Political Scene

ALASKA

Palin legal defense fund ruled illegal

ANCHORAGE, Alaska | A legal defense fund set up for Sarah Palin when she was Alaska governor was illegal, an investigator for the state Personnel Board said Thursday.

Investigator Timothy Petumenos said the Alaska Fund Trust inappropriately used the word “official” on its website to describe it, wrongly implying Mrs. Palin’s endorsement as governor.

Mrs. Palin’s attorney, Thomas Van Flein, said she will return the money from the fund, which brought in almost $390,000.

Mr. Petumenos, however, found that Mrs. Palin, the 2008 GOP vice-presidential nominee, acted in good faith and relied on a team of lawyers to make sure the fund was lawful.

Thursday’s findings are an outgrowth from a preliminary, confidential report by another board investigator that also implicated Mrs. Palin. The earlier report was issued less than two weeks after she announced she was resigning from office last July.

In announcing her resignation, Mrs. Palin cited the toll of the ethics probes as one of the reasons she was stepping down. She has said she racked up at least $500,000 in legal fees.

Mrs. Palin’s friends and supporters created the Alaska Fund Trust in April 2009, limiting donations to $150 per person. The ethics complaint was filed soon after by Eagle River resident Kim Chatman, who said Mrs. Palin was misusing her official position and accepting improper gifts.

SENATE

Petraeus to testify on Hill next week

A Senate panel is moving quickly to hold a confirmation hearing for Gen. David H. Petraeus as the new commander for the war in Afghanistan. The Armed Services Committee will hold a hearing for the Army four-star general next Tuesday.

Both Republicans and Democrats have said they back Gen. Petraeus for the job. He would replace Gen. Stanley A. McChrystal, who resigned after he and his aides were quoted in a magazine article making scornful remarks about the administration.

Gen. Petraeus currently heads the U.S. Central Command, which oversees military operations in Iraq, Afghanistan and elsewhere. His replacement has not been named.

WHITE HOUSE

Podesta among picks for service board

President Obama is nominating John Podesta, a key political ally, to serve on the board that helps set policies and direction for the government’s national service agency, the White House announced Thursday.

Mr. Podesta, who guided Mr. Obama through the presidential transition process, is among seven people Mr. Obama picked to be on the bipartisan board of directors for the Corporation for National and Community Service.

Mr. Podesta served as President Clinton’s chief of staff. He heads the Center for American Progress, a liberal public policy group that he helped create in 2003 to counteract conservative think tanks.

SUPREME COURT

ABA: Kagan ’well qualified’

The nation’s largest lawyers group is calling Solicitor General Elena Kagan well qualified for the Supreme Court.

The American Bar Association wrote senators Thursday giving Ms. Kagan its highest rating. Kim J. Askew, the chairman of the committee that reviewed Ms. Kagan’s qualifications, says it reached its conclusion unanimously, with one person abstaining.

The rating comes just days before Ms. Kagan is to go before the Senate Judiciary Committee for high-stakes confirmation hearings.

COURTS

Judge won’t stay drilling-ban ruling

NEW ORLEANS | A federal judge who overturned a six-month moratorium on deep-water drilling imposed after the Gulf oil spill refused Thursday to put his ruling on hold while the government appeals.

The Justice Department had asked U.S. District Judge Martin Feldman to delay his ruling until the 5th U.S. Circuit Court of Appeals in New Orleans can review it. Judge Feldman rejected that request Thursday.

On Tuesday, he struck down the Interior Department’s moratorium that halted approval of new permits for deep-water projects and suspended drilling on 33 exploratory wells. Judge Feldman concluded the government simply assumed that because one deep-water rig went up in flames, others were dangerous, too.

The moratorium was imposed after the offshore oil rig Deepwater Horizon exploded April 20, killing 11 workers. Oil has been gushing from the blown-out well ever since.

CHINA

Levin: Keep yuan sanctions option open

China’s actions in coming weeks will determine whether the U.S. Congress passes legislation to pressure Beijing to raise the value of its currency, a Michigan congressman said Thursday.

“I think we need to keep that legislation on the burner. I think whether we act on it will be affected by what China does,” House Ways and Means Committee Chairman Sander M. Levin told reporters.

Bowing to pressure from the U.S. and other trading partners, China announced Saturday that it was freeing its closely managed currency from a two-year peg to the dollar.

President Obama’s administration welcomed the move, but many U.S. lawmakers want China to go further and raise the value of the yuan against the dollar.

SOCIAL NETWORKING

Twitter settles over security lapses

Twitter has settled charges with federal regulators that it put the privacy of its users at risk by failing to protect them from data-security lapses last year that let hackers access their accounts.

The Federal Trade Commission announced the settlement Thursday.

It bars Twitter from misleading consumers about its security and privacy practices. Twitter must establish and maintain a comprehensive information security program.

There were no monetary damages assessed.

The FTC says the breaches allowed hackers to gain administrative control over the online service, whose users send brief messages called tweets to each other. The FTC says hackers got access to user messages, reset user passwords and sent phony tweets from user accounts.

SENATE

For-profit colleges scrutinized by panel

Democratic senators sharply questioned Thursday whether for-profit colleges reaping huge amounts of federal aid dollars are delivering on promises to students and taxpayers.

The fast-growing for-profit college industry has faced increased scrutiny in recent months and is fighting greater government regulation, which it says will cut off access to education at the worst possible time.

The first in a series of congressional hearings on for-profit colleges raised more questions than it provided answers about possible steps Congress or the Education Department might take. One common refrain from senators and witnesses was how the for-profit college landscape includes both “good actors” and “bad actors” - and that they’re uncertain how to weed out the bad ones.

Sen. Tom Harkin, Iowa Democrat and chairman of the Senate Health, Education, Labor and Pensions Committee, said Congress must pay more attention to for-profit colleges to make sure federal money is being spent wisely and that the for-profit schools “are serving students, not just the shareholders.”

Mr. Harkin cited students who said they were misled and “false hopes pedaled on a billboard or a pop-up ad or an enticing phone call.”