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bloomberg.com — U.S. regulators working to untangle Bernard Madoff’s alleged $50 billion Ponzi scheme are probing other money managers suspected of using similar tactics, two people with knowledge of the inquiries said. The U.S. Securities and Exchange Commission is pursuing at least one case in which investors may have been cheated out of as much as $1 billion, according to a person, who declined to name the manager and asked not to be identified because the probe isn’t public. Regulators may discover additional Ponzi arrangements as declining stock markets prompt investors to withdraw their cash and they question how their money is being managed.

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thehill.com — Despite keeping Defense Secretary Robert Gates in the Pentagon, President-elect Obama’s transition team informed 90 Bush appointees their services will not be needed after Inauguration Day. Scott Gration, a senior official on Obama’s transition team, called and emailed several of President Bush’s Pentagon appointees about 10 days ago to inform them they were being dismissed. Gates "is sensitive to the fact that a number of appointees will not be able to stay on after [Jan.] 20th," Defense Department spokesman Geoff Morrell said. He noted Gates did request many appointees stay on and the "Obama team was able to cooperate."

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rawstory.com — Ayad Allawi, the American-appointed, one-time prime minister of Iraq, said Saturday the Bush administration's policies in the country have been an "utter failure." In a wide-ranging interview with Arab newspaper Asharq al-Awsat, Allawi offered harsh criticisms of George W. Bush's handling of the nation's sectarian violence, and of the sitting Iraqi administration. "Yes, Bush's policies failed utterly," said Allawi. "Utter failure. Failure of U.S. domestic and foreign policy, including fighting terrorism and economic policy."

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usatoday.com — Communities nationwide have repaired fewer than half of the 122 levees identified by the government almost two years ago as too poorly maintained to be reliable in major floods, according to Army Corps of Engineers data. State and local governments were given a year to fix levees cited by the corps for "unacceptable" maintenance deficiencies in a February 2007 review that was part of a post-Hurricane Katrina crackdown. Only 45 have had necessary repairs, according to data. The remaining unrepaired levees are spread across 18 states and Puerto Rico. Communities nationwide have repaired fewer than half of the 122 levees identified by the government almost two years ago as too poorly maintained to be reliable in major floods, according to Army Corps of Engineers data.

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washingtonpost.com — A senior federal banking regulator approved a plan by IndyMac Bank to exaggerate its financial health in a May federal filing, allowing the California company to avoid regulatory restrictions only two months before it collapsed, a federal inquiry has found. The same regulatory agency, the Office of Thrift Supervision, allowed similar legerdemain by other banks, according to a letter sent to members of Congress by the Treasury Department's inspector general, Eric Thorson. The letter did not provide details about the other incidents. The regulator named in Thorson's letter, Darrel Dochow, was removed from his position as director of OTS's west division, which supervised Washington Mutual, Countrywide, IndyMac and Downey Savings and Loan, among other banks that have been seized or sold this year.

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iht.com — Eight years after arriving in Washington vowing to spread the dream of home ownership, Bush is leaving office, as he himself said recently, "faced with the prospect of a global meltdown" with roots in the housing sector he so ardently championed. There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk. But the story of how we got here is partly one of Bush's own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.

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washingtonpost.com — Shortly after an inspector general questioned the practice, the U.S. Army began advertising this week for an American firm to manage oversight of private security companies in Afghanistan. As it did in Iraq, the Army is increasingly turning to contractors to provide security services in Afghanistan, duties that include protecting American forward operating bases and the growing number of convoys bringing in supplies from Pakistan. The reliance on private security firms, and military management of the companies, became a political flashpoint last year when Blackwater Worldwide guards in Iraq killed at least 14 civilians and wounded 20 at Baghdad's Nisoor Square. Five of the guards have since been indicted on U.S. charges including voluntary manslaughter, and the sixth pleaded guilty.

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hosted.ap.org — Taxpayers were billed an average of $45,000 in overtime and extra pay for each FBI agent temporarily posted to Iraq over the course of four years, according to a new Justice Department report. In some cases, agents were paid to watch movies, exercise and attend parties. In all, the audit by Justice Department Inspector General Glenn A. Fine found the FBI racked up $7.8 million in improper wages between 2003 and 2007. The report blamed a faulty FBI policy that allowed agents to claim the extra time and money. An FBI spokesman said that policy — which initially sought to enlist volunteers to go to dangerous war zones — is no longer in place.

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hosted.ap.org — The top congressional watchdog overseeing the nation's financial bailout says she's frustrated by the Treasury Department's refusal to explain how it is doling out billions in taxpayer money. Harvard law professor Elizabeth Warren, the chairwoman of a congressional oversight panel, said in an interview that she doesn't understand why it's taken so long for the Bush administration to explain its plan. Warren said she doesn't want to believe it's because there never was a plan for spending $700 billion in taxpayer money to rescue banks. "I don't buy a winter coat without a plan," she said. "I can't imagine how someone could think they were going to repair a failing economy and undertake spending billions of dollars in taxpayer money without a plan."

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washingtonpost.com — The Environmental Protection Agency ruled that new power plants are not required to install technology to reduce carbon dioxide emissions, rejecting an argument from environmental groups. The ruling, in a memorandum signed by EPA Administrator Stephen L. Johnson, turns on a seemingly arcane regulatory question that could govern the future of new fossil fuel-burning buildings and power plants under the Clean Air Act. During the Bush administration, the EPA has rejected the idea that greenhouse gases should be regulated like soot, smog precursors and other kinds of air pollution, despite an April 2007 Supreme Court ruling that said carbon dioxide fit the definition of a pollutant that could be regulated under the Clean Air Act.

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