History > 2006 > USA > Senate (IV-VI)

Biden Opposes a Troop Increase in Iraq,

Foreshadowing a Fight

With the Bush Administration

December 27, 2006
The New York Times
By HELENE COOPER

WASHINGTON, Dec. 26 — Senator Joseph R. Biden Jr. of Delaware, the incoming chairman of the Senate Foreign Relations Committee, on Tuesday rejected a troop increase for Iraq, foreshadowing what could be a contentious fight between the Bush administration and Congress.

Mr. Biden, a Democrat, announced that he would begin hearings on Iraq on Jan. 9 and expected high-ranking officials, including Secretary of State Condoleezza Rice, to appear.

As President Bush flew to his Texas ranch on Tuesday, a spokesman for the National Security Council urged the senator to wait for Mr. Bush to present his new Iraq policy next month before passing judgment.

“President Bush will talk soon to our troops, the American people and Iraqis about a new way forward for Iraq that will lead to a democratic, unified country that can govern, defend and sustain itself,” said Gordon Johndroe, the council spokesman.

The date has not been scheduled, but administration officials said it would be before the State of the Union address on Jan. 23. Mr. Bush, who intends to write the speech this week, is to hold a National Security Council meeting on Thursday at his ranch to discuss Iraq policy. Vice President Dick Cheney, Ms. Rice, Defense Secretary Robert M. Gates and Stephen J. Hadley, the national security adviser, are expected to attend.

One plan under consideration is to send an additional 30,000 troops to Iraq in a bid to restore order. “I totally oppose this surging of additional American troops into Baghdad,” Mr. Biden said. “It’s contrary to the overwhelming body of informed opinion, both inside and outside the administration.”

Mr. Biden, who said he planned to run for president in 2008, made his critique during a teleconference call with reporters. He continued to press his proposal for a partitioning of Iraq into three autonomous states — controlled by Shiites, Sunnis and Kurds — to be sustained with what he called an equitable distribution of the country’s oil wealth.

He did not say what he would do if the administration went ahead with a temporary increase in American combat forces, and it is unclear whether the Democrats have the power to stop such a move.

While Congress could hold up funding for the war in Iraq, the administration retains the upper hand in determining the American course there, especially since it is unlikely that a Congress that is so evenly split between Republicans and Democrats will speak with a unified voice.

One thing remains certain, though: President Bush will remain under pressure to talk to Iran and Syria about the deteriorating situation in Iraq in particular and the Middle East in general, as is called for by the bipartisan Iraq Study Group, led by James A. Baker III, the former Republican secretary of state, and Lee H. Hamilton, the former Democratic congressman.

While the Bush administration has indicated that American officials will not heed the suggestion that they enlist help from Iran and Syria, there continues to be a drumbeat of calls for the United States to talk to those countries.

Earlier this month, three Democratic senators — Christopher J. Dodd of Connecticut, Bill Nelson of Florida and John Kerry of Massachusetts — ignored protests from the Bush administration and flew to Damascus to meet with the Syrian president, Bashar al-Assad. On Tuesday, Senator Arlen Specter of Pennsylvania became the first Republican to follow suit.

Mr. Specter said before leaving the United States that other Republican lawmakers might follow him to Damascus. He said there was growing concern that the administration’s policies in the Middle East were not working.

Although the United States still has an embassy in Damascus, it has been represented there by a chargé d’affaires since Mr. Bush recalled the ambassador, Margaret Scobey, after the assassination of Rafik Hariri, the former Lebanese prime minister, in February 2005.

Since then contact between the two governments have been kept to low-level officials, and last week Ms. Rice reiterated that the United States planned to keep its associations with Damascus in the deep freeze.

Jeff Zeleny contributed reporting.

Biden Opposes a Troop Increase in Iraq, Foreshadowing a Fight With the Bush Administration, NYT, 27.12.2006, http://www.nytimes.com/2006/12/27/washington/27diplo.html

Congress passes tax and trade bills

Sat Dec 9, 2006 2:06 AM ET
Reuters
By Donna Smith

WASHINGTON (Reuters) - As the Republican-led Congress rushed to adjourn, the U.S. Senate on Saturday sent President George W. Bush legislation to normalize trade with former enemy Vietnam, renew popular tax cuts and open the Gulf of Mexico to new oil and gas drilling.

The economic package was one of one of several bills Republican leaders cleared before Democrats take control of the new Congress to be seated in January.

The Senate's 79-9 vote came shortly after the U.S. House of Representatives approved the measures.

Congress also passed a bill that would help clear the way for nuclear-armed India to buy U.S. nuclear reactors and fuel for the first time in 30 years.

And rushing to beat a Friday midnight deadline, the House and Senate approved a money bill to keep the government running into next year.

Republicans are leaving nine of 11 spending bills that finance various government programs for the new Democratic-led Congress to finish. The stopgap spending bill was therefore needed to avoid a government shutdown.

COST OBJECTIONS

Senate Budget Committee Chairman Judd Gregg failed in an attempt to kill the tax bill because of a $40 billion five-year price tag to the federal treasury.

Gregg, a New Hampshire Republican, said the total could top $50 billion over 10 years. The package would extend tax breaks for research and development, education, state and local sales taxes and other popular causes. It will also cancel a scheduled Medicare pay cut for doctors next year and open some 8.3 million acres in the eastern Gulf of Mexico near Florida to new oil and gas drilling.

"It has in it a large amount of items which have nothing to do with extending taxes and have a lot to do with personal interests of various groups around this country who have the capacity to get things in bills," Gregg said in a Senate speech.

"You must have to ask yourself how we as a party got to this point when we have a leadership that is going to ram down our throats ... the biggest budget buster in the history of this Congress, under Republican leadership," he said.

Even as Gregg raised his objections, the House overwhelmingly passed the tax measure, 367-45, and the trade package, 212-184.

The trade and tax bills were merged into one bill to help ease passage in the Senate after objections from Gregg and eight other senators who said a trade measure affecting Haiti would replace about $200 million in sales of U.S. yarn and fabric to the Caribbean nation with cheap supplies from China.

The trade measure would set aside Cold War restrictions on trade with Vietnam and clear the way for U.S. farmers, bankers and other businesses to share in the market-opening benefits of Hanoi's entry into the World Trade Organization next month.

(Additional reporting by Missy Ryan)

    Congress passes tax and trade bills, R, 9.12.2006, http://today.reuters.com/news/articlenews.aspx?type=politicsNews&storyID=2006-12-09T070629Z_01_N08454270_RTRUKOC_0_US-USA-CONGRESS.xml&WTmodLoc=Home-C5-politicsNews-3

Senate Passes Bill

to Criminalize Pretexting

December 9, 2006
The New York Times
By BRAD STONE and MATT RICHTEL

The Senate passed legislation last night that would make it a federal crime to obtain a person’s telephone records without permission, an act known as pretexting.

The measure, which was approved by unanimous consent last night and is similar to a bill passed earlier in the House, imposes a fine of up to $250,000 and imprisonment of up to 10 years for duping telephone companies into divulging the calling records of private individuals. The penalties can go up under special circumstances, like cases involving domestic abuse.

The support for the legislation comes in the aftermath of the spying scandal at Hewlett-Packard, the computer giant. The company, eager to ferret out purported leaks to journalists from within its board, used private detective firms to retrieve phone records of directors, managers and journalists.

Companies convicted under the Senate legislation face fines of up to $500,000.

The legislation includes penalties and a prison sentence of up to 10 years for individuals who sell or buy phone records knowing the lists were obtained through deceptive means. Passage, which came just days before the conclusion of the Republican-led Congress, is a victory for privacy advocates and regular phone users concerned about the confidentiality of their records.

“The fraudulent acquisition of phone records is now clearly and unequivocally illegal,” said Jon Leibowitz, a commissioner at the Federal Trade Commission, an agency charged with combating unfair and deceptive business practices, including pretexting.

“Just having the statute on the books will help reduce the number of bad actors out there,” Mr. Leibowitz said.

But some privacy advocates say the legislation does not go far enough.

“Given the amount of attention Congress has given to this issue, we should have a better bill," said Marc Rotenberg, the executive director of the Electronic Privacy Information Center.

Mr. Rotenberg said he would like to see Congress force companies to protect their customers’ personal information. Mr. Rotenberg also expressed concern over an exemption in the legislation for law enforcement agencies that could allow them to hire private detectives or others to obtain individuals’ calling records.

The bill passed the House on a unanimous 409-0 vote in April. But it remained stalled in the Senate Judiciary Committee for months, largely because of competition with a more complex pretexting bill in the Senate Commerce Committee, which would have required phone companies to ensure that personal records were being given only to the appropriate person.

After the Hewlett-Packard pretexting scandal made national headlines, House Republicans sent a letter to the Senate majority leader, Bill Frist, invoking the saga and urging prompt action on the stronger bill pending in the judiciary committee.

Consumer advocates plan to propose broader legislation in a session of Congress next year that would also make it illegal to try to fraudulently obtain other kinds of personal information, like utility, TV and Internet service provider records.

At Hewlett-Packard, regulatory filings this summer revealed that the company chairwoman, Patricia C. Dunn, had authorized a broad investigation into the source of embarrassing boardroom leaks to the news media. On Thursday, the company said it would pay $14.5 million to settle a civil lawsuit brought by the California attorney general, Bill Lockyer.

Detectives hired by the company employed pretexting techniques to obtain the phone records of company board members, employees and at least nine journalists who covered the company.

Ms. Dunn resigned from the company in September and in October was charged by Mr. Lockyer with identity theft and conspiracy. Privacy advocates say that even before the new law was passed, the attention the case was getting was pushing pretexters further underground.

Rob Douglas, who testified about pretexting on Capitol Hill and runs the Web site PrivacyToday.com, says the major test will be whether federal prosecutors back up the bill with aggressive enforcement. “If the Department of Justice doesn’t take the issue seriously and prosecute individuals,” he said, “it will be taken by the underground information community that they have carte blanche to continue the practice.”

    Senate Passes Bill to Criminalize Pretexting, NYT, 9.12.2006, http://www.nytimes.com/2006/12/09/business/09pretext.html

Defense Nominee Gains Approval of Senate Panel

December 6, 2006
The New York Times
By DAVID S. CLOUD and MARK MAZZETTI

WASHINGTON, Dec. 5 — Robert M. Gates, President Bush’s nominee to be defense secretary, won unanimous approval from a Senate panel on Tuesday after testifying that the United States was not winning in Iraq and that American failure there could ignite “a regional conflagration” in the Middle East.

At one point, Mr. Gates said it was “too soon to tell” whether the American invasion of 2003 had been a wise decision. He added: “My greatest worry if we mishandle the next year or two and leave Iraq in chaos is that a variety of regional powers will become involved in Iraq, and we will have a regional conflict on our hands.”

Mr. Gates is expected to win confirmation from the full Senate as early as Wednesday to succeed Donald H. Rumsfeld. At the daylong hearing of the Senate Armed Services Committee, Democrats and Republicans praised what they called Mr. Gates’s refreshing candor.

Mr. Gates gave few firm signals on Tuesday about his own favored options for Iraq, but portrayed himself as a flexible realist, open to all options for adjusting American strategy. But he made clear that he had concerns about a rapid military withdrawal, and said the recommendations to be made public on Wednesday by the Iraq Study Group would be important but not “the last word.”

“It’s my impression that frankly there are no new ideas on Iraq,” Mr. Gates said, pointing out that there are multiple other government reviews under way. “The question is: Is there a way to put pieces of those different proposals together in a way that provides a way forward?”

The group, headed by James A. Baker III and Lee H. Hamilton, is expected to propose that American combat troops be pulled back from Iraq, but not necessarily withdrawn, by sometime in 2008.

In 2003, Mr. Gates supported the administration’s decision to invade Iraq. In his testimony on Tuesday, however, he made clear that his operating style and approach would be in some respects different from those of Mr. Rumsfeld and his deputies, who have led the Defense Department for nearly six years. Mr. Gates expressed grave reservations about taking military action against Iran, an idea that the Bush administration has not ruled out in trying to halt its nuclear program.

“I think that military action against Iran would be an absolute last resort,” Mr. Gates said. “I think that we have seen in Iraq that once war is unleashed, it becomes unpredictable. And I think that the consequences of a conflict, a military conflict, with Iran could be quite dramatic. And therefore, I would counsel against military action, except as a last resort.”

Mr. Gates said he also opposed any attack on Syria, which the Bush administration has criticized, along with Iran, for contributing to the instability in Iraq.

Mr. Gates’s most direct statements about Iraq came during exchanges with Senators Carl Levin, the Michigan Democrat who will take over as the panel’s chairman, and John McCain of Arizona, who will become the top-ranking Republican.

“Do you believe that we are currently winning in Iraq?” asked Mr. Levin, who has pushed for announcing a date to begin withdrawing American troops from Iraq. “No, sir,” Mr. Gates replied, adding that he did not believe that the United States was losing, either.

Senator John W. Warner, Republican of Virginia, pointed out that Gen. Peter Pace, the chairman of the Joint Chiefs of Staff, had used language similar to Mr. Gates’s at a policy forum in Washington on Monday.

As recently as October, Mr. Bush said that “absolutely, we’re winning” in Iraq, though he also made clear he was dissatisfied with the pace of progress.

Mr. Warner, the chairman of the Senate committee, said the message from last month’s elections was that “change is needed.”

Mr. Gates said he agreed with Mr. Levin that it was “worth looking into” the idea of withdrawing troops to instill a “sense of urgency” in the Iraqi government to resolve sectarian strife. But he ruled out setting a date for a withdrawal.

Under questioning from Mr. McCain, Mr. Gates said there had not been sufficient troops in Iraq immediately after the 2003 invasion. If confirmed, he said, he would consult with ground commanders about whether they wanted additional forces.

Mr. Gates also appeared to differ slightly with Mr. Bush’s frequent declaration that Iraq is the “central battlefield” in fighting terrorists. Asked if he agreed with that description, Mr. Gates called Iraq “one of the central fronts in the war on terror” but said the United States also faced a “dispersed” enemy of Islamic militants worldwide.

But he was more direct in criticizing the Bush administration’s decision to disband the Iraqi Army and, for a time, to bar from government jobs tens of thousands of Iraqis who were members of Saddam Hussein’s Baath Party.

Several Democrats, while applauding Mr. Gates’s forthrightness and willingness to consider new tactics, questioned whether Mr. Bush would follow his advice on a new strategy.

“Senator, I’m not coming here to be a bump on a log and not say exactly what I think,” Mr. Gates told Senator Edward M. Kennedy, Democrat of Massachusetts. He added: “There is still only one president of the United States. He will make the final decision.”

Mr. Gates said he had abandoned certain positions he once held on certain national security issues. Asked about an article he wrote in 1994 advocating a military strike against North Korea’s nuclear facilities, Mr. Gates said he had changed his mind about how to deal with the communist country’s developing nuclear program. “I believe that clearly at this point, the best course is the diplomatic one,” Mr. Gates said.

If confirmed, Mr. Gates said, he would make an early visit to Iraq to assess the situation. He visited Iraq in September as a member of the Iraq Study Group, a post he resigned after being nominated by Mr. Bush on Nov. 8 to take charge at the Pentagon. On Tuesday, Mr. Bush and Mr. Baker ate lunch together to talk about the recommendations the group would make, said Dana Perino, a White House spokeswoman.

Mr. Gates did not say whether he intended to roll back any of Mr. Rumsfeld’s initiatives, but there were indications that his tenure at the Pentagon would be vastly different from the nearly six-year term of Mr. Rumsfeld.

Mr. Rumsfeld arrived at the Pentagon brimming with ideas for a leaner, more agile military. He promised to challenge what he saw as the status quo thinking of the military services, and he brought in civilian aides who clashed repeatedly with senior uniformed officers.

Mr. Gates offered no such agenda or vision. He said the campaign to transform the military needed to continue, but admitted that he was not familiar with the details of Mr. Rumsfeld’s efforts. He also questioned some of the Pentagon’s efforts before the Iraq war to analyze raw intelligence.

Mr. Gates’s presumably easy path to confirmation contrasts with his two previous nomination hearings before the Senate, both for the post of director of central intelligence. Mr. Gates withdrew his nomination the first time, in 1987, after questions arose about his role in the Iran-contra affair.

After being nominated again by Mr. Bush’s father in 1991, Mr. Gates was confirmed, but 31 Democrats voted against him, including 12 senators who are still in office.

Mr. Levin, one of those who opposed him in 1991, said after Tuesday’s vote, “I voted yes because in both the substance of his answers and the tone of his answers, he seemed open to course correction.”

As the day wore on and his confirmation appeared increasingly secure, Mr. Gates seemed to absorb the weight of the job. He asked to expound on his morning remark about not winning in Iraq, saying he did not want the troops to believe they were being unsuccessful.

“Our military wins the battles that we fight,” Mr. Gates said. He added that “where we’re having our challenges, frankly, are in the areas of stabilization and political developments,” and that he believed that other federal agencies should contribute more assistance in Iraq.

Dinner for Secretary General

WASHINGTON, Dec. 5 — The White House under Mr. Bush and the United Nations under Kofi Annan have not exactly gone together like Mom and apple pie. But the White House spokesman, Tony Snow, predicted that all would be amicable when Mr. Bush, Mr. Annan and their top aides met for a final time Tuesday over dinner in the White House residence, where Mr. Bush was to toast Mr. Annan on the completion later this month of his tenure as the United Nations secretary general.

It was unclear, however, whether the White House had a table long enough or wide enough to separate John Bolton, who has resigned as United Nations ambassador, and Mr. Annan’s top deputy, Mark Malloch Brown, who was visibly pleased on Monday at the news of Mr. Bolton’s departure.

Mr. Snow said he was not worried. “We practice effective diplomacy,” he said. “I expect it will be perfectly pleasant.”

    Defense Nominee Gains Approval of Senate Panel, NYT, 6.12.2006, http://www.nytimes.com/2006/12/06/washington/06gates.html?hp&ex=1165467600&en=15ed3293cf3a4551&ei=5094&partner=homepage

Senate Democrats Revive Demand for Classified Data

November 24, 2006
The New York Times
By DAVID JOHNSTON

WASHINGTON, Nov. 23 — Seeking information about detention of terrorism suspects, abuse of detainees and government secrecy, Democrats on the Senate Judiciary Committee are reviving dozens of demands for classified documents that until now have been rebuffed or ignored by the Justice Department and other agencies.

“I expect real answers, or we’ll have testimony under oath until we get them,” Senator Patrick J. Leahy of Vermont, who will head the committee beginning in January, said in an interview this week. “We’re entitled to know these answers, and in many instances we don’t get them because people are hiding their mistakes. And that’s no excuse.”

Mr. Leahy, who has said little about his plans for the committee, expressed hope for greater cooperation from the Bush administration, which he described as having been “obsessively secretive.” His aides have identified more than 65 requests he has made to the Justice Department or other agencies in recent years that have been rejected or permitted to languish without reply.

Now that they are about to control Congress, what he and other Democrats regard as a record of unresponsiveness has energized their renewal of longstanding requests for information about some of the administration’s most hidden and fiercely debated operations. In addition, other such requests by committee members deal with subjects like voter fraud, immigration and background inquiries on Supreme Court nominees.

With little more than two weeks gone since the elections that gave his party a majority in both houses, Mr. Leahy has already begun pressing the Justice Department for greater openness. In a letter last Friday, he asked Attorney General Alberto R. Gonzales to release two documents whose existence the Central Intelligence Agency, in response to a suit by the American Civil Liberties Union, recently acknowledged for the first time. Although their details are not known, the documents appear to have provided a legal basis for the agency’s detention and harsh interrogation of high-level terrorism suspects.

One document is a directive, signed by President Bush shortly after the September 2001 attacks, that granted the C.I.A. authority to set up detention centers outside the United States and outlined allowable interrogation procedures.

The second is a memorandum, written by the Office of Legal Counsel at the Justice Department in 2002, that is thought to have given the C.I.A. specific legal advice about interrogation methods that would not violate a federal statute on torture.

With Democrats in control, it will be harder for executive branch agencies to sidestep requests for documents. Behind each request will be the possibility of Democrats’ voting to issue subpoenas that would compel documents or testimony, although Senate aides said they hoped to avoid conflict.

So far, few signs have emerged that the administration is preparing to be more responsive, even in the absence of a Republican majority’s protection. Mr. Bush has promised to work with Democrats, but there appears to be little change in the reluctance of the Justice Department’s officials to start opening its files to Mr. Leahy’s committee.

“The department will continue to work closely with the Congress as they exercise their oversight functions, and we will appropriately respond to all requests in the spirit of that longstanding relationship,” said a department spokesman, Brian Roehrkasse. “When making those decisions, it is vital to protect national security information, particularly when they relate to sensitive intelligence programs that are the subject of oversight by the Intelligence Committees. We also must give appropriate weight to the confidentiality of internal executive branch deliberations.”

C.I.A. lawyers have sought in the past to avoid any discussion of whether the agency has documents related to its detention and interrogation of leading members of Al Qaeda in secret prisons overseas. The lawyers have said national security would be endangered if the agency was forced to tell in any way of its involvement in such operations.

But in September, the president said 14 high-level terrorism suspects had been transferred from secret locations abroad to the detention center at Guantánamo Bay, Cuba. That effectively confirmed the existence of the prisons, as long reported.

The two documents requested by Mr. Leahy in his letter of last Friday are among what Congressional aides maintain are perhaps hundreds, crucial to shaping the government’s counterterrorism policies, that have never been released or publicly acknowledged.

Justice Department officials have long said they will resist efforts to require disclosure of classified documents that provide legal advice to other agencies. But in the interview this week, Mr. Leahy signaled that he expected the department to provide a fuller documentary history on issues like detention.

The senator’s letter to Mr. Gonzales requested “all directives, memoranda, and/or orders including any and all attachments to such documents, regarding C.I.A. interrogation methods or policies for the treatment of detainees.” It also sought an index of all documents related to Justice Department inquiries into detainee abuse by “U.S. military or civilian personnel in Guantánamo Bay, Abu Ghraib prison or elsewhere.”

It is not known whether the material sought would clarify the origin and evolution of policies on issues like national security wiretaps, detention and interrogation. But there are wide gaps in what is publicly known about these policies, who authorized them and what exactly has been authorized by administration directives and legal advisories.

“The American people,” Mr. Leahy’s letter said, “deserve to have detailed and accurate information about the role of the Bush administration in developing the interrogation policies and practices that have engendered such deep criticism around the world.”

    Senate Democrats Revive Demand for Classified Data, NYT, 24.11.2006, http://www.nytimes.com/2006/11/24/washington/24documents.html?hp&ex=1164430800&en=c1ad79d641e8e036&ei=5094&partner=homepage

Nuclear Deal With India Wins Senate Backing

November 17, 2006
The New York Times
By THOM SHANKER

WASHINGTON, Nov. 16 — The Senate gave overwhelming approval late Thursday to President Bush’s deal for nuclear cooperation with India, a vote expressing that a goal of nurturing India as an ally outweighed concerns over the risks of spreading nuclear skills and bomb-making materials.

By a vote of 85 to 12, senators agreed to a program that would allow the United States to send nuclear fuel and technology to India, which has refused to sign the Nuclear Nonproliferation Treaty.

The agreement, negotiated by President Bush and Prime Minister Manmohan Singh of India in March, calls for the United States to end a long moratorium on sales of nuclear fuel and reactor components. For its part, India would divide its reactor facilities into civilian and military nuclear programs, with civilian facilities open to international inspections.

Critics have been unwavering in arguing that the pact would rally nations like North Korea and Iran to press ahead with nuclear weapons programs despite international complaints and threats. Opponents of the measure also warned that the deal would allow India to build more bombs with its limited stockpile of radioactive material, and could spur a regional nuclear arms race with Pakistan and China.

Senator Richard G. Lugar, the Indiana Republican who is chairman of the Foreign Relations Committee, hailed the measure’s passage as “one more important step toward a vibrant and exciting relationship between our two great democracies.”

His endorsement was significant, coming from a senator respected for efforts in nonproliferation and whose name is part of a sweeping program to secure nuclear bomb-making materials in the former Soviet Union. He also expressed “thanks for a truly bipartisan effort” to Senator Joseph R. Biden Jr., the Delaware Democrat set to become Foreign Relations chairman in the new Congress.

While advocates of the measure said it would be an incentive for India to refrain from nuclear tests, denunciations came quickly from a minority of senators who opposed it, as well as from critics in the House.

“It is a sad day for U.S. national security when the Senate passes a sweeping exemption to our nonproliferation laws that will allow India to increase its annual bomb-production capacity from 7 to over 40 bombs a year,” said Representative Edward J. Markey, co-chairman of the House Bipartisan Taskforce on Nonproliferation. He said the measure “sends the wrong signal at a time when the world is trying to prevent Iran from getting the bomb.”

After the vote, the White House issued a statement from President Bush praising passage of the bill.

“The United States and India enjoy a strategic partnership based upon common values,” the statement said. “The U.S.-India Civil Nuclear Cooperation agreement will bring India into the international nuclear nonproliferation mainstream and will increase the transparency of India’s entire civilian nuclear program.”

The Senate rejected several amendments that sponsors said would clarify or narrow the deal, including one that would have required India to halt all military relations with Iran. The legislation, as passed, does contain a new provision that requires the president to declare that India has joined multinational efforts to contain Iran’s nuclear program before the United States-India nuclear deal moves forward.

The Senate legislation now must be matched to the House version, which passed in July by a vote of 359 to 68; both chambers then must approve the final language. Even with Senate approval, the package will not move forward until both houses agree to specifics of a nuclear-cooperation accord with India. A complementary deal between India and the International Atomic Energy Agency also must be reached.

When the plan was announced, India pledged to classify 14 of its 22 nuclear reactors as civilian facilities. That would put those reactors under international inspections for the first time. But other reactors would remain under Indian military jurisdiction, and not open to inspectors.

After India and Pakistan conducted surprise nuclear tests about eight years ago, the Clinton administration imposed economic sanctions on both countries. But the Bush administration’s effort to enlist allies for its global antiterrorism campaign brought an end to those sanctions.

    Nuclear Deal With India Wins Senate Backing, NYT, 17.11.2006, http://www.nytimes.com/2006/11/17/washington/17nuke.html

With Politics as Subtext, Senators Clash on Iraq

November 16, 2006
The New York Times
By KATE ZERNIKE

WASHINGTON, Nov. 15 — For much of the first postelection hearing on the war in Iraq on Wednesday, the Republican side of the table was largely empty. But the room was still crowded — with competing agendas.

There were three contenders for president, including the Democratic and the Republican titans for 2008 and the one from Indiana who is hoping to cast himself as the Democrats’ compromise candidate.

There was the self-described “Independent Democrat — capital I, capital D,” who is at risk of bolting and taking his party’s new narrow majority with him. (Was that red tie a hint?) And there were the two parties, trying to bolster their positions on the war after an election that each side seemed to interpret in wildly different ways.

In contrast to the Republicans, who arrived late and left early (if they arrived at all), all but one of the Democrats arrived early and stayed late, filling up their side of the Armed Services Committee table quickly, eager to assert their new strength. As the hearing began, Senator Bill Nelson, a Florida Democrat, flashed a thumbs-up to the incoming Democratic chairman, Senator Carl Levin of Michigan.

But no sooner had Mr. Levin outlined his case for a phased pullout of troops beginning in four to six months than the new Independent Democratic hero of the hawkish wing, Senator Joseph I. Lieberman of Connecticut, began acting the role of cross-examiner, leading Gen. John P. Abizaid, the top American military commander in the Middle East, to say that such a withdrawal would increase violence and instability.

“I take it by your answer that you profoundly disagree?” Mr. Lieberman asked. With the Democrats, he meant. “We have a window of opportunity and, really, responsibility now, after the election,” he said, “to find a bipartisan consensus for being supportive of the efforts of our troops and our diplomats there to achieve success.”

To this, Senator Hillary Rodham Clinton of New York, the leading Democratic contender for the 2008 race, knocked back the remains in her coffee cup.

Her leading Republican rival, Senator John McCain of Arizona, pressed his argument that more troops were needed in Iraq. When General Abizaid disagreed, Mr. McCain called attention to the remarks of retired military officers who characterized Congressional proposals for phased withdrawal as “terribly naïve.” Mr. McCain’s protégé, Senator Lindsey Graham of South Carolina, backed him up; when the general insisted that more troops were not the solution, Mr. Graham cut him off, saying, “Do we need less?” forcing General Abizaid to say that no, that was not the solution, either.

Mrs. Clinton pressed the Democrats’ case that a change in military strategy was necessary to prod the Iraqis into taking responsibility for their own country. “Hope is not a strategy,” she told the generals. “Hortatory talk about what the Iraqi government must do is getting old. I have heard over and over again, ‘The government must do this, the Iraqi Army must do that.’ Nobody disagrees with that. The brutal fact is, it’s not happening.”

She showed she could play bipartisan with the best of them, noting that the new Iraq had failed to meet the benchmarks demanded by Mr. Nelson and Senator Saxby Chambliss of Georgia, a Republican.

“Can you offer us more than the hope that the Iraqi government and the Iraqi Army will step up to the task?” she asked.

Mr. McCain, who would have been the committee chairman had the Republicans maintained control of the Senate, arrived almost an hour late, heralded by the accelerated click of cameras.

As Mr. Nelson questioned General Abizaid, the Arizona senator stood up to confer with Senator Susan M. Collins, a moderate Republican from Maine. At this, Mr. Lieberman got up and walked to the Republican side to join them in a brief, chuckling huddle, then ambled back to his party’s side with a glance at his colleagues as if to say, “You watching?”

In his questions, Mr. Lieberman noted that he was “picking up on” points Mr. McCain and Mr. Graham had made.

Senator Evan Bayh of Indiana, the other Democratic presidential hopeful, who advocates moderation between the party’s liberal and hawkish wings, tried to emphasize that the Republicans had lost a national referendum on Iraq.

“We just had an election in our country in which the American people expressed less than total confidence in the effectiveness of our own government,” Mr. Bayh said, introducing the idea that the Iraqi government did not deserve much confidence, either.

“I mean, they say the right things,” he said, “but when the going gets tough and they have to make the hard decisions, they sort of retreat into their corner and they’re just not able to find that common ground.”

But while Democrats argued that the election had been a signal from American people that the military solution was not working, Mr. McCain said it was a message that they were unhappy with the status quo — and that only more troops could shake the stagnation.

“Many of us believe that this may not be a long-term commitment,” he said, “but at least a commitment to bring Baghdad under control, and that is not happening today.”

General Abizaid gave something to both sides, arguing for making the American teams helping to train the Iraqi military “more robust.” But he said Iraqis looked unkindly on a major increase in American troops. “They believe it undermines their gaining greater and greater authority and responsibility,” he said.

The Republican side was anchored by the departing chairman and the protector of Senate decorum, Senator John W. Warner of Virginia. He congratulated Mr. Levin, noting that they came to the Senate together 28 years ago. When Senator Jim Talent of Missouri, the only committee member seeking re-election to lose, arrived on the Republican side, Mr. Warner walked over to shake his hand.

    With Politics as Subtext, Senators Clash on Iraq, NYT, 16.11.2006, http://www.nytimes.com/2006/11/16/world/middleeast/16hearing.html?_r=1&oref=slogin

 Democrats Weigh New Power as Leaders        NYT        10.11.2006
http://www.nytimes.com/2006/11/10/us/politics/10cong.html

Democrats Weigh New Power as Leaders

November 10, 2006
The New York Times
By CARL HULSE

WASHINGTON, Nov. 9 — When Democrats take control of the Senate in January, they will immediately assume far more power to influence President Bush’s agenda, particularly his choice of executive and judicial nominations that must pass through the chamber.

By virtue of their de facto 51-to-49 majority, Democrats will now control the committees and the floor schedule — a factor Mr. Bush will have to weigh in his selection of high-level candidates. (The Senate split 49 to 49, but tipping the scales toward the Democrats are Senator-elect Bernard Sanders of Vermont, an independent who caucuses with Democrats, and Senator Joseph I. Lieberman of Connecticut, a Democrat who ran as an independent after losing in the primary.)

“It means send us more moderate people or don’t waste your time,” said Senator Richard J. Durbin of Illinois, the second-in-command and a member of the Judiciary Committee, which considers judicial nominees.

Republicans acknowledge that the shift will be a significant factor in high-profile nominations, such as any to fill Supreme Court vacancies, in the remainder of the president’s term. But they also say that the Senate tradition of respecting the rights of the minority gives them the same opportunities to influence the agenda that Democrats used during their years out of power.

“It is clearly going to be harder to get his people through, not easier,” said Senator John Cornyn, a Texas Republican and White House ally who also sits on the Judiciary Committee. “But the Senate is different from the House, and 49 Republican senators can certainly shape a piece of legislation that goes through, or if they feel it is bad enough, they have the power to kill it.”

The new majority leader, Senator Harry Reid of Nevada, promised Thursday to have a more collegial relationship with the minority Republicans than he said was shown to the Democrats over the past four years of partisanship and procedural gamesmanship.

“They’ve set a bad example in not working with us,” Mr. Reid told cheering supporters who gathered across from the Capitol to celebrate the Democrat victory. “We’re not following that example.”

In contrast to the House, the Senate has experienced more regular shifts in party control over the years — Democrats were last in the majority in 2002 — and many current members are accustomed to suddenly going from committee chairman to ranking minority member. In fact, many of the Democrats in line to take over important committees have wielded the gavel before, sometimes alongside the Republican who will be leaving the chairmanship.

For instance, Senator Carl Levin, a Michigan Democrat and a leading party voice on military issues, has led the Armed Services Committee and has a good working relationship with senior Republicans on the panel. He will now play a major role in determining the approach on Iraq.

But there are pronounced ideological differences between the incoming leaders and those they will be replacing, as well as other lingering issues. On the Intelligence Committee, Senator John D. Rockefeller IV of West Virginia, the top Democrat, has feuded with Senator Pat Roberts of Kansas, the Republican chairman, over Mr. Roberts’ reluctance to challenge the administration’s handling of intelligence preceding the Iraq war.

In what could be the biggest policy divide on the panels, Senator Barbara Boxer, the liberal California Democrat and environmental advocate, is in line to take control of the Environment and Public Works Committee from Senator James M. Inhofe of Oklahoma, who has disputed the existence of global warming.

“He thinks global warming is a hoax and I think it is the challenge of our generation,” said Ms. Boxer, who said she has a cordial working relationship with Mr. Inhofe. “We have to move on it.”

In other notable changes, Senator Robert C. Byrd, 88, the West Virginia Democrat elected to his ninth term, is expected to resume his role as chairman of the Appropriations Committee. Senator Edward M. Kennedy of Massachusetts, also re-elected, will be back at the Health, Education, Labor and Pensions Committee. Senator Joseph R. Biden Jr. of Delaware will be at the helm of the Foreign Relations Committee.

With new power, Senate Republicans said Democrats will now have to do more than criticize. “Now that Democrats will have control of Congress for the next two years, they have a new responsibility for one of the most important issues of our time,” said Amy Call, a spokeswoman for Senator Bill Frist of Tennessee, the majority leader who is retiring at the end of the year. “Quite simply, how shall we win the war on terror?”

While there will no doubt be clashes with Mr. Bush, there are also some issues where he could find the new Senate easier to work with than the old one. Democrats have been much more supportive than Republicans of Mr. Bush’s broad approach on immigration and that issue could get new traction.

Democrats have been cheered by Mr. Bush’s new bipartisan tone in recent days and say they are willing to reciprocate. But some also noted that the president laid out a very ambitious agenda for the post-election session scheduled to begin Monday under Republican control, including seeking approval of the nomination of John R. Bolton as ambassador to the United Nations. Mr. Bolton is serving as ambassador under an interim appointment after his nomination stalled in the Senate.

“The president has indicated that he understands the significance of Tuesday’s election and the need to work in a bipartisan fashion to move our nation forward,” said Senator Christopher J. Dodd, Democrat of Connecticut and a Bolton critic.

“But,” he added, “trying to jam this nomination through during a lame-duck session may indicate that the president didn’t fully hear the voice of the American public — and that is troubling.”

Democrats have complained for years that Republicans have run roughshod over the minority party in both the House and Senate, and they promise to restore more traditional processes, including having open negotiations between the House and Senate over major legislation.

With the pickup of six Senate seats that even he did not anticipate, Mr. Reid is more than secure in his post as party leader, with Mr. Durbin as the assistant leader. The party is exploring ways to recognize the leadership role of Senator Charles E. Schumer of New York. Mr. Schumer, the architect of the Democrats’ triumph as head of the Democratic Senatorial Campaign Committee, has been invited to lead that group for the 2008 elections if he chooses.

In the House, Representative Rahm Emanuel of Illinois, who led the successful campaign effort there, announced Thursday that he would seek to lead the Democratic conference — the fourth-ranking leadership slot. The decision could earn Mr. Emanuel, 47, further goodwill by averting a potentially divisive contest for the majority whip position with Representative James E. Clyburn of South Carolina.

“I seek this post, and not any other, because I believe what we need now is a unified Democratic caucus, focused squarely on the business of moving this country forward,” Mr. Emanuel said in a statement.

    Democrats Weigh New Power as Leaders, NYT, 10.11.2006, http://www.nytimes.com/2006/11/10/us/politics/10cong.html

S.E.C. Inquiry on Hedge Fund Draws Scrutiny

October 22, 2006
The New York Times
By WALT BOGDANICH and GRETCHEN MORGENSON

By the evening of June 20, 2005, the government’s investigation of possible insider trading by Pequot Capital Management, a prominent hedge fund, had reached a critical stage.

Throughout the day, Robert Hanson, a branch chief in the Washington office of the Securities and Exchange Commission, had been questioning his lead investigator in the case about taking the testimony of John J. Mack, an influential Wall Street executive.

The investigator, Gary J. Aguirre, was trying to find out if Mr. Mack had obtained inside information about a merger and passed it to his friend, Pequot’s founder, Arthur J. Samberg.

Finally at 8:25 p.m., Mr. Hanson sent Mr. Aguirre a message from his BlackBerry expressing enthusiasm about the inquiry. “Okay Gary you’ve given me the bug,” he wrote, according to confidential S.E.C. documents. “I’m starting to think about the case during my non work hours.”

But three days later, the investigation abruptly changed course. Mr. Aguirre later told a Senate committee that after news broke that Mr. Mack was being considered to run Morgan Stanley, his supervisor said he could not interview the executive because of his political power. Mr. Aguirre protested and was eventually fired in September 2005, just days after receiving a two-step merit pay increase.

Mr. Mack and Mr. Samberg have both repeatedly denied any improper conduct. Earlier this month, the S.E.C. informed them that it would not bring any charges.

Now, it is the S.E.C. that is under scrutiny. Two Senate committees — Finance and Judiciary — are investigating how diligently the S.E.C. pursued its Pequot inquiry, whether Mr. Aguirre’s firing was an attempt to silence him, and whether senior S.E.C. officials gave special treatment to Mr. Mack by not taking his testimony when Mr. Aguirre wanted to. Mr. Mack, a major fund-raiser for President Bush’s 2004 campaign, was eventually interviewed last August, after Congress began asking questions.

The congressional inquiry centers on dozens of pages of internal S.E.C. documents that Mr. Aguirre turned over to Congress and were obtained by The New York Times. The documents, including e-mail messages from Mr. Samberg and his associates, as well as contemporaneous e-mails from investigators, provide the first inside look at the case, and shed light on why the two Senate panels are interested in the matter.

The primary focus of the congressional inquiry is the S.E.C.’s investigation into Pequot’s purchase of stock in Heller Financial, a financial services firm, and the dispute over taking Mr. Mack’s testimony. The documents say that Pequot became the nation’s biggest purchaser of Heller stock in the four weeks before the company was acquired by GE Capital in July 2001. Mr. Samberg bet $44 million on Heller and wanted to invest even more, according to the documents, but his trader could not fill all the orders.

The file shows that after Mr. Aguirre was blocked from questioning Mr. Mack about the Heller deal, Mr. Hanson, the S.E.C. branch chief, acknowledged in e-mail messages that he had discussed Mr. Mack’s “political clout” and the “juice” of his lawyers with officials at the commission.

In an exchange of e-mails in the summer of 2005, Mr. Hanson said that he had merely been trying to “alert folks above me,” and that politics did not influence S.E.C. decisions. Mr. Aguirre replied: “Bob, this is spin. You told me it would be tough to take Mack’s testimony because he has political clout.”

In the documents, S.E.C. officials argued that Mr. Aguirre was not justified in taking Mr. Mack’s testimony because he could not show that Mr. Mack had inside information or a clear motive for giving it to Mr. Samberg. But Mr. Aguirre said he was only asking for permission to interview Mr. Mack, not bring charges.

The file portrays the S.E.C. as a place where stock exchange referrals of suspected insider trading can languish for years without serious investigation.

In the Pequot case, senators are examining how the S.E.C. handled a total of 18 referrals. In addition to the Heller deal, they include an investigation involving federal prosecutors into whether the hedge fund bought Microsoft options based on inside information. E-mails show that Mr. Samberg solicited information about the software company’s financial performance from a Microsoft manager he was recruiting shortly before Pequot invested in the company.

“I shouldn’t say this, but you have probably paid for yourself already!” Mr. Samberg wrote to the former Microsoft manager as he was preparing to join Pequot in 2001.

None of the 18 referrals, including the one involving Microsoft, led to an enforcement action, according to people briefed on the matter.

Mr. Aguirre’s documents have surfaced amid rising concern on Capitol Hill about the lightly regulated world of hedge funds. The chairman of the finance committee, Senator Charles E. Grassley, Republican of Iowa, said last week that after questioning S.E.C. officials about the Pequot investigation, “my initial concerns haven’t been put to rest by what I’ve learned so far.”

The file is not a full record of Mr. Aguirre’s investigation, and it is silent about what happened in the inquiry after he left the commission. In the papers, Mr. Aguirre acknowledged before his firing that he had not proved that Pequot had engaged in insider trading, or that Mr. Mack ever had inside information about Heller.

Since The New York Times first reported Mr. Aguirre’s allegations last June, the inspector general for the S.E.C. reopened his investigation into the firing after it was disclosed that he had not interviewed Mr. Aguirre. The inspector general, whose conduct is also being examined by the Senate, declined to comment.

Mr. Aguirre declined to be interviewed for this article, but in an Aug. 21 letter, he told the banking committee, which oversees the S.E.C., that he had little faith in either investigation. “The same I.G. who did the first whitewash would do the new one,” he wrote. “The senior enforcement attorneys who pretended no grounds existed to take Mack’s testimony will now pretend to take Mack’s testimony.”

In a statement, Jeanmarie McFadden, a spokeswoman for Morgan Stanley, said: “Mr. Aguirre’s allegations against John Mack are irresponsible and without any evidence whatsoever to support them. John Mack had nothing to do with the S.E.C.’s decision if or when it would seek his testimony. As soon as he was asked, John Mack immediately agreed to provide his testimony and was subsequently advised that the S.E.C. would take no action regarding him in this matter.”

Jonathan Gasthalter, a Pequot spokesman, said in a statement: “The S.E.C. staff conducted an extensive, two-year investigation of Pequot’s trading and that investigation is over. During the course of the S.E.C.’s investigation, the U.S. attorney for the Southern District of New York reviewed the firm’s 2001 trades in Microsoft and concluded that no action was warranted.”

Officials at the S.E.C. declined to comment on the Pequot investigation and its outcome. But Walter G. Ricciardi, deputy director of enforcement, said that if investigators uncovered evidence that supported an insider trading case, they would pursue it vigorously. He denied Mr. Aguirre’s contention that referrals from the stock exchanges languish, saying that the commission’s staff follows up on three-quarters of the 350 to 450 referrals received each year.

“Insider trading is a very big priority for us,” Mr. Ricciardi said. “We recognize that the integrity of the marketplace is at stake.”

Focusing on the Heller Deal

The following account is largely based on the investigative files and letters Mr. Aguirre sent to Senate investigators in August.

According to these records, two days after joining the commission in September 2004, Mr. Aguirre was assigned to look into suspicious trading by Pequot in an information management company shortly before it was acquired in 2003.

In a matter of months, Mr. Aguirre said he discovered 13 referrals involving Pequot that had not been fully investigated by the S.E.C. Eventually, he would look into 18 referrals, including one older one where Pequot suddenly began buying the stock of Heller Financial.

That referral soon became the focus of the S.E.C.’s Pequot investigation.

What intrigued federal investigators, Mr. Aguirre said, was that before buying Heller stock, Mr. Samberg apparently did not follow the financial services industry or Heller. Mr. Samberg’s bet had paid off: On July 30, 2001, the GE Capital Corporation announced that it was buying Heller, sending Heller’s stock up 50 percent. Pequot made $18 million on the deal, primarily by investing in Heller, but also by short-selling GE Capital’s parent, General Electric, which dropped on news of the buyout.

After the deal was announced Mr. Samberg sent an e-mail containing six “smiley” faces, Mr. Aguirre said.

According to Mr. Aguirre, Mr. Samberg told the S.E.C. in May 2005 that he had six reasons for buying Heller stock, including the company’s strong financial model, analysts’ reports and speculation that Heller might be a takeover candidate.

But Mr. Aguirre says that when Mr. Samberg testified a second time in June, he was less certain, saying he had “no recollection specifically of how I started the Heller investment other than to know that I had been doing this for many years and recognized these opportunities when they come up.”

Mr. Samberg said he could not recall seeing any newspaper articles about Heller or point to any specific analysts’ reports he had read about the company, according to an e-mail Mr. Aguirre sent to his supervisor, Mr. Hanson, on June 27, 2005. Nor did Mr. Samberg remember speaking with others at Pequot about the deal, Mr. Aguirre wrote. After Mr. Aguirre was fired, the S.E.C. interviewed Mr. Samberg a third time, but the files do not reflect what he said.

Microsoft Trading Raises Concern

Beyond Mr. Samberg’s testimony, Mr. Aguirre said his suspicions were fueled by Pequot’s trading in Microsoft.

In early 2001, Mr. Samberg sought financial information on Microsoft from a product manager at the company, David Zilkha, whom he was trying to recruit, according to Mr. Aguirre.

“Might as well pick your brain before you go on the payroll,” Mr. Samberg wrote in an e-mail message to Mr. Zilkha on Feb. 28, 2001. After expressing unhappiness with Pequot’s research on Microsoft, Mr. Samberg asked: “Do you have any current views that could be helpful?”

On April 6, 2001, Mr. Samberg pressed Mr. Zilkha about Microsoft’s upcoming earnings report. “Any tidbits you might care to lob in,” Mr. Samberg asked in an e-mail, after noting “the recurring indications from knowledgeable people” that Microsoft’s earnings might fall short.

Mr. Zilkha responded the next day, saying he would get back to him “ASAP.”

There is no record of Mr. Zilkha’s response or evidence that he passed information to Mr. Samberg.

Mr. Aguirre told the banking committee that between April 9 and 11, 2001, Mr. Samberg bought 30,000 options contracts, apparently believing Microsoft “would beat its earnings, the reverse of his belief stated in his e-mail.”

A little more than a week later, on April 19, Microsoft reported better-than-expected earnings, sending its stock sharply higher the next day. Mr. Samberg made a $12 million profit on his Microsoft options, Mr. Aguirre said. The next day Mr. Samberg sent Mr. Zilkha, still three days away from joining Pequot, the gushing e-mail that said, “you have probably paid for yourself already.” On Mr. Zilkha’s first day on the job, Mr. Samberg alerted others to the new employee’s “great p.& l.” — or profit and loss — based on his Microsoft “input.”

Mr. Aguirre told the banking committee that “critical gaps in the evidence” prevented the S.E.C. from charging anyone with insider trading in connection with the Microsoft investigation. The Justice Department also took no action.

Mr. Zilkha, who no longer works for Pequot, declined to comment. But his lawyer, Henry Putzel III, issued a statement: “David Zilkha worked in a nonfinancial capacity, primarily in marketing for the MSN division of Microsoft. For approximately five months before his employment at Pequot, Mr. Zilkha was on family leave from Microsoft. David Zilkha never obtained and did not communicate any material, nonpublic information, nor did he attempt to do so.”

A Dispute Over Testimony

The Zilkha e-mail messages fed Mr. Aguirre’s belief that Mr. Samberg might have had nonpublic information when, around the same time, he invested in Heller Financial. His suspicion fell on Mr. Mack, a longtime friend of Mr. Samberg’s who was Pequot’s chairman for several weeks in June 2005. “There are hundreds of Pequot e-mails referring to Mack, including a dozen in July 2001,” Mr. Aguirre wrote in a June 2005 e-mail message to S.E.C. officials.

None of those e-mails show Mr. Mack passing on any tips about the Heller deal. Nor do they prove that he even knew about the deal before Pequot started buying Heller stock on July 2, 2001.

But what the e-mails and trading records do show, Mr. Aguirre believed, was enough circumstantial evidence to warrant taking Mr. Mack’s testimony — a standard procedure in such a situation, he said — and to issue more subpoenas to Credit Suisse First Boston, the investment bank that advised Heller during its talks with G.E. Mr. Mack became chief executive of Credit Suisse in July 2001.

In e-mails to S.E.C. officials in the summer of 2005, Mr. Aguirre made his case, noting that Mr. Samberg and Mr. Mack were close and trusted each other, and that Mr. Mack was allowed to invest in hot Pequot funds and financings. In addition, Mr. Aguirre speculated that Mr. Mack might have learned about the upcoming Heller-GE Capital deal while negotiating his job with Credit Suisse. Mr. Mack began at Credit Suisse on July 12, 2001, a little more than a week after Pequot began buying Heller stock. Pequot continued to buy Heller stock in the following weeks.

“Samberg’s aggressive buying of Heller suggests he received the tip shortly before July 2,” Mr. Aguirre said in an e-mail to Mr. Hanson, his S.E.C. supervisor. And Pequot’s e-mails show that Mr. Samberg and Mr. Mack spoke after the market closed on Friday, June 29, according to Mr. Aguirre. “That matched perfectly with Samberg’s decision to begin buying Heller with a vengeance the next trading day after he spoke with Mack,” Mr. Aguirre said in his letter to the banking committee.

The committee files show that until late June of last year, S.E.C. officials appeared to support Mr. Aguirre’s investigation. Around that time, Mr. Aguirre said, his supervisors authorized him to contact the Federal Bureau of Investigation and a federal prosecutor about the investigation.

But when Morgan Stanley was considering hiring Mr. Mack as chief executive, Mr. Aguirre said, a regulatory official at the investment bank called to ask if Mr. Mack was a serious target in the Pequot investigation. The official “explained that the prospect of such an action against Mack could affect Morgan Stanley’s decision whether to rehire him as its C.E.O.,” Mr. Aguirre told the banking committee.

Before answering, Mr. Aguirre said, he consulted with his two supervisors, Mr. Hanson and Mark Kreitman, an assistant director of enforcement at the agency. According to Mr. Aguirre, Mr. Kreitman favored telling Morgan Stanley that Mr. Mack was indeed a target, but first he informed his boss, Paul R. Berger, an associate director of enforcement, by speakerphone.

With Mr. Aguirre listening in, Mr. Berger quickly overruled Mr. Kreitman, saying in effect that the S.E.C. would most likely not file charges against Mr. Mack and that nothing should be said to Morgan Stanley, Mr. Aguirre said.

Mr. Aguirre was stunned. He told the banking committee that after the call, “The usual routines and protocols went out the window.” Suddenly, Mr. Aguirre said, he was excluded from senior staff meetings about the Pequot investigation. And subpoenaed records that ordinarily would go directly to him were instead directed to Linda Thomsen, the agency’s chief of enforcement, he said.

Mr. Berger, now a lawyer at Debevoise & Plimpton, declined to comment.

For the next two months, Mr. Aguirre pressed his superiors for permission to take Mr. Mack’s testimony. He failed to change their minds.

“I need greater specificity than the information provided here,” Mr. Kreitman wrote in a July 25, 2005, e-mail to Mr. Aguirre. Mr. Kreitman said the evidence of motive “may have substance but it’s too vague.” And while contacts between Mr. Mack and Mr. Samberg “were potentially significant,” they were not “aberrational.”

“I have indicated repeatedly that concrete evidence of when Mack obtained access to material nonpublic information re the G.E./Heller deal is the sine qua non for focused investigation of Mack,” Mr. Kreitman wrote.

To Mr. Aguirre, this standard had not been applied to other executives he had subpoenaed. Just as troubling, he said, were references by Mr. Hanson to the power of Mr. Mack and his lawyers, who included former S.E.C. officials.

“Mack’s counsel will have ‘juice,’ as I described last night — meaning that they may reach out to Paul and Linda (and possibly others),” Mr. Hanson told Mr. Aguirre in an e-mail on Aug. 4, 2005. The reference apparently was to Mr. Berger and Ms. Thomsen.

Three weeks later, on Aug. 24, Mr. Hanson again acknowledged Mr. Mack’s status. “Most importantly the political clout I mentioned to you was a reason to keep Paul and possibly Linda in the loop on the testimony,” Mr. Hanson wrote. But he added: “As far as I know politics are never involved in determining whether to take someone’s testimony. I’ve not seen it done at this agency.”

Mr. Aguirre disputed Mr. Hanson’s account, calling it “spin,” and added: “An artificially high barrier has been set for his exam. I do not think this is proper.”

Mr. Ricciardi of the S.E.C., speaking generally, said, “Every day enforcement deals with powerful people and we treat them equally with an appropriate level of fairness for the people being investigated and fierceness for the investors we protect.” He also said that lawyers representing possible targets often approach top enforcement officials. “They don’t have to be a famous lawyer, and they don’t have to have a famous client,” he said.

An S.E.C. spokesman declined to provide comments from Mr. Kreitman, Mr. Hanson or Ms. Thomsen.

By the end of August, Mr. Aguirre was complaining that the Heller investigation “has slowed to a snail’s pace.” He was fired about a week later while on vacation.

In late August of this year, Senator Grassley, the finance committee chairman, wrote to the S.E.C. chairman, Christopher Cox, raising questions about how the agency handled the investigation. He wrote that congressional investigators had found that the S.E.C.’s Heller inquiry had stopped, and had resumed only after Congress began looking at the matter.

Senator Grassley also took the inspector general’s office to task, saying it had shown little interest in Mr. Aguirre’s contention that Mr. Mack’s political clout was a factor in not taking his testimony last year.

The inspector general “closed its inquiry, claiming it found no evidence that S.E.C. officials had referenced Mack’s political clout,” Mr. Grassley wrote, adding, “Contrary to the I.G. report, however, documentary evidence exists and corroborates” that assertion.

    S.E.C. Inquiry on Hedge Fund Draws Scrutiny, NYT, 22.10.2006, http://www.nytimes.com/2006/10/22/business/22hedge.html?hp&ex=1161576000&en=6d37c7b362a14057&ei=5094&partner=homepage

Senator Reid Used Donations for Condo Tips

October 17, 2006
The New York Times
By THE ASSOCIATED PRESS

WASHINGTON, Oct. 16 (AP) — The Senate Democratic leader, Harry Reid of Nevada, has been using campaign donations instead of his personal money to pay Christmas bonuses for the support staff at the Ritz-Carlton hotel here, where he lives in a condominium.

Federal election law bars candidates from converting political donations for personal use.

Questioned about the campaign expenditures, Mr. Reid’s office said Monday that his lawyers had approved them but that he nonetheless was personally reimbursing his campaign for the $3,300 he had directed to the staff holiday fund at his residence.

The bonuses — $600 in 2002, $1,200 in 2004 and $1,500 in 2005 — went from Mr. Reid’s re-election campaign to an entity listed as the REC Employee Holiday Fund. His campaign listed the expenses as campaign “salary” for two years, which Mr. Reid said was a clerical error, and as a “contribution” one year.

Mr. Reid also announced he was amending his ethics reports to Congress to account more fully for a Las Vegas land deal, highlighted in an Associated Press article last week, that allowed him to collect $1.1 million in 2004 for property he had not personally owned in three years.

In that matter, the senator had not disclosed to Congress that he first sold land to a friend’s limited liability company back in 2001 and took an ownership stake in the company. He collected the seven-figure payout when the company sold the land again in 2004 to others.

Mr. Reid portrayed the 2004 sale as a personal sale of land, not mentioning the company’s ownership or its role in the sale.

    Senator Reid Used Donations for Condo Tips, NYT, 17.10.2006, http://www.nytimes.com/2006/10/17/washington/17reid.html

Virginia Senator Did Not Disclose Stock Options

October 9, 2006
The New York Times
By THE ASSOCIATED PRESS

RICHMOND, Va., Oct. 8 (AP) — For the past five years, Senator George Allen, Republican of Virginia, has failed to tell Congress about stock options he got for his work as a director of a high-tech company.

Congressional rules require senators to disclose to the Senate all deferred compensation, like stock options. The rules also urge senators to avoid taking any official action that could benefit them financially or appear to do so.

Mr. Allen’s stock options date to the period from January 1998 to January 2001, after his term as governor of Virginia and before he took office as senator.

The Associated Press reviewed his financial dealings from that time and found that he had twice failed to promptly alert the Securities and Exchange Commission of insider stock transactions as a director of Xybernaut and of Commonwealth Biotechnologies.

In interviews, Mr. Allen and his staff sought to play down his corporate dealings, saying they were a good learning experience but did not lead to any large amounts of money — except for a $250,000 windfall from Com-Net Ericsson stock.

Mr. Allen’s office said he had sold his Xybernaut stock at a loss and had not cashed in his Commonwealth options because they cost more than the stock is now worth.

“I actually got no money out of Xybernaut,” he said. “I got paid in stock options, which were worthless.”

Mr. Allen’s office said he did not report his Commonwealth options because their purchase price was higher than the current market value. Mr. Allen viewed them as worthless and believed he did not have to report them, aides said.

Kathleen Clark, a law professor at Washington University of St. Louis, a former prosecutor and a former Democratic Congressional aide, said, “As an ethical matter, it’s irrelevant whether the exercise price of those stock options is above or below the current market price.”

“If he owns stock options,” Ms. Clark added, “he does have such a financial stake, whether the exercise price is above or below current market value.”

Mr. Allen’s office acknowledged that he had met socially over the years with company executives and that his office had granted “routine courtesy meetings” to company lobbyists “to hear their opinion on legislation and issues before the federal government.”

John Reid, a spokesman for Mr. Allen, said he was aware of only one time that Mr. Allen’s office had helped any of his former companies. That came in December 2001 when Mr. Allen asked the Army to resolve a lingering issue with Xybernaut. The company asked Mr. Allen to intervene, and he urged the Army to give Xybernaut an answer, Mr. Reid said.

At the time, Mr. Allen still owned options to buy 110,000 shares of Xybernaut stock, which could have been affected by any new federal contracts.

The Army answered but did not give Xybernaut what it wanted, and Mr. Allen did nothing more, Mr. Reid said.

    Virginia Senator Did Not Disclose Stock Options, NYT, 9.10.2006, http://www.nytimes.com/2006/10/09/washington/09allen.html

Warner’s Iraq Remarks Surprise White House

October 7, 2006
The New York Times
By SHERYL GAY STOLBERG

WASHINGTON, Oct. 6 — The White House, caught off guard by a leading Republican senator who said the situation in Iraq was “drifting sideways,” responded cautiously on Friday, with a spokeswoman for President Bush stopping short of saying outright that Mr. Bush disagreed with the assessment.

“I don’t believe that the president thinks that way,” Dana Perino, the deputy White House press secretary, said when asked whether the president agreed with the senator, John Warner of Virginia. “I think that he believes that while it is tough going in Iraq, that slow progress is being made.”

Ms. Perino’s carefully worded response underscores the delicate situation that Mr. Warner, chairman of the Armed Services Committee, has created for the White House just one month before an election in which Mr. Bush has been trying to shift the national debate from the war in Iraq to the broader war on terror.

Speaking to reporters on Thursday after returning from a trip that included a one-day stop in Baghdad, Mr. Warner said the United States should consider “a change of course” if the violence there did not diminish soon. He did not specify what shift might be necessary, but said that the American military had done what it could to stabilize Iraq and that no policy options should be taken “off the table.”

With the blessing of the White House, a high-level commission led by James A. Baker III, the former secretary of state, is already reviewing American policy in Iraq. But the commission is not scheduled to report to Mr. Bush and Congress until after the November elections, a timeline that the White House had hoped would enable Mr. Bush to avoid public discussion of any change of course until after voters determine which party will control Congress next year.

Now, Mr. Warner’s comments are pushing up that timeline, forcing Republicans to confront the issue before some are ready. In an interview on Friday, Senator Susan Collins, a Maine Republican who has been critical of the administration’s approach in the past, said there was a “growing sense of unease” among other Republicans, which she said could deepen because of Senator Warner’s comments.

Ms. Collins, who is the chairwoman of the Senate Homeland Security Committee, echoed Mr. Warner’s calls for a shift in strategy in Iraq. “When Chairman Warner, who has been a steadfast ally of this administration, calls for a new strategy,” she said, “that is clearly significant.”

She said the current approach, which she attributed to Secretary of Defense Donald H. Rumsfeld, had not led to an overall reduction in violence or any prospect that American troop levels would come down soon.

“We’ve heard over and over that as Iraqis stand up, our troops will stand down,” Ms. Collins said. “Well, there are now hundreds of thousands of Iraqi troops and security forces, and yet we have not seen any reduction in violence.”

Democrats, who have been using their fall election campaigns to tap into intense voter dissatisfaction with the way that Mr. Bush has handled Iraq, quickly seized on the Warner remarks, circulating them in e-mail messages to reporters. Senator Joseph R. Biden Jr., the senior Democrat on the Foreign Relations Committee, convened a conference call on Friday afternoon to hammer home the theme that even Republicans believed that the administration must change course. “Warner’s statement is an important, important statement and, I hope, a turning point,” Mr. Biden told reporters.

He that at least two Republican colleagues other than Mr. Warner had told him that once the election was over, they would join with Democrats in working on a bipartisan plan for bringing stability to Iraq. Echoing Mr. Warner’s language, he said, “I wouldn’t take any option off the table at this time. We are at the point of no return.”

The White House said Friday that Mr. Bush had not spoken to Mr. Warner about his comments, and otherwise insisted that it had not glossed over the problems in Iraq. During her afternoon briefing, Ms. Perino harked back to a speech in late August in which, she said, the president said Iraq was at a “crucial moment.” She said Secretary of State Condoleezza Rice had put forth the same message during her unannounced visit to Baghdad this week.

Later in the day, the White House circulated an e-mail message titled “Iraq Update: Political Progress,” citing comments of other lawmakers, including Democrats, who had returned from the Middle East with more hopeful assessments than the one offered by Mr. Warner.

David S. Cloud contributed reporting.

    Warner’s Iraq Remarks Surprise White House, NYT, 7.10.2006, http://www.nytimes.com/2006/10/07/world/middleeast/07capital.html?hp&ex=1160280000&en=d127e25ac8d82c04&ei=5094&partner=homepage

Same - Sex Rite Stalls Judge Nomination

October 6, 2006
By THE ASSOCIATED PRESS
Filed at 12:28 p.m. ET
The New York Times

WASHINGTON (AP) -- A Republican senator is holding up a Michigan judge's nomination to the federal bench because she reportedly helped lead a commitment ceremony for a lesbian couple four years ago.

Sen. Sam Brownback of Kansas, an opponent of gay marriage who has presidential aspirations, said Friday he wants to know whether there was anything illegal or improper about the ceremony in Massachusetts.

He also said he wants to question Michigan Court of Appeals Judge Janet T. Neff about her views on gay marriage and how her actions might shape her judicial philosophy.

''It seems to speak about her view of judicial activism,'' Brownback said. ''That's something I want to inquire of her further.''

The Senate Judiciary Committee last week approved Neff's nomination for a seat on the U.S. District Court in Michigan's Western District. Her nomination is now pending before the full Senate.

A single senator can block a nomination from moving forward by placing a hold on it.

A White House spokesman did not immediately return a call seeking comment on Friday. Neff has not returned phone calls this week.

Brownback said Republican activists in Michigan expressed concerns about Neff after seeing her name in a September 2002 New York Times ''Weddings/Celebrations'' announcement. It said Neff led the commitment ceremony for Karen Adelman and Mary Curtin with the Rev. Kelly A. Gallagher, a minister of the United Church of Christ.

While commitment ceremonies marking the union of same-sex couples have grown increasingly common, they are largely symbolic and carry no legal benefits. Brownback said he wanted to find out whether Neff may have presided over ''an illegal marriage ceremony'' that skirted Massachusetts law, which did not recognize gay marriages at the time.

The state later legalized gay marriage in 2004 -- the only state to do so -- after a ruling from its highest court.

Sen. Carl Levin, D-Mich., who learned about the ceremony this week, said based on the newspaper announcement it didn't sound like Neff did anything illegal.

''There's no reason why two people can't stand up and exchange commitments with each other provided they don't do anything illegal,'' Levin said.

Brownback cited recent instances in California and New York where local officials issued marriage licenses to same-sex couples contrary to existing laws.

''I don't know what she did,'' Brownback said. ''That's why there's a factual question.''

Brownback has asked the U.S. Justice Department for a formal legal opinion in addition to asking Neff specific questions.

Joe Solmonese, president of the gay rights group Human Rights Campaign, said commitment ceremonies ''have nothing to do with the law. This was a symbolic expression of love between two people.''

''This is nothing more than Sam Brownback looking for another opportunity to rear his bigoted head and find a way to attack gay people,'' Solmonese said.

Neff, 61, has served on the Michigan Court of Appeals since 1989. She was nominated by President Bush in June -- along with Grand Rapids attorney Robert Jonker and Berrien County Circuit Judge Paul Maloney -- to fill three vacancies on the district court.

Levin said Neff was nominated along with Jonker and Maloney as part of an agreement he and Sen. Debbie Stabenow, D-Mich., reached with the White House. Brownback said Neff has a more liberal reputation while Jonker and Maloney are considered conservatives.

Bush has long advocated a ban on gay marriage. In July, a proposed constitutional amendment to ban same-sex marriage failed to win the needed two-thirds support in both the Senate and House.

Forty-five states have either constitutional amendments banning gay marriage or statutes outlawing same-sex weddings. Twenty states, including Michigan, have approved bans on same-sex marriage and eight states are considering similar measures in November.

    Same - Sex Rite Stalls Judge Nomination, NYT, 6.10.2006, http://www.nytimes.com/aponline/us/AP-Judge-Gay-Marriage.html

Senator Says U.S. Should Rethink Iraq Strategy

October 6, 2006
The New York Times
By DAVID S. CLOUD

WASHINGTON, Oct. 5 — The Republican chairman of the Senate Armed Services Committee warned Thursday that the situation in Iraq was “drifting sideways” and said that the United States should consider a “change of course” if violence did not diminish soon.

The chairman, Senator John W. Warner of Virginia, expressed particular concern that Prime Minister Nuri Kamal al-Maliki had not moved decisively against sectarian militias.

“In two or three months if this thing hasn’t come to fruition and this level of violence is not under control, I think it’s a responsibility of our government to determine: Is there a change of course we should take?” Senator Warner said.

He did not specify what shift might be necessary in Iraq, but he said that the American military had done what it could to stabilize Iraq and that no policy options should be taken “off the table.” He was speaking at a Capitol Hill news conference after returning from a Middle East trip that included a one-day visit to Baghdad.

His comments underscored the growing misgivings of even senior Republicans about the situation in Iraq. They also appeared to be a warning to the Bush administration that it might have to consider different approaches after the November midterm elections.

Mr. Warner, whose term as chairman expires at the end of the year, said he hoped his committee would be able to hold hearings in November on policy options recommended by an independent panel, led by former Representative Lee H. Hamilton of Indiana and former Secretary of State James A. Baker III.

Mr. Warner said the idea of partitioning Iraq along ethnic and sectarian lines would have “very serious consequences,” and he refused to endorse the idea of setting a timetable for a phased withdrawal of American troops.

In a separate news conference, Senator Carl Levin of Michigan, the top Democrat on the committee, said he told Iraqi officials during the trip that he favored setting a date for a drawdown of troops.

Mr. Levin described a plan that Mr. Maliki announced Monday to increase security in Baghdad as “very tenuous.” The plan has no provisions for disarming sectarian militias, he said.

Mr. Levin added that the American ambassador in Baghdad, Zalmay Khalilzad, had told him during the trip that such warnings were a “useful message” to send to Mr. Maliki, though the administration had not endorsed the idea.

“I think the time is coming when the administration is going to deliver that message,” he said, “because it’s the only way, I believe, to change the dynamic in Iraq.”

    Senator Says U.S. Should Rethink Iraq Strategy, NYT, 6.10.2006, http://www.nytimes.com/2006/10/06/world/middleeast/06capital.html