Senate Banking Committee Chairman Chris Dodd (D-Conn.) on Friday asked Attorney General Eric Holder to investigate allegations of misleading accounting at the failed financial firm Lehman Brothers Holdings Inc. “with a view toward prosecution.”
Lehman’s collapse in September 2008 precipitated the global credit crisis and the subsequent creation of Treasury’s Troubled Asset Relief Program.
Last week Lehman’s court-appointed Chapter 11 examiner, Jenner & Block Chairman Anton Valukas, reported that company executives “painted a misleading picture” of the firm’s finances to help shore up investor confidence. According to Valukas, Lehman used a type of repurchase agreement called Repo 105 that temporarily removed securities from Lehman’s balance sheet, making the company appear healthier than it was.
Dodd in a letter to Holder called for a special task force to investigate the practices.
“We must work tirelessly to reduce the incidence of financial fraud in order to restore trust and confidence in the financial markets,” Dodd wrote. “A task force investigation and taking appropriate Federal actions in these matters will contribute to these goals.”
Valukas was the U.S. Attorney for the Northern District of Illinois from 1985 through 1989. He also served as an Assistant U.S. Attorney from 1970 to 1974), chief of the special prosecutions division in 1974 and First Assistant U.S. Attorney from 1975 to 1976.
Below is the full text of Dodd’s letter:
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The late decision by Sen. Christopher Dodd (D-Conn.) not to run for re-election leaves his preferred successor — former Connecticut U.S. Attorney Richard Blumenthal — with a daunting challenge to organize a campaign and raise money.
Earlier this month, Dodd announced that he would retire at the end of his current term and endorsed Blumenthal.
Blumenthal, who is now Connecticut’s attorney general, was the state’s U.S. Attorney from 1977 to 1981. He also served in the state House from 1984 to 1987 and the state Senate from 1987 to 1990. Blumenthal has been state attorney general since 1991.
Although Blumental, who filed his statement of candidacy Jan. 11, has more name recognition than the other two Democrats in the race, they have both been in the race for nearly nine months and have a jump on fundraising. This means before the August primary Blumenthal will need to work on fundraising.
The other two Democrats in the race are software executive Merrick Alpert and former Greenwich, Conn., first selectman Roger Pearson.
Alpert, who filed his statement of candidacy May 19, 2009, has yet to file a quarterly campaign finance report, indicating that he has yet to raise the amount at which candidates are required to report their donations. Pearson, who filed his statement of candidacy May 29, 2009, had $41,528.21 cash on hand at the end of the third quarter of 2009. He has yet to file his end of year report.
Three Republicans are vying for their party’s nomination.
Former World Wrestling Entertainment CEO Linda McMahon filed her statement of candidacy on Sept. 16, 2009. At the end of the fourth quarter she had about $1.1 million cash on hand.
McMahon’s main competition in the primary appears to be former Rep. Rob Simmons, who filed his statement of candidacy March 25, 2009, and had $1.1 million cash on hand at the end of the third quarter. He has yet to file a year-end campaign finance report.
The third Republican in the race is stockbroker Peter Schiff, who filed his statement of candidacy Oct. 8, 2009. He has yet to file a quarterly report.
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A former Connecticut U.S. Attorney is slated to declare his candidacy to succeed Sen. Christopher Dodd (D-Conn.) after the senator formally announces today that he will not run for reelection, the Associated Press reported today.
Richard Blumenthal, a Democrat, was the state’s U.S. Attorney from 1977 to 1981. He also served in the state house from 1984 to 1987 and the state senate from 1987 to 1990. Blumenthal has been the state attorney general since 1991.
Dodd, who has spent more than three decades in Congress, will hold a news conference at noon today. He is expected to announce that he will not seek reelection and that Blumenthal will be running for the Democratic nomination to replace him, the AP reported.
Blumenthal told the AP that he has been eying a Senate run for years despite talk that he might run for the Democratic nomination for governor to replace Gov. Jodi Rell (R), who is retiring. Blumenthal said, “The United States Senate has been a longtime public service goal, and I would be proud and honored to have the opportunity to serve the people of Connecticut … in the Senate.”
Democrat Merrick Alpert, a software executive and former aide to Vice President Al Gore, has already thrown his hat into the race. Democrat Roger Pearson, an attorney and former Greenwich, Conn., first selectman, may also run, according to Politcs1.com.
On the other side of the aisle, former World Wrestling Entertainment CEO Linda McMahon, stockbroker and anti-tax activist Peter Schiff and former Rep. Rob Simmons are running for the seat. Simmons had recently been polling ahead of Dodd, according to the AP.
This post has been corrected from an earlier version.
UPDATE: Below is the video of Dodd’s news conference:
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Senate Democrats introduced legislation Thursday that would establish the same sentencing guidelines for powder cocaine and crack offenses.
The Fair Sentencing Act, sponsored by Senate Assistant Majority Leader Dick Durbin (D-Ill.) and nine other Democrats, would end the 100-to-1 ratio between crack and powder cocaine penalties enacted in the 1980s. The bill would also trigger a five-year mandatory minimum sentence for the possession of 500 grams of either of the substances.
The decades-old law gives the same five-year mandatory minimum sentence for the possession of five grams of crack cocaine as it does for the possession of 500 grams of powder cocaine. Democrats have said the law tends to disproportionately harm blacks, because crack is generally used in poorer urban communities.
“The sentencing disparity between crack and powder cocaine has contributed to the imprisonment of African Americans at six times the rate of whites and to the United States’ position as the world’s leader in incarcerations,” Durbin said in a statement. “Congress has talked about addressing this injustice for long enough; it’s time for us to act.”
The cosponsors of the bill are Judiciary Committee Chairman Patrick Leahy (D-Vt.), Judiciary crime and drugs subcommittee Chairman Arlen Specter (D-Pa.), Judiciary panel members Sens. Russ Feingold (D-Wisc.), Ben Cardin (D-Md.), Sheldon Whitehouse (D-R.I.), Ted Kaufman (D-Del.) and Al Franken (D-Min.) Sens. John Kerry (D-Mass.) and Chris Dodd (D-Conn.) are also cosponsors.
The House Judiciary Committee approved its version of the legislation in July. Unlike the Senate bill, the House legislation eliminates mandatory minimum sentences for cocaine and crack offenses.
The Justice Department supports Congress’s efforts to eliminate the differences between crack and powder cocaine sentencing. Assistant Attorney General Lanny Breuer said at a House hearing in May that the current sentencing policies are “hard to justify.”
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