The rumors circulated back in August, but now it looks like it’s finally happening. From Marc Ambinder, shortly before 11 on Thursday night:

Sources in government say that White House Counsel Gregory Craig has decided to resign, and that the president’s personal lawyer, Robert Bauer, will take his place. A formal announcement is slated next week, though word might drop tomorrow.

Looks like that announcement is getting sped up. More after the jump.

UPDATE: Greg Craig’s resignation letter, also after the jump.

* Does R.E.M. have a copyright infringement claim against the government if their music was used to torture Guantanamo detainees? What if R.E.M. was simply used to give the interrogators a blueprint on how to torture somebody? That’s me in the corner, that’s me in the spotlight, losing my religion. [The Volokh Conspiracy]

* Gibson Dunn is joining Pepin Tuma to battle police abuse of disorderly conduct laws. I’d make a joke about cops now, but I’m in the privacy of my own home and I don’t want to tempt any officers to come in here and arrest me. [Huffington Post]

* Parents in Las Vegas don’t want their children to perform a version of Rent as a school play. You live in Las Vegas and you’re worried about what a Bohemian musical is going to do to your kids? That’s like living in Mississippi and wondering if Jackass: The Movie is going to make your kids dumb. [Legally Unbound]

* You know what, screw first time home buyers. What about longtime home renters? Where’s our tax credit? [Blackbook Legal]

* It’s been a good day for jokes about male reproductive organs. [Courtoons]

* Kanye West managed to keep his mouth shut long enough to have his vandalism charge dismissed. [Popsquire]

* SCOTUS has agreed to decide whether federal courts can order Guantanamo detainees to be released into the United States, which raises separation of powers issues (because the political branches are in charge of passing and enforcing immigration laws). [How Appealing (linkwrap)]

* A big loss for Exxon Mobil (and its lawyers at McDermott): a jury issues a $104.7 million verdict, after finding the company liable for poisoning NYC water wells. [Bloomberg]

* Weekend at Bernie’s: lawsuit alleges drug use and debauchery at the Madoff offices. [ABA Journal]

* The Galleon / Raj Rajaratnam insider trading case lands in Judge Rakoff’s court. Could this create complications for the SEC? [WSJ Law Blog]

* The FAA is investigating last week’s Balloon Boy incident. [CNN]

* Pay czar Kenneth Feinberg runs into legal obstacles in his effort to trim AIG bonuses. [New York Times]

* Gov. Schwarzenegger has signed a California law aimed at curbing overzealous paparazzi, by criminalizing the taking and selling of unauthorized photos of celebrities in “personal or familial activity.” [CNN]

* How to deal with the 97 Yemenis at Guantanamo? Send them to Saudi Arabia. [Washington Post]

* It’s official: it’s okay to call Stalin a “bloodthirsty cannibal,” even in Russia. [AP via WSJ Law Blog]

* The Supreme Court hears a challenge to Illinois forfeiture laws that claims the laws don’t sufficiently protect the rights of “innocent owners.” [ABA Journal]

* The New York Court of Appeals hears two cases challenging state policies granting benefits and recognition to gay couples married outside New York. [New York Times]

* What’s the scope of the Bank of America privilege waiver? Zach Lowe has this interesting analysis. [Am Law Daily]

* At the Supreme Court, much ado about a cross. [Washington Post (Robert Barnes); Washington Post (Dana Milbank)]

* Former Heller Ehrman partners deny that the firm was insolvent in 2007. [Am Law Daily]

* The new Honduran government, which came to power through a coup, has hired lawyers and law firms — including Lanny Davis, who recently moved from Orrick to McDermott — to defend its legitimacy. [New York Times]

* And there may be more work for antitrust lawyers, thanks to a new Justice Department invesitgation of IBM. [Reuters]

* Key Democratic lawyers agree to allow Guantanamo detainees to be transferred to the U.S. for trial. [Washington Post]

* Prosecutors drop one victim from the case, but Judge Herman “Who Needs A Spanking?” Thomas still faces charges dozens of counts related to 14 other victims. [CNN]

* No, it’s not your imagination: Gov. Jon Corzine’s campaign commercials are making fun of former U.S. Attorney Chris Christie (pictured) for being fat. (Disclosure: We worked as an AUSA under Christie from 2003 until 2006.) [New York Times]

Might this be the kindest cut of all? Perkins Coie just announced a salary cut for associates, but it’s rather small — and it was accompanied by good news.

Today a firm-wide voice mail from managing partner Robert Giles went out, announcing the following:

— an average 3.8 percent pay cut for Perkins Coie associates, effective September 1;

— deferred salary rollbacks in some offices — e.g., Menlo Park — until “our competitors in these markets rollback associate salaries” (hmm, sounds like an invitation to us); and

— an expression of confidence that there will be no more layoffs this year.

We reached out to Bob Giles, who confirmed the accuracy of the foregoing.

All in all, it’s on the mild side for bad news, sort of like the firm’s modest layoffs back in April (just 12 attorneys). No wonder Perkins employees seem to like the place so much.

P.S. Congratulations to Perkins Coie partner Harry Schneider, this year’s winner of the American Inns of Court’s Professionalism Award for the Ninth Circuit. We met Schneider at the Ninth Circuit Judicial Conference, where the honor was presented to him in person. Schneider successfully represented Guantanamo detainee Salim Hamdan in Hamdan v. Rumsfeld.

Earlier: Prior ATL coverage of Perkins Coie

* The Virginia and New York U.S. attorney’s offices both want a piece of Khalid Sheik Mohammed. [Washington Post]

* Guys at my high school who were married to the Secretary of State used to go on “private missions” to North Korea all the time. It was no big deal. [New York Times]

* Utah has instituted a mandatory mentorship program for newly minted lawyers. [Salt Lake Tribune]

* Kindle lovers in Seattle have filed a class action suit against Amazon for deleting books like 1984 from their electronic readers. So Orwellian. [Courthouse News Service]

* The Department of Justice says Guantanamo search woes are Google’s fault. [Under The Radar/Politico]

* L.A. judges are money. [San Jose Mercury News]

Last night, the Wall Street Journal (subscription) sent out a news alert claiming that President Obama’s White House counsel, Gregory Craig, is getting kicked to the curb:

Obama administration officials are holding discussions that could result in White House counsel Gregory Craig leaving his post, following a rocky tenure, people familiar with the matter said.

The WSJ implies that Craig — a former Williams & Connolly partner, perhaps best known for extracting President Clinton from the impeachment mess — has botched advising the President on several national-security issues, including the Guantanamo prison closure, the release of national-security documents from the Bush era, and detainee holdings.

But the White House says ‘whoa, whoa, settle down now.’

* Goldman Sachs has been taking a beating in the press recently thanks in large part to Matt Taibbi calling it “a great vampire squid wrapped around the face of humanity” in Rolling Stone. And now, one of its lawyers has been charged with trying to get a 15-year-old to beat it. [New York Daily News]

* Obama could face the “ultimate confrontation” in the courts over Guantanamo. [New York Times]

* Nationwide Layoff Watch: Hawaii firm fires nine administrative staff. But holla’! They’re looking to hire new IP attorneys. [Pacific Business News]

* Prison porn for California guards? [Courthouse News Service]

* Lawyer Jules Cattie is playing New York subway watchdog. He says he recently spotted a child operating his train. [New York Daily News]

* New Jersey Internet radio host Hal Turner pleads not guilty to death threats against federal judges Easterbrook, Bauer, and Posner. [Chicago Tribune]

We like to highlight examples of Biglaw associates who get to do especially interesting or high-profile work. E.g., Lindsay Harrison, the Jenner & Block associate who argued a case — and won — before the U.S. Supreme Court.

Most lawyers tuned in to Congress yesterday were listening to Judge Sonia Sotomayor’s confirmation hearings (even if day 4 was less than thrilling). But over on the House side, one young lawyer was talking rather than listening. Jason Pinney (pictured), a (rather handsome) sixth-year associate at Bingham McCutchen, got to testify before lawmakers.

Pinney addressed the House Committee on Foreign Affairs, specifically, the Subcommittee on International Organization, Human Rights and Oversight. He spoke about his work as part of a Bingham legal team representing a group of Uighurs detained at Guantanamo Bay. The Bingham lawyers obtained the release of two Uighurs in 2006 and four more Uighurs last month.

(As explained by the AP, “[t]he Uighurs, a Turkic minority from China’s far west, were sent to the U.S. facility in Cuba after their capture in Afghanistan and Pakistan in 2001. The Pentagon determined last year that they were not enemy combatants.” Oops!)

Congrats to the Bingham lawyers on their successful representation of their clients — and to Pinney on his congressional testimony. To download a copy of the testimony, click here.

Today in Congress: July 16, 2009 [Washington Post]
Lawmakers want investigation into Uighurs at Gitmo [AP]
Jason S. Pinney [Bingham McCutchen]
Pinney Testimony [PDF]

* Republicans slam Obama for his “empathy” standard for his SCOTUS nominee, citing an earlier speech on the Senate floor emphasizing a different standard. [The Washington Post]

* Speaking of Obama, is he “the best lawyer to occupy the U.S. presidency since William Howard Taft”? [Foreign Policy]

* The Yankees held a moot court in a room off the clubhouse. Would you want to face a jury of Derek Jeter and Johnny Damon? [The New York Times]

* The Justice Department has arranged for the first Guantanamo inmate to be tried in a New York court. [The Washington Post]

* Shuttered Chrysler dealers may have a tough time fighting their closures in court, due to the freedom that bankruptcy laws give courts to tear up contracts. [The Wall Street Journal]

* Immigrants are being deported in the middle of their court cases. [The Los Angeles Times]

* President Obama will talk about his plans to close Guantanamo in a national address in order to rally support from the public after getting shut down by members of Congress. [CNN]

* After quietly accepting charges from several states, Craiglist is fighting back. The company sued South Carolina’s attorney general for violating free speech and the Commerce Clause with his prosecution threats. [San Francisco Chronicle]

* A “flamboyant” high profile defense attorney in New Jersey who was famous for saying “no witness, no case” has been charged with having key witnesses murdered. [New York Times]

* “Manhattan prosecutors have charged a New York personal injury lawyer with stealing $650,000 in client settlement money. [ABA Journal]

* Despite his liberal tendencies, David Souter treated the business community well. Will Obama’s successor do the same? [Wall Street Journal]

* The pitfalls and benefits of power of attorney. [New York Times]

* A word of advice to the new summer associates: Paralegals can’t be trusted. [Legal Intelligencer]

* SCOTUS dismissed the lawsuit that sought to punish top Bush officials, including former Attorney General John Ashcroft, for detaining Muslims that were not involved in 9-11. [Christian Science Monitor]

* Military commission trials for Guantanamo detainees present many of the same challenges that the Bush administration faced, in spite of Obama’s facelift. [New York Times]

* The White House passed on an opportunity to bring a case involving gays in the military to the Supreme Court. Are they stalling and playing politics or are they right to say that the law should be changed in the legislature and not the courts? [Wall Street Journal (subscription)]

* What do potential SCOTUS nominees and ambulance chasers have in common? Uh, hopefully nothing…[Esquire]

* The court will hear a case against Sarbanes-Oxley in the fall term—is this the time to question too much oversight? [Washington Post]

Berkeley Law School professor — and former Department of Justice attorney — John Yoo published his inaugural column in the Philadelphia Inquirer on Sunday. He argues that Obama should nominate somebody FDR would have liked:

Franklin Roosevelt faced exactly this dilemma. With large majorities at his back, FDR pushed through sweeping legislative efforts to end the Great Depression (which never really worked). His only obstacle became the Supreme Court, which held several basic New Deal laws to violate the Constitution’s limits on federal powers and the economic rights of the individual. Only after FDR waged a campaign to increase the size of the court and give himself more appointments did the justices surrender. The New Deal could not have survived without judges that deferred to the legislature on economic regulation.

Obama could make a pick based solely on race or sex - though it’s not clear why the most empathetic judges are minorities or women - to please parts of his coalition. But if the president wants to secure the success of his economic, political, and national-security objectives, he should remember FDR’s example and choose a judge who believes in the right of the president and Congress, not the courts, to make the nation’s policies. If Obama shoots for empathy instead, he will give Senate Republicans yet another opportunity to rally around a unifying issue where they better represent the majority of Americans.

Wait, so now FDR’s court packing scheme was a good idea? Because it hobbled SCOTUS and forced them to defer to Roosevelt’s amazing enhancement of federal power? A conservative believes this?

Before we get too bogged down in Yoo’s argument, can somebody remind me why we care about what John Yoo has to say?

The left (over) reacts after the jump.

* The recession has turned 21st century America in to Victorian England with the reinstatement of debtor’s prisons. You’ve got to love a good recession trend story. [The New York Times]

* Emboldened by the recent coup in Iowa, activists push for the expansion of gay marriage rights in New England. [The New York Times]

* Between Guantanamo, Senator Stevens, and the mysterious 2006 dismissal of 9 US attorneys, Attorney General Eric Holder has been busy cleaning up after the last administration. [USA Today]

* Madonna returned home this weekend after her request to adopt a second child from a Malawi orphanage was denied. [Los Angeles Times]

* Watch this wicked, hilarious SNL skit about Madonna and Angelina and their love of adopting “exotic babies.” [Morninpaper.com]

* The lawyers arguing the criminal case over Brooke Astor’s fortune just can’t seem to get along. [The New York Times]

* What’s in a name? The Obama administration announced that prisoners held at Guantanamo will no longer be called “enemy combatants,” but they still have basically the same right to hold the prisoners indefinitely. [Los Angeles Times]

* Minor spats with Sam are the least of Lilo’s worries, apparently there’s a warrant for her arrest. [The Associated Press]

* With her husband in jail, Ruth Madoff has seen better days—the feds are working hard to freeze $93 million worth of her assets. [msnbc.com]

* Remember the Minnesota Senate race? Yeah, that’s right, their Senator is still not seated. Franken and Coleman’s lawyers delivered closing arguments Friday—and now the 3 judge panel will decide, but if they choose Franken—Coleman is poised for an appeal. [The Hill]

* Washington Lawyer DeMaurice F. Smith, a partner at Patton Boggs, is the new head of the NFL Players Association—he has no previous ties to the NFL, but he is a devoted Redskins fan. [The Washington Post]

* Also, since sports are more fun to talk about than layoffs—we have created an “Above the Law” group for the NCAA tournament on ESPN. Group name: Above the Law. Password: abovethelaw. It is free and you can make multiple entries (Mr. Mystal will be making many!) Have fun. [Above the Law tournament group]

* After visiting Guantanamo, Attorney General Eric Holder says the prison is “well-run now” but the administration is going to close it anyway. The White House just gave itself a big pat on the back. [Reuters]

* The court rejected a Long island surgeon’s bid to get $1.5 million in compensation for the kidney he donated to his estranged wife. [The National Law Journal]

*Bonus Watch part deux: Bank of America’s CEO will testify today in Andrew Cuomo’s investigation of the $3.6 billion in bonuses paid at Merril Lynch before the two banks merged. [Bloomberg.com]

* “The U.S. Supreme Court made it tougher to sue companies for antitrust violations. [Bloomberg]

* A federal identity-theft law that is a “favorite tool of the government” in immigration cases was flawed in the eyes of SCOTUS when they heard arguments about it yesterday. [The New York Times]

* Two former pro-Israel Lobbyists accused of espionage can use classified documents in their defense, a federal appeals court ruled. [The Associated Press]

* SCOTUS will look at the separation of church and state when they decide whether “a cross to honor fallen soldiers can stand in a national preserve in California.” [The Los Angeles Times]

* Lawyers say Madoff must have had help with his Ponzi scheme. [Bloomberg]

* Attorney General Eric Holder visited Guantanamo yesterday to see what is needed to close the prison. [The Associated Press]

* Meanwhile, a Pentagon official who inspected Guantanamo at Obama’s request is under fire from human rights activists for filing a report (which declares Gitmo humane) that is little more than good public relations for the administration. [The New York Times]

* What do you do when your boss gets indicted for securities fraud? You get another job. A team of seven bankruptcy lawyers left Dreier LLP for Epstein Becker Green. [EBG]

* A federal judge encouraged the Obama administration to decide whether to keep pursuing a case against 11 Vietnam War Veterans accused of trying to overthrow Laos’s communist government. [The Associated Press]

* Judge says: UBS must respond to the U.S. lawsuit seeking disclosure of 52,000 names of people who allegedly used Swiss accounts for tax evasion. [Bloomberg]

* Obama made the order to close Guantanamo within a year and former U.S. attorney David Iglesias has been hired to prosecute suspected terrorists held at the prison. [The Associated Press]

* Caroline Kennedy withdrew her Senate bid, so all that press was much ado about nothing. [The New York Times]

* The Chinese court sentenced two to death and one to a life prison sentence for their role in the tainted milk scandal. [The International Herald Tribune]

* SCOTUS refused to reconsider COPA Wednesday, and agreed that a Massachusetts family could sue the school district for sex discrimination.[The Associated Press]

* A Bank of America shareholder is accusing the bank of withholding information about Merrill Lynch’s $15.3 billion in losses before the shareholders voted on its acquisition. [Bloomberg]

* Enjoy the inauguration. Even if work sucks—America is awesome. There is a lot of news concerning the inauguration, but one interesting point is that Defense Secretary Robert M. Gates is the “designated successor” to run the federal government in case of emergency and will not attend the inauguration. [The Washington Post]

* A federal judge granted Cheney discretion over which records of his actions as Vice President have to be preserved in the national archives. Good idea. Surely we can count on Dick Cheney not to destroy any documents that make him look bad. Especially since he has been so truthful and transparent in the past. [The Washington Post]

* Former public defender Randy Koshnick’s representation of cop-killer Ted Oswald could hurt him in his bid for a seat on Wisconsin’s Supreme Court. [The Chicago Tribune]

* Frequent ATL readers are probably sick of reading about Guantanamo. But the war crimes court at the prison convened yesterday, and proceedings were disrupted by the self-proclaimed mastermind of 9-11. [Reuters]

* The International Court of Justice ruled that the U.S. violated a previous order when Texas executed a Mexican national guilty of rape and murder. [The Los Angeles Times]

* The 213 families in China whose babies got sick from drinking tainted milk brought the case to Chinese Supreme Court. [The Associated Press]

* Chicago lawyer Anton Valukas is in charge of investigating Lehman Brother’s bankruptcy. [Bloomberg.com]