Rod Blagojevich’s legal troubles have not, apparently, shrunk his ego. “I will fight, I will fight, I will fight,” Blagojevich said during a press conference at which he proclaimed his innocence. The Illinois governor said he will not resign, plans to hit back at his enemies in a court of law, and quoted Rudyard Kipling. He did not take any questions.

Number one item on Henry Paulson’s Christmas list? The second half of the $700 billion rescue funds that he had originally set aside to pass onto Barack Obama. Paulson has requested that Congress make those funds available to him. With the commitment of $17.4 billion to the auto industry, the first half is essentially spent. In order to receive the money, Paulson will have to submit a report to Congress specifying how he’ll use the funds. Paulson needs the funds, he said in a statement, “to support financial market stability.”

The latest big Democratic name to come out in favor of Caroline Kennedy’s Senate seat bid is the widow of Sen. Daniel Patrick Moynihan. But when Mrs. Kennedy Schlossberg had a chance to vote for Sen. Moynihan in 1994, records show she was otherwise engaged and stayed at home. This is only one of many important voting opportunities that Caroline has missed. She also skipped the mayoral primary in 1997 and 2005 and the general election in 2002. "Some Democrats privately expressed surprise about the non-votes. Kennedy has talked about her civic commitment as a reason why she's seeking the seat Clinton is leaving," reports the New York Post. (While Murdoch’s Post is supporting the Kennedy campaign, its news columns continue to report on her inadequacies.)

Disgraced former New York governor Eliot Spitzer's bad year keeps getting worse: having thrown up a glittering career that might have made him favorite to assume Hillary Clinton’s empty Senate seat, you can now add him to the list of victims of Bernard Madoff's $50 billion scam. Spitzer confessed at a weekend holiday drinks party that he too had been hit by Madoff’s Ponzi scheme, reports The New York Times. This is a double embarrassment for Spitzer, who was once praised as the "Sheriff of Wall Street" for his unflinching toughness when it came to running down financial fraudsters. The exact figure Spitzer lost remains unknown, for now.

The remains found in the woods in Orange County, Florida last week have been identified by police as those of two-year-old Caylee Anthony. The remains were found half-a-mile from the home of Caylee’s grandparents’ home. Caylee’s 22-year-old mother, Casey, faces charges including first-degree murder. Police were first directed to the area by a meter reader in August, and investigators are looking to see whether the tips were properly followed up.

Isn’t anyone paying attention? Part of the cause of the financial meltdown was the allocation of inappropriate credit ratings to banks that had leveraged themselves into deepest risk. But according to Bloomberg, "Federal Reserve Chairman Ben S. Bernanke is basing hundreds of billions in emergency lending on credit ratings from companies that gave AAA grades to toxic securities." Most of the Fed's $1 trillion in transactions have required appraisals by Moody's, S&P, or Fitch. "They're outsourcing the credit assessment to a group of people whose recent performance has been unbelievably bad," said one asset evaluator. "If their goal is to not take a loss on these assets, they should be hiring independent analysts." Rather than relying on the three big ratings agencies, says another source, we should be ending the trio's "official status as the government's favored arbiters of credit quality." It's impossible exactly to figure out how the Fed analyzes debt. In order to discover exactly where taxpayers’ bailout money is going, Bloomberg has filed a federal lawsuit seeking full disclosure.

W. Mark Felt, the "Deep Throat" who tipped off reporters Bob Woodward and Carl Bernstein during Watergate, died last night at 95. He was the number two official at the FBI when he began leaking news of the crime to The Washington Post reporters. His motive was in part because he had been spurned by Nixon's decision to overlook him when replacing J. Edgar Hoover as the Feds’ head. Paradoxically, in 1980, Felt himself was convicted of authorizing nine illegal break-ins to the homes of those related to the Weather Underground. He was convicted and received a presidential pardon from Reagan.

The latest dispatch from Palin land is quite sad: Sherry Johnston, the mother of Levi Johnston (the father of Sarah Palin’s daughter’s expected baby) was arrested yesterday by Alaska State Troopers and charged with six felony count of misconduct involving a controlled substance, which is typically issued for manufacturing or delivering drugs. The charges came at the end of an undercover narcotics investigation. Levi’s and Bristol’s Palin’s child is due on Saturday.

So the Arrested Development is definitely happening! Right? Mitch Hurwitz, the creator and executive producer of the show, thinks so. And he's even got some ideas about where the plot of the much-loved show-turned-movie will go. It might start where the show left off, he says. Or it might become a "film within a film," picking up Maeby Bluth's pitch of her life story in the last episode. There might even be an animated opening sequence! And what of this rumor that Will Arnett and Michael Cera are the lone hold-outs keeping the film from being made? "Will Arnett is gung-ho, so there’s a big clue," he said. Michael Cera is making a huge mistake.

Here’s something for Bill O’Reilly to get riled over: The Guardian reports that over 700 pounds of turkey breasts were destroyed when the Taliban blew up the truck traveling from Pakistan to the British military base Camp Bastion. Luckily air support delivered culinary reinforcements, meaning no soldier will go without his turkey, Brussels sprouts, or Christmas pudding. Said one soldier: "Never underestimate the ingenuity of the men and women to at least have a little bit of festive cheer, wherever they are!”

In theory, a Ted Haggard “comeback” is unwelcome, but this is rather intriguing: Next month in Los Angeles, a documentary about the disgraced evangelical preacher who was caught in a gay prostitution and crystal meth scandal in 2006, will debut. The Trials of Ted Haggard is directed, interestingly, by Nancy Pelosi’s daughter Alexandra. In it, Haggard admits to struggling with his sexuality and says that he is committed to his marriage for the sake of his children. He now sells insurance. “At this stage in my life, I am a loser,” he says in the documentary.

Jeremey Piven dropped out of David Mamet’s Broadway play Speed-the-Plow on Wednesday, saying he was advised by his doctors to “end his run immediately” due to high levels of mercury in his system that were causing him to feel sick and required a brief hospitalization. On Thursday, producers announced his key role will be filled first by Norbert Leo Butz and then by William H. Macy. Piven, a big fan of sushi, had complained of fatigue and exhaustion from the start of the production, his doctor told The New York Times. Producer Jeffrey Richards, though, seemed miff, telling the Times that Piven tried to get out of the contract earlier and even tried to find his own replacement. “It was rather unusual,” he said. “He was trying to be quote-unquote helpful.”

Forget Team of Rivals. As Obama said this week, his cabinet could easily take on all comers in a game of hoops. The Wall Street Journal confirms the Obama team has "serious basketball credentials" and several of them are hoping for regular court time once the new president is settled into the White House. The NBA has reached out to help the White House install a regulation court and Obama is expected to host weekly games. Requests to participate will be handled by Rahm Emanuel. Not everyone is a fan of the idea: The White House already features a bowling alley beneath the north driveway, installed as a birthday present to Harry Truman, and the president of the Bowling Proprietors Association of America said it would be a "sad, sad day" if Obama makes good on rumors he will scrap it.

Calvin Klein has a funny way of cutting costs. Sure, he's chopping his Southampton McMansion down to half its size, but the demolition and rebuilding will cost the fashion icon $30 million, a pretty penny in these cash strapped times. Klein purchased the 50,000 square foot castle in 2003, but now intends to replace it with a sleek, modern 17,500 structure. His neighbors couldn't be happier. "We are delighted by the proposed demolition of our over-scaled and garish neighbor," wrote hotel mogul Ian Schrager in a letter to the Southampton Village Board of Historic Preservation and Architectural Review. The estate saw dramatic expansions during the 1980s when former owner Barry Trupin added thousands of square feet and installed curiosities like a fully stocked shark tank, prompting the local zoning board to dub the property "Disneyland on LSD".

After the flop of his Australia, starring Ozzies Nicole Kidman and Hugh Jackman, it's clear that director Baz Luhrmann's once-promising talent is mostly spent. Remember Moulin Rouge? If you don’t you are lucky. But really, does he have to take down an American classic with him when he goes? Luhrmann is preparing to direct a new adaptation of The Great Gatsby. "I can report that Baz Luhrmann's next project is definitely The Great Gatsby," writes Nikki Finke. According to her, Lurhmann has purchased the rights to the book. Let us hope, if nothing else, he spares us by casting someone other than Kidman as Daisy.

And six weeks after the election, it’s still too close to call in the Minnesota Senate race? The latest twist? Norm Coleman's lead over Al Franken in the contested senate contest is down to just two votes, Politico reports. Yesterday, in a boost to Franken, the Minnesota State Supreme Court said the state must count improperly rejected absentee ballots that Coleman was trying to block. The current common wisdom is that Franken will win, but don't hold your breath. According to the Minneapolis Star-Tribune, "the court ruling could postpone a final outcome for weeks."

In what seems a fitting photograph for the lonely end of his presidency, George W. Bush unveiled today his portrait at the National Portrait Gallery and posed in front of it trying to shake his own hand. Laura Bush also unveiled a separate portrait. Both portraits were painted by Robert Anderson, a classmate of Bush’s from Yale. “I suspected there would be a good-size crowd once the word got out about my hanging,” the president joked. At the event, no shoes were thrown.

Marc Dreier's colleagues could not figure how he supported his four lavish homes on two coasts, his Aston Martin and his 123 foot yacht, or even how he could afford to pay them their oversized compensation when the firm was generating such little business. The answer, of course, was that he couldn't afford it. Dreier's arrest for fraud on December 2 was quickly followed by his firm’s bankruptcy. The Wall Street Journal reports on the lifestyle behind his crimes. Unlike a typical law firm, where partners share power, Dreier managed every detail himself and treated his litigators like paid employees. Secretaries earned more than $200,000 a year. In 2006, Dreier opened a sushi restaurant and liked to party late there with attorneys and "young women" enjoying his favorite delicacy, live California scorpion fish impaled on a stick with the heart still beating. "He liked exotic things," said manager Raphaela Bazalgette. "We were told he came from family money," said Timothy Bechen, who was a week away from being made partner when the firm collapsed.

Those who are keen to free everyone at Gitmo, take note. Yazid Sufaat, a microbiologist who oversaw Al Qaeda’s germ warfare programs, has been released from a Malaysian jail. Held since 2001, the Malaysian government has informed the US that they no longer have grounds to legally detain him. Sufaat earned a degree at the California State University of Sacramento and became a devout follower of the South Asian sect Jemaah Islamiah in the Nineties. He is believed to have contributed to the terrorist attacks on America of September 11 2001 by hosting key planning meetings. Sufaat’s release comes just a day after a report was released warning that future Al Qaeda attacks are likely to be biological.

With the Russian and Ukrainian economies both on the rocks, Gazprom, Russia’s largest company, firmly under the control of Vladimir Putin, has threatened to cut off supplies to Ukraine from January 1 if its $2.4 billion bill is not paid, according to The Times of London. Ukraine has accused Russia of exploiting the situation to gain control of the country’s gas network, which contains key strategic pipelines that connect to the rest of Europe. The attempt to grab Ukraine’s lifeline is not new. “It’s been happening every winter since 2005,” said a European Commission official in Brussels.

While his country starves and lives in fear of a cholera outbreak, Zimbabwe President Robert Mugabe and delegates to a conference held by his political party, the Zanu-PF, will gorge on a feast of 124 cattle, 81 goats and 18 pigs over four days, reports Time. Geoffrey Nyarota, managing editor of thezimbabwetimes.com, points out that with 5,000 delegates, the math worked out to “40 delegates per bovine over four days – that is not to mention the pork, the goat, the maize-meal, the rice among other basic foodstuffs in acute shortage throughout Zimbabwe.” In the meantime, Mugabe’s Marxist party has stood by as 1,111 people have died of cholera, with a further 20,580 people infected, according to the latest UN figures. The UN estimates that 5.8 million of Zimbabwe’s 12 million population will need food aid during the first quarter of 2009.

Actor Richard Dreyfuss’ colorful life – three wives, a kicked cocaine habit, and a diagnosis of bipolar disorder – has hit another snag. According to The Independent, the Jaws and W actor is suing his father and uncle for $4 million in repayments, interest fees, and damages. The fracas is over $870,000 he advanced to his family in 1984 to help with a 12-story office building in downtown LA. Dreyfuss alleges that his father and uncle refused to turn over accounting records that would show whether he deserved a return on the investment. Dreyfuss has been estranged from his father ever since his mother died from a stroke in 2000.

The names of donors to Bill Clinton's private foundation were released yesterday and those who have searched through the entrails discover a string of potential conflicts for Secretary of State apparent Hillary Clinton when she comes before the Senate at her confirmation hearings. Take mining mogul Frank Giustra, who gave Clinton between $10 and $25 million. He flew Bill Clinton to Kazakhstan on his private jet, then won a lucrative uranium mining contract from the Central Asian nation. Hillary will face even more acute scrutiny over Bill’s links to Arab donors from Saudi Arabia, Kuwait, Qatar, Oman, and the United Arab Emirates. "People may say, well, even if they are not sharing the same bed at night, they still may talk to each other and it doesn't look right," Harvey Sicherman, president of the Foreign Policy Research Institute and a State Department adviser during the Reagan administration told the New York Post. More trouble: the Clinton Foundation received millions from Indian politico Amar Singh, who has advocated sharing nuclear technology with the United States. "Any appearance that a Secretary of State Clinton has a close relationship with India could add drama to tense negotiations with the Asian subcontinent's nuclear-armed rival Pakistan."

President Bush unveiled a $13.4 billion emergency low-interest loan package for General Motors and Chrysler on Friday to keep the automakers running through March. In February, an additional $4 billion will be available. The funds, which come from the Troubled Asset Relief Program, are tied to companies proving their viability. "These are not ordinary circumstances, in the midst of a financial crisis and a recession allowing the US auto industry to collapse is not a responsible action," Bush said Friday morning. The loans will require the companies to restructure and get concessions from creditors, unions and suppliers. Early reports said Obama agreed with the plan.

Bernard Madoff may have ripped off 1,000 times as much money as Lehman Brothers trader Matthew Devlin, but the latter wins bonus scandal points for involving a Playmate in his scheme. Devlin has been charged, writes the New York Post, with masterminding a $4.8 million insider-trading scheme that passed information to his friends and included Maria Checa, Playboy magazine’s Miss August 1994. Devlin conveyed information to his friends via his publicist wife, whom he called the “golden goose.” Checa is not being charged, but is named in the civil lawsuit filed by the SEC. According to her Playboy spread, her turnoffs include “dishonest” people.

President Bush will offer low-interest loans to General Motors and Chrysler to keep them running into the new year. "The White House has been talking to the Obama team on its strategy, and the incoming Democratic administration has expressed no objections to the plan," ABC News reported. The loans will require the companies to restructure and get "tough concessions from creditors, suppliers and the labor union," according to ABC. "It's all about viability," one official told Politico. "We aren't going to throw good money after bad." Bush is scheduled to announce the offer at 9 a.m. ET.

Herald zur Hausen, a joint winner of this year’s Nobel Prize for Medicine for his work on the human papilloma virus (HPV), which can lead to cervical cancer, is being investigated. Prosecutors are examining the influence upon the awards committee of AstraZeneca, a drug company that developed a key component of the HPV vaccine, reports The Times of London. AstraZeneca sponsors the Nobel website and a Nobel subsidiary. Bertil Fredholm, chairman of the committee assessing Nobel candidates, was a paid consultant for the company in 2006 and Bo Anglin, one of 50 who get to vote on the winner, sits on AstraZeneca’s board. And that’s not all. Yesterday, a Swedish prosecutor alleged in court that Nobel committee members accepted free trips to China to explain how they selected winners to Chinese officials.

For the first time, more than 10,000 people in the United States are waiting for an organ transplant. According to the Wall Street Journal, more than 6,000 of them will die this year. The irony is that the biggest impediment to increasing organ donation is a federal mandate put in place to eliminate black market organ trading. That legislation was so broadly written that it reduced organ donation across the board, even when the rewards for giving were perfectly legal. Now Senator Arlen Specter has drafted a bill which attempts to encourage the use of tax deductions as a reward for organ donation, while at the same time strengthening the laws that would punish organ traffickers.