This week, we learned that the White House knew about last year's deal between Texas-based Hunt Oil and the Kurdish Regional Government.

Apparently the threat it posed to the fragile negotiations in Baghdad didn't concern the president as much as he suggested in public.

The Kurds have made a lot of friends in Washington during the past few years -- especially among Republicans.

It's a relationship that's bolstered by aggressive lobbying by the Kurds. The Kurdish Regional Government has 11 active contracts with U.S. lawyers and lobbyists, according to the State Department's database maintained under the Foreign Agents Registration Act. The Kurds have been shelling out far more money on K Street than any other group or government in Iraq.

A key ally for the Kurds is the firm Barbour Griffith Rogers, the lobbying shop founded by Mississippi Gov. Haley Barbour, formerly head of the Republican National Committee. BGR receives $700,000 a year from the Kurdish Regional Government. Their agreement says the firm will "arrange meetings" with U.S. media and government officials.

The firm has a separate agreement with the Kurdistan Democratic Party for a $262,500 annual fee, according to the FARA database.

The Kurdish Regional Government also has a deal with the Republican-linked firm Russo, March and Rogers for running a "media campaign" and a "public relations campaign."

The Washington Post last year also noted the Kurds efforts to reach out to evangelical Christians.

In the past year, the Kurds have spent more than $3 million to retain lobbyists and set up a diplomatic office in Washington. They are cultivating grass-roots advocates among supporters of President Bush's war policy and evangelicals who believe that many key figures in the Bible lived in Kurdistan. And they are seeking to build an emotional bond with ordinary Americans, like those forged by Israel and Taiwan, by running commercials on national cable news channels to assert that even as Iraq teeters toward a full-blown civil war, one corner of the country, at least, has fulfilled the Bush administration's ambition of a peaceful, democratic, pro-Western beachhead in the Middle East.

The Kurds are probably watching this year's campaign very closely.

Rep. Don Young (R-AK) has been fighting corruption charges for awhile. He even tried a legal defense fund to help him through hard times, but now it looks like he's started to pay his own million-dollar legal tab from his campaign funds, but also that of Steven Dougherty, his campaign manager who is under FBI scrutiny.

According to the AP:

Young has spent more than $1 million in campaign contributions on legal fees. He is represented by the Washington law firm of Akin Gump Strauss Hauer and Feld. His campaign finance reports also show $35,020 in fees to John W. Wolfe, a prominent Seattle white-collar defense attorney who represents Dougherty as well as Stevens' son, Ben. The campaign has also paid about $196,000 since October to Tobin, O'Connor and Ewing, a Washington law firm, though it's unclear whom the firm represents.

Just last week, House Judiciary Chairman John Conyers (D-MI) subpoenaed a big chunk of the Bush Administration to talk to the Committee about the Valerie Plame leak scandal. Among those listed to testify: Karl Rove, Lewis "Scooter" Libby, Scott McClellan, Dan Bartlett and Andrew Card.

And, predictably, Rove is the first one to thumb his nose at the Committee.

In a letter from Rove's attorney to Chairman Conyers, Robert Luskin writes:

While I understand that you would prefer-- and the Congress has taken the position in the pending litigation-- that Mr. Rove appear in person and assert any applicable privileges on a question by question basis, Mr. Rove is simply not free to accede to the Committee's view and take a position inconsistent with that asserted by the White House in the litigation. Mr. Rove will respectfully decline to appear before the Subcommittee on July 10 on the grounds that Executive Privilege confers upon him immunity from process in response to subpoena directed to this subject.

Our old friend executive privilege, rears its head again.

There's been a lot of talk in the last few weeks and months about John McCain's ties to lobbyists. So here at TPMmuckraker, we decided to do a little digging to officially catalog the possibilities. What we came up with, we fondly call "John McCain's Lobbyist Universe," a working guide to the presidential hopeful's connections. Click on each of the familiar faces to get a synopsis of their role in the campaign and their lobbyist ties. We expect to be growing and expanding this chart as more facts come in, and as always we welcome any tips or knowledge that you, our readers, have to offer.

Raising millions in campaign cash on behalf of someone else and spending almost the same amount on the fundraising process itself is just part of the business, according to staffers at the firm BMW Direct.

The company recently explained to ProPublica that even if a candidate doesn't actually keep much of the money, it's building a "donor file."

"One of things you do when you go out prospecting is build a donor file and that costs money," Scott Mackenzie, a consultant for BMW Direct and Chavez-Ochoa's campaign treasurer, said. "Once you build a house file and start mailing to the list, that's when you start making the money."
...
"We don't feel it's right that all these candidates should run unopposed," said Mackenzie, and direct mail is the "only way if a candidate doesn't have name recognition or personal finances to run their campaigns."

Where would the little guys be without the help of firms like BMW Direct?

"We like working with people who are long shots," Jordan Gerhke, the firm's director of development, said. If not for the firm's efforts to help little-known candidates, only "a bunch of millionaires" would be able to afford a run, he said.

BMW even recruits some of those longshot candidates. For example, ProPublica found Brian Chavez-Ochoa who briefly ran against Rep. Nancy Pelosi (D-CA) in 2006. How did this obscure candidate get into the race?

"I was asked by a group in D.C. to put my hat in the ring, so I did," he told ProPublica. That group was BMW Direct, which proceeded to raise -- and spend -- more than $220,000 on his behalf.

It may not be new, but that doesn't mean donors like it.

The "Swift Boaters" from 2004 are back at it.

A group of top Republican contributors who financially fueled the famous "Swift Boat" campaign ads that helped sink Sen. John Kerry's presidential campaign back in 2004 are starting to regroup.

A story in today's Wall Street Journal reports on new Republican efforts to circumvent the landmark campaign finance laws named after their top candidate -- the McCain-Feingold Act of 2002.

The GOP is raising tons of cash for the Republican Governors Association, which is a so-called 527 group and permits donors to exceed the $2,300 individual cap that applies to presidential campaigns. Although these groups are barred from soliciting money for presidential candidates, the association is telling prospective contributors that money for the association will ultimately help out McCain at the top of the ticket.

Of course the association's fund is getting cash from big corporations like Pfizer, Bank of America Corp. and Travelers, which have given $150,000 or more. But that's not the main target of this fundraising effort.

Rather, the pitch is aimed at individuals, including many top contributors to the controversial Swift Boat group that targeted Sen. Kerry. Texas developer Bob Perry, the largest financial backer of the Swift Boat group, also is the largest individual donor to the governors group, at $250,000. Carl Lindner, a retired insurance executive in Ohio and another top Swift Boat financier, has contributed $100,000 to the governors' fund. The campaign-finance lawyer for the Swift Boat group in 2004 now serves the same role for the governors association. The McCain campaign and the individual contributors all declined to comment on their involvement.

Yet the whole situation is dubiously legal. In 2005 the Federal Election Commission banned such groups from soliciting donations by pledging help to a federal candidate. Even the McCain camp questions the pitch tactics.

"If it is in fact telling its donors their money will help elect McCain they are being inaccurate," said McCain spokesman Brian Rogers, told the Journal, noting the group cannot legally attempt to sway a federal race. But he said that because he had not yet seen evidence the group is campaigning on Sen. McCain's behalf, "It's not an issue."

We'll have to wait and see what kind of ads the association actually runs. But so far, they've seen a big uptick in donations, raking in $14 million during the first half of this year, compared to $3 million for the Democratic governors' group.

The governor's association is unique among the so-called 527 groups. Like its Democratic counterpart, it is the only 527 set up by the national party.

The McCain camp is also trying out some other tactics to get around McCain's 2002 law and rake in more money to match Sen. Barack Obama's massive money machine, according to the Journal.

They're leveraging a technique that establishes a joint fund-raising account allowing donors write checks for up to $70,100. The campaign pulled in $3 million for the fund in a matter of days in June.

The Justice Department admitted error yesterday for failing to inform the Supreme Court that Congress had recently made the rape of a child a capital offense in the military. On June 25, the Court ruled that the death penalty was not appropriate punishment for the rape of an child. Admissions of error are highly unusual for the Justice Department. (New York Times)

After revelations from the House Oversight Committee that the Bush Administration was aware of the deal between Hunt Oil and the Kurdistan Regional Government, the State Department released a statement insisting they had no prior knowledge of the arrangement. (Washington Post)

A federal judge dismissed a lawsuit Wednesday by an Islamic organization that accused the Bush administration of illegally wiretapping its telephones. The federal judge tossed out the suit because the call log was part of a top secret document. (AP)

Read more »

We finally heard back from someone at the campaign of Deborah Travis Honeycutt. A couple days ago, we reported that a Washington-based fundraising group raked in more than $500,000 for the little-known Republican running for Congress in suburban Atlanta.

That money came from a nationwide direct-mail effort targeting self-styled conservatives who want to help defeat Democratic lawmakers.

But only about $17,000 of that amount was spent in her district. Most of the rest went to fees paid to the fundrasing firm, BMW Direct, and its affiliates and vendors.

That didn't seem to bother her campaign manager, Michael Murphy.

"We've been very pleased with them. BMW Direct has been able to help us raise resources and tap into a thirst in the country for the principles and platforms that she stands on," he said.

Murphy was unable to say what that campaign money raised was spent on. The three campaign staffers are volunteers, and so far the main activity has been "pressing the flesh," he said.

Murphy couldn't say exactly how much was ultimately given to the campaign. Those details were handled by Andrew Honeycutt, the candidate's husband and "campaign executive," he said. (Andrew Honeycutt has not returned our calls)

"I just work with the resources we have," Murphy said in the interview today.

"All I can say is we've been very pleased with BMW Direct."

Thanks to help from TPM Reader BK, we uncovered some congressional testimony from last year about BWM Direct, the Washington direct marketing firm that raises money for GOP candidates, among others, but doesn't give them much of it.

The House oversight committee held a hearing on December 13, 2007, about veterans' charities. The legislators heard a complaint from Bonnie Carroll, the executive director for the Tragedy Assistance Program for Survivors, or TAPS, a group that provides support to families of fallen combat troops.

Carroll had this exchange with Rep. Elijah Cummings (D-MD) at the hearing on Dec. 13, 2007. She doesn't identify the firm during the hearing, but in a phone interview with TPMmuckraker this week she confirmed she was referring to BMW Direct:

Mr. CUMMINGS. Well, Let me ask you this. How much money did you make under the telemarketer? How much money did you make?

Ms. CARROLL. If I could just defer to our CFO here.

Mr. CUMMINGS. Sure.

Ms. CARROLL. It is upset,ting to say that our income was approximately $50,000 to their total of $500,000.

Mr. CUMMINGS. Wait a minute. Let me get this right. I know I didn't hear that right. Let me get this right. They got $500,000, and you got $50,000?

Ms. CARROLL. Yes, sir, that is correct.

Mr. CUMMINGS. Jiminy Christmas.

Ms. CARROLL. And we terminated that very quickly, and it was a regrettable experience.

Carrol provided us with this data on how their deal with BMW played out between 2005 and 2007:

In 2005, the firm raised $371,375 and spent $366,375, giving TAPS a net of $5,000.

In 2006, the firm raised $187,394 and spend $176,310, giving TAPS a net of $11,084.

In 2007, the firm raised $3,187 and took no expenses out, giving TAPS a net of $3,187.

In total, BMW Direct raised $561,956 on behalf of TAPS, spent $542,685, giving TAPS a net of $19,271.

Let's do the math. That's...3.5 percent. So all those people who thought they were giving money to support widowed wives of slain combat troops, less than a nickel on the dollar actually did.

While TAPS was disappointed with how much money they ultimately received, Carroll said BMW Direct didn't misrepresent itself from the outset. "BMW was forthright," she said, and was not "raising false expectations on either instantaneous or total economic returns."

We also talked to the National Black Republican Association, which used to have BMW Direct raising money for its Black Republican PAC. Frances Rice, the group's chair, said they stopped working with BMW Direct last year. The two parties had a "disagreement over strategy." Rice declined to elaborate.

As we reported earlier, Chairman Waxman of the House Oversight Committee claimed today that the Bush Administration knew about the Hunt Oil deal way before it happened-- something the administration has denied regularly.

According to Waxman, there were nearly a dozen contacts between various levels of the administration and Hunt Oil as the deal was taking place. Hunt regularly informed the President's Foreign Intelligence Advisory Board of his intentions to seek a deal with the Kurdistan government. Management at Hunt also regularly met and communicated with the U.S. Regional Reconstruction Team (RRT), as well as State Department personnel.

So let's go through a little time line of the events and communication leading up to Sept. 8, 2007-- the day the Hunt Oil deal was finalized with the Kurdistan government.

June 12 and 15: Hunt Oil officials meet with officials from the RRT for the Kurdistan region, "to investigate investment prospects" in the Kurdish region. Hunt Oil General Manager Ken McDonald, asks RRT members if the deal between Hunt Oil and Kurdistan is in violation of U.S. policy:

I specifically asked if the USG had a policy toward companies entering into contracts with the KRG and [redacted] replied that there was no policy, neither for nor against.

July 12, 2007: Ray Hunt, president and CEO of Hunt Oil sends a letter to the President's Foreign Intelligence Advisory Board, letting them know he is pursuing an oil deal in Kurdistan:

We were approached a month or so ago by representatives of a private group in Kurdistan as to the possibílity of our becoming interested in that region. We had one team of geoscientists travel to Kurdistan several weeks ago and were encouraged by what we saw. We have a larger team going back to Kurdistan this week but who they will actually meet with while they are there and what the relationships of those people might be with the Government of Kurdistan are both unclear at this time.

August 2007: Hunt Oil representatives exchange a series of emails with State Department personnel discussing their return to Kurdistan.

August 30, 2007: Ray Hunt sends another letter to the Advisory Board to let them know he will be in Kurdistan the week of September 3:

While my schedule is still fluid, there is a high likelihood that I will meet with President Masoud Barzani, the Prime Minister, the Oil Minister and various other individuals associated with the government of Kurdistan.

September 5, 2007: McDonald informs the RRT in Erbil that "Hunt is expecting to sign an exploration contract" with the Kurdistan Regional Government. That same day, the RRT leader sends an e-mail summary of the meeting to the Embassy in Baghdad and the State Department headquarters in Washington. A second synopsis of the meeting is sent to the Embassy in Baghdad in a situation report the following day.

September 8, 2007: The Hunt Oil contract is finalized with the Kurdistan Regional Government.

September 13, 2007: A State Department official contacts Hunt Oil to describe another "good opportunity for Hunt" in Iraq, prompting a Hunt Oil official to write Ray Hunt: "This is really good for us. . .I find it a huge compliment that he is 'tipping' us off about this . . .This is a lucky break."

House oversight committee Chairman Henry Waxman says the Bush Administration knew about the September 2007 deal that Texas-based Hunt Oil struck with Kurdish officials in Iraq.

That contradicts what President Bush said at the time.

That deal was controversial because it came at a time of precarious negotiations in Baghdad about a possible revenue-sharing agreement between the warring factions in Iraq. The Kurds decision to forge a deal independent of the Baghdad government angered the Sunni and Shia Arabs in Iraq.

In a letter to Secretary of State Condoleezza Rice, Waxman asked for further information about the U.S. involvement in Iraqi oil deals, the Hunt Oil deal as well as more recent deals. He quoted the president speaking shortly after the deal was announced almost a year ago.

Administration officials criticized the Hunt Oil contract because it jeopardized the efforts of the Iraqi parliament to come to an agreement on the national oil legislation. When President Bush was asked about the Hunt Oil contract, he stated:

"I knew nothing about the deal. I need to know exactly how it happened. To the extent that it does undermine the ability for the government to come up with an oil revenue sharing plan that unifies the country, obviously if it undermines it I'm concerned"

Waxman said his committee has conducted an investigation of the Hunt Oil deal.

The documents that the Committee has received tell a different story about the role of Administration officials. Ray Hunt, the head of Hunt Oil, personally informed advisors to President Bush of meetings he and other Hunt Oil officials planned with representatives of the Kurdish government. Other Hunt Oil officials kept State Department officials informed about the company' s intentions.

After taking a hard look at the candidates who work with BMW Direct, the conservative Washington political firm that appears to keep a lot of the money it raises on behalf of other people, we've found an interesting pattern.

The firm appears to have two different types of clients.

For some candidates -- the little known longshots who are challenging incumbents -- the firm raises considerable amounts of money with nationwide mailings and spends almost all of that money on its own direct mail campaign. The monies raised by BMW go into the campaign's accounts then are quickly expended with various fees back to BMW or its affiliates, usually by the end of the same FEC reporting period.

For other candidates -- ones who are already in office and have a substantial campaign operation -- the firm appears to charge less in fees and does not allow expenses to eat up all the money pulled in. These candidates actually have some cash on hand at the end of the reporting period.

For example, take a look at Rep. Geoff Davis, the Republican from Kentucky. According to his most recent quarterly FEC report, he spent a lot of money on direct mail expenses -- $88,674.56 -- during the first quarter. But that was less than 60 percent of his total expenses. Davis also appears to have other normal campaign activity, where he is paying people in his home district for "administrative support," rent, catering campaign events, and paying mobile phone bills. (And $1,521 worth of tickets to the Kentucky Derby.)

And most importantly, while most of his campaign contributions were from outside his district -- presumably the haul from a nationwide direct mail campaign -- he actually had money left over at the end of the quarter - a net gain of $73,750.62. It's also very clear that Davis. a two-term incumbent from a district with a lot of Democrats, has an established campaign in place. That additional money added to his overall war chest for a total of $724,286.

Another client who appears to do routine business with BMW Direct is Rep. Virgil Goode (R-VA). He's actually facing a tough race this year. Goode spent $69,852 on direct-mail related expenses in April and May. But he took in a total of $136,909, including a lot donations from inside his own state. And Goode still has more than $600,000 on hand.

The upstarts don't fare as well with BMW Direct. We've already told you about Deborah Travis Honeycutt down in Georgia. There are a few others like her.

For example, Duane Sand, a little known Republican from North Dakota. His filings show he raised more than $300,000 during the first quarter and also spent more than $300,000. In the end he had less than $40,000 on hand. Almost all of his money came from out of state. And his expenditures show that more than 90 percent of his expenses were related to the direct-mail campaign, or $360,681.77 out of the total expenses of $389,501.01 spent for the quarter.

It's the same with Russell Williams, a retired Army lieutenant colonel and Republican running for office in Pennsylvania. He's challenging Rep. John Murtha (D-PA). During the first quarter, he only held on to about 13 percent of his money, raising $222,071.09 and spending $193,606.89, almost all of that money going to direct-mail expenses. Russell's campaign treasurer is Scott Mackenzie of BMW Direct.

Typically, direct-mail fundraisers take at least 30 percent of the fees raised. So even for the office holders, BMW Direct looks pricey. But at least they actually get some return on the deal. Some of those longshots aren't so lucky.

It was bound to happen when you had a big mess of lawyers disqualified from hiring for illegal reasons. One of the de-selected masses filed a lawsuit claiming $100,000 in damages on Monday.

As the The Blog of Legal Times wrote yesterday:

The class action by Sean Gerlich -- filed yesterday in U.S. District Court for the District of Columbia -- is the first suit resulting from an internal Justice report issued last week that says two former Justice officials illegally screened applicants to the honors and summer intern programs.

The two officials were Esther Slater McDonald, then counsel to the associate attorney general and now an associate at Seyfarth Shaw, and Michael Elston, then chief of staff to Deputy Attorney General Paul McNulty and now a partner at McGuireWoods.

Gerlich's suit says the department politicized the selection process, mishandled the applications and failed to maintain the records, all in violation of the Privacy Act, the Civil Service Reform Act and the Federal Records Act. In addition, the suit claims violations of the First and 14th Amendments.

Gerlich says he was rejected because of his liberal affiliations, which officials dug up through Internet searches.

Samuel Israel III, the convicted hedge fund manager who faked his own suicide just days before he was to be sent to prison, turned himself into police in Southwick, Massachusetts today.

From the AP:

Federal officials say fugitive hedge-fund swindler Samuel Israel has surrendered to authorities.

Rebekah Carmichael, a spokeswoman for U.S. Attorney Michael Garcia, said Wednesday that Israel is in federal custody. She would not immediately provide other details.

Israel disappeared last month on the day he was supposed to report to federal prison. Authorities found his car on a bridge over the Hudson River with the words "suicide is painless" scrawled in the dust on the hood.

He was sentenced to 20 years in prison for bilking investors out of $450 million in hedge funds.

As predicted, there's been lots of fall out from the first report by the Department of Justice Office of Inspector General on the hiring practices used by the DOJ.

As the New York Times reports today:

The Office of Special Counsel, an agency that investigates political interference in the federal workplace, let the Justice Department know this week that it would be examining the issues raised in the report "to discuss what our next step should be," said James P. Mitchell, a spokesman for the office.

The special counsel has offered to work with the department "to determine whether disciplinary action is warranted," Mr. Mitchell said. The inspector general's report noted that two department officials who it said were largely responsible for the abuses in 2006, Michael Elston and Esther Slater McDonald, could not face disciplinary action because both had left the department.

But Mr. Mitchell said: "That doesn't rule out others -- those who considered political affiliation in making decisions as well as those who let them do that. This is a prohibited practice, and this is an area that we enforce."

The OSC is no stranger to trouble. It's had its own issues lately, namely that the head of the department, Scott Bloch, is under investigation by the FBI.

For all the allegations of fraud, waste and abuse in Iraq and Afghanistan, few U.S. individuals or companies have been hauled into court, placed under oath and forced to answer a lot of questions.

A story in today's Washington Post offers some insight as to why not.

There's a massive backlog of whistle-blower cases over at the Department of Justice. These are unique cases where regular citizen-whistleblowers are the plaintiffs (and share in the recovery when the cases are successful, which is supposed to encourage them come forward). The reason we don't hear much about them is because they are automatically placed under seal. Filed under the Civil War-era False Claims Act, not even the people filing them can talk about them.

In theory, this allows the government to conduct an investigation without tipping off the target of that investigation. The government has the option of joining the plaintiff in the case. But that veil of secrecy can also allow the government to drag its feet on an investigation, which the Post points out.

Critics argue that the delays are at least partly the result of foot-dragging by Justice and the federal agencies whose position it represents, especially in the touchy area of suppliers that may have overbilled the government for equipment, food and other items used by troops in Iraq and Afghanistan.

Justice lawyers have rejected about 19 cases involving contractor fraud in Iraq and Afghanistan, registering five settlements that resulted in $16 million, officials said. Government officials said this week that they are considering whether to dive into 32 more whistle-blower cases involving Iraq or the Middle East.

"It's just flatly absurd for us to be five years into this war" with so few public cases, said Alan Grayson, a whistle-blower lawyer in Florida who has criticized the Justice effort and who is running for Congress as a Democrat.

There was an oddly written report from the BBC a few weeks ago that appeared to be reffering to these cases, known as "Qui Tam" cases.

One case that did become public a few years ago was the case of Custer Battles, when we heard about soldiers unloading trunks full of $100 bills from C-130 cargo planes with no sign of any accounting system.

Typically these whistleblower cases take two to four years to become public. But there are a lot of challenges to investigating a legal claim in a war zone.

Whistle-blower lawyers say other factors can contribute to long delays, including the difficulty in investigating claims in war-torn areas and complications that arise when military officials contend that technology or other products at issue in the lawsuits are classified. In addition, Justice lawyers who handle civil cases often cannot proceed until authorities decide whether a case merits criminal prosecution, the lawyers said.

In an interview with TPMmuckraker few weeks ago, Robert Bauman, a former Department of Defense criminal investigator who now works as a consultant to people who file whistleblower cases, said there's a lot of cases still unresolved.

"They're still in the mill," Bauman said. "They will come out. I don't know how long it will be, but eventually, they'll come out."

Blackwater has sparked new controversy with their plan to expand its military-training business in San Diego. Sen. James Webb (D-VA) is holding out on approving four civilian defense officials until he receives more information about a Blackwater training facility in California. One of the nominees being held is set to be the undersecretary of the Army. (Wall Street Journal)

The ACLU filed a Freedom of Information Act request on Tuesday for records pertaining to the government's cell phone tracking practices. The ACLU is concerned that the government is exercising unconstitutional powers with this practice and seeks to learn further details for a possible suit. (New York Times)

In the wake of legal and financial problems, the new UBS chairman has announced the departure of four directors and a layer of board management. There are still many concerns that these moves will not be enough to help the ailing bank. (Wall Street Journal)

Read more »

As we reported yesterday, the Justice Department sought a court order against UBS, to force the Swiss banking giant to give up the identify of its U.S. shareholders. A long court battle was predicted, and now it has begun.

From the International Herald Tribune:

An order signed by Judge Joan A. Lenard of U.S. District Court in Miami gives investigators the authority to request the information from UBS. A spokesman for the Internal Revenue Service said the agency, which was working with U.S. prosecutors, was expected to serve UBS with a summons for names within several days. The bank can either turn the names over -- an unprecedented move for a Swiss bank under secrecy laws -- or appeal the judge's ruling.

We've got a couple more examples of how a conservative Washington political group is raising money on behalf of other people then keeping a extraordinary chunk of that money in fees.

BMW Direct, a direct-mail fundraising firm, has been raising money for groups called Freedom's Defense Fund and The Madison Project.

It's not clear what Freedom's Defense Fund supposedly does. It shares an address at the same office as BMW Direct. It does not appear to have a Web site.

The Madison Project, according to its Web site, "raises money for conservative candidates through our network of grassroots conservatives."

Today ProPublica points out a Roll Call story from April showing that the Washington firm raised more than $1 million for Freedom's Defense Fund during the past three election cycles and spent more than 95 percent on the fundraising effort.

BMW Direct didn't return our phone call yesterday, but they did talk to Roll Call a couple months ago.

[BMW Direct Chief Operating Officer Michael] Centanni defended the in-house arrangement and the PAC's seemingly high operating expenses, arguing that "Freedom's Defense Fund doesn't pay any rent. ... We don't have payroll, and we try to keep our costs low."

And despite the fact that only 5 cents for every dollar the PAC raises actually goes to Republican candidates or causes, Centanni said it provides a vehicle for less-heeled donors "to be part of the process." He also said to check back with the group in November, when he expects expenses to dwindle and predicted that three cycles of donor mining will finally pay off.

"We will be spending a lot more money ... on contributions to candidates," he said.

As for the Madison Project, we checked the group's records over at the Center for Responsive Politics. It looks like the Madison Project so far this election cycle has spent nearly $300,000 on direct mail efforts with BMW Direct and its affiliates.

It has given no money in contributions to federal candidates so far this cycle.

Are the people over at BMW Direct getting defensive?

The conservative Washington fundraising firm took down several pages from their Web site this afternoon, in particular those listing the names of people involved with the company and their list of clients.

However, we've had our eye on this firm for a while now, and we've got photos of those pages. So in case you're looking for any info about the shop, here you go (click to enlarge):

Below the fold pictures after the jump.

Late Update: BMW Direct restored their Web site pages about one day after this post.

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As we reported, the RAND Corporation, released a long quashed critical report yesterday on the role of the White House, Defense Department and State Department in Iraq.

"After Saddam: Prewar Planning and the Occupation of Iraq" was put on the RAND Corporation website late Monday. The New York Times dug into more detailed excerpts in a Blog post from their Baghdad Bureau.

The report confirms much of the conventional wisdom of our failures there, as well as what has said by military leaders-- that after the fall of Saddam Hussein there were too few people, and not enough planning.

But not for lack of trying. The report states that while there was "a range of possible postwar challenges" and "suggested strategies for addressing them," "few if any, made it into the serious planning phases" to be incorporated into Operation Iraqi Freedom.

Like the most recent study released by the Army, the RAND report also lays blame on Gen. Tommy Franks and his inopportune decision to restructure the operations in Iraq after the fall of Saddam-- a tactic that made creating a "stable, reasonably democratic Iraq" more "difficult to achieve."

On the role of the DOD in the chaos surrounding post-Saddam Iraq, the report faults the decision to make the Department of Defense the lead agency in 2003:

While this may have made sense in theory, it did not work in practice. . . DoD's lack of capacity for civilian reconstruction planning and execution continued to pose problems throughout the occupation period.

The report also comes down hard on the "Future of Iraq" project designed by the State Department:

Press reports have widely described the Future of Iraq project as a State Department "plan" for the reconstruction of Iraq. Such a characterization is unwarranted. Plans require a concrete set of prioritized steps that should be taken in a given situation, and a plan ideally assigns responsibility for each of those steps. The Future of Iraq project did not contain any such prioritization; it was not something that could be taken off the shelf and immediately executed.

Last week we pointed out what a great deal on rent Sen. Norm Coleman (R-MN) appears to be getting on his Washington apartment.

A National Journal reporter found that Coleman pays just $600 a month to live in the Capitol Hill townhouse that belongs to his longtime friend and Republican political operative Jeff Larson. And he's missed a couple months rent, too.

Apparently the scenario didn't pass the smell test with the Citizens for Responsibility and Ethics in Washington, who have filed just an ethics complaint.

They want the Senate ethics committee to take a look at the relationship between Coleman and Larson. Larson's firm, FLS Connect, pulled in more than a million dollars from Coleman's campaign committees and leadership PAC since 2001.

And they're also curious about how Larson's wife used to work for Coleman until just recently.

CREW is asking the Senate Ethics Committee to look into whether or not Sen. Coleman is paying fair market value for the apartment, whether Sen. Coleman would have paid the November 2007 and January 2008 rent had National Journal not raised the non-payment as an issue, whether Sen. Coleman and Mr. Larson had agreed that Mr. Larson would not cash the March 2008 rent check, why Sen. Coleman suddenly made up his back rent after National Journal asked questions about it, and why Sen. Coleman's office announced that Ms. Kainz would be leaving the senator's employ after National Journal asked about her role.

FLS is also linked to The DCI Group, a lobbying firm that came under scrutiny for its work in Myanmar and its ties to the John McCain campaign. They're known for "Astroturf" organizing as well as robo-calls.

A former senior executive at UBS, who pleaded guilty to conspiring to assist a wealthy client in hiding millions of dollars from taxes, is aiding the Justice Department in their fight to force the Swiss banking giant to give up their ultra-secret client list.

As the Wall Street Journal reports today, the former UBS executive, Bradley Birkenfeld, has shed light on the shady dealings of UBS with its wealthiest clients. Birkenfeld explained how the Zurich-based banking giant coached its executives to conceal assets, from lying on customs forms to smuggling jewels in toothpaste tubes:

Mr. Birkenfeld told U.S. prosecutors that UBS holds an estimated $20 billion in assets for U.S. clients in undeclared accounts. These accounts generated $200 million a year in revenues for the bank, prosecutors said.

. . . UBS trained private bankers in techniques to avoid detection by U.S. law enforcement, including instructing them to indicate on customs forms that they were coming to the U.S. on vacation instead of business, according to court documents.

Prosecutors say Mr. Birkenfeld also explained how bankers advised clients to hide their wealth by purchasing artwork and jewels with funds from Swiss accounts. For one client, Mr. Birkenfeld told prosecutors he smuggled diamonds into the U.S. inside a toothpaste tube.

After weeks of talking with UBS and Swiss banking authorities on divulging the identity of U.S. account holders, the DOJ has finally sought a court order. The so-called "John Doe" summons is usually used by the government to investigate tax fraud "by people whose identities are unknown." It has never been used before against a non-U.S. bank.

Revealing client lists would be a huge blow to UBS and all Swiss banks, who pride themselves on the secrecy and privacy for its clients. The DOJ's filing is likely to spark a long and tedious legal battle-- something not unfamiliar to UBS:

In a 2002 memorandum to clients following UBS's acquisition of PaineWebber, UBS bankers tried to assuage clients' worries that their secrets might be breached as a result of the bank's new connection to a U.S. firm. The memo, filed in court by prosecutors, reads in part: "information relative to your Swiss banking relationship is as safe as ever..."

The memo went on to point out that UBS has been doing business in the U.S. since 1939, without having U.S. authorities gaining "jurisdiction over assets booked abroad....Please note that our bank has a successful track record of challenging such attempts."

And perhaps being caught in the DOJ bear trap has convinced UBS to gnaw off its U.S. brokerage arm, leave the U.S. and head for the safety of the Alps. As the International Herald Tribune reported, UBS is currently in talks to sell off its U.S. wealth management base, PaineWebber.

The Pentagon will inspect buildings handled by KBR, the embattled military contractor in Iraq, for poor electrical wiring. This comes in the wake of at least 13 Americans being electrocuted since the Iraq war began. (New York Times)

A federal appeals court has found that accusations against a Uighur Muslim being held at Guantanamo were based on bare and unverifiable claims. A unanimous panel overturned the Pentagon's determination that the detainee was properly detained as an enemy combatant. The man, Huzaifa Parhat, has been held in Guantanamo for more than six years.(New York Times)

Jack Abramoff, the corrupt former lobbyist, has agreed to cooperate with the attorney general in Guam and has given information related to pending criminal charges for former Superior Court Administrator Tony Sanchez. Prosecutor Jeff Moots claims that the AG is planning to seek the dismisal of criminal charges against Abramoff in return for his cooperation. (KUAM News)

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The Boston Globe reports again today about BMW Direct, the conservative political fundraising firm in Washington.

Despite calls for an investigation, specialists in campaign finance rules said it would be difficult to prove that a direct-mail firm violated federal rules by keeping most of the hundreds of thousands of dollars it raised on behalf of little-known GOP candidates running nearly invisible campaigns against high-profile Democrats.

The practice may fall somewhere between the jurisdiction of Federal Election Commission rules and local consumer protection statutes, which are enforced by states, specialists said.

"These people have found the loopholes," said Scott Harshbarger, the former Massachusetts attorney general who served for three years as national president of Common Cause, an advocacy group that monitors election fund-raising.

During the first quarter of 2008, BMW Direct, a conservative political firm in Washington, helped raise more than $500,000 for an obscure Republican longshot running for Congress in Georgia.

But in a replay of the firm's modus operandi in a Massachusetts race, as chronicled by the Boston Globe, most of the money raised by BMW Direct in the Georgia race has come from out-of-state contributors and been spent on supposed campaign-related services provide by the firm and its affiliates.

A half a million dollars in a single quarter is a substantial haul for even well-financed, high-profile candidates, let alone someone like Deborah Travis Honeycutt, who ran for the seat in 2006 and lost by 38 points.

BMW Direct, which has a track record of raising a lot of campaign money and then directing most of it to affiliates or vendors, uses glossy direct-mail campaigns targeting conservatives across the country, urging them to chip in to help defeat liberal lawmakers and push hot-button right-wing issues.

Honeycutt lists BMW Direct's Washington office as her campaign address, and the firm's FEC compliance officer, Scott Mackenzie, is listed as her treasurer, according to her most recent FEC filing.

Honeycutt's campaign has brought in more than $1.7 million so far this election cycle. It has also spent more than $1.5 million.

For the most recent quarter, the campaign raised $620,016.72 in mostly small donations from across the country, according to her most recent FEC filing. And she spent $537,622.68 during the first quarter, most of which was to cover the costs of the direct mail campaign.

Only a small fraction of the money went to pay for a campaign on the ground. The total money spent in Georgia was $16,695. That covered expenses listed as political field work, public relations and media.

However, more than $314,000 went to BMW Direct and its affiliates who all work in the same downtown Washington office building. That's not including the other large payments to other Washington-area firms for direct mail-related expenses.

For example, Honeycutt's FEC report shows a payment to BMW Direct affiliate Century Data Systems Corp. for $7,430.85 for "data processing" on Feb. 4, 2008. The campaign cut a $23,569 check to the affiliate Legacy List Marketing for "list rentals" on Feb. 21, 2008. And a $19,544 check on March 7 for "direct mail fundraising" went to a company called Patriot Partners, which shares an office address with Legacy List Marketing.

This is the second time Honeycutt's run for the seat, and last time she also worked with BMW Direct. In the 2006 cycle, she raised $1.1 million from donors across the country. But most of the money went to BMW Direct and its affiliates and vendors. That campaign didn't get much attention and she lost to the incumbent, Rep. David Scott (D-GA) by a wide margin, 31 percent to Scott's 69 percent.

Now she's at it again. Honeycutt is outraising and outspending Scott by about four times. But the district is rated "Safe Democrat" by Congressional Quarterly.

We called the BMW Direct office this afternoon and a receptionist said there was no one available to take our call. We also put in a call down to Honeycutt's campaign in Georgia, but have not heard back from them.

As we mentioned earlier today, House Oversight's subpoenas for Bush and Cheney's interview records from DOJ Special Counsel Patrick Fitzgerald's inquiry into the Valerie Plame leak case were rebuffed by the Justice Department.

Since then, we've obtained a copy of the letter dated June 24 that the Justice Department sent to Congress, declining to comply with the subpoena.

Their reasons? The ever-ready assertion of executive privilege because the write ups of the FBI interviews with White House officials during the Plame leak investigation contain accounts of of internal White House deliberations, including those involving how to respond to the fallout from the infamous 16 words on Niger yellowcake in the President's 2003 State of the Union address:

However, these reports also contain considerable information detailing the internal White House deliberations and communications of senior White House staff concerning how they should respond on behalf of the President to public assertions challenging the accuracy of a statement made in the President's State of the Union Address.

The DOJ was also concerned that by releasing their interview records with Bush and Cheney, they would create a disincentive for future voluntary interviews from the executive branch. . . despite the fact that it's all been done before. In 1999, the FBI surrendered interview records of former President Bill Clinton and former Vice-President Al Gore:

We are aware that in 1999 the Department made available to this Committee the FBI reports of interviews with President Clinton and Vice President Gore that were taken during the Department's campaign finance investigation. We consider that situation to be fundamentally different from the present situation. We understand that the intrusion on Executive Branch confidentiality interests was significantly less because the Clinton Administration interview reports presumably did not involve the substance of internal White House deliberations and communications concerning official White House business, but rather concerned campaign-fundraising political activities.

The full text of the letter, after the jump.

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Convicted former-State Rep. Vic Kohring didn't seem to be the least bit fazed that today is his last day of freedom for 3 and 1/2 years.

Before turning himself over to federal marshals, Kohring spent the morning standing next to a home-made sign on the Glenn Highway in Alaska, waving to pedestrians and sipping hot chocolate (picture at left):

He said he's not scared of going to prison, but has been Googling the Southern California facility he'll live in for up to 3 and a half years. He could rattle off the population of the nearby town and the high temperature last week (103 degrees).

Said he might write an autobiography while in jail, call it "Absolutely Innocent." Plans to read a lot. Write a lot of letters.

. . . He said he spent the weekend with his family, and has been doing things like stopping mail to his mail box and closing his bank account. Packing.

"It's almost like going away on a vacation. A .... Government sponsored vacation," he said.

Kohring was convicted in November 2007 and sentenced last month for accepting bribes to advocate a natural gas pipeline. His trial was central in bringing Sen. Ted Stevens (R-AK) into the VECO scandal, with the testimony of VECO CEO Bill Allen. Allen testified that he was blackmailed by his nephew, who was doing home renovations for Stevens, which were paid for in part by VECO.

[Late Update]: The ADN has obliged us with some great video from Kohring's roadside debacle and a heckler who stopped by to tell him to "give it up and go prison". . . which he does at the end of the clip. Enjoy.

Earlier this year, it was revealed that the Army quashed public release of a 2005 report by the RAND corporation, their federally-financed research arm, that came to some "sharp conclusions" about who was responsible for the myriad of shortcomings in Iraq.

According to the New York Times, that report will finally be released today:

In 2005, the RAND Corporation submitted a report to the Army, called