The Wall Street Journal reports federal prosecutors, working with securities regulators, are conducting a preliminary criminal probe into whether several major Wall Street banks misled investors about their roles in mortgage-bond deals. The banks facing scrutiny include JPMorgan Chase, Citigroup, Deutsche Bank and UBS. The banks have also received civil subpoenas from the Securities and Exchange Commission as part of a sweeping investigation of banks’ selling and trading of mortgage-related deals known as collateralized debt obligations. Goldman Sachs and Morgan Stanley are already facing criminal probes.

New York Attorney General Andrew Cuomo has begun an investigation into eight banks to determine whether they provided misleading information to agencies that rate mortgage securities. The probe’s targets are Goldman Sachs, Morgan Stanley, UBS, Citigroup, Credit Suisse, Deutsche Bank, Crédit Agricole and Merrill Lynch, now owned by Bank of America. The companies that rated the mortgage deals are Standard & Poor’s, Fitch Ratings and Moody’s Investors Service.

In other financial news, Senator Byron Dorgan of North Dakota gave an impassioned speech on the floor of the Senate Wednesday saying the Senate’s proposals to reform Wall Street don’t go far enough.

Sen. Byron Dorgan: “If we have institutions that are too big to fail, that is, so large that they cause moral hazard to this country, should they fail, so large that they cause completely unacceptable risks of bringing the country’s economy down, should they fail, if we don’t do something about that, we cannot claim ever that we have done something about this system.”

The Dow Jones Newswire is reporting that Transocean, the owner and operator of the Deepwater Horizon drilling rig that exploded and sank last month, is seeking to limit its liability to just under $27 million. The world’s biggest offshore driller is filing the request in the US District Court in Houston under a century-and-a-half-old law originally aimed at helping US ship owners compete with foreign-flagged vessels. Transocean’s rig was being leased by BP at the time of the April 20th explosion that killed eleven workers and caused the devastating oil spill in the Gulf of Mexico. Meanwhile, evidence emerged Wednesday that the oil well failed a pressure test hours before the drilling rig exploded. Pressure tests are conducted to ensure the integrity of cement poured into the well to keep out natural gas. Congressman Henry Waxman discussed the test findings at a congressional hearing Wednesday.

Henry Waxman: “The anomalies in the pressure testing present a significant question that should be thoroughly investigated. Just hours before the explosion, tests on the well returned results that signaled a possible well failure and the influx of gas up the wall. Yet it appears that the companies did not suspend well operations, and now eleven workers are dead and the Gulf Coast region faces catastrophic environmental damages. We need to know if that’s the case and why it was the case.”

BP has finally released video showing the oil spewing from the broken well. Up until yesterday BP had refused all requests to release footage of the spill. The thirty-second video shows the black plume of the oil and a white plume, which is believed to be natural gas escaping into the water.

President Obama and Afghan President Hamid Karzai met at the White House Wednesday. Karzai is on his first trip to Washington since President Obama expanded the war in Afghanistan by ordering the deployment of 30,000 more troops. During a press conference, President Obama addressed the rising number of civilian casualties in Afghanistan.

President Obama: “When there is a civilian casualty, that is not just a political problem for me. I am ultimately accountable, just as General McChrystal is accountable, for somebody who is not on the battlefield who got killed. And that is something that I have to carry with me and that anybody who’s involved in a military operation has to carry with them. And so we do not take that lightly. We have an interest in reducing civilian casualties not because it’s a problem for President Karzai; we have an interest in reducing civilian casualties because I don’t want civilians killed.”

President Obama did not detail how he or Gen. McChrystal are held accountable when US forces kill Afghan civilians. The number of civilians killed by US forces have spiked in recent years. In February, US and Afghan gunmen killed two pregnant mothers, a teenage girl and two local officials in a botched nighttime raid. US forces then tried to cover up the killings by claiming that the three women had been discovered bound and gagged, apparently killed execution style. Earlier this week, the New York Times revealed that the number of Afghan civilians shot by US and NATO convoys at military checkpoints has recently jumped. At least twenty-eight Afghans have been killed and forty-three wounded in convoy and checkpoint shootings this year.

The Guardian newspaper reports the White House is likely to delay the withdrawal of the first large phase of combat troops from Iraq for at least a month after escalating bloodshed and political instability in the country. The US commander, General Ray Odierno, had originally expected to give the order within sixty days of the general election held in Iraq on March 7. In a message to Congress yesterday, President Obama said the situation in Iraq continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.

In news from Europe, a Spanish prosecutor has asked a judge to issue arrest warrants for thirteen CIA agents who are said to have been involved in the kidnapping and detention of an innocent German citizen named Khalid El-Masri. El-Masri was seized in Macedonia as part of the CIA’s secret extraordinary rendition program. He was held in a secret prison in Afghanistan for months before being abandoned by the CIA on a hillside in Albania. In November 2009, an Italian court convicted twenty-three Americans for their role in the extraordinary rendition of a Muslim cleric who was kidnapped in Milan in 2003.

The Obama administration is urging the Supreme Court to reject an appeal from the Canadian citizen Maher Arar. In 2002, Arar was seized by US officials at Kennedy Airport in New York and rendered to Syria, where he was tortured, interrogated and detained in a tiny underground cell for nearly a year. He later sued the United States. In court papers filed Wednesday, the Obama administration said that lower courts were right to dismiss Arar’s lawsuit.

A video has been published on the internet showing a former Bush administration attorney training police officers in Arizona on how to detect undocumented immigrants. The training is conducted by Kris Kobach, a Kansas-based attorney who helped draft Arizona’s law that orders police officers to stop and interrogate anyone they suspect is undocumented. Kobach is a former Justice Department attorney who helped John Ashcroft create a program that required all visiting citizens from twenty-five mostly Arab countries to be fingerprinted and monitored. Kris Kobach now works for the Immigration Reform Law Institute. During the training, he listed twenty ways police officers can detect undocumented immigrants.

Kris Kobach: “Indications from the dress or appearance of an individual that he has been — has recently — that he’s an illegal alien and perhaps that he has just entered without inspection, based on the totality circumstances. Number nineteen, related indications that the vehicle and/or its occupants have been on a very long trip. And number twenty, the individual avoids making eye contact with the officer, and this, of course, can give rise to reasonable suspicion, not only in the immigration context, but in other law enforcement contexts, as well.”

In other news from Arizona, fifteen people, including several students, were arrested at the state offices of education in Tucson Wednesday. The group was protesting Arizona Governor Brewer’s decision to sign a law banning the teaching of ethnic studies in public schools. Meanwhile, Judy Burns, president of the Tucson Unified School District’s governing board, says she will not comply with the law. This is Isabel Garcia, co-chair of the Tucson-based Coalition for Human Rights and legal defender of Pima County, Arizona.

Isabel Garcia: “These students here are here because they’ve got to fight. They can’t legalized discrimination. They cannot legalize racism. They cannot legalize the elimination of knowledge and classes that they feel are important to them. And they’re very clear about what’s going on in the state of Arizona. So they’re clearly fighting this entire police state and toxic racist environment that we’re subjecting them to as the state of Arizona. So these students are really clear. They’re not going to go back.” (Video: Courtesy of Pan Left Productions)

The prominent anti-gay rights activist who recently vacationed in Europe with a gay male escort has resigned from the National Association for Research & Therapy of Homosexuality. In a statement, George Rekers denied engaging in homosexual behavior. The Miami New Times recently reported that Rekers’s vacation companion was an escort hired through “Rent Boy dot com,” which bills itself as the world’s largest gay escort site. Rekers has maintained he hired the escort to help him carry his luggage. Rekers was a founder of the Family Research Council with the well-known anti-gay evangelist James Dobson.

Former First Lady Laura Bush has publicly endorsed gay marriage and abortion rights. In an interview with Larry King, she admitted she disagreed with her husband on these key social issues.

Laura Bush: “You know, when couples are committed to each other and love each other, then they ought to have, I think, the same sort of rights that everyone has.”

Larry King: “So would that be an area where you disagree? You can’t agree on everything.”

Laura Bush: “I guess that would be an area that we disagree. I mean, I understand totally what George thinks and what other people think about marriage being between a man and a woman, and it’s a real, you know, reversal, really, for that, to accept gay marriage.”

Larry King: “But you do.”

Laura Bush: “But I think we could, yeah.”

In education news, Maryland has become the first state to bar public high schools from automatically sending student test scores on a widely used military aptitude test to military recruiters. Under the new law, military recruiters will only receive scores on the Armed Services Vocational Aptitude Battery exam from students who choose to send their scores.

Here in New York, newly released statistics show the city’s police stopped and frisked over 575,000 individuals on the streets last year. Blacks and Latinos were nine times as likely as whites to be stopped by the police.