Sunday, February 24, 2008

Files and McCain Letter Show Effort to Keep Loophole

Files and McCain Letter Show Effort to Keep Loophole

The New York Times
February 23, 2008

In late 1998, Senator John McCain sent an unusually blunt letter to the head of the Federal Communications Commission, warning that he would try to overhaul the agency if it closed a broadcast ownership loophole.

The letter, and two later ones signed by Mr. McCain, then chairman of the Senate Commerce Committee, urged the commission to abandon plans to close a loophole vitally important to Glencairn Ltd., a client of Vicki Iseman, a lobbyist. The provision enabled one of the nation’s largest broadcasting companies, Sinclair, to use a marketing agreement with Glencairn, a far smaller broadcaster, to get around a restriction barring single ownership of two television stations in the same city.

At a news conference on Thursday, Mr. McCain denounced an article in The New York Times that described concerns by top advisers a decade ago about his ties to Ms. Iseman, a partner at the firm Alcalde & Fay. He said he never had any discussions with his advisers about Ms. Iseman and never did any favors for any lobbyist.

One of the McCain campaign’s statements about his dealings with Ms. Iseman was challenged by news accounts on Friday. In discussing letters he wrote regulators about a deal involving another of Ms. Iseman’s clients, Lowell W. Paxson, the campaign had said the senator had never spoken to her or anyone from the company. But Mr. McCain acknowledged in a 2002 deposition that he had sent the letters after meeting with Mr. Paxson.

On Glencairn, the campaign said Mr. McCain’s efforts to retain the loophole were not done at Ms. Iseman’s request. It said Mr. McCain was merely directing the commission to “not act in a manner contradictory to Congressional intent.” Mr. McCain wrote in the letters that a 1996 law, the telecommunications act, required the loophole; a legal opinion by the staff of the commission took the opposite view.

A review of the record, including agency records now at the National Archives and interviews with participants, shows that Mr. McCain, Republican of Arizona, played a significant role in killing the plan to eliminate the loophole. His actions followed requests by Ms. Iseman and lobbyists at other broadcasting companies, according to lobbying records and Congressional aides.

Over the years, Mr. McCain has taken varying positions on broadcast ownership issues. He has supported the relaxation of the ownership rules, but he has also been sharply critical of rules that permit too much concentration of ownership in a single market.

By November 1998, the F.C.C. was planning to strike down broadcasting marketing agreements, a potentially ruinous development for Glencairn. But after receiving Mr. McCain’s Dec. 1 letter, it put off consideration of the issue.

“To the extent the F.C.C. shows itself incapable of following Congressional intent,” the letter said, “these issues will become part of our overall review of the commission’s functions and structure during the next session of Congress.”

The letter, sent from Mr. McCain’s office by his staff at the commerce committee, was also signed by Senator Conrad Burns, Republican of Montana and chairman of a communications subcommittee. It was uncharacteristic of Mr. McCain, according to a review of dozens of letters sent by him to the commission during the same period.

It was the only letter that contained a suggestion that a failure to act would result in the possible overhaul of the agency.

The letter said that “as a leading participant in the passage of the 1996 Act, I have a very clear understanding” of the law’s intent and why it required the ownership loophole to be preserved. Mr. McCain was one of five senators — and the only Republican — to vote against the act. He has also been an outspoken critic of it.

While other companies also complained to Congress about the plan to close the loophole, the issue was particularly important to Sinclair because it had more marketing agreements than any in the nation. For its part, Glencairn appeared to have been getting little support in Congress until it retained Ms. Iseman in 1998.

Edwin Edwards, who was the president of the company at the time, said in a recent interview that after retaining Ms. Iseman, he was able to get heard by Mr. McCain.

“We were pounding the pavement in Washington,” Mr. Edwards said. “We recruited help from as many people as we could. We knocked on every door just trying to get support.”

The campaign said that Mr. McCain never spoke with Ms. Iseman about the issue, but that she did speak to his staff about it. Mr. Edwards and Mr. McCain met on July 20, 1999, according to the campaign.

After the commission postponed consideration of the issue, Mr. McCain signed a second letter to the agency on Dec. 7, 1998, in support of local marketing agreements, and a third one on Feb. 11, 1999. The third letter was signed by four other lawmakers. Ultimately, the F.C.C. loosened the rules to permit a company to own two television stations in some markets.

The letters Mr. McCain wrote to the commission in the Paxson matter were sent in late 1999 and prompted the agency’s chairman to chastise him for interfering in a licensing matter. The incident embarrassed Mr. McCain, then making his first presidential run, because Mr. Paxson was a campaign contributor and fund-raiser.

While the campaign said Thursday that Mr. McCain never spoke to anyone from Paxson or Ms. Iseman’s lobbying firm before sending those letters to the commission, an article posted Friday on Newsweek’s Web site said Mr. McCain had previously acknowledged first speaking to Mr. Paxson. Recounting that conversation, Mr. McCain testified in the deposition, “I said I would be glad to write a letter asking them to act.”

The Washington Post reported Friday on its Web site that Mr. Paxson acknowledged in an interview that he had met with Mr. McCain to discuss the letters before they were sent and that Ms. Iseman was probably at the meeting.

In three interviews with The Times since December, Mr. Paxson has provided varying accounts about the letters. In the first, he said Ms. Iseman was involved in the drafting of them and had lobbied Mr. McCain. He later said he could not recall who had been involved.

Jerry Sanders wants to appoint the person who will audit his books

From Pat Flannery's Bog of San Diego:

"Sanders' power-grab at appointing the City's Internal Auditor (the very person who will audit his books) will be decided by the City Council on Monday...

"Peters and Sanders want option (2): "appointed by the City Manager [now the Mayor], in consultation with the Audit Committee, and confirmed by the Council". Donna Frye will continue to oppose the Mayor having any role in appointing the City Auditor. She has consistently pointed out that it is wrong both in substance and appearance and a giant step backwards for this wayward City..."

Friday, February 22, 2008

Dysfunction follows city council killings in Kirkwood, Missouri

I don't know if dysfunction preceded the city council killings in Kirkwood, Missouri, but it certainly is occurring in the wake of those killings. I have to agree with citizens who want more than one name on their ballots for the upcoming mayoral election. A candidate who died was removed from the ballot, but her supporters want to be able to indicate their dissatisfaction with the one person named on the ballot.

The city attorney says the election can't be delayed. Okay, let me get this straight. Having one name on the ballot is okay, even though it eliminates democracy, but delaying an election isn't okay?

The spirit of the law is to bring about democracy. That's what the rules are for. When the rules start bringing about the opposite of democracy, it's time to come up with an equitable solution to the problem.

It appears that this city council doesn't know how to come up with equitable solutions. And it certainly shouldn't be blaming the dead woman's husband for it's decision. There's no law that says you have to do what surviving spouses want. I wonder if the bereaved man was pressured to agree to taking his wife's name off the ballot.

Here's an Associated Press article:

First City Meeting Since Killings Gets Ugly
Associated Press

The first City Council meeting since a gunman stormed City Hall and killed five people began with a sense of togetherness that didn't last long.

Residents and elected officials of Kirkwood, Mo., came together Thursday for the first City Council meeting since a gunman stormed City Hall two weeks ago, killing five people and wounding two others. Here, locals Lorraine Brown and Franklin McCallie greet each other with a hug before the meeting, which did not continue as amicably.

After opening with a moment of silence to remember the rampage two weeks ago, the meeting turned into a bitter fight over the how the St. Louis suburb will move on now that three city officials are dead and the mayor is incapacitated.

Police say 52-year-old Charles Lee "Cookie" Thornton entered the council chambers on Feb. 7 and killed two police officers, two council members and the city's public works director before police shot him to death. Mayor Mike Swoboda was shot twice in the head and remains hospitalized.

Among the dead was Connie Karr, an alderwoman who was running for mayor. Last week the city had her name removed from the ballot, leaving only alderman Arthur McDonnell listed.

Dozens attended Thursday's meeting to criticize the move, saying it undercut the voters' right to choose their mayor in the April election.

"I feel that with only one candidate, you're not going to have any discussion or debate," Kirkwood resident Karl Unsworth said.

Spectators booed and groaned during a long and disorderly public comment period; some yelled at city officials as they spoke.

State Senate President Pro Tem Michael Gibbons, a Republican from Kirkwood, took his turn at the microphone to hold a moment of silence after particularly heated comments. He then led a prayer.

"God, I would ask that the people of Kirkwood learn how to address the struggles and challenges that we face," he said.

City Attorney John Hessel explained repeatedly that Karr's name was removed from the ballot at her husband's request. He said it was impossible under city and state law to delay the vote, except if a disaster occurred on the day of the election.

Hessel criticized many of the speakers who questioned his legal rationale and suggested he wasn't honoring Karr's legacy. He survived the shooting attack only after throwing chairs at Thornton to fend him off before police arrived.

"Connie Karr's death is all of our worst nightmare," Hessel said. "It is something that I live over and over."

Besides Karr, killed in the rampage were Officer William Biggs Jr., Officer Tom Ballman, Public Works Director Ken Yost and Councilman Michael H.T. Lynch.

Thornton had a long history of fighting with city officials over a litany of code violations, fines and citations.

It isn't just San Diego; Arizona Congressman took kickbacks

Feds Indict Congressman in Land Deal
Associated Press
Feb. 22, 2008

Republican Rep. Rick Renzi was indicted Friday on charges of extortion, wire fraud, money laundering and other matters in an Arizona land swap scam that allegedly helped him collect hundreds of thousands of dollars in payoffs.

Rep. Rick Renzi, a three-term member of the House, also served as Arizona chairman for GOP presidential front-runner John McCain's campaign.

A 26-page federal indictment unsealed in Tucson, Ariz., accuses Renzi and two former business partners of embezzlement and conspiring to promote the sale of land that buyers could swap for property owned by the federal government.

Renzi is a three-term member of the House. He announced in August that he would not seek re-election. Attempts to reach Renzi by phone on Friday through his congressional office in Flagstaff and his lawyer were unsuccessful.

The indictment accuses Renzi of using his position as a member of the House Natural Resources Committee to push the land swaps for business partner James W. Sandlin, a real estate investor from Sherman, Texas. It comes after a lengthy federal investigation into the land development and insurance businesses owned by Renzi's family.

As part of the alleged scam, Renzi and Sandlin concealed at least $733,000 that the congressman took for helping seal the land deals, the indictment says. They are each charged with 27 counts of wire fraud, extortion and money laundering, and conspiracy connected to the scam in Cochise County, Ariz.

"Renzi was having financial difficulty throughout 2005 and needed a substantial infusion of funds to keep his insurance business solvent and to maintain his personal lifestyle," the indictment says.

Additionally, Renzi and his second business partner, Andrew Beardall of Rockville, Md., allegedly embezzled more than $400,000 in insurance premiums in 2001 and 2002 to fund his first congressional campaign, according to the indictment.

All three men are scheduled to appear in federal court in Tucson on March 6.

"Public corruption creates a cynicism for government and unfairly stains legions of honest public servants," Assistant Attorney General Alice S. Fisher said in a statement. "These charges represent allegations that Congressman Renzi defrauded the public of his unbiased, honest services as an elected official."

Renzi is the Arizona chairman for GOP presidential front-runner Sen. John McCain's campaign. McCain seemed surprised when asked in Indianapolis for his reaction to the indictment, choosing his words carefully, shaking his head and speaking slowly.

"I'm sorry. I feel for the family; as you know, he has 12 children," McCain told reporters on the presidential campaign trail. "But I don't know enough of the details to make a judgment. These kinds of things are always very unfortunate.... I rely on our Department of Justice and system of justice to make the right outcome."

The land swap deal has dogged Renzi more than a year.

The indictment says Renzi refused in 2005 and 2006 to secure congressional approval for land swaps by two unnamed businesses if they did not agree to buy Sandlin's property as a part of the deal.

One of the businesses, seeking congressional approval for surface rights for a copper mining project in Renzi's district, failed to buy the land in early 2005. As a result, Renzi allegedly told the business, "No Sandlin property, no bill."

Renzi had previously owned some of Sandlin's property, and concealed his relationship with the real estate investor from the mining company even when expressly asked. At the time, Sandlin owed $700,000 of the $800,000 price tag on property Renzi sold him in Kingman, Ariz.

Meanwhile, Renzi allegedly pushed the land on a second firm, an unnamed investment group, that was trying to secure a federal land swap. If the firm accepted Sandlin's property as part of the transaction, Renzi allegedly said investors would receive a "free pass" through the House Natural Resources Committee, according to the indictment.

In April 2005, the investors reluctantly agreed to the deal.

"Please be sensitive to the fact that we are going way out on a limb at the request of Congressman Renzi," one of the investors wrote in an April 17, 2005 e-mail to a Renzi aide. "I am putting my complete faith in Congressman Renzi and you that this is the correct decision."

The investment group agreed to pay $4.6 million for Sandlin's land, the indictment says. Sandlin then paid Renzi $733,000 for his help in securing the land swap from the second business.

Renzi failed to report the income on financial disclosure reports to Congress, as is required.

Government watchdog group Citizens for Responsibility and Ethics in Washington applauded the Justice Department for holding Renzi "accountable given that his House colleagues refused to do so." The group has had Renzi on its "Most Corrupt Members of Congress" list for the last three years.

"Bluster aside, this latest in a string of congressional indictments demonstrates that Congress simply will not police itself," said CREW executive director Melanie Sloan.

Wednesday, February 20, 2008

Scott Lewis explains the Mike Aguirre-City Council-pension lawsuit connection

From Voice of San Diego
by Scott Lewis

Having It Both Ways

A reader, who is an attorney, wrote me an e-mail about the revived ambiguity surrounding the 2005 vote (or non-vote) the City Council supposedly took to authorize City Attorney Mike Aguirre's legacy lawsuit to roll back city employee pension benefits.

Remember yesterday's reminder of what Council President Scott Peters argues: that Aguirre only received authorization to sue in his own name.

Here's the attorney:

I too have always been confused on how that went down. I'm not sure what it means to authorize Aguirre to sue in his own name? He's the City Attorney for crying out loud! Did they mean he could sue as an individual? In that case, he really didn't need their permission.

What also always irritated was that if the Council felt like their position on this was misunderstood and they really did not want him to file the suit, why did they not revote and clarify their position at the next Council meeting or anytime thereafter??? Don't get me wrong I absolutely believe the City Attorney can not file this type of lawsuit without Council approval. I just thought they left him an out with their ambiguity and never clarified as they most certainly could have.

This is a vitally important point. If the City Council never authorized Aguirre to sue to roll back what he claimed were illegal pension benefits, why in the world did they never do a single thing about it?

This may be why the issue is coming up now. One of the big arguments Peters and the gang looking to throw Aguirre out of office will undoubtedly use is the meme that Aguirre has been a reckless litigator.

If he has been a reckless litigator, his most reckless litigation is the pension lawsuit. But how can Peters (and his colleague Brian Maienschein) possibly argue that this was as reckless as they say if they authorized him to file the lawsuit?

The State Bar, by investigating this, is enabling Peters and Maienschein to float the idea that they never did authorize the litigation.

It should be remembered, of course, that they never did anything to stop it either.

But regardless, this can all be cleared up if the City Council would release the transcript of what really happened at that meeting. But they decided only to give the transcript to the State Bar.

How convenient.

Wednesday, February 20 -- 3:02 pm

Click here to post comments (3 posted so far)

The Meeting in Question
In light of today's U-T report on the State Bar investigation into City Attorney Mike Aguirre, I'm having flashbacks of a series of columns I did in 2005 about the meeting that is apparently at the center of the Bar's probe.

Flashback with me: Watching a City Council meeting in August of that year, I was shocked to see then Assistant City Attorney Les Girard quietly announce that the City Council had authorized City Attorney Mike Aguirre to sue to get rid of pension benefits he thought city employees had illegally secured.

It was a stunner. I rewound the tape a couple of times to make sure I understood him because the City Council had, until that point, never been too enthusiastic about Aguirre's expressed desire to completely roll back benefit enhancements city employees had secured in the 90s and in 2002.

So I called Aguirre to confirm and wrote up what I thought was big news.

Don "The Rat" McGrath today tries to explain the city attorney's side.
It suddenly got the attention of both union leaders and a blogger named Pat Flannery neither of whom completely believed me until they too saw the tapes. When Ann Smith, the lawyer for the city's Municipal Employee Association heard about it, she wanted to know what was going on as well and sent a letter to the City Council asking.

I wrote up a followup after asking a couple of City Council members.

On Aug. 9 just before the City Council broke its meeting to go to lunch (at 1 hour, 43 minutes into the archived video on the city's Web site -- for the really interested), Assistant City Attorney Les Girard made this announcement:

"Last week in closed session, by a unanimous vote, the City Council authorized the city attorney to pursue a modified cross complaint in the action of SDCERS v. the city of San Diego and City Attorney Michael Aguirre."

Heck, it's my blog, I'm just going to reprint the best part of the column here:

In an interview Aug. 12, Aguirre said that the council had "joined the city attorney" in his legal pursuits against the pension board on the condition that he drop his contention that individuals named in the suit be held personally liable for their actions. That was how the complaint was "modified," Aguirre said.

"This is an area where the City Council has chosen to support the city attorney," he said.

He reaffirmed his statements last week.

But relations among the city leaders have apparently deteriorated so badly that they can't even agree on what official actions they have taken.

Deputy Mayor Toni Atkins released a one-line reaction.

"The Council took no action nor a position on benefits being legal or illegal nor allowing the City Attorney to be counsel for the [San Diego City Employees' Retirement System] board," Atkins said.

Since it's the only statement we have from her on this, we have to take each word for what its worth.

Let's see that again: "The Council took no action nor a position on benefits being legal or illegal."

So what did they do? Why did Les Girard announce in an open council session that "the City Council authorized the city attorney to pursue a modified cross complaint ..."

Is that not an "action"?

Atkins' colleague, Councilman Scott Peters, acknowledges that the council took an action, just not an action with the impact Aguirre describes.

Here's Peters' take.

"...the City Council has authorized the city attorney to allege illegality in his name only," Peters wrote (emphasis added) in a memorandum to Aguirre disputing language Aguirre uses in court documents.

Peters made his case to Voice of San Diego Thursday.

"No one has signed on to his view that the benefits are illegal. He has been authorized to make that argument in his own name but not on behalf of the City Council or the City of San Diego," Peters said. "I would never have voted to authorize him to litigate this illegality issue if the retirement board hadn't brought it up."

Peters said the authorization the council granted Aguirre "in no way" signifies official City Council support for Aguirre's legal maneuver.

Isn't it, however, a bit more supportive than, say, not authorizing him?

Peters explained that, in this instance, it's the retirement board's fault. The pension system, in July, filed a complaint asking a judge to determine if -- in light of Aguirre's blistering investigative reports -- benefits it was paying out were illegal or not.

The pension board had also filed a lawsuit against Aguirre after he tried to take over the attorney chair at the agency.

Now, fast forward two-and-a-half years and the state bar apparently is suspicious of whether the City Council actually did give Aguirre authorization to do the lawsuit or not. And that, we're all assuming, must be something the Bar has a serious problem with. The Bar, according to the U-T's Alex Roth, has asked for a transcript of the secret meeting Girard had referred.

Let's just say that if the City Council does waive the right to keep that transcript private, I will be the first in line to get a copy. It never was entirely clear what the City Council authorized and didn’t.

But I'll repeat this one point I've been making for a couple of years now: Aguirre always argued that he didn't need the City Council to approve his litigious actions yet in times like this, he sought and trumpeted their approval. If he didn't need their approval and really believed that, he probably would never have sought it.

Tuesday, February 19 -- 1:07 pm

Monday, February 04, 2008

Ann Smith said San Diego had to pay when it was a billion in debt, now she says city has to pay even more

After Metropolitan Employees Association (MEA) lawyer Ann Smith helped finagle a deal (that the SEC says was illegal) with the City of San Diego, she insisted that San Diego had to stick with the deal even though it put the city a billion dollars into the red and was illegal.

Now she says that the city's health care payments have gone down, so the city should pass on the savings.

Pass on the savings, but not the losses, eh, Ann?

Ann Smith clearly doesn't care if her union bankrupts the city.