duncan, though, has little of the national political experience that education secretaries often need in representing the White House’s educational agenda before Congress and negotiating with the leaders of the 50 state school systems and the myriad interest groups that make up the educational establishment. His expertise in elementary-secondary education is considerable, and his late father was a psychology professor at the University of Chicago, but Mr. Duncan has little professional experience navigating the higher-education landscape.

Mr. Duncan was born on Nov. 6, 1964. He comes from a family of educators: his mother founded and has run a vaunted Chicago tutoring program for 48 years. He graduated magna cum laude from Harvard and sits on the Harvard Board of Overseers. Mr. Duncan tutored Chicago children during a year he took off from studying sociology at Harvard.
Chicago Schools Chief Is Obama’s Education Pick
NYTIMES
By SAM DILLON
December 16, 2008

Arne Duncan, the Chicago schools superintendent known for taking tough steps to improve schools while maintaining respectful relations with teachers and their unions, is President-elect Barack Obama’s choice as secretary of education, Democratic officials said Monday.

Mr. Duncan, a 44-year-old Harvard graduate, has raised achievement in the nation’s third-largest school district and often faced the ticklish challenge of shuttering failing schools and replacing ineffective teachers, usually with improved results.  He represents a compromise choice in the debate that has divided Democrats in recent months over the proper course for public-school policy after the Bush years.

In June, rival nationwide groups of educators circulated competing educational manifestos, with one group espousing a get-tough policy based on pushing teachers and administrators harder to raise achievement, and another arguing that schools alone could not close the racial achievement gap and urging new investments in school-based health clinics and other social programs to help poor students learn.

Mr. Duncan was the only big-city superintendent to sign both manifestos.  He argued that the nation’s schools needed to be held accountable for student progress, but also needed major new investments, new talent and new teacher-training efforts.  In straddling the two camps, Mr. Duncan seemed to reflect Mr. Obama’s own impatience with what he has called “tired educational debates.”

In his last major educational speech of the campaign, Mr. Obama said: “It’s been Democrat versus Republican, vouchers versus the status quo, more money versus more reform. There’s partisanship and there’s bickering, but no understanding that both sides have good ideas.”

The rival educational camps swamped the Obama transition in recent weeks with recommendations for the post. The National Education Association, the largest teachers’ union, pressed for several current and former governors who had made schools a priority in their states.  Many former members of Teach for America, the program that sends elite-college graduates to teach in low-income schools, weighed in on behalf of Joel I. Klein, the New York City schools chancellor, and Michelle Rhee, the Washington schools chancellor, both of whom have clashed with the teachers’ unions.

“Obama found the sweet spot with Arne Duncan,” said Susan Traiman, director of educational policy at the Business Roundtable. “Both camps will be O.K. with the pick!”

Mr. Duncan’s acquaintance with Mr. Obama began on the basketball court nearly two decades ago but has flowered since he became the chief executive of the Chicago Public Schools in 2001, and Mr. Obama has used him as a frequent sounding board in discussions of education policy.  The two men have visited a number of Chicago schools together. In October 2005, they visited the Dodge Renaissance Academy, a once-failing elementary school that Mr. Duncan closed and reopened, with a new staff, as a working public school and a teacher training academy.

During the visit, Mr. Obama sat down with school staff members in the library for more than an hour and questioned them at length about arcane instructional issues, Mr. Duncan said in an interview.

“I’ve taken lots of political leaders on school visits, and nobody spends the amount of time, asks the depth of questions, or is more engaged and curious than Barack,” Mr. Duncan said in an August interview.

The Obama transition team has scheduled a news conference for Tuesday at the Dodge Renaissance school.

Mr. Duncan’s background includes playing professional basketball in Australia and intermittently tutoring urban youth, but no formal teaching experience. He helped draft Mr. Obama’s extensive education platform, which called for recruiting thousands of new teachers, encouraging local school districts to adopt performance-based teacher pay initiatives, recruiting and training effective principals, and placing new emphasis on science and mathematics education.

The platform also calls for making major federal investments in early childhood education, which Mr. Obama believes is a more effective use of educational dollars than spending them on remedial programs later.

Mr. Duncan has been working for several years to expand the early childhood opportunities in the Chicago Public Schools, increasing enrollment opportunities for 3- and 4-year-olds by 1,000 places or more each year. Mr. Duncan has worked closely in that effort with Barbara T. Bowman, the Chicago Public Schools’ chief officer for early childhood education, who is the mother of Mr. Obama’s senior adviser, Valerie Jarrett.

Allan R. Odden, a professor of education at the University of Wisconsin, heads a project that is studying how school districts recruit, assign and train their principals and teachers. He said Chicago had made considerable progress under Mr. Duncan.

“He’s gotten the job done in Chicago,” Dr. Odden said. “There’s more to be done, but he’s done a great job of reaching out and recruiting and improving the talent of both teachers and principals.”

During Mr. Duncan’s tenure, the Chicago schools, which in the 1970s and 1980s experienced nine teachers’ strikes in 17 years, has had labor stability, and last week, Randi Weingarten, president of the American Federation of Teachers, praised Mr. Duncan.

As secretary of education, one of Mr. Duncan’s major challenges will be to rebuild the bipartisan consensus that helped President Bush win passage of his No Child Left Behind law in 2001.

An effort to rewrite the law, the most important statement of federal policy toward public schools, collapsed last year in the face of opposition from conservative Republicans angered over the law’s intrusion onto states’ educational prerogatives and Democrats upset with the law’s emphasis on standardized testing.

Mr. Obama has called for a thorough rewrite, but has pledged to defend the accountability provisions in the law that require schools to improve.

Joe Williams, executive director of Democrats for Education Reform, said last week that his group would be delighted to see Mr. Klein or Ms. Rhee appointed, but had sent to the transition team a memorandum recommending Mr. Duncan.

“He is the kind of guy who can work with all sorts of people with different viewpoints, and we like his work in Chicago with charter schools,” Mr. Williams said.

Representative George Miller, the California Democrat who as the chairman of the House Education and Labor Committee will lead any reauthorization effort, called Mr. Duncan “a good choice for school reform and our schoolchildren.”

“He is an experienced and accomplished leader who is open to new ideas for improving our schools,” Mr. Miller said.
Who Will He Choose?
NYTIMES OP-ED
By DAVID BROOKS
December 5, 2008

As in many other areas, the biggest education debates are happening within the Democratic Party. On the one hand, there are the reformers like Joel Klein and Michelle Rhee, who support merit pay for good teachers, charter schools and tough accountability standards. On the other hand, there are the teachers’ unions and the members of the Ed School establishment, who emphasize greater funding, smaller class sizes and superficial reforms.

During the presidential race, Barack Obama straddled the two camps. One campaign adviser, John Schnur, represented the reform view in the internal discussions. Another, Linda Darling-Hammond, was more likely to represent the establishment view. Their disagreements were collegial (this is Obamaland after all), but substantive.

In public, Obama shifted nimbly from camp to camp while education experts studied his intonations with the intensity of Kremlinologists. Sometimes, he flirted with the union positions. At other times, he practiced dog-whistle politics, sending out reassuring signals that only the reformers could hear.

Each camp was secretly convinced that at the end of the day, Obama would come down on their side. The reformers were cheered when Obama praised a Denver performance pay initiative. The unions could take succor from the fact that though Obama would occasionally talk about merit pay, none of his actual proposals contradicted their positions.

Obama never had to pick a side. That is, until now. There is only one education secretary, and if you hang around these circles, the air is thick with speculation, anticipation, anxiety, hope and misinformation. Every day, new rumors are circulated and new front-runners declared. It’s kind of like being in a Trollope novel as Lord So-and-So figures out to whom he’s going to propose.

You can measure the anxiety in the reformist camp by the level of nervous phone chatter each morning. Weeks ago, Obama announced that Darling-Hammond would lead his transition team and reformist cellphones around the country lit up. Darling-Hammond, a professor at Stanford, is a sharp critic of Teach for America and promotes weaker reforms.

Anxieties cooled, but then one morning a few weeks ago, I got a flurry of phone calls from reform leaders nervous that Obama was about to side against them. I interviewed people in the president-elect’s inner circle and was reassured that the reformers had nothing to worry about. Obama had not gone native.

Obama’s aides point to his long record on merit pay, his sympathy for charter schools and his tendency to highlight his commitment to serious education reform.

But the union lobbying efforts are relentless and in the past week prospects for a reforming education secretary are thought to have dimmed. The candidates before Obama apparently include: Joel Klein, the highly successful New York chancellor who has, nonetheless, been blackballed by the unions; Arne Duncan, the reforming Chicago head who is less controversial; Darling-Hammond herself; and some former governor to be named later, with Darling-Hammond as the deputy secretary.

In some sense, the final option would be the biggest setback for reform. Education is one of those areas where implementation and the details are more important than grand pronouncements. If the deputies and assistants in the secretary’s office are not true reformers, nothing will get done.

The stakes are huge. For the first time in decades, there is real momentum for reform. It’s not only Rhee and Klein — the celebrities — but also superintendents in cities across America who are getting better teachers into the classrooms and producing measurable results. There is an unprecedented political coalition building, among liberals as well as conservatives, for radical reform.

No Child Left Behind is about to be reauthorized. Everyone has reservations about that law, but it is the glaring spotlight that reveals and pierces the complacency at mediocre schools. If accountability standards are watered down, as the establishment wants, then real reform will fade.

This will be a tough call for Obama, because it will mean offending people, but he can either galvanize the cause of reform or demoralize it. It’ll be one of the biggest choices of his presidency.

Many of the reformist hopes now hang on Obama’s friend, Arne Duncan. In Chicago, he’s a successful reformer who has produced impressive results in a huge and historically troubled system. He has the political skills necessary to build a coalition on behalf of No Child Left Behind reauthorization. Because he is close to both Obamas, he will ensure that education doesn’t fall, as it usually does, into the ranks of the second-tier issues.

If Obama picks a reformer like Duncan, Klein or one of the others, he will be picking a fight with the status quo. But there’s never been a better time to have that fight than right now.




Energy

Dr. Steven Chu for Energy Sec'y...photo above left probably when he received the Nobel Prize?  Policy really made here?
Energy Secretary Serves Under a Microscope
NYTIMES
By JOHN M. BRODER
March 23, 2009

WASHINGTON — As a physicist, Steven Chu has seen atoms suspended in a powerful laser beam and DNA stretched out in a vacuum chamber.

But in his new job as energy secretary, Dr. Chu is observing phenomena he never saw in the science laboratory.

At a recent Senate hearing, for example, he witnessed a junior cabinet member (himself) being systematically dissected by a senior senator (John McCain).

Mr. McCain, Republican of Arizona, was unhappy when Dr. Chu affirmed the Obama administration’s intention to suspend work at a planned nuclear waste site in Nevada. “What’s wrong with Yucca Mountain, Dr. Chu?” he demanded repeatedly as Dr. Chu tried to explain.

“I think we can do a better job,” Dr. Chu finally replied.

For a slight, soft-spoken Nobel laureate, Washington has been an initiation that he has likened to being “dumped in the deep end of the pool.” Dr. Chu, 61, was chairman of Stanford’s physics department and ran a national research laboratory. But in addition to being verbally slapped around by Mr. McCain, he has been forced to backtrack on some ill-informed comments about OPEC and ordered to spend quickly tens of billions of dollars in stimulus money with virtually no top-level help.

Dr. Chu is still mastering skills like ducking a tough question from a reporter and delivering the all-purpose “I’ll get back to you on that.”

He has admitted his naïveté on certain policy questions, like OPEC production quotas, and is still getting used to the scrutiny that comes with a cabinet job.

“I didn’t appreciate how much of a public figure you become,” Dr. Chu said in an interview recently in Milwaukee, where he spent the day talking to scientists about biofuels and touring a home that was being weatherized under a local program.

President Obama has assigned Dr. Chu to carry out some of his central priorities: wean America from dependence on fossil fuels, rebuild the nation’s electrical grid and address the challenges of climate change.

The science part of his job is the most rewarding, Dr. Chu said. On his visit to Milwaukee, he visibly brightened when one University of Wisconsin researcher told him about a local entrepreneur who was turning the waste products from cheesemaking into ethanol, which was then blended with gasoline at a nearby convenience store.

“Does he drop some off at the liquor store on his way?” Dr. Chu asked impishly.

A few hours later, wearing khakis frayed at the cuffs and brown, thick-soled professorial shoes, he dutifully traipsed through the small house that was getting new insulation and appliances to cut the owner’s electric bills. When he emerged, five news cameras were set up on the lawn. But to his relief, most of the questions went to Gov. James E. Doyle of Wisconsin, who had accompanied him on the tour.

Asked later what part of his job he liked the least, Dr. Chu said: “The fact that I’m constantly being told that I have to be careful what I say to the press and in public. I can’t speculate out loud anymore. Everything I say is taken with total seriousness.”

Yet as he takes on one of the toughest policy and management challenges in government, Dr. Chu brings certain assets that none of his peers or predecessors have had: a Nobel Prize, a YouTube following (for his lectures on climate change) and an unofficial theme song (“Dr. Wu” by Steely Dan). He is a major celebrity in Taiwan, where scientific achievement is rewarded with rock star status. He is a member of Academica Sinica, Taiwan’s most distinguished scholarly society, as was his father.

Dr. Chu is struggling to get his arms around one of the most perplexing and intractable bureaucracies in Washington and to efficiently — and carefully — disperse $39 billion in funding from the stimulus package. Most of the department’s top appointed positions, including deputy secretary, remain unfilled, leaving him largely reliant on career staff members to manage 114,000 employees and contractors and a budget that has more than doubled this year. The task at times appears overwhelming, and some in Washington quietly wonder if Dr. Chu is in over his head.

Karen Harbert, president of the Institute for 21st Century Energy at the United States Chamber of Commerce, praised Dr. Chu’s academic credentials, calling him Mr. Science. But she suggested that the main decisions on energy and climate change policy were being made at the White House by a small team led by Carol Browner, the former administrator of the Environmental Protection Agency.

“Is he secretary of energy or secretary of research and development?” Ms. Harbert asked.

Dan Leistikow, the Energy Department’s director of public affairs, said that Dr. Chu was a scientist, not a politician, and should be given a little time to adjust.

“A Nobel scientist is more likely to figure out Washington than a career politician is to figure out how to deal with carbon sequestration,” Mr. Leistikow said.

Dr. Chu came to Washington after serving as director of the Energy Department’s Lawrence Berkeley National Laboratory in California, a civilian research organization with 4,000 employees and a $600 million annual budget. Before that, he was a professor and research scientist at Stanford and Bell Laboratories. He shared the 1997 Nobel in physics for his work on cooling and trapping atoms with laser light.

He comes from a family of academic overachievers. His father emigrated from China to study chemical engineering at the Massachusetts Institute of Technology and retired as a professor at the Polytechnic Institute of Brooklyn. His mother studied economics in China and at M.I.T. One brother, Gilbert, is a professor of medicine and biochemistry at Stanford; the other, Morgan, is a highly regarded intellectual property lawyer in Los Angeles. Dr. Chu once described himself as the academic black sheep of the family.

Morgan Chu said of his brother, “He’s acclimating very well, all things considered.” He added, “He has a wonderful set of skills for the job — an unbending respect for discovering the unvarnished truth and a willingness to challenge established dogma.”

Matt Rogers, an energy expert with McKinsey & Company whom Dr. Chu brought in last month to help speed the pace of Energy Department spending, said it would be a mistake to dismiss Dr. Chu as just a science geek. “He is a kind man; he is a nice man,” Mr. Rogers said. “But he is not a patient man. People are going to have to take a deep breath and realize they’re going to be moving at a much quicker pace than they were used to.”

Dr. Chu said he had been frustrated by the job vacancies and the glacial pace of his department. He is eager, he said, to get on with what he sees as his main task: finding and financing the scientific breakthroughs that will end the nation’s dependence on carbon-based fuels and solve the climate change problem.

Borrowing an analogy from the world of physics, he said that in Washington, Newton’s first law — a body in motion tends to stay in motion — does not apply. “In a bureaucracy, if you start something in motion, it either stops or gets derailed,” he said. “You have to keep applying force.”

He intends to keep applying that force, he said, because it could help solve the world’s energy and climate change problems.

“If we don’t spend this money wisely and invest in new technology that addresses these challenges,” he said, “we will have failed the country. We will have failed the world.”
Energy Nominee Shifts His Stance
NYTIMES
By MATTHEW L. WALD
January 13, 2009

WASHINGTON — Physics met politics at the confirmation hearing Tuesday for Steven Chu, the Nobel laureate scientist chosen by President-elect Barack Obama to head the Department of Energy, and the physics bent a bit, as Dr. Chu backed away slightly from earlier statements he has made — that gasoline prices should be higher, and that coal was his “nightmare.”

Dr. Chu, whose last job was director of the Lawrence Berkeley National Laboratory, answered an array of questions from the Senate committee on Energy and Natural Resources — about his position on new nuclear reactors (yes, at least for a few plants), offshore drilling (only as part of an energy package) and new coal-burning power plants (a few, until we figure out a better way). He told the lawmakers that “last year’s rapid spike in oil and gasoline prices not only contributed to the recession we are now experiencing, it also put a huge strain on the budgets of families all across America.”

Last September, though, he told The Wall Street Journal, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” At the hearing, responding to a question about that statement, he said, “What the American family does not want is to pay an increasing fraction of their budget, their precious dollars, for energy costs, both in transportation and keeping their homes warm and lit.”

The answer is efficiency, using less so that even if the price rises, the bill does not, he said.

He also said that coal, which has a wide political constituency, would continue to be used, and that the trick was to convert it to electricity cleanly.

Dr. Chu, who is 60, got a friendly welcome from the committee, but really warmed up when Senator Blanche Lincoln, Democrat of Arkansas, asked him how plants could be turned into substitutes for petroleum.

“Actually, now we’re getting to science, I love this,” he said, to laugher around the room. He said he has supervised research to figure out, “How do you break those plants down into the kind of sugars these little critters, the yeast and bacteria, can actually use.” Gene-altered bacteria have been developed to turn sugar into substitutes for gasoline, diesel and jet fuel, he said.

Several senators reiterated the idea that the energy department faced terrific scientific challenges, and that a Nobel physicist was the appropriate person to head it. Senator Dianne Feinstein, a California Democrat who introduced him to the committee, referred to him as “one of the great brilliant thinkers of his generation.” Around Washington, Dr. Chu draws wide approval for stressing energy efficiency and new technology as approaches to the problems of energy prices and global warming.

But his science-based frankness sometimes contrasts with ordinary energy politics, which are often more centered on narrower economic interests.

For example, in a presentation at Berkeley in April 2007, now preserved on YouTube, he declared, “coal is my worst nightmare,” words previous energy secretaries would be unlikely to utter.

“We have lots of fossil fuel,” he said in that presentation. “That’s really both good and bad news. We won’t run out of energy but there’s enough carbon in the ground to really cook us.”

And he has said frankly that some of the technologies that federal dollars are pursuing would be nice to have, but are not today ready for use, either because they are too expensive to be practical, or not demonstrated to be safe. In this category he puts sequestering the carbon dioxide from power plants, recycling nuclear fuel to reduce its volume and recover unused fuel, and making ethanol from cellulose, which is essentially woody wastes or non-crop plants.

In the course of the hearing, the main mission of the department — making, maintaining and dismantling nuclear weapons, and cleaning up from six decades of nuclear weapon production — got intermittent mention. According to a report on nuclear weapons spending by Stephen I. Schwartz and sponsored by the Carnegie Endowment, the budget for nuclear weapons in 2008 was over $52 billion. Robert Alvarez, who was a policy advisor to the energy secretary in the Clinton administration, said in an interview that the department is spending about 11 times more money on nuclear weapons than on energy conservation.

Dr. Chu faces a variety of conflicting mandates. For example, he said that using more renewable energy is a national priority and thus will require a national electric grid. To help create such a grid, a 2005 law gives the department the authority to designate high-priority corridors, to overrule local objections to new power lines. But Senator Robert Menendez, a Democrat, complained that the department had designated his entire state, New Jersey, as part of a corridor. Mr. Chu promised to investigate.

Another problem is nuclear waste. Dr. Chu repeatedly said that of the carbon-free power generation in this country, 70 percent is nuclear. But Mr. Obama has expressed deep skepticism about the plan to bury nuclear waste at Yucca Mountain, the site near Las Vegas that the government has worked for 20 years to develop. A solution would have to be found, Dr. Chu said, but construction of new plants should resume now, after a hiatus of 30 years, even before the solution is developed.



Today, the NYTIMES suggests the above triumvirate for energy team - Carol Browner (close-up above), Dr. Steven Chu and Lisa Jackson;  Nancy Sutley, for head of Council on Environmental Quality; at right, Sec'y of the Interior Salazar.


E.P.A. Moves Toward Regulating Greenhouse Gases
NYTIMES
By FELICITY BARRINGER
March 24, 2009

The Environmental Protection Agency has moved to declare that greenhouse gases are pollutants that pose a danger to the public’s health and welfare. That determination, once made final, will pave the way for federal regulation of carbon dioxide, methane and other heat-trapping gases linked to global warming.

In February, the E.P.A.’s administrator, Lisa P. Jackson, hinted strongly in an interview with The New York Times that the agency would take action on the issue before April 2. That date marks the second anniversary of a Supreme Court ruling ordering the agency to determine whether carbon dioxide and other greenhouse gases qualify as pollutants under the Clean Air Act.

The Bush administration stalled in complying with the court order, opting for more study of the issue, although there was wide consensus among E.P.A. experts that such a determination was supported by scientific research.

The agency sent the finding on Friday to the Office of Management and Budget for review, according to a Web site that lists pending federal rules. Once the budget office clears the finding, it can be signed by Ms. Jackson.

The action, known as an endangerment finding, would allow federal regulation of motor vehicle emissions of greenhouse gases. If further action is taken by the E.P.A., it could open the door to regulatory controls over power plants, oil refineries, cement plants and other factories that emit such gases.

Although the agency’s action was widely expected, word that it was headed for the finish line stirred elation among environmental groups and Congressional Democrats and brought dire warnings of regulatory chaos from business groups.

“This finding will officially end the era of denial on global warming,” said Rep. Edward J. Markey, a Massachusetts Democrat who is chairman of a select committee on global warming.

John Walke, a senior lawyer at the Natural Resources Defense Council, welcomed the E.P.A.’s decision as the opening act of a new effort to tackle global warming, one that he hoped would ultimately culminate in federal legislation. “For some period we may have parallel efforts of Environmental Protection Agency pursuing or even adopting regulation while the eventual main show will be in Congress,” he said.

But Bill Kovacs, a specialist on global warming issues with the United States Chamber of Commerce, said that an endangerment finding would automatically provoke a tangle of regulatory requirements for businesses large and small, including, he predicted, small dairy farms whose cattle produce methane gas.

Climate czar left no electronic trail
Washington Times
Jim McElhatton
Wednesday, December 24, 2008

Don't bother looking for any electronic records of Carol Browner's first stint as a federal government executive. The soon-to-be Obama administration climate czar intentionally didn't keep many.

In sworn testimony obtained by The Washington Times, Ms. Browner disclosed that she refused to use e-mail when she served as President Clinton's Environmental Protection Agency chief in the 1990s for fear of leaving a digital trail. She also ordered her government computer hard drive wiped clean of records just before leaving office.

"It was a conscious decision not to use a piece of equipment or to learn how to use a piece of equipment because I didn't want to be in a situation similar to what I had been in Florida," she testified about government computers. The testimony referred to her days as an environmental regulator in Florida, where an e-mail message sent to her surfaced in litigation.

"This is why I made this decision not to use my computer," she said. "I was very careful."

Ms. Browner's sworn statements were gathered in a little-noticed civil case involving the government's obligation to preserve its official records that transpired after Ms. Browner left office in January 2001. The lawsuit examined why EPA officials failed to save electronic records that chronicled the Clinton administration's final actions in office and that were being sought by a conservative legal group under federal open-records laws.

The same day a judge ordered the agency to preserve such records, Ms. Browner asked a staff member that any files on her government computer be erased, prompting allegations of a possible cover-up.

The ensuing investigation ultimately cleared Ms. Browner of any wrongdoing, concluding she was unaware of the judge's order. Her former agency, however, didn't fare as well. It was found in contempt of court for failing to preserve government records at the heart of the case.

While exonerated, Ms. Browner's testimony provided a rare insight into her distaste for keeping historical government records in electronic form. It's an aversion that concerns some government watchdogs as she prepares to take the high-profile job of coordinating President-elect Barack Obama's efforts against global warming.

"Obviously, it's troubling that public officials would avoid doing things because they're afraid the public might see it later," said Mike Surrusco, senior researcher at Common Cause, a nonpartisan group that monitors government ethics and openness.

Charles Davis, executive director of the National Freedom of Information Coalition at the University of Missouri, said avoiding computers and e-mail "seems a little drastic and over the top."

"It's regrettable," Mr. Davis added. "It seems a rejection of the entire inertia of the marketplace to forswear digital communications."

Obama aides declined to say whether Ms. Browner plans to use email or computers in her new job but said she worked to improve transparency during her years at the EPA, where she made decisions on written memos instead of e-mails.

She is hardly the only high-ranking government official to avoid e-mail.

Former Secretary of Defense Donald H. Rumsfeld and current Secretary of Homeland Security Michael Chertoff have opted not to use e-mail on the job, either, according to a 2006 House report. And President Bush has cited personal privacy issues for his decision to forgo e-mail.

In her deposition, Ms. Browner said she instructed her staff to remove her computer when she first took office at the EPA, though she later kept it when told the computer was assigned to her office.

Still, she said she hardly ever used it and relied on her staff to sort through e-mails and print out important messages. In Florida, she said she was overwhelmed by e-mail. She also said during her 2001 deposition that during her years as an environmental regulator in Florida, she once had to provide affidavits after an internal e-mail sent to her surfaced in litigation involving a permitting issue

"I thought, you know what? I don't need this. I don't need to go there again, I don't need to deal with this. I will not use e-mail, and I did not use e-mail."

Just before leaving office, Ms. Browner ordered that the hard drive of her computer be wiped clean, though a group had been seeking a court injunction to preserve her records. She said she wasn't told to keep the computer records intact in connection with the FOIA lawsuit, but wanted to make sure that computer games her son installed on her work computer were removed.

Landmark Legal Foundation's president, Mark R. Levin, who sued the EPA and was among the lawyers at Ms. Browner's deposition, said her answers suggested a "culture of deniability" during her years at the agency.

"She was the most disconnected senior official I have ever come across in government," Mr. Levin said.

Tommy Vietor, a spokesman for the Obama transition team, disputed Mr. Levin's criticism, calling Landmark "a partisan attack group that fought clean-air standards and efforts to get arsenic out of drinking water."

"Carol Browner's record at EPA is marked by her work to increase the public's right to know about toxic chemicals in the air and water, and her efforts to improve the government's responsiveness to environmental issues," he said.

"Both a judge and inspector general report found that Ms. Browner did nothing wrong" by ordering her computer files deleted, Mr. Vietor said.

Meredith Fuchs, general counsel to the nonpartisan National Security Archive, which collects and publishes declassified government records, said government officials have to walk a fine line when it comes to e-mail.

"A lot of these officials look at the record laws as a limitation of what they can do," she said. "But they're doing things on behalf of the public, and there has to be some transparency about what they're doing."

On the other hand, Ms. Fuchs added, "We don't want these people heading big agencies reading e-mail all day."
Hard Task for New Team on Energy and Climate
NYTIMES
By JOHN M. BRODER and ANDREW C. REVKIN
December 16, 2008

WASHINGTON — The team President-elect Barack Obama introduced on Monday to carry out his energy and environmental policies faces a host of political, economic, diplomatic and scientific challenges that could impede his plans to address global warming and America’s growing dependence on dirty and uncertain sources of energy.

Acknowledging that a succession of presidents and Congresses had failed to make much progress on the issues, Mr. Obama vowed to press ahead despite the faltering economy and suggested that he would invest his political capital in trying to break logjams.

“This tim