Banks' (Quasi) Independence Day
The New York Timesleads with the Treasury Department's decision to allow 10 of the nation's biggest banks to repay the cash they received under the Troubled Asset Relief Program. Some of the biggest names in finance—including JPMorgan Chase, Goldman Sachs, and Morgan Stanley—plan to return a total of $68.3 billion, more than one-quarter of the bailout money the government has given to banks since October. By giving back the money, they will free themselves from a slew of federal restrictions while retaining their ability to rely on a variety of government programs, including issuing debt that is guaranteed by the Federal Deposit Insurance Corp. USA Todayleads with a look at how lawmakers have been "working behind the scenes" to try to get federal agencies to pour stimulus money into pet projects.
The Wall Street Journalleads its world-wide newsbox with the first transfer of a non-U.S. citizen from Guantanamo to face trial in the United States. Ahmed Ghailani appeared in federal court in New York yesterday, where he pleaded not guilty to charges relating to the 1998 bombings at the U.S. embassies in Tanzania and Kenya. Opponents of President Obama's plans to shut down Guantanamo criticized the move and accused the White House of ignoring lawmakers who have overwhelmingly stated their opposition to bringing detainees into the United States. The Washington Postleads with the surprising victory of R. Creigh Deeds in Virginia's Democratic primary for governor. Deeds trounced two rivals who had bigger coffers and better connections, ultimately obtaining close to 50 percent of the vote. Although he was a distant third for much of the campaign, Deeds surged in the final weeks of the campaign partly by making the most out of an endorsement by the Post. The Los Angeles Timesleads with a look at how homes in some parts of Southern California are being sold for less than they were 20 years ago.
While giving banks permission to repay TARP money is clearly a sign that the industry has largely come back from the brink, it also "ushered in a new, and potentially risky, phase of the banking crisis," details the NYT. The government will lose "much of its leverage" over the banks before it has a chance to push through industrywide reforms that could help prevent a future crisis. The decision also shouldn't be mistaken for a sign that everything is sunny in the banking world. Three of the initial recipients of TARP funding—Bank of America, Citigroup, and Wells Fargo—can't give back their money just yet. Taxpayers will end up making billions in profits from the 10 banks that the administration could use to help other banks without having to ask Congress for more money. At the same time, though, if all banks return the money to Washington, that's unlikely to benefit consumers as a whole since they'd be giving back the cash that could be used to make loans.
While Democratic leaders have insisted the stimulus package doesn't contain earmarks, it doesn't mean lawmakers haven't been trying to get their projects funded in other ways. USAT got records from 10 of the 27 departments and agencies that are getting stimulus cash and found that 60 members of Congress got in touch to recommend projects, including 13 who voted against the package. In fact, the no-earmarks provision may have ended up making things less transparent. Under ethics rules, lawmakers now have to certify that specific projects inserted into spending bills would not directly benefit them or their families. But there's no such requirement when a lawmaker nudges an agency through e-mails or phone calls.
The Obama administration might have chosen to start with Ghailani because his case will likely be easier to make in civilian court than those of other Guantanmo detainees. Four of his alleged co-conspirators are already serving prison sentences inside the United States after they were tried and convicted by U.S. courts. The Post talks to Senate Minority Leader Mitch McConnell, who says there's an argument to be made that Obama might not even be allowed to bring Guantanamo detainees into the country, although he declined to say whether lawmakers would consider pursuing further action to prevent future transfers. In a military hearing in 2007, Ghaliani admitted he helped the bombers but insists he had no idea what was really going on. "I would like to apologize to the United States government for what I did before," he said. "It was without my knowledge what they were doing, but I helped them."
The NYT and LAT go inside with news that the Pacific island nation of Palau has agreed to take in up to 17 Chinese Muslims who are currently being held in Guantanamo despite the fact that the Bush administration had declared that the Uighurs are not enemy combatants. In a statement released to the Associated Press, the president of Palau said the sparsely populated archipelago that has a population of about 20,000 would accept the detainees "as a humanitarian gesture." The United States said it would give Palau $200 million in long-term development aid, but officials deny the money would be given in exchange for housing the detainees.
Everyone reports that gunmen opened fire outside a five-star hotel in Peshawar, Pakistan, before a powerful truck bomb exploded, killing at least 11 people and wounding 55. The blast collapsed a part of the hotel, which was popular with foreigners, so it's likely the death toll will rise. It was the largest attack against a Western target in Pakistan since last year, when more than 50 people were killed at Islamabad's Marriott Hotel.
The NYT fronts word that villagers in the district of Dir, a remote area of northern Pakistan, have launched a "grass-roots rebellion" against Taliban militants living in their midst. It all began Friday, after a Taliban suicide bomber attacked a mosque during prayer time and killed 30 people. That's when men from the area got together to track down and kill Taliban fighters. This isn't the first time that villagers have stood up against Taliban militants, but previous efforts have often failed because they lacked support from the government and the military. As the military works to root out militants from the Swat Valley, this uprising could present a good opportunity for the government to demonstrate it is ready to support local militias. But that might be a mixed blessing. When the military sent helicopter gunships to help the people in Dir, most "missed their marks."
The WSJ goes high with word that the White House will be dropping plans to mandate salary caps for employees of companies that are receiving bailout cash, meaning they would only have to contend with the limits on bonuses imposed by Congress. The move, which is set to be announced today, would bring an end to a running back-and-forth about how to best join pay directives issued by the White House and Congress. In addition, the administration is widely expected to push all companies to make a bigger effort to tie compensation with long-term performance.
Administration officials breathed a huge sigh of relief yesterday when the Supreme Court declined to hear a challenge to the sale of Chrysler to Fiat. The court said the Indiana funds that protested the deal "have not carried the burden" of proving why the nation's highest court should take up the case.
Daniel Politi has been contributing to Slate since 2004 and wrote the "Today's Papers" column from 2006 to 2009. You can follow him on Twitter @dpoliti.