Tim Samick, a laid-off factory worker from Elk County, Pa., laments the chances of finding a good job as he passes the time at the VFW on Main Street in Ridgway, Pa. Officials and residents of this struggling manufacturing community are learning they will receive no immediate transportation money from the economic stimulus plan despite their 13.8 percent unemployment rate. Counties suffering the most from job losses are receiving the least help so far from President Obama's plan to spend billions of stimulus dollars on roads and bridges, an Associated Press analysis has found.

WASHINGTON – Counties suffering the most from job losses stand to receive the least help from President Barack Obama’s plan to spend billions of stimulus dollars on roads and bridges, an Associated Press analysis has found.

Although the intent of the money is to put people back to work, AP’s review of more than 5,500 planned transportation projects nationwide reveals that states are planning to spend the stimulus in communities where jobless rates are already lower.

One result among many: Elk County, Pa., isn’t receiving any road money despite its 13.8 percent unemployment rate. Yet the military and college community of Riley County, Kan., with its 3.4 percent unemployment, will benefit from about $56 million to build a highway, improve an intersection and restore a historic farmhouse.

Altogether, the government is set to spend 50 percent more per person in areas with the lowest unemployment than it will in communities with the highest.

The AP reviewed $18.9 billion in projects, the most complete picture available of where states plan to spend the first wave of highway money. The projects account for about half of the $38 billion set aside for states and local governments to spend on roads, bridges and infrastructure in the stimulus plan.

The very promise that Obama made, to spend money quickly and create jobs, is locking out many struggling communities needing those jobs.

The money goes to projects ready to start. But many struggling communities don’t have projects waiting on a shelf. They couldn’t afford the millions of dollars for preparation and plans that often is required.

“It’s not fair,” said Martin Schuller, the borough manager in the Elk County seat of Ridgway, who commiserates about the inequity in highway aid with colleagues in nearby towns. “It’s a joke because we’re not going to get it, because we don’t have any projects ready to go.”

The early trend seen in the AP analysis runs counter to expectations raised by Obama, that road and infrastructure money from the historic $787 billion stimulus plan would create jobs in areas most devastated by layoffs and plant closings. Transportation money, he said, would mean paychecks for “folks looking for work” and “folks who want to work.”

“That’s the core of my plan, putting people to work doing the work that America needs done,” Obama said in a Feb. 11 speech promoting transportation spending as a way to expand employment.

Also, Congress required states to use some of the highway money for projects in economically distressed areas, but didn’t impose sanctions if they didn’t. States can lose money, however, if they don’t spend fast enough.

The AP examined the earliest projects announced nationwide, the ones most likely to break ground and create jobs first. More projects are continually being announced, and some areas that received little or no help so far may benefit later. The Obama administration could also encourage states to change their plans.

To determine whether there was a disparity in where the money would go, the AP divided the nation’s counties into four groups by unemployment levels. The analysis found that, no matter how the early money is measured, communities suffering most fare the worst:

• High-unemployment counties, those in the top quarter of jobless rates, are allotted about 16 percent of the money, compared with about 20 percent for areas least affected by joblessness.

• In low-unemployment counties nationwide, those in the bottom quarter of jobless rates, the federal government is spending about $89 a person compared with $59 a person in the worst-hit areas.

• In counties with the largest populations, the government is spending about $69 a person in areas with the lowest unemployment and $40 a person in places with the greatest job need.

The analysis also found that counties with the highest unemployment are most likely to have been passed over completely in the early spending.

Among them: Wheeler County, Ore.; Steuben County, Ind.; Macon County, Ga.; and Crowley County, Colo.

Many others are getting minimal help in this round: Vermillion County, Ind.; Lapeer County, Mich.; Presidio County, Texas; Tallahatchi County, Miss.

Those counties still will benefit from job creation elsewhere in their states, said Lana Hurdle, a Transportation official overseeing the agency’s stimulus money.

“Even if you have to drive to it, it’s better than no job,” Hurdle said.

Joel Szabat, who also oversees the stimulus for the Transportation Department, said the agency presses states to build projects in struggling areas but does not normally consider how much money is going to each county.

Presented with AP’s findings, he said: “I will be going back to ask our folks to do this kind of analysis, the overall amount for the projects.”

“Our goal, and I think it is a goal that will be achieved, is that you will see that a fair share of this money will go to these areas,” Szabat said.

Obama’s plan sends $38 billion to states and local governments for roads, bridges, transit and other infrastructure, about 5 percent of the overall program that also includes money for, among other things, schools, community development, technology, worker training and tax breaks.

All counties will receive some stimulus relief eventually. But the haste voiced by the White House is not reflected in the flow of highway money so far.

“We cannot wait,” Vice President Joe Biden said last week when announcing a $30 million transit project in his hometown of Wilmington, Del., where the 7.7 percent unemployment rate remains below the national average. “We’re spending a lot of time and money. Why? It’s about … jobs, jobs, jobs, jobs. That’s why we cannot wait.”

Yet residents of Perry County, Tenn., will have to wait. County Mayor John Carroll said he’s disappointed his community, which suffers from 25.4 percent unemployment, won’t receive a dime any time soon for its road needs.

“It’s pretty easy to draw a connection between the high unemployment rate and the lack of any four-lane highways,” he said.

Federal auditors acknowledge they can’t yet track the transportation money that is leaving Washington and there is no single list of the thousands of projects planned in each state. For its analysis, the AP used lists of projects approved through March by the Transportation Department and collected lists of stimulus projects that have been announced in 49 states, Puerto Rico and the Virgin Islands.

Federal officials have approved 2,800 projects. The remaining projects on the AP list represent the states’ official plans for the money. Only Virginia, which has not announced its plan, is not included.

As the number of projects grows, places like Elk County, Pa., could still be left out because they could not afford the upfront costs needed to put proposals in the pipeline.

“It’s all based on this ‘shovel readiness,”‘ said Elk County Commissioner Daniel Freeburg. “That’s been our stumbling block.”

Elk County surely could use jobs. The once thriving north central Pennsylvania county is home to metal factories that equip the nation’s auto industry. Layoffs are mounting.

Freeburg is pinning hopes on getting future stimulus money, such as for energy conservation programs, that will create jobs and rekindle the local metal and lumber industries.

In promoting his plan, Obama went to hard-hit communities such as Elkhart, Ind., and Peoria, Ill., and promised the jobs would come.

“Now, I know that some of you might be thinking, ‘Well that all sounds good, but when are we going to see any of that here in Elkhart?”‘ Obama said. “‘What does all that mean for our families and our community?’ Those are exactly the kind of questions you should be asking of your president and your government.”

Obama kept his promise to Elkhart, which so far is expected to receive $13.7 million, and Peoria, which should receive at least $10.6 million. But other, similar counties have not been so lucky.

For now, laid-off workers in Elk County, Pa., question why they’ve missed out, while money flows to more prosperous places.

“Why are they helping them?” asked Wendy Cameron, 50, of Saint Marys, Pa., who lost her job in a metal factory last year. She doesn’t have health insurance and would gladly take road work. “They’re not in need. We are.

“What are these people going to do? Is everybody going to go on welfare? I’ve never been on welfare. I don’t want to be on welfare.”

Associated Press writer Cal Woodward contributed to this report.

———

ON THE WEB

Interactive tracking stimulus money on a map: tinyurl.com/orulga

By Brett J. Blackledge, Matt Apuzzo

WASHINGTON – The journey into the CIA’s most extreme interrogation program began in darkness.

Blindfolded, hooded and wearing earmuffs, suspected terrorists were shackled and flown to secret interrogation centers. The buildings themselves were quiet, clinical and designed to fill prisoners with dread. Detainees were shaved, stripped and photographed nude.

The questioning began mildly, a shackled detainee facing a non-threatening CIA interrogator. But for detainees who refused to cooperate, the interrogation escalated in terrifying ways.

Few people have ever witnessed the process, which was designed to extract secrets from “high value” suspects during the years after the Sept. 11, 2001, terrorism attacks on the U.S. But Justice Department documents, which the Obama administration simultaneously released and repudiated Thursday, describe the process from darkness to water boarding in skin-crawling detail.

Prisoners were naked, shackled and hooded to start their interrogation sessions. When the CIA interrogator removed the hood, the questioning began. Whenever the prisoner resisted, the documents outlined a series of techniques the CIA could use to bring him back in line:

• Nudity, sleep deprivation and dietary restrictions kept prisoners compliant and reminded them they had no control over their basic needs. Clothes and food could be used as rewards for cooperation.

• Slapping prisoners on the face or abdomen was allowed. So was grabbing them forcefully by the collar or slamming them into a false wall, a technique called “walling” that had a goal of fear more than pain.

• Water hoses were used to douse the prisoners for minutes at a time. The hoses were turned on and off as the interrogation continued.

• Prisoners were put into one of three in “stress positions,” such as sitting on the floor with legs out straight and arms raised in the air to cause discomfort.

At night, the detainees were shackled, standing naked or wearing a diaper. The length of sleep deprivation varied by prisoner but was authorized for up to 180 hours. Interrogation sessions ranged from 30 minutes to several hours and could be repeated as necessary and as approved by psychological and medical teams.

Some of these techniques, such as stripping a detainee naked, depriving him of sleep and putting a hood over his head, are prohibited under the U.S. Army Field Manual. But in 2002, the Justice Department authorized CIA interrogators to step up the pressure even further on suspected terrorist Abu Zubaydah.

Justice Department lawyers said the CIA could place Zubaydah in a cramped confinement box. Because Zubaydah appeared afraid of insects, they also authorized interrogators to place him in a box and fill it box with caterpillars (that tactic ultimately was not used).

Finally, the Justice Department authorized interrogators to take a step into what the United States now considers torture, water boarding.

The Bush administration approved the use of water boarding, a technique in which Zubaydah was strapped to a board, his feet raised above his head. His face was covered with a wet cloth as interrogators poured water over it.

The body responds as if it is drowning, over and over as the process is repeated.

“We find that the use of the wafer board constitutes a threat of imminent death,” Justice Department attorneys wrote. “From the vantage point of any reasonable person undergoing this procedure in such circumstances, he would feel as if he is drowning at the very moment of the procedure due to the uncontrollable physiological sensation he is experiencing.”

But lawyers decided that water boarding caused “no pain or actual harm whatsoever” and so did not meet the “severe pain and suffering” standard to be considered torture.

President Obama has ended the CIA’s interrogation program. CIA interrogators are now required to follow Army guidelines, under which water boarding and many of the techniques listed above are prohibited.

This photo was turned over as evidence to federal prosecutors investigating the 2007 shooting in Baghdad, Iraq, involving Blackwater Worldwide contractors. Defense lawyers say the photos are of bullet damage and prove Blackwater was fired upon that day, though the photos are not time stamped and the trucks were repaired before the FBI began investigating.

WASHINGTON – Radio logs from a deadly 2007 shooting in Baghdad cast doubt on U.S. government claims that Blackwater Worldwide security guards were unprovoked when they killed 14 Iraqi civilians.

The transcripts of Blackwater radio reports, obtained by The Associated Press, describe a hectic eight minutes in which the guards repeatedly reported incoming gunfire from insurgents and Iraqi police.

Five guards face manslaughter and weapons charges for their roles in the shootings. A sixth has pleaded guilty. Prosecutors said the men unleashed a gruesome attack on unarmed Iraqis, including women, children and people trying to escape.

But the radio logs from the Sept. 16, 2007 shooting suggest otherwise. Copies of the logs were turned over to prosecutors by Blackwater.

Because Blackwater guards were authorized to fire in self-defense, any evidence their convoy was attacked will make it harder for the Justice Department to prove they acted unlawfully.

The logs, which document radio traffic heard by the company’s dispatch center inside the U.S.-controlled Green Zone, show that the Blackwater convoy known as Raven 23 reported taking small arms fire—or SAF— from insurgents within one minute of shutting down traffic in Baghdad’s Nisoor Square.

“Mult insuirg SAF R23,” the log states at 12:12 p.m.

One minute later, the Raven 23 convoy reported taking fire from Iraqi police: “R23 rpts IPs shooting R23.”

It’s unclear why Iraqi police would fire on the Blackwater convoy. Prosecutors could argue the police fired because they believed Blackwater was attacking civilians. It’s also common for insurgents to dress as Iraqi police or military officials.

Raven 23 was told to leave the square and return to the Green Zone at 12:14, according to the logs. But one minute later, the convoy reported that one of its heavily armored vehicles was disabled. Guards jumped out of another truck and set up a tow rig, still under fire, according to the logs.

“R23 in trfc still under sporadic SAF,” the log shows at 12:20 p.m., as the convoy made its way back to the Green Zone.

“Unless these guys are lying to their command watch in real time, making up stuff, that’s real-time reporting that they were taking small arms fire,” said defense attorney Thomas Connolly, who represents Nick Slatten, a former Army sergeant and indicted Blackwater guard.

Connolly provided the logs to the AP because he said prosecutors knew there was evidence of a firefight, yet unfairly described it as a massacre.

“The Justice Department began their presentation to the American people with a lie,” Connolly said.

Justice Department spokesman Dean Boyd declined to discuss the contents of the logs. “We cannot comment on evidence related to a pending case, but we are fully prepared to address in court arguments made by the defense concerning the documents you reference,” he said.

Blackwater, based in Moyock, N.C., confirmed the authenticity of the logs but declined further comment.

The logs add a new uncertainty to an already murky case. Iraqi witnesses say Blackwater fired the only shots. And some Raven 23 members, including at least one who set up the tow rig, told authorities they saw no gunfire, according to people close to the case who spoke on condition of anonymity because they were not authorized to discuss it publicly.

Others in the convoy told authorities they did see enemy gunfire. And Blackwater turned over to prosecutors pictures of vehicles pocked with bullet holes, which the company says proves the guards were shot at. The photos were not time-stamped, however, and the trucks were repainted and repaired by the time FBI agents began investigating.

The Iraqi government has labeled the guards “criminals” and is closely watching the Blackwater case. The shooting strained diplomacy between Washington and Baghdad and fueled anti-American insurgency in Iraq.

U.S. prosecutors were aggressive in their charges against the guards. They used an anti-machine gun law to attach 30-year mandatory prison sentences to the charges. And though they can’t say for sure exactly which guards shot which victims, all five guards are charged with 14 counts of manslaughter.

A sixth Blackwater guard struck a deal with prosecutors, turned on his former colleagues, and pleaded guilty to killing one Iraqi and wounding another.

“Those who engaged in unprovoked and illegal attacks on civilians, whether during times of conflict or times of peace, will be held accountable,” national security prosecutor Patrick Rowan told reporters when announcing the indictments.

Mark Hulkower, an attorney representing Army veteran and former Blackwater guard Paul Slough, said the logs undermine that claim.

“It’s absolutely bizarre that the Department of Justice thinks it can call balls and strikes for every shot fired in a firefight,” Hulkower said. “I think a jury would be reluctant to do that.”

In all, 17 Iraqis were killed in the assault. Rowan said evidence in the case could only prove the guards shot 14, although he left open the possibility of future charges. Blackwater Worldwide and its corporate officers were not charged.

———

RADIO LOGS

A summary of radio logs from Blackwater Worldwide indicating that a convoy of security guards, Raven 23, reported being under fire in Baghdad’s Nisoor Square. Raven 23 is the convoy involved in the fatal shooting of 17 civilians. Raven 4 refers to a separate convoy escorting a U.S. diplomat. Raven 22 is a convoy dispatched to join Raven 4 after a car bombing.

1159 – Blackwater convoy Raven 4, protecting US diplomat, reports car bombing

1200 – Blackwater convoy Raven 22 exits Green Zone checkpoint 12 to escort Raven 4

1210 – Raven 22 and Raven 4 depart for Green Zone

1211 – Raven 23 secures Nisoor Square

1212 – Raven 23 reports multiple insurgent small arms fire

1213 – Blackwater air support advised of small arms fire at Nisoor Square. Raven 23 reports Iraqi police shooting at convoy

1214 – Raven 23 ordered back to Green Zone checkpoint 2

1216 – Raven 23 reports command vehicle disabled, no injuries

1218 – Raven 23 begins towing out disabled command vehicle, still being engaged by unspecified enemy

1220 – Raven 22 advised of Raven 23 shooting at Nisoor Square. Green Zone checkpoint 12 closed.

1220 – Raven 23 in traffic, still taking sporadic small arms fire

By Matt Apuzzo, Lara Jakes

Washington Mutual executives were among those who fought regulations against high-risk mortgages. Two years later, the bank failed.

WASHINGTON – The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.

“Expect fallout, expect foreclosures, expect horror stories,” California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job.

Bowing to aggressive lobbying — along with assurances from banks that the troubled mortgages were OK — regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.

“These mortgages have been considered more safe and sound for portfolio lenders than many fixed rate mortgages,” David Schneider, home loan president of Washington Mutual, told federal regulators in early 2006. Two years later, WaMu became the largest bank failure in U.S. history.

The administration’s blind eye to the impending crisis is emblematic of a philosophy that trusted market forces and discounted the need for government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s.

“We’re going to be feeling the effects of the regulators’ failure to address these mortgages for the next several years,” said Kevin Stein of the California Reinvestment Coalition, who warned regulators to tighten lending rules before it was too late.

Many of the banks that fought to undermine the proposals by some regulators are now either out of business or accepting billions in federal aid to recover from a mortgage crisis they insisted would never come. Many executives remain in high-paying jobs, even after their assurances were proved false.

In 2005, faced with ominous signs the housing market was in jeopardy, bank regulators proposed new guidelines for banks writing risky loans. Today, in the midst of the worst housing recession in a generation, the proposal reads like a list of what-ifs:

• Regulators told bankers exotic mortgages were often inappropriate for buyers with bad credit.

• Banks would have been required to increase efforts to verify that buyers actually had jobs and could afford houses.

• Regulators proposed a cap on risky mortgages so a string of defaults wouldn’t be crippling.

• Banks that bundled and sold mortgages were told to be sure investors knew exactly what they were buying.

• Regulators urged banks to help buyers make responsible decisions and clearly advise them that interest rates might skyrocket and huge payments might be due sooner than expected.

Those proposals all were stripped from the final rules. None required congressional approval or the president’s signature.

“In hindsight, it was spot on,” said Jeffrey Brown, a former top official at the Office of Comptroller of the Currency, one of the first agencies to raise concerns about risky lending.

Federal regulators were especially concerned about mortgages known as “option ARMs,” which allow borrowers to make payments so low that mortgage debt actually increases every month. But banking executives accused the government of overreacting.

Bankers said such loans might be risky when approved with no money down or without ensuring buyers have jobs but such risk could be managed without government intervention.

“An open market will mean that different institutions will develop different methodologies for achieving this goal,” Joseph Polizzotto, counsel to now-bankrupt Lehman Brothers, told U.S. regulators in a March 2006.

Countrywide Financial Corp., at the time the nation’s largest mortgage lender, agreed. The proposal “appears excessive and will inhibit future innovation in the marketplace,” said Mary Jane Seebach, managing director of public affairs.

One of the most contested rules said that before banks purchase mortgages from brokers, they should verify the process to ensure buyers could afford their homes. Some bankers now blame much of the housing crisis on brokers who wrote fraudulent, predatory loans. But in 2006, banks said they shouldn’t have to double-check the brokers.

“It is not our role to be the regulator for the third-party lenders,” wrote Ruthann Melbourne, chief risk officer of IndyMac Bank.

California-based IndyMac also criticized regulators for not recognizing the track record of interest-only loans and option ARMs, which accounted for 70 percent of IndyMac’s 2005 mortgage portfolio. This summer, the government seized IndyMac and will pay an estimated $9 billion to ensure customers don’t lose their deposits.

Last week, Downey Savings joined the growing list of failed banks. The problem: About 52 percent of its mortgage portfolio was tied up in risky option ARMs, which in 2006 Downey insisted were safe — maybe even safer than traditional 30-year mortgages.

“To conclude that ‘nontraditional’ equates to higher risk does not appropriately balance risk and compensating factors of these products,” said Lillian Gavin, the bank’s chief credit officer.

At least some regulators didn’t buy it. The comptroller of the currency, John C. Dugan, was among the first to sound the alarm in mid-2005. Speaking to a consumer advocacy group, Dugan painted a troublesome picture of option-ARM lending. Many buyers, particularly those with bad credit, would soon be unable to afford their payments, he said. And if housing prices declined, homeowners wouldn’t even be able to sell their way out of the mess.

It sounded simple, but “people kind of looked at us regulators as old-fashioned,” said Brown, the agency’s former deputy comptroller.

Diane Casey-Landry, of the American Bankers Association, said the industry feared a two-tiered system in which banks had to follow rules that mortgage brokers did not. She said opposition was based on the banks’ best information.

“You’re looking at a decline in real estate values that was never contemplated,” she said.

Some saw problems coming. Community groups and even some in the mortgage business, like Welch, warned regulators not to ease their rules.

“We expect to see a huge increase in defaults, delinquencies and foreclosures as a result of the over selling of these products,” Stein, the associate director of the California Reinvestment Coalition, wrote to regulators in 2006. The group advocates on housing and banking issues for low-income and minority residents.

The government’s banking agencies spent nearly a year debating the rules, which required unanimous agreement among the OCC, Federal Deposit Insurance Corp., Federal Reserve, and the Office of Thrift Supervision — agencies that sometimes don’t agree.

The Fed, for instance, was reluctant under Alan Greenspan to heavily regulate lending. Similarly, the Office of Thrift Supervision, an arm of the Treasury Department that regulated many in the subprime mortgage market, worried that restricting certain mortgages would hurt banks and consumers.

Grovetta Gardineer, OTS managing director for corporate and international activities, said the 2005 proposal “attempted to send an alarm bell that these products are bad.” After hearing from banks, she said, regulators were persuaded that the loans themselves were not problematic as long as banks managed the risk. She disputes the notion that the rules were weakened.

Marc Savitt, president of the National Association of Mortgage Brokers, said regulators were afraid of stopping a good thing.

“If it seems to be working, if it’s not broken don’t fix it, if everybody’s making money, then the good times are rolling and nobody wants to be the one guy to put the brakes on,” he said.

In the past year, with Congress scrambling to stanch the bleeding in the financial industry, regulators have tightened rules on risky mortgages.

Congress is considering further tightening, including some of the same proposals abandoned years ago.

WASHINGTON – Attorney General Michael Mukasey was feeling better Friday after collapsing during a speech, a spokeswoman said, reporting that hospital medical tests showed no signs of a stroke or cardiac-related problem.

Gina Talamona of the Justice Department told reporters the 67-year-old Mukasey, who had been rushed to George Washington University Hospital after the attack late Thursday, was still recovering Friday and had more tests scheduled as a precaution. She said he never transferred his authority as attorney general at any time during the incident.

“There’s no indication that he suffered a stroke or any heart-related incident,” Talamona said outside the hospital. “It really appears to be a fainting spell.”

A senior Justice Department official, speaking on condition of anonymity, said that an MRI was clear. The official was not authorized to publicly speak about Mukasey’s medical procedures.

President Bush telephoned the attorney general shortly before 7 a.m. EST to wish him a speedy recovery, press secretary Dana Perino said, describing Mukasey as “sounding well” and saying he was getting “excellent care.”

Talamona noted that Mukasey had had a very busy day before going to a Washington hotel to give the keynote speech to at a black-tie dinner of The Federalist Society, a conservative-oriented legal group. During the talk, he began to slur his words, nodded, turned and started to collapse when he was caught by men standing nearby.

His spokeswoman noted that he “works long days. It was a late night speech under hot lights.”

She said doctors were doing an additional round of routine tests.

“He certainly wants to leave and get back to work as soon as possible,” Talamona said.

Of Mukasey, she said: “He’s in good shape, he’s very active, he’s very alert and very ready to leave.”

Bush brought the retired federal judge in last year to replace Attorney General Alberto Gonzales, who resigned under pressure in a controversy over the firings of several federal prosecutors.

It was not clear when Mukasey would be released from the hospital after being admitted overnight for observation and tests. He briefly lost consciousness during the attack.

Mukasey opened his speech on terrorism with a wry remark about expecting the mood at the dinner to be “somber or sober.” He slumped over the podium about 15 minutes later and could be seen swaying and shaking slightly just before he collapsed.

“Oh, no, no!” people in the audience cried out as Mukasey fell. “Oh, my God!”

Mukasey is Bush’s third attorney general. The flinty but measured New Yorker has said the job initially discouraged him, and he has scaled back his public appearances in recent weeks.

A former prosecutor who saw Mukasey hours earlier described the attorney general as tired-looking and drawn.

Talamona said that Mukasey’s wife, Susan, was with him at the hospital.

After collapsing, Mukasey lay on the stage for about 10 minutes being attended to by his FBI security detail and medical personnel at the dinner, said eyewitness Abigail Thernstrom, a senior fellow at the Manhattan Institute. Though he lost consciousness initially, Mukasey appeared to be awake when he was taken from the Marriott Wardman Park Hotel in northwest Washington, she said.

“It was hard to watch such a thing,” Thernstrom said. “It was horrible.”

A Republican staffer on the Senate Judiciary Committee, Jack Daly, who was also at the dinner, said in an e-mail to colleagues sent at 10:20 p.m. EST: “AG Mukasey collapsed in the middle of his keynote address at tonight’s fed-soc dinner. He is still on stage after ten minutes and his security detail has called 911. The paramedics just arrived.”

Twenty minutes later, Daly added in another e-mail: “Mukasey did regain consciousness before he was taken away.”

By Matt Apuzzo, Lara Jakes Jordan

WASHINGTON – A source close to the process of selecting Barack Obama’s attorney general says the president-elect has “informally” offered the post to Washington lawyer Eric Holder, who has accepted.

The person spoke on condition of anonymity Wednesday because no announcement has been made. He said that Holder has “informally” accepted the offer, pending completion of the vetting process.

Holder would be the nation’s first black attorney general. He could run into some potential political problems over a 2001 pardon of a wealthy commodities dealer by President Bill Clinton, whose administration Holder served as deputy attorney general. The trader, Marc Rich, had spent years running from tax charges.

By Matt Apuzzo, Lara Jakes Jordan

When the U.S. government took over mortgage giants Fannie Mae and Freddie Mac, taxpayers inherited more than bad debts. They're also potentially on the hook for tens of millions of dollars in legal fees for the executives at the center of the housing market's collapse.

WASHINGTON – When the government took over mortgage giants Fannie Mae and Freddie Mac, taxpayers inherited more than just bad debts. They’re also potentially on the hook for tens of millions of dollars in legal fees for the executives at the center of the housing market’s collapse.

With the Justice Department investigating companies involved in the mortgage and financial meltdown, executives around the country are hiring defense lawyers. Like many large companies, Fannie and Freddie had contracts promising to cover legal bills for their executives.

When the Treasury Department delivered a $200 billion bailout to Fannie and Freddie, that obligation passed to the government, which may find itself paying for the lawyers defending the executives against the government’s own prosecutors.

“Who’d have thought we might be on the hook for paying the defense costs when we’re also paying the prosecution costs?” said Doug Heller, executive director of Consumer Watchdog, a Santa Monica, Calif.-based group that has been critical of the financial bailout packages. “To defend the economy from the havoc that’s been created, we’re going to defend the havoc creators?”

The Bush administration is working to avoid it. The Federal Housing Finance Agency, which controls Fannie and Freddie, said in regulatory filings that it soon will issue regulations spelling out exactly how such legal fees may be dolled out. The agency could prohibit some fees, but a broad prohibition almost certainly would lead to a costly court fight over who’s responsible for the bills when the Justice Department comes knocking.

Fannie’s and Freddie’s contracts also cover legal fees from shareholder lawsuits. Taxpayers could be forced to pay those legal bills, too. If the shareholders win — if they can prove the companies were mismanaged — the government could be liable for millions of dollars to make up for the executives’ failures.

It wouldn’t be the first time federal money intended to prop up the financial industry was used for unintended purposes. Days after it received an $85 billion federal bailout loan, the huge insurer American International Group Inc. spent $440,000 on an executive retreat with spa treatments, banquets and golf outings.

Both Fannie Mae and Freddie Mac have been subpoenaed as part of the wide-ranging Justice Department investigation into the companies’ accounting, disclosure and governance practices. The two companies are key to the U.S. mortgage industry. After banks make loans to home buyers, Fannie and Freddie buy the mortgages from the banks so bankers can have cash on hand to make more loans and keep the economy humming. Fannie and Freddie then bundle those loans and sell them as mortgage-backed securities. The proceeds of those sales help buy more mortgages.

In recent years, however, the companies purchased more risky, subprime mortgages. When the housing bubble burst and the subprime industry imploded, investors feared the risk of buying Fannie and Freddie’s mortgage-backed securities, making it harder for the companies to raise money.

Combined, Fannie and Freddie own or guarantee nearly half of all U.S. mortgages. The Treasury Department stepped in to keep the companies from collapsing and taking the mortgage industry with them.

Neither Fannie nor Freddie has said whether they already have advanced any legal fees to former executives. The companies are required to make general disclosures about such payments but only on quarterly corporate filings.

When the government took over, Fannie Mae chief executive Daniel H. Mudd, Freddie Mac chief executive Richard F. Syron and the rest of the companies’ leadership was dismissed. All those executives would be entitled to have their legal fees covered.

The obligations could easily stretch into millions of dollars. Both companies have promised to pay legal fees for all current and former board members, executives and employees charged or investigated in connection with their employment.

Legal fees can add up quickly. After Freddie Mac restated its earnings in 2003, it became embroiled in several investigations and lawsuits. By the middle of 2005, the company had paid $16.8 million in legal fees for its executives and employees.

Executives who are convicted of wrongdoing are required to give the money back. Those who are acquitted, who are merely witnesses or who are investigated but never charged do not need to reimburse the company.

It’s impossible to determine how much money might be at stake. In taking over the two mortgage giants, the government pledged to spend up to $200 billion to keep both companies afloat. The amount the government actually will spend depends on how well the companies perform in a changing mortgage industry.

With so much money at stake, defense attorneys are watching closely to see how broadly housing regulators restrict any future legal payments. The Fannie and Freddie contracts give the executives the right to sue to force the companies to pay their legal fees. If the executives win, the cost of those lawsuits gets passed to Fannie and Freddie, and potentially to the taxpayers.

Sen. Ted Stevens

WASHINGTON – Alaska Sen. Ted Stevens was convicted of seven corruption charges Monday in a trial that tainted the 40-year Senate career of Alaska’s political patriarch.

The verdict, coming barely a week before Election Day, added further uncertainty to a closely watched Senate race. Democrats hope to seize the once reliably Republican seat as part of their bid for a filibuster-proof majority in the Senate.

Stevens, 84, was convicted of all the charges he faced of lying about free home renovations and other gifts from a wealthy oil contractor. Jurors began deliberating last week.

The senator showed no emotion as the jury foreman said “guilty” seven times. After the verdicts, Stevens sat in his chair and stared at the ceiling as attorney Brendan Sullivan put his arm around him.

Stevens faces up to five years in prison on each count when he is sentenced, but under federal guidelines he is likely to receive much less prison time, if any. The judge originally scheduled sentencing for Jan. 26 but then changed his mind and did not immediately set a date.

The monthlong trial revealed that employees for VECO Corp., an oil services company, transformed Stevens’ modest mountain cabin into a modern, two-story home with wraparound porches, a sauna and a wine cellar.

The Senate’s longest-serving Republican, Stevens said he had no idea he was getting freebies. He said he paid $160,000 for the project and believed that covered everything.

He had asked for an unusually speedy trial, hoping he’d be exonerated in time to return to Alaska and win re-election. He kept his campaign going and gave no indication that he had a contingency plan in case of conviction.

Despite being a convicted felon, he is not required to drop out of the race or resign from the Senate. If he wins re-election, he can continue to hold his seat because there is no rule barring felons from serving in Congress. The Senate could vote to expel him on a two-thirds vote.

“Put this down: That will never happen — ever, OK?” Stevens said in the weeks leading up to his trial. “I am not stepping down. I’m going to run through, and I’m going to win this election.”

Democrats have invested heavily in the race, running television advertisements starring fictional FBI agents and featuring excerpts from wiretaps.

Stevens’ conviction hinged on the testimony of Bill Allen, the senator’s longtime drinking and fishing buddy. Allen, the founder of VECO, testified that he never billed his friend for the work on the house and that Stevens knew he was getting a special deal.

Stevens spent three days on the witness stand, vehemently denying that allegation. He said his wife, Catherine, paid every bill they received.

Living in Washington, thousands of miles away, made it impossible to monitor the project every day, he said. Stevens relied on Allen to oversee the renovations, he said, and his friend deceived him by not forwarding all the bills.

Stevens is a legendary figure in Alaska, where he has wielded political influence since before statehood. His knack for steering billions of dollars in federal money to his home state has drawn praise from his constituents and consternation from budget hawks.

Stevens is the fifth senator convicted of criminal charges. The last previous one was Republican David Durenberger of Minnesota, who was indicted in 1993 on charges of conspiring to make fraudulent claims for Senate reimbursement of $3,825 in lodging expenses. He later pleaded guilty to misdemeanor charges and was sentenced to one year of probation and a $1,000 fine.

The jurors left the court without comment.

Said U.S. District Judge Emmet Sullivan: “The jurors have unanimously told me that no one has any desire to speak to any member of the media. They have asked to go home and they are en route home.”

The jurors had been shuttled to and from the proceedings each day by court officials.

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On the web

Justice Department documents: www.usdoj.gov/criminal/us-v-stevens/

By Matt Apuzzo, Jesse J. Holland

WASHINGTON – A judge ordered a one- to two-day halt to jury deliberations in Sen. Ted Stevens’ corruption trial Friday, the latest setback in a gripping case and one that could delay a verdict until after Election Day.

U.S. District Judge Emmet Sullivan said he wanted to accommodate a juror whose father died. The juror rushed to California early Friday morning, before jurors were set to begin their third day of deliberations.

Prosecutors asked Sullivan to bring an alternate juror onto the panel so deliberations could continue but the judge declined. The first two days of deliberations have been marked by reports of stress and violent outbursts in the jury room and Sullivan said jurors might benefit from a break.

“Everybody needs a day off now and then,” Sullivan told the jury. “I want you to enjoy yourself this weekend.”

Sullivan said he would speak with the juror Sunday night and determine whether she could return Monday. He said he might delay deliberations until Tuesday or call in an alternate.

If an alternate is tapped, jurors would be ordered to start deliberating anew. Election Day is 11 days away. Stevens, 84, is locked in a tight race with Democrat Mark Begich, who is trying to unseat the 40-year senator.

The Senate’s longest-serving Republican, Stevens is charged with lying for years on Senate financial disclosure documents to conceal $250,000 in home renovations and other gifts from his friend, millionaire oil contractor Bill Allen.

The trial has been beset by problems since the eight women and four men received the case Wednesday afternoon. Within hours, jurors asked to go home, sending a note to the judge saying that things had become “stressful.” Thursday afternoon, a more explicit note was handed up, with jurors asking that one of their members be dismissed.

“She has had violent outbursts with other jurors, and that’s not helping anyone,” the note read.

Sullivan did not send the woman home. Instead, he called jurors into the courtroom and told them to “encourage civility and mutual respect among yourselves.”

Tension in the jury room normally is viewed as good for a defendant. It increases the likelihood that jurors won’t reach the unanimous decision needed for a verdict. Without unanimity, a trial ends in a mistrial and prosecutors must decide whether to start over.

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On the Web

Justice Department documents: http://www.usdoj.gov/criminal/us-v-stevens/

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Stevens jury sent home, deliberations halted

By Matt Apuzzo, Jesse J. Holland

ANCHORAGE, Alaska – Republican vice presidential candidate Sarah Palin says she’s an open book regarding an abuse-of-power investigation. Apparently her staff doesn’t feel the same way.

While the Alaska governor has waived her privacy rights so details about her firing of a state commissioner can be made public, she has not called on others in her administration to do the same. Unless they do, the results of the personnel board investigation may never be revealed.

The personnel board and the state Legislature are running separate investigations into whether Palin abused her power by firing Public Safety Commissioner Walt Monegan, who says he resisted pressure to fire a state trooper involved in a messy divorce with the governor’s sister.

The controversy, known in Alaska as Troopergate, could hurt John McCain’s presidential bid. Legislative investigators are due to submit a report Friday that could reveal embarrassing details about Palin’s leadership and provide campaign fodder in the final weeks of before the election.

Palin refuses to cooperate with that inquiry, which she says has become too political, citing comments made by the Democratic senator overseeing the case. She is only cooperating with the personnel board inquiry, which is much more secretive, is run by people she can fire, and could take years to resolve.

With the stakes so high, both sides were planning a week of court fighting ahead of Friday’s deadline.

To head off the report, five Republican state lawmakers asked the Alaska Supreme Court on Monday to shut down the legislative investigation. Oral arguments are scheduled for Wednesday.

A legal fight is also brewing over the secrecy of the personnel board investigation. Anchorage white collar attorney Meg Simonian wants the board’s independent council Tim Petumenos to conduct his probe in public and says she’s planning a lawsuit to force him to do so.

“Gov. Palin has said repeatedly, through her ‘Truth Squad,’ that she has nothing to hide and wants the personnel board’s investigation to be open,” Simonian wrote in a letter to Petumenos. “That does not appear to be true of her politically appointed employees.”

Asked whether the governor would call for her aides to open the investigation, her attorney, deferred to Petumenos.

“The governor waived her confidentiality and wanted this matter decided openly,” attorney Thomas Van Flein said. “Mr. Petumenos is in charge of his investigation and until and unless he says otherwise, we will respect his decision.”

Petumenos did not respond to a message seeking comment Monday but, in a letter to Simonian, he said he was required by law to keep the matter confidential because those under scrutiny have not waived their privacy rights.

WASHINGTON – A longtime friend of Alaska Sen. Ted Stevens crossed the powerful lawmaker and testified Tuesday as the star witness in the Republican senator’s gift-giving trial.

The fiercely loyal Stevens did not acknowledge Bill Allen when he entered the courtroom. The two men barely looked at each other as Allen prepared to testify that he gave the senator $250,000 in home renovations and other gifts.

Stevens, 84, is on trial for not disclosing those gifts on Senate financial documents.

“That’s Ted, right over there,” Allen said, pointing across the crowded courtroom to an expressionless Stevens.

Allen is the linchpin of the case and federal prosecutors sought to bolster his credibility by asking about a backbreaking career that took him from picking crops to learning to weld to running VECO Corp., a multibillion-dollar oil pipeline company.

At the apex of their careers, the two men held nearly unrivaled power. Stevens was a master of the Senate, a beloved figure in Alaska who steered billions of dollars to his home state. Allen was a self-made millionaire who, over drinks in his hotel room, could summon state lawmakers to his hotel room and tell them how to vote.

The Justice Department corruption investigation changed all that.

Confronted with overwhelming evidence against him, Allen turned on the senator. The last time the two men spoke, FBI agents were listening in. Since then, Allen has pleaded guilty to bribery and turned against his old friends in hopes of reducing his own prison time.

Over the past few days, VECO employees have testified to working long hours at Stevens’ home, building a balcony and a roof, installing a custom staircase and a generator, upgrading the electrical system and more.

Prosecutors are counting on Allen to tell jurors that work was part of a long pattern of gift-giving.

Just as Allen’s testimony is key to the government’s case, discrediting him is essential for Stevens.

The 84-year-old senator says he never asked Allen for any free work and thought his friend was sending him every bill for the job. Stevens and his wife say they paid $160,000 for the project and assumed that covered everything.

Stevens says that if freebies were tacked onto the job, Allen did so without telling him. Because the senator’s wife handled all the finances, he says there’s no way he could have known Allen was adding on work.

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On the WEb:

Justice Department documents: www.usdoj.gov/criminal/us-v-stevens/

By Matt Apuzzo, Tom Hays

WASHINGTON – When the next generations of $5, $10, $20 and $50 bills roll off the presses, there should be some way for blind people to tell them apart, a federal judge said Thursday.

U.S. District Judge James Robertson said he would not allow the Treasury Department to go at its own pace as it complies with a May ruling that U.S. paper money discriminates against the blind.

Treasury officials have hired a contractor to investigate ways to help the blind differentiate between bills, perhaps by printing different sizes or including raised numbers. Government attorneys urged the judge to let that process play out and not interfere with anti-counterfeiting redesigns that are already in process.

Robertson was not persuaded.

“The Treasury Department is not going to just conduct this on its own schedule and its own terms. Let that be clear,” he said.

Robertson ordered attorneys for the government to meet with the American Council of the Blind, which brought the lawsuit, and come up with a schedule that requires changes in the next generation of bills.

The next $100 design could be printed as early as this fall and Robertson said those bills won’t be affected. But subsequent designs should be able to solve the problem, the judge said.

Government lawyers said they plan to argue that Robertson does not have the authority to interfere with the Treasury’s printing responsibilities.

The judge said he’d consider the argument but quipped that, if he didn’t have authority to require changes, how was he supposed to enforce the ruling? What would the court order say, he asked, “Go out and have a good time? We’ll see you when it’s all over?”

WASHINGTON – A federal judge overseeing Guantanamo Bay lawsuits ordered the Justice Department to put other cases aside and make it clear throughout the Bush administration that, after nearly seven years of detention, the detainees must have their day in court.

“The time has come to move these forward,” Judge Thomas F. Hogan said Tuesday during the first hearing over whether the detainees are being held lawfully. “Set aside every other case that’s pending in the division and address this case first.”

The Bush administration hoped it would never come to this. The Justice Department has fought for years to keep civilian judges from reviewing evidence against terrorism suspects. But a Supreme Court ruling last month opened the courthouse doors to the detainees.

About 200 lawyers, law clerks and reporters sat through the nearly three-hour court hearing. Other lawyers joined by phone for the historic hearing. Attorneys, nearly all of them working for free, have long asked for a judge to scrutinize the evidence, saying the detainees could not be held indefinitely, simply on the government’s say-so.

“A day in court on the Guantanamo cases is a treasured moment,” said Gitanjali Gutierrez, one of two attorneys for the Center for Constitutional Rights selected to address the court on behalf of all the lawyers.

There are about 270 detainees being held at the U.S. naval base at Guantanamo Bay, Cuba. The government has already cleared one of five for release and is just looking for a country to send them to, the Justice Department said.

“That’s the issue the executive branch is struggling with,” Justice Department attorney Judry L. Subar said.

“Maybe we can assist them,” Hogan said.

Hogan is coordinating most of the estimated 200 Guantanamo Bay cases on behalf of most of the Washington federal judges. He will decide how quickly the Justice Department must turn over the evidence against the detainees.

The Justice Department is asking for about eight weeks to start doing so. It is dramatically expanding the litigation team handling the cases and is asking for time to get the new attorneys brought up to speed, settled in their new offices and approved to handle the classified evidence.

It also wants time to update and add to the evidence that was originally used to justify holding the detainees.

“The government should be entitled, in 2008, to present its best case,” Justice Department attorney Gregory G. Katsas said.

Lawyers for the detainees adamantly oppose that move and Hogan was skeptical of the plan. If the evidence was enough to warrant holding the detainees for six years, he said he didn’t understand why it suddenly needs to be changed.

“If it wasn’t sufficient, then they shouldn’t have been picked up,” Hogan said, adding that he probably would make the government explain any proposed change.

A schedule has not been set but it appears judges could begin reviewing evidence in September. If judges find the evidence lacking, they could order detainees released, but the Bush administration would decide where to send them. Judges do not generally have authority to bring detainees into the U.S., despite White House assertions that the court process could release terrorists onto U.S. streets.

Shayana Kadidal, another attorney for the Center for Constitutional Rights, said he doubts most detainees ever get that far. He predicted that once judges order the evidence is made available, the Bush administration would try to release as many detainees as possible to prevent judges from scrutinizing it.

In those cases in which evidence is reviewed, judges will decide how much weight to give the government’s evidence, which in many situations will include unidentified sources and hearsay.

A federal appeals court recently scrutinized the case of a Chinese Muslim and found the evidence lacking. The court said the detainee must be released. Susan Baker Manning, an attorney in that case, said she expects district court judges to be similarly skeptical of the government’s evidence.

Democratic presidential hopeful, New Mexico Gov. Bill Richardson, right, speaks during the Brown and Black Forum as fellow hopeful, Sen. Barack Obama, D-Ill., looks on, Saturday, Dec. 1, 2007, in Des Moines, Iowa. New Mexico Gov. Bill Richardson, the nation's only Hispanic governor, is endorsing Sen. Barack Obama for president, calling him a "once-in-a- lifetime leader" who can unite the nation and restore America's international leadership.

PORTLAND, Ore. – Bill Richardson, the nation’s only Hispanic governor, backed Barack Obama for president Friday, moved to deliver his much-coveted endorsement by the senator’s speech about race.

The New Mexico governor joined Obama at spirited rally Friday and said the Illinois senator demonstrated his leadership abilities this week with his speech on race. “You are a once-in-a-lifetime leader,” the governor said from the stage. “Above all, you will be a president who brings this nation together.”

Richardson dropped his own bid for the nomination in January. His support for Obama comes during a tough period for the senator. Although he still leads Hillary Rodham Clinton in delegates, Obama has seen his lead in national polls wither in the fallout from divisive remarks by his former pastor.

Richardson was relentlessly courted by both candidates and his support for Obama provides him a potential counterweight to Clinton’s strength among Hispanic voters.

It wasn’t the first time racial concerns had helped to drive a prominent backer to Obama. Massachusetts Sen. Edward Kennedy was moved to drop his neutrality and side with Obama in part because of what he saw as Bill Clinton’s racially tinged criticisms of the senator.

Richardson heaped praise on Obama’s speech about the nation’s racial divide, the candidate’s attempt to contain damage from his former pastor’s comments.

“As a Hispanic-American, I was particularly touched by his words,” Richardson said. “Senator Obama has started a discussion in this country that is long overdue and rejects the politics of pitting race against race.”

The governor backed Obama despite his earlier statements that Democratic superdelegates, of which he’s one, should pick sides based on the votes of their state or constituency. By that reasoning, he might have been expected to support Clinton because she won the New Mexico contest.

As a superdelegate, the governor plays a part in the tight race for nominating votes and could bring other superdelegates to Obama’s side. He also has been mentioned as a potential running mate for either candidate.

No primaries are scheduled until Pennsylvania’s on April 22, a gap Obama hopes to use for such announcements to assert that he is the front-runner for the nomination. Oregon hold its primary May 20.

Richardson backed Obama despite his ties to Clinton and her husband, the former president. Richardson served as ambassador to the U.N. and as secretary of the Energy Department during the Clinton administration. Last month, Richardson and former President Clinton watched the Super Bowl together at the governor’s residence in Santa Fe.

Richardson praised Hillary Clinton as a “distinguished leader with vast experience.” But the governor said Obama “will be a historic and great president, who can bring us the change we so desperately need by bringing us together as a nation here at home and with our allies abroad.”

The Clinton campaign publicly dismissed the endorsement, after the New York senator failed to win it for herself.

Citing Clinton’s victory in New Mexico in February, senior strategist Mark Penn said, “Perhaps the time when he could have been most effective has long since passed.”

Richardson bristled at that statement, which he said was a stereotypical suggestion that he was only valuable in states with large Hispanic populations. Obama wants Richardson to help boost his foreign policy credentials, which Clinton has described as lacking.

Obama said Richardson “frankly has more concrete accomplishments on the international stage than my opponents, Democrat or Republican.”

Richardson was a roving diplomatic troubleshooter when he was a congressman from New Mexico, negotiating the release of U.S. hostages in several countries and meeting a rogue’s gallery of U.S. adversaries, including Saddam Hussein and Fidel Castro.

“There is no doubt in my mind that Barack Obama has the judgment and courage we need in a commander in chief when our nation’s security is on the line,” Richardson said. “He showed this judgment by opposing the Iraq war from the start, and he has shown it during this campaign by standing up for a new era in American leadership internationally.”

Obama embraced the endorsement of an accomplished figure who “understands the importance of restoring diplomacy as a central part of our national security strategy.”

Both men have proposed negotiating with enemies as well as friends, while Clinton has emphasized the need to press for changes in repressive or hostile regimes before engaging with them at the presidential level.

There were also personal aspects to Richardson’s swing behind Obama. He noted that both are the sons of one foreign-born parent — Obama’s father was from Kenya, Richardson’s mother was from Mexico.

And Richardson told of the time, during one of the many Democratic debates, when his attention wandered and he didn’t hear the question that came at him. Obama, then his rival, bailed him out by whispering to him that it was about Hurricane Katrina.

“He could have thrown me under the bus,” Richardson cracked, “but he stood behind me.”

Among veterans of the once-crowded field of Democratic presidential hopefuls, Sen. Chris Dodd of Connecticut is the only other one who has taken a side so far. Dodd also endorsed Obama.

John Edwards, the strongest performer among the nomination dropouts, has also been wooed by Clinton and Obama but he’s not announced an endorsement.

FAYETTEVILLE, N.C. — Barack Obama suggested Wednesday that Hillary Clinton could not be trusted to end the Iraq war because she only started opposing it when she began her bid for president.

In a speech not far from North Carolina’s Fort Bragg military base, the Democratic presidential hopeful told military families and local officials that the war has emboldened al-Qaida, the Taliban, Iran and North Korea.

“Ask yourself,” Obama told the crowd, “Who do you trust to end a war: someone who opposed the war from the beginning, or someone who started opposing it when they started preparing a run for president?”

Obama used the five-year anniversary of the Iraq invasion to again cast himself as the only true anti-war candidate, one who openly opposed the invasion as a state lawmaker. He renewed criticism of Clinton for voting to authorize the use of force against Iraq.

Clinton campaign spokesman Phil Singer responded: “The reality is that Senator Obama took practically no action to end the war until he started his White House run while Senator Clinton has been a consistent critic of Iraq for many years.”

Obama also teased likely Republican nominee John McCain for a foreign policy gaffe Tuesday in which McCain, touring the Middle East, said several times that Iran was training al-Qaida in Iraq. Iran is a predominantly Shiite Muslim country and has been at pains to close its borders to al-Qaida fighters of the rival Sunni sect. After another senator on the trip, Joe Lieberman, I-Conn., whispered into his ear, McCain finally corrected himself to say Iran was training Shiite militants.

“Maybe that is why he voted to go to war with a country that had no al-Qaida ties,” Obama said to laughter and applause. “Maybe that is why he completely fails to understand that the war in Iraq has done more to embolden America’s enemies than any strategic choice that we have made in decades.”

In the days before she won primaries in Texas and Ohio, Clinton argued that she was better prepared to be commander in chief and broadcast a television ad that asked who could handle a middle-of-the-night crisis. Obama countered that Clinton had bungled her crisis moment when she voted to authorize military force to oust Saddam Hussein.

Obama alluded to that ad in his speech.

“What we need in our next commander in chief is not a stubborn refusal to acknowledge reality or empty rhetoric about 3 a.m. phone calls,” he said. “What we need is a pragmatic strategy that focuses on fighting our real enemies, rebuilding alliances and renewing our engagement with the world’s people.”

He said Clinton and likely Republican McCain talk tough on national security yet they make decisions that leave the country less secure.

“This is why the judgment that matters most on Iraq — and on any decision to deploy military force — is the judgment made first,” Obama said.

Special forces from Fort Bragg were among the first soldiers in Iraq during the 2003 invasion and its paratroopers led last year’s troop increase. President Bush visited the base to deliver his 2005 Independence Day speech, where he warned that setting a timetable to withdraw from Iraq would only embolden terrorists.

McCain has issued similar remarks and Obama squarely rejected them.

“These are the mistaken and misleading arguments we hear from those who have failed to demonstrate how the war in Iraq has made us safer,” Obama said.

Mark Salter, a senior adviser to McCain, responded: “John McCain wants American forces to come home when our clear and serious interests at stake in Iraq, which nearly 4,000 Americans have given their lives to secure, are truly safe, when al-Qaida is defeated; Iran’s influence is contained, and the potential for a truly cataclysmic civil war in Iraq is remote. That, I think, is what is called ‘making us safer.”‘

Obama also defended his contention that the United States should act on intelligence about top terrorist targets in Pakistan even if President Pervez Musharraf refuses — a statement last year that drew criticism from Republicans.

“We have a security gap when candidates say they will follow Osama bin Laden to the gates of hell, but refuse to follow him where he actually goes,” Obama said, referring to McCain’s vow to chase down bin Laden.

North Carolina holds its primary May 6. Obama was scheduled to travel to Charlotte on Wednesday evening for a town hall meeting and a fundraiser.