A Close Encounter with Joe Cassano

So I had a weird experience the other day — my editors will probably want me to lay off writing about this on the blog because I have a story coming out on the subject, but I'll just mention it quickly.

I was sitting in the Financial Crisis Inquiry Hearing on Wednesday, listening to the testimony of some acquaintances who have been good sources for me on the financial stuff (Mike Masters of Masters Capital Management and professor Michael Greenberger of the University of Maryland), when all of the sudden I was swarmed by photographers who all started snapping pictures, seemingly of me. I immediately dismissed the embarrassing thought Naturally, they're taking pictures of famous muckraker Matt Taibbi! by remembering that a) I had been sitting there for hours already, and b) some of those same photographers had already rudely pushed me out of the way (with one saying, "Christ, will you move?") to get a close-up of FCIC chair Phil Angelides earlier in the morning. My second thought was that something simultaneously terrible and visually newsworthy had happened to me, like maybe my penis had fallen off — but then why were they shooting in the direction of my head?

Then I turned around and saw that sitting behind me was Joe Cassano, the patient zero of the financial crisis — the former AIG executive who nearly blew up the universe by issuing half a trillion dollars worth of credit default swaps without having any money to back it up. Nobody has really seen Cassano since AIG imploded in 2008; he's been in semi-hiding in London, as far as anyone knows, keeping clear of any wayward pitchforks I suppose. Being that he's been transformed into sort of a mythical creature in the financial crisis story it was surreal seeing him sit there in the flesh, like turning around in a diner and seeing the Headless Horseman eating a tuna melt.

Anyway I have more coming out about all of this in an upcoming story, but Cassano's testimony turned out to be brilliant comedy — it turns out, according to him, that he did a pretty good job and his risk management skills were top-notch! I kept waiting for some sort of cosmic Hand of Justice to reach into the hearing room (a la the climactic death scene in Mozart's Don Giovanni), snatch Cassano up in the middle of one of his mumbling self-congratulatory responses, and then pull him kicking and screaming straight through the floor into the furnace of hell — but it never happened. In fact he barely even took much heat from the panel. In that sense, a very disappointing afternoon.

Meanwhile the passage of the final Financial Regulatory Reform Bill has been hopelessly complicated by a number of factors, the biggest among them being the death of Robert Byrd. But with the news today that Maria Cantwell is back on board with the bill, it looks like the Dems have the 60 votes they need to pass this thing. The story of what it took to get those 60 votes is sort of amazing — again, I have more on this coming out later — but let's just say the whittling process has been in overdrive for almost all of the last month and while all of the major "reforms" are still in place, each of them is getting smaller and smaller with every passing minute. And they still could get whittled down even more in the week and a half or so that's supposedly left until the Senate votes on the bill.

As one Senator I spoke with yesterday said, "This thing is in play until they put the final nail in the coffin."

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In an unrelated matter, I've gotten some letters from people asking me what I think about online reporters from the Washington Post and ABC using unnamed sources to make allegations against Rolling Stone that reporter Michael Hastings violated an off-the-record arrangement in the McChrystal story.

What I think: it's slimy. And political. In a situation like this, when someone from the military calls and says, "That reporter screwed us, lied to us," then insists that he doesn't want to put his name next to that allegation or offer any proof backing it up, that's the time when most reporters would hang up the phone. The only time you keep listening is if you want the Pentagon owing you a favor later on.

The basic rule of anonymous sources is that you don't let them make personal attacks unless you can independently verify the information. The fact that the Pentagon won't go on the record about this suggests to me that they know the truth — which is that nobody expressly told Hastings that any of those utterances were off the record. This stuff isn't brain surgery. If you don't tell a reporter that what you're saying is off the record, it's on the record.

This is all academic, anyway. The fact that all of these news organizations are trying to make a story out of Rolling Stone's journalistic ethics — it would be rotten even if it didn't involve anonymous sources. This is damage-control p.r. 101, reflexively attacking the reporter's ethics or accuracy when he publishes embarrassing information, and the fact that the Post and ABC are cooperating with the government in this effort is pretty shameful stuff. There was a time when no self-respecting journalist would go near something like this, but the definition of a self-respecting journalist has clearly evolved over the years.

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