Saturday, January 21, 2006

Democrats want ethics committee to probe 'day trading' allegations
01/19/2006 @ 11:57 am
Filed by John Byrne

After a comment by Rep. Louise Slaughter (D-NY) on Air America's Majority Report Wednesday evening, RAW STORY has learned that House Democrats are pushing the ethics committee to investigate allegations of congressional offices providing privleged information to Wall Street investors.

On Air America, Slaughter alleged that "day traders" in the offices of Senate Majority Leader Bill Frist (R-TN) and former House Majority Leader Tom DeLay (R-TX) had aided such investors. She mentioned as a specific example that individuals got advance notice that an asbestos bill was not going to emerge from the Senate (Audio here).

An article that ran below the radar in November revealed the "day trading" practice, in which little-known firms use sources in Congress to glean information relevant to publicly-traded stocks. As Washington turns its eyes to fallen conservative superlobbyist Jack Abramoff, new focus has come to other allegations of congressional wrongdoing.

Independently, RAW STORY has received word that such activity -- which involves passing on information to stock brokers on how the House is going to vote on legislation that affects large companies, such as Defense Appropriations bills -- is a practice that may go beyond a single individual or congressmember's office. Individuals on Capitol Hill have pointed to others already ensnared in the Abramoff probe as possibly having engaged in "day trading."

RAW STORY has acquired a letter sent by Rep. Brian Baird (D-WA) in November of last year to the House Ethics Committee requesting a formal investigation into the matter. Meghan O'Shaughnessy, Baird's press secretary, confirmed that the committee had received the letter but has not responded to the Democrats' request.

The committee remains in flux after an internecine battle between the parties on how it would operate, and is not believed to have met this year.

In his letter, Baird writes, "I am very concerned that privileging a handful of investors with confidential information undermines investor confidence in the fairness and integrity of the securities market."

O'Shaughnessy confirmed that Baird is still aggressively pursuing the allegations. The congressman is currently drafting legislation to ban the practice, and has not ruled out bringing the allegations to the Justice Department or the Securities and Exchange Commission for a formal inquiry. The congressman will be on Air America's Majority Report tonight at 7:51pm ET.

"We'll definitely be looking into this to pursue legislative or perhaps investigative avenues to get it fixed," O'Shaughnessy said.

"I don't think anybody would be shocked were these allegations to be true, that folks would profit over legislation," one Democratic aide remarked.

"Everybody, to a degree, does this," Brian Hale of Patton Boggs, a Washington lobbying and legal firm, told The Hill.

The Hill included an anecdote from one of the members of a firm that specializes in "political intelligence." The Washington-based paper did not indicate whether the practice was limited to one office or one political party.

The "intelligence" collector said "only that he predicted in the phone call with his client whether the energy bill would make it to the Senate floor the next day. (He predicted correctly, he said.) Most firms contacted for this article wouldn't disclose their revenues from the work."

One firm told the Hill their business brings in "seven figures" each year. The article maintains that gaming legislation is not prohibited under insider-trading laws.

RAW STORY will continue to provide updates as they unfold. If you have information about insider trading and wish to report anonymously, please email

Daniel Ellsberg on Judith Miller and the NY Times

Conversations with Daniel Ellsberg, Part 2
by SusanG
Sat Jan 21, 2006 at 09:22:50 AM PDT

Judith Miller, the New York Times and Government-Controlled Press

In agreeing to hand over a copy, even in the absence of any assurances that the Times planned to run the story, I was aware, as presumably Neil [Sheehan] was, that I was signaling my trust in him to use the material as he saw fit. It was my consent for the Times to publish at its discretion. But in fact, as I learned later, he did not need my consent, or my copy for that matter. What I did not know, what he chose not to tell me, was that the Times had already rented several suites in the New York Hilton, where a team was working over the Pentagon Papers on a crash basis, writing commentaries and selecting parts of the text and documents for inclusion. They had had a full copy of what I had shown to Neil for more than a month.

Parts of this story came out over the next two years (though major parts remain obscure or puzzling to me to this day). Near the end of my trial, on belated discovery, we got the contents of Howard Hunt's White House safe, which included a chronology by Hunt indicating that Neil and Susan Sheehan in March had checked in under assumed names at hotels in Cambridge and had taken thousands of pages, eventually the entire study, to local copying establishments in Medford and Boston.

One weekend, when he knew I would be out of town with Patricia, Neil had come secretly to Cambridge and used a key to Spencer's apartment that I had given him. He removed the whole study, and he and his wife took it to a copy shop in Medford.

--Daniel Ellsberg
Secrets: A Memoir of Vietnam and the Pentagon Papers

Although in the public mind, Daniel Ellsberg and the New York Times may be joined at the legendary hip, as the quotation from Secrets above indicates, there are aspects of that relationship that are, if not straightforwardly problematic, qualify at the very least as... baffling.

Ellsberg's position in Washington at the Defense Department and in Vietnam as civilian advisor gave him first-hand opportunities to observe governmental manipulation of the press from one side; his subsequent role as source and disseminator of classified information gave him a view from the other. With a Carl Bernstein article published in 1977 in Rolling Stone magazine, entitled "The CIA and the Media," another piece of a puzzle that had long interested Ellsberg fell into place when Bernstein reported that for 20 years, many mainstream journalists had been working hand in glove with the CIA.

Whether it's a matter of self-censorship, gentle governmental pressure or outright threat, Ellsberg believes the institution of the press in America as entirely "free" is mythical. His observations on the conduct of Judith Miller and the New York Times have further eroded his trust in the press as an unfettered actor in the public arena and have caused him to draw some speculative and unflattering conclusions about both the reporter and the nation's paper of record. To a lesser degree, the media blackout surrounding the anti-war movement during the run-up to the invasion of Iraq - which coincided with the public launch of his memoir - added to his disillusionment.

This is the second of a six-part series of conversations with Ellsberg that were conducted earlier this month. My questions are in boldface, Ellsberg's responses are in lightface. Topics and dates of future postings can be found at the end of this interview.

* ::

When did you actually write your book? I know it was published in 2002.

From about the fall of 1999. I had been working on it really for years before that, from about 1995. Most of what I wrote in the first couple of years didn't make it into the book, so there will either have to be another book or separate pieces. I wrote quite a bit about my earlier life and about nuclear matters. That should make my next book.

So at the point that you finished writing this, we were not yet anywhere near going to war again.

Well, no ... when I finished it, which is essentially the spring of 2002, I wasn't thinking at all at that time that we were going into Iraq. By late summer it was pretty clear they were pointing toward Iraq. But that really became clearer in September and I was heading right toward publication date, October 15. The first copies were available at the beginning of October.

I began speaking out against what I saw as the rush toward war from September on. And that probably lost me my appearance on the Today show, which was scheduled for the day of publication, My publisher, Viking, was pretty happy about the appearance, saying that was the best opening I could get. But about two weeks before that, about the first of October, the Today Show suddenly cancelled with no explanation, except that an assistant producer who had actually arranged the booking in the first place said that her boss, another producer, had said, "I don't like his politics."

It was too late to get on any of the other network shows at that point. So the day that they dropped the Today show, it was pretty clear to Viking that I wasn't going to be a New York Times bestseller because it's almost impossible to do that without any national shows.

Do you think there was any sort of organized campaign to keep you off the air?

I think I was simply hit by what hit every anti-war critic at that time. I think it was very hard to get on a national program criticizing our movement toward the war. So it wasn't just personal.

Probably if the book had come out a year later or two years later, when the connection to Vietnam was clearer and people were disillusioned with the war, it probably would have had a chance to get exposure.

You think the refusal to give voice to anti-war critics during that period was just a general feeling of "we have to be patriotic and not let any critics speak?"

I think it was partly that. What does happen though in many administrations is that the shows are made aware that they're going to face criticism and challenge directly from the White House if they seem to be putting people on who are challenging the policy at certain periods. I don't think it's really known, why the press was as compliant and self-censored - or censored by others. It would have to be self-censorship because I don't think the White House has the capability to give directives.

But the administration certainly isn't reticent about expressing their feelings about things. We're talking now about a White House does have a lot of say in licensing of TV and anti-trust type decisions that have to do with whether stations or newspapers can combine.

I don't know why the press was seduced in such degree as a press agent for the war or why the Democrats went along with it to the extent they did.

One factor is that they understood from early on that to criticize was to be called names, by the White House, Republicans in the Senate or the House. Names like "traitor," and certainly "unpatriotic," "cowardly," "weak on terrorism," "weak on Osama bin Laden," "playing the game of Osama bin Laden," whatever.

If your book had been timed differently, would you have drawn the parallels between Vietnam and Iraq in it?

I spent my entire book tour talking about the Iraq war. I did very little quoting from my book. I drew some parallels with how we got into it, the fact that we'd been lied into it. Of course, had the book come out later, say nine months, it then would have been the case that we were in the same kind of war as Vietnam.

What failures do you see in the current press?

For one thing, we'll find out something about the NSA or the Downing Street Memos, new revelations, and the press doesn't go back and look at their own reporting and say, how did we report that? Who lied to us? Somebody almost surely who is still doing it. How did he do it? How did he fool us? How easily we were fooled?

And in the run-up to the war -

I have asked people, how can one explain the performance of the press, which was so bad on the question of getting us into the war - and really, not just the build-up in the fall of 2002, but the year after the war started. Why are they so bad?

Scott Ritter said, you know, when they get a background piece of information that's given to them, "exclusively," that gives them a story. They can tell an editor who they got it from or how high the person was they got it from, and the fact that this person is saying this officially though anonymously gives them a story. And the person can get his byline on the front page, they can get it into the paper that way. If what he was told was a lie or terribly misleading in the wrong direction, this was what it was meant to do and that may eventually come out.

Why not burn the source then? Reveal who told them the bad information?

If the reporter were to punish that person or that agency, he gives up access to that person to be lied to again. Now you can say, what's his loss? To a reporter, which is more important: to have one or two stories that happen to be true or have ten stories in which nine are false, but they're all in? And then when it comes out, as Judith Miller put it, it wasn't as though she did anything wrong - she just repeated what she was told.

The reporter himself or herself has really little incentive to close off that source. That's why somebody who's a relative outsider, maybe in and out of Washington but not there regularly, has less to lose if he goes ahead and questions a source, or combines that piece of information with somebody else who refutes it.

But it goes back to something that Anthony Lewis told me years ago during the Vietnam War. He said, "Dan, you have to realize that in this town there is nothing that a bureau chief from a non-Washington newspaper can deliver to his editor that is more important than a lunch with Henry Kissinger?" And he said, "If when his editor or publisher comes to town and wants to see the top people, if he can get in a breakfast or a lunch or just an audience with Henry Kissinger, he's in, he's doing his job, he's okay. And if he can't do that, he's in trouble. And if you print the stuff that Henry didn't want printed or with the wrong slant, you can't deliver that."

Well, how do we circumvent this information shortage?

The internet does give a possibility for confrontation and interaction by bloggers and readers. It seems to me there's an opportunity that didn't exist before because of the internet for local people to be going into their local newspapers and networks and saying, Here's what was on the internet, here's the coverage, how come you didn't have anything on this?

A Tiger Force story came out in the Toledo Blade and Sy Hersh had a piece about it and he pointed out that nobody followed up on the Toledo Blade. They did these atrocity stories, which were very relevant to the whole issue with the attack on Kerry. The Toledo Blade was making it clear that there was a hell of lot more My Lais than we ever heard about.

The point is that nowadays you can do what you couldn't do 10 or 20 years ago unless you subscribed to every paper in the world. You now go in there and you say to these people, how do you explain your lack of this coverage of this and can't you do better than that?

Or you go in and say, here are the internet archives, here's how you reported this a year ago, which we now know was all lies because of what's come out now. What are you going to do about it?

There's a tremendous lack of self-examination by the press. Put real public pressure on them right now, to get them to do a hell of a lot better than they did last year or the year before.

We have the fact that more than half of the country still believes that Saddam was connected with 9/11 and that WMD were found in Iraq. It's not enough to stop with that. Yes, it's horrible. But then we have to learn something from it. Doesn't that tell us that more than half the country then is not benefiting from the internet, because I would say if you're reading broadly on the internet, you couldn't have that impression.

To be fair, I don't think these people who believe that stuff ... I think they're not really getting it from the print either. They're getting it from Fox News and, I've heard, from their ministers, at their churches.

And how about putting some pressure on CNN, that they don't just try to become like Fox News? Put some pressure on them to counter the pressure they do get from the White House and from Fox News and from Ann Coulter.

You'd think the element of competition alone would motivate the press, yet it failed in the run-up to the war.

Exactly. As it did in Vietnam, of course. And by the way, it really failed to a large extent in the Gulf War.

In the fall of 1990, after the invasion of Kuwait, there was a congressional election coming up. The first reaction, we now know, of Bush and Powell and other was: we can't do anything about this. They are going into Kuwait. And then Thatcher and Scowcroft and some of the others said no, no, no, we've got to draw the line here, we can't let this happen and so forth.

All the word was in September and October was that we were putting 50,0000 troops into Saudi Arabia as a defensive strategy. I supported that move at the time, not because I was big fan of Saudi Arabia, but because from all I'd heard about Saddam Hussein, it would not be a good thing for the world for him to control the oil of Iraq, Kuwait and Saudi Arabia. I wasn't in favor of the U.S. empire particularly, but I thought his empire would be even worse.

Then the military and others were pressing very hard for a combination of sanctions, boycott and blockade to get him out of Kuwait. If you were to look at American newspapers of late September and October before the election you find nothing in the Post and the Times suggesting the possibility that there may be an offensive into Kuwait, which would obviously take a lot more troops. And there was no hint that there would be that much of a presence over there.

There's a Dave's Smoke Shop that carries the British papers in Berkeley and I began getting the British papers, and it was astonishing. The British papers were filled with interviews of people from the Pentagon saying there's going to be a huge build-up immediately after the election and we're going to invade Kuwait.

So I look back at the Post and the Times. Nothing. They were covering the same building, the same State Department, Defense Department. What the hell is this? So then I noticed that in the LA Times, which I was also getting - I was living in Berkeley at the time - but the LA Times did have some stories to this effect. There were stories that were like the British papers. I called Tony Lewis at the New York Times and I said, "Tony, how the hell can it be that the British papers are all saying, and the LA Times is saying, that there's going to be a huge build-up right after the election and an offensive strategy and the Times isn't mentioning this?"

And he said, "Could you send me the LA Times?" I said, "Tony, I'm talking to the New York Times. You must get the LA Times." He said, "You know, I had the impression that we're cost-cutting here or something." So I actually sent them Federal Express, copies of the headlines from the LA Times and a whole collection of clippings I copied from the London papers. I sent them out to people on the East Coast and asked, What is going on here?

Well, what went on from start to finish was, there was scarcely a hint in the major papers or on television that this was awaiting us once the election was over. Bush didn't want to go into the election forecasting that we were going to get into a big war. Had he known for sure that the war would be such a wonderful success as it was, no doubt he would have trumpeted it a little earlier and won the election on that. But he wasn't, in 1990.

Yet the New York Times -- belatedly - printed the NSA wiretap story.

Yeah, but a year? A year to decide to do it? What the hell is going on? Supposing that they had held it just one more week than they did. You realize what difference that would have made? The Patriot Act, we'd have the extended Patriot Act for seven years. Now they're excused of playing politics by putting it out just before the vote ... in other words, when it was relevant. A year late, but still it wasn't too late for that. What if they'd held onto it one more week and we had a Patriot Act? What would be the appropriate response of the citizenry and Times readers to that? If we had a Patriot Act in which critical votes had been cast ignorant of that story?

If they had let that go another week then I want to suggest there should be a process for impeaching the editor of the New York Times for journalistic misdemeanors, if not high crimes. There isn't a way to do it, but that's what you would want. You should be able to fire this guy. Of course, the readers don't exactly do that, but I expect the readers can put a lot of pressure on publishers.

In your view, was the story timed for the Patriot Act vote?

Let me mention one other possibility. They also knew that James Risen was writing his book and the book was due out in January. At that point, it was going to be known that they'd sat on it for a year. So they had to scramble, first to beat Risen. In a way, I think a crucial thing in getting the Times to publish the documents on the Pentagon Papers - this is a speculation, but with some basis for it - was the fact that they had a mistaken belief that I was likely to give it to the Washington Post if they delayed. And in fact, I didn't have that plan, although in the end I did give it to the Post, but that was after they had an injunction. I think that element of competition was crucial to getting it out.

What do you think of the Judith Miller episode?

Their performance on the whole Judith Miller question from start to finish was just awful.

Now it was something I talked to you before about. Let me put it down on paper. Did you look at the Carl Bernstein piece?


Over 200 reporters, according to Bernstein, had signed secrecy agreements with the CIA. There were a number of individuals who did really work to put stories in that they wanted, to publish stuff they wanted. I believe that's what they were saying about Joe Alsop and Stewart Alsop, that they were essentially assets of the CIA, which means they would put out CIA line. Not because they were literal employees, but because they were friends with people in the CIA.

But that's a thin line isn't it? I'm not sure that anybody said specifically, write a story that's very positive about X so that we look good. I think a lot of it is just an understanding of being a part of that establishment back then and they saw it as patriotism, from what Bernstein said.

Certainly that is a major aspect to the whole thing. They're not under the impression that they're working for and with the city machine or the mafia or something. This is the U.S. government, this is the CIA, this is the establishment.

But let me put a slightly different spin on it: Remember Sy Sulzberger was mentioned as one person who had a clearance. He had a column, and he denied it, but several people from the CIA said that on one occasion he called up for information, they gave him the briefing paper and he simply put the briefing in under his byline. He literally reproduced the whole briefing paper.

Now how often is that done? Remember, a lot of these people were putting out mainly opinion columns, not reporting news ... like Joe Alsop and Stewart Alsop. How often did they call up their friend at the CIA who simply told them, here's what's going on. And they then go on to print, here's what's going on. They don't say, I was told by a high official. See, they say, this is the reality. This is what's really happening, here's the real news. Sometimes they would say, yes, I got this from some official, but other times they would just say, this is a result of my observations or this is they way I see it. How often was the way they saw it in their highly read column simply what Allen Dulles or Richard Helms told them and they believed it? It wasn't that they were just being servile, they're just presenting a crafted CIA line which has been given to them.

Here's the point I was really coming to: I was most struck in that by the idea of a secrecy clearance, as somebody who had had a dozen simultaneous clearances.

The relationship that that implies has a number of dimensions to it. One of them - it's just one, but it's an important one - is that you are led to believe (quite misleadingly actually) that if you violate that agreement, you will be prosecuted. You are violating a law. And even if you're not prosecuted, you will know you are violating a law if you break the terms of that agreement. They mention to you 18 USC 793 (d) and (e) and so forth - what I was charged with. And indeed, I was prosecuted.

Now the catch is, I was the first person ever prosecuted for it. No one had ever been prosecuted, but I didn't know that, and they don't know that, and most people don't know it to this day. Not one reporter in a hundred have I ever met - and I've talked to audiences of journalists - knows that I was the first person ever to be prosecuted.

However, every time you sign that agreement, you are confronted with these laws that say you are subject to prosecution, so they think they're violating a law if they put that out, that they will get prosecuted having agreed to this. A reporter who is just slipped something under the cover on one particular day or who was told something over lunch, a reporter who hasn't signed an agreement, I think, is unlikely to believe that he or she is in trouble if he puts it out. He's more likely to believe that the source will get in trouble.

A reporter who has signed that agreement is definitely led to believe that he or she is subject to prosecution if he breaks that agreement. That's the number one point.

Number two point is ... Judith Miller said, I had a security clearance. Now I think she was telling the truth. They said, no, it was just a simple non-disclosure agreement or some misunderstanding, I think that's the cover story. She had a clearance. What would that mean?

It means that she's trusted by these people as one of the team. They're not giving it to her under threat, they're giving it to her because they trust her to carry this out. Wonderful self-esteem there and the feeling of being an insider, and your fellows don't have that. It means you will now get information that people who don't have that clearance will not get. You'll get it in part because you're trusted and because you have something to lose, they'll take it away. If you violate it, you won't get that stuff anymore. You infer from that that you will get information that others don't get because you'll be trusted not to print it unless they tell you it's all right.

My guess is very strongly that Judith Miller did have such a clearance and did have a background check and it meant that she was entitled to get information authoritatively that others were not entitled to get on the understanding that she has a lot to lose - namely a clearance - and not just the one source, but from a lot of sources. It gives her entrée. Take somebody who likes Judith Miller and would tell her all these things, he would tell her various background things. He liked Miller, he's an old friend of hers. That doesn't mean he could take her into a room and tell a subordinate or tell somebody else to show her a piece of paper. He couldn't do that. He'd be putting his neck on the line.

If she has a clearance, he could take her to a meeting, to a place, to anybody, and say, "This woman is okay, she's cleared."

I thought right away: Judith Miller, Judith Miller. She's one of Bernstein's people here. And remember, he says it was one of their most carefully guarded secrets that they had, that they kept the Church Committee from putting out. They gave them stuff on assassination instead; that was less scary.

In every case, Bernstein said, where a journalist had such an agreement, it was known to their boss - to their editor or publisher or both. So I infer from that that probably Bill Keller - possibly not - or Howell Raines, but certainly the publisher, Sulzberger, did know. Now let's go one step further. Bernstein quotes somebody at the CIA as saying, "Our greatest asset is the New York Times." All right.

My guess would be that much more likely than not that Judith Miller had clearance and I would infer from that there's a good possibility, one-third (I really think it's more than half) that the current publisher has a security clearance. Now you could say, the simple reaction to that could be well, all right, you know, he's in the news business for foreign affairs it might be good for him to be able to learn some secrets. But if you know the system, even without saying, "this is absolutely outrageous and horrible and intolerable" - you don't have to go that far - there are some real problems with that. And it has to do with a formal acceptance of being on the team. It goes beyond having lunch with these people and having the same social set. It's really very like being part of the government. I'm not saying it's clearly an instrument of the government all the time, but it might be an instrument of the government part of the time.

That's one thing for radicals to say as they do that they're all on the same team. But I'm sorry, I would not be happy to have it proved that the New York Times, which is the first thing I read every morning is, after all, a government newspaper. And obviously there are limitations to that because there's no question that they do put out from time to time things that the government does not want out. I can say that I know that better than most.

But keep in mind that Nixon was not in fact unhappy to see the Pentagon Papers out, and he wanted to put more stuff out.

And in order to be an effective instrument of the government, it has to sometimes challenge the government.

It should show a certain amount of independence from time to time, yes.

But the stuff that was coming out during the first Gulf War was exactly like what was coming out in the invasion of Iraq this time. If the coverage had been coming right out of a shop in the Pentagon, controlling every aspect of the television coverage of the first Gulf War, how different would it have been? I didn't see how it could have been different.

It's still going on.

So how did they do it?

I'm putting into the pot this: The control of the war coverage was very, very effective. And these PR guys know what they're doing. They did it in Grenada. I believe they didn't allow any reporters in when the actual operation was going on. And in Panama, there was hardly any coverage and to this day there's never been any investigation of how many Panamanians had been killed in that attack on Noriega's headquarters.

Just from the outside, you look at that and you say: You know, they're acting as though it's a controlled press. So let me put into the pot just the hypothesis that to a greater extent than we are really aware, it is a controlled press. And it's not 100 percent and some of the exposes occasionally - not that many - even go beyond what is necessary to establish an appearance of independence and constitutes a real degree of independence. But I think it's just possible that when you look a flagship like the New York Times from which other papers take their cues as to what is news and what isn't, there may be a critical element of top-level people being actually on the team. It's clear that Judith Miller was on the team. I'm suggesting that that goes beyond a mere groupie-type enthusiasm for the policy. She was on the team, period. She was one of us. She's an insider, not an outsider, let's say.

Was she fooled a lot? Well, yeah, but that's what happens with insiders, especially given that level. After all, public affairs people get lied to quite a bit. They don't tell them everything. We have to think in some cases, for example, Scott McClellan knows he's just lying, he knows he's blowing smoke. But in other cases, he's probably fooled himself. They don't trust him to know the full truth and get out there and lie effectively.

Let me put it this way: Giving somebody a security clearance as a journalist, which itself has to be a big secret, because the fact that you have it ... well, on first hearing, it doesn't sound good. It raises questions, so it's a secret. Being trusted with that secret cements the sealing of collegiality, of being an insider and makes you more of something like a cleared consultant.

Judith Miller is in that role.