The McCain campaign claims Sen. McCain had no obligation to report gambling winnings on his personal financial disclosure reports.  That’s wrong; gambling winnings are earned income that must be disclosed.  It’s not even a close call.

Pages 33-34 of the Senate Ethics Manual (pdf available here) state “the staffer who appears on Jeopardy and becomes a grand champion may keep her prize money and other winnings as may the Senator who purchases the winning Powerball ticket.”  The manual continues, “Such winnings must be reported by disclosing individuals as earned income.”  What possible distinction can there be between lottery and game show winnings and money won at a craps table?

Second, some have suggested that because the IRS allows a person to net out his winnings and losses and report only the gain, the same rule must apply to personal financial disclosure forms.  Wrong again. The IRS rules are designed to determine a person's total income, but the Ethics in Government Act's disclosure requirements are designed to identify all of a Member's sources of income.  So under IRS rules, if Sen. McCain won $2,000 at the MGM Grand on Saturday and then lost it all at the Venetian on Sunday, he wouldn't have to report any net income from gambling.  Under the Ethics in Government Act, however, he would still have to report the $2,000 he won at the MGM Grand as income of more than $200 from a specific source.  Other members of Congress, including Sen. Judd Gregg (R-NH), House Minority Leader John Boehner (R-OH), and Rep. Paul Kanjorski (D-PA), all understand this rule and reported such winnings.  Former Rep. Bob Ney (R-OH), on the other hand, went to prison, in part, for failing to properly disclose gambling winnings on his personal financial disclosure form.

Yesterday, CREW filed an ethics complaint against Senator John McCain (R-AZ) for failing to disclose his gambling winnings.  That move has generated a good deal of media coverage.

The Hill:

The Senate Ethics Committee should look into whether John McCain violated federal laws by failing to list gambling winnings on his Senate financial disclosure forms, according to a watchdog group. 

The request by the left-leaning Citizens for Responsibility and Ethics in Washington (CREW) cites several media reports describing McCain as an avid, high-stakes gambler. The group questions why the Arizona senator has not included any gambling winnings on his disclosure forms.

"The Crypt" at Politico.com:

It's no secret that McCain likes to shoot craps, but his campaign told Politico Thursday afternoon that McCain had no gambling winnings in 2006 or 2007. The CREW complaint cites a 2007 weekend in Las Vegas gambling at MGM among the reported incidents in which McCain walked away a winner.

"He had no gambling winnings in 2006 or 2007," McCain spokesman Brian Rogers said in an e-mail. "If he had, they would have been disclosed on his tax returns."

CREW also points to a New York Times report about a McCain visit to Foxwoods Casino in 2000 in which he won money but did not report it on his 2001 disclosure forms.

The Washington Post:

The CREW complaint, however, provides a window into McCain's gambling nature; assuming he abides by all Senate and federal tax laws, McCain's not much of a winner at the craps table.

Under Senate rules, all gambling winnings would be treated the same way as pension plans, book royalties, or other winnings from competitions such as lotteries that are open to the public. They are considered "earned income."

So, under Senate rules, at the end of each year, McCain was required to tally up those gambling trips and determine if he netted at least $200. If he had, he was required to report such winnings on his disclosure forms.

Federal tax law is even more strict: "All gambling winnings must be reported irrespective as to whether any portion thereof is subject to withholding. In addition, you may be required to pay an estimated tax on your gambling winnings."

(For anyone who's ever spent a weekend in Las Vegas, this would appear to be one of the most loosely enforced tax rules ever. However, there are plenty of online guides to explain how McCain, or even once-a-year gamblers, are supposed to report wins and losses while legally gambling.)

Today, CREW filed a complaint against Senator John McCain (R-AZ) with the Senate Ethics Committee.  CREW wants that committee to investigate whether Senator McCain violated federal law and Senate rules by failing to disclose gambling winnings on his Senate financial disclosure reports.   In contrast to House rules, Senate rules allow outsiders to file ethics complaints. Senate rules also require the Ethics Committee to conduct a preliminary inquiry of the complaint.  A copy of our complaint can be found here.

According to a recent article in The New York Times , Sen. McCain is an avid gambler, who frequents casinos as often as once a month. The article states that in the winter of 2000, at the Foxwoods Casino in Connecticut, “[Sen. McCain] and his entourage emerged with thousands of dollars in winnings.” Sen. McCain also reportedly spent a weekend at the MGM Grand in Las Vegas, Nevada in 2007, playing craps while there.

In July, Time reported that over the past decade, Sen. McCain has gambled on Mississippi riverboats, on Indian land, in Caribbean craps pits and on the Las Vegas strip, allegedly playing “for a few thousand dollars at a time.” In 2005, The New Yorker reported that while in New Orleans in the spring of that year, Sen. McCain gambled at Harrah’s Casino.

Federal law and Senate rules require all income to be reported on annual financial disclosure reports. The Senate Ethics Manual states that winnings, such as those derived from a lottery or a game show, are gifts that must be reported as income. Knowingly filing a false report is a crime punishable by up to five years in jail.

Nevertheless, Sen. McCain reported no income derived from gambling on the personal financial disclosure reports he filed with the Senate between 2000 and 2007.

In contrast, other members of Congress, including Sen. Judd Gregg (R-NH), House Minority Leader John Boehner (R-OH) and Rep. Paul Kanjorski (D-PA) all reported winnings on their financial disclosure reports.

CREW’s executive director Melanie Sloan issued this statement when we filed the complaint:

Given Sen. McCain’s long history of gambling, the fact that he never included gambling income on his financial disclosure forms suggests he is either the unluckiest gambler ever or, more likely, he failed to report the income.

The Senate Ethics Committee should investigate whether Sen. McCain deliberately failed to report gambling winnings, and if so, the matter should be turned over to the Department of Justice for a criminal investigation.

During opening arguments in this case, the lawyer for Ted Stevens suggested that Mrs. Stevens was to blame because she handled all the renovation-related business. Not according to emails introduced as evidence at the trial yesterday:

Prosecutors wrapped up their case Wednesday against U.S. Sen. Ted Stevens with a methodical presentation of dozens of e-mails showing Stevens was regularly briefed about the remodeling of his Girdwood home.

Rather than the disinterested husband whose wife ran the "teepee," as Stevens' attorney said in his opening statement to jurors, Stevens received as many as four or five e-mails a week from his friend and Girdwood neighbor Bob Persons on the status of the work. Persons, owner of Girdwood's Double Musky restaurant, frequently reported that much of the work was being done by employees from the oil-field service company Veco. He continually praised Veco's foreman, Rocky Williams, and had good words to say about other Veco workers.

Stevens replied to many of the e-mails and forwarded others to his wife, Catherine, with comments.

Orlando Sentinel columnist Mike Thomas wrote to U.S. Representatives Ric Keller and Tom Feeney asking them to defend their effectiveness.  Keller apparently did.  For four years in a row, CREW has designated Feeney as one of the most corrupt members of Congress.  Feeney didn't respond to Thomas' request.  Instead, he launched into an attack on CREW:

Now compare that to Feeney, who spent his entire letter obsessing over the Citizens for Responsibility and Ethics in Washington. This group (CREW) lists Feeney as one of the most corrupt members of Congress, to which Tom responds it is a liberal, partisan group.

However, CREW has six Democrats on its list, including Charlie Rangel, the corrupt liberal darling of New York. And why, of all Republicans out there, would CREW decide to pick on Feeney.

And, in fact, Feeney already has admitted the big charge CREW has rung him up on and apologized for it. I'll put a link to their section on Feeney and you can draw  your own conclusions.

CREW isn't the problem, Tom. You are. Do you see John Mica, Mel Martinez or Ric Keller on that list? Why do you think that's the case?

What Feeney should have done, if either he or his press office had any sense, was admit his mistake, taken one shot at CREW, and then like Keller moved on to issues. What? Tom couldn't come up with any legislation of interest to Central Florida to mention?

Tom gets so wrapped up with things, Tom DeLay comes to mind, that he obsesses, gets tunnel vision and self-destructs. And obviously his staff either isn't smart enough or is too intimidated to call him on it.

More tapes were played at the trial of Senator Ted Stevens.  According to his "friends," the Alaska Senator didn't like to spend his own money.  And, there seemed to be a concerted effort to make sure Stevens didn't have to spend his own money:

The tapes included conversations with people central to the case: Bill Allen, Stevens's longtime friend, who owned the now-defunct oil-services firm Veco Corp. and paid for the bulk of the home renovations; and Bob Persons, a local restaurant owner who monitored the renovations while Stevens was in Washington.

In a February 2006 telephone call, Persons and Allen said they needed to be discreet with the bills. Persons suggested authorities were looking at "raking [Stevens] over the coals over anything they have."

"Catherine says Ted gets hysterical when he has to spend his own money," Persons said on the call, referring to the senator's wife and a racehorse he and Allen co-owned with the senator. "He gets hysterical because he can’t afford to pay a bunch of money."

"I know," Allen responded.

Today, CREW asked the House Committee on Standards of Official Conduct to investigate whether Rep. Heather Wilson (R-NM) violated House rules by improperly contacting a sitting U.S. Attorney.

We initially made that request for an ethics investigation of Rep. Wilson in March of 2007.  We're renewing that effort today as the House Ethics Committee took no action.  However, the report released by the U.S. Department of Justice implicates Wilson's role in the firing of U.S. Attorney David Iglesias, as noted by the Boston Globe:

The report leaves no doubt in the case of David Iglesias, a fired US attorney from New Mexico. Senator Pete Domenici and Representative Heather Wilson, both Republicans, complained to Justice about Iglesias for, in their view, his failure to prosecute allegations of vote fraud and corruption by Democrats. The department tried to hide the true reasons for his removal, the report concluded, with public misstatements and "disingenuous after-the-fact rationalizations."

Melanie Sloan, CREW’s executive director, stated:

Reprehensibly, Rep. Wilson attempted to influence the criminal justice process for partisan political gain and then tried to hide her misconduct from public scrutiny.  Now that Rep. Wilson has finally come clean, it is time for the newly reconstituted House ethics committee to prove it is not merely a paper tiger and take swift action. Anything less undermines our criminal justice system.

Here's the background:

The U.S. Attorney in Albuquerque, New Mexico, David C. Iglesias has stated that, in mid-October of 2006, two members of Congress from New Mexico pressured him about an ongoing corruption probe of state Democrats. Apparently, Rep. Wilson first called Mr. Iglesias and Sen. Pete Domenici (R-NM) called a week later. After Sen. Dominici admitted calling Mr. Iglesias, yesterday, Rep. Wilson finally admitted that she too had called the U.S. Attorney.

Rep. Wilson’s call to Mr. Iglesias violates chapter 7 of the House ethics manual, which prohibits members from contacting executive or agency officials regarding the merits of matters under their formal consideration. House rules also state that if a member wants to affect the outcome of a matter in litigation, the member’s can file a brief with the court, make a floor statement, or insert a statement into the Congressional Record. Directly calling officials to influence an on-going enforcement matter is not an option.

House rules also state that a member may not claim he or she was merely requesting “background information” or a “status report” because the House has recognized that such requests “may in effect be an indirect or subtle effort to influence the substantive outcome of the proceedings.”

Rep. Wilson’s conduct may also violate the requirement that members conduct themselves in a manner that “reflects creditably on the House.” In a precedent cited by the House ethics committee when it admonished former Majority Leader Tom DeLay (R-TX), the House has held that members are prohibited from asking an executive branch employee to engage in an activity having an impermissible political purpose.

CREW’s complaint alleges Rep. Wilson contacted Mr. Iglesias to discuss an ongoing investigative matter for the impermissible political purpose of harming Democrats in the November elections.

Yesterday was a dramatic day in the Stevens trial.  Tapes, secretly recorded, between the Alaska Senator and the prosecutions chief witness were played in court.  The witness, Bill Allen, was cooperating with federal authorities:

In secretly recorded telephone conversations played in court Monday, Sen. Ted Stevens denied wrongdoing and spat out expletives to describe the federal agents who were raiding homes and offices in Alaska as part of a sweeping corruption probe.

"I don't know what the (expletive) these guys are doing, we'll have to figure that out later," Stevens said to Bill Allen, the chief executive of the oilfield services firm, Veco Corp. The jury heard the full-throated Stevens, profanity and all.

But the recordings also provided insight into how Stevens has maintained his presence in Washington and Alaska without shrinking in shame or embarrassment despite the long, public investigation and then his seven-count felony indictment in July.

A partial transcript of the tapes can be found here.

An audio of the tapes can be found here.

There was an important development in our lawsuit against Vice President Dick Cheney over the weekend.   We had a victory in our effort to conduct a deposition of Cheney's Chief of Staff, David Addington, which the Bush administration is trying desperately to prevent.

Yesterday District Court Judge Colleen Kollar-Kotelly issued a 26-page opinion denying the request of the vice president and the Office of the Vice President for a stay of her discovery order while the U.S. Court of Appeals for the D.C. Circuit considers their mandamus petition. 

Judge Kollar-Kotelly authorized CREW to take the depositions of David Addington and NARA official Nancy Smith to try to answer the question of whether the vice president truly is preserving all categories of records covered by the Presidential Records Act.  On the eve of the first deposition, the White House filed an emergency petition for a writ of mandamus in the D.C. Circuit.  By this form of extraordinary relief, the White House is asking the appellate court to order the district court to vacate the discovery order, which the White House claims will intrude into constitutionally-protected areas of the vice president. 

The district court refused to stay the discovery while the mandamus petition is pending, reasoning that the White House defendants have no likelihood of success on the merits of their petition.   Judge Kollar-Kotelly especially took issue with the factual representations made by the White House defendants in the D.C. Circuit, , noting that they “contain content that bears no resemblance to what has actually transpired in this case.”  Although she denied the stay, Judge Kollar-Kotelly suspended the depositions to give the Court of Appeals time to address the stay motion now before that court.

Expect some drama in the court room today.  The defense is pushing for a dismissal of the case.  They've upped the ante by calling the prosecutors' actions "intentional":

Sen. Ted Stevens’s defense attorneys accused the Justice Department Sunday of "intentionally" mishandling key evidence in their latest call for a full dismissal of the Alaska Republican's seven-count indictment.

The latest charge came after the Justice Department provided Stevens's lawyers with a slew of new documents to comply with an extraordinary order issued last week by Judge Emmet G. Sullivan of the U.S. District Court of the District of Columbia. The accusation will be the focus of a status hearing scheduled for Monday morning that could determine whether the criminal case against the Senate's most senior Republican will proceed.

"Until today, defense counsel have refrained from alleging intentional misconduct by the government," wrote lead defense attorney Brendan Sullivan, in court papers filed Sunday night. "We can no longer do so in good conscience."