How Paulson Used AIG To Throw Goldman Sachs A Big Old Bone

Among a lot of others, mind you.

It's in the WSJ today and branching out from there -- several of the counterparties receiving par payouts for their toxic CDOs now owned by the taxpayers have been identified. The first name on the list is Goldman Sachs:

Among those institutions are Goldman Sachs Group Inc. and Germany's Deutsche Bank AG, each of which received roughly $6 billion in payments between mid-September and December 2008, according to a confidential document and people familiar with the matter.

Other banks that received large payouts from AIG late last year include Merrill Lynch, now part of Bank of America Corp., and French bank Société Générale SA.

More than a dozen firms with smaller exposures to AIG also received payouts, including Morgan Stanley, Royal Bank of Scotland Group PLC and HSBC Holdings PLC, according to the confidential document.

This is big news because the vice chairman of the Fed, Donald Kohn, would not identify any of these companies when he appeared before the Senate Banking Committee on Thursday.

However, it was already known that Goldman Sachs, Societe, and Deutsche Bank had gotten a big payout from the AIG debacle, as this December 17 article from Business Week shows.

I've been trying to understand what happened here. Putting the Business Week article together with the Kohn testimony and this summary of part of the deal and other sources, you get a clearer idea of just how billions in TARP money has been funneled to these institutions. And it stinks.

To help explain what's happened, I've prepared a PDF presentation of this, relying mostly on Kohn's testimony. You can access it at my unrelated website here (pdf).

Let's go back a bit to when Bear Stearns went under. The Federal Reserve worked together with JPMorgan Chase to get JPMorgan a great deal. The Fed created a limited liability company in Delaware, named after the street the New York Fed bank is on, Maiden Lane. Maiden Lane, LLC, received $29 billion in loans from the Fed, and $1 billion in loans from JPMorgan. Maiden Lane used that money to buy up the toxic assets at the heart of Bear Stearns' woes. JPMorgan Chase then purchased Bear Stearns, free of the toxic assets with $30 billion sitting there all nice and tidy. And then JPMorgan bought Bear Stearns at $10 a share (although, remember, Hank Paulson wanted them to sell at $2).

Now this whole deal stunk mightily in the nostrils of Congress, and they saddled the Federal Reserve with some more strigent restrictions on how they deal out the money. And Maiden Lane, LLC, has actually lost $5 billion in value since that time. But that didn't stop them from pulling out the old playbook when AIG came staggering in through the door.

Well, what else was the Fed going to do?

AIG is actually a quite stolid and no-nonsense company for the most part. But one of its arms, AIG Financial Products (AIGFP), was described recently by Ben Bernanke:

"If there is a single episode in this entire 18 months that has made me more angry, I can’t think of one other than AIG," Bernanke told lawmakers today. "AIG exploited a huge gap in the regulatory system, there was no oversight of the financial-products division. This was a hedge fund basically that was attached to a large and stable insurance company.

What AIGFP was pretty wild. First they took out loans on stable assets owned by AIG and used that cash to invest in what would become toxic assets -- the collateralized debt obligations (CDOs) that have become so familiar to ordinary Americans nowadays. These are the complex financial instruments that all sorts of mortgages had been bundled into, sliced up, and rebundled to help minimize risk. AIGFP bought up a lot of them.

They also had friends out there doing the same thing. These companies wanted a kind of insurance on their CDO's, so AIGFP sold them credit default swaps (CDSs). This meant that AIG would be responsible for losses on the CDOs after a deductible of sorts was reached. But since they were all as safe as houses, the money being paid into AIGFP was a windfall. Money for everyone, and all granted under AIG's Triple A credit rating. Nice of them to lend that out to the underregulated, loophole-exploiting Financial Products arm, don't you think?

Of course, the housing market started to tank. And the truth is, AIG had been trying to extricate itself from this godawful mess for a while. They stopped issuing these types of deals back in 2005 when they started feeling squishy about them. They'd been working with regulators to unwind all of this mess.

But then a crisis point was reached. The counterparties who held the loans on their stable assets were starting to ask for their money back. The counterparties who'd bought credit default swaps on their toxic assets were losing cash and starting to call in their CDSs. And AIGFP had not set aside any capitalization against those CDSs -- they didn't have to! They weren't technically insurance. They were derivatives. And AIGFP was having difficulty selling their own toxic assets to meet their obligation to these two sets of counterparties.

This is the essence of a liquidity crunch. The cash has seized up. AIG needed help fast and a lot of it.

On September 16, 2008, the Federal Reserve provided AIG with a huge line of revolving credit. They created a facility with the quirky name Revolving Credit Facility. They put $85 billion inside this facility and opened up a window for AIG. This was the plan -- AIG draws on the credit as they have need to satisfy their obligations. Over time good assets get freed up and/or toxic assets become good boys and girls again. By selling these assets, AIG could then pay back the Revolving Credit Facility. And it had two years to do so, and then, poof! The Revolving Credit Facility is no more and AIG has learned a very important lesson.

And just to make extra sure that the government wouldn't lose any money in the deal, AIG had to place 79.9% of preferred convertible stock into a trust payable to the Treasury. The important thing here to know about preferred convertible stock is that if the Treasury decides to, it can convert this preferred stock into common stock, which means the Treasury really does own a massive controlling interest in AIG at that point.

So that worked, right? Not quite. By October 1, AIG had already drawn out $61 billion of the $85 billion available to it. Yes, you read that right. Two weeks later.

The toxic CDOs were getting worse and worse. They still couldn't sell their own, and the cash collateral calls from the counterparties from whom they'd borrowed were stacking up and the CDSs were mounting as well.

So the Fed took some further steps. They created a second facility for AIG, the Secured Borrowing Facility, that allowed several AIG subsidiaries to borrow up to $37.8 billion more to pay off the cash collateral calls. This was only a temporary fix, meant to buy AIG time to start selling assets and get their own cash flow running again.

Do you think it worked? Does a bear poop in the Vatican?

By November, the economic crisis was deepening and AIG was about to lose its Triple A credit rating. That would have mean immediate needs to pump up their available capital, with more collateral calls and more people bailing out of other financial arrangements. Plus, they did have this thing called actual insurance that they did occasionally like to sell to people, and that business was drying up fast as well. AIG was barely hanging on.

But by November, Hank Paulson had gotten his $700 billion in the Troubled Asset Relief Program and the wheeling and dealing had begun. Bernanke was spitting nails already about the whole situation, so the two of them got together and start thinking about restructuring the entire AIG bailout.

They came up with this. First, Bernanke capped the first facility from September, the Revolving Credit Facility, at $60 billion. He also lowered the interest rate AIG paid on this money and stretched out the loan term to five years. But AIG had to post all proceeds from asset sales into this facility and pay off the $60 billion.

Paulson agreed to give AIG $40 billion in TARP funds in exchange for $40 billion in Senior Preferred Stock in AIG. Fancy!

Then the Fed created two more Maiden Lane corporations, Maiden Lane II and Maiden Lane III. Paulson funded both of these institutions with TARP funds and then both started dealing with AIG's major problems, their own toxic assets and the CDSs on other counterparties' toxic assets.

Maiden Lane II got $20 billion in TARP funds from the Treasury. It went to the AIG subsidiaries that had been borrowing from the Secured Borrowing Facility created in October by the Fed. In exchange, the subsidiaries forked over the toxic assets they held. They were worth $40 billion at par (what AIG paid for them in the first place) but AIG only got $20 billion for them. They took the hit themselves, writing off the rest, and then paid back the Secured Borrowing Facility what they had borrowed.

And, poof! The Secured Borrowing Facility was terminated.

Maiden Lane II has 6 years to repay the TARP money to the Treasury. Its only holdings are these toxic assets bought at about 50 cents on the dollar, so the Fed is betting that the assets will at least be worth that $20 billion plus interest in six years. If there's any money left over after the Treasury is paid off, the Fed gets 67% of that and AIG gets 33%. Cross your fingers!

But it's Maiden Lane III that is the real piece of work. Keep your eye on the ball...

Maiden Lane III has been funded with $25 billion of the TARP funds (under the same terms as Maiden Lane II), and AIG was told to kick in $5 billion as well. Maiden Lane III has gone to to the counterparties that purchased the credit default swaps from AIG and given them an offer they couldn't refuse - all of their money back.

Here's how it worked. There was around $62 billion of toxic assets (at this point) being held by these counterparties. They gave them to Maiden Lane III for the grand total of $25 billion. Sounds bad, right? Sounds like they took a bad loss for buying such crazy assets in the first place, right?

AIG paid them everything else.

That's right. In exchange for terminating the CDSs they held on AIG, these counterparties received every single cent they ever paid for these crappy assets. They got par. Now it may very well be that these counterparties have more CDOs that weren't backed up by AIG's credit default swaps, and could still be in a world of hurt. But how nice was it that Maiden Lane comes along with TARP funds and brokers them a par payment on these crappy derivatives!

AIG, of course, took the hit here as well. $37 billion writeoff here, plus $20 billion writeoff because of Maiden Lane II, and $5 billion paid to Maiden Lane III... well, it's a good thing old Hank, former CEO of Goldman Sachs, plugged $40 billion extra of TARP funds into AIG, because that spectacular net loss of $62 billion in the fourth quarter could have been $100 billion.

And now we know that one of the two biggest beneficiaries of this incredible money shuffle was Goldman Sachs, which got (according to the Wall Street Journal) 10% of the money paid out through this deal.

Goldman Sachs received full par payment of their toxic assets backed up by AIG, $6 billion worth, thanks to the keeper of the TARP funds, Hank Paulson.

How is this not the definition of moral hazard, the dreaded term so hated by Paulson that he actually let Lehman Brothers collapse to avoid it? Yes, Lehman Brothers was one of Goldman Sachs' competitors, now that you mention it. They get the shaft, Goldman gets a great big bone from Paulson, AIG writes off billions, and the taxpayers are left holding the bag.

But wait, it gets better. In the Business Week December article, not all of this money had been thrown around yet. The figures are incomplete. Here, only $15 billion had come from TARP into Maiden Lane III, and with the $5 billion from AIG, Maiden Lane III had purchased only $46 billion from this counterparties at that point in time. So AIG had paid out $26 billion due to its CDS obligations.

The final numbers are $24.3 billion from TARP. Now they leave AIG's $5 billion in Maiden Lane III to guard against loss of asset value. So that left $4.3 billion to buy up $16 billion more in toxic assets. That was about 25 cents on the dollar for those assets. Yay, us. But of course AIG made up the difference to terminate the CDSs, so these companies also got par for this junk.

How are all of these assets performing in the Maiden Lane LLCs? How does Paulson justify throwing that kind of money at his old company? How much did Paulson know about these CDSs? After all, Paulson wasn't Treasury Secretary until the middle of 2006 and AIG had stopped all sales of these CDSs in 2005. In other words, Goldman Sachs got all of their AIG credit default swaps while Paulson was CEO.

Oh, by the way, Goldman Sachs did post a fourth quarter 2008 loss, $2.8 billion. They still managed to end the year with a $2.32 billion profit, though. I guess that $6 billion from the AIG situation really helped out at the end of the day.

I hope we do as well.

TPM: Maiden Lane I, II, and III

Hoo boy. After Bernanke's appearance today in front of the Senate Banking, Housing, and Urban Affairs Committee to deal with the AIG mess, a rather astute observer wrote Josh Marshall with a succinct explanation of what the Fed's been up to. Brace yourself:

Josh, your reporting on the AIG credit default swap/counterparties issue has been spot-on. But to understand what happened there, you have to understand the Fed's "Maiden Lane" vehicles and how it's used them to avoid what Congress intended with TARP, which was the real story that came out of Dodd's hearing on the AIG mess today. And the roots of it go back to the Bear Stearns rescue last year.

By law, the Fed isn't allowed to buy assets -- it can only lend, as lender of last resort. That was a problem for the Bear Stearns bailout, because JP Morgan said it would only buy Bear if someone else assumed responsibility for the crap. Fed came up with this idea to start a shadow company, called a special purpose vehicle (SPVs were how Enron operated, creating "Chewco" and the like named after Chewbacca - the New York Fed called their SPV "Maiden Lane LLC" for name of the street the NY Fed is located on in southern Manhattan). The deal then was JP Morgan put $1 billion into Maiden Lane, the Fed put $29 billion in cash into it. Maiden Lane paid Bear Stearns $30 billion, which went straight back to JP Morgan as this deal happened simultaneously to JP's purchase of Bear. So Morgan got $30 billion in cash ($29 billion net) and the Fed got stuck owning the crap, but was legally only making a loan to Maiden Lane, who was the legal owner (Maiden Lane was incorporated not in NYC, but in Delaware to avoid paying taxes). By the Fed's own accounting - which is very different from a real company's accounting - Maiden Lane has lost $5 billion between its creation and today.

The same problem happened in AIG, but this time there was no buyer. In Sept, the Fed bought AIG (80%) in exchange for an $85 bill loan. By Oct, it was clear AIG was still dying, so the Fed lent it another $40 billion. This $40 billion was restructured in November when the Treasury put in $40 billion of TARP funds, which was needed to bail out the Fed's loan which had by this time gone bad. But essentially AIG had 2 problems: it had lent out safe securities with real values and used that money to buy shit mortgage backed securities -- this was called 'Secured Lending Facility' which was done right under the nose of the state insurance commissioners. It was in the hole $20 billion. The other problem was the crappy insurance that AIG's financial products company had written on other people's shit mortgage backed securities - the credit default swaps (CDS). When the bad mortgages that AIG insured went bad, the insurance had to pay-up -- but because it wasn't called insurance, but rather derivatives, AIG hadn't reserved any money against it. This had lost about $25 billion.

Using the loophole it had learned during Bear Stearns, the Fed set up two new companies: Maiden Lane II and Maiden Lane III. Two dealt with the secured lending and Three the shitty credit default swaps. The Fed lent each Maiden Lane $20 billion and $25 billion and then Maiden Lane paid off the investors that had either lent AIG the money to buy the shitty mortgage backed securities (ML II) and those who had the shitty mortgages and the corresponding insurance (ML III). To avoid booking a loss on the Fed's balance sheet, because the Fed had some legal problems if either of these Maiden Lanes lost money, and because of a reporting requirement that Dodd had put into TARP which actually required the Fed to report to the Congress and the public about the cost to taxpayers from ML I, the Fed did some creative accounting. They still paid all of the investors off at full value (par), so that they didn't lose anything. But they booked the loss on AIG's balance sheet and kept Maiden Lane clean. This is the hidden story behind how AIG went from losing $38 billion during the first 9 months of 2008 to losing $61 billion in the 4th quarter.

This was all exposed at today's hearing. And despite repeated requests from Senators on both sides - Dodd, Shelby, Corker, Warner - the Fed is still refusing to say who it bailed out through Maiden Lane II and III.

I didn't get to hear this today but I'm going to watch as much as I can at C-Span.org. I've embedded the hearing below so you can, too.

I'll be back with more on this once I've seen the video.

Update: It's Donald Kohn, the vice chairman of the Fed, giving testimony, not Bernanke. More up above.

Tumulty: The Health-Care Crisis Hits Home

Karen Tumulty wrote this article for Time. Its thesis was suggested when her brother was diagnosed with kidney failure:

The diagnosis was only the first shock. The second came a few weeks later, in an Aug. 5 letter from Pat's health-insurance company. For six years — since losing the last job he had that provided medical coverage — Pat had been faithfully paying premiums to Assurant Health, buying a series of six-month medical policies, one after the other, always hoping he would soon find a job that would include health coverage. Until that happened, "unexpected illnesses and accidents happen every day, and the resulting medical bills can be disastrous," Assurant's website warned. "Safeguard your financial future with Short Term Medical temporary insurance. It provides the peace of mind and health care access you need at a price you can afford."

...Pat's decision to save some money by buying short-term insurance was a big mistake, says Karen Pollitz, project director of Georgetown University's Health Policy Institute and a leading expert on the individual-insurance market. "These short-term policies are a joke," she says. "Nobody should ever buy them. It is false security that is being sold. It's junk."

That's because diagnosing and treating an illness may not fall neatly into six-month increments. While Pat had been continuously covered since 2002 by the same company, Assurant Health, each successive policy treated him as a brand-new customer. In looking back over Pat's medical records, the company noticed test results from December, eight months earlier. Though Pat's doctors didn't determine the precise cause of the problem until the following July, his kidney disease was nonetheless judged a "pre-existing condition" — meaning his insurance wouldn't cover it, since he was now under a different six-month policy from the one he had when he got those first tests.

After 33 years of wrestling with insurance companies, Deborah Haile, payment coordinator at the San Antonio Kidney Disease Center, where Pat went for treatment, has pretty much figured out the system. So when I put in my first desperate call to her, on Aug. 20, 2008, she offered to make another run at Assurant. Within an hour, Haile called back, her voice bristling with anger. "Cancel that policy," she advised me. "Your brother is wasting his money on premiums, and he's going to need it."

The underinsured, which as Tumulty puts it, is "the shadow problem facing an additional 25 million people who spend more than 10% of their income on out-of-pocket medical costs." And they usually don't realize it until disaster hits. They think they're covered.

John Aravosis of Americablog.com recently discovered how antiquated his prescription drug coverage was when they began denying his asthma medication at the end of last year, and John has the best self-employed health insurance with the most prescription drug coverage available. When he first got the insurance, $1500 a year was adequate. But as the premium rose, the ceiling on coverage didn't and the drugs got more and more expensive. He even discovered that if he used a mail-order company to provide his needed medication cheaper, his co-pay would increase. Can there be a more Walgreen's-friendly rider?

Today President Obama brought together the major players in a White House Forum on Health Reform:

If we want to create jobs and rebuild our economy and get our federal budget under control, then we have to address the crushing cost of health care this year, in this administration. Making investments in reform now, investments that will dramatically lower costs, won't add to our budget deficits in the long term -- rather, it is one of the best ways -- in fact maybe the only way -- to reduce those long-term costs.

Now, I know people are skeptical about whether Washington can bring about this change. Our inability to reform health care in the past is just one example of how special interests have had their way, and the public interest has fallen by the wayside. And I know people are afraid we'll draw the same old lines in the sand and give in to the same entrenched interests and arrive back at the same stalemate that we've been stuck in for decades.

But I am here today and I believe you are here today because this time is different. This time, the call for reform is coming from the bottom up and from all across the spectrum -- from doctors, from nurses, from patients; from unions, from businesses; from hospitals, health care providers, community groups. It's coming from mayors and governors and legislatures, Democrats, Republicans -- all who are racing ahead of Washington to pass bold health care initiatives on their own. This time, there is no debate about whether all Americans should have quality, affordable health care -- the only question is, how?

There are going to be plenty who yell about socialism. These ninnyheads should be ignored. The general welfare of Americans is best served by all of its citizens gaining access to some basic levels and more of health care, and all of our society will be better served by eliminating the scourge of medical bankruptcies. America pays more per capita for health care than any other nation by far, and yet we still rank far below most other industrialized nations in all other leading indicators of a healthy populace. It is time for this state of affairs to end.

The Benefits Of Being Fat

I've been losing weight now since the middle of November. I needed to do it, my cholesterol numbers were looking a little iffy, and I weighed more than I ever had in my life. I was around 225 and actually bought a chair that told me I weighed too much to sit in it safely. That was it. I called up Nutrisystem and started their plan.

Part of the plan is what they call the Mindset Makeover. It's not a plan that brainwashes you to do Nutrisystem. Stop saying that. It's a plan that brainwashes you into thinking in a healthy way about your appetite and your goals. The only thing "Nutrisystem" about it is that it's from them and it has Nutrisystem all over the paperwork. But it's just a way of learning to set goals and follow them through.

But in following it, you have to think through why you're overweight or obese and how to get yourself out of it. And a lot of people on the forums talk about how they slide back into old habits and nothing seems to work. Well, I realized that there's got to be something that's keeping us there, that's keeping us fat. There must be some kind of benefit to being fat that we keep exploiting. And so I thought about it and came up with three benefits of being fat that we have to sacrifice before we are what AA calls "entirely ready" to get on with a lifestyle change like losing weight.

I put this together into a blog post at Nutrisystem, and the response was so positive, I thought I'd put here on my main blog. Enjoy!

I had to say goodbye to smoking. It was like a bad relationship. It took some time, but eventually you can say goodbye to all of it. The good isn't all that great, and the bad is pretty bad, indeed. But I had to be ready to give up what I liked about smoking -- the nicotine, having something to do with your hands, etc. It was only then that quitting smoking finally took.

Well, it's the same thing with being fat. There are benefits to being fat. Let's list them together, shall we?


1. Being fat is a great way to constantly punish yourself.

That's a benefit? Oddly enough, it is. Not everybody is like this, but I fear a great many of us are. I won't go into reasons why we might feel like we need to punish ourselves because I'll bet as soon as you read that sentence, you recognized whether it was true about you or not.

Well, I'll mention one -- one of the worst ones. We deserve to be punished because we let ourselves get this fat! That causes a vicious feedback loop. We need to be punished because we let ourselves get this fat, so we keep shoveling the food in.

So our fat becomes both our sin and our absolution. We learn to put up with the stares, the inconvenience, and the health problems because after all, who put us into this mess? We did! And that becomes an odd comfort -- at least we're shouldering our own cross!

A more rational response to this is to get rid of the fat, get it down to a healthy level. Then you can take a sense of accomplishment from making yourself better and keeping yourself better. Continuing my religious analogy, Jesus was only on the cross three hours, right? At some point, he was finished with it. When are we going to be finished with our cross of lard?

2. Being fat is a great way to protect ourselves from other people hurting us again.

Again, I don't have to go into details here because you'll recognize the truth of this if it applies. It's so much easier to avoid pain if you can convince the pain to avoid you. A great way to make sure somebody who could hurt you stays away is to make sure these people are repulsed by you.

Fat becomes a powerful defensive weapon in this constant struggle. There are others -- avoiding society, anti-social behavior and demeanor in unavoidable society -- but fat ranks right on up there. It's the choice of people who don't really want to avoid society at all (the stereotype of the jovial fat person is based on a kernel of truth, a really large kernel).

However, this is one you probably need some outside help with. When the fat goes away, the shield goes with it, and if you don't fix the root problem, a relapse is one bad scene away.

Hey, tired of all the psychobabble? Here's one we can all agree on.

3. Being fat is just so dang easy to do.

Shoving a pizza down your gullet is the easiest thing in the world to do. Pizzas taste GOOD. They are designed to taste good. We used to have to chase our food around in Africa for days, and now we can put Papa John's on speed-dial. "Yes, I would like my usual with extra cheese sauce." Ding-dong! You're a fat ass.

When you get past the genetic inclination to obesity, you still end up with a lot of lazy fat asses. Fat, after all, is stored energy. To lose it, you've got to burn it. And there's only two ways to start burning all that stored energy -- eat less food and get your body into motion.

I'm finding that my body is losing some muscle along with the fat. The overall trend is a loss in body fat percentage, but it is slow. Part of that isn't so surprising -- I don't need as much muscle because I'm not lugging around all that much fat anymore! Fat people have to be strong because just walking to the mailbox is resistance training!

I love that picture of happyhoward holding onto the two 50 lb bags of dog food. He used to have 100 excess pounds of fat on his body 24/7/365! Folks, you are carrying your gym with you right now. I'm not going to discourage anybody from buying a gym membership or a Wii Fit or a BodyBugg, but you have everything you need to lose weight right now. Find time two or three times a day to walk your home gym around the block. Haul your home gym up the steps instead of parking it in the elevator.

Losing the weight means we lose these benefits of being fat and we have to be ready to give them up. If not, right back up the scale you will go, because it's an established comfort zone. We can help each other be entirely ready to give up these benefits, but in the end it's up to those three people in the mirror: me, myself, and I.

No more self-flagellation! No more hiding! No more stalling! Let's do this.

Just so you know, I started the program November 14, 2009 at 230 (after a nice Goodbye to Food tour). Now I'm down to 190.6 pounds as of this morning.

Cafe Wellstone In Second Life

I'm at the Cafe tonight, after a rather lengthy post I put together at DU. Enjoying some early Randy Newman...




Cafe Wellstone is run by the General of Jesus' General. He got bit by a hobo spider last night, but seems to be much better today. Thank goodness...

I found a smashing Irish hat in my inventory.



It says it's for a lass, but I think it fits a hobbit just fine.

Secret Bush Memos Released

On a Monday. Welcome to the new administration:

The Obama administration threw open the curtain on years of Bush-era secrets Monday, revealing anti-terror memos that claimed exceptional search-and-seizure powers and divulging that the CIA destroyed nearly 100 videotapes of interrogations and other treatment of terror suspects.

The Justice Department released nine legal opinions showing that, following the Sept. 11, 2001, terrorist attacks, the Bush administration determined that certain constitutional rights would not apply during the coming fight. Within two weeks, government lawyers were already discussing ways to wiretap U.S. conversations without warrants.

The Bush administration eventually abandoned many of the legal conclusions, but the documents themselves had been closely held. By releasing them, President Barack Obama continued a house-cleaning of the previous administration's most contentious policies.

The shame in this is not that they are exposed but that they were written in the first place.

On The Subject of Kenneth Pollack

Kenneth Pollack, our intrepid media's example of an Iraqi war opponent, wrote a book called "The Threatening Storm: The Case For Invading Iraq." I have it. I bought it because I saw Joe Lieberman hold that book up in the U.S. Senate as a book we should all read when we consider invading Iraq. He used the book twice in his floor speeches to bolster the case for invading Iraq

It was not just Joe Lieberman. Kay Bailey Hutchison quoted twice from Pollack's book and ensured that certain quotes made their way into the record. Jon Kyl used an article of Pollack's to give us a specific quote: "war now or war later." George Voinovich reminded us all of Pollack's book in his support for an emergency supplemental bill for Iraq and Afghanistan. Even Edward Kennedy cited Pollack when he made his own argument for war against Iraq.

Pollack and his partner in crime, Michael O'Hanlon, are providing political cover for wavering Republicans while trying to salvage their own reputations. In short, this is just more of the same from these two. Don't get fooled again.

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New 9-11 Video: But Larry Silverstein Said "Pull It"!

The latest debunking video I've made available at YouTube, I hope.

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What's Behind The Data-Mining Curtain?

Via Josh Marshall (short post, so that's the whole thing):

As you can see, we now have the first hint of what was at the center of the Ashcroft hospital room showdown. According to the New York Times, what the White House calls the 'terrorist surveillance [i.e., warrantless wiretap] program' originally included some sort of largescale data mining.

I don't doubt that this is true as far as it goes. But this must only scratch the surface because, frankly, at least as presented, this just doesn't account for the depth of the controversy or the fact that so many law-and-order DOJ types were willing to resign over what was happening. Something's missing.

Of course, 'data mining' can mean virtually anything. What kind of data and whose you're looking at makes all the difference in the world. Suggestively, the Times article includes this cryptic passage: "Some of the officials said the 2004 dispute involved other issues in addition to the data mining, but would not provide details. They would not say whether the differences were over how the databases were searched or how the resulting information was used."

To put this into perspective, remember that the White House has been willing to go to the public and make a positive argument for certain surveillance procedures (notably evasion of the FISA Court strictures) which appear to be illegal on their face. This must be much more serious and apparently something all but the most ravenous Bush authoritarians would never accept. It is supposedly no longer even happening and hasn't been for a few years. So disclosing it could not jeopardize a program. The only reason that suggests itself is that the political and legal consequences of disclosure are too grave to allow.

Late Update: The Post has a follow story on the data mining issue. It covers most of the same ground but hints a little more directly about possible interception of emails and phone calls. The article suggests that examination of "metadata" was the issue here. But, again, it doesn't fit. The intensity of the covering up doesn't match the alleged secret.

So what does match the intensity of the covering up?

First, a word about data mining. That Wiki article will give you all the info you need, I expect, but here's what I'd like to emphasize. You have a vast amount of data, too much for one person or even a dedicated group of people to pore over. Therefore, you use a computer to search out key phrases or data sets to help focus your search. The computer can cut through the chatter and find the key phrases, giving the investigators a greatly reduced amount of data in which to perform more focused searches, or even to simply start laying human eyes upon.

Say you're in the FBI, and you want to hunt terrorists. You know that the terrorists are using the Internet, for example. So you find a way to allow your data mining program to intercept email messages and scan them as they travel down the tubes. The ones with the key phrases get flagged, and the ones that don't are flushed.

This is my question: where do the key phrases come from?

I rather doubt that the terrorists are talking freely about wanton destruction in any way. There's got to be some kind of coded message, and it needs to be rather innocuous sounding small talk to escape detection. "I got oranges at the market today, but I couldn't lay my hands on any rhubarb." And so bin Laden knows that the cell leader talked to one crucial member of the cell but couldn't find another.

How do you data mine a conversation like that? How do you even know what they are talking about?

This is off the top of my head, but tell me why it wouldn't work. You do some initial surveillance. You do the monitoring of telephone calls to known al-Qaeda members outside the country. You come up with a pared-down list of people in the United States that may or may not be talking to the terrorists about terrorism.

Then you track down their email accounts. You feed the telephone conversations into a text analyzer.

And then you crack those emails and telephone conversations open. You use text analysis to identify common phrases and words, you put human eyes on this mass of data to see if humans think these conversations sound fishy, and then you boil it all down to key phrases to focus the larger task of data mining.

And then you do it all over again. You identify people who are using the same key phrases in their emails and telephone conversations. You boil them down, crack open their conversations, and work the process again. Hits begin to accumulate, maybe. Misses gets refined out of the process, maybe. But since the key phrases are likely innocuous sounding, you get hundreds of thousands of misses.

It's the chicken or the egg problem: which comes first, the data mining or the key phrases?

What if, to get a huge jump start on the process, the Bush Administration violated the privacy rights of thousands of Americans, again and again and again? What if career prosecutors were unwilling to accept any of the tainted results because they would never be admissible in a court of law if the original and continued process of validating key phrases became known? What if millions of dollars were thrown into this kind of a program, all to get the vast amount of evidence thrown out and the guilty set free?

Okay, don't listen to that - it's all about this:

Well, well. As we wrote over a year ago, after combining careful examination of how Republicans parse their statements with network engineering knowledge available through open sources:

Long story short: (1) Internet surveillance is Bush’s goal, not voice calls; (2) the Republican “wiretap” talking point is a diversion, to voice, away from from Internet surveillance; (3) Bush’s domestic surveillance system would pose no engineering challenges whatever to NSA. No rocket science—or tinfoil hats—required.

Can we please stop talking about “wiretaps” now? It’s not your voice communications Bush wants. It’s your mail.

Because email and all Internet communication is sent by packets all around the Internet, some of the packets could go outside the United States. That means the entire message could be forfeit. For all we know, they intentionally direct email out of the country so that they can then grab it.

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Gonzales Committed Perjury On Tuesday

From the Associated Press:

WASHINGTON - Documents show that eight congressional leaders were briefed about the Bush administration's terrorist surveillance program on the eve of its expiration in 2004, contradicting sworn Senate testimony this week by Attorney General Alberto Gonzales.

The documents, obtained by The Associated Press, come as senators consider whether a perjury investigation should be opened into conflicting accounts about the program and a dramatic March 2004 confrontation leading up to its potentially illegal reauthorization.

..."The dissent related to other intelligence activities," Gonzales testified at Tuesday's hearing. "The dissent was not about the terrorist surveillance program."

"Not the TSP?" responded Sen. Charles E. Schumer, D-N.Y. "Come on. If you say it's about other, that implies not. Now say it or not."

"It was not," Gonzales answered. "It was about other intelligence activities."

A four-page memo from the national intelligence director's office shows that the White House briefing with the eight lawmakers on March 10, 2004, was about the terror surveillance program, or TSP.

The memo, dated May 17, 2006, and addressed to then-House Speaker Dennis Hastert, details "the classification of the dates, locations, and names of members of Congress who attended briefings on the Terrorist Surveillance Program," wrote then-Director of National Intelligence John Negroponte.

Sigh.

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Cheney Contemplating a Run?

From Think Progress:

This New York Sun editorial explores the idea of Richard Cheney running for president.

Mr. Cheney has virtues as a candidate in his own right. He has foreign policy experience by virtue of having served as defense secretary, and he has economic policy experience, having served as a leading tax-cutter while a member of the House of Representatives. His wife, Lynne, would be an asset to the ticket in her own right, a point made by Kathryn Jean Lopez in a post on the topic at National Review Online back in February. By our rights, Lynne Cheney would make one of the greatest First Ladies in history. Mr. Cheney, in any event, is more than four years younger than Mr. McCain, and, if elected, would be 67 years old at his inauguration, younger than Reagan was when he took office. His health, while a topic of frequent speculation, hasn't interfered with his service as vice president.

Lawrence Kudlow wrote a column a while back saying he hoped President Bush asked Vice President Cheney to run for president in 2008. It was a fine idea then and it still is — not because the current field is particularly weak, but because Mr. Cheney is so much more experienced and shrewd a figure, one who could help settle some of the arguments about the Bush years in favor of Mr. Bush. A White House aiming to get Mr. Cheney elected could also avoid some of the hazards that befall lame-ducks — drift, brain drain, irrelevance. Such a campaign might lift Mr. Cheney 's own standing in the polls.

The vice president's stature would put him instantly into the first rank of contenders on the Republican side. On Monday, speaking in Alabama, the vice president received such a warm greeting that he began his remarks by saying, "A reception like that is almost enough to make you want to run for office again." It is hard to imagine the vice president did not comprehend how tantalizing such a remark would be. He used the same opening line on March 24 when he spoke to the leadership of the Republican Jewish Coalition. This is not an endorsement, and there are things we find attractive about many of the other candidates. But for those of us who are concerned with extending Mr. Bush's campaign for freedom around the world and cutting taxes at home, a Cheney campaign is attractive.

Oh please please please please please please PLEASE don't throw us into that briar patch, Brer Cheney.

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Talking To Your Kids About Internet Porn

This is from Savage Love, a great sex advice column which is no-holds-barred and no-nonsense. I think that should be the gold standard for advice columns, but anyway, on to the quote, which is not actually from Dan Savage, but one of his readers:

This is in response to IPRUDE, the mother who's worried about her son's online porn consumption. I'll never forget the day my mom found my porn magazines. She never confronted me; I simply lifted the mattress one afternoon to find my precious Penthouses gone. In their place: Sunset magazine and Good Housekeeping. It was a reminder that (1) I needed to do a better job of hiding my porn, and (2) that she wouldn't have found it in the first place if she didn't have to clean my damn room for me. It was the most effective nonconversation we ever had.

Here's an update for the internet age: IPRUDE should clear the cache of her internet browser, so the zillions of porn website addresses don't show up as soon as she begins typing a URL. Cache cleared, Mom should type in some made-up URLs: www.stoplookingatporn.com, www.asianslutsarepeopletooyouknow.com, and www.fortheloveofgodjasonquitwatchingexploitativeasianporn.net, etc. It won't matter that these websites don't exist; the browser's autocomplete function will list them as soon as her son types the first letter of his favorite porn URL.

It's funny because it's true.

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Generation Chickenhawk: Max Blumenthal Interviews College Republicans

The highlight? Tom Delay, who had a brilliant idea on what those 40 million aborted babies coulda growed up ta do.

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The Final Gasp: Bush Asserting That Executive Privilege Trumps Oversight

Bush administration officials unveiled a bold new assertion of executive authority yesterday in the dispute over the firing of nine U.S. attorneys, saying that the Justice Department will never be allowed to pursue contempt charges initiated by Congress against White House officials once the president has invoked executive privilege.

The position presents serious legal and political obstacles for congressional Democrats, who have begun laying the groundwork for contempt proceedings against current and former White House officials in order to pry loose information about the dismissals.

Under federal law, a statutory contempt citation by the House or Senate must be submitted to the U.S. attorney for the District of Columbia, "whose duty it shall be to bring the matter before the grand jury for its action."

But administration officials argued yesterday that Congress has no power to force a U.S. attorney to pursue contempt charges in cases, such as the prosecutor firings, in which the president has declared that testimony or documents are protected from release by executive privilege. Officials pointed to a Justice Department legal opinion during the Reagan administration, which made the same argument in a case that was never resolved by the courts.

This is it. This is the endgame. Bush just drew a line in the sand and said, "Bring it on."

The Congress has an obligation to challenge this. They must. This is the final battle - who has the ultimate authority in the American government, the President or Congress?

We have heard a lot about the American experiment. This may actually be the end of it. If Congress knuckles under or loses this battle, the President may as well start wearing a laurel wreath because he will be Emperor. If Bush can block any inquiry into his actions, if he can commute and pardon those who keep the truth from being known, then the gig is up. America will be so far gone from what the Founding Fathers intended that we might as well tear down their monuments now. It would be a more fitting and honorable memory of them.

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Dodd's Republican Debate Talk Clock

Wolf Blitzer, what a guy.

Give Them An Inch

Owen, Rogers Brown Back on Short List

Leading Senate Democrats are already warning against solidly conservative nominees, and that could make confirmation difficult in the Democratic-controlled Senate.

Still, some of Bush's political advisers believe he would be better off tapping a strong conservative who would rally the base -- especially a nominee with a compelling life story who would be difficult for moderate Senate Democrats to oppose.

In that camp are federal appeals court Judges Priscilla Owen and Janice Rogers Brown. Both were filibustered by Senate Democrats after Bush nominated them as appellate judges and were eventually confirmed after Senate leaders struck a compromise on judicial nominations.

Either could have been a likely replacement for O'Connor in 2005, but leading Senate Republicans told the White House not to nominate them because they were seen as too controversial at the time. Now that both are on the federal bench, the White House has put them back on a working short list.

Of the two, Owen is the best known in the White House and is generally considered less controversial than the more outspoken Brown.

Owen, like Brown, also has gotten high marks from her colleagues on the federal appeals court. But Owen's friendship with Karl Rove could hurt her, especially in a White House vulnerable to charges of cronyism.

Whatta surprise.

Chris Dodd's Talk Clock for the Debate

Very smart idea, not only to see the candidates' allocation of time, but also to see the moderator's talk time in comparison.

The only person who spoke more than Wolf was Clinton and Obama. Wolf just edged Edwards by a whisker. It's clear who the media sees as the people to take seriously.

Everyone says Biden did well, but he has less time to make a mistake than most. Maybe that's a secret Biden should employ more often.

Help Me Choose My Daemon!

It's not as bad as it sounds. This is a neat promo doohickey from the upcoming Golden Compass movie. It's fun!



Go find your own! Check out the movie site. It's going to be coo-ul!

The Soundbites: But WTC7 Wasn't Hit By A Plane!

Here's the final version of the last video I released. All better!

The Rove-Crow Exchange

At the Huffington Post:

In his attempt to dismiss us, Mr. Rove turned to head toward his table, but as soon as he did so, Sheryl reached out to touch his arm. Karl swung around and spat, "Don't touch me." How hardened and removed from reality must a person be to refuse to be touched by Sheryl Crow? Unphased, Sheryl abruptly responded, "You can't speak to us like that, you work for us." Karl then quipped, "I don't work for you, I work for the American people." To which Sheryl promptly reminded him, "We are the American people."

At Fox News:

Crow and "An Inconvenient Truth" producer David walked over to the presidential adviser's table, where David suggested that Rove "take a new look at global warming." David said Rove was rude with her, but witnesses say David was very aggressive.

Rove said David came over to insult him and succeeded.

Crow tried to calm things down but was instead drawn into the debate with Rove, telling him, "You work for me."

Rove responded, "No. I work for the American people."

Writing about the encounter on The Huffington Post Web log, the Hollywood mavens gave a colorful recount of the discussion.

Click here to read The Huffington Post blog entry.

"In his attempt to dismiss us, Mr. Rove turned to head toward his table, but as soon as he did so, Sheryl reached out to touch his arm. Karl swung around and spat, 'Don't touch me.' How hardened and removed from reality must a person be to refuse to be touched by Sheryl Crow?" they wrote.

The two also weren't impressed by Rove's apparent argument that the United States would lose it's competitive edge by acting unilaterally.

At CNN:

"I am floored by what I just experienced with Karl Rove," David said later. "I went over to him and said, I urge you to take a new look at global warming. He went zero to 100 with me. ... I've never had anyone be so rude."

Rove said: "She came over to insult me and she succeeded."

As the debate intensified, Crow tried to calm things down but was drawn into the debate with Rove instead.

"You work for me," she told Rove, according to the Post column "The Reliable Source."

"No," was his response. "I work for the American people."

Heather Lylis, a spokeswoman for Crow and David's global warming tour, said Sunday that Crow's response for Rove was: "Yes, and I'm an American citizen."

Reliable Source:

"I am floored by what I just experienced with Karl Rove," David reports. "I went over to him and said, 'I urge you to take a new look at global warming.' He went zero to 100 with me. . . . I've never had anyone be so rude."

Rove's version: "She came over to insult me and she succeeded."

Things got so hot that Crow stepped in to defuse the situation and then got into it with Rove herself. "You work for me," she told the presidential adviser, according to singed bystanders. "No," was his response. "I work for the American people."

News of the dust-up filtered quickly through the room. Some witnesses said David was very aggressive with Rove; a shaken Crow later said that Rove was "combative and unresponsive."

I just found it interesting who would tell the whole story, and who wouldn't.

Bolo YouTube: But WTC 7 Wasn't Hit By A Plane!

UPDATE: I've pulled this for a couple of reasons. I will repost it next Thursday.

George Bush Fired David Ignatius

Because Pete Domenici wanted Ignatius fired.

Kaboom.

Bolo YouTube: How Fast Did Building 7 Fall?

Yep, done by little old Bolo. I don't get into it much here, but I'm a rabid debunker of 9/11 conspiracy myths online, and I've finally gotten a setup to make YouTube videos with. So here's the first short I did. I expect to do one of these a week, and eventually the expected Video Response, when and if I ever get a camera.

So anyway, click and enjoy.

UPDATE: Hmm. The YouTube isn't working. Well, anyway, here's the Google Video link:



2nd UPDATE: YouTube is done hiccuping.

I Discovered Second Life Last Night!

Wow!

I made my avatar and learned to walk and fly, Wow!

I went to Help Island, played games, got some free stuff, learned to dance, got a bike, Wow!

I transported to the Main area, Wow!

I walked around, and walked around, and flew, and ran into red barriers, and looked at stores and casinos, and couldn't find anyone in place after place.

Bleh.

Maybe if I find some people, it will be more fun.

I'll post snapshots later.

A Funny Thing Happened On the Way To Syria

I'm in a work cycle here, so it's been hard to understand exactly what happened when Nancy Pelosi went to Syria. I know what a lot of partisan people are saying about it, on both sides of the aisle, and seeing where my seat is situated, I know who I think has the more solid take on the matter.

Still I don't want to pass judgment just yet. I'm quite willing to believe that the Speaker is capable of making a mistake. She definitely did when she supported John Murtha over Steny Hoyer for House Majority Leader. But that was a good mistake; it showed how loyal she could be to a friend. In the end, Hoyer won the vote handily, and though it was hard to see Murtha up there behind the podium, still he was there, and it was because of Pelosi. Mistakes like that we need more of.

Let us gather the facts, if we can find them. And let's be as basic as we can about the facts, starting with this one: Nancy Pelosi has just recently been on a trip to Israel and Syria.

During the trip, on March 30th, Speaker Pelosi's office released this statement:

As recommended by the Iraq Study Group, a bipartisan delegation led by Speaker Pelosi intends to discuss a wide range of security issues affecting the United States and the Middle East with representatives of governments in the region, including Syria.

Pelosi's press release reads like it is a response to the comments made by the White House:

Q Dana, the Speaker of the House is traveling to Syria next week. Wondering what the White House's view on that is.

MS. PERINO: Well, as you know, we do not encourage -- in fact, we discourage members of Congress to make such visits to Syria. This is a country that is a state sponsor of terror, one that is trying to disrupt the Siniora government in Lebanon, and one that is allowing foreign fighters to flow into Iraq from its borders. And so we don't think it's productive to go to Syria and try to -- well, I don't know what she's trying to accomplish. I don't believe that anyone in the administration has spoken to her about it. But in general we do discourage such trips.

Q So specifically on this one -- this will be the highest-ranking U.S. official to go to Syria since the Hariri assassination, even before that, and apparently she's going to meet with President Assad. Would you have a specific message to the Speaker of the House about meeting with President Assad at a time when the administration has even withdrawn our ambassador from Damascus?

MS. PERINO: Well, again, I don't know if anyone has spoken to the Speaker. I do think that, as a general rule -- and this would go for Speaker of the House Pelosi and this apparent trip that she is going to be taking -- that we don't think it's a good idea. We think that someone should take a step back and think about the message that it sends, and the message that it sends to our allies. I'm not sure what the hopes are to -- what she's hoping to accomplish there. I know that Assad probably really wants people to come and have a photo opportunity and have tea with him, and have discussions about where they're coming from, but we do think that's a really bad idea.

...Q Dana, normally when a congressional leader goes on a trip, no matter what party they're in, they consult with the State Department. Were there any consultations between her and --

MS. PERINO: I don't know. I just learned about this trip right before I came out here. We'll check. Our initial check was that nobody was aware of any discussions, but we'll confirm and let you know.

Q Do you know, did anyone from the White House try to dissuade her from going on this trip?

MS. PERINO: As far as I know, we just found about it. I just found about it.

So at this point, the White House doesn't know if the State Department talked to the Pelosi group, but in general, they say, they discourage people from going. It sends a bad message. It only gives President Assad a photo opportunity.

The State Department, same day, about an hour and a half later:

QUESTION: On Syria.

MR. MCCORMACK: Yeah.

QUESTION: Nancy Pelosi is visiting Syria. The White House criticized her decision to go. I was wondering what you think of this. And it's my understanding that the Bush Administration tried to dissuade her from visiting Syria at this time, didn't think it would be appropriate.

MR. MCCORMACK: Right.

QUESTION: Can you speak to that?

MR. MCCORMACK: Well, we've -- you know, our message both to Republicans and Democrats alike who either have visited Syria in this recent period or intend to, as Speaker Pelosi does, has been consistent, it's been the same. In our view, it's not the right time to have those sort of high-profile visitors to Syria mostly for the simple fact that the Syrians, despite a number of different pleas and approaches from the United States as well as other countries, have refused to change their behavior vis-à-vis support for Palestinian rejectionist groups, for their support for -- their unhelpful stance with respect to Lebanon. And we don't think it would be appropriate for high-level visitors, even those from the Congress, to pay a visit to Syria right now.

A typical Syrian MO on this is to use these visits to tell the rest of the world and say, "Look, there's nothing wrong. We're having all these visitors come to Syria, coming to Damascus, there's no problem with our behavior," and they point to the visits as proof that there is no problem with their behavior and that they are not, in fact, isolated. So that's the simple reason why we have encouraged others as well as Speaker Pelosi not to travel.

That said, congressmen and representatives are going to make their own decisions about where they travel. And in this case, they made the decision to go forward. We are going to provide all the support that might normally be expected to be provided to a member of Congress traveling to a foreign country. We provided a briefing for Speaker Pelosi's staff and those traveling with her. So that's about -- that's really where we stand right now.

QUESTION: Will anyone from State be accompanying Speaker Pelosi?

MR. MCCORMACK: No.

QUESTION: Sometimes, you send along a little help (inaudible).

MR. MCCORMACK: A little help --

(Laughter.)

MR. MCCORMACK: Not to my knowledge, not to my knowledge. Of course, other people on the ground are ready to assist the congressional delegation in setting up meetings and even attending those meetings if that's what the congressional delegation wants.

QUESTION: But Ellen Sauerbrey was there and --

MR. MCCORMACK: A very specific mission dealing with the humanitarian issue of Iraqi refugees and she went in -- talked to somebody at her level, her counterpart on a very limited scope mission.

Yeah.

QUESTION: Just to sort of -- has there been a presidential or vice presidential visit to Syria?

MR. MCCORMACK: To Syria? When?

QUESTION: Has there been?

MR. MCCORMACK: Ever?

QUESTION: Ever.

MR. MCCORMACK: I'm going to look over here. George. (Laughter.)

QUESTION: Jimmy Carter met with President Asad, I think in Geneva. So did --

QUESTION: So did Clinton.

MR. MCCORMACK: In Geneva. And Secretary [Madeline] Albright, I know, visited there for the funeral and then --

QUESTION: [Warren] Christopher --

QUESTION: Christopher went a couple of times.

MR. MCCORMACK: [James] Baker's been there numerous times.

QUESTION: Even Sean McCormack, I think might have been to Damascus once or twice. Is that true?

MR. MCCORMACK: I made one trip there, yeah. Not that that's important. (Laughter.)

I include the last part to show just exactly what a big deal the Speaker in Damascus is. The last high ranking official to go to Damascus was actually Secretary Powell , who was there in 2003. But since then, the Bush Administration has not been too happy about anybody meeting with Syria.

The meetings have happened, though. It seems recently the floodgates have opened. On March 30th, three Republican representatives were already in Israel getting ready to go to Damascus.

The Assistant Secretary of State had gone to Damascus earlier in March, as the briefing above points out, on a limited-scope mission.

The US had even sat down with Syria in multilateral talks about Iraq that month - in Baghdad.

A few months earlier, in December 2006, Arlen Specter had gone to Damascus. Arlen's been there a few times, and most notably was in Damascus the day that the former President Bush had begun dropping bombs on Baghdad:

Mr. Specter, who visited Syria despite loud objections from the Bush administration, did not say what conditions Mr. Assad gave for restarting talks with the Israelis. Syrian officials were not available for comment.

Mr. Specter's visit came on the heels of trips to Damascus by Democratic Sens. Bill Nelson of Florida, John Kerry of Massachusetts and Christopher Dodd of Connecticut.

A bipartisan panel on Iraq recommended earlier this month that the United States engage Syria, Iraq's neighbor, toward returning stability to Iraq.

The United States has limited diplomatic ties with Syria because of its support for Hezbollah and Hamas, which the United States deems terrorist organizations. President Bush has expressed reluctance to seek help from Damascus on Iraq until the Syrians curb that support and reduce their influence in Lebanon.

...Mr. Specter said before he left that he and other Republicans are concerned that the administration's policies in the Middle East are not working and that other GOP members may follow in his footsteps.

And the day after Pelosi's visit, Darrell Issa would meet with Assad as well.

A name or two keeps popping up here: James Baker and the Iraqi Study Group. Hold onto that.

On the 31st, Pelosi and the bipartisan delegation met with the Israeli Prime Minister, Ehud Olmert. While meeting with him, Olmert spoke to Pelosi about Syria and the peace process.

Pelosi left that meeting, intending to communicate a clear message to Syria:

Pelosi has said she will tell Syrian leaders that Israel will talk peace with them only if Syria stops supporting Palestinian militants. She has said she will also talk to the Syrians about Iraq, their role in neighboring Lebanon and their support for Lebanon’s Hezbollah militants.

On April 1st, she met with Israel's acting president Dalia Itzik, who defended the idea of Pelosi going to Syria:

"Your expected visit to Damascus has naturally touched off a political debate in your country, and of course, here," Itzik said in televised remarks.

"I believe in your worthy intentions. Perhaps a step, seen as unpopular at this stage ... will clarify to the Syrian people and leadership they must abandon the axis of evil (and) stop supporting terrorism and giving shelter to (terrorist) headquarters," said Itzik, a member of Prime Minister Ehud Olmert's centrist Kadima party.

...Pelosi, who met Olmert earlier in the day, held aloft during her dinner speech in parliament replicas of the dog-tags of the three captive [Israeli] soldiers.

"They (the dog-tags) are in my office, I carry them with me today, with the promise that we must never rest until they are all safely at home. And yes, I will mention this to the president of Syria," said Pelosi, the top House Democrat.

On April 4, Pelosi flew into Damascus. An Australian network filed this report, before the Speaker had met with Assad:

KIM LANDERS: But should the Democrats be dabbling in US foreign policy?

Charles Kupchan is a Senior Fellow at the Council on Foreign Relations.

CHARLES KUPCHAN: The Democrats are making an assault on President Bush's monopoly over foreign policy in the United States, both through legislation, on getting troops out of Iraq, and now also conducting their own independent diplomacy by heading to the Middle East and meeting not just with the Syrians, but a host of other countries.

KIM LANDERS: He says Nancy Pelosi is picking up on the recommendations of the independent Iraq Study Group, which recommended engaging with Iraq's neighbours, including Syria.

CHARLES KUPCHAN: If we could find some way of having a working relationship with the Syrians, that would help us in Iraq, particularly on Anbar province, which is where the al-Qaeda network is still alive and well, and that's an area that's very close to the Syrian border.

KIM LANDERS: But Robert Lieber, who's a Professor of Government and International Affairs at Georgetown University, has doubts about the merits of the senior Democrat's trip.

ROBERT LIEBER: There are real grounds for concern about the appropriateness of this, given the role that Syria has played and the fact that any number of political actors and sometimes government officials have had their pocket picked, in policy terms, in travelling to Syria to meet with the elder or now younger Assad.

It's a dicey game.

KIM LANDERS: By asserting themselves on the foreign policy stage, are the Democrats showing too much ambition?

ROBERT LIEBER: Possibly, yes.

I think there is a very important piece of information we don't know. We don't know what Nancy Pelosi is going to say to the Syrians.

If she delivers a smart, tough message, which I would think some of the key figures in Democratic foreign policy making would want her to do, that's one thing. If on the other hand she delivers something that is fatuous or which seems overly indulgent to the Syrians, or inclined to take Bashar Assad at his word, then I think the impact of the visit will be counterproductive and even destructive in policy terms.

ELEANOR HALL: Professor Robert Lieber speaking to Kim Landers in Washington.

Professor Lieber appears to have not been paying attention to Nancy Pelosi. Every indication from her was a smart, tough message. I mean, she had replicas of the Israeli soldiers' dogtags around her neck.

But the ink seems to be already dry on the script of how Pelosi's visit would be played.

There's more to this story, much more. But I fear it must wait till tomorrow.

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