H U D: The Housing
& Urban Disaster
“Pray for Cleveland”
Sightings from The Catbird Seat
~ o ~
SEARCHING FOR THE
MOOSEHEAD TRUTH
From Unlimited Access: An FBI Agent Inside the Clinton Whitehouse
by Gary Aldrich
~ ~ ~
Special agents of the FBI are trained to find truth, document truth, and present it to a judge, to a jury, or even to the counsel of the president of the United States.
In the many assignments that I was privileged to have over the course of a twenty-six-year career with the FBI, I would often come across a special kind of truth. Everyone has experienced moments of great clarity when we see or hear evidence that is irrefutable. Judges have a name for it – they call it prima facie evidence, facts that are indisputable and require no explanation.
Water is wet, fire burns, con men con.
When I was a young agent in Los Angeles, my prosecutor partner was an assistant U.S. attorney, fresh from Stanford University Law School. We had a bribery case to take to trial. We needed to prove that a Department of Housing and Urban Development (HUD) inspector took bribes from contractors so they could pocket money earmarked for home repairs that they never made – repairs paid for with taxpayer dollars.
Our evidence, frankly, was weak, but the crimes were especially heinous, because when the “repaired” roof leaked like a sieve or when the electrical outlet shorted out or when the furnace didn’t work, the poor couldn’t afford to make the repairs. When they walked away from their defective homes, because they had been defrauded and could not repair them, they walked away from their small chance to have the American Dream. Their credit could be destroyed by a mortgage foreclosure and eventual bankruptcy. Their neighborhoods, full of similarly defrauded people, would disintegrate, and disintegrating neighborhoods were breeding grounds for serious crime.
It was a hard case to prove because the bribes were paid in cash, and the HUD inspector–I’ll call him Raymond–never put the money in a bank. Of course Raymond denied the bribes and blamed the contractors for not doing the work. . . .
The inspector was very slick in his defense. In the end only one contractor had the guts to testify for the government, and he was on the witness stand.
He had some serious problems in his past, including alcoholism and divorce, and the defense attorney took him apart, destroying his credibility. The assistant U.S. attorney and I were worried. The defense attorney’s withering attack on our witness’s character meant we might lose the case.
Our witness was now ‘on trial’, and he was unraveling. But the defense attorney, not knowing when to quit, asked, “Mr. Smith, you didn’t pay any bribes, did you? You were drunk all of the time. Your wife threw you out of the house. In short, you were a mess, weren’t you?”
“Well, actually now that you ask, there is this one thing...,” Smith began.
The defense attorney, sensing danger, tried to cut him off. “Never mind, Mr. Smith, I think the jury has heard enough of your lies. We all know what your answer is going to be. No further questions, your honor.”
The prosecutor stood up. He had a hunch our witness had something important to say. “Wait a minute, your honor, I think we are entitled to hear Mr. Smith’s answer, don’t you?”
The judge concurred. “Go ahead, Mr. Smith, you can finish your answer.”
Smith looked alarmed. “Judge, if I tell it, I gotta use some, well, bad language, and I don’t feel right about that.” He looked over at the jury.
The judge smiled at Smith. “Mr. Smith, I am sure that this Los Angeles jury has probably already heard whatever words you might need to use.” All eyes turned to the jury. They nodded.
“Well, your honor, there was this one thing. Raymond always made us come to his office to pay the bribes. He insisted that it had to be in his office because it was safe there. Behind his desk, where he sat when we paid him, was this big mounted moosehead. Well, when Raymond looked into the envelope to count the hundred dollar bills, he would always laugh. He’d point up at the moosehead behind his desk and say, “If that f—ing moosehead could talk, we’d all go to jail!”
There it was. The moosehead truth. The MHT.
The guilty look on Raymond’s face said the rest. It was all over.
The jury came back inside of thirty minutes with guilty verdicts on all counts.
I’ve always remembered that trial and the discovery of the MHT, and in every case I handled thereafter, I searched for the moosehead truth....
In this book I hope to help the reader find the moosehead truth about the Clintons, their friends, and their political agenda, an agenda that I conclude is at odds with the Constitution I had been sworn to uphold....
March 31, 2008
HUD Secretary Alphonso Jackson resigns
Dallas Business Journal - by Christine Perez
Nearly two years after a Dallas Business Journal report sparked a federal investigation of U.S. Housing Secretary Alphonso Jackson, the embattled administrator has resigned.
Jackson announced his resignation at a brief press conference Monday morning, citing personal and family matters. He will step down April 18.
In a letter to President Bush, Jackson said he would "fully assist in the orderly transition of the leadership at HUD."
A former president and CEO of the Dallas Housing Authority, Jackson has fought off charges of cronyism and the politicization of HUD's contracting processes for the last two years. The controversy was sparked by a May 2006 report in the DBJ, which covered a speech Jackson gave in Dallas to a private group of minority real estate executives.
The secretary told the group he had canceled a contract after the contractor said he had a problem with President Bush: "Why should I reward someone who doesn't like the president, so they can use the funds to try to campaign against the president?" Jackson said. "Logic says they don't get the contract. That's the way I believe."
The secretary also told the audience "how government works. Once you get the contract," he said, "they just keep giving you tax dollars. ... The most amazing thing I've ever seen is the amount of contracts we give out every day. One contract can make you wealthy."
Jackson later apologized for the remarks about the contractor and said he had lied. Responding to a flurry of complaints, the HUD Inspector General launched an investigation.
According to an internal copy of the IG's findings, obtained by the DBJ through a Freedom of Information Act request, top aides to Jackson testified that they and other senior staff members were advised to take political leanings into consideration when awarding discretionary contracts.
Despite Jackson's edict, there was no evidence that "information regarding political affiliation was routinely or generally received, maintained or applied to the contracting process; however, there were some limited instances where political affiliation may have been a factor in contract issues involving Jackson," the report found.
Sworn statements Jackson made to the IG's office as part of that investigation -- and later before a Senate panel -- have led to an ongoing probe by a federal grand jury, the Justice Department, the FBI and the HUD inspector general. Jackson testified that had no involvement in the awarding of contracts.
More recently, Jackson has been embroiled in a controversy involving a Philadelphia redevelopment project. A lawsuit filed by the Philadelphia's housing authority claims that Jackson tried to punish the authority for its refusal to award a contract to one of his friends. The secretary and other HUD officials have denied any wrongdoing.
In a Senate subcommittee hearing earlier this month, Jackson refused to answer questions about the Philadelphia matter -- and about the IG's findings relating to his 2006 comments in Dallas. Jackson's lack of cooperation led two senators -- Patty Murray (D-Wash.) and Christopher Dodd (D-Conn.), chairman of the of the Banking, Housing and Urban Affairs Committee -- to call for his resignation.
In a letter to President Bush, a close Jackson ally, the senators urged the President to ask Jackson to step down.
"We are deeply troubled by the growing number of allegations of impropriety on the part of HUD Secretary Alphonso Jackson and the Secretary's refusal to answer appropriate Congressional inquiries on these matters," the senators wrote. "Unfortunately, the allegations surrounding Secretary Jackson, as well as his rejection of appropriate Congressional oversight of his Department, undermine his ability to effectively address the current housing crisis."
Jackson was named HUD secretary in March 2004. He joined the Bush administration in 2001 as HUD's deputy secretary and chief operating officer.
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July 14, 1989
H.U.D. Grants Under Reagan: A Case Study in Connections
By DAVID JOHNSTON, SPECIAL TO THE NEW YORK TIMES
Four former housing officials who got more than $130 million in renovation contracts present a case study of how development grants were awarded in the Reagan Administration.
Philip D. Winn, a former assistant secretary for housing who is now Ambassador to Switzerland, and Philip Abrams, a former Under Secretary, headed the development group, made up of four former officials of the Department of Housing and Urban Development. The group renovated seven housing projects in the West using grants from the department's much-criticized Moderate Rehabilitation program.
Both Mr. Winn and Mr. Abrams have said they did nothing wrong in establishing the highly profitable business, a collection of partnerships based in Denver that went by the informal name the Winn Group. Heated Exchange With Panel
But in a heated exchange last month, when Mr. Abrams appeared before the House panel that is investigating abuses at the housing department, the chairman, Representative Tom Lantos of California, told him, ''Many of these units were awarded to you because of your pre-existing relationship with with high-ranking H.U.D. officials.''
Representative Christopher Shays, a Connecticut Republican who is a member of the Lantos subcommittee, said the group was a classic example of the Washington syndrome in which former officials leave office only to return after a legally mandated waiting period to lobby former colleagues for projects.
''Philip Winn and Phil Abrams ripped off the taxpayers,'' he said. ''They were involved in a dirty, smelly, slimy business, and they made millions off the taxpayers because of their special relationship with the agency.''
The two other associates in the Winn Group were J. Michael Queenan, a former director of housing development at the regional office in Denver, and Lance Wilson, who preceded Deborah Gore Dean as executive assistant to Samuel R. Pierce Jr., the Secretary of H.U.D. in the Reagan Administration. Mr. Queenan was familiar with local housing authorities in the West; Mr. Wilson, who is now a first vice president of Paine Webber Inc. in New York, brought to the group his knowledge of financing.
Mr. Winn and Mr. Abrams held an interest in each of seven projects developed by the group in Oklahoma, Nevada and Colorado, according to Congressional testimony and investigators. But Mr. Wilson and a lawyer for Mr. Queenan said they did not invest in all the projects and held only small percentages in some.
The group's activities were described in detail in a 700-page audit prepared by H.U.D.'s inspector general, Paul A. Adams, that was made public in April. #11 Months, 1,000 Units In one 11-month period, the group obtained funds to renovate more than 1,000 units, or nearly one-eighth of the total nationwide annual allocation under the Moderate Rehabilitation program, in which grants were awarded to public housing authorities to pay private developers to upgrade substandard apartments.
Housing Secretary Jack F. Kemp suspended the program earlier this year, but reopened it after ordering changes intended to eliminate favoritism in the application procedures. On Tuesday, however, a House Appropriations subcommittee voted to eliminate funds for the program.
Representative Lantos estimated that the Winn Group exploited its contacts to obtain $133 million in renovation funds, plus an additional $29 million in tax credits on the projects. There has been no public estimate of their profits; in each project the developers must pay to buy and maintain the units. Mr. Lantos agreed that the projects met the technical requirements of the program, but he questioned whether they were built in the areas of greatest need. The subcommittee is scheduled to hold further hearings on the Winn Group later this month.
So far, no evidence has surfaced that Winn Group members violated the law. But their activities are under investigation by H.U.D. auditors and the Justice Department's Public Integrity Section. Some officials, like Mr. Shays, believe that the activities of the former officials illustrate the need for more stringent controls at the housing agency and tighter ethics laws regulating the activities of high officials after they leave Government.
Little Public Attention
The group's activities have received comparatively little attention. The focus has been on two other kinds of actions detailed in the 700-page audit of the Moderate Rehabilitation program, which led to the current broad investigation of H.U.D.: the dispensing of grants by top officials like Ms. Dean to well-connected Republicans, and the lucrative consulting fees paid to people like former Interior Secretary James G. Watt for helping clients obtain Federal housing subsidies.
Local housing officials, the report said, were often surprised by the ability of the Winn Group members to cut their way through the H.U.D. bureaucracy. ''Abrams appeared to be more informed about the Moderate Rehabilitation program than the area H.U.D. office,'' the report quoted one local housing official as saying.
The manner in which the Winn Group obtained grants contributed heavily to the inspector general's finding that the Moderate Rehabilitation program was riddled with instances of preferential treatment.
Mr. Winn has said he would not answer reporters' questions about his H.U.D. activities. But a spokesman for the United States Embassy in Bern, Sherman N. Hinson, said, ''The Ambassador does not consider that he did anything that was in any way improper while he was involved in the projects under this program.'' A reporter's calls to Mr. Abrams at his office in Colorado and to his Washington attorney were not returned. 'Dear Debbie'
Mr. Abrams, whose duties as assistant secretary for housing and Under Secretary brought him into contact with Ms. Dean, wrote personal notes addressed to ''Dear Debbie'' after he left the agency. Three times he sought her support for Winn Group projects at a time when she and a handful of other officials determined who received the money.
Mr. Winn and Mr. Abrams were also in contact with Thomas T. Demery, an assistant secretary for housing at H.U.D. from 1986 to 1988. Mr. Demery also played a crucial role in choosing renovation projects. A sample of General Service Administration telephone logs from some of Mr. Demery's office phones showed that 42 calls were made from his office to the Winn Group from August 1987 to February 1988.
In December 1987, Mr. Demery vacationed at a condominium in Vail, Colo., of which Mr. Winn was part-owner. While he was there, Mr. Demery received internal documents that were sent by facsimile through the Winn Group's offices. Mr. Demery, who said he paid $500 for the use of the condominium, has said no confidential information was disclosed.
On another occasion, Mr. Demery gave a Winn Group consultant an internal H.U.D. memorandum that detailed financing plans for the Moderate Rehabilitation program for part of the 1988 fiscal year. The consultant was Silvio D. Debartolomeis, a former general deputy assistant secretary for housing, who also helped manage the renovation program until he left the agency in December 1986.
Mr. Demery has denied taking part in any improper activities. In an interview with investigators from the inspector general's office last year, he said his award recommendations on moderate rehabilitation were never influenced by a developer's lobbying efforts, and he denied giving preferential treatment to the Winn Group.
Mr. Demery said his discussions with Mr. Abrams, which he said took place no more than once a month, were held because of Mr. Abrams's extensive knowledge of H.U.D programs.
July 12, 2003
Probe nets high-profile donor
By Johnny Brannon, The Honolulu Advertiser
Wesley Segawa, former chairman of the Housing and Community Development Corp. of Hawai`i, was arrested yesterday as part of a wide-ranging criminal investigation on illegal political donations.
The probe has become one of the most sweeping in state history, and more than 600 subpoenas have been issued to a variety of companies and individuals for bank records and other financial documents. Segawa’s arrest is the highest-profile so far.
Segawa also agreed in May to pay the state Campaign Spending Commission a $53,500 fine for making illegal donations to several politicians, according to a signed agreement made public yesterday>
He was booked at the Honolulu Police Department’s main station on suspicion of money laundering, illegal ownership of business, making campaign donations under a false name, and an illegal business practice known as monopolization. He was released pending further investigation.
The campaign commission found that Segawa funneled $26,275 to Mayor Jeremy Harris, $21,950 to former Gov. Ben Cayetano, $14,300 to former Lt. Gov. Mazie Hirono, $12,500 to former Maui Mayor James “Kimo” Apana, and $3,000 to Hawai`i County Councilman and former mayoral candidate Fred Holshuh.
Commission director Robert Watada said Segawa provided the money to employees, relatives and friends, and directed them to make campaign contributions. Segawa owns a Hilo engineering firm, Wesley R. Segawa and Associates Inc....
The investigation has lasted more than 18 months and focused largely on money that went to Harris, whose attorney has blasted the effort as a witch hunt. Harris has not been formally accused of wrongdoing.
Segawa’s arrest was the latest in a series that have included several other engineering company figures, all of whom were released uncharged.
Sam Kyu Hyun, president of W.A. Hirai and Associates, was arrested and released on Tuesday on suspicion of the same offenses as Segawa.
Hyun’s firm agreed in March to pay a $19,000 fine for making illegal donations to the campaigns of Harris, Cayetano, Hirono and Apana.
Others arrested earlier this month include Edward K. Noda, vice president of a company that bears his name, and Nancy Matsuno, treasurer for R.M.Towill Corp. Towill vice president Roy T. Tsutsui was arrested last month.
Noda agreed in March to pay the state Campaign Spending Commission a $53,000 fine for funneling money through other people to the campaigns of Harris, Cayetano and former Mayor Frank Fasi.
Segawa and eight other HCDCH board members resigned late last year after the U.S. Department of Housing and Urban Development accused the agency of mismanaging federal money.
HCDCH was also told to refund $771,000, the amount of sole-source contract that HUD said was improperly awarded by former HCDCH executive director Sharyn Miyashiro to a company partly owned by her ex-husband, Dennis Mitsunaga.
Mitsunaga was a major campaign fund-raiser for Harris, Cayetano and others, and is Segawa’s second cousin.
Watada said Mitsunaga’s fund-raising involved many companies that have been fined or are under investigation, but that he has not been accused of wrongdoing.
Several people were charged earlier in the campaign probe. They include Michael Matsumoto, head of SSFM International Inc. engineering, who pleaded no contest last December to felony money laundering and a misdemeanor campaign finance violation. Three others associated with the company were also charged with misdemeanors.
Earlier this month, a member of Harris’ Cabinet pleaded no contest to misdemeanor theft for instructing his secretary to file Harris campaign spending reports while on duty at City Hall.
Michael Amii, director of the city Department of Community Services, was ordered to pay $495 in fines and restitution, and was placed on a form of probation for one year. He remains on the job.
In May, an attorney for the Food Pantry grocery chain was indicted on two misdemeanor charges for allegedly orchestrating illegal campaign contributions to Harris. The lawyer, Edward Chun, pleaded not guilty.
Another company, GYA Architects Inc., has agreed to pay the campaign commission a $6,500 fine for making improper donations to Cayetano, Hirono, and Harris, Watada said....
Remember the ‘War on Poverty’?
From : "Catherine Austin Fitts" <catherine@solari.com>
To : "Solari Action Network" <catherine@solari.com>
Subject : Solari Action Network: Targeting of US population with biological warfare.
Date : Wed, 1 Jan 2003 11:51:09 -0400
It's a New World Order, and brother you're the prey.
---Curtis Mayfield
========================================================
-----Original Message-----
From: Tom
Sent: Wednesday, January 01, 2003 12:43 PM
To: catherine@solari.com
Subject: Have you seen this web site?
Is this guy a crackpot or is he substantial?
FITTS RESPONSE
I do not know Graves other than through the internet. Based on my research and anecdotal experience, I believe the gist of what he says is true. If you are interested, read Len Horowitz's book on viruses....
The group doing all of this was the same group targeting black communities with HUD fraud and narcotics trafficking and the war on drugs in combination. The plan was to depopulate blacks in a way that made money from the blacks and the rest of us through the federal credit programs. It was very successful -- both in terms of ensuring continued leadership of a select group in a "democracy", depopulating and dispersing minorities and generating money for the black budget and greater centralized enforcement control.
To get a sense of it, you might want to read/listen to the following links if you have not read them before. These are all quite solid. Graves may or may not be. I just have not had time to look at his material. My focus is entirely on winning the litigation this year. I have another year of very hard work to win this thing.
I believe from the latest deposition that John Ervin and his attorneys believe that they are protecting this ethnic cleansing operation....
HUD was the primary "marketing" arm based on my experience.
==========
As First Published in the May, 1999 issue of From the Wilderness.
EXCLUSIVE
Former Bush Assistant Secretary for HUD Reveals "Ethnic Cleansing" Connected to CIA Drug Dealing in Los Angeles
Government Spends Millions in Campaign to Silence Former Wall Street Banker, Cover Up Connections to Dark Alliance Stories & CIA Inspector General Report on Drug Trafficking
Special to From The Wilderness
by Contributing Editor, Catherine Austin Fitts
~ ~ ~
I was ten years old when the combined action of HUD housing investment and heroin trafficking destroyed my West Philadelphia neighborhood. The combined real estate and drug play destroyed the equity in our homes and businesses. Many of us left. Those who stayed were embroiled in the increasing stress of what happens as neighborhoods deteriorate into crime and decay. I decided that I would learn how money worked. I was too young to understand fully how the combination of HUD investment and drugs could move control and ownership from the many people who lived in a community to a few people who lived outside the community. -- C.A.F.
* * * * *
I'm an investment banker. In the eighties I was a Managing Director and member of the Board of Directors at the Wall Street investment bank Dillon, Read & Co., Inc. I managed the firm's large municipal and government clients. My projects included the financing of billions of dollars of improvements in New York City's subway, bus and commuter rail systems. I also organized the financing for hundreds of millions in renovations to the infrastructures of New York and New Jersey. I regularly handled hundreds of millions of dollars in transactions.
I also helped to make tens of millions of dollars in profits for my firm and I raised tens of thousands of dollars for the George Bush Presidential campaign in 1988. Nicholas Brady, who became George Bush's Treasury Secretary, had been my partner and boss at Dillon Read.
I was a Wall Street insider and a political insider - or so I thought. I was successful at Dillon Read because I created new investment models that helped ordinary people while making a profit. I thought "outside the box." When Iran-Contra came and went I was oblivious. I had no idea about the drugs. It never entered my mind. Yet today I am convinced that the illegal drug trade, the enormous cheap capital it generates, and the CIA's role as enforcer/protector for the profits of that trade is a dominant factor in the economy of this country.
It is a factor, which is destroying the entire American culture and is utterly out of control. As an investor and banker and as a former Cabinet level appointee, I tell you this is true.
My evolution came slowly. In 1989 I was named Assistant Secretary of Housing-FHA Commissioner under Housing and Urban Development Secretary Jack Kemp. I managed $300 billion of mortgage insurance, mortgages and properties of the Federal Housing Administration and, as Commissioner, I advised the Secretary on another $1 trillion of mortgage financing. I was fired by Jack Kemp in late 1990 because I would not go along with the questionable political practices, which seem to be built into HUD's machinery and purpose.
But still I did not see the bigger picture.
In 1990, after leaving HUD, I started my own investment company, The Hamilton Securities Group, and I devised new and creative ways to save taxpayers billions of dollars.
In 1993, Hamilton secured contracts with HUD through Secretary Henry Cisneros. Hamilton saved taxpayers billions of dollars by taking defaulted HUD housing mortgages, repackaging them and auctioning them on the private market.
Hamilton began putting wealth back into inner city projects by hiring women living in HUD housing and teaching them how to use computers to build data bases on how money works in 63,000 neighborhoods throughout America. Hamilton started a data processing company with these women in a HUD project (Edgewood Terrace) in Washington. The women who lived there earned stock in the company. The company made money and proved the concept of what on-line access in communities could do to build jobs and businesses. We used the success of that effort to persuade HUD to fund computer learning centers in other housing projects. Hamilton was extremely successful. We made millions and we saved the government billions.
Fulfilling my childhood dream, Hamilton also created new software and money management tools, which were, for the first time ever, able to map down to the neighborhood, exactly how HUD and other federal money worked, who profited when loans defaulted, and how money came into or left a community.
For example, we were often able to see where HUD was spending $100-250,000 per unit on apartment buildings when there was single family housing available within walking distance for $25-50,000.
Secretary Cisneros had been extremely supportive of our work. We had unrestricted access to rich quantities of government financial data that was supposedly public but hard to understand. We were translating that into useable information so that people in any community could see how the money flowed through their neighborhood. We helped HUD get increasing amounts of data up on its web site. An unforeseen side effect for the women at Edgewood, and for Hamilton, was that by seeing clearly how the clean money worked, we also began to see how the dirty money worked.
As an investor for more than twenty years, I believed that it was actually more profitable for people to own their own neighborhoods and businesses and to know exactly how the money worked. The MONEY MAPS we made were so simple to understand that they looked like comic books.
As it turns out we mapped a great deal more than we knew.
In 1996, as reporter Gary Webb was busy writing a series of stories connecting CIA and the Contras to the crack cocaine epidemic in Los Angeles, I was busy using the money maps in a way that would help people move people from government subsidies to home ownership and entrepreneurship.
I was also advocating that U.S. government investment in communities should be subject to the same public disclosure rules that private companies are obligated to follow under the Securities and Exchange Commission Rules. If you are a shareholder in a company, that company is using your money. The law requires that they use your money legally and that they do their best to protect your money and make you more.
To earn money, and to do so in a fair, honest and competitive way, federal and state laws require companies to report performance and key transactions to you, the shareholder.
Every citizen is a shareholder in the government. If governments worked like they require corporations to work, they would be required to report to you, in the sunshine, exactly how the money was working, in your neighborhood, and you could either approve - or disapprove of the fairness and effectiveness of that, based upon your understanding of your own needs. That is very threatening to those who have used agencies like HUD as a trough to pay off political cronies.
On August 1, 1996, I gave the keynote address at a Neighborhood Networks conference in Boston, Massachusetts to 500 owners, managers and tenants in private HUD housing. As part of the speech I showed a slide of one of our money maps of Los Angeles. As I put the slide up I made the following statement:
"One of the products that has been most successful for the first data servicing sites, Edgewood Technology Services, has been "geo-coding" databases and mapping. I wanted to show you this map; it's up on the World Wide Web. This is a map of Los Angeles. Can anyone figure out where south central LA is from looking at where the HUD properties are on this map? This is the same thing as the Washington DC map I showed earlier. The little red dots are single family properties that were financed by (now) defaulted HUD-held mortgages. This map was geo-coded and designed and programmed by a woman who, four months before, had been on unemployment compensation and is a tenant in HUD housing"
If you compare this map with the fact that Freeway Ricky Ross - the crack cocaine kingpin described in Gary Webb's Dark Alliance was known for buying up real estate along the Harbor Freeway and selling drugs throughout this exact area - the mathematical correlation is staggering. Every dot represents a HUD mortgage where the taxpayers lost money in a defaulted FHA loan and where somebody else bought the property for pennies on the dollar.
Most of those loans defaulted as the crack cocaine epidemic ravaged Los Angeles. The taxpayers bear the costs of not only the defaulted mortgages, but also deterioration in property value, the crime, and ultimately the depopulation due to very expensive prison warehousing and welfare.
Exactly who bought and traded in properties throughout this area should be the subject of congressional hearings looking into corrupt HUD practices from the period and continuing to this day. I suspect that many of the same players connected to the Savings and Loan scandals, who have also been tied to Iran-Contra and CIA's drugs will surface yet again.
Demographically it is also easy to see now that the racial composition of South Central has changed radically and that African-Americans have been geographically and politically fragmented as, I believe, an intended result. Their political power has been weakened.
Just days after showing this first map, I received a subpoena from the Office of the Inspector General of HUD asking for extensive data and records from Hamilton. Suddenly, the loan sales and Hamilton were under investigation. The HUD IG’s actions were doubly surprising given their intimate involvement in and positive feedback about the loan sales program and because a HUD OIG audit team had just finished an audit of the loan sales program and had informed our project manager and HUD that our performance was excellent and there were no problems whatsoever.
At the same time, we got calls from a team of reporters from US News & World Report. They had been assured "at the highest levels" of the HUD Inspector General’s office that we were guilty of criminal action and that I and would soon be indicted. The recent favorable audit disappeared. Investigators started doing interviews where they did more seed planting than information gathering.
The "investigators" at HUD started suggesting to reporters that bid rigging had occurred in the loan sales. This was just after members of the HUD IG audit team had actually sat in on one sale, and concluded that bid rigging was impossible. They had also concluded that there was no way that "rigging" could have taken place because in a sealed-bid auction, you cannot favor one bidder when all bidders have access to the same information. That audit report was suppressed while the IG investigators pushed the exact opposite notion to reporters.
On August 10, Bob Dole announced Jack Kemp as his running mate. Meantime, the Republican appropriations committee, chaired by Republican Congressman Jerry Lewis of San Bernardino, gave Susan Gaffney, the HUD IG a large appropriations increase for her program Operation Safe Home, which targeted black communities for visible media "wag-the-dog" roundups of drug offenders. At the same time, our model for computer learning and data processing by people who had a stake in the company that did the work was adopted by Unicorp.
Unicorp is the Department of Justice private business that markets prison labor to federal agencies.
Suddenly, the black people who were apparently not smart enough to do database and software development near their children and parents were more than competent enough to do it in prison. The prison investment boom was taking off, fueled by new and longer mandated sentences. We at Hamilton felt like we were walking around with a big bullseye on our back because we wanted the communities of America to know what we knew, which was how to make maps that tracked the money flow in their own home towns.
I was not the only one dealing with Inspector General inquiries. The HUD officials working with me were also inundated with an investigation marked by leaks and dirty tactics. The former Deputy Assistant Secretary for Multifamily at HUD, Helen Dunlap, was one of the people targeted. She was from California and had previously run the California Housing Partnership. She had lots of experience in real estate and community development in Los Angeles.
Gary Squier, the Housing Commissioner of LA, on loan from Los Angeles, who was not involved in mortgage sales with Hamilton, nonetheless found himself dealing with similar probes from the HUD OIG. He was later to be turned down for a position by the White House despite impeccable credentials. No one could figure out why.
Suddenly I was persona non grata to long time friends and business relations in and around the government. I believe the leak campaign was far more sophisticated than something the HUD Inspector General could or would do on her own. It appeared that major economic and political powers had ordered that Hamilton be destroyed. More importantly, they wanted the evidence of what we knew - the maps - destroyed. That is also why, to this day, we believe the Federal government has destroyed many, but not all, of our tools and databases.
We didn't realize it at the time, but I am now convinced that in the summer of 1996, our software and mapping techniques uncovered evidence of ethnic cleansing on Los Angeles. Hamilton's map revealed that one of the most significant effects of the crack cocaine epidemic was that black homeowners, faced with payments on unlivable and unsellable properties, simply defaulted and fled the city to get away from the shootings and the drugs.
Those properties: industrial, residential and commercial were scooped up for pennies on the dollar. Wouldn't it be fascinating to know who bought the properties and how much money has been made on them since?
Thanks to people like Gary Webb, Peter Dale Scott (Cocaine Politics), Alex Cockburn (Whiteout), Mike Ruppert, brave DEA Agents like Celerino Castillo - and now to the CIA's own reports - we can prove that the CIA knew full well what it was doing.
And, as is his particular gift, Mike Ruppert, who gives us permission to see the obvious, has established that blacks were targeted by CIA and that the people who control our intelligence agencies are the same ones who control our economy and Wall Street.
Mike has taken great pains to document these things in previous issues of From The Wilderness.
ETHNIC CLEANSING IN LOS ANGELES
Ethnic cleansing is a bit trickier in South Central Los Angeles than it is in South Central Europe. It is essential in a "democracy" to have people do it in a way that makes it look like they're "doing it" to themselves. You need a socially induced suicide.
So how do you get people to commit suicide? You make it very attractive for their children to make money doing something illegal. Then you arrest them for it in a very visible way (Remember the battering rams and armored cars?). You design stories to make people blame themselves for what has happened.
This is how branding works. Pepsi = tastes good, Black people = cause illegal drugs and crime. Support all this by a national media owned by defense contractors and other corporate interests. That way the nightly news has lots of moneymaking incentives to cover HUD OIG sponsored drug raids in black communities rather than doing a story on CIA drug trafficking.
The most efficient ethnic cleansing is self-financed or, better yet, profitable. Drugs and alcohol are excellent tools toward this end, especially when they are combined with easy access to guns. Sell large amounts of addictive substances to a group of people in an area you want to take over, then use the cash flow to buy up their homes and commercial real estate for 10 cents on the dollar, without much competition, while you enjoy the full value of their cash flow. You can then afford the long holding period required to make the land profitable again after the cleansing period is over.
I believe that if the Federal government would make citizens' data (and it is our data) available, instead of trying to suppress it, it would prove that taxpayers are losing money to fund ethnic cleansing while the people in South Central LA are losing their lives. And I believe that it was the effectiveness of our maps which threatened to expose the deeper financial agendas of the eighties.
I believe our current model, the Solari Investment Model, (www.solarivillage.com) which I am still developing, may well tie Iran-Contra, The Savings and Loan Scandals and the HUD scandals of the late 1980s into one big economic package designed to benefit a very few.
The way to start to do this is to look closely at all the government investment, credit and regulations in Los Angeles since 1980.
Our maps suggest to me and others that the crack cocaine epidemic, created by the CIA was, I believe, just as much a program of ethnic cleansing and land grabbing economic warfare as it was about a bunch of rebels in Central America who were not the equivalent of our Founding Fathers.
But this kind of ethnic cleansing was hard to contain and it spread to other races and classes. It reached the rural and suburban neighborhoods of places like Iowa, Ohio and Tennessee.
By the end of the 1980s it had reached all my friends and relatives who listen to Rush Limbaugh, voted for George Bush and donated money to Oliver North - not knowing that, according to CIA's own reports, the networks he controlled were the key to the supply of drugs flowing to their kids and communities.
As Michael Ventura once wrote, "We all live in the South Bronx now." White families all across America were hurt by drugs and violence and their pocketbooks also got drained, even as the media reinforced the notion that drugs were a black problem....
© Copyright 1999. From The Wilderness Publications
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After the 1996 election, Secretary Cisneros was asked to resign from HUD.
The choice of Cisneros' successor seemed strange and somehow connected to Hamilton's predicament. The Afro-American mayor of Seattle was widely considered to be a shoe-in. After the White House floated his name, another investigation by the HUD OIG into possible misuse of HUD monies in Seattle caused him to be dropped.
Two days later we were assured that an Afro-American woman from Los Angeles, Yvonne Braithwaite-Burke, was the President’s leading candidate. Then suddenly, she disappeared from the radar screen and Andrew Cuomo was announced with surprisingly strong bipartisan support for someone with such a partisan history.
Cuomo moved into the Secretary’s office at HUD from his then current position as Assistant Secretary for Community Development and Planning. Rumors started to float around the HUD networks about minorities and people sympathetic to minorities being moved out.
Meantime, the new Secretary made it clear that his top priority was enforcement and it appeared that the Secretary and the OIG were going to compete for an ever-growing budget via media-worthy enforcement actions. So, then came the Urban Fraud Initiative and increased funding for Operation Safe Home, targeting tenants, real estate owners and managers in black communities.
At the time, we made no connection between these actions and the promotion of prison privatization by Vice President Gore’s National Performance Review. New Federal sentencing guidelines helped increase black inmates to approximately 50% of a rapidly expanding prison population. All this at an extraordinary cost to taxpayers.
As the audits of Hamilton continued, forcing us to spend hundreds of thousands on legal fees, Secretary Cuomo and the Inspector General’s staff, who were later to withhold $2 million in payments, became obsessed with seizing our data and software. This was software we were planning on giving away via the web!
The critical issue from October 1997 through the following March seemed to be - our knowledge! In October, great emphasis was placed on our returning all of our HUD databases, including those that were supposed to be publicly available, and certifying that we had done so.
In the following months, the HUD OIG tried to seize all of our documents, including originals, with no basis in law. After demanding physical access to our computers, government employees made back-ups of our data which, whether intentionally or not, seriously damaged it.
And no one has yet officially accused us of any wrongdoing. We were, and are to this day, only being investigated. It is clear to us that the intent of this campaign was to drive the company into bankruptcy.
The leak campaign against the company and me has since reached new heights of absurdity. As the HUD IG keeps assuring the media that that I am guilty of criminal violations they now have investigators focusing on my sex life! Worse still, HUD IG agents recently showed up at the home of my 72 year old uncle with a subpoena for records of a family owned farm house that doesn't even have indoor plumbing, implying some kind of fraudulent transaction. Members of my family have reduced or cut off communications, fearing they could be targeted too.
After court battles and negotiation, in March of 1998 HUD insisted that all of our computers be scrubbed. We were not going to be allowed to transfer our own proprietary data and the Federal District Court Judge, Stanley Sporkin, appointed a Special Master as trustee to manage all our digital and paper records.
Inexplicably, HUD was quite upset when they found we had taken our main server with us and not sold it, in spite of the government's destruction of its files. The HUD investigator made it clear that we could not keep the server because - "We were not allowed to have any of the knowledge". We could not explain this bizarre position and neither could they.
What I did not know until approximately a year later, after reviewing tapes of Mike Ruppert's lectures, was that hearings were held on Volume I of the CIA Inspector General’s report on the Dark Alliance allegations on March 16 of 1998. At the same moment the government was trying to steal Hamilton's data and knowledge.
We also did not notice in February when Vice President Al Gore announced that Secretary Cuomo was bestowing an empowerment zone and $300 million in tax credits on Maxine Water’s congressional district. That was just before the March 16th hearing where Maxine Waters performed brilliantly against CIA in a show that nobody watched. We were busy, at the time, moving our computers over to our law firm to protect the MONEY MAPS from a series of break-ins and other harassment around my home.
Our growing fear of being set up in an asset forfeiture case, after the Department of Justice threatened my assets personally, dominated our lives and does so to this day.
And so we did not notice when the damning Volume II of the CIA Inspector General's report was released on October 8th, one hour after Henry Hyde's Committee started the Impeachment inquiry. And we did not notice that Maxine Waters' voice suddenly fell almost silent as Bill Clinton saved his presidency by blackmailing the Republicans with Volume II and its contents.
I made efforts to communicate with Maxine Waters in November and December 1998 about possible connections between our case and CIA drug dealing but, aside fro