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This Week in Scandal Watch

1. Subprime Mortgages and Ratings Agencies

The House passed a housing bill Wednesday that should help 400,000 homeowners and battered mortgage titans Fannie Mae and Freddie Mac. The Senate is expected to vote on the bill Saturday and President Bush has already said he would sign it into law.

Meanwhile, lawsuits and investigations continued to mount against lenders as a federal grand jury began a probe into Countrywide and others.

On the regulation front, the SEC and Federal Reserve asked lawmakers for the ability to oversee investment banks. Lawmakers also took on the issues of executive pay and lobbying at Fannie and Freddie.

2. Detainee Treatment

Salim Hamdan (Credit: Neal Katyal/Reuters/Handout)The trial of Salim Hamdan, a Gitmo detainee and Osama bin Laden's former driver, began on Monday. The prosecution is depicting Hamdan as a terrorist who helped bin Laden elude capture, while the defense maintains that he was no more than a hired hand. The judge excluded evidence that had been obtained at Bagram Air Base in Afghanistan on the grounds that it was obtained under "highly coercive environments and conditions." Former detainees have alleged that they were tortured at Bagram, calling it a "center of systemic brutality." Shown footage yesterday of his first interrogation by U.S. forces, Hamdan reportedly got upset and left the courtroom.   

At the trial, an FBI agent testified that interrogators did not tell detainees about their right to refuse to say anything self-incriminatory

Meanwhile, Attorney General Michael Mukasey refused to open an outside investigation into the case of a Canadian detainee the U.S. sent to Syria, where he claims he was tortured. Secretary of State Condoleezza Rice admitted last October that his case had not been "handled particularly well."

Mukasey also charged Congress with the task of regulating the trials of Gitmo detainees, rather than leaving it to the Supreme Court to decide.

The ACLU released memos obtained from the Justice Department that show DoJ lawyers told the CIA  in 2002 that it could legally waterboard al-Qaida detainees if they believed "in good faith" that the harsh treatment would induce the detainee to talk. The memos also show that the CIA maintained detailed logs on their methods of interrogation.

3. Military Contractor Abuse

Blackwater announced this week that it was planning to shift its focus away from the private security business, citing bad publicity surrounding its Iraq contracts.

Defense Secretary Robert Gates ordered a review of the Pentagon's practice of hiring contractors to train its military this week.

The GAO released a report this week that said auditors at the Pentagon's Defense Contract Audit Agency had been pressured by supervisors to skew audits so that wrongdoing by military contractors was concealed. The Senate Appropriations Committee held a hearing on the Pentagon's military contractor oversight on Wednesday, lambasting the Pentagon and the Bush administration for wasting billions of dollars.

4. Politicization at EPA

The House Select Committee on Energy Independence and Global Warming released a report this week alleging that Bush administration officials were in favor of greenhouse gas regulation until Vice President Dick Cheney's office and the oil industry voiced their opposition. Earlier this month, an ex-EPA official claimed that Cheney's office had censored testimony that said greenhouse gas emissions were harmful to public health. 

The White House blocked an EPA draft report on greenhouse gas regulation in December 2007. Three Senate Democrats got a look at that document this week after the Senate Environment and Public Works Committee chairwoman threatened a subpoena. The report concluded that global warming poses a significant health threat.

An ex-EPA official testified that EPA Administrator Stephen Johnson had planned on complying with his staff's recommendations to approve California's emissions regulation plan, but changed his mind after some last-minute conversations with the White House.

Stephen Johnson was meant to testify next week to the Senate Judiciary Committee on his refusal to supply EPA documents sought by Congress, but the committee's chairman announced yesterday that Johnson refused to appear.

The Bush administration had been pushing a voluntary greenhouse-gas-reduction plan instead of regulating greenhouse gases under the Clean Air Act, but a report from the EPA's inspector general said that few companies were volunteering.

5. Earmark Abuse

Last Friday, the Department of Defense inspector general released a report saying that $18 million in Defense earmarks from 2007 were unnecessary or irrelevant to DoD goals.

Further, Government Executive reports, earmarks in the 2009 Defense spending bill would steer $10 billion toward military contractors under a no-bid system.

And finally, Rep. Charles Rangel (D-NY) admitted that he solicited funds on congressional stationary for his personal foundation, which garnered the nickname "Monument to Me" last year after Rangel won a $1.9 million earmark for it.

 

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