Two Dems Back Republican Push for Countrywide VIP Subpoena

ABCNews' Matthew Jaffe reports:

A House panel's contentious battle over issuing a subpoena to obtain documents about a controversial Countrywide program took a turn Thursday night when two Democratic members on the committee supported the ranking Republican's request to proceed with the investigation.

Rep. Paul Hodes, D-NH, and Rep. Mike Quigley, D-IL, wrote to House Oversight & Government Reform committee chairman Ed Towns, D-NY, and Darrell Issa, R-CA, informing the panel chiefs of their desire to issue a subpoena.

“We write to you today to request that the committee initiate an investigation into Countrywide Financial's “Friends of Angelo” program, and if it was used to gain influence over federal officials,” Hodes and Quigley wrote. “We believe that to properly conduct this investigation, the committee needs to gain access to all documents related to the program that Countrywide used to provide preferred status to certain customers.”

In recent weeks, Issa has vehemently argued for Towns to issue a subpoena, but Towns has refused to do so. Issa then attempted to call a committee vote on the subpoena, but a bizarre sequence of cancellations and lock-outs has prevented the California lawmaker from bringing the panel to a vote.

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The new support of Hodes and Quigley, a Republican committee aide told ABC News, now gives the GOP the necessary votes to pass the subpoena measure, assuming they can manage to bring it to a vote.

“Ranking member Issa fully supports the outline that Reps. Hodes and Quigley have outlined,” said Kurt Bardella, the spokesman for Issa. “He believes it is a blueprint for a fair and comprehensive investigation that will uncover the full scope of Countrywide's efforts to buy influence.”

Issa has fought to gain documents on the murky Countrywide program, which he has said was used to give sweetheart deals to federal government officials and members of Congress who worked on housing policy in an effort to gain their support.

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Democrats have called the GOP's push for a vote a political stunt to embarrass two prominent Senate Democrats, Chris Dodd and Kent Conrad, who received special VIP loans from the lender. Dodd chairs the Senate Banking committee and Conrad the Senate Budget committee.

Countrywide, once the nation's largest home mortgage lender, collapsed in 2008 in the midst of the subprime mortgage meltdown. In June, the company's former CEO was charged by the Securities & Exchange Commission with civil fraud and insider trading, making him the highest-profile official to date faced with federal charges stemming from the financial crisis.
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-Matthew Jaffe

Republican Senators Divided Over Governors Rejecting Stimulus Money

ABC News’ Z. Byron Wolf reports: Stimulus funds have only just started to filter out to the states, and already several Republican senators have said they don’t want all the money due to them in the $787 billion bill meant to kick-start the sputtering economy.

While it raises legal questions, the actions by governors in South Carolina and, according to more recent reports, Texas, largely fit into the broader Republican talking point that the new Obama administration is spending too much money in its effort to save the economy.

But not all Republicans agree. At a news conference with other Republicans announcing a GOP oversight initiative of the stimulus program, Sen. George Voinovich, R-Ohio, who opposed the stimulus and is a former chairman of the National Governors Association, said governors who are rejecting the stimulus money now should have spoken up while the stimulus was being drafted.

“My attitude is that governors should have gotten their act together and they didn’t,” he said. “The Republicans and Democrats – [Sen.] Lamar [Alexander, R-Tenn.] — I think you were chairman of the National Governors Association too. When we were chairman, I tried to get them in a room and say look, ‘Republicans, Democrats, let’s get a common thing, let’s go to the Hill and let’s do it.’ And what happened was they spoke with different voices. And now, they’re going to have to live with the program.”

This was a bit off-message for Republicans, who have been trying to make the point that Democrats, now that they’re in power, are spending too much money. The two senators joining Voinovich at the news conference, where Voinovich and Sen. John Thune, R-S.D., were introduced as the two senators who will be in charge of overseeing Republican oversight of the stimulus, immediately tried to dial back the criticism.

“I think the governors have a legitimate concern here,” Alexander said. “[S.C.] Gov. [Mark] Sanford is a Republican, but Tennessee’s governor, a Democrat, raised an issue about whether we should accept the unemployment insurance money because it might require our state to raise taxes on employers, therefore driving jobs out of the state. That’s a legitimate concern.”

Tennessee Gov. Phil Bredesen has since said he will accept all the stimulus money, approximately $4.5 billion.

Alexander was asked if the governors have the ability, constitutionally, to turn down the money.

“I don’t know the answer to that,” he said. “But it’s a very wise question by a governor because, in Tennessee, we kept our debt low because if we we don’t have to pay interest on the debt we can build schools and roads and parks. … And what Gov. Sanford, I am sure, is saying is that if I can use that money for the long-term, I will have more money every year to spend on schools and roads and parks.”

Thune said his governor has also considered turning down stimulus money that requires state matching funds and increased eligibility for programs receiving federal dollars.

“Once you’ve expanded the eligibility, I guess is what I’m saying, it will be difficult to tell people they are no longer eligible for this,” he said. “And so I think some of these governors have got some very legitimate questions about these funds and how they might be used. And if they’re going to be forced into expanding eligibility to qualify for them and create long-term budgetary problems down the road for their states, then some of them are exercising their prerogative not to accept them and I think that is probably a fair thing for them to do.”

Famed Republican Strategist Resurfaces in Small-Town Election

ABC News’ Jonathan Karl Reports: Remember Arthur Finkelstein? He was once one of the most feared Republican political strategists in the country, the mastermind behind a series of ruthless, hard-hitting and high-profile campaigns during the 1980s and 1990s — Helms v. Gantt, D’Amato v. Javits, Mack v. McKay, Pataki v. Cuomo.

Finkelstein has re-emerged in an unlikely place: a local election in the tiny village of Lynbrook, New York (population 19,911).

Finkelstein’s influence isn’t hard to spot. A full-page ad in this week’s Lynbrook Herald savages two members of the Lynbrook Village Board, dubbing them “The Tax Twins of Lynbrook.” The ad declares: “It’s shocking but true, the Tax Twins Dave Penso and Tom Miccio recklessly raised taxes, created record debt and mortgaged our families’ futures. Call Village Hall for their Disgraceful Record. DON’T BE FOOLED!”

That’s tough stuff for a small-town election, but it’s vintage Finkelstein. Over the years, his campaigns attacked opponents as “recklessly liberal”, “embarrassingly liberal”, “hopelessly liberal”, “foolishly liberal” and “too liberal for too long.”

In this case, Finkelstein is not working for a Republican candidate with deep pockets. The Lynbrook village ad is paid for by a group called The New Vision Party, which is running two candidates against those evil tax twins. Campaign finance records show the party has paid Mr. Finkelstein $12,000 for “polling.”

Asked why they hired a once high-profile national political strategist for small local election, Leslie Rothschild of the New Vision Party told ABC News, “I’ve known Arthur for years. He’s the best in the business.”

Senate Republican Leader: Gregg’s Exit Won’t Change Senate Makeup

ABC News’ Tahman Bradley reports: Senate Republican leader Mitch McConnell said on CBS’s “Face the Nation” this morning that Sen. Judd Gregg, R-N.H., has assured him that if he leaves the Senate to fill the vacant Commerce Secretary post in the Obama administration that New Hampshire’s governor would replace him with someone who would caucus with the Republicans.

“Sen. Gregg has assured me that if this were to happen, if it were to happen, it would not change the makeup of the Senate. In other words, whoever is appointed to replace him would caucus with Senate Republicans so I think it would have no impact on the balance of power in the Senate,” said the Kentucky senator.

Gregg is believed to be President Barack Obama’s top candidate for the vacant Commerce Secretary post.

There was concern among Republicans that New Hampshire Gov. John Lynch (D) might appoint a Democrat to replace Gregg, which would give Democrats a filibuster-proof 60th Democratic vote in the Senate pending the result in the contested Minnesota Senate race. But, it appears that the White House, and Lynch may have reached some sort of deal that would move Gregg from the Senate.

Reached by ABC News, Lynch’s spokesman, Colin Manning, declined to comment on any agreement, saying only that “There has been no formal announcement. This is a situation that is still between the White House and Senator Gregg.”