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Newsbriefs: Gonzales Under Pressure, Pace Says Too Much, Junk Mortgage Fallout

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Sampson Resigns, Gonzales Under Pressure

As the details of the process by which eight out of the 93 US attorneys were fired emerge, calls have begun on Capitol Hill for the resignation of Attorney General Alberto Gonzales. Kyle Sampson has now resigned as Gonzales' chief of staff. Sampson had been directly responsible for the program under which the Justice Department determined to fire the eight U.S. attorneys.

The firings were initiated at the request of former White House Counsel Harriet Miers who wanted to follow the same procedure used in the Clinton administration and fire all 93 of the U.S. attorneys, but Sampson objected: it would create too much upheaval and discontinuity and problems with ongoing prosecutions. Ordinarily, all U.S. Attorneys submit letters of resignation after each presidential election and are then either rehired or let go at the discretion of the Attorney General. Instead Sampson rated attorneys on how well they followed administration policy and how effective they were at their jobs, and ultimately identified the eight who were fired. According to latest reports, one of the key issues was how aggressively the attorneys were pursuing allegations of election fraud in cases where close elections had significant irregularities which went uninvestigated. The rating system was independent of normal performance evaluations, and has been criticized for being primarily political in nature.

The White House consulted closely on the firings, and there was some concern raised by Sampson that there might be political repercussions if legislators from the states where the attorneys were working raised objections. Partisan political outcry has been strong from Democrats on Capitol Hill, with Judiciary Committee Chairman Senator John Conyers convening a hearing last week to question those involved, including the fired attorneys. After the hearings Conyers commented, "Today, we received strong evidence that the firing of these U.S. Attorneys was politically motivated, and we clearly need to follow up on these developments with further investigations."

Some Democrats have called for the resignation of Attorney General Gonzales, but he has clearly indicated that he regrets the abrupt character of the firings, but does not believe that anything took place which was outside of the scope of normal Justice Department practices, maintaining that the attorneys fired were fired for cause, in most of the cases because they did not follow specific directives to pursue administration initiatives on gun crime, election fraud, drug enforcement and other issues.

For more see Reuters, Sampson's emails about the firings. Transcript of Gonzales' Tuesday press conference.

Pace Steps Over the Invisible Line

When the military has a policy of "don't ask, don't tell" for homosexuals, it might be advisable for military leaders to maintain a similar policy of circumspection. Joint Chiefs Chairman General Peter Pace touched off a storm of controversy this week when he condemned homosexuals in an interview with the Chicago Tribune in which he said: "I believe that homosexual acts between individuals are immoral, and that we should not condone immoral acts. I do not believe the United States is well served by a policy that says it is OK to be immoral in any way." He also went on to compare homosexuality to adultery.

Pace immediately came under fire from gay advocacy groups and explained that his intent was merely to express his support for the continuation of the "don't ask, don't tell" policy which originated under the Clinton administration. Clearly he went much further than his original intent – with an expression of personal moral belief which many have found inappropriate. Pace has not been asked to resign over his statements, but may face further problems because of differences with the Bush administration over Iraq policy.

At a time when military manpower is sorely taxed, many regard as extraordinarily short-sighted Pace's enthusiastic endorsement of a policy which excludes a large number of willing soldiers from service unless they choose to conceal their sexual identity. Over 10,000 openly gay soldiers have been forced to leave the service since the policy was initiated in 1994.

More from Voice of America, Seattle Post Intelligencer, Baptist Press.

Wall Street Staggers In Response to Junk Mortgage News

The price of the recent real estate boom was paid in the stock market on Tuesday, as news about the high level of 'junk' mortgages which are in default raised investor concerns and reversed the recovering trend which had begun after last-week's major adjustment. The Dow Jones had dropped over 240 points by closing.

In the recent real estate boom, developers took advantage of the easy availability of credit to offer low qualifying or non-qualifying loans to many first time home-buyers and buyers who might not normally have been able to get credit. These so-called "junk" "" financing methods which put home buyers at greater risk and increased profits for unscrupulous lenders and developers.

As the real estate market calms down, buyers find themselves saddled with homes which are not holding their value, financed with double mortgages with high payments, increasing adjustable rates, or even very unattractive front-loaded or balloon payment loans. Some can't continue to afford payments which have increased beyond a level they could barely pay in the first place. Others who already have bad credit feel little motivation to stay in a home which is costing them too much and losing value.

The Mortgage Bankers Association has now announced that .54% of all mortgages are in foreclosure and over 6% are in default. The foreclosure rate is the highest it has been in more than 3 decades, including the post boom period of high foreclosures in the 1980s. The default rate is only up slightly and is not as high as it was during the 2002/2003 recession.

Banks are already tightening up on loan requirements, and interest rates are expected to continue to increase. With the increase in availability of foreclosed homes at discounted prices the demand for new homes is also likely to slow, leading to contraction in the construction industry. In combination with a weak day in overseas markets this news led to a 242 point drop in the Dow on Tuesday and somewhat more moderate drops in the other indexes.

For more see The New York Times, MarketWatch, San Francisco Chronicle.

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About Dave Nalle

  • http://www.elitebloggers.com Dave Nalle

    It looks like some of these stories – less than 12 hours old – already need some significant followup, so here’s some followup and some commentary.

    Sampson Resigns, Gonzales Under Pressure

    At first I thought this was just another partisan witch hunt from capitol hill, but as details have emerged it turns out there actually IS a scandal here, but it’s not the one promoted in the media. The actual scandal is the case of two of fired US attorneys, one in Seattle and one in New Mexico, who failed to pursue allegations of voter fraud. In both cases Democrats won extremely close elections where it turned out there were really suspicious irregularities, including dead people voting, false registrations, missing ballots and vote buying. The Bush administration directed these two attorneys to follow up on the allegations and nothing was done. In Washington the difference in the election was only 129 votes. But here’s what really piques my interest. The name that keeps coming up in both of these vote fraud cases that were dropped is ACORN, the multiply indicted far-left activist group which has been responsible for election fraud in Florida, Pennsylvania, Ohio, Colorado and Missouri. ACORN has been buying votes and filing fraudulent registrations all over the country since before the 2000 election. The scale of the fraud they have committed is enormous, but politically partisan prosecutors have been reluctant to investigate them, as was the case here. Firing was too good for these US Attorneys. They ought to be investigated for conspiracy in the fraud cases.

    Pace Steps Over the Invisible Line

    What the hell is wrong with Peter Pace? And how the hell did someone with such poor judgement end up in the position he’s in. He ought to be kicked out on his bigoted ass. That said, the real issue here remains “don’t ask, don’t tell.” Maybe it’s time for Bush to prove once and for all that the GOP is the real party of equal rights and put an end to that policy and welcome openly gay recruits into the military.

    Wall Street Staggers In Response to Junk Mortgage News

    Good news and bad news is surfacing on this story today. The good news is that the most recent mortgage figures show loans up and interest rates down, so aside from the incredibly irresponsible loans it looks like the housing market overall isn’t going in the tank. The bad news is that Sen. Chris Dodd of the Banking Committee is seriously talking about a mortgage bailout for the irresponsible and unqualified home buyers who are defaulting. He’s talking about 2 billion dollars which would basically be a payoff for banks who gave loans to people who weren’t qualified to get them. Last I checked that was fraud, and punishable by a hefty jail term, not by being given a government handout.

    Dave

  • Nancy

    The mortgage industry doesn’t deserve a bailout, IMO. They got themselves into trouble thru unmitigated greed, ditching normal principles of solvency for the chance to make a nickel here & now. And now we should reward them for their stupidity & greed? I think not. It’s their responsibility to make a reasonable & rational decision on how much to loan, & turn down those who aren’t good risks. They didn’t, & didn’t with malice aforethought, as it were. Let them sink.

  • zingzing

    “In Washington the difference in the election was only 129 votes.”

    you think there was no inquiry into this election? it went on for months! it was counted and recounted and election fraud, from both sides was brought up time and time again. frankly, i was relieved when it finally ended.

    as for ACORN, they aren’t very good at what they do, or at least not as good as the right-wing election fraud teams. frankly, if there has been election fraud in ohio and florida, i don’t really believe it’s been the left’s doing. or else we just aren’t very good at election fraud. either way, it’s okay.

    still, you do find a way to turn this story to the right, don’t you? good job. your habit of telling the story “straight” in the main text and then giving your slant on it straight after is a bit disingenuous. just put your damn comments in the text if you’re going to do that.

    that said, i agree with you on pace and the housing market. pace is stupid. the people who bought into that housing market are equally stupid. a friend of mine and his dad concocted some scheme to purchase homes, fix them up and put them back on the market. he wanted to know if i wanted to be involved. i told him i wouldn’t find that any fun, i don’t have the kind of money you need to start that, that idea is rather old and the housing market is going to collapse and soon. that’s the day i decided that his father has a bunch of bad ideas. who couldn’t see that bubble? i was skeptical from the beginning.

  • moonraven

    Dave,

    You have added zip to what has already been all over the mainstream media.

    Just one comment: in New Mexico dead people are always very conscientious voters. Especially in Rio Arriba County.

  • http://www.elitebloggers.com Dave Nalle

    you think there was no inquiry into this election? it went on for months! it was counted and recounted and election fraud, from both sides was brought up time and time again. frankly, i was relieved when it finally ended.

    I realize there was a lot of vote recounting and a lot of coverage in the media, but as I understand it there was never an official federal investigation from the US Attorney’s office or any effort to follow up and definitively prove or disprove the allegations which were raised.

    In the Bernalillo County case in New Mexico there was an investigation, but it was basically a whitewash job and no real effort was made to pursue any of the leads.

    as for ACORN, they aren’t very good at what they do,

    They certainly get caught a lot, but my impression is that this is because of the huge amount of fraud they’re involved in and the fact that they frequently neglect to pay their hirelings who then rat them out to prosecutors.

    or at least not as good as the right-wing election fraud teams.

    There are no right-wing election fraud teams and I have never seen credible evidence of fraud of this sort on the kind of massive organized level found on the left.

    frankly, if there has been election fraud in ohio and florida, i don’t really believe it’s been the left’s doing. or else we just aren’t very good at election fraud. either way, it’s okay.

    I’m sure the massive election fraud engaged in by the left is okay with you, but it’s not okay with the rest of us.

    still, you do find a way to turn this story to the right, don’t you? good job. your habit of telling the story “straight” in the main text and then giving your slant on it straight after is a bit disingenuous. just put your damn comments in the text if you’re going to do that.

    If I put my comments in the text, then that kind of taints the straight news I’m reporting. I put them in the comments to provide that clear division between news and commentary. I’d call that the opposite of disingenuous.

    that said, i agree with you on pace and the housing market. pace is stupid.

    I think that he’s too stupid to be allowed to keep his job.

    the people who bought into that housing market are equally stupid… who couldn’t see that bubble? i was skeptical from the beginning.

    I live a couple of miles from a perfect example of the problem, a neighborhood of low priced new homes where the builders were selling to people regardless of income or credit history and providing them with all sorts of bogus semi-scam financing as well. It was obvious from the get-go that they were going to have massive foreclosures.

    Dave

  • http://www.fifthdentist.blogspot.com The Fifth Dentist

    “Miers who wanted to follow the same procedure used in the Clinton administration and fire all 93 of the U.S. attorneys …”

    Dave you’re talking about when Clinton initally took office in 1992. Every administration appoints its own U.S. attorneys. The issue here is whether the administration interfered with the independence it’s prosecutors for their refusal to cooperate politically.

  • Nancy

    For those who STILL don’t get it, as 5th points out, there’s a fine line between cleaning house by an incoming administration (their privilege), and long afterwards, getting rid of incumbent personnel who are on record as doing good work, because they refuse or fail to take the hint & prosecute members of the opposite party just before an election. As the saying is, timing is everything, in this case. And then there’s the little matter of giving a capable DA the boot because the pillsbury dough boy, Rove, wanted a cushy place to park a favorite ex-aide. Must’ve been the one who made all those Dunkin’ Donut & Pizza Hut runs for him.

  • http://lowether.blogspot.com Sam Jack

    Way to reproduce the White House press release, Dave. What about all the stuff that’s coming out over at tpmmuckraker.com? What about the fact that there was an e-mail citing ‘problems’ with Carol Lam on the very day that she indicted Duke Cunningham?

    It seems to me that Carol Lam’s firing is the real scandal here. The ‘problems’ the White House was having with her ‘performance’ seem likely to be problems with her indicting Republicans–even though Cunningham was a Republican that was later found guilty in an entirely non-partisan Court of Law.

  • http://www.elitebloggers.com Dave Nalle

    Dave you’re talking about when Clinton initally took office in 1992.

    1993, actually.

    Every administration appoints its own U.S. attorneys. The issue here is whether the administration interfered with the independence it’s prosecutors for their refusal to cooperate politically.

    The problem here is that what you call ‘politics’ others can easily call ‘policy’. It’s politics when it’s a campaign slogan. It’s policy when you’ve had a few years in office and given the people a chance to implement your ideas and priorities and they haven’t followed through, and in order to pursue the policies you want to represent your administration you think they should be replaced.

    You cannot hold the administration accountable for firing people who don’t agree with their priorities. The priorities may be political in origin, but they are represented by concrete policies and the administration has the absolute right to be represented in court by people who will pursue their agenda and not oppose it.

    Dave

  • http://www.elitebloggers.com Dave Nalle

    What about all the stuff that’s coming out over at tpmmuckraker.com?

    I’ve never heard of that site, but the name certainly doesn’t inspire me with confidence in its objectivity.

    What about the fact that there was an e-mail citing ‘problems’ with Carol Lam on the very day that she indicted Duke Cunningham?

    Did the email cite problems with her indictment of Cunningham? And might I note that she stayed in office for more than a year after the date of that memo to complete the prosecution of Cunningham and other cases. So nothing was done to interfere with her prosecution of Cunningham. And technically she was not fired, but resigned.

    The truth is that the reason Lam was fired is that Rep. Daryl Issa is an raving nativist and made an effective case against her. When making decisions like this it’s natural for the administation to take into consideration the complaints of congressmnen from the jurisdiction in question and Issa hated Lam for ignoring border issues and cutting the number of prosecutions in her office almost in half.

    even though Cunningham was a Republican that was later found guilty in an entirely non-partisan Court of Law.

    You defeat your own argument here, because the prosecution of Cunningham was already to the point where it wasn’t going to be stopped, and did continue to a conviction.

    Dave

  • zingzing

    “There are no right-wing election fraud teams and I have never seen credible evidence of fraud of this sort on the kind of massive organized level found on the left.”

    yeah, yeah. okay. come on. they just haven’t been caught.

    “I’m sure the massive election fraud engaged in by the left is okay with you, but it’s not okay with the rest of us.”

    no, no, my point was that there is no massive election fraud engaged in by the left. there’s a rag-tag organization that got caught. not a deeply inbedded political monster of a fraud team like the right has. or does it? oh…

    acorn is a little shit. having your friends run the voting machines is…

  • Nancy

    You got it, Zing. Anything a 2-bit group like Acorn does is peanuts compared to the concerted, professional organization of amoral thugs the GOP has, which is run right of the the WH by … good ol’ sneakthief extraordinaire Karl Rove, therefore by extension (since he IS ‘Bush’s brain’) Dubya himself.

  • http://www.elitebloggers.com Dave Nalle

    ACORN has operatives in dozens of states and a budget in the millions of dollars. It’s hardly a two-bit organization. Some places they don’t need ACORN because the local political machine is already doing the job quite well enough.

    As for ‘friends running the voting machines’, there are more of those machines run by Democrats than by Republicans. In fact, Democrats hold a higher proportion of city and county offices nationwide, so as a result they control more voting machines for more of the population.

    Dave

  • http://www.elitebloggers.com Dave Nalle

    The mortgage industry doesn’t deserve a bailout, IMO. They got themselves into trouble thru unmitigated greed, ditching normal principles of solvency for the chance to make a nickel here & now. And now we should reward them for their stupidity & greed? I think not. It’s their responsibility to make a reasonable & rational decision on how much to loan, & turn down those who aren’t good risks. They didn’t, & didn’t with malice aforethought, as it were. Let them sink.

    The motivation to bail them out will come from the concern that too many average people will be harmed because they own stock in mortgage banks either directly or through mutual funds.

    Personally I think the extent of the ‘crisis’ is overstated. This situation isn’t anywhere near the scale of the S&L bailout in the 80s.

    What I’d like to see if something IS done about this situation is some sort of mortgage assistance program, perhaps combined with credit counseling so that some of these homebuyers who are just a month or two behind on their payments could be helped out and put back on a sound footing. Perhaps a program where they were switched over to some sort of federally backed loan program specifically designed for higher risk buyers.

    Dave