Following a dramatic conflict between Democratic heavyweights two years ago today's leadership elections in Harrisburg had no drama. Keith McCall was elected House Speaker, Todd Eachus Majority Leader and Sen. Joe Scarnati is President Pro Tem of the State Senate. Democrats hold a more comfortable lead in the House compared to the razor thin one vote margin of 2007 which allowed Rep. Thomas Caltagirone to leverage his influence and elect Republican compromise candidate Dennis O'Brien as Speaker.
Though O'Brien was a good enough Speaker the fact Democrats held the majority but didn't have the Speakership created considerable drama. Republicans have 29 seats in the Senate pending the outcome of March 3rd's special election to fill the seat of the late Jim Rhoades. Scarnati also is serving as Acting Lt. Governor due to the death of Catherine Baker Knoll.
Today's elections were so sure Capitol workers already had the gold lettering embossed on the offices of the Speaker and Majority Leader. This is always an interesting day in Harrisburg because so many political people descend to mix and watch the formalities. I ran into some including Montgomery County Commissioner Joe Hoeffel. I asked if he'd be running for his old Congressional seat in 2010 if Rep. Allyson Schwartz runs for Arlen Specter's Senate seat. He will not. That would leave that race open for a newcomer. Montgomery County has a number of up and coming young Democrats who might see that as an opportunity.
The same man who is under investigation as part of a potential pay to play scheme which has New Mexico Governor Bill Richardson stepping aside as Commerce Secretary may also ensnare Ed Rendell. The AP is reporting that the California company at the center of the probe also gave wads of cash to our Governor and, coincidentally, holds a state contract here as well.
CDR Financial Products head David Rubin gave Fast Eddie $40,000 and now has a contract for $45,000/year with the Pennsylvania Housing Finance Authority. This agency is active trying to save homeowners facing foreclosure. Will this scandal foreclose the Governor's future political aspirations?
Companies contribute to politicians all the time and companies which vie for state contracts do especially. The key is whether there existed a "quid pro quo," or agreement that contracts would be rewarded to those who gave campaign cash. This is the situation in Illinois where Rod Blagojevich actually shook down kickbacks to his campaigns. If proper contract procedures were engaged in by the state (competitive bidding) and there was no action on the part of the Governor or his office then there is nothing wrong with the fact Rubin gave campaign contributions and also got a contract.
Of course if we had public financing of all elections this wouldn't be a problem.
Congressman Paul Kanjorski is heading a Congressional investigation into the $50 billion pyramid scheme hatched and controlled by Bernie Madoff in spite of eight separate SEC audits. The Securities and Exchange Commission allowed the illegal Ponzi scheme to operate under it snose for decades and numerous charities, non profits and individuals lost billions.
At the same time valuable organizations were closing their doors due to Madoff's illegal activities he was giving millions of dollars worth of jewelry to family and friends last month. This is what happens when you're rich and powerful; you get a "get out of jail free" card and wear an ankle bracelet which allows you to hide your ill gotten gains. Now efforts are under way to revoke the bail and send this crook to prison. Finally.
Kanjorski's Congressional committee is investigating why the SEC failed to uncover the scheme in spite of repeated warnings. Former GOP Congressman Christopher Cox oversaw this negligence as head of the SEC under a Bush Administration whose ideology was to stop all oversight and regulation. This is what happens when greed and avarice are allowed to go unchecked.
Congressman Kanjorski made these statements yesterday:
These deeply disturbing events have raised even more troubling questions about the effectiveness of our regulatory system. I have long stressed the need for pursuing comprehensive regulatory reform, and I have convened hearings to advance this initiative. But, before we act on legislation in the 111th Congress to restructure the regulatory system for the financial services industry and enhance investor protection, we need to understand how Mr. Madoff organized his many business operations and how he perpetrated his fraudulent acts.
This elaborate Ponzi scheme fell through the cracks of our regulatory system. From what we have all learned in the press, it now appears that regulators should have detected the Madoff wrongdoing earlier because of the red flags raised by others. Authorities received information about potential problems when outsiders like Mr. Markopolos could not create a model that matched the results of Mr. Madoff's purported strategy. Others published articles as early as 2001 raising questions about Mr. Madoff's firm. Other red flags include unrealistically steady investment returns and an auditor the size of a mouse examining a fund the size of an elephant.
Perhaps most shocking, after Mr. Madoff misled government examiners and after he was then forced to register as an investment adviser, the Commission did not conduct any subsequent inspections. Moreover, in its prior examinations, the Commission failed to effectively use its subpoena power to obtain any records other than those voluntarily offered.
In the wake of this unprecedented financial crisis, we now know that our securities regulators have not only missed opportunities to protect investors against massive losses from the most complex financial instruments like derivatives, but they have also missed the chance to protect them against the simplest of scams, the Ponzi scheme. Clearly, our regulatory system has failed miserably and we must rebuild it now.
As we resurrect our regulatory structure, we must ensure that regulators have the resources that they need to get the job done. A former chairman of the Commission, Arthur Leavitt, has noted that the agency's enforcement unit is chronically understaffed. Whereas it had had 433 people in the office of compliance and examinations looking at 8,000 advisers two years ago, today it has 400 people looking at 11,000 advisers and thousands of mutual funds.
Moreover, the number of investment advisers subject to the Commission's oversight has doubled since 1997. While we do not yet know if the Commission's oversight in this case can be blamed on a lack of resources, we can certainly work to make sure adequate staff and powers are available in the future.
We must also take actions to better protect all investors, from elderly widows to sophisticated market participants. There are many ideas on how we can accomplish this objective. The Congress will review these options. In the Madoff case, legal authorities will be tasked with finding a way to help aggrieved investors, too.
Finally, it is important to note that this is a real crisis with real victims. I, for one, was saddened to learn of a gentleman who, because he lost the money of his family and his clients in the Madoff financial scandal, took his own life. Life is always more precious than money. I therefore hope that we will see no more tragic fallout from this messy, sordid affair.
In closing, I thank our witnesses and my colleagues for joining me here today. Together, I hope that we can learn from this terrible event, figure out how we can improve our regulatory structure, and undertake the most substantial rewrite of the laws governing the U.S. financial markets since the Great Depression.
Senate Democrats blocked Illinois' appointed U.S. Senator Roland Burris today. He was not allowed access to the Senate floor on the grounds his credentials are not complete. The Illinois Secretary of State has refused to sign Burris' credentials and certify his appointment by disgraced Governor Rod Blogojevich. This opens the door for Republicans to bar Al Franken on similar grounds and hold up vital legislation.
I've been following the prosecution of former State Senator Vince Fumo and the evidence has been powerful. Powerful enough to indict and convict one of the most powerful figures in Pennsylvania. A witness has now testified how Sen. Fumo tried to extort $50 million from Verizon in exchange for his support of deregulation.
This reminds me of the old joke where you ask someone how much you;d pay them to have sex with you. You keep increasing the amount until they agree. Then you say "now that we've established what you are all we need do is negotiate the price." At least Fumo wasn't a cheap whore. A whore but not a cheap one.
State government was for sale in Sen. Fumo's office and the price was steep. He insisted on a $15 million contribution for his Philadelphia charity which, it seems, existed only for his personal enrichment, $10 million for neighborhood redevelopment (supposedly what his non profit was for and for which he'd take credit running for re-election), and $10 million to be deposited in his bank.
Fumo, the owner of Pennsylvania Savings Bank, was a very wealthy man. In spite of this his greed knew no bounds. He fleeced the taxpayers, his non profit and the Seaport Museum for millions. PECO fell for the extortion scheme and gave the charity $17 million. The employees there spent tons of time and money doing routine personal errands, tasks and jobs for Fumo.
The case of Vince Fumo should weigh heavily upon the state legislators as they gather for a new session Tuesday. Hubris, greed and the lust for power are powerful forces inside the state capitol and can be the downfall of the powerful.
Harry Reid's tenure as Senate Majority Leader has been abysmal. Republicans filibustered almost 90 bills last session and threaten to derail President elect Obama's entire agenda until the 2010 elections revert them to a very minority Party. Reid's performance yesterday on "Meet The Press" was intolerable. Inconsistent strategy is now allowing the GOP to block seating Al Franken due to Reid's mishandling of the Burris fiasco.
Is there anything constructive to say for Harry Reid's tenure as Majority Leader? What accomplishments have resulted from his being in this role? He has been the most inept Leader I have any witnessed in all the years I've followed politics.
Now he is poised to disgrace Democrats by blocking Roland Burris at the Senate door tomorrow. Asked by MTP's David Gregory what his legal foundation for this action is Reid cited The Los Angeles Times. Honestly he actually cited a newspaper for legal justification. I cringed while listening to this as I do almost every time Reid opens his mouth and says something new which is stupid. With a new session it is time for Democrats to elect a new Leader in the Senate.
New Mexico Governor Bill Richardson stepped aisde as Barack Obama's choice for Commerce Secretary as he is under federal investigation. The allegations involve state contracts awarded to a firm which has given generously to Richardson campaigns. The specter of pay to play again haunts the political scene.
I've always like Gov. Richardson and I love his state The Land of Enchantment. If you've never been to New Mexico I urge you to pay it a visit. I absolutely fell in love with Santa Fe a couple years ago. Rumors of a "zipper problem" have plagued Richardson for years and I always suspected that would be his downfall rather than ethical questions. I doubt anything serious will come from this probe but right now the Obama White House cannot tolerate more controversy and more issues which must be handled.
As Congress reconvenes this week Republicans, especially those remaining in the Senate are preparing a new campaign of obstructionism. The GOP, once a staunch opponent of filibusters when they the majority party, has so embraced the tactic that no business got done in the 110th Congress. They now are risking becoming an even smaller Party by angering the majority of the country.
Democrats behind Barack Obama won significant gains for the second consecutive election and the nation seeks a new direction from the partisan bickering and extreme policies Republicans inflicted upon the people for eight years. The mood of the country in the beginning of a long, serious recession isn't good. Further obstruction of the new president's agenda and his efforts to paint the GOP as obstructionist will likely relegate them to an even smaller role.
It is a big risk being taken by a party on the verge of becoming irrelevant. The fact Republicans have deaf ears as to why the voters are rejecting their failed ideology explains their huge gamble this week. If the GOP continues filibustering legislation even safe seats like Arlen Specter's will disappear in 2010.
Israel escalated their escalation of violence against Gaza today with a land invasion of the tiny, densely packed territory. Looking and acting like brutes inconsiderate of the human toll of their brutality this is beginning to cost Israel dearly in the eyes of the world. The Jewish state does not need to engage in such disproportional violence in response to what is, in essence, a thorn in its side.
Gaza has been blockaded and put under siege for years by Israel. The unemployment rate has gone over 60% since no Palestinians could enter Israel for their jobs so what else are they to do? This is what breeds terrorism. Conditions imposed on the Palestinians, people driven from their ancient homelands when Israel was created, are tragic.
This seems an extension of the over reaction Israel committed against Hezbollah and Lebanon two years ago and which went quite badly. If they suffer significant losses in Gaza their position in the world order, already suffering from the wholesale murder of women and children, will evaporate. This is stupid, reckless and irresponsible foreign policy. It is time to cut off American financial support for Israel's military.
My beloved Nittany Lions lost to USC yesterday in the Rose Bowl. The appalling bad sportsmanship of the Southern California Trojans was appalling. Their first half behavior, including Coach Pete Carroll, showed that though they won the game they are losers in life. The Nittany Lions, on the other hand, played with class, never gave up and showed what collegiate sports should be about: representing your school, alumni, and state with a high level of sportsmanship, class and success.
A new era of open government begins in Pennsylvania. As the Open Records Law finally takes effect all governmental bodies must comply within five days to requests for records not limited. The new law assumes most all public records in the Commonwealth are just that: public. Exclusions involve personnel files, law enforcement investigations, most of the obviously private stuff. Everything else is considered public and available for minimal fees. The five day compliance clause is important as many local and county governments are known for stonewalling on records requests.
You do not have to offer or give any explanation for records you seek. Many government officials are in the habit of asking people why they want records; you do not need to give any reason for the records requests made. This is important, do not succumb to their intimidation. You can get more information about the law at this website. The Community Legal Defense Fund also is a good resource.
The propaganda campaign being waged by mining interests trying to convince Americans that coal is a clean energy source was destroyed when 400 acres in Tennessee were devastated by coal ash, a byproduct of "Clean Coal" technology. Burning coal for energy is the dirtiest method of supplying our energy needs. No amount of millions spent on television brainwashing will erase the negativity created through this accident.
Gov. Rod Blagojevich nominated Roland Burris yesterday to replace Barack Obama in the U.S. Senate. An exercise in extreme hubris this move signaled an arrogance unchallenged outside the White House in recent years. No one nominated by Blago has any credibility and cannot serve. The automatic assumption is the seat was bought and paid for and therefore only a fool would agree to such a nomination. The Senate already has enough fools and doesn't need one more.
Why Roland Burris would ever agree to be humiliated this way is the obvious question. The Governor tried challenging anyone who contests his appointment by claiming the people of Illinois would be deprived of their voice and full voting representation in the Senate should Burris be rejected. The Illinois Secretary of State is already refusing to certify the appointment.
Blagojevich is correct that the people of Illinois are being denied full representation in the Senate due to this scandal. What he doesn't realize is that this is wholly, completely his fault and his responsibility. If he'd kept such high minded principles in mind instead of trying to auction the seat to the highest bidder his concerns might be credible. As such it seems they only serve as reasons to impeach him as Governor.
I'm sick and tired of the talking heads on TV saying Chip Saltsman isn't representative of Republicans. The former Huckabee (let's remember this when Huck runs again) campaign manager is running for Chair of the Republican National Committee and sent an overtly racist cd to RNC members over the holiday. The music included the Rush Limbaugh "Barack the Magic Negro" outrage and another song titled the "Star Spanglish Banner."
I interviewed many Republicans at McCain-Palin events this fall and can say, without doubt or hesitation, that this racism IS representative of the GOP. The Republican "big tent" these days is nothing more than an oversized Ku Klux Klan hat. I found no one at these events who wasn't a racist. Many were proud of that characterization. To discover that Saltsman, a candidate for their highest Party office sent such a racist item out to his voters did not come as a shock or surprise.
When I outed Adam LaDuca (Pennsylvania College Republicans) as a racist not one Republican official even made a public comment. When Rush Limbaugh first aired "Barack the Magic Negro" no Republicans condemned the act. When Mike Morrill and I taped racist Republicans at McCain-Palin events no Republicans responded here condemning their actions. The pattern is that Republicans tolerate this shit. Don't go on CNN and try and tell me this isn't representative of the GOP when it is.
