Braden Goyette

A reading list for following the debt ceiling drama

Congress has until a week from today to raise the debt ceiling, the cap on the amount of money the Treasury can borrow to pay the government’s bills. As the clock keeps ticking, you may still have unanswered questions. How dire could the consequences of not raising the debt ceiling be? What are the possible solutions? Here’s a reading list to help you keep up.

Following the debt ceiling debate in real time:

Slate has an updating infographic that lets you see how much money the Treasury has in its bank account right now. For the latest news and analysis, the Wall Street Journal has a frequently updated live blog. The Economist is also doing daily debt ceiling updates. Some good people to follow for updates on Twitter include CNBC’s @JamesPethokoukis, TIME Magazine’s @MarkHalperin, CBS’s @NorahODonnell, NBC’s @LukeRussert and @KellyO, Slate’s @daveweigel, and the Bipartisan Policy Center (@BPC_Bipartisan).

The basics on the debt ceiling (including where it comes from):

An earlier guide of ours answers basic questions about the debt ceiling, like “What is the debt ceiling, really?” and “Is the debt ceiling necessary?” Poynter has a guide to common misconceptions about the debt ceiling that can help you cut through misleading coverage. It’s important to note, as Poynter does, that raising the debt ceiling doesn’t mean that we’re increasing spending, but that we’re letting the Treasury borrow money to pay for things we’ve already agreed to spend on. Here’s how NPR Correspondent Robert Smith explained the situation to Poynter:

“The way I put it is that Congress has already ordered the pizza. They approved the pepperoni. They called up and had someone deliver it,” Smith said via email. “Now the pizza guy is knocking at the door, and asking to get paid. If you don’t raise the debt ceiling, it’s like saying we didn’t want that pizza in the first place. Maybe he’ll go away if we don’t answer.”

The New York Times has a helpful chart that breaks down which policies have contributed to the national debt over the Bush and Obama administrations. This chart, tweeted James Fallows at the Atlantic, “should accompany every story about the debt ceiling debate.” Talking Points Memo explains that most of the U.S. national debt is actually owed to the United States—it’s money that some government agencies have borrowed from each other. The Guardian’s data blog has a rundown of which foreign countries the United States owes, and how much we owe them.

What might happen if the debt limit isn’t raised:

Basically, anyone and anything that relies on federal government funds may not get paid, including members of the U.S. military and military contractors and people receiving Social Security checks. The New York Times has a story detailing what may happen to state governments if the debt ceiling doesn’t get extended. Bloomberg has an interactive that lets you take on the role of the Treasury trying to decide which of its bills to pay.

The U.S. credit rating might get downgraded, which could raise the cost of borrowing and cause panic in financial markets and dumping of U.S. bonds. The IMF said today that a downgrade could be “extremely damaging” to the world economy. Forbes has a piece weighing the pros and cons of a credit rating downgrade and whether or not it’s inevitable.

What, and who, is holding up the deal:

Much of the debate has centered on other things that should go along with raising the debt ceiling, like repeal of health care law (here’s an earlier post we did on that). This New York Times chart lays out the major obstacles to working out a debt ceiling deal. At the New York Review of Books, Elizabeth Drew has an insightful summary of the failures of the negotiations so far.

Possible solutions:

As of last week, there were eight possible deals on the table, all of which the New York Times’ Caucus blog detailed in a cheat sheet. After debt ceiling negotiations temporarily broke off on Friday, congressional party leaders began drafting two new plans. Bloomberg has the details of those plans here. Bill Clinton also raised the possibility that Obama could raise the debt ceiling without congressional approval, using a provision in the 14th Amendment. The New York Times explains how Clinton’s recommendation would work. In the event that a deal isn’t reached, CNBC’s John Carney suggests that the Federal Reserve might be able to keep the Treasury afloat by selling its Treasury securities. At The New Yorker, James Surowiecki argues that it would be best to just get rid of the debt ceiling altogether.

What’s the deal with News Corp’s other, U.S.-based, hacking scandal?

After testifying before the British Parliament last week, Rupert Murdoch returned to the United States to be greeted with more bad news: The Justice Department is opening up an inquiry into allegations of computer hacking by News Corp’s American advertising wing, News America Marketing. The New York Times’ David Carr revisited News America’s troubled history with “anti-competitive behavior” in a column. On Wednesday, New Jersey Sen. Frank Lautenberg wrote to Eric Holder calling for a federal investigation into the hacking claims, pointing back to a similar request he had made back in 2005.

What’s this other hacking scandal all about?

News America was accused in a 2009 lawsuit of hacking into the computers of one of its competitors, Floorgraphics Inc., to steal detailed information about their sales, clients and finances. Floorgraphics said they first realized they were being hacked in 2004, when they discovered intrusions from computers with IP addresses registered to News America. The company claimed that their information was accessed at least 11 times over four months and that they started losing important clients to News America shortly afterward, leading to a round of layoffs.

There was an FBI investigation into the hacking allegations in 2004, but it didn’t end up going anywhere.

Why would News America want to do that?

News America and Floorgraphics Inc. both provide services for clients to promote their products in grocery stores.

According to court testimony from one of the founders of Floorgraphics, George Rebh, News America CEO Paul Carlucci expressed interest in buying the company years before the hacking incident. Carlucci then threatened them after Floorgraphics declined. From the Guardian:

According to transcripts of a trial that took place 10 years after the lunch, the Rebh brothers were astonished. No, they replied, they only wanted to talk about working together and had no intention of selling. George Rebh told the jury that Carlucci then said: “From now on, consider us your competitor and understand this: if you ever get into any of our businesses, I will destroy you. I work for a man who wants it all, and doesn’t understand anybody telling him he can’t have it all.”

News Corp later denied that Carlucci had said this.

Has News America been caught up in any other similar lawsuits?

News America was involved in lawsuits with two other competitors, Valassis Communications and Insignia Systems, who accused News America of engaging in predatory business practices and violating U.S. antitrust law. These cases didn’t involve hacking. News Corp settled with Valassis for $500 million and with Insignia for $125 million.

How did the Floorgraphics lawsuit end?

News America settled out of court with Floorgraphics for $29.5 million a little over a week into the trial and then bought the company within the same week.

What happened to the guy who was running News America at the time of this alleged hacking?

Paul Carlucci is now the publisher of the New York Post and is still the CEO of News America.

What does this have to do with the phone hacking scandal in the U.K.?

Nothing so far, but journalists are latching onto it as a window into News Corp’s overall culture. The New York Times’ Carr has pointed out that there are interesting parallels in terms of how News Corp moved quickly to settle out of court, ensuring that evidence remains sealed and plaintiffs can’t talk.

So, wait; how many investigations into News Corp are going on in the United States?

There are three. The Justice Department is currently investigating claims that News Corp hacked into Floorgraphics’ computers. The FBI has begun investigating claims that Murdoch papers attempted to hack into the phones of 9/11 victims. Separately, the Department of Justice is looking into the alleged bribes Murdoch papers paid to British police. Fortunately for News Corp, they’ve got former federal prosecutors on their side. (Here’s our earlier story explaining why the United States is getting involved over bribes made abroad.)

Did Murdoch papers hack into the phones of 9/11 victims?

We really don’t know. That accusation originated from a story in another British tabloid, The Daily Mirror, that cites an unnamed ex-NYPD officer as its main source. The FBI inquiry came in response to calls from politicians, and not because any incriminating evidence has been found.

This week’s top MuckReads: Corporations crafting laws, cheating cops & student visa mills

Here are this week’s top 10 must-read stories from #MuckReads, ProPublica’s ongoing collection of the best watchdog journalism. Anyone can contribute by tweeting a link to a story and just including the hashtag #MuckReads or by sending an email to MuckReads@ProPublica.org. The best submissions are selected by ProPublica’s editors and reporters and then featured on our site and @ProPublica.

Koch Joins Exxon to Craft State Laws From D.C. in ALEC’s Industry Agenda, Bloomberg News
How a powerful nonprofit named ALEC gives corporations the opportunity to shape state laws. (Here’s a background piece we’ve done on ALEC.)
Contributed by @kleinmatic

Little-Known Firms Tracking Data Used in Credit Scores, Washington Post
The firms who help put together credit scores have access to a surprising amount information about our lives, but they aren’t held to much scrutiny themselves. This article sheds light on what they do and the regulatory vacuum they exist in.
Contributed by @nfkpdx

Freedom From Pain, Al Jazeera English
Al Jazeera examines why it’s so difficult for people in countries around the world to gain access to pain killers like morphine.
Submitted via email by Sophia Qureshi

L.A. County Is Seeing a Spike in Deputy-Fraud Allegations, Los Angeles Times
An independent watchdog group reports that cuts in overtime pay might be leading to a rise in financial crimes among the L.A. County Sheriff’s deputies. The alleged crimes range from mortgage fraud to torching a car to cash in on the insurance.
See all MuckReads about police misconduct.

Universities or Visa Mills?  San Jose Mercury News
Unaccredited universities in California are bringing thousands of international students to the United States with the promise they can get them student visas—a promise they don’t actually have the ability to keep.
Contributed by @sdutWatchdog

Blood in the Water, Outside magazine
A disturbing pattern of whale trainer deaths raises questions about how marine parks should operate.
Contributed by @longreads

Small Town Teacher Seeks Help for Big Debt, Ends Up in Bankruptcy, iWatch News
A profile of a retired schoolteacher who paid a firm to help her get out of debt and ended up losing $7,000, none of which went to her creditors. The story is part of a series on financial service businesses that abuse consumers.
Contributed by @sscarpinelli

How Foreign Money Can Find Its Way Into Political Campaigns, Huffington Post
Though it’s illegal for U.S. political candidates to take money from foreign interests, disclosure filings suggest that foreign governments and corporations are hiring lobbyists to donate to campaigns for them.
Contributed by @POGOBlog

Sloppy Investigation of Sloppy Investigation in Baily Case, New America Media
After Bay Area journalist Chauncey Bailey was murdered in 2007, a group of journalists banded together to finish the investigation he’d been working on. Now some of those reporters are documenting flaws in the two inquiries into the Oakland police’s handling of the case.
Contributed by @ProPubPR

Superintendent Merry-Go-Round Yields Fat Severances, Chicago Tribune
The Chicago Tribune investigates secretive buyout deals that Illinois school districts make with departing superintendents—even ones who were asked to leave due to poor performance.
See other MuckReads about education.

These stories and many more can be found at ProPublica. You can also subscribe to a daily #MuckReads email, or follow ProPublica on Twitter. Reader submissions are key to making #MuckReads a success—please contribute!

The phone hacking scandal by the numbers

The U.K.’s phone hacking scandal seems to keep getting bigger, with more revelations, resignations and arrests. Here’s a quick breakdown of some important stats in the scandal so far. For background on how the scandal developed, see our reader’s guide and our collection of related MuckReads.

The number of people who have been arrested in the current investigation: 10. (It’s worth noting that an arrest means something a bit different in the U.K. than it does in the U.S.)

The number of people who have resigned over the scandal: 7, including 4 top News International executives and 2 Scotland Yard officers.

The amount of money Rebekah Brooks received as a severance package: 3.5 million pounds ($5.6 million)

Number of Murdoch sons who has admitted to misleading parliament: 1

The number of people on Scotland Yard’s press team who used to work for News International: 10, out of a total 45 staffers

Amount of email investigators suspect was deleted by a News International executive: according to The Guardian, about half a terabyte’s worth, “equivalent to 500 editions of Encyclopedia Britannica.”

Number of pages of information about the phone hacking scandal that were sitting in a Scotland Yard evidence room: 11,000. The documents were seized from the home of the private investigator who hacked phones for NotW, Glenn Mulcaire, during the first phone hacking investigation.

Number of hours the head of Scotland Yard’s first phone hacking investigation, John Yates, spent reviewing the documents before deciding they weren’t worth looking into: 8

Number of years before that evidence was thoroughly examined: almost 4

Number of phone numbers listed in those documents: 5,000 landlines and 4,000 cell phones

Number of phone hacking victims prosecutors initially identified in 2007: 8

Estimated number of total phone hacking victims: about 4,000

The number of phone hacking victims who’ve been notified so far: 170

Number of detectives now working on the investigation: 45

The number of phone hacking victims Scotland Yard is now contacting per week: 30

Estimated time it will take Scotland Yard to contact all phone hacking victims: 2 years

The value of private investigator Glenn Mulcaire’s original year-long contract with NotW, for providing “information and research”: 104,988 pounds ($169,167 at today’s exchange rate)

The amount of money that News International has reportedly paid to settle lawsuits from phone hacking victims: at least 2 million pounds ($3.2 million). The documents in these cases were sealed, and some of the plaintiffs agreed to stay quiet.

The amount of money that News of the World allegedly spent bribing Scotland Yard officers: 100,000 pounds ($161,130), paid to up to five officers.

Number of News of the World whistleblowers found dead: 1. Sean Hoare, the first News of the World journalist who came out and said that former Editor Andy Coulson knew about phone hacking, was found dead in his home yesterday. Hoare previously had drug and alcohol problems and police said that while his death is so far “unexplained” it’s not “suspicious.”

The number of people working at News of the World when it closed: 200

Number of people pied in the face during today’s parliamentary hearing: 1

See anything we missed? Send your favorite stats about the phone hacking scandal to braden.goyette@propublica.org.

This story appeared originally at ProPublica.

Our reader’s guide to the phone hacking scandal

Rupert Murdoch’s News International just announced its decision to close News of the World, the paper that’s been accused of hiring private investigators to hack into cell phones and staging a widespread cover-up to conceal it.

We’ve invited two esteemed journalists who’ve been covering the story to guest edit our #MuckReads feature for the day: Don Van Natta, Jr. (@dvnjr), investigative reporter at The New York Times, and Sarah Ellison (@sarahlellison), Contributing Editor at Vanity Fair. They’ve been sharing the most essential reporting about the scandal, and their thoughts on why each piece is significant. It’s a great resource for those just coming to the story to get oriented.

Here’s a brief summary to get you started:

The scandal goes back to 2005 (The Guardian has a useful timeline of the whole affair; here’s another from The Times), when Prince William and members of the royal staff suspected their voice mail was being tampered with and asked Scotland Yard to investigate. If you’re wondering how that’s even possible, The New York Times has an explanation of how phone hacking works.

In 2006, News of the World royal editor Clive Goodman and a private investigator named Glenn Mulcaire were arrested and charged with hacking the cell phones. The two men served some jail time and the editor of News of the World resigned. Scotland Yard and the U.K. Press Complaints Commission, an independent body that oversees the self-regulation of the press, conducted inquiries that didn’t result in any shocking new findings. The story died down.

In July 2009, an investigative report by The Guardian’s Nick Davies drew fresh attention to the case. Davies found that, far from being a one-off event, the phone hacking had been more widespread — and that the paper had made massive payoffs to keep the story quiet. Ellison notes in #MuckReads that the payoffs were the News of the World’s “first and fatal step into denial that has led them to their untenable position today.”

In response, the Press Complaints Commission criticized The Guardian’s story, saying that there was no evidence the hacking was more widespread than News of the World initially said.

As court cases began to reveal new details about the extent of the phone hacking, a September 2010 story in The New York Times raised questions about how much News of the World editors and reporters knew and why Scotland Yard hadn’t been very aggressive in pursuing the case. Van Natta Jr., one of the three Times reporters on the story, recalls a top Scotland Yard investigator’s defense of the weak police response: “We were not going to set off on a cleanup of the British media.”

In April, Scotland Yard opened up a new investigation and arrested a former News of the World editor and two reporters. In a June Vanity Fair piece, Ellison took a broad look at the scandal, looking at what’s at stake, and how this kind of thing could have happened.

This week, The Guardian reported that the News of the World had hacked into the voice mail of a murdered school girl and deleted some messages, triggering calls for a public inquiry.

Here’s a list of the reported phone hacking victims so far and a round-up of phone hacking-related denials.

This article appeared originally at ProPublica.

Use our coverage to understand Pakistan’s suspected terror connections and more

ProPublica’s Sebastian Rotella has spent more than a year investigating suspected links between Pakistan’s intelligence service and terrorist groups as well as the failure of the U.S. government to detect the growing threat posed by the Lashkar-i-Taiba militant group. He has traveled overseas and around the United States to track down secret documents and conduct exclusive interviews with counterterrorism officials and people close to David Coleman Headley, a Pakistani-American who has confessed to doing reconnaissance work in Mumbai for Lashkar. Rotella has written more than 33,000 words on the subject, which might seem a bit overwhelming if you’re a newcomer to the subject. So here’s an overview of the basics to get you started, plus links to stories that can help you dig even deeper.

What’s the significance of the terrorism trial going on in Chicago?

The United States has indicted seven suspects in the three-day string of terrorist attacks in Mumbai in November 2008 and a follow-up plot in Denmark. The attacks killed 166 people and wounded 308. Because six of the dead were U.S. citizens, federal prosecutors and the FBI are required by law to pursue an investigation.

On May 23, a Chicago immigration consultant, Tahawwur Rana, went on trial in Chicago federal court on charges of material support of terrorism. The trial has attracted worldwide attention because, for the first time, details about the alleged terror connections of Pakistan’s Inter-Services Intelligence Directorate (ISI) are being brought to light in a U.S courtroom. Several of the alleged masterminds of the Mumbai attacks have been linked to the ISI. Though the U.S. has long suspected elements of the ISI of working with terrorist groups, those concerns have been downplayed because Pakistan is a key ally in the fight against terrorism.

The Mumbai massacre is the most spectacular strike to date by Lashkar-i-Taiba, and the first Lashkar attack that has expressly targeted Westerners. Prior to the Mumbai attacks, many U.S. officials assumed Lashkar’s energies were focused on India in the struggle over the territory of Kashmir.

Some worry that publicity from the trial could interfere with the U.S. government’s goal of keeping Pakistan as an ally.

For the latest from the trial, keep an eye on our investigation page.

Who are the major players in the trial?

Tahawwur Rana is on trial as an accomplice in the Mumbai attack and the Denmark plot. Prosecutors allege that he allowed Headley to use his business as a cover while performing reconnaissance missions related to Mumbai. Rana has pleaded not guilty. For more on Rana, and Rotella’s exclusive interview with Rana’s wife, see this piece produced by our partners at PBS Frontline.

The star witness against Rana is his boyhood friend David Coleman Headley, a former DEA informant who has confessed to doing reconnaissance work for Lashkar in the years leading up to the Mumbai attacks. Headley also did reconnaissance for al Qaeda in a failed plot to behead employees of a Danish newspaper that published a cartoon of the Prophet Muhammad. After Headley’s arrest in 2009, he offered to help the FBI capture other terrorists as he sought a deal to avoid the death penalty. Headley’s testimony points to a close alliance between Lashkar and ISI officers. Headley, 50, has proven a great asset to the terror groups he has worked with because of his atypical profile: his American passport and Western appearance, his age and language skills, his ability to operate in the West and South Asia and his extensive contacts in Pakistan’s elite and the criminal underworld. He is possibly the most colorful character to emerge at the center of a U.S. terrorism trial. You can read more about his background here, and about the credibility of his testimony here.

Two alleged masterminds named in the indictment, Sajid Mir and a man known only as Major Iqbal, are suspected of having ISI connections. Mir was picked by Lashkar-i-Taiba to organize the Mumbai massacre: he chose targets, oversaw the plotting and directed the militants carrying out the attacks by phone from Pakistan. Some anti-terrorism officials say he is a former officer in the Pakistani military or the ISI, though others doubt he was actually in the military. Rotella put together a compelling portrait of Mir and the Mumbai attacks, “The Man Behind Mumbai.” It’s also available as a Kindle Single.

Major Iqbal is a suspected ISI officer who worked as a liaison to Lashkar. Headley identifies him as his ISI handler, saying Iqbal worked in tandem with Mir, Headley’s Lashkar handler. Iqbal trained Headley in espionage skills separately from Lashkar, directed and funded his reconnaissance and played a key role in planning the Mumbai attack, according to trial testimony.

What is Laskhar-i-Taiba?

Lashkar was founded in the 1980s and fought against Soviet incursions into Afghanistan, an effort supported by the U.S and Pakistan. Pakistan’s military used the group as a strategic ally in its fight with India over Kashmir, working so closely with Lashkar that the military often assigned officers to work with the militant group. The Pakistani government officially outlawed Lashkar after a 2001 attack on India’s parliament. But David Coleman Headley testified that in the years leading up to the Mumbai attacks the ISI retained a close alliance with Lashkar and its officers helped screen and train recruits from overseas at Lashkar training camps.

Lashkar is enmeshed with other terror groups in the region. Its founder, Hafiz Saeed, was a mentor to Osama bin Laden and helped him found a group that was a precursor to al Qaeda. Al Qaeda, for its part, works with the Pakistani Taliban. The Barcelona subway bombing plot of 2008 was believed to have been a joint venture by the Taliban and al Qaeda. The Mumbai investigation showed that a number of Lashkar fighters, including former Pakistani military officers, have defected to the Taliban and al Qaeda in recent years.

Lashkar has long served as an ally for al Qaeda, providing everything from safe houses for leaders to a kind of training ground for aspiring holy warriors. Rotella reported that several led al Qaeda plots against New York and London.

After 9/11, most U.S. counterterror officials dismissed Lashkar as a potential threat because it seemed focused on India. But Lashkar increasingly seems to pose a unique threat because of its para-military discipline, popularity in Pakistan, ample war chest and longtime ties to the Pakistani intelligence service.

Jean-Louis Bruguière, a French judge who investigated Mir, said “Lashkar is not just a tool of the ISI, but an ally of al Qaeda that participates in its global jihad. Today Pakistan is the heart of the terrorist threat. And it may be too late to do anything about it.”

For a rundown of Lashkar’s origins and a fuller account of the plot behind the Mumbai attacks, read “The Man Behind Mumbai.”

How did the U.S. handle warnings about Headley?

Beginning in 2001, five people close to Headley warned U.S. officials about his dealings with terrorists, including two of Headley’s three wives. They described his radicalization, his training in Lashkar camps and his apparent missions in Pakistan and India. But the officials said their allegations were too general, didn’t point to a particular plot and could have been motivated by personal grudges. Despite the repeated warnings about Headley’s terrorist involvement, he wasn’t arrested until 2009, 11 months after the Mumbai attacks. Headley served as a DEA informant starting in the late 1990s and testimony revealed that he was still an informant when he trained in Lashkar’s camps in 2002. Mysteries persist about the nature of his work as an informant, when it ended and whether it shielded him from more aggressive scrutiny by the FBI.

See this story for details on the substance of the tips, and how they were handled by U.S. officials. As a result of Rotella’s stories last October, the Office of the Director of National Intelligence reviewed the U.S. government’s handling of Headley. Its findings have not been made public.

What happened with the Denmark plot?

Headley testified in Chicago that the plot to attack the Danish newspaper was launched by the ISI and Lashkar, but they shelved the project after his first reconnaissance trip. The plot then shifted to al Qaeda, with kingpin Ilyas Kashmiri directing and funding Headley’s reconnaissance and attempts to recruit an attack team in Europe. News reports from Pakistan this weekend indicate Kashmiri may have been killed in a U.S. missile strike, but U.S. officials have not yet confirmed that. ProPublica and PBS Frontline are working on a documentary about the Mumbai and Denmark terror plots that will air in the fall.

In this video, Sebastian Rotella walks you through the details of Headley’s reconnaissance work:

 

Watch the full episode. See more FRONTLINE.

 

Watch the full episode. See more FRONTLINE.