September 10, 2010

From the Desk of Judicial Watch President Tom Fitton:

What is Obama’s Pay Czar’s Pay?

He was hired by the Obama administration to slash executive compensation at companies bailed out by the federal government. But now he’s involved in a salary controversy of his own. In a Washington corruption chronicles classic, the Obama administration can’t even shoot straight on the pay of its pay czar!

I’m speaking of Kenneth Feinberg, President Obama’s “Special Master for TARP Executive Compensation.” Judicial Watch recently received documents from the Treasury Department indicating that Feinberg received a $120,830 annual salary to establish executive compensation levels at companies bailed out by the federal government. We got hold of these documents pursuant to a Freedom of Information Act (FOIA) request we filed on July 20, 2010.

Now there’s nothing necessarily unusual about a federal appointee hauling in six figures. But here’s the problem: These documents contradict multiple press reports that Feinberg would not be compensated for this work for the Treasury Department at all.

When President Obama appointed Washington lawyer Feinberg “Pay Czar” in 2009, the press reported that he would perform his duties pro bono. Dozens of mainstream media stories confirmed that Feinberg, founder and managing partner of the Washington, D.C., firm Feinberg, Rozen, LLP, would not receive a salary to set pay limits for more than two dozen executives at companies receiving government bailouts.

For example, Forbes magazine reported in August 2009 (via Reuters), “Feinberg is receiving no compensation for his role.”

However, Judicial Watch has obtained the Treasury Department’s June 8, 2009, welcome letter to Feinberg, congratulating him for being selected “Special Master of Executive Compensation” and listing his annual salary at $120,830. Judicial Watch has also uncovered a “Notification of Personnel Action” from the U.S. Office of Personnel Management dated June 8, 2009, also establishing Feinberg’s salary level at $120,830.

So why the discrepancy?

Judicial Watch repeatedly attempted to get an answer from Mr. Feinberg. We also repeatedly asked Treasury Press Secretary Mark Paustenbach. We finally got a response after our release hit the wires yesterday. A representative of Mr. Feinberg finally called Judicial Watch and stated that Mr. Feinberg pays his government salary back “every two weeks.” (See his response to our report at the Washington Examiner.)

But regardless of the explanation, we have yet another reason why more of these Obama czars should go through the Senate confirmation process rather than being simply installed into power by Obama. We shouldn’t have to pepper the Obama administration with FOIA requests to know what these czars are doing and how much they’re getting paid to do it. More information about these Obama czars should be part of the public record and transparent to the American people.

(And that’s why we’ve initiated a comprehensive investigation of Obama czars. You can read more about these investigations here.)

By the way, this salary controversy is not the only ongoing Judicial Watch investigation involving Feinberg. We also have a FOIA lawsuit against the Treasury Department to obtain documents related to meetings between Feinberg, AIG Chairman Robert Benmosche, and New York Federal Reserve Bank President William Dudley.

You may recall, in March 2009, AIG disbursed $165 million in taxpayer-funded Troubled Asset Relief Program (TARP) funds to its top executives, prompting a massive public backlash. Obama officials reportedly lobbied Congress to insert legislative language allowing the AIG bonus payments and then apparently lied about their knowledge of the payment scheme. The meetings at issue in Judicial Watch’s FOIA request took place in November 2009, just weeks after Feinberg publicly announced pay cuts and salary caps for AIG’s top paid executives.

Like Obama’s other czars, Feinberg wields a tremendous amount of power, yet there is too little transparency regarding his activities. This is a dangerous combination.

“Government Motors” Fills Political Coffers

So much for GM’s self-imposed ban on political contributions. According to The Washington Post:

General Motors reported making $47,000 in contributions to lawmakers and congressional candidates in July, the first it has made since November 2008. The company stopped giving through its political action committee just as it began to seek government assistance to stay in business.

The U.S. government provided support but also steered the company through bankruptcy. Today, the Treasury owns a 60 percent stake in the company, which recently announced plans to go public with a stock sale.

GM earlier gave $41,000 to groups and causes associated with lawmakers. The latest contributions were made directly to lawmakers’ campaigns.

The Post notes the fact that GM is spreading the wealth around to both political parties: $26,000 to Republicans and $21,000 to Democrats. I found for you the list of the GM PAC recipients from the Federal Election Commission:

Now it should go without saying that a company that is owned and operated by the government has no business making campaign contributions to members of Congress, no matter how the company tries to spin it. But this is exactly the kind of suspicious, shady and corrupt arrangement we can expect now that the government has decided to meddle so obtrusively into the private sector.

I checked with a spokesman for the Corporation for Public Broadcasting (CPB), another “private” corporation funded and controlled by the federal government. He told me that CPB does not have a PAC.

You may recall I called attention to another conflict of interest when the government provided a $527 million loan to the auto company Fisker, which then used the funds to purchase a former GM plant. (Vice President Biden was also caught up in the controversy, as the plant is located in Delaware, Biden’s home state. Read more here.)

While the political activities of GM are particularly offensive given the government’s considerable ownership stake, other companies bailed out with taxpayer dollars also continue to fill the political coffers according to Fox News:

Several companies that escaped financial failure two years ago through massive taxpayer-funded bailouts are spending millions of dollars to make donations to political causes and even some candidates’ campaigns.

General Motors, Chrysler and Citigroup are just three of the biggest bailout recipients who have continued to remain politically active, through their political action committees, federal lobbying or direct donations to the pet projects of lawmakers.

Getting back to GM, its ban on political contributions ought to be made permanent, at least until such time as the government has relinquished its ownership stake. Politicians on both sides of the aisle, such as Rep. Eric Cantor (R-VA) and Sen. Chuck Schumer (D-NY), who received GM PAC contributions, should return them immediately.

Government corporations giving money to politicians to help them run for government office: Does it get any more corrupt than that?

Your Judicial Watch is on the case. Our investigators sent a Freedom of Information Act request August 26 to GM’s overlords at the Treasury Department about these scandalous contributions. I’ll be sure to let you know what we find out.

Ted Kennedy’s FBI Secrets

On a wide range of investigations — from the financial bailouts to ACORN corruption to the collapse of Fannie and Freddie — the Obama White House continues finding excuses to keep critical government documents secret.

The motivation seems obvious: These documents might just link the Obama administration and key allies in Congress to unethical and perhaps even criminal activity. Or, in the very least, government documents might provide a source of embarrassment for the administration.

It seems that the political sensitivity may extend to the beyond in the case of FBI documents about the late Senator Edward “Ted” Kennedy.

Since May, Judicial Watch has been battling the Obama Administration over documents related to Kennedy’s FBI file. When the FBI balked and reports suggested that the Kennedy family (represented by none other than Obama pay czar Ken Feinberg!) would help vet what would be released, we sued and forced the release of much of Kennedy’s FBI file.

Most of the media focused on the FBI material related to numerous death threats directed at Ted Kennedy. The Washington Post suggested that the threats “may have contributed to his reckless behavior over the years.”

Well, that’s certainly an interesting theory. Ted Kennedy was corrupt and reckless because he was the subject of death threats!

But some might find FBI information on Ted Kennedy’s fellow travelers more interesting.

According to the FBI files, Kennedy’s father, Joseph P. Kennedy, called the Bureau in 1954 to complain about a news story about to be published indicating that “Teddy” was denied the opportunity to attend school at Ft. Holabird, MD, while in the U.S. Army because of “an adverse FBI report which linked him to a group of ‘pinkos.’”

The report further indicates that during a 1961 tour to Central and South American countries, Kennedy “expressed an interest in meeting with ‘Leftists’ to talk with them and determine why they think as they do. Kennedy met with a number of individuals known to have communist sympathies,” the report notes. While in Mexico City, Kennedy asked the Ambassador to set up interviews at the Embassy with communists. The Ambassador refused.

The FBI also documents a 1961 meeting between Kennedy and the notorious Dr. Lauchlin Bernard Currie, an alleged Soviet spy.

These meetings took place just months before Kennedy entered national politics and laid the groundwork for the radical leftist policies he advocated during his almost 47 years in the U.S. Senate.

And just this week, Judicial Watch obtained 23 new pages of documents regarding Kennedy’s activities.

The newly released FBI documents include a memo dated March 28, 1963, that details the FBI’s concerns over an effort by Edward and Robert Kennedy to pressure the State Department to allow Katalin Karady, a Hungarian émigré living in Brazil, to enter the United States:

Legat, Rio de Janeiro, has furnished data from State Department files, Sao Paulo, Brazil indicating that in August, 1961, Edward and Robert Kennedy, now U.S. Senator and Attorney General, respectively, were interested in [Katalin Karady’s] obtaining an immigrant visa to U.S. Subject is former Hungarian actress of unsavory reputation who has now obtained the immigrant visa…

…Subject, Hungarian-born, aged 48, is former well-known actress in Hungary. Numerous allegations have been received in the past indicating subject to have been a communist collaborator, lesbian, and prostitute. She has reportedly admitted being the fiancée of the head of Hungarian intelligence (Nazi) during World War II.

(FBI Director J. Edgar Hoover seems to have handwritten the note “I am speechless!” at the bottom of this memo.)

However, while we have been successful in obtaining these Kennedy FBI documents, the Obama White House continues to keep others under lock and key. We are still fighting to obtain an additional 71 pages of documents currently being withheld by the FBI.

In the Freedom of Information “world,” the release of a deceased person’s FBI file is a relatively straightforward matter. But not for Ted Kennedy. We had to file a lawsuit and fight over documents that reference events from nearly 50 years ago. Remember this the next time you hear Obama promote his administration’s “transparency.” It is a big lie.

(This piece is scheduled to run on Sunday in the Pittsburgh Tribune-Review.)

Until next week…

Tom Fitton
President

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