H U D: The Housing
& Urban Disaster
“Pray for Cleveland”
Sightings from The Catbird Seat
~ o ~
SEARCHING FOR THE
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,
“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
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
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
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
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
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
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.
Dallas Bizjournals - 03/31/08
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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
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
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.
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
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.
A Colorado Vacation
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
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
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
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
Remember the ‘War on Poverty’?
From : "Catherine Austin Fitts" <email@example.com>
To : "Solari Action Network" <firstname.lastname@example.org>
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.
Sent: Wednesday, January 01, 2003 12:43 PM
Subject: Have you seen this web site?
Is this guy a crackpot or is he substantial?
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
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.
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
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
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
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
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
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
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
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
~ ~ ~
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
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
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 from an
initial contact, our calls were not returned.
[FTW placed telephone and e-mail requests to both the LA and Washington offices of
Maxine Waters to ascertain whether the $300 million tax credit award in March, 1998
was spontaneous or the result of a previously submitted request. As of press time we
have received no response. - ED]
To date we estimate that the HUD Inspector General investigation targeting my
companies and me has cost the American taxpayer $35MM. To date we have
not been successful in getting the Department of Justice or the HUD OIG to tell us what
they are investigating or even who is in charge of the investigation. The investigation
continues with no end in site. We have multiple lawsuits filed against HUD and are filing
more. We continually hear Judge Stanley Sporkin, rule against us with statements
that he disagrees with the law so we should take it up with Congress.
The company I founded, Hamilton, was liquidated a year ago to pay the bills of the
ongoing campaign to discredit us. As a result of the persecution we have lost more than
one hundred million dollars. I have sold my home, lost millions of dollars in unpaid HUD
contracts, endured eighteen audits, burglaries, physical harassment and an unending
smear campaign which has produced not a single complaint or indictment after almost
I believe this is because I have the pieces to help prove that what Gary Webb stumbled
upon was ethnic cleansing - American style.
For those of you pushing for testimony on Volume II, let’s try another tactic. Let’s push
for a Congressional and GAO investigation on how all the federal investment, credit and
regulation worked in Los Angeles from 1980 to 1994. Let’s look at how our government
was used, from CIA to DEA to HUD, to destroy and loot our communities.
The key is HUD.
Let’s look at how the Section 8 owners, managers and tax partnership beneficiaries
worked along side the drug traffickers.
Let’s look for patterns of loan brokering, money laundering, cleansing and other
relationships between real estate, land, prison growth and privatization and the kind
of investors who control CIA and intelligence networks.
Then let’s look how this ties in to campaign fundraising.
The present economic and political system is not sustainable and must collapse - or
change. New investment models in the information age will show us that integrity,
honesty and win-win investment models, rooted in community and place based
autonomy are actually more profitable than the liquidate and destroy models currently
Like the auto mechanic said to the car owner who needed repairs, "You can either pay
some now - or pay a lot more later."
But we have to solve some problems first. Finding the will to do that is made easier for
me as I recall the words of Bishop Alfred Owens of the Greater Mount Calvary Holy
Church, "If we can face it. God can fix it."
After a lifetime of study, from Wharton to the inner sancta of government, I believe I
have found the solution to a very real corruption which neither Congress nor Wall Street
presently possess the ability to stop. It is a new investment model, born of the
Information Age, which will save both the just and the unjust alike by turning the current
Industrial Age investment model upside down and making what was once secret -
available to all.
As the edge of the precipice approaches and as our economic snake eats its own tail it
shouldn't be long before those who have scoffed at the truth-tellers recognize that we
are the ones with the maps to lead them out of the jungle.
You can learn more about the Solari investment model by visiting
Catherine Austin Fitts, is a 1978 Graduate of the Wharton School of Business with an
MBA in Finance. From1978 to 1989, at the Wall Street investment bank Dillon, Read &
Co she served in the Corporate Finance, Energy Finance, Mergers and Acquisitions
and Public Finance Departments. From 1986-9 Fitts was a Managing Director and
member of the Board of Directors.
From 1989-90 Fitts served as Assistant Secretary of Housing - Federal Housing
Commissioner at the Department of Housing and Urban Development. From 1991-7
she served as President/CEO of the Hamilton Securities Group with aggregate
revenues of $50 million, an employee base of 50 and portfolio strategy responsibilities
for $400 billion of financial assets.
She is now President and CEO of Solari, Inc; a Washington consulting firm specializing
in equity based neighborhood investment models for the Information Age.
Black Op Radio Archive: Show #62
Feature: D'Ferdinand deposition by attorney Ray Kohlman.
Desiree Carone Ferdinand is the daughter of Colonel Albert Carone, who was the
paymaster for Army-CIA-NYPD narcotics trafficking, money laundering and
assassinations through the mid-1980's/Iran Contra.
These depositions provide Desiree and her husband Tom's Ferdinand's recollections of
what they saw, heard and were told by their father/father-in-law about narcotics
trafficking, money laundering and assassination by the US Army, CIA and New York-organized crime with the knowledge/support of NYPD through the mid-80's, including
their use of Afro American gangs to distribute drugs in Afro-American neighborhoods.
Crack the CIA: On Line Video from Guerilla Network News
The Spooky-Minded Professor: CIA Cover-Up Meister Gets Princeton Job
(February 2001) http://www.steamshovelpress.com/offlineillumination4.html
The Story of Edgewood Technology Services- or How I Lost $100 Million
Bush Assistant Secretary for HUD Reveals “Ethnic Cleaning” Connected to CIA
To: The Solari Action Network
Subject: The Kemp Tapes, I-XII- Now Available from Black Ops Radio
Date: Fri, 20 Jun 2003 01:34:21 UT
In 1998, my attorneys asked me to record my recollections of serving as Assistant
Secretary of Housing-Federal Housing Commissioner during the first Bush
Administration, 1989-90. I had reported to HUD Secretary Jack Kemp and worked with
his general counsel Frank Keating, his undersecretary, Al DelliBovi and his chief of
staff, Scott Reed.
Kemp had announced as the Republican VP candidate in 1996, just after my company
had received its first subpoena in the "enemy of the state" process and two weeks
before Gary Webb's Dark Alliance story began publication in the San Jose Mercury
One of the reasons that was given for Kemp's choice was his ability to attract women
and minority voters to support the Republican ticket.
Obviously the truth of HUD fraud and narcotics trafficking in South Central LA was
not something that either the Republicans or Democrats wanted to come to light.
While I never dreamed that I would circulate the truth of Kemp's behavior at HUD
publicly at that time (and it took years of being targeted before I was willing to do so),
the possibility may have been on the mind of both Kemp and Dole's campaign
manager, Scott Reed, as my company was working for HUD, then led by Secretary
Henry Cisneros who was a Democratic politician from Texas. The notion of
neutralizing both Cisneros and Fitts with a fake scandal may have been attractive.
During 1998-1999, I dictated nine hours of recollections. My apologies, as I never
anticipated that this would be listened to by someone other than that an attorney paid to
deal with my litigation. The first hour or so were recorded with a cold in a Corvette on
the highway. And others were recorded late after office work was done, when I had a
Hence, these are raw.
After shipping the cassettes over to my attorneys, one of my colleagues asked me if
they could listen to them. To my surprise, they found the Kemp Tapes remarkably
interesting and informative. They said that they felt like they were walking around inside
"how the money works" for the first time in their life. As a result, others wanted to listen
and then others, and over time hundreds of cassette six-packs circulated among
researchers interested in Iran Contra, HUD and financial fraud.
This is simply story after story, including the story of Kemp telling me that he would not
come to my house for a party because my house was bigger than his house and he
"would find it castrating". There is the story of Kemp ordering me to lengthen my skirts.
And the story of the efforts to illegally award project subsidy to Andrew Cuomo in New
And stories that describe the scenes created when billions of waste and Iran Contra
fraud are being covered up. I left out a few of the most sensitive.
Anita Langley of Black Op Radio has posted The Kemp Tapes at their Hidden Room
With the following descriptions:
"The Kemp Tapes - recollections of corruption. Catherine Austin Fitts discusses her
work as Assistant Secretary of Housing. There are 12 segments, each approximately
45 minutes. The first two are quite difficult to hear, but it gets easier. I, II, III, IV, V, VI,
VII, VIII, IX, X, XI, XII."
~ ~ ~
Much of what I learned about Iran Contra fraud came after I recorded the tapes. By
reading and studying the available written material about HUD fraud and then
estimating out how the money worked on the various stories, I developed a much better
understanding in hindsight of what had really been happening.
For those interested in Frank Keating's recent role in the Catholic Church
commission related to sex abuses, these tapes may also be useful....
March 3, 2003
Who Is Guarding
The HUD Guards?
By Martin Edwin Andersen, Insight Magazine
Is HUD Secretary Mel Martinez unprotected by IG´s Secret Service ´detail´?
The question is as old as Ancient Rome: Quis custodiet ipsos custodes? (Who will
guard the guards?) It was a question raised yet again when media attention focused on
pistol-packing Inspector General Janet Rehnquist at the Department of Health and
Human Services (HHS) and allegations of document shredding in her office, long
considered a model by internal investigators at other agencies. But the epicenter of
complaints of wrongdoing by those in charge of policing key government functions may
be the Office of the Inspector General (IG) at the Department of Housing and
Urban Development (HUD).
Insiders tell Insight that investigative-staff morale has plummeted at HUD in the face of
growing allegations of wrongdoing involving senior officials in the internal-affairs office.
According to an internal memorandum obtained by Insight, in just 21 months at least 56
agents, nearly 25 percent of the total investigative workforce, voluntarily have left the
IG's employment, an attrition rate critics say is 10 times the average.
In place of senior and seasoned investigators, critics complain, a group of retired Secret
Service officials, many unskilled in the kind of white-collar fraud investigations required
at HUD, have been appointed to what one IG watcher complained is a growing
"good-old-boy" network reflecting senior management's background in the
presidential-protection service. While investigative talent has leached out of HUD, critics
contend, management has compensated by lowering the bar on investigatory targets --
going after what one agent called "low-hanging fruit" -- and systematically giving
Congress misleading information about the scope and success of those inquiries it
An Insight investigation into the inner workings of the HUD IG office has revealed a
complex web of alleged abuses of investigative power. Waste and mismanagement of
monies appropriated to crack down on the hundreds of millions of dollars' worth of fraud
in federal housing programs is common, and allegations of disregard for civil-service
hiring rules and a penchant for political cronyism appear to reach into the highest ranks
of the investigations office. Scores of documents examined by this magazine, made
available by congressional critics of HUD, suggest that within the very office meant to
audit, investigate and evaluate the spending by HUD of billions in taxpayer dollars are
senior officials who have engaged in chronic wrongdoing.
In a confidential letter prepared for delivery to Congress and obtained by Insight nearly
one-dozen current and former IG officials, including winners of that office's highest
awards, say current leadership at the HUD IG office "cannot be trusted to address the
abuses of investigative power, waste of federal funds, mismanagement, political
cronyism and disregard for merit principles within its own office." The IG managers, they
charge, engage in cover-ups, "abuse their office to remain in power, ruthlessly crush all
dissent and resist any external accountability."
For example, the former San Francisco-based Western regional director of HUD,
Richard Mallory, was appointed by President George W. Bush and is a career housing
expert. Last year Mallory used his post aggressively to advocate that strong monitoring
and enforcement actions should be taken against that city's troubled federal housing
programs. His concerns included the city of San Francisco's misuse of HUD
community-development funds to sell a property to a convicted felon, a friend of Mayor
Willie Brown, who deeded the property to the Nation of Islam for use as a religious
In response, Mallory was warned by one of his superiors that HUD Deputy Secretary
Alphonso Jackson, the country's No. 2 housing official, is a close friend of Brown and
that Mallory should not anger either Brown or the San Francisco Housing Authority
(SFHA). Mallory's predecessor in the post already had been demoted for complaining
about long-standing corruption and mismanagement at SFHA, which also had been
accused by the HUD IG office of widespread mismanagement.
On Feb. 20, 2002, Jackson fired Mallory without giving a reason. In a letter a week later
former California governor Pete Wilson, a Republican and former U.S. senator, sent the
White House a letter charging that Mallory had been fired at Brown's request after
having exposed internal corruption at HUD. "As I mentioned in our conversation today,"
Wilson wrote to White House Counsel Al Gonzalez, "Mallory's firing was requested by
the mayor in a phone call to the deputy secretary. Also [HUD manager] Lily Lee has
arrived in [San Francisco] to be the acting regional director."
Wilson added: "Don't hesitate to call if I can be of any assistance. The president and
[HUD] Secretary [Mel] Martinez deserve to be protected."
In response to his removal, Mallory contacted the former regional HUD IG, Daniel Pifer,
requesting an investigation of his discharge, which he believed to be the result of
retaliation. According to local press reports -- confirmed by the confidential letter
prepared for Congress -- Jackson and Lee (who reportedly had been removed earlier
under a cloud as head of the Santa Ana [Calif.] Homeownership Center) were close
friends, and the SFHA was about to be forgiven some $1.8 million in debt it owed to
As Pifer prepared to investigate Mallory's charges, he was informed by HUD
headquarters in Washington that the unfolding San Francisco situation was considered
to be "a very big deal" and that then-IG-designate Kenneth Donohue had been briefed
on the matter. A day later, sources say, an acting deputy IG for investigations placed
Pifer on one week's administrative leave. When he returned, according to insiders, the
assistant IG for investigations ordered him to "stand down on the Mallory issue" and to
"initiate no action at this time." The matter was allowed to drop.
Sources at the HUD IG office complain that a climate of orchestrated witch-hunts and
the creation of scapegoats pervades the current management structure, adding to the
attrition rate and skills drain. They point to the case of Jeffrey Finn, a former special
agent in charge of the IG's Denver-based Rocky Mountain district office. Finn did not
contest his removal from federal employment in January 2001 after being the target of
numerous accusations of misconduct and administrative violations. According to court
documents and the testimony of current and former IG employees, however, IG efforts
to "destroy" Finn with trumped-up criminal charges also were used to wreck the careers
of a number of employees with whom he had a relationship.
An affidavit offered by a senior IG official claiming, under penalty of perjury, that case
documents had been shredded in accordance with existing policy cited a policy that
does not exist. A senior IG official appeared to perjure himself when he claimed that his
decision to remove two employees from their posts could not have had anything to do
with their testimony in support of Finn because he knew nothing about it -- yet
throughout the court proceedings he had prepared e-mail updates to colleagues around
the country. Negative information about two members of the IG team investigating Finn
that cast doubt on their credibility never was disclosed to the defense as required.
In throwing out four of the charges against Finn, U.S. District Judge Walker D. Miller
found that the HUD IG office not only had engaged in the illegal shredding of potentially
exculpatory evidence but also had waged a campaign of "outrageous, improper
intimidation" and coercion against Rocky Mountain district agents and administrative
employees. Finn was found not guilty of having misused $200 in funds, and Miller has
not yet ruled on the other charge -- that Finn ordered a subordinate to change the
receipt for these funds from "fence damage" to "storage costs."
IG sources tell Insight that at least half-a-million dollars in federal funds were used to
prosecute Finn. The IG investigation of the Rocky Mountain field office found only
$18.80 in missing funds out of $1,450,177 in expenditures made by the office during a
Allegations of intimidation did not stop there, IG sources say. They extended to the Fort
Worth, Texas, office where two highly regarded IG managers, special agent in charge
(SAC) Larry Chapman and assistant SAC James Malloy, one of two American Indian
agents in the IG office, were forced into retirement after refusing to support the
credibility of the Denver investigation by taking punitive actions in Texas. At issue: their
alleged failure to retaliate against former Denver employees who had testified in favor
Angry IG staff also have complained that Donohue and Deputy IG Michael P. Stephens,
both retired Secret Service agents, have converted the office into "an employment
agency" for their retired Secret Service friends. "These retired Secret Service agents,
largely white males, have inundated the Inspector General's office at high-graded GS
14/15 positions," according to one source.
Retired Secret Service agents "who are now the favored elite" in the office, say insiders,
include a deputy assistant IG for investigations, a senior Special Investigation Division
(SID) agent, the special agent in charge for the Southeast/ Caribbean region and at
least five SID senior agents.
One of the former Secret Service agents selected for a senior HUD IG post later was
sued successfully by an IG special agent for sexual harassment; this after the man's
estranged wife, saying she feared for her safety, had turned in his weapon to the
Anaheim, Calif., police department after he allegedly assaulted her.
IG agents are preparing to take their concerns to a Republican senator who is the chair
of a powerful committee. They say they will bypass referral of their complaints to the
President's Council on Integrity and Efficiency (PCIE) for investigation because,
although the PCIE is within the Office of Management and Budget, "it is controlled by
the IG community and therefore not independent.
In the unlikely event that the council found cause to discipline one of its own, the result
would be no more than a 'slap on the wrist,' given that the council has no statutory
authority to take independent corrective action."
December 20, 2002
Lingle wants investigation
of public housing agency
By Jim Dooley, Honolulu Advertiser
Gov. Linda Lingle said yesterday she would ask the attorney general to look into
possible wrongdoing at the state public housing agency, despite an earlier investigation
by former Gov. Ben Cayetano's administration that found no evidence of criminal acts
at the agency.
Lingle's move comes as the Honolulu office of the FBI conducts its own investigation of
the Housing and Community Development Corp. of Hawai'i....
Auditors and officials of the federal Department of Housing and Urban Development,
which oversees and funds HCDCH, have been highly critical of the state agency this
year, accusing it of financial mismanagement and procurement improprieties.
Some of the most pointed criticism has been aimed at a federally funded $771,000
non-bid contract awarded 2 1/2 years ago by Sharyn Miyashiro, then executive
director of the agency.
The contract was given to Punaluu Builders Inc., a company founded and partly
owned by her ex-husband, Dennis Mitsunaga.
The Advertiser first reported on the existence of the contract and the circumstances
surrounding its award in July.
HUD Assistant Secretary Michael Liu, a former Republican state legislator in Hawai'i,
has called the contract award improper, and demanded that HCDCH reimburse the
money to HUD.
Cayetano said Liu's demand was politically motivated, as it was delivered just days
before the November gubernatorial election —— an accusation that Lingle denied
"I think HUD has acted appropriately," Lingle said.
In mid-October, Cayetano did order an investigation into the awarding of the contract.
Within a month, the attorney general's office reported finding no criminal
Lingle said she and her senior adviser, Randall Roth, had been in close contact with
HUD officials this week about the state housing agency, and she had asked the new
attorney general, Mark Bennett, to review reported problems there after he takes office
"If the governor feels that the previous investigation was not as thorough or complete as
it might have been, perhaps another investigation is appropriate," said State Sen. Ron
Menor, D-17th (Mililani-Waipi'o), chairman of the Senate Committee on Commerce,
Consumer Protection and Housing.
Menor said earlier this week that his review of HCDCH materials had led him to
conclude that Miyashiro, who stepped down Dec. 1, violated federal prohibitions against
the "appearance of impropriety" in awarding the contract to Punaluu Builders.
Although Miyashiro and Mitsunaga were divorced more than 20 years ago, the terms of
their divorce decree required him to pay her home mortgage, supply her with a car and
pay her home repair bills until she remarried. Miyashiro has not remarried, but has
refused to say whether Mitsunaga supported her financially.
Miyashiro has denied any conflict of interest in the contract award and said a HUD audit
of the contract "contains numerous inaccuracies ... lacks specificity and made
conclusions based on (a) hasty investigation."
Dexter Sato, president of Punaluu Builders, could not be reached for comment
Lingle said she planned to have a "memo of understanding" hammered out with HUD
officials by the end of year about how her administration would handle problems at
She said she planned to try to collect the $771,000 from Punaluu Builders and
forward it to HUD.
Other terms of the agreement include:
>> A nationwide search for a new executive director. The salary, set by the Legislature,
is $73,000 a year. Menor said he did not know whether that was adequate to attract the
most qualified candidates, and said he would be willing to discuss an increase if the
administration seeks it.
>> Approval from HUD officials before new members of the HCDCH board are
appointed or new executive staff hired.
>> Increased training in procurement laws and regulations for HCDCH personnel.
>> Prohibition on awarding any more contracts to companies found to have "abused
federal programs or misspent federal funds."
Liu has said federal money to HCDCH could be cut if the federal housing agency's
demands for improvements are not met. Virtually all of the state public housing
programs are financed with $25 million in federal money a year.
Lingle said she has made straightening out problems at HCDCH a priority "so that the
people who benefit from these programs would not be hurt, and so we can be
positioned to help more people in the coming years."
In a related development yesterday, outgoing members of the HCDCH board, who have
said they would resign by the end of the year, were asked by HUD officials to award
a new $1.2 million consulting contract for an exhaustive management study the
HUD said it had selected IBM Corp. as the consultant in a competitive procurement
process handled by the Denver office. Federal officials told the HCDCH board the work
would be performed by personnel from PriceWaterhouse-Coopers Consulting, a firm
acquired by IBM in July.
HUD demanded earlier this year that HCDCH spend as much as $2 million on an
independent outside consultant study to recommend structural changes and eliminate
widespread management and financial problems.
The money will come from federal grants previously given to HCDCH.
Acting HCDCH director Robert Hall told board members the money to pay IBM would
be drawn from "rehabilitation and maintenance" projects that will have to be deferred.
The IBM contract, if approved by the HCDCH board of directors, would include a
$401,000 management assessment and a $790,000 study of the physical condition of
the public housing projects managed by HCDCH.
The $1.2 million contract will be followed by a "technical assistance" contract to be
paid for from the $2 million originally set aside by HCDCH to meet HUD's demands for
October 16, 2002
AG to look into
Cayetano says he does not believe
there has been wrongdoing
By Richard Borreca, Honolulu Star-Bulletin
Gov. Ben Cayetano says he has asked the attorney general to look into reports of
missing records from a state housing agency.
"Some people say there are missing documents and that sort of thing. I think the public
is entitled to know," Cayetano told reporters during an informal news conference at the
state Capitol yesterday.
Cayetano also defended Sharyn Miyashiro, executive director of the Housing and
Community Development Corporation of Hawaii, saying she is "entitled to the
presumption that she has done nothing wrong."
Miyashiro has said she plans to leave her job at the end of the year, after working for
state government for more than 30 years according to Darrell Young, housing
department information officer.
Cayetano said the missing records are noted in a report issued as part of an
investigation by the federal Department of Housing and Urban Development.
The investigation was led by Michael Liu, HUD assistant secretary for public and
Indian housing and a former Hawaii GOP state senator.
"Whether she did her job in concurrence with federal procurement laws, that is another
thing, but I don't think there has been any criminal activity," Cayetano said.
He stressed, however, that if the federal government thinks that there is a criminal
wrongdoing with the state agency, it should bring charges.
"To clear the air, we welcome the federal government, our own attorney general is
looking into it and if the city prosecutor thinks it is worth it, let him come and look at it as
well," Cayetano said.
Cayetano also questioned a portion of the HUD report that was critical of the state's
procedure to combine contracts for design and construction work on projects. He said
the state has been successful in using the procedure and cited the Hawaii Convention
Center as an example. The Convention Center was not a HUD-funded project.
Two years ago, a state audit criticized the state housing agency, saying there were
problems in its accounting and internal controls. The agency said it has implemented
most of the auditor's recommendations.
The audit also faulted a 23-month delay in executing a design-consultant contract and
procedures it says could have resulted in a freeze of federal funding assistance.
Slow placement of applicants for low-income housing and rental assistance could lead
to a waiting period of two to seven years, the audit said....
For more, GO TO > > > Predators in Paradise
June 25, 2002
Attorney: Hawaiian homes are
By TIFFANY EDWARDS/ West Hawaii Today
The attorney who successfully argued the Rice v. Cayetano case before the U.S.
Supreme Court is preparing another racially-based complaint in Hawaii.
John Goemans sent a letter Thursday to Department of Housing and Urban
Development (HUD) Secretary Mel Martinez claiming a Hawaiian Homes subdivision
planned in Kamuela violates the Fair Housing Act of 1968.
Goemans asserts the violation is based on Supreme Court justices' ruling in Rice v.
Cayetano that Native Hawaiians are a race, not a tribe.
"I am writing for that class of persons, residents of (Kamuela), who are now threatened
by the state of Hawaii with the economic loss and deprivation of the social and
professional benefits of living in a racially integrated community," Goemans wrote
He notes the construction of homes on state lands in the next three years will be "solely
for lease and sale to persons of the Hawaiian race and no others" and HUD is charged
with "the termination of such overt racial discriminations."
Goemans' letter expresses confidence that Martinez' attention to the matter "will protect
our town from the evils of racially segregated housing and zoning."
In an interview Thursday afternoon with West Hawaii Today, Goemans charged the Fair
Housing Act and the Hawaiian Homes Commission Act of 1920 are in conflict because
the latter states land is to be set aside specifically to be leased only to people having
50-percent native Hawaiian blood.
"The Fair Housing Act states there is to be no discrimination based on race in housing
in America," he said.
Goemans said his "micro-concern" is to prevent the Hawaiian Home Lands subdivision
in Kamuela, but the larger effect might be the establishment of "a uniform policy"
against programs geared specifically for Native Hawaiians, brought forth either by HUD
or the Department of Justice's Office for Civil Rights.
"The effects are far-reaching," he said.
Goemans' letter has been written less than a month after he returned from Washington,
D.C., where he resided at a hotel to see the Rice v. Cayetano case through the high
The decision was handed down in February 2000, after being presented to the
Supreme Court justices in the spring of 1996. Goemans said he and his client Freddy
Rice had lost in two lower federal courts.
Rice challenged the voting system in Hawaii to elect the 9-member Office of Hawaiian
Affairs (OHA) Board, specifically requiring that those casting a vote for OHA board
members be able to trace their Hawaiian ancestry back to 1778.
Goemans maintained Thursday that since Rice v. Cayetano decision, the Department
of Education denied Kamehameha Schools some federal funding and the
Department of Defense notified the trust that Kamehameha Schools would have
to drop their ROTC programs because of a "racially discriminative admissions
Goemans said HUD is mandated to respond to his letter within 10 days of receipt, and
that agency must also notify its state counterpart of his complaint within that same time
Department of Hawaiian Home Lands (DHHL) Deputy Chairwoman Jobie M.K.M.
Yamaguchi, reached just before the end of business hours Thursday, said she
believed Goemans was incorrect in terms of the Rice v. Cayetano decision, that it
pertains to voting rights specifically. "It was based on the 15th Amendment and not on
issues relating to the 14th Amendment," she said.
Yamaguchi maintained that the planned subdivision in Kamuela is consistent with the
Hawaiian Homes Commission Act, which DHHL is responsible for implementing.
The deputy chairwoman, meanwhile, could not provide details about the proposed
subdivision Thursday, and Sandy Asato, who is the DHHL employee in charge of the
"Native Hawaiian Housing Plan" could not be reached....
Incidentally, in a Internet-posted commentary entitled, "A Wake Up Call for Native
Hawaiians," written by Hon. William Fernandez (ret.), Goemans is charged to have
"made it very clear that he is on a crusade to strip Hawaiians of all their race based
Fernandez, in a separate commentary that was also posted on
http://Imuakamehameha.com, writes, "Rice V. Cayetano is more than a decision on
voting rights. Our United States Supreme Court in that decision stated that they found
no unique obligation owed to Hawaiians by the United States nor that Congress ever
intended to give native Hawaiians the same statues as 'that of Indians in organized
The Court expressed grave doubts as to whether 'Congress may treat the native
Hawaiians as it does the Indian tribes.'"
For more, GO TO > > > Apartheid, Hawaiian Style
February 2, 2002
Disgruntled HUD official
shunted to L.A.
Move follows memo on ex-S.F. housing chief case
Patrick Hoge, San Francisco Chronicle
San Francisco -- A senior U.S. Department of Housing and Urban Development
official was abruptly moved from San Francisco to a subordinate position in Los
Angeles after he complained that his agency was being lax on corruption and
mismanagement in the San Francisco Housing Authority, The Chronicle has learned.
John Phillips, HUD's acting director for California, Arizona, Nevada and Hawaii for
the past year and an agency employee in San Francisco for more than two decades,
was ordered in December to run the Los Angeles HUD office for at least two months.
Until becoming acting director, Phillips had been the Pacific/Hawaii region's No. 2
official and thus up the chain of command from the Los Angeles operation.
Phillips declined to discuss his transfer. But his wife said she believes it is retaliation for
a memo he wrote to his bosses Nov. 2 criticizing HUD's "alarming" handling of a plea
bargain involving former San Francisco Housing Authority Director Ronnie Davis,
who recently pleaded guilty to taking excess compensation from a Cleveland housing
agency where he once worked.
"I'm thoroughly demoralized. I'm married to a man who's devoted his working life to an
agency, and it's really hard to feel that this isn't punitive at some level," said the Rev.
Joan Hull, a retired minister with the Unitarian Church of San Francisco. "It was done so
abruptly and so rudely."
The plea deal Phillips criticized dismissed felony charges against Davis and promised
that HUD would halt disciplinary actions arising from audits that accused Davis of
mismanaging public money in San Francisco and Cleveland. The deal also allowed
Davis to have a public-housing management role again.
"The plea bargain has added weight to charges in San Francisco that the department
tolerates corruption in San Francisco," Phillips wrote in his memo. "The way we handled
this raises serious questions . . . about the department's ability to communicate a clear
and consistent message against Housing Authority mismanagement and corruption."
Phillips addressed his memo to Alphonso Jackson, HUD's deputy secretary, who was
traveling yesterday and did not return calls.
Shortly after Phillips' transfer, Jackson was the guest of honor at a City Hall party
hosted by Mayor Willie Brown, who has stuck by Davis and maintained he improved
the city's public housing.
Brown's spokesman P.J. Johnston said yesterday that he didn't know anything about
Phillips' transfer and that the mayor hasn't been involved with HUD's handling of Davis.
HUD spokeswoman Nancy Segerdahl said Phillips was not being punished. "If there is
any suggestion whatsoever that there's some sort of linkage between this memo and
the reassignment, that would be completely wrong," she said.
Hull said her husband learned of his transfer Dec. 3 from officials in Washington, who
told him "in a very peremptory fashion with no explanation" to report for work in Los
Angeles within two days.
Hull said her husband was told the assignment would last at least 60 days. Phillips has
been flying down during the week and staying in a hotel at HUD's expense, returning on
weekends, Hull said.
Since Phillips' transfer, the office has been run by Lily Lee, a HUD manager from
Washington, D.C. She said yesterday was her last day and that an appointee of
President Bush, Richard Mallory, would take over Monday.
The office had been run under the Clinton administration by Art Agnos, a former mayor
of San Francisco.
As to whether Phillips' transfer was retaliatory, Lee said: "I don't attempt to see how
people perceive things."
Phillips' memo to Jackson focused on the Oct. 29 plea agreement that HUD and the
U.S. attorney's office in Cleveland reached with Davis. Under it, Davis pleaded guilty to
a misdemeanor charge of knowingly failing to prevent the Cleveland housing agency
from paying him twice for benefits when he left for San Francisco in 1996.
Davis, who agreed to repay $5,467, is expected to be sentenced Feb. 26, after which
he has agreed to testify in the trial of his old boss, who still faces charges of stealing
Both HUD and federal prosecutors in Cleveland tried unsuccessfully to back out of the
plea bargain after the U.S. attorney's office in San Francisco complained that it was
never consulted about the deal, which also gave Davis immunity from prosecution
regarding his employment in San Francisco and Cleveland. Last month, a federal judge
ruled that the deal would stand.
Davis has not been charged with any illegal activity in San Francisco, but HUD auditors
strongly suggested that his administration submitted a forged document to them. Davis
was accused of similar misconduct in Ohio, where a woman testified that he was
instrumental in creating a letter authorizing the use of public funds to pay his
Three housing authority commissioners testified that signatures on the letter were not
Davis has denied wrongdoing in both cases.
The San Francisco Housing Authority this week also agreed to pay $320,000 to two
employees who said they had been punished for speaking out about corruption while
working under Davis. Former eligibility manager Carmen Rosales said Davis ignored
her warning that housing benefits were going to people who were ineligible.
Under the settlement, the Housing Authority admitted no fault. Rosales' suit uncovered
evidence that led to the conviction of 21 people, including two agency employees, for
participating in a bribery scheme involving the sale of public housing benefits....
THE JAPANESE WURLITZER
From “Agents of Influence:
How Japan Manipulates America’s Political and Economic System,”
by Pat Choate
JAPAN’S ECONOMIC PROPAGANDA techniques are remarkably similar to America’s
political propaganda techniques. A quick way to understand how Japan spreads its
propaganda in America is to look at how America spreads its own propaganda
America operates two propaganda program – one is overt, the other is covert. The
overt program is operated by the U.S. Information Agency (USIA), which diffuses
information about American culture, history, and political positions. USIA employs all
the standard public relations techniques – hosting lunches, arranging interviews,
distributing literature, providing American guest speakers, stocking libraries, arranging
cultural exchanges, sponsoring conferences, and financing trips to America for
students, academics, and foreign opinion leaders.
America’s covert propaganda program is directed by the Central Intelligence
Agency. By any measure, this is a massive undertaking. Loch Johnson estimates that
fully 40 percent of CIA secret operations are propaganda programs....
In addition to advancing specific U.S. themes, the CIA also uses its media assets to
boost politicians and opinion leaders in other countries whose positions are favorable to
the United States and to tarnish those whose positions are not. Other nations do the
same, including Japan....
Japan’s propaganda techniques are similar to those used by America. Much like an
enormous Wurlitzer organ, Japan pumps out a steady flow of propaganda through
thousands of outlets – books, speeches, reports, conferences, television, editorials,
articles, and whisper campaigns....
It’s not surprising, Japanese investors provide much of the new money on which Wall
Street depends. And Japanese investors now own an extensive financial stake in may
of American’s leading investment firms. Nomura Securities, for instance, owns 20
percent of Wassertein, Perella, the prominent merger and acq1uisition (M&A)
specialists. Yamaichi Securities holds 20 percent of the Lodestar Group, which is led
by the ex-vice chairman of Merrill Lynch & Company and former chairman of Morgan
Stanley & Company.
Sumitomo Bank bought a 12.5 percent share in Goldman, Sachs for $500 million in
1986. Former Federal Reserve chairman Paul Volcker works for Fuji-Wolfensohn, a
joint venture to which Fuji Bank contributed $52.5 of the $55 million start-up capital....
AMERICA THE VULNERABLE
HUNDREDS OF WASHINGTON’S POWER ELITE now work to advance Japan’s
political and economic interests in America. Nothing comparable is found in the capital
of any other nation....
How did this come to be? Why do so many of America’s best and brightest – people
who come to Washington to fight for conservative or liberal causes – stay on after their
public service to work for overseas interests? Moreover, how do they justify working on
behalf of foreign countries in those cases where it is clear that their victories can only
occur through American losses?
The answer: money and ideology.
A revealing example of “Washington ethics” in action is contained in the scandal that
rocked the Department of Housing and Urban Development (HUD) in the late 1980s.
In early 1989, congressional hearings revealed that, over the previous decade, much of
the HUD money available for low-income housing was allocated on the basis of insider
relationships. The technique was simple. A lobbyist or consultant with special
connections to the Reagan Administration, the Republican Party, or a high-ranking HUD
official would ask the HUD Secretary or his top aides for a funding priority. Once the
project was approved, the influence peddler would be paid a huge fee.
The ethical mind-set among many insiders is revealed in their responses to the HUD
scandal. In July 1989, for instance, the topic arose at a private dinner party in
Washington’s fashionable Cleveland Park. Among the guests were a prominent
Washington lawyer-lobbyist, several other lobbyists, their spouses, and ex-congressman, and a corporate executive.
One guest condemned the immorality of HUD’s influence peddlers, who had siphoned
money earmarked to house the poor. Another sneered at the hypocrisy of James
Watt, the ultraconservative former Secretary of the Interior, who publicly denounced
HUD’s activities but took $400,000 for using his political connections to get three HUD
The lawyer-lobbyist, however, had a somewhat different perspective.
“I only wish,” he said, “that I could have gotten in on the deal. Everything that Watt and
the others did was legal. And as far as I’m concerned, if it’s legal, it’s okay” is the
ethical standard that now prevails....
October 14, 2000
WHY IS $59 BILLION
MISSING FROM HUD?
By Kelly Patricia O’Meara, InsightMag.com
Billions of dollars are missing from the U.S. Department of Housing and Urban
Some HUD officials blame computer glitches; others allege widespread graft.
The Department of Housing and Urban Development (HUD) has earned a failing
grade from the House Government Reform subcommittee on Government Management
for the way the agency manages taxpayers’ money.
Subcommittee chairman Stephen Horn, R-Calif., is said to be furious that HUD’s most
recent financial report shows the agency is unable to balance its checkbook and cannot
account for $59 billion.
For most Americans, it is incomprehensible that $59 billion could be missing from the
ledger of a single agency. But despite years of earning failing grades – as well as years
of being unable to account for tens of billions of dollars – the Clinton/Gore
management team at HUD has continued to shell out hundreds of millions of dollars to
the same contractors hired to ensure financial systems are in place and working.
It doesn’t take a certified public accountant to see that HUD Secretary Andrew
Cuomo’s financial house is not in order, and Susan Gaffney, the inspector general (IG)
of HUD, tells Insight, “It’s more serious than you know.”
This dire yet brutally honest evaluation by the IG came in response to questions about
her testimony concerning HUD’s 1999 audit, delivered before Horn’s subcommittee in
And HUD’s 1999 audit still has not been completed even as the agency is nearing the
starting date for the 2000 audit. Instead, Gaffney submitted a 14-page “summary” for
1999, providing a laundry list of systemic reasons for HUD’s financial woes.
Indeed, it took Insight a day and a half just to make sense of the IG’s simplified
testimony concerning these financial shenanigans.
Beyond the fact that $59 billion is unaccounted for and that auditors have had to make
manual adjustments to the checkbook system retroactively, it is glaringly apparent in
the IG’s report that taxpayers should consider themselves lucky that the amount isn’t
What also is more than evident is that the IG devoted most of her testimony to
explaining failed processes at HUD rather than focusing on any specific examples of
theft, conversion, embezzlement and other larceny.
For instance, according to Gaffney’s testimony, she could not sign off on the 1999 audit
because of “the undetermined effects of the conversion problems of the general ledger
from the Program Accounting System [PAS] to HUD’s Central Account and Program
System [HUDCAPS] during the fiscal year, the integrated state of HUD’s reconciliation
efforts and their documentation for the general ledger accounts for the fund balance
with Treasury, and the late manual posting of numerous and significant adjustments
(some as late as Feb. 25, 2000) directly to the financial statements, for which we lacked
sufficient time to test their legitimacy.”
What the IG is saying is that HUD’s finances are in a shambles because, during 1999,
the agency was converting to a new computer system, the field offices didn’t balance
their checkbooks on a monthly basis and manual postings were made to the financial
statements so late that the IG had no time to review whether the postings were correct.
Gaffney does report in one section of her testimony that “242 adjustments, totaling
about $59.6 billion, were made to adjust fiscal year 1999 activity.”
The IG, however, does not explain where the “adjustments” were made, for what
services or from which region or field office. But she tells Insight that HUD’s financial
problems stem from glitches within the agency’’s computer systems.
“The material weakness,” explains the IG, “is that HUD does not have a single financial
ledger system in place and this year they tried to implement that. The effort was flawed
to say the least. The financial systems flowing in were incompatible and the system
rejected transactions, and the rejected transactions weren’t corrected in the new ledger
system. HUD does not have a reliable and accurate statement of its financial condition.”
Apparently, the HUDCAPS system that has been going online since 1997 and is
supposed to correct the agency’s overwhelming financial-management problems now is
According to Gaffney, just last week she was made aware that Chief Financial Officer
Victoria Bateman has decided that HUDCAPS does not do the job and that a new add-on system is being implemented. It’s anyone’s guess when the new system will be fully
integrated with the old “new” system which, to date, has done nothing to enhance
HUD’s ability to account for the billions of dollars in missing tax money.
According to one source familiar with HUD’s finances who spoke on condition that he
not be identified, blaming computer glitches is what is done when they want to
“The history of effort and expenditures that has been poured into correcting deficiencies
at HUD does not support a theory of incompetence. If you don’t have decent accounting
systems it’s because someone wants to make sure you don’t. It’s standard operating
procedure that if one system is being replaced you keep the old one up and running
while you work out the kinks in the new one – they’re run parallel. In this case, they
took down a system that was running, replaced it with a system that wasn’t and then
cried, ‘Oh, we can’t balance the books!’ They can’t say the resources don’t exist to
correct the problem. If Cuomo can find hundreds of community builders to run around
neighborhoods, he can find enough people to balance the checkbooks.”
And the source adds, “Furthermore, if I wanted to rip off HUD, this is exactly how I
would do it. Don’t run parallel systems, don’t bother to balance the books and then
radically reengineer the system all at the same time that you double the volume of work.
It’s a system ripe for financial fraud. The point is that you have to know what checks
were authorized in a specific place and how they sort out, and if you balance the books
monthly it becomes very easy to zero in on where the fraud is taking place. What the IG
has missed is that it’s not about knowing a problem exists, it’s about fixing the problem
– you want to know where and why you’re missing $59 billion. A huge computer system
isn’t needed for HUD to balance the books; monthly statement reconciliation is all that
The source continues: “Everything that has transpired at HUD is not an accident, and it
sure isn’t a computer glitch. When you take the different material violations of the most
basic financial-management rules and compare them to the time and effort put in to
have first-rate systems, it is impossible to explain it as anything other than significant
financial fraud. The losses could be far greater than $59 billion, but they don’t know for
sure because the audit isn’t completed. Secretary Cuomo is a very smart control freak,
so it’s ludicrous to think that he doesn’t know what is going on.
There are several ways to correct these problems. Most are basic, but if you want to
use the big sledgehammer, the Office of Management and Budget [OMB] and
Congress have the ability to make HUD balance the books or [they] shut down the
money supply. They are the guardians at the gate. But that is the most telling thing
about this problem – OMB and the appropriators have been silent. This is exactly what
happened right before the savings-and-loan scandal.”
So is it possible that a problem within the agency’s computer systems is the cause of
tens of billions of dollars being unaccounted for or missing? Not if you ask whistle-blower Jack Ballinger.
In 1994 Ballinger began working for the New York City Housing Authority (NYCHA) as a
contract inspector. He worked his way up through the system and was made manager
of a new section, the Computer Operations and Reports Section. He was there only a
few weeks when he became aware of major problems in payments to contractors.
What he found was the main financial-management computer system, known as
Financial Management Services (FMS), contained files verifying payments of more than
$50 million on nearly 150 contracts that did not show up on the computer system used
by the bookkeepers and investigators to track the services provided. Called CAD, this
system should have been keeping track of the inspections, the inspector, dates of
inspection and inspection results.
Realizing the gravity of the problem, Ballinger reported the missing files. Shortly
thereafter the new section was disbanded, his staff was sent back to their previous
positions and he was transferred to Coney Island as a boiler inspector. Nonetheless, he
was joined in calling for an investigation by a dozen other “clean” inspectors.
Ballinger first requested an investigation by the New York City Department of
Investigations. When nothing happened, he contacted Bill DiBlasio, then the IG for
HUD in New York (and now Hillary Rodham Clinton’s campaign manager); HUD IG
Gaffney in Washington; Rep. Rick Lazio, R-N.Y.; and HUD Secretary Cuomo, whose
agency provides more than 90 percent of the funding that NYCHA receives.
Despite overwhelming evidence of corruption – including audio- and videotapes of
bribes being offered and accepted, as well as one inspector telling his story of an
organized group of inspectors receiving bribes – there was no serious investigation of
the misappropriation of funds within the NYCHA.
“The IG,” says Ballinger, “said it was a paperwork mistake and cleared up. But not one
person who looked at this could see it as a paperwork problem, and this has been going
on for almost two years. There were hundreds of contracts being reported and
monitored through that computer system and it would have taken someone a lot of work
to pick out 143 that weren’t there every month. I can’t say that the inspections haven’t
been done, but there is no record of the work being done on these 143 files. Still they
were getting paid. It’s almost funny how sloppy they are about it. They leave a trail
because they know that no one will be held accountable.”
The financial problems Ballinger uncovered in the NYCHA are similar to those at HUD.
For instance, the IG’s testimony to Congress also raises the issue of a wide variety of
people having access to the accounting system with no controls or audit trail to tell what
transactions are taking place and under whose guidance.
The IG states, “HUD uses a powerful utility system to resolve data discrepancies by
directly altering the data in the HUDCAPS financial tables. … There were an excessive
number of users with access to the utility, including users from four different contractor
firms as well as HUD program offices. We questioned the need for the high number of
users and the database administrator agreed not all the users on the list require access
to perform their jobs. Allowing uncontrolled use of such a utility exposes HUD’s financial
data to damage and fraudulent activities.”
Gaffney is saying that just about anyone can get into HUD’s financial system,
including many who don’t have any business or authorization to be in it. Once in,
intruders can change numbers, take money and engage in financial fraud without
anyone catching or stopping them.
While Gaffney cannot force changes within HUD, as IG she can bring the problems to
light. Unfortunately, the testimony she provided to Congress did little more than alert
members to the already-known fact that there are serious financial-management
problems under Cuomo at HUD. The IG’s report provides no specific data to help
lawmakers, who have oversight of this agency, recommend appropriate and necessary
changes. In fact, it is possible members of Congress had the same difficulty
deciphering the IG’s testimony as everyone else with whom Insight has spoken.
Despite the fact that the entire report by the IG to Congress deals with financial
mismanagement at HUD, not once in all of her 14 pages of testimony did Gaffney so
much as use the word “money.”
How much HUD’s missing $59 billion is of concern to lawmakers is anyone’s guess.
Chairman Horn, as well as Senate Governmental Affairs Committee Chairman Fred
Thompson of Tennessee and Senate Appropriations subcommittee on VA-HUD
Chairman Kit Bond of Missouri, did not return Insight’s calls about these matters. . . .
From The Harvard Data Dump:
IS THERE A CONNECTION BETWEEN A $4.7 BILLION
RESERVE BY THE SWISS RE NAZI GOLD,
AND A $4.7 BILLION ATTEMPTED SEIZURE OF
GOLDMAN SACHS HUD LOAN SALE ASSETS?
In the summer of 1996, a highly political "investigation" was begun by the Department
of Justice into bid rigging and insider trading with respect to $4.7 billion of HUD loan
sales by Goldman Sachs and PNC.
If various efforts to falsify evidence by the HUD and/or destroy evidence by the HUD
Inspector General (DynCorp, now prime contractor) and destroy witnesses through a
smear campaign during the subsequent four year investigation had been successful,
the Department of Justice Asset Forfeiture Fund (DynCorp, prime contractor) would
have had the basis of a $4.7 billion seizure of assets from Goldman and PNC.
During the same summer in 1996, efforts began to identify and seek reparations
regarding Nazi gold and other assets maintained by Swiss banks, including the Swiss
National Bank, Credit Swiss, and United Bank of Switzerland (UBS).
The interim reparations fund was established by the Swiss at $4.7 billion US.
Allegations exist that the PROMIS software system at the Department of Justice was
used to identify Nazi accounts at the Swiss banks. According to Bill Hamilton of
Inslaw, DynCorp is one of the contractors who assumed Inslaw's work in managing
the PROMIS system for the Department of Justice.
Allegations also exist regarding the use by Lockheed and Pug Winokur/DynCorp of
the PROMIS system to compromise the HUD systems, with $17 billion and $59
billion reported missing in FY1998 and FY1999.
Lockheed with DynCorp as a subcontractor manages the largest part of the HUD
computer systems. HUD has refused to respond to FOIA's regarding DynCorp's
contracts and subcontracts at HUD, taking the position that they have no contracts with
DynCorp and that the prime contractor refuses to respond to their requests. . . .
~ ~ ~
For more on Nazi Gold, GO TO > > > Dirty Gold in Goldman Sachs?
For more on the Greed at Lockheed, GO TO > > > Tarnished Wings
Carla A. Hills is Chairman and CEO of Hills & Company, International
Consultants. The firm provides advice to U.S. businesses on investment, trade, and
risk assessment issues abroad, particularly in emerging market economies.
Hills currently serves as a Member of the Board of Directors for American
International Group, Chevron, Lucent Technologies Inc., and Time Warner.
She is a Co-Chair of the International Advisory board of the Center for Strategic and
International Studies; a Vice Chair of the National Committee on U.S.-China Relations
and U.S. China Business Council; a Member of the Board of Trustees of the Asia
Society, the Council on Foreign Relations, the Institute for International Economics, and
the America-China Society; and a Member of the Trilateral Commission and the Inter-American Dialogue.
Hills served as United States Trade Representative from 1989-1993. As a member of
President Bush's Cabinet, Hills was the President's principal advisor on international
trade policy. She was also the nation's chief trade negotiator, representing American
interests in multilateral and bilateral trade negotiations throughout the world.
Hills was chairman of the Urban Institute from 1983 through 1988, and was a member
of the Executive Committee of the American Agenda, co-chaired by Presidents Ford
and Carter. In 1981-1982, she served as Vice-Chairman of President Reagan's
Commission on Housing and in 1985-1986 as a member of the President's
Commission on Defense Management.
Hills has been active in the American Bar Association, serving as Chairman of the
Antitrust Section 1982-1983, and as Chairman of the Conference of Section Chairmen
From 1974 to 1975, she was Assistant Attorney General, Civil Division, United
States Department of Justice.
In 1975, Carla Hills, already serving as an assistant attorney general, was named by
Republican President Gerald Ford as Secretary of the Department of Housing and
Urban Development, becoming the third woman in the US to hold a cabinet-level
position. Her lack of relevant experience was somewhat controversial during the
appointment hearings. She was succeeded, when Democratic President Jimmy Carter
took office, by Patricia Robert Harris, in 1977.
In 1989, President George Bush appointed her to another cabinet level position, this
time as US Trade Representative. (At the same time, Bush appointed Elizabeth Dole,
the former Secretary of Transportation, as Secretary of Labor.)
A free trade advocate, Hills was the primary US negotiator of the North American
Free Trade Agreement (NAFTA).
She was first offered an appointment as assistant US Attorney by Elliot L. Richardson
in 1973, but he resigned shortly thereafter during the Watergate scandal. The
offer was renewed by his successor, William B. Saxbe, in 1974.
From 1978 through 1989 she was active again in her profession of law; after 1993 she
has worked as a consultant and public speaker. She was one of the founders of the
Forum for International Policy.
Hills co-founded the Los Angeles law firm of Munger, Tolles & Hills, where she was a
partner from 1962-1974. She was an Adjunct Professor at the University of California at
Los Angeles Law School, teaching antitrust law, and co-authored the Antitrust Adviser,
which was published by McGraw-Hill.
For more on Carla Hills, GO TO > > >: BiotechBirds; The Sinking of the Ehime Maru
CLINTON’S FINAL DAY
January 20, 2001
WASHINGTON (CNN) -- President Clinton, just hours before leaving office, pardoned
more than 130 people, including Whitewater figure Susan McDougal, former Housing
Secretary Henry Cisneros, ex-CIA chief John Deutch and publishing heiress Patty
The president pardoned his brother, Roger Clinton, who had been convicted on a
cocaine charge in the 1980s after cooperating with authorities, and former Gov. Fife
Symington of Arizona, a Republican whose conviction for bank and wire fraud was
overturned on appeal.
Prosecutors had sought a rehearing in the case.
Deutch had been under investigation by the Justice Department for mishandling secrets
on a home computer. Hearst was kidnapped in the 1970's and then went to prison for
Cisneros entered a plea agreement as part of an investigation into payments to
McDougal, the Clinton's business partner in the Whitewater land venture, was convicted
of loan fraud and spent almost two years in prison for refusing to testify against Clinton
before a federal grand jury empanelled by Independent Counsel Kenneth Starr.
Another Whitewater figure and former law partner of Hillary Rodham Clinton, Webster
Hubbell, was not pardoned. Hubbell, who served in a top Justice Department position
in Clinton's first term, had to resign and spent 15 months in prison for tax evasion and
No pardons for Milken or Peltier
The president also denied a pardon for financier Michael Milken, the 1980s "junk
bond" king who served 22 months for swindling investors of $1 billion, and Leonard
Peltier, convicted in the deaths of two FBI agents in 1975.
Federal law enforcement and security enforcement officials urged the president to deny
a pardon for Milken, an outspoken cancer survivor and generous philanthropist. FBI
agents had protested the possibility of pardoning Peltier after learning his name was on
a list of those being considered.
Cisneros, former San Antonio mayor, Clinton's closest friend among his early
Cabinet appointees and a rising political star when his career was unhinged by
scandal, was convicted in a cover-up controversy involving payments he made to
Deutch, who stepped down as CIA director in 1996, had been considering a deal with
the Justice Department in which he would plead guilty to a misdemeanor charge of
keeping classified data on his home computers....
Housing Authority In Puerto Rico
Under Fire Again
By Cathy Newman, Washington Post Staff Writer
August 22, 2000
The Puerto Rico Public Housing Administration, already under fire over corruption
charges, is now being scrutinized over whether it improperly spent federal money hiring
a Washington law firm to defend it in a lawsuit against the U.S. government.
The housing authority is slated to appear before the U.S. District Court in Puerto Rico
next month to answer fresh questions about its conduct. It also faces the possibility of
having its federal funds blocked by Sen. Christopher S. Bond (R-Mo.) because of
concern over alleged wrongdoing.
The Puerto Rico housing authority is under investigation by the U.S. attorney, the FBI
and the inspector general of the Department of Housing and Urban Development in
eight separate corruption cases involving employees and contractors.
Since October 1998, 13 people have been indicted on charges including
conspiracy to defraud, embezzlement, theft, kickbacks and money laundering.
Most recently, HUD Inspector General Susan Gaffney has pressed the housing
authority about the source of funds used to pay the Washington-based firm of Verner,
Liipfert, Bernhard, McPherson and Hand, which represented it in a long-running
lawsuit against HUD.
Gaffney said in legal papers that the housing authority may have violated federal
regulations prohibiting the use of federal funds to sue the government. She said the
agency had a contract to pay Verner $625,000 for legal services relating to the
In legal documents filed earlier this month with the District Court, the inspector general
alleges the housing authority only supplied checks to Verner dating from 1996 and
1997, and that the payment amounts were blacked out.
Verner declined to comment yesterday. However, John Blakeman, executive director
of the Puerto Rico agency, denied using federal funds to pay the checks, and added it
had supplied all its checks, only withholding information it regarded as confidential.
About 250,000 people live in 57,000 public housing units in Puerto Rico, but, according
to Gaffney, conditions are "not good," even though HUD last year gave the agency
about $260.6 million.
"Things aren't fixed. . . . The people who live in public housing should not have to live in
these conditions," she said in an interview last week. An IG audit in March said that of
$39 million in housing authority procurements and other disbursements, about
$21.8 million were "ineligible costs."
The continued controversy over the housing authority's operations has led to criticism
over HUD's agreement to pay the Puerto Rican agency $130 million to settle its
lawsuit. The housing authority filed the legal action in 1996, claiming the U.S.
government had over the years shortchanged it.
But although HUD had billed the settlement as a triumph--the Puerto Rico agency had
sought $500 million--Gaffney thought otherwise. In a stinging memo to Housing
Secretary Andrew M. Cuomo last month, she accused HUD of "failure to stop
flagrant fraud, waste, and abuse in the operations" of the housing authority.
It was not that she opposed the payout per se, she said last week, but she believed
HUD should have "built into the settlement some measures that would have
Gaffney, a Clinton appointee often at odds with HUD officials, has found an ally in
Republican Sen. Bond, who chairs the Senate Appropriations housing subcommittee.
Bond said yesterday that although he would favor a settlement that corrected a
historical shortchanging, more safeguards are needed to ensure that federal dollars are
"Before any more money goes, we want to know: Have the recommended changes
been made to ensure that dollars going to the [housing authority] are handled
appropriately, so the benefits flow to the needy in Puerto Rico?" he said. An aide said
Bond will be discussing with other members of the subcommittee the prospect of
holding back additional federal funds for the authority until such a guarantee is given.
HUD is far more sympathetic, insisting that the housing authority is cleaning up its act.
The Puerto Rican agency was removed from the "troubled list" of poor performing
housing authorities in 1996, after 15 years.
"The last couple of years we've had some optimism in that their financial statements
were auditable. . . . We need to assess a number of improvements that have been
made" by the housing authority, a senior HUD official said.
Blakeman said the housing authority is cooperating in all the investigations.
"We don't believe in hiding corruption. . . . Maybe we're not where we should be, but
we're heading in that direction," he said.
© Copyright 2000 The Washington Post Company
For more on Verner, Liipfert, Bernhard, McPherson and Hand, GO TO > > > Broken
From The Conspirators: Secrets of an Iran-Contra Insider, by Al Martin:
THE DON AUSTIN DENVER
HUD FRAUD CASE
Regarding Denver HUD-Iran-Contra profiteering, I’ve got to give you a little
background for this to make sense. There was a scenario of fraud conducted through
the HUD office in Denver, when Samuel Pierce was head of HUD and became part of
Iran-Contra profiteering, dissipation, illegal transfer of funds, and so on.
A number of billions were involved.
The center of these frauds was HUD, namely the HUD office in Denver. . . .
The way these schemes work is to form real estate companies and incorporate licensed
mortgage brokers into them. These then act as pass through agents for HUD loans. . .
Very simply, projects would be defaulted on or the same mortgages would be applied
for. There’d be two, three, and four first mortgages from HUD on the same properties
which would then, in turn, guarantee equally fraudulent bank loans usually through
Monies then would be siphoned off, and ostensibly, this was just part of a much larger
But, obviously for this to work, there have to be Republican judges involved, as well as
Republican US Attorneys and Assistant US Attorneys.
This includes Gale Norton, former Attorney General of the State of Colorado and
current US Secretary of the Interior, who can also be indicted for various
The reason Dinnerstein says it’s so easy is because Zita Weinshank and Ed Burnhill,
both Republican appointed judges, are part of the original scheme....
~ ~ ~
THE GOTTI-CUOMO-BUSH SCAM
And what about all the heat regarding the National Heritage deal recently profiled on 60
It’s another fraud. The genesis of the fraud is that a partnership was formed to
purchase Heritage Life Insurance for $4 million. This partnership involved all of the
Bush Brothers, including, by the way, John Gotti. . . .
How did it happen? On a Friday night, this partnership purchased Heritage Life. They
proffered a check for four million dollars.
The check was worthless. . . .
Over the weekend Heritage turned over the keys to its offices in Boca Raton, Florida, all
its files. Everything.
Over the weekend this new partnership proceeds to transfer $4 million of Heritage Life’s
reserve capital into its own accounts to cover the check that it had written to buy it.
It’s a true story.
Then they proceeded to turn Heritage Life into a fraud center. They perpetuated a
variety of fraud, specializing in and concentrating in HUD fraud.
They would buy busted out HUD properties for $500,000, then list their value on the
Heritage books as $5 million. The other four and a half million dollars would simply go
into the partnership’s pockets.
And they did this repeatedly.
Andrew Cuomo, through his father Mario’s influence, was hired on as a consultant to
the corporation. He was also a member of the Board of Trustees of Heritage Life at
$50,000 per year.
When Andrew became Director of HUD, Andrew helped cover-up Heritage’s scams vis-a-vis HUD. Heritage in turn not only buys up HUD property, but it also becomes
its own insurer of HUD property.
For example, it would claim that the insurance premium on XYZ property was $1
million a year, when in fact the insurance was only $100,000 a year.
Heritage Life Insurance Company was part and parcel of Heritage Financial Group,
Heritage Credit Group, Heritage Securities Group, Heritage Banking Group.
It was much more than just an insurance company. Heritage was a consolidated
financial group involving securities, banking, and insurance.
One of the principals of the company was John Gotti. Among the directors was
George Sr., George Jr., Jeb, Neil, etc.
These were the directors of the holding company called Heritage Group International.
Because of the relationship (Gotti’s involvement) Richard Brenneke and the National
Brokerage Group became involved in selling Heritage policies and securities.
Richard Brenneke was very close to John Gotti and more importantly Brenneke was
head of National Brokerage Group, which had a primary securities relationship with
Blinder Robinson, (Meyer Blinder, the old con artist). National Brokerage Group in
turn marketed Heritage product, Heritage Insurance, Heritage annuities, Heritage
securities and Heritage partnerships, etc.
Andrew Cuomo may become another Samuel Pierce, another scapegoat.
The missing $59 billion from HUD coffers is probably a record, but only in terms of
public disclosure. . . .
For more on Gale Norton, GO TO > > > Bureau of Indian Affairs
HUD FRAUD, SPOOKS AND THE
SLUMLORDS OF HARVARD
by Uri Dowbenko
Catherine Austin Fitts is still trying to figure out what happened.
Her company, Hamilton Securities, Inc., was the lead financial advisor to the US
Department of Housing and Urban Development (HUD).
Hamilton was hired to manage the sales of $10 billion worth of mortgages on houses,
apartment buildings and nursing homes.
By all accounts, Hamilton's new program was a resounding success.
In fact, the HUD loan sales program team was even given a Hammer Award for
Excellence in Re-engineering Government by Vice President Al Gore's Reinventing
By cutting red tape and improving the resale value of HUD owned mortgages, Hamilton
Securities was a case study of a public-private partnership that saved US taxpayers lots
The firm was ambushed by a series of lawsuits, audits and unsubstantiated rumors
which destroyed the business.
Catherine Austin Fitts -- Maverick Banker
In the arcane but stodgy world of investment banking, Catherine Austin Fitts is a
Before founding her own firm, Fitts, a Wharton graduate, was the first woman to be
promoted to managing director of Dillon, Read and Co, Inc., the prototypical elitist
men's club Wall Street investment bank.
To her credit, Fitts was instrumental in building a new market for Dillon Read. She
began underwriting previously unrated municipal bonds, in essence, financing large
government projects which other Wall Street firms said couldn't be done.
These novel bond sales helped revive New York City's crumbling subway system, and
they provided funding for the City University of New York and other major projects.
The market in unrated and low-rated muni bonds took off, earning Fitts the title of
"Wonder Woman of Muni Bonds," in a glowing Business Week article (February 23,
In 1989, she was asked to become the Federal Housing Administrator under HUD
Secretary Jack Kemp. Fitts moved to Washington to undertake the monumental task
of reforming the scandal-ridden, fraud-plagued agency.
After her stint in government, she was invited to be a Governor of the Federal Reserve
Board. She declined.
Instead she founded Hamilton Securities Group, an employee-owned investment
banking firm, which created an innovative system for saving taxpayers billions of dollars
in the sale of government-guaranteed mortgage-loan sales from HUD.
By promoting open disclosure in the HUD financial transactions, Fitts undoubtedly, and
unknowingly, must have stepped on a lot of toes.
The Crony Capitalists (or Old Boys' Network -- or the Octopus) must have seen
Hamilton's program of financial transparency as a major threat to their system of bid
rigging and insider trading.
HUD Cost Savings Lead to Hamilton's Demise
In this extremely complex case, newly disclosed evidence indicates that powerful forces
conspired to destroy the financial equity of employee-owned Hamilton Securities, as
well as the personal life savings of the firm's president, Catherine Austin Fitts.
Because Hamilton Securities had opened up the market for defaulted
In simple terms, the established network of insiders would be susceptible to -- horrors! -- open competition, not to mention an entire universe of new bidders.
In fact, Hamilton's plan for optimization of sales of defaulted mortgages resulted in a
savings of over $2.2 billion for US taxpayers.
The numbers are staggering. Every year HUD issues about $70 billion of mortgage
insurance which guarantees the mortgages used to finance homes, apartment
buildings, nursing homes, assisted living facilities and hospitals. HUD then pays out
about $6 billion on claims for defaulted mortgages, which the agency has to then
manage at great cost to taxpayers.
Prior to Hamilton's involvement, HUD was recovering about 35 cents on the dollar of
mortgage insurance payments made on defaulted mortgages.
When Hamilton instituted their new program, HUD's recovery rate soared to about 70 to
90 cents on the dollar. How? Hamilton introduced a proprietary optimization bidding
software and an on-line database of information, accessible to all investors, so that the
defaulted portfolio could be bid upon in an open auction.
In October 1997, the Chairman of one Congressional oversight committee referred to
the Hamilton-based loan sales at HUD as generating "eye-popping" yields.
In fact from 1994-97, HUD saved about $2.2 billion in HUD's $12 billion mortgage
portfolio. These savings then allowed HUD to issue far more new mortgage insurance
at a lower cost.
When Hamilton's successful loan sales-auction program was suspended due to the
investigation, the old levels of government inefficiency and fraud were resumed.
Call it "Business As Usual."
That means HUD is now losing about $4 billion per year on its $6 billion of defaulted
mortgages -- instead of just $2 billion.
That's the equivalent of 20,000 taxpayers working their whole lives to pay for this
boondoggle for just one year.
Anatomy of a Corporate Murder
Targeted by criminal elements in the Department of Justice (DoJ), Housing and Urban
Development (HUD), as well as a cartel of private investment companies, Hamilton
Securities has undergone an onslaught of unimaginable harassment and intimidation.
There had been a SWAT-like attack on Hamilton's office in Washington, 19 audits,
countless subpoenas as well as ongoing litigation against HUD to force them to pay
monies owed on their contract. It's been a 4-year long financially and emotionally
draining "investigation." To date, there has been no evidence of any wrongdoing -- just
rumors, innuendo, and lots of character assassination.
First, in June 1996, a sealed qui tam lawsuit, a phoney whistle-blower suit, as well as a
Bivens action was filed by John Ervin of Ervin & Associates, Inc., a HUD
subcontractor, notorious for filing nuisance lawsuits and "bid protests" -- 37 of them in
the recent past. In the Bivens suit, he sued HUD itself, as well as several former HUD
In fact, Ervin's lawsuits have cost a good-sized fortune in legal fees and overhead,
estimated -- from 1995 to date -- to be as high as $40 to $50 million. An insider claims
that during that time Ervin had up to 17 in-house personnel working full time on
mountains of paperwork regarding this and other cases.
So who's bankrolling Ervin?
Nobody has offered any explanations, but for a small time HUD sub-contractor like
Ervin, this has turned out to be a serious investment.
Under the False Claims Act, a private party like Ervin, who files suit on behalf of the
government, can receive 15-30% of any recovery, if the government's claim is
successful. That percentage (15-30%) would have covered asset seizures of up to $4.7
billion of loan sales won by Goldman Sachs and its partners.
Is somebody just playing the odds? In this version of government "greenmail", or state-sponsored extortion, any asset seizures could be part of this 15 to 30% bounty.
The Spooky Life of Stanley Sporkin
Then, it just so happened that the judge presiding over the Hamilton case was the
former CIA Counsel -- Federal Judge Stanley Sporkin (recently retired).
According to Rodney Stich, author of Defrauding America:
"Sporkin was involved with the 1980 October Surprise scheme and his judicial
appointment was probably his reward by the Reagan-Bush administration for helping
carry it out, and to block any judicial exposure or prosecution action."
(The October Surprise was the Reagan-Bush black-ops/covert action to delay the
release of the hostages in Iran, resulting in the electoral victory of Reagan as US
Sporkin was appointed to the bench by Ronald Reagan in 1985. His spooky roots,
however, go back to the days when he was a director of the SEC's Division of
Enforcement, while the infamous Bill Casey was practicing his Wall Street shakedown
techniques as Chairman of the Securities and Exchange Commission.
Sporkin's other claim to fame was to encourage Casey to go after the infamous
scamster Robert Vesco.
Was Vesco more competition -- or just another freelancer?
Casey, who like George H. W. Bush, neglected or "forgot" to put his assets in a blind
trust later also became director of the CIA. His shares -- controlling stock in Capitol
Cities Communications -- were eventually used to take over ABC in a $3.5 billion
In the words of Joseph Persico, author of "Casey", "the director of the Central
Intelligence Agency was soon to be a substantial shareholder in one of the
country's major forums of free expression, with wondrous opportunity for
managing the news."
Also according to Persico, Casey further employed Sporkin's specious reasoning by
claiming that killing "suspected terrorists" was not murder.
Reagan's infamous Executive Order 12333 which privatized US National Security State
dirty tricks was ostensibly the reason.
"Striking at terrorists planning to strike at you was not assassination," wrote Persico
referring to Sporkin's logic, "it was 'preemptive self-defense.'"
Then Sporkin became the general counsel for the CIA (1981-86) and his mastery of
coverup skills increased dramatically.
For instance, in keeping the Oliver North Cocaine Trafficking Operation under
wraps, it was Sporkin who invented another ingenious method of lying by
Persico writes that "North's insistence that the oversight committees be cut out troubled
the CIA people. But the adroit Sporkin found a loophole. The President was required to
inform the oversight committees of a covert action presumably in advance of the action,
except when the urgency of the situation required that notification be delayed."
Everybody was notified 48 hours after the operation.
According to Persico, Sporkin also perfected the techniques of writing retroactive
"findings" for Congress, so that CIA criminality could always be disguised or covered up
-- after the fact.
Stich concludes that "to protect the incoming Reagan-Bush teams and many of the
federal officials and others who took part in October Surprise, the Reagan-Bush team
placed people, including those implicated in the activities, in control of key federal
agencies and the federal courts.
Some, like attorneys Stanley Sporkin, Lawrence Silberman, and Lowell Jensen
were appointed to the federal bench defusing any litigation arising from the October
Surprise or its many tentacles. . .
“Organized crime never had it so good." . . .
~ ~ ~
Ironic Postscript Dept.: In Feb. 2000, retired spooky judge Stanley Sporkin (Yale
Law School, 1957) joined the global powerhouse law firm Weil, Gotshal & Manges
LLP. The company, which boasts 750 attorneys in 12 offices worldwide, is considered
one of the leading law firms in the country on bankruptcy.
~ ~ ~
The Hamilton Bushwhack
In the Hamilton Securities case, Sporkin's claim to fame is that he managed to illegally
keep a qui tam lawsuit sealed for almost 4 years. That could be a "judicial" record.
In August 1996, an investigation against Hamilton was initiated by HUD Inspector
General Susan Gaffney, serving two subpoenas on the company -- and incidentally
failing to tell Hamilton about the existence of the qui tam as required by law.
The subpoenas demanded hundreds of thousands of documents, mostly HUD
documents that HUD already had, or that had been supplied to them as part of the
ongoing work -- a clear case of burying Hamilton in paperwork as more ongoing
At the same time, a HUD audit team from Denver had completed a favorable audit of
Hamilton's program. When Fitts asked HUD IG Gaffney whether she intended to "bury
the Denver audit," Gaffney huffed back, "How dare you suggest that I would do any
such thing? That would be unethical."
In fact, she did exactly that. Susan Gaffney never allowed the publication of the Denver
Audit team's report which exonerated all of Hamilton's methodology and results.
Then, at the same time, a smear campaign against Hamilton was being waged through
a "US News and World Report" hatchet-job article about HUD Secretary Henry
Cisneros and the loan sales program.
According to Fitts, the lead reporter had been assured "at the highest levels" of the
HUD Inspector General's office that Hamilton Securities and Fitts were the subject of a
criminal investigation and were guilty of criminal violations.
There was no evidence, however, either offered by HUD or published by the magazine,
and these false allegation also died with the passage of time.
In a bizarre double-bind mentality, HUD and DoJ -- in a separate court and with a
different judge -- had taken the position that the Ervin lawsuit was without merit -- even
while Hamilton's legal costs climbed into the millions of dollars.
The Dirty Fingerprints of Lee Radek
In December 1997, Hamilton wrote a letter to the President's Council on Integrity &
Efficiency (PCIE), a committee in the Office of Management and Budget (OMB), to
investigate HUD IG Susan Gaffney's conduct.
Hamilton's four-page highly detailed letter to Neil J. Gallagher, Acting Assistant Director
of the FBI's Criminal Investigative Division and Chairperson of PCIE was blunt.
"The HUD IG has crossed the line in its investigation of Hamilton, which was begun in
response to complaints from Ervin & Associates, a disgruntled HUD contractor," wrote
Fitts. "The IG's wide-ranging and unfocused "fishing expedition" against Hamilton has
failed to produce findings of wrongdoing and threatens the survival of the firm. The
repeated leaking to the press of proprietary and confidential information that only the
HUD IG could know and the intervention of other Federal Agencies [IRS, FDIC] into
Hamilton's affairs constitute a campaign of smear, slander and intimidation that should
be investigated and stopped."
Fitts wrote about many incidents of intimidation and harassment which "demonstrate or
suggest that the HUD IG is deliberately leaking information to the press about its
investigation of Hamilton. These leaks represent serious and persistent breaches of
confidentiality, unethical and unlawful behavior and violations of Hamilton's
PCIE declined to investigate. In her next letter to Gallagher in February 1998, Fitts
wrote that "since the filing of our complaint, the Hamilton Securities Group Inc. and all
of its subsidiaries have been rendered insolvent... In the face of eighteen months of
Inspector General 'lynch mobbing' we have exhausted our reserves and have no means
to continue an investigation that has no end..."
After another refusal by PCIE to investigate, Hamilton filed a Freedom of Information
Action (FOIA) for the files.
The files revealed a heavily redacted letter signed by the Lead Coverup Meister
himself -- Lee Radek, head of the Department of Justice's ironically named "Office of
In a letter dated April 3, 1998 addressed to Thomas J. Piccard, Chairman of the
Integrity Committee of the PCIE, Radek wrote "C. Austin Fitts, President of the
Hamilton Securities Group, Inc. sent the IC a copy of a civil complaint filed by Hamilton
Securities against HUD Secretary Andrew Cuomo, Assistant Secretary Nicolas
Retsinas and Inspector General Susan Gaffney. The complaint alleged that HUD's
OIG investigation of Hamilton and improper media leaks by the OIG about the
investigation was causing Hamilton to go out of business... After reviewing the letter
and the attachments, the Public Integrity Section concludes that the allegations in the
complaint do not provide sufficient information to warrant a criminal investigation."
The rest of the page -- seven inches of what used to be text -- is blacked out.
For the record, US Department of Justice apparatchik Lee Radek has held a virtual
stranglehold on DoJ "investigations," consistently covering up the criminal activities of
the Clinton Administration. As a linchpin in the corrupt DoJ, he has had many
opportunities to coverup crimes and block inquiries -- and he has taken full advantage
of his position as a Federal-Mob "enforcer."
It's an ironic twist of fate, then, that Neil Gallagher -- the FBI staff member of PCIE,
whose job it was to investigate allegations against Susan Gaffney -- and Lee Radek
appeared together in May 2000 before a Congressional hearing -- as antagonists.
Gallagher affirmed in public testimony that Radek was indeed under pressure from US
Attorney General Janet Reno to stall any investigation into the Clinton-Gore campaign
fund raising scandals.
Unsealing the Lawsuit
Finally in May 2000, US District Judge Louis F. Oberdorfer unsealed the qui tam
lawsuit against Hamilton -- and surprise! -- the DoJ decided not to pursue the
The suit was filed in June 1996, and DoJ's decision not to intervene in this case came
after a 1,400 day so-called "investigation" -- or 1,340 days longer than the 60 days
mandated by the Federal False Claims Act.
Hamilton Securities maintained that the allegations in the complaint were not true, and
there was no evidence to support the false allegations.
In fact, HUD security procedures and overlapping levels of review associated with the
open bidding process made the alleged bid rigging and insider trading impossible. This
was corroborated by HUD's own audits.
The sources for the alleged bid rigging in Ervin's complaint, kept under court seal for
almost four years, included Jeff Parker of the Cargill Group, Terry R. Dewitt of J-Hawk (First City Financial Corporation of Waco, Texas, and a Cargill investment
and joint venture partner), and Michael Nathans of Penn Capital Corporation.
The Waco-Cargill Connection
In retrospect, Hamilton must have been a major threat to the nation-wide money
laundering and financial fraud network which uses government-guaranteed mortgages
and other programs to scam US taxpayers. The formerly secret sources of the false
allegations against Hamilton have some interesting connections.
SEC documents state that First City Financial Corporation (FCFC) of Waco,
Texas started business in 1986 "purchasing distressed assets from FDIC and RTC."
Another subsidiary, First City Commercial Corp. was used to "acquire portfolios of
distressed loans" -- another hallmark of the standard money laundry operation.
According to the Houston Business Journal (Sept. 24, 1999), "First City Bancorporation,
once one of Houston's largest bank holding companies, was acquired out of bankruptcy
in 1995 by J-Hawk Corp of Waco and renamed First City Financial Corp."
"FCFC began its relationship with Cargill Financial Services Corp. in 1991," according
to the company's SEC filings. "Since that time, the Company and Cargill Financial have
formed a series of Acquisition Partnerships through which they have jointly acquired
over $3.2 billion in Face Value of distressed assets. By the end of 1994, the Company
had grown to nine offices with over 180 professionals and had acquired portfolios with
assets in virtually every state."
But then -- and now comes the sad part --- the mortgage banking subsidiary of First
City Financial Corporation, Harbor Financial Group Inc., filed for bankruptcy (Oct.,
1999), just as the notorious Denver-based money laundry, M&L Business Machines,
had done years before.
The corporate shell game of mergers, acquisitions and liquidation is obviously in full
play in this scenario.
The other false accuser listed -- Cargill Financial Services Corp., -- on the other
hand, is a subsidiary of Cargill, the Minneapolis-based global agribusiness cartel and
the world's largest privately-held company.
Cargill is a mega-corporate international merchant of agricultural, industrial and
financial commodities, and it operates in 59 countries, has 82,000 employees, and
about $50 billion in annual sales.
The financial subsidiary, Access Financial Holdings Corp., was formed to "manage
the housing finance business" and "provide residential real estate mortgages," an
unregulated arena in which money laundering is often the real business.
And here's the punch line in this revolving-door-syndrome joke of the Criminal Big
Government-Big Business Syndicate.
The lead law firm listed on First City Financial's 1998 registration statement is Weil
Gotshal -- former spooky judge Stanley Sporkin's new employer.
Whistle-Blower Stew Webb's Perspective
Federal whistle-blower Stewart Webb thinks he knows why Catherine Austin Fitts and
her company, Hamilton Securities, were bushwhacked.
In fact, he believes that her operation was a direct threat to the "Denver Boys" --
the Bush Crime Family's money laundering operation based in Denver.
Why was she targeted? "Because she had set up a company which was showing the
government how to save money through competitive loan sales programs," explains
Webb. "It was a threat to [Leonard] Millman in Denver. Because they were in control
of the mortgage program."
Webb is referring to the many HUD low-income housing-based frauds and scandals in
Denver. He claims that one of their proxies was John Ervin himself. "He had his own
office in Denver," says Webb. "One of the biggest supplies of money to these boys is
the money they're stealing from HUD. They are still robbing HUD like nobody's
"That's a massive covert revenue stream for them," continues Webb. "As of last year,
they became the largest apartment owner in the United States. AIMCO. That's Millman
and Company in Denver."
Apartment Investment and Management Co. (AIMCO) is one of the largest real
estate investment trusts, or REITs, in the the US with headquarters in Denver, Colorado
and 36 regional offices. AIMCO operates about 1,834 properties, including about
385,000 apartment units nationwide in every state except Vermont.
AIMCO is the successor to the Considine Co,. founded in 1975, by Terry Considine. It
was then re-organized as a real estate investment trust and became a public company
through an initial stock offering in July 1994.
In an article called "HUD, AIMCO Clash Over Housing" (Denver Business Journal,
May 8, 1998), AIMCO was excoriated by affordable-housing advocates for taking
90,000 low-income ("affordable housing") apartments -- bought from HUD at below
market rates -- and converting them into higher end properties, thereby displacing poor
According to the article, "the revamping also involves upgrading bare-bones properties
built with federal funds two decades ago which will allow AIMCO to boost rents."
AIMCO has also gobbled up Washington DC-based apartment manager NHP, Inc.,
Ambassador Apartments, a Chicago-based REIT, and the apartment portion of Insignia
Since AIMCO is the nation's largest owner of affordable housing and the sole provider
of such homes in many markets, the implications are ominous.
More homeless people on the streets are a sure bet.
The Harvard-Bush Connection
Since historically the Chinese Opium Trade and the African Slave Trade have provided
the financial foundation for the Boston "Bluebloods," it should come as no surprise that
the Harvard Endowment Fund and the Harvard Management Corporation are
involved in what can be characterized as shady enterprise at best -- or criminal activity
In 1989, the Harvard Endowment Fund, became the 50% owner of HUD subsidy
(Section 8) and non-subsidy apartment buildings through its purchase of NHP, an
apartment management firm, headed by Roderick Heller III.
Since their plan was to do an Initial Public Offering (IPO) or a merger for NHP, they
tried to run up the value by aggressive acquisition of more apartments, preferably with
HUD issued mortgage insurance which could be defaulted on -- with little or no
Unfortunately for Harvard, HUD had initiated its new open-disclosure and performance-based auction under the direction of Hamilton Securities. When the private market firms
battled it out, Harvard was outbid by GE, Goldman Sachs and Black Rock and its sour
grapes apparently turned to vengeance.
In 1996, according to Fitts, Rod Heller told her that the government had a "moral
obligation" to him and his investors (Harvard Endowment) to renew or roll over the
subsidies with them to maintain their profits.
In other words, an open auction-free marketplace was not acceptable to the Harvard
Boys, since they were operating their business of HUD-backed corporate welfare-subsidies under what Heller claimed was "an understood handshake."
The HUD portfolio of distressed properties had traditionally been managed to derive
profits for private business -- like Harvard Endowment Fund -- and not the US
taxpayers. Since Harvard was used to rigging profits through politics, not fair business
practices, it started losing income because there were less management fees and the
value of its stock started going down.
In 1991, Harvard and Heller asked Fitts to do an investment bank with them. At the last
minute, Harvard Management Company honcho Michael R. Eisenson told her he
wanted 20% of her new company's stock, and the deal was shattered.
On the first large HUD loan sale, Eisenson complained to Fitts, "I don't like this" --referring to Hamilton's use of optimization software to auction HUD mortgages --
"because the only way we can win is by paying more than our competitors. We prefer a
bid process where we can win by 'gaming it' because we are 'smarter.'"
For those unfamiliar with Soviet (or is it Harvard-Mob?) terminology, "smarter" is code
language for saying "we can rig it." And "gaming it" means finding a way of
manipulating the players to get control of them, rather than using the competitive
process of free market capitalism.
Eisenson was obviously quite at home with the proverbial "fix."
And who is Mike Eisenson? He was the lead investor who eventually sold Harvard's
share of NHP to the Denver-based AIMCO. His other claim to fame is that he was on
the board of directors of the infamous Harken Energy which rigged an insider stock
deal on behalf of George W. Bush -- not coincidentally a Harvard grad.
In 1986, a small company called Spectrum 7 (George W. Bush, Chairman and CEO)
was acquired by Harken Energy Corp.
After Bush joined Harken, the largest stock position and seat on its board was acquired
by Harvard Management Co. The oil and gas, real estate and private equity portion of
Harvard Endowment also acquired.
Warren Buffet's position in NHP, one of the largest owners of HUD Section 8
subsidized properties in 1989.
Then the Hamilton Securities-initiated HUD loan sales were slowed down and
cancelled, and, of course, Harvard's capital gains were ensured through an IPO of NHP
and through a sale to AIMCO.
The Harken Board gave the Junior Bush $600,000 worth of company stock, plus a seat
on the board, plus a consultancy worth $120,000 a year -- despite suffering losses of
more than $12 million dollars against revenues of $1 billion in 1989.
In 1987 when creditors were threatening to foreclose, the Junior Bush himself made a
trip to Arkansas to meet criminal-banking kingpin Jackson Stephens, whose Stephens
Inc. arranged financing for the faltering Harken Energy from a subsidiary of the Unon
Bank of Switzerland (UBS).
Stephens Inc, of course, had ties to the notorious CIA money laundry bank, the Bank
of Credit and Commerce International (BCCI), where drug trafficking and arms-smuggling profits mingled freely with looted S&L and fraud-scam proceeds.
Then 1990 Bahrain awarded an exclusive drilling rights contract to Harken and the
Bass brothers added more equity to the deal. Six months later George Bush Jr. sold
off 212,140 shares grossing him $848,560.
When Saddam Hussein invaded Kuwait the Harken stock dropped suddenly. The SEC
was not notified, and no action for insider trading was taken against the Junior Bush.
Why? SEC chairman Richard Breeden was a faithful Bush loyalist.
Today Eisenson, formerly one of the lead investors in NHP and Harken and one of the
primary portfolio managers of Harvard Management, runs a private equity portfolio
called Charlesbank Capital Partners LLC, Boston which manages $1.4 billion in real
estate investments for the Harvard Endowment.
One of the partners of a company doing business with NHP, Scott Nordheimer
actually admitted to Fitts in June 1996 -- "We tried to get you fired through the White
House and that didn't work. So now the Big Boys got together, and you're going
Shortly thereafter the qui tam lawsuit with the bogus whistle-blower charges was filed
In this complicated story, there's another part of the puzzle which needs exposure. The
Hamilton Bushwhack involved Cargill personnel falsely accusing the following
companies of financial improprieties: Hamilton Securities, as well as investment
bankers Goldman Sachs and Black Rock Financial, a subsidiary of PNC.
Goldman Sachs has been touted as one of the largest contributors to the Democratic
National Committee and the Clinton-Gore Presidential Campaign.
Was the Hamilton Bushwhack just another outward sign of a covert power struggle?
Because of its implications, it had the potential to lead to Clinton's impeachment on
serious fund raising violations -- a much more significant charge than the Monica
Lewinsky Sexcapades used in the Ken Starr Coverup.
More Spooky Harvard Connections
The key to the mystery of the Hamilton Bushwhack may ultimately be found in the
relationship between 1) government guaranteed/insured mortgages, 2) asset
seizure/forfeitures, and 3) the private companies whose profits derive from an inside
track with both government programs.
More lucrative than mere corporate subsidies, there are entire segments of mega-business which depend on these government insider deals.
For example, besides Harvard, the other primary investor in apartment management
company NHP was Capricorn Investments and Herbert S. "Pug" Winokur, Jr.
Winokur, former Executive Vice President and Director of Penn Central Corp, CEO of
Capricorn Holdings Inc. and managing partner of three Capricorn Investors Limited
Partnerships, is one of those insiders who may have benefited from the outrageous
assault on Hamilton's open bid auction for defaulted HUD mortgages.
Not incidentally, from 1988 to 1997, because of his large investments, Winokur was
also the Chairman and CEO of DynCorp, a US government contractor whose
customers include Department of Defense, NASA, Department of State, EPA,
Center for Disease Control, National Institute of Health, the US Postal Service and
other US Government agencies.
Most importantly, according to SEC registration documents (S-1), DynCorp is the prime
servicer on the Department of Justice Asset Forfeiture Fund, having procured a five
year contract with the Department of Justice worth $217 million from 1993 to 1998.
This 1000 person contract required staffing at over 300 locations in the US and involved
support of DoJ's drug-related asset seizure program. According to SEC documents,
DynCorp's personnel supports "US Attorney Offices that are responsible for
administering the federal asset forfeiture laws."
In other words, DynCorp could have profited first from a successful seizure of HUD
loan sales. Then, DynCorp could have also profited from HUD "Operation Safe Home"
seizures, which target low-income tenants, mortgage holders and apartment owners.
And, since the company has the expertise and personnel, DynCorp could also have
targeted these communities with private surveillance teams and non-lethal weapons to
effect asset seizures using the phoney War on Drugs as a rationale.
By all accounts, there is at least a major conflict of interest in Winokur's investments in
HUD low income housing and his role in Department of Justice seizures.
Imagine -- if you're Winokur, you can make money on defaulted HUD mortgages,
guaranteed by US taxpayers, as well as by kicking out low-income housing tenants
because of drug-related "asset seizures." The criminal-corporate-government scams
don't get any better.
In the case of Hamilton's open-bid auction process on defaulted HUD mortgages, the
potential $4.7 billion seizure of HUD loan sales would have been a major plum for
DynCorp as the prime servicer of the DoJ Asset Forfeiture Fund.
By the way, Winokur also had the "foresight" not to board the ill-fated flight to
war-torn Yugoslavia, which took Secretary of Commerce Ron Brown's life.
There are other spooky connections. According to Newsweek (Feb. 15, 1999), Reston,
Virginia based DynCorp is a $1.3 billion firm, which also trains police in Haiti and works
on coca eradication in Colombia, where three of its American pilots have died since
Reliable sources allege this shadowy outfit may be a CIA-military proprietary, in other
words, a privatized entity useful for "plausible deniability." At any rate, it also provides
"Yankee Mercenaries" for the Colombian campaign against drug trafficking. Employing
about 30 US Vietnam War veterans, DynCorp has a $600 million contract to run and
maintain the planes and helicopters used in "anti-drug" efforts in Peru, Bolivia and
Colombia, according to the World Press Review (Nov. 1, 1998).
Postscript: Who says (corporate) crime doesn't pay? According to the Harvard
University Gazette, in June 2000, Herbert S. Winokur Jr. was named to join the seven-member Harvard Corporation, the University's executive governing board.
~ ~ ~
Doing Business with the Feds
- Imagine having to wait more than 4 years to get paid on an invoice.
- For more than $2 million.
- From the US Government.
That, in short, is what happened to Hamilton Securities.
Doing business with the US Federal Government should come with a warning label.
WARNING: Saving money for the taxpayers can be hazardous to your health!
"HUD is withholding about $2 million of funds owed to Hamilton for services performed
for HUD," says Hamilton's President Catherine Austin Fitts. "We also understand that
this with-holding is at the request of the Justice Department and the HUD Investigator
"As the lead investment banker on $10 billion of loan sales, we have been able to
preserve the integrity of these transactions. We intend to take whatever steps
necessary to recover our shareholders" and employees value as we have done for the
US taxpayers. The unsealing of the qui tam lawsuit should free HUD to meet its
outstanding contractual obligations to Hamilton as quickly as possible."
Toward a Positive Future
And what is Catherine Austin Fitts doing now?
Besides trying to recover her life, she's moving ahead with her new company called
Solari Inc., and her vision, the Solari Investment Model, community-based programs
for local equity building and investment.
"Solari is an investment advisory service, which plans to re engineer investment and
financial structures at a local level, so that new technology can be integrated into
communities to increase jobs and ownership," says Fitts.
"Over the last ten years, we have prototyped a substantial number of transactions,
venture capital and portfolio strategy to determine the ideal way to refinance
communities in the stock market," she continues. "Our intention is to create a fund
which can finance local development -- and maintain local control -- through an
investment model geared for breakthrough transformations with individual,
organizational and community change."
Her far-reaching vision is an inspiration. "By creating one or two Solari Stock
Corporations (one for real estate and one for venture capital) through a community
offering, and swapping non-voting stock for outstanding debt," says Fitts, "the
community can lower short term debt service and realign interests between numerous
constituents who can be positioned in a win-win financial model."
The problem, in one sense, is simple.
The old model -- the Soviet-inspired centralized command & control system which rules
Washington, its agencies and the beltway bandits feeding at the trough of corporate
subsidies -- must give way to the new paradigm of the neighborhood investment model.
It's a foregone conclusion: the corrupt system which guarantees profits to insiders will
be swept into the ashcan of history, just as the Soviet Union and its proxies' brand of
communism has been discredited forever. It's just a matter of time.
In the end -- by building an alignment between spirituality and the material world --
Catherine Austin Fitts believes that "everyone can prosper through actions which
integrate our spiritual principles in the material world in which we live and work."
– Copyright 2000 Uri Dowbenko. All Rights Reserved.
For some new poop on Herbert S. “Pug” Winokur, Jr., GO TO > > > The Story of
And for some old poop, GO TO > > > Dirty Gold in Goldman Sachs
For more on Dyncorp, GO TO > > > Nests in the Pentagon; The Mercenaries
DOJ LIES: UNSEALED COURT DOCS REVEAL
HOW HAMILTON WAS BUSHWHACKED
By: Uri Dowbenko
Recently unsealed court documents in the Hamilton Securities case show that attorneys
from the Department of Justice and HUD (Housing and Urban Development) lied
repeatedly in court before US District Judge Stanley Sporkin.
In an outrageous example of judiciary malfeasance, Judge Sporkin himself coached the
government attorneys on how they should proceed with their investigation and litigation
Prior to the lawsuit, Hamilton Securities, an innovative software company and its
president Catherine Austin Fitts successfully completed an auction sale of defaulted
HUD properties, which saved the government $2.2 billion in lost revenue.
Then Hamilton became a target.
In June 1996, John Ervin of Ervin Associates, a disgruntled HUD contractor, filed a
secret qui tam lawsuit against Hamilton Securities, Goldman Sachs, and Blackrock
PNC. He also filed a lawsuit against HUD and HUD officials.
Transcripts of the sealed hearings show that DoJ and HUD attorneys were clearly the
strategic force behind Ervin's phony suit against Hamilton, running interference for Ervin
in closed sessions with Judge Sporkin.
DoJ attorneys Barbara Van Gelder and Anthony Alexis, as well as HUD attorney
Judith Hetherton, then managed to keep stalling the qui tam lawsuit against Hamilton
for an astonishing four years. This was apparently a clear-cut effort to bleed Hamilton's
financial resources. The time proscribed by law, by the way, for "investigations" of this
type, is 60 days.
The coordination against Hamilton seems to have originated in the US Attorney's office
in the District of Columbia, as well as the Lee Radek fiefdom of the Department of
Justice, misnamed the "Office of Public Integrity."
Former CIA operative Lee Radek is a master of conspiracy cover-up and his office has
a well-documented reputation for derailing criminal investigation of government insiders
and coordinating reprisals against whistleblowers.
Hetherton was a former member of the District of Columbia's US Attorney's office, while
Van Gelder worked for Eric Holder, the DC US Attorney who became the Assistant
Attorney General under Janet Reno.
Van Gelder also reported to Frank Hunger, Al Gore's brother in law, head of the Civil
Division of the Department of Justice.
In essence, the qui tam lawsuit, filed by a bounty hunter (Ervin) on behalf of the
government, alleged that the government had been harmed by bid rigging between
Goldman Sachs, Black Rock, HUD and Hamilton Securities.
Court documents present a convincing case that the qui tam and the civil lawsuits were
themselves concocted by the DC US Attorney's team -- even though they knew it was
completely without merit.
During the same time frame (four years), Judge Sporkin illegally kept the court
documents sealed to further obfuscate DoJ's criminality.
In fact, the unsealed court transcripts reveal an astonishing disregard for evidence and
normal court protocol by government attorneys as well as the judge.
It's clear that Judge Sporkin was guiding DoJ and Ervin attorneys in their "search" for
non-existent evidence against Hamilton.
Sporkin, former CIA and SEC counsel under Bill Casey, repeatedly helped goverment
attorneys by verbally nudging them toward some semblance of professional behavior.
Sporkin, by the way, took over the case from Judge Charles R. Richey who
mysteriously -- and unexpectedly -- died after the first several hearings.
In the March 29, 1999 transcript, for example, Judge Sporkin asked US Attorney
Anthony Alexis. "Where are we on this thing here? Where's the government going? Do
they know yet?"
Alexis replies. "No." Sporkin, evidently frustrated by the US Attorney's inability to
present a credible case against Hamilton, asks him, "You don't know where you want to
Alexis answers, "I kind of know which direction I want to go in terms of who I want to
speak to, but there's well, obviously the documents which Ms. Hetherton can speak to
which is before the special master."
The case, by the way, was first heard on June 20, 1996, so the preceding conversation
took place three years after the supposed "investigation," which yielded no evidence of
wrongdoing by Hamilton.
Each time attorneys for DoJ and HUD appeared in closed session with the judge, they
would, time and again, present no evidence, no affidavits, and no documents -- just a
plea to postpone the case.
Judge Sporkin, time and again, acceded to their baseless request and postponed the
The chronology of illegal and bizarre behavior by Sporkin and government attorneys
* July 1, 1996 -- Judge Richey extends the case for 60 days based on Barbara Van
Gelder's unsubstantiated allegations that fraud was involved. Judge Richey tells Van
Gelder he won't give them another extension. Then Judge Richey suddenly gets sick
* Aug 19, 1996 -- The new judge, Stanley Sporkin, extends the case another 90 days.
* December 19, 1996 -- Sporkin gives government attorneys another 90 day extension.
He comments on the fact that John Ervin, the disgruntled government contractor-bounty
hunter would get 15% to 30% of the settlement.
"Gee, I had one of these qui tams where the government recovered close to 30 million.
And the relator I guess got -- what do they get, a third?" the judge asks. "Thirty
percent," answers Wayne Travell, a Venable, Baetjer, Howard & Civilleti attorney,
representing failed bounty hunter John Ervin.
* May 20, 1997 - US Attorney Barbara van Gelder lies once again regarding her lack of
evidence in the case. She implies that if she's given more time, she'll definitely come up
with something concrete.
When Sporkin asks her about consolidating the two cases, Van Gelder flirts with the
judge and tells him, "Oh, it's always a pleasure to appear before you."
The judge says, "You know how to butter me up, don't you? You and I go back many
But Sporkin doesn't recuse himself.
Van Gelder then tells the judge, "The reason why we can't -- I believe that we can't
have one case consolidated is that one judge would have total knowledge of the case
and the problem is in the other case we are the defendant, and so with the United
States being the plaintiff and the United States being the defendant..."
In other words the government is in the bizarre situation of being the Plaintiff AND the
Defendant, since Ervin has also sued the government, specifically HUD and HUD
officials. Sporkin is puzzled too. He asks her how the government can be both plaintiff
and defendant in the case.
After Ervin and his counsel are referred to in court as "bounty hunters," Sporkin gives
government attorneys another 90 days -- illegally. Again Van Gelder lies and tells the
judge she needs an additional six months.
Sporkin replies, "...these are interesting cases. I've had one of these where the relator I
think, he recaptured abut 30 million and I think 25 percent is tops."
Van Gelder says, "Twenty five is the top, right." Sporkin says, "And you figure 25
percent of 30 million is 7.5 million bucks."
The message between the lines is that Sporkin is wondering out loud what the patsy
John Ervin is actually doing to "earn" his share of the loot -- 25% of the disputed $4.7
billion won by Goldman Sachs and their partners in the HUD loan sales.
* Sept 10, 1997 -- Sporkin recommends that Van Gelder use SEC investigators to
figure out if the HUD loan sales can be construed as "securities." Van Gelder says that
she wants to use SEC only in an advisory capacity. In essence, Sporkin the judge is
advising Van Gelder the DoJ Attorney on litigation and investigation strategy. Improper?
Sure. Has Sporkin and van Gelder been censured, fined or prosecuted? Not yet.
* October 1997 -- HUD Secretary Andrew Cuomo abruptly cancels the Hamilton
Securities contract, despite the fact that Hamilton successfully auctioned off $10 billion
worth of defaulted HUD mortgages thereby saving the government $2.2 billion.
HUD still owes Hamilton $2.5 million for contracted services.
* March 9, 1998 -- HUD and the FBI loot the Hamilton Securities office in Washington,
DC. A sworn affidavit by a building custodian shows DoJ's intent to plant false evidence
in the basement hoard of Hamilton documents in order to frame Hamilton -- and in turn,
DoJ Attorney Tony Alexis appears and asks for another 120 day extension in the case.
* July 10, 1998 -- Tony Alexis lies again and claims Hamilton isn't giving them
documents they have asked for. The Judge stalls the case again.
* Nov 19, 1998 -- Dan Hawke, Ervin's attorney, asks for another 90 days.
* Jan 29, 1999 - Tony Alexis, assistant US Attorney Civil Division, asks for the case to
be sealed for 90 days.
* June 2, 1999 -- DoJ attorneys continue to mislead the court.Judge Sporkin begins to
show his frustration at the ineptness of government attorneys. You can imagine how he
feels after more than three years of no results. He says, "Let me tell you what you've
got to do here. What you've really got to do, because this thing is dragging on, get a
team together of some very knowledgeable people. You might have to bring them in
from the outside. There's a big pool of people over there at Securities and Exchange
Commission you could use. And I don't know whether you're permitted to go outside of
the SEC to bring in some people that are knowledgeable in Wall Street and how these
things work and get into that end of it. And I don't know whether HUD has that -- the
Inspector General has those skills. I don't know. I really, I think it's dragging on. And the
longer you wait, the harder it's going to be to reconstruct things because what you're
going to have to do is reconstruct your market."
Translation: I'm really really frustrated with the incompetence of all you government
attorneys. Why can't you just do the job?
Sporkin then continues leading them, trying to motivate them to bring him something --
anything with some kind of perceived value. Sporkin says, "I think you've really got to
get a team together that's knowledgeable in this area of the law and can, you know, can
go into it and see if these allegations are true or not. I don't know how you're going to
do it, but you've got to get -- I don't know -- is the Inspector General carrying this on or
do you have anybody from Justice working on this?"
The transcripts show that the Hamilton bushwhack was a setup, a story of dirty politics
within the DoJ and HUD.
The transcripts also implicate DoJ Attorneys, the HUD Inspector General Susan
Gaffney and HUD Secretary Andrew Cuomo in criminal collusion, if not conspiracy,
against Hamilton Securities.
Andrew Cuomo, the mob-connected son of former Governor Mario Cuomo, is
currently running for Governor of New York. While he was the director of HUD, HUD
Inspector General Susan Gaffney revealed in March 2000 that $59 billion of HUD
monies had been "lost" and the accounting could not be reconciled. Computer "error"
was initially blamed for the shortfall, but this ludicrous and laughable cover story did not
Furthermore it becomes clear that --
1. DoJ designed the construct and rationale for Ervin to file the lawsuit against
Hamilton on behalf of the government.
2. DoJ taught Ervin how to get the ultimate kickback as a "bounty hunter." Incidentally
Ervin was actually paid several million dollars when he agreed to withdraw his lawsuit
against HUD and HUD officials, an obvious backdoor payoff.
3. Judge Stanley Sporkin's egregious behavior and improper conduct is evidence of
criminal conspiracy. Well-trained in dirty tricks and spooky "tradecraft," Sporkin, like
Lowell Jensen and Lawrence Silberman, was "appointed to the federal bench to
defuse any litigation arising from the October Surprise or its many tentacles," according
to whistleblower Rodney Stich in his magnum opus "Defrauding America."
So was Hamilton Securities just another domino used by insiders to try to knock down
Or was Hamiton and its innovative software a serious threat to insiders who wanted to
cancel the sales of defaulted loans to hide the rampant fraud at HUD?
Were they so afraid that Hamilton's open auction and bid optimization software would
cut them out and destroy their covert revenue streams and money laundering capability
And, given the well-documented fraud at HUD, why was the Department of Justice so
afraid of getting the Securities and Exchange Commission involved in the investigation?
Other more serious questions also remain.
Why did HUD Secretary Andrew Cuomo and Al Gore's brother-in-law, Frank Hunger,
head of the Civil Divsion of DoJ, try to frame Goldman Sachs during the Clinton
impeachment, despite the fact that Goldman Sachs was a major contributor to the
Was this the aftermath of a failed palace coup by Al Gore, Frank Hunger and Hillary
Clinton against Bill Clinton himself?
Timing, after all, is everything.
Hamilton Securities and Catherine Austin Fitts continue to struggle under the burden of
a meritless lawsuit by Ervin with continuous support from the Department of Justice.
Hamilton has still not been paid on its invoices for $2.5 million -- unquestionably and
undeniably owed by HUD.
Gored and bushwhacked, software pioneer Catherine Austin Fitts has paid dearly for
her company's innovations. Nevertheless she's ready to begin her new project -- (The
Solari Spirit: How to Create Local Prosperity in a Global Economy) -- as soon as this
outrageous case is settled...
From Investors Business Daily, March 27, 2000, by John Berlau:
HUD Huddles With Business
To Build Housing In China
As tensions mount over China’s threats to attack Taiwan, the Clinton administration is
holding closed-door meetings with American industry leaders and Chinese government
officials to help China build new housing, Investor’s Business Daily has learned.
On Thursday, representatives of industry and nonprofit groups gathered at the
Department of Housing and Urban Development for a meeting of the U.S.-China
Residential Building Council, or RBC. The council’s members, mostly from industry,
include the American Forest and Paper Association, Fannie Mae, the National
Association of Realtors, the Mortgage Bankers of America and Lehman Bros.
HUD would not allow IBD to attend the meeting, which was closed to the public and not
reported in the Federal Register. The closed meeting was a possible violation of federal
law covering advisory committees with private-sector members.
It is designed in part to demonstrate the success of the president’s policy of
engagement with China. It’s a vehicle through which we can have positive cooperation,
which can demonstrate changes to the Chinese people in institutions that deal with
housing that will demonstrate the benefits of a stable relationship with the U.S.,” said a
HUD consultant who did not want his name used.
“This is the restoration of the relationship in the areas of housing and urban
development after a 10-year hiatus,” said the consultant, referred to IBD by HUD’’s
According to the consultant, HUD and the Chinese government had cooperated on
projects in the 1980s, but these ceased after the Chinese government massacred pro-democracy demonstrators at Tiananmen Square in 1989.
But on his trip to China in 1998, Clinton called for a new initiative to help China
modernize its housing system. So in November 1999, according to a HUD press
release, HUD Secretary Andrew Cuomo, Commerce Secretary William Daley and
Chinese Minister of Construction Yu Zhengsheng signed a “memorandum of
understanding” setting up the council to “provide new housing opportunities for
families and to create housing industry jobs and stronger economies in both
But Rep. Dana Rohrabacher, R.-Calif., a senior member of the House International
Relations Committee, believes “something stinks about the whole deal.”
“If American business wants to go over there and make a buck by building houses in
China, it’s OK with me,” Rohrabacher said. “That should have nothing to do with the
United States government. If HUD is involved, it means there is a subsidy in some
way from the American taxpayers to this project, and that’s what is alarming.”
The HUD consultant said the department will spend less than $100,000 on studies
comparing the Chinese and American housing markets, but added, “there’s no U.S.
government money going to the Chinese.”
The consultant said the council plans two projects: a pilot housing complex in China
with materials from American builders and a program to help China securitize a pool
of mortgages. He said the council has no budget, and “everything that the RBC
members do on any of these projects, they are pledging to do pro bono. They will be
donating time, expertise and, in some cases, material.”
But a watchdog group on government waste remains skeptical.
“You just don’t have an international housing cooperative initiative for free,” said
Citizens Against Government Waste spokesman Aaron Taylor, who noted that the
time HUD staffers spend on the projects also costs taxpayers money.
Taylor is disturbed that the meetings are closed to the public. He notes that secrecy
contradicts the ostensible goal of helping China achieve more openness and
transparency. If they were interested in openness in housing policy, there is no reason
to be keeping these meetings confidential in any respect,” Taylor said.
“Communist dictatorships thrive on secrecy.”
The Clinton administration might again be violating the Federal Advisory Committee
Act, which requires panels with nongovernmental members advising the president or his
agencies to notify and open their meetings to the public, says Miami attorney Tom
HUD spokeswoman Maria Peralta said the council “was not set up as a federal advisory
committee, so the FACA rules would not apply to any convening of that committee.”
She then amended “committee” to “building council.”
But Spencer said, “It appears to me this is very close to a (federal advisory committee)
if it’s going to be utilized for advice by the administration.”
He added, “This administration has had the dubious honor of having more FACA cases
on its tail than any other administration, and they’ve tried to avoid it more often than any
HUD told IBD it would send a written opinion from HUD’s legal counsel spelling out why
the council doesn’t fall under the law, but the agency had not done so by press time
Different members of the council have different objectives. Donald Martin, a builder who
represents the National Association of Home Builders on the council, said he hopes the
project will “broaden the scope” of opportunities American builders have in China.
Shelley Poticha, executive director of the Congress for the New Urbanism, thinks the
U.S. can learn from China’s “transportation system that’s not exclusively reliant on
But Sophia Conroy of the U.S. Tibet Committee is skeptical.
She said the Chinese government’s “ideas of development and ideas of modernizing
are totally at the expense of the wishes of the local people in many cases.”
Copyright © Investor's Business Daily
For more, GO TO > > > The Secret Affairs of Fannie Mae & Freddie Mac
Independent Counsels Release Report
On Reagan Era HUD Abuses
Article submitted by: John Henneberger, TxLIHIS, email@example.com (10/30/98).
The longest-running independent counsel investigation in history is not Ken Starr's
probe of Bill Clinton, but the probe of the illegal doings of top HUD officials during the
The independent counsels this week released their findings to the D.C. Circuit of the
U.S. Court of Appeals. The independent counsels accused high-ranking former HUD
officials of a "monumental and calculated abuse of the public trust." The report found
"a pervasive pattern of improper and illegal behavior" within HUD.
"High-ranking HUD officials put their own interests ahead of those of the members of
the public they were charged to serve and protect: the poor and homeless of this
nation," the three-volume report stated. HUD money was not awarded on the basis of
merit but for the personal benefit of former HUD officials and other "well-connected
individuals," according to the report.
"At a time of dramatic cutbacks in federal funding -- cutbacks that many of these
officials publicly supported -- increased vigilance was essential to ensure that the
scarce remaining funds were put to the best possible use," the report stated.
"Instead, a pattern of greed, criminal conduct and systematic corruption of the
government process by HUD officials emerged."
According to the Washington Post, the probe's top focus, former HUD secretary
Samuel R. Pierce Jr., was never charged with criminal wrongdoing. Pierce
acknowledged in 1994 that he helped create a climate in which the corruption took
place and accepted responsibility for the need to launch the independent counsel
In return for that statement, prosecutors agreed not to pursue charges against him.
During the course of the investigation two former assistant housing secretaries were
among those convicted.
Charles Rosoetti - IRS CHIEF ON THE TAKE?
By: Uri Dowbenko
The multi-millionaire IRS Commissioner Charles Rossotti acts as if the usual rules don’t
apply to him. And actually he’s right. They don’t.
In a glaring conflict of interest, Charles Rossotti, Commissioner of the US Internal
Revenue Service and former Chairman of American Management Systems Inc.
(AMS), has retained between $16 million and $80 million of AMS stock.
It’s the ultimate insider’s deal. In essence, Rossotti gets a kickback every time AMS, a
computer data-processing company based in Fairfax, Virginia, gets a new government
Rossotti’s ownership of AMS stock was revealed in financial disclosure forms filed in
In 1998, the New York Times reported that Rossotti was the largest individual
shareholder in AMS, a company that had revenues of $1.28 billion in 2000.
Unlike Vice President Dick Cheney who sold his Halliburton Corp. stock and Treasury
Secretary Paul O’Neill who sold $100 million worth of his Alcoa Corp. stock, Rossotti
refuses to divest.
In fact, Rossotti flaunts his conflict of interest and ethically challenged behavior.
Appointed by President Clinton in 1997, Rossotti’s brazen ethics-be-damned position
is buttressed by the fact that later he received an executive waiver of conflict of interest
rules from the Clinton Administration.
According to Insight Magazine ("IRS Boss Snagged Clinton Waiver" by John Berlau,
April 30, 2001), Rossotti got a waiver from Stuart Eizenstat, Clinton’s deputy Treasury
Secretary. This last minute waiver allows Rossotti to participate in decisions regarding
AMS contracts with the IRS. In essence, Rossotti can continue to ensure that AMS
interests - and his own - continue to be served by new as well as ongoing government
Incidentally AMS is supposed to be paid more than $17 million by the IRS this year for
"add-ons" to existing contracts for internal software systems -- the so-called Custodial
Accounting Project (CAP).
IRS continues to give AMS these add-on contracts without taking new bids from any
This egregious corporate-government fraud by IRS Commissioner Charles Rossotti is
unprecedented in recent history.
AMS: Corporate Insiders at the Government Trough
Founded by Charles Rossotti in 1970, AMS has leveraged its insider contacts and
government contracts into a $1.28 billion global business with clients that include
more than 43 state governments and federal agencies.
From 1965 to 1969, Rossotti himself was one of the so-called "Whiz Kids" of Defense
Department Secretary (and unindicted war criminal) Robert McNamara, whose legacy
remains the failed policy to prosecute the bogus Vietnam War.
Rossotti worked in the Office of Systems Analysis within the Office of the Secretary of
The Office’s claim to fame was inventing the use of "body counts" (dead "enemy"
soldiers) as a gauge of "success" during the infamous war....
Rossotti’s IRS Shakedowns: Political Enemies Audited
The long-standing tradition of failing upward has finally landed Rossotti in the office of
Commissioner of the Internal Revenue Service.
According to his website bio, Charles Rossotti "assumed his duties as Commissioner on
November 13, 1997, pledging to turn the IRS into an organization that will consistently
provide first-class service to the American public."
This stance belies the ugly reality of the IRS and its ongoing shakedowns of perceived
political enemies. Its well-known tactics of fear and intimidation have been increasing
steadily, marking the IRS as a reasonable facsimile of Soviet thuggery and/or banana
Since Rossotti assumed office, many political enemies of the administration have
suffered IRS audits. These audits can only be construed as politically motivated de
A partial list of those targeted by Rossotti and his allegedly "kinder gentler" IRS include:
> Joseph Farah and The Western Journalism Center
> Juanita Broaddrick, who publicly accused Clinton of raping her while he was
Arkansas attorney general
> National Center for Public Policy, a group critical of Clinton’s environmental policies
> Bill O’Reilly of Fox News’ The O’Reilly Factor
> Citizens Against Government Waste.
> Catherine Austin Fitts, former FHA Commissioner under Jack Kemp and President
of Hamilton Securities, a company which ironically saved HUD $2.2 billion through its
innovative loan sales/auction. . . .
Rossotti’s AMS Sued for Breach of Contract
The corporate history of AMS is rife with lawsuits.
According to its Proxy Statement (2000), AMS has been sued at least several times by
its own clients for sub-standard performance, shoddy work and breach of contract.
For example, in 1993, the State of Mississippi had contracted with AMS to improve and
integrate its tax collection software. By April 1999, "not a single tax-collection software
program was operational," read the lawsuit, filed on April 22, 1999 against AMS.
On August 23, 2000, a jury found AMS guilty of breach of contract and ordered to pay
the State of Mississippi $474.5 million in actual and punitive damages.
Eventually the case was settled for $185 million, of which about $102 million was paid
by its insurers.
In 1999, AMS Technical Systems, an AMS subsidiary, was sued by Bezeq, the Israeli
telecommunications company. Bezeq alleged that AMS was in breach of contract and
sought damages for $39 million. The case was later settled out of court.
In 1995, AMS’s Form 10-K reported that Andersen had also sued AMS for copyright
infringement and appropriation of trade secrets
Rossotti’s AMS and the
"Missing" $59 Billion at HUD
One of the most outrageous breaches of public trust (or in-your-face fraud) has been
the Department of Housing and Urban Development’s (HUD) "loss" of $59 billion in
Fiscal Year (FY) 1999 and $17 billion in FY 1998.
According to the Government Accounting Office (GAO), the company responsible for
the HUD software system called HUDCAPS was Rossotti’’s company, AMS, as well as
a company called Advance Technology Systems (ATS).
Despite the poor performance, HUD continued to pay on its contract to AMS, even
though the system didn’t work and $59 billion was "missing."
The HUD Audit Debacle was then blamed on the agency’s financial reporting systems,
i.e. accounting software. In fact in her statement to Congress, HUD Inspector General
Susan Gaffney reported that she could not validate an audit of the books.
In other words, there has been no audit of HUD financial statements for 1999. And $59
billion is still "missing." . . .
In May 2000, Gaffney herself told lawmakers that "the material weakness is that HUD
does not have a single financial ledger system in place…… the financial systems
flowing in were incompatible and the system rejected the transactions. The rejected
transactions weren’t corrected in the new ledger system."
Gaffney’s conclusion was that "HUD does not have a reliable and accurate statement of
its financial condition."
In other words, then HUD Commissioner Andrew Cuomo (who plans to run for
Governor of New York, while "losing" $59 billion during his tenure at HUD) used AMS to
install an accounting system, which has never worked.
The HUDCAPS system has supposedly been going online since 1997. According to
Gaffney, HUDCAPS does not work and that a new so-called "add-on" system is being
It’s well known among insiders that "computer glitches" are often used as an
excuse to hide fraud within government agencies.
The Office of Management and Budget (OMB), which has the power to rein in this
fraud by cutting the HUD budget, has heretofore refused to take responsibility.
And, so far, AMS has avoided a PR debacle - primarily because mainstream media has
studiously avoided mentioning its role in HUD’s "missing" $59 billion scandal.
AMS, however, continues to be paid on its $250 million HUD contract - despite its non-performance and its breach of contract in providing HUD with a useable accounting
Rossotti must be smiling. But you’d be smiling too - if you weren’t held accountable.
And if you had between "$16 million and $80 million" worth of AMS stock that was going
up while you slept.
As IRS Commissioner, Charles Rossotti has reached the pinnacle of corporate-government fraud.
After all, who’s going to trifle with the guy?
Gale Norton - From Al Martin Raw, by Al Martin:
From Cradle to Cabal:
The Secret Life of Gale Norton
A True Blue Republican Party Apparatchik Also Rises
Gale Norton, the Bush designate for Secretary of Interior, was Attorney General of
Colorado from 1991 to 1999. She was brought in after her predecessor Duane
Woodard was forced to resign because of his involvement in illegal political
Incidentally Woodard through his involvement in a series of partnerships and
corporations had borrowed over $70 million from the infamous Silverado Savings,
which he never repaid. He was recommended for these loans by then Silverado
Director Neil Bush.
At the same time, Robert Gallagher, the Arapahoe County District Attorney, was
appointed to investigate MDC Holdings Corp., a publicly traded company on the
American Stock Exchange, controlled by the infamous Republican cabalist Leonard
Millman. After an SEC investigation, MDC plead guilty in 1991, paid a $1.5 million fine
and was under SEC supervision for three years.
Then Judge Richard G. Matsch (of the Oklahoma City Bombing Case fame) was
assigned to the MDC Holdings case. Denver US Attorney Mike Norton (no relation to
Gale) was the prosecutor. Prior to his US Attorney appointment, Mike Norton ran for
the Senate, and his campaign manager was the Chief Executive Officer of MDC
Holdings, Larry Mizel.
The Assistant US Attorneys in the case were Joseph Mackey and Greg Graff, whose
brother, Robert Graff, was also an MDC Holdings Director.
Because of public and media pressure, the US Attorneys office indicted several of the
vice presidents of MDC subsidiaries, including Richmond American Homes, one of
the nation's largest builders. They plead guilty.
At that point, Judge Matsch made a statement in open court that he was tired of the
prosecution bringing in low level vice presidents before him and because of the serious
evidence he expected the prosecutors to vigorously prosecute those who were at the
top, David Mandarich and Larry Mizel, and that he would vigorously sentence those
Within days, his daughter was dead.
The bizarre circumstances involved her "falling" into a volcano on Hawaii during a
trip there with her boyfriend. An inside source claims that the boyfriend was planted on
her. He supposedly met her in a grocery store, wined and dined her and had been
dating her for about a month from the time Judge Matsch was assigned to the case.
Then because of the death of his daughter, the MDC case was reassigned to the Chief
Judge of the Tenth Federal Circuit Court, Judge Sherman Finesilver. Finesilver
accepted a $1.5 million plea bargain from MDC and acquitted Mandarich while Judge
Matsch was in mourning.
At that time, Robert Gallagher was appointed Special Assistant Attorney General by the
Governor of Colorado to investigate the alleged political contributions of MDC Holdings.
Colorado Attorney General Woodard was named one of the recipients of illegal
campaign money and he resigned.
With Woodard gone and Gallagher's investigation completed, Gale Norton, the new
Attorney General, took the investigation report and doctored it, eliminating
evidence of wrongdoing by MDC Holdings and its officials, especially Larry Mizel.
And how was Gale Norton paid off?
She was allowed to hire six new attorneys for her staff to interface with Colorado state
officials, congressmen and senators. Eyewitness reports have described only two
attorneys on staff in the basement offices and the other four attorneys were never seen.
Evidently the notorious M & L Business Machines, a subsidiary of MDC Holdings, had
laundered the attorneys payroll checks for Gale Norton's benefit.
In fact, M & L Business Machines president Robert Joseph testified before a US
Federal Grand Jury that the payroll checks for Gale Norton's phantom attorneys were
indeed laundered through M& L Business Machines. Assistants to Gale Norton were
further advised and evidence was turned over to them about their boss's criminal
activity and obstruction of justice.
Later when allegations of corruption concerning Silverado Savings and Loan and
Denver International Airport appeared on an official report, Gale Norton again rewrote
the report omitting any accounts of wrongdoing by her real bosses, Leonard Millman
and the Denver Boys.
When Gale Norton left the Attorney General's office, she was rewarded, given a
partnership at the infamous Denver-based Brownstein Law Firm.
So here are some of the connections. Norman Brownstein was on the Board of
Directors of MDC Holdings, parent company of Silverado S&L and Richmond
Homes, as well as MDC's corporate counsel.
Brownstein was also on the Board of Directors of Chubb Securities, the insurance
company which paid for Bill Clinton's impeachment defense, the Paula Jones
lawsuit damages, and other legal expenses.
Brownstein was on the Board of Directors of AIMCO, one of the largest apartment
landlords in the US, which were former properties stolen from HUD.
Other MDC Directors include illegal campaign money and narcotics money launderer
Larry Mizel, HUD scamscateer Phil Winn, recently pardoned by Bill Clinton, as well
as Clinton's personal attorney, James M. Lyons, who was also involved with the
Whitewater Development fraud and illegal campaign money laundering related to
Clinton's 1992 presidential campaign.
M&L Industries was controlled by MDC Holdings Group, which is Leonard Millman.
Gale Norton then was given the lucrative partnership with the law firm of Norman
By the way, Brownstein, a former Bush-era CIA counsel, made his claim to fame in
representing Republican-connected scamscateers and CIA-connected dopers in the
Brownstein was also co-counsel for the defense of Jack Devoe. Devoe was the
largest CIA-connected cocaine trafficker during Iran-Contra. Devoe received
sentences totaling 117 years and spent 22 days in jail. Then he was allowed to leave
the United States and take up residence in India, of all places. (For more details, see
When the SEC asked Norton to investigate the Boulder Properties Limited
Partnerships, she dragged her feet and again came up with a clean report.
The assets of these limited partnerships was defaulted HUD property picked up by
Leonard Millman, appraised for twice its value, and also formerly owned by Millman
himself. The financing for it came from a loan from Silverado S&L personally approved
by Neil Bush. Neil Bush then was put on the Board of General Partnership of the
Boulder Properties Limited Series.
The intent of the Boulder Properties Limited Partnerships was to market them to
potentially hostile Democrats in Congress for the purpose of compromise and control.
Congressman William V. Alexander, Democrat of Arkansas, for example, purchased
one of them through Jonathan Flake, an officer of the selling agents, Twin Cities Bank
of North Little Rock, Arkansas, and a cohort and close business associate of Oliver
Alexander made the purchase for $3 million dollars. No money down. Just recourse
notes. Then in 1992, he was approached by Flake and asked to stop his Alexander
Commission's Iran-Contra probe. Alexander refused. The notes were pulled and made
full recourse. Since the partnership was not paying out any cash dividends anymore,
Alexander had no choice but to declare bankruptcy. Congressman Alexander formally
complained to Colorado Attorney General Gale Norton.
Again Gale Norton undertook no action.
For the record, Gale Norton also used her authority as Attorney General to fight any
increase in mining and mineral lease fees in the State of Colorado. which had not been
raised since 1872. She was also involved in keeping prices down on grazing fees,
since her patron Leonard Millman, a large landowner, was on the Colorado beef
marketing board. She continued to serve Leonard Millman by allowing the sale of
BLM property at below market value.
Millman's companies, Richmond Homes and Red Hawk Homes, as well as Venrock
and Phoenix-based Olympic Corp., were the beneficiaries of her fraud. As US
Secretary of Interior, Gale Norton will be able to orchestrate the continuing cover-up
pertaining to sales of BLM land at below market value.
Before she's confirmed, Gale Norton should probably be tested for drugs. Doreen
Bishop, the infamous Denver political gadfly, involved in Woody Harrelson's
campaign to legalize marijuana, claims that she supplies Norton with high grade
sinsemilla. According to an inside source, she grows very high quality marijuana on her
property, which an eyewitness reports "look like trees."
She claims she sells the marijuana to all the politicians, including former Colorado
Governor Romer, Gale Norton and "all the Denver crowd." She said even Denver
Mayor Wellington Webb's wife came over and picked some up for him.
The eyewitness also said that "this is the only gal I know where the FBI goes out to her
house, stares at her marijuana plants and says, 'Wow, I didn't know they grew this big.'"
Incidentally, Norman Brokaw, the head of William Morris talent agency, is Doreen
Bishop's uncle. Her cousin is Tom Brokaw of the NBC Nightly News.
Doreen Bishop also admitted that Oliver North was "taken care of" to the tune of $40
million. Of course, North, formally represented by William Morris, has claimed that any
payments made by William Morris were for his book or for appearances. Yeah, sure,
It's well known that Ms. Norton frequents a certain Denver drinking establishment which
caters to a female clientele of a certain sexual persuasion. There is also a prominent
Denver area woman involved in politics who has publicly revealed the nature of her
relationship with Ms. Norton to a prominent political investigative journalist with the
Rocky Mountain News. Since this column is devoted to serious political matters,
perhaps it would be in the domain of the tabloid press to pursue these well-documented
For more on Gale Norton, GO TO > > > Bureau of Indian Affairs; Heavens and Earth;
The Biotech Birds
Solari is managing the liquidation of The Hamilton Securities Group, Inc.
Our project name for this process is "Gideon", named after the Biblical leader Gideon
who was asked by God to free Israel from the captivity of the Midianites. (The Bible –
The thing we best remember about Hamilton was how wonderful it was.
The people were great. The work was challenging and interesting. Everyday was a
learning experience, with software developers and young people from around the world
working and learning side by side with Wall Street investors, government leaders and
old style community activists.
Hamilton redefined the meaning and the power of the word diversity.
We believed we could do good and make money. We believed that new technology had
filled the world with possibility. We believed that the creation of wealth could help
address many problems. We believed that hard work and extraordinary performance
could depend on the rule of law. We were wrong, but for a few years, how wonderful life
was and how full of hope....
Hamilton was an employee owned investment bank in Washington, D.C.
Hamilton was founded by Catherine Austin Fitts in 1990 and ceased operations in
~ ~ ~
THE SWAT LIST:
AUDITS, INVESTIGATIONS, INQUIRIES,
LEAKS, CONFLICTS OF INTEREST,
HARASSMENT AND SURVEILLANCE
“They'll never suspect the old double framus” – Howling Mad Murdock,
"Swat" is the term we use to refer to a multiple action/agency effort by government
agencies, often with the participation and assistance of private "informants," individuals
and companies, to profit from the destruction, asset seizure or black mail of the target.
The purpose is to satisfy the goals of one or more private special interest groups and/
or governmental covert operations.
We first learned how a Swat worked when Catherine Austin Fitts, founder of Hamilton,
served as Assistant Secretary of Housing/Federal Housing Commissioner at the
Department of Housing and Urban Development during the Bush Administration
and watched senior government officials order companies destroyed in this manner.
With the HUD loan sales, Hamilton was helping to reengineer and decentralize
government to advantage taxpayers and communities as opposed to special interest
groups. Because of the risks associated with recommending changes that would
disadvantage powerful special interest groups, Hamilton was operated in a transparent
fashion in the hopes that open disclosure would reduce the risks associated with any
possible "swat" attack.
As part of this plan to avert "swat" assaults, Hamilton carefully designed its operations
to withstand close unethical scrutiny by those who might wish to involve Hamilton in
>> Salaries were kept low, bonuses were paid with equity, all checks required multiple
signatures, monthly financials were posted on the Hamilton network intranet.
>> All of Fitts's assets were kept within the United States and all personal financial
records were disclosed to Hamilton’s chief financial officer and managed by an
>> Hamilton was audited by Big 6 accounting firms, had a Board of Directors and
audit committee overseeing the Chief Financial Officer and also had special audits by
government contracting firms and advice from counsel expert in government contracting
to ensure a very high standard of performance that was known and understood widely
by employees and entities doing business with Hamilton.
Because of the viciousness with which the charge of "conflict of interest" was raised
through carefully placed "rumors" and "leaks" heard by Hamilton contacts and HUD
program staff, Hamilton made a determination not to engage in financial advisory work
for private clients and not to develop its planned trading operation until it was free of its
last HUD contract.
Unfortunately, Hamilton did not anticipate the ferociousness with which HUD would
attack and that such attack would involve HUD's destruction of its own internal financial
controls and the use of its own contractors as a scapegoat, as a means of justifying the
return to policies favoring special interests....
While it can be argued that some of these events may have occurred in the ordinary
course and that the confluence of any two or three might be coincidence, we think that
if you look at events over a period of years, the pattern that emerges speaks for itself.
In viewing this pattern we would make several comments:
>> The nature of a successful covert operation is to achieve one’s goals without the
general public’s being aware that a single force is responsible for what appears to be a
series of unrelated events. The solution to the problem of bright, tenacious members of
the independent press who tend to expose such operations for what they are or might
be is to discredit their work as unsupported and to label them as nuts. Witness Gary
Webb and his newspaper series and book Dark Alliance, which inspired a CIA
Inspector General’s report that affirmed Webb's assertions that individuals involved in
CIA covert operations were witnessing, facilitating and profiting from the dealing of
illegal drugs on a massive scale.
>> The best way to prevent someone from harming your credibility by exposing the
truth is to carry out a preemptive attack in which you accuse that individual of taking
part in the very type of behavior that you are attempting to cover up. That way, when
the time comes that the truth teller could harm your credibility, he or she will look silly or
be ineffective. So, as an example, if you are guilty of insider trading, you attack any
potential accuser for insider trading. And so forth. One of the best clues to understand
who is behind a swat attack of the kind that Hamilton experienced is to simply
determine: Who is in fact engaging in the type of behavior that Hamilton was accused
of and needed a scapegoat? Specifically, who was concerned that Hamilton’’s
promotion of on-line access to government information would illuminate its illegal
>> In many, if not most, instances of scandalous and immoral behavior by those in
positions of authority, plausible deniability is key. Each person who contributes to the
illicit affair must be able to avoid seeing the world whole and placing his or her behavior
in the overall plan. Each participant must be able to delude himself or herself into
believing that the actual result was not intended, that he or she was merely following
orders and acting for the well-being of his or her family and organization members. For
this reason, very few of those who carry out the "plan," if you will, recognize they are in
fact members of a team. So, a HUD official does what is asked and as a result enjoys
big budget increases. This official believes himself or herself free of any responsibility
for the overall result and harm to taxpayers or for the destruction of internal controls
and program integrity at HUD.
It is not necessary to the success of a covert operation that each participant has the
same or even similar interests to those of other participants, that participants belong to
the same political party or recognized social class, or even that the participants know
Picture a train.
A very few passengers get on at the first stop and travel to the end of the line. Most get
on and off at different points, with no awareness of the destinations or identities of the
other passengers. But all have an interest in going in the same direction and arriving at
their own individual destinations along the way without impediment, burden or undue
cost or risk.
When special interests can control large amounts of government and private
funding to get what they want, it is not hard to see lots of government officials
undertaking multiple actions that result in a common economic end....
Richard Lugar - From The Buying of the President (1996): The fact that Indiana
Senator Richard Lugar is not generally considered to have a real chance of winning the
1996 Republican nomination for president doubtless says more about the process than
the candidate. . . .
Lugar was born in 1932 in Indianapolis. Just after attending Ohio’s Denison University
in 1954, he became a Rhodes scholar, got married, and then enlisted in the Navy to
serve as an intelligence officer . . .
When Lugar was a child, he thought Indianapolis’s historic Marrott Hotel– where Betty
Grable and other well-known personalities used to live– was quite impressive. . . . Over
the years, however, the old hotel had fallen on hard times and needed a serious
In 1982, Indianapolis developer Kenneth Puller decided it was time to restore some of
the grandeur of the building and spearheaded a project to covert the hotel into upscale
apartments. But in order to finance the renovation, Puller needed a loan from the
Department of Housing and Urban Development. That’s where his friend Dick
Lugar came into the picture.
“I remember Mr. Puller and his wife were contributors to my campaigns,” Lugar told the
Center for Public Integrity. “And I think they contributed in more than one instance ...
They were active in the Indiana builders and people who wee doing work for the
builders.” . . .
Lugar’s aides, with the senator’s approval, lobbied HUD officials in Washington, D.C. to
approve the loan, despite the fact that the Indianapolis HUD branch had initially
rejected the project. Lugar told the Center for Public Integrity that he had sent a letter
to HUD on Puller’s behalf.
In a letter to a Kentucky newspaper, Lugar explained, “A member of my Senate staff
worked with the city of Indianapolis and with HUD to convince the latter to take a longer
term view and to support the project. . . .
At the time, Lugar was chairman of the Senate Housing and Urban Affairs
Committee. Two weeks afer the Indiana office rejected the Puller loan, a Lugar
supporter and campaign contributor, Martha Lamkin, was appointed to take over the
Indianapolis HUD office. She and her husband gave $2,455 between 1979 and 1994.
Lamkin told Newsday that she was instructed by the regional HUD officers to approve
the loan immediately.
Puller was successful in securing a nearly $13 million HUD loan. But by early 1989,
despite the fact that most of the apartments in the renovated Marott Hotel were
occupied, he was forced into default on the loan after higher-than-expected
construction costs rendered Puller unable to pay back the debt. HUD wound up buying
back the mortgage, costing taxpayers millions.
The hotel was sold at auction in January 1994 for $2.5 million. . . .
Lugar also helped Puller in early 1980s when the senator wrote to HUD officials asking
that Puller be admitted into a new HUD program called “co-insurance.” The program
replaced HUD staff with private entities who would receive fees for processing loans for
housing projects “by selling securities backed by the Government National Mortgage
Association,” according to Newsday. If the private lenders defaulted, the government
would assume 80 percent of the cost.
Puller’s company was the first to participate in the program, where he eventually
developed $400 million worth of HUD-backed projects, with the potential for Puller to
earn tens of millions of dollars. However, in 1989, HUD indefinitely suspended Puller’s
Lugar told the Center for Public Integrity that he helped another campaign contributor,
J. Irwin Miller, the chairman of Cummins Engine Co., and other citizens of Columbus,
Indiana, obtain HUD financing for a development project there. Lugar actually visited
then-Secretary of HUD, Samuel Pierce, to discuss the matter.
Miller, whom Lugar described as “one of the patron saints of the country,” has donated
$4,850 to Lugar’s Senate campaigns. . . .
< < < FLASHBACK < < <
From salon.com, April 20, 2000:
Hillary brings in a glamorous group of
givers in New York Senate race.
By Jesse Drucker
In what is sure to be the most expensive U.S. Senate race of all time, Hillary Rodham
Clinton and Rudy Giuliani continue to raise money at a torrid pace. Giuliani has raised
nearly $20 million in campaign funds -- including soft-money donations -- while Clinton
has raised roughly $16 million in soft- and hard-money contributions.
The two candidates' most-recent filings, made available this week, revealed the latest
round of fat cats who want to influence the outcome of the election and presumably, the
After the reports were released, the campaigns quickly traded charges and
countercharges attacking the ethical hygiene of the opposition's contributors. The
Clinton campaign said it would return $22,000 from a Miami businesswoman who once
helped solicit a contribution to the Democratic National Committee from an admitted
cocaine trafficker now in prison.
The Giuliani campaign, meanwhile, came under attack for accepting $100,000 from the
Renco Group, a company whose holdings include Magnesium Corp. of America,
which was cited in a 1998 federal Environmental Protection Agency report as the
nation's top dumper of toxic chemicals.
Both campaigns have established soft-money committees to essentially bypass the
federal restrictions on campaign contributions, resulting in some enormous donations.
"It is grotesque," said Don Simon, general counsel to Common Cause, which along
with Democracy 21 has filed a complaint with the Federal Election Commission about
the fund-raising practices of the two campaigns.
“You have Senate candidates here openly engaged in the solicitation of contributions
far in excess of what the federal rules allow. Those rules have been put there in order
to protect the political process from corruption and the appearance of corruption and
those rules are just being flouted," Simon said.
Not surprisingly, donors to Giuliani's camp include scores of businessmen, many of
whom have contracts with the city. They include real-estate developers Douglas Durst,
Bernard Mendik and Edward S. Gordon, city bus franchise holder Edward Arrigoni,
and builders Joseph Mattone and Lester Petracca.
Financial services company American International Group (recipient of a nearly $56
million city tax break in 1997) gave $20,000.
Several longtime powerhouse national GOP contributors also ponied up for Giuliani.
Venture capitalist Thomas McInerney gave $50,000, retired Amway head Richard
DeVos and his wife Helen each gave $1,000, television station owner Herbert J.
Siegel gave $20,000.
Team Giuliani also attracted plenty of conservatives with national name recognition
including columnist William F. Buckley and former Secretary of State Henry
Hillary's camp, meanwhile, is also being courted by plenty of businesspeople and their
emissaries. Financier Bruce Wasserstein, investor Warren Buffett, developer
William Zeckendorf and lobbyist Thomas Boggs appear on Clinton's contributor list.
The influence of Clinton's husband, who will be in New York with his wife and Al Gore
on Monday for a DNC fund-raiser, is felt as well.
Friends of Bill on Hillary's list include attorney and presidential advisor Lloyd Cutler,
attorney Richard Ben-Veniste (who represents Terence McAuliffe, President Clinton's
chief fund-raiser), former HUD secretary Henry Cisneros and former White House
counsel Charles Ruff.
Other contributors to the Clinton campaign include Joyce Dinkins, wife of former New
York Mayor David Dinkins, People for the American Way official Barbara Handman,
feminist icon Eleanor Smeal and Coretta Scott King.
Like her husband, Clinton has no shortage of celebrity donors, including: actors James
Garner, Chevy Chase and Sally Field, deejay Casey Kasem, Talk magazine executive
Devereux Chatillon (remember the puff piece on Clinton in the magazine's first issue?),
music producer Quincy Jones, publicist Susan Blond, former Cosmopolitan editor Helen
Gurley Brown, author Dominick Dunne, musician Don Henley, director Ron Howard,
screenwriter Paul Schrader, film editor Thelma Schoonmaker and Playboy CEO
But perhaps the most intriguing contribution on the list was the $7,000 Clinton received
from the law firm Kirkland & Ellis, home to former independent counsel Kenneth
Starr, still on unpaid leave from the firm.
Copyright © 2000 Salon.com All rights reserved.
August 30, 1999
Counsel Has Previous
David M. Barrett, the independent counsel
investigating Henry Cisneros.
By Dan Morgan, Washington Post
David M. Barrett, the independent counsel prosecuting former housing secretary
Henry Cisneros, brings a unique perspective to the job: Before Barrett was selected
four years ago to investigate Cisneros, his own dealings with high-ranking officials at
the Department of Housing and Urban Development were scrutinized by an
independent counsel looking into a Reagan administration scandal.
No wrongdoing was ever alleged against Barrett, 62, a Republican activist who has had
a varied career as a lobbyist, lawyer and Washington deal-maker. But that brush
with prosecutors is part of a background that includes a number of twists and turns
unusual for an independent counsel.
It includes close associations with at least two former HUD officials who were convicted
in the HUD scandals of the 1980s. Barrett himself was questioned by prosecutors as
part of the investigation.
Years later, after Barrett was chosen to look into Cisneros's statements about whether
he lied to the FBI about payments to his ex-mistress, Linda Jones, a company Barrett
set up to receive revenue from a Washington television tower came under scrutiny by
another independent counsel, this one investigating the late Commerce Secretary
Ronald H. Brown. Barrett did not report on his financial disclosure form that he was an
officer and director of that company in 1994.
Although the independent counsel statute expired June 30, Barrett's mandate to
complete his $9 million investigation of Cisneros continues under terms of that law.
Cisneros's trial on 18 felony charges that he lied to the FBI and the Clinton presidential
transition team about payments to his ex-mistress is now scheduled for September. In
July, Barrett agreed to drop criminal charges against two former Cisneros aides.
While Barrett's friends praise his probity, critics say his selection underscores the
mysterious--and, some say, erratic--way that independent counsels have been selected
by a special judicial panel.
The 1978 law responded to concerns that the attorney general would always be
perceived as biased when investigating the president and high administration officials.
As a result, critics of the counsel selection process say, it is imperative that those
holding the uniquely sensitive and powerful position be free of the slightest trace of
partisan taint, personal conflicts or background questions.
Barrett "would not seem to most people to be an 'A' choice," said Charles Lewis of the
Center for Public Integrity. "Why he was chosen is frankly mystifying." Barrett's history
of being "deeply enmeshed in the housing contract culture," Lewis said, makes for a
"peculiar juxtaposition" with his current role.
Friends in Barrett's circle of Washington judges and lawyers bridle at any criticism of his
ethics or qualifications. "He has a wonderful sense of decency and integrity that you
don't find in this town very often," said Washington lawyer Robert J. Higgins.
Barrett declined to be interviewed, and Judge David B. Sentelle of the U.S. Court of
Appeals for the D.C. Circuit, who has presided over the judicial selection panel for more
than six years, did not respond to written questions about the Barrett appointment.
In a short letter to The Washington Post, Barrett said that "the screening process [by
the judges] included thorough inquiry into my past work, including all matters involving
At Senate hearings in April, Sentelle defended his screening system, saying he and his
fellow judges "cross-examine [candidates] pretty thoroughly" and have eliminated those
with "something that would have caused a bad appearance."
But neither of the two independent counsels who oversaw the investigation of abuses at
HUD, Arlin M. Adams and Larry D. Thompson, could recall being contacted by Sentelle
about the Barrett appointment.
"There's no way of knowing what due diligence they [the judges] do," said Georgetown
University law professor Julie O'Sullivan, an expert on the counsel law.
Barrett is a lawyer with a significantly different profile than many of his
predecessors--without either extensive experience in criminal prosecution and defense
or an illustrious title in his resume such as former federal judge.
Instead, Barrett spent much of his career as a commercial lawyer with an eye for
business opportunities, often involving HUD. When appointed, Barrett was a registered
lobbyist for a large manufactured-housing company.
Barrett said in his letter to The Post that he had no contact with HUD officials after his
appointment and gave up clients with matters before HUD "at some personal sacrifice."
During the year after his selection, while he was launching the Cisneros inquiry, Barrett
reported earning $302,793 in outside legal fees and received more than $1 million in
stock options from a Pennsylvania environmental company.
After brief stints as an assistant U.S. attorney in Washington and county attorney in
Indiana, he made a failed bid for a U.S. House seat from Indiana in 1968. Barrett
subsequently labored as a GOP fund-raiser, organizer and activist, volunteering for
Lawyers for Reagan in 1980. The group's chairman, Edward L. Weidenfeld,
remembers that Barrett was "politically seasoned and seemed to know a lot of people."
The Reagan administration seriously considered Barrett for a federal judgeship, but he
"could not afford to take it," according to Fred Fielding, Ronald Reagan's White House
counsel. Instead, Barrett threw himself into lobbying, law and business, concentrating
heavily on HUD. In 1988, he was well-heeled enough to lay out $500,000 as a one-time
premium for a life insurance policy, according to his financial disclosure reports.
Information gathered during the investigation of Reagan administration HUD Secretary
Samuel R. Pierce Jr., along with inquiries by congressional committees and the HUD
inspector general, shows that Barrett was part of an interconnected group of
lobbyists, consultants, and current and former HUD officials who benefited from
high-level access to HUD at a time when corruption in the department was
Rep. Tom Lantos (D-Calif.), who conducted hearings into the HUD scandal in 1989-90,
denounced Barrett's 1995 appointment. He "clearly benefited from influence-peddling at
HUD during the Reagan administration," said Lantos, who likened his selection to
"appointing the well-fed fox to investigate missing hens at the chicken coop."
At the Reagan housing department, Barrett was acquainted with Pierce's executive
assistant, Lance H. Wilson, who had worked with him in Lawyers for Reagan and on
the Reagan transition team.
Barrett also befriended Thomas T. Demery, a former Michigan real estate operator and
GOP fund-raiser who became federal housing commissioner in 1986.
Demery told the independent counsel for Pierce that Barrett helped him get the job.
Once Demery was situated at HUD, phone logs and other records show, Barrett was in
frequent contact with him, organizing meetings, meals, parties and out-of-town travel. In
a 1987 memo to GOP presidential candidate Pat Robertson, Demery said Barrett
could provide fund-raising help "with the Republican machine."
Two months later, Barrett's partner in two Tulsa housing developments wrote to
Demery's office seeking an easing of HUD rules for an apartment building that was
seeking federal subsidies.
During questioning by a House committee, Demery initially denied that he had ever
discussed the Tulsa projects with Barrett. But the committee introduced a May 1987
entry from Demery's phone log, noting that Barrett had called "re: Tulsa Hsg Auth . . .
needs your help . . . A letter from him is in your box."
Demery told the committee he did "not remember this particular situation."
A week after the Barrett message, however, Demery's office sent a letter to Barrett's
Oklahoma partner, George Carnes, approving the loosened rules. Carnes told HUD
auditors in 1988 that he "needed Barrett's financial backing" and that Barrett was
"well-connected in Washington," though he insisted that Barrett never provided special
help to him at HUD.
The mortgage company that made HUD-subsidized loans on the Oklahoma properties
later pleaded guilty to concealing illegal payments to Wilson, who by then had left
HUD, for his help in obtaining the loans. The illegal "finder's fees" involving the
Oklahoma properties were featured prominently in the Pierce independent counsel's
report released last October, well after Barrett had become the Cisneros independent
counsel. Barrett's name was not mentioned in the report.
Demery also figured in another HUD decision that benefited a client of Barrett's,
according to the 1990 report of Rep. Lantos's committee. Demery's appointment
schedule showed that he met in May 1987 with Wilson and a developer seeking HUD
subsidies for a project in St. Louis. Two months later, the House report said, Demery
allowed the project to proceed, despite objections from local housing authorities that the
area was oversaturated with HUD-backed housing.
A 1989 HUD audit of the project revealed that the developer paid Barrett's law firm
$83,400 in 1987. Later that year, Barrett wrote a $40,000 check to Wilson for
"HUD-related work," according to the Lantos report.
Wilson invoked the Fifth Amendment rather than testify before the Lantos committee
and declined to be interviewed for this article. A lawyer friend of Barrett's said the
$40,000 payment was a private transaction between his law firm and Wilson, and noted
that the independent counsel looked at the transaction and took no action.
Wilson and Demery were convicted on HUD-related charges separate from their
dealings with Barrett. Wilson's conviction was reversed on appeal. Demery received
Prosecutors for the Pierce independent counsel questioned Barrett for about an hour
about his contacts with Demery and others, and also subpoenaed records of some of
his clients, sources said. "It was my very clear impression that they viewed Dave's
conduct in all respects as not inappropriate," said his lawyer at the time, Mark Tuohey.
Soon after Barrett took office in 1995, a company in which he was involved was drawn
into an investigation by an independent counsel probing the business dealings of the
late Commerce Secretary Brown.
Barrett set up Silverbar Communications Inc. in Delaware in 1994, and the
company's annual report lists him and a law client, Fort Worth financier John A.
Freeman Jr., as the sole officers and directors.
In late 1994, Freeman--who had been a top official of a bankrupt Texas savings
and loan--was involved in a complex series of transactions that ended with
Silverbar taking over a note from the Resolution Trust Co. that gave the company
the right to revenue from the Channel 50 television tower in Washington.
Prosecutors came across Silverbar and Freeman when they were probing the business
activities of Nolanda S. Hill, Brown's onetime business partner and former president of
the company that owned Channel 50. They wanted to know if Hill or Brown had a
hidden interest in the TV tower.
When Barrett learned Silverbar was under investigation, he demanded that his name be
removed from corporate papers, according to a friend. An attorney for Freeman said
nothing unlawful was ever alleged about Freeman or Silverbar. Barrett reported on his
federal financial disclosure form for 1994 that he received more than $5,000 in legal
fees from Freeman that year. But he did not disclose that he was a director of Silverbar,
as the statement he filed with the U.S. Office of Government Ethics appears to require.
A friend said the apparent oversight occurred because Barrett had no financial interest
in Silverbar and considered his involvement with it "de minimis."
"Dave Barrett is a good, decent guy," he added. "If there are some chinks in his armor
they are de minimis."
© 1999 The Washington Post Company
FLASHBACK > > > From Reader’s Digest, April, 1968:
FEDERAL AID TO CITIES – THE
By Earl Selby
Our large cities are today facing their gravest crisis.
They are pock-marked with slums, joblessness, crime and disease. Every day they
lose more ground in the fight against blight. Increasingly the poor, the illiterates, the
unemployables are finding haven within their boundaries. Meanwhile, they are losing
their greatest resources – their affluent people, their industries, their sources of tax
There was a time when American cities had financial muscle to deal with such misery.
As recently as 1932, local governments collected more that 50 percent of all taxes; by
1967 they were down to 14 percent.
And the states got only a shade more. Out of every three tax dollars, the federal
government takes two. So when cities look for rescue they know where to look.
In response to the steadily worsening urban crisis, Washington has done everything
except what it should have done first – THINK!
The federal establishment – Administration, Congress, the bureaucracy – has thrashed
around, scattering billions of dollars in a spree of uncoordinated and often unsuccessful
A number of these programs, instead of helping, have actually contributed to the
problem. . . .
Camps of the Abandoned
For more than three years I have been looking at our sick cities – some with only a
slight fever, others on the critical list. I have talked with mayors, governors,
Congressmen, administrators. I have also been with the people in the slums. The
disparity between what the experts talk about doing and what is actually going on in
these decaying, dying neighborhoods is staggering.
While protesting its devotion to the dispossessed, the federal government itself has
been a major cause of driving the poor deeper into ghettos.
According to Prof. Scott Greer of the Center for Metropolitan Studies at Northwestern
University, government urban-renewal programs, costing three billion dollars, have
“materially reduced the supply of low-cost city housing.” It’s FHA mortgage-insurance
policies, oriented to the suburbs, have encouraged middle-class whites to flee the cities.
Its welfare policies, pouring in as much as two billion dollars a year in rental payments
for families who can find only substandard housing, have been a slumlord’s best
No one set out to punish the poor, the disadvantaged, or to make the inner cores of our
large cities little more than camps of the abandoned.
But that is what they are. And the federal government has helped to aggravate this
In the Worm Can
In the absence of any overall strategy, nearly everyone in official Washington plunged
into the game of “Save Our Cities.” The result is a nightmare!
Sen. Edmund S. Muskie, chairman of a subcommittee which for three years had been
studying government’s labyrinthine channels, found that 21 federal agencies with 150
bureaus in Washington and 400 offices in the field, direct 220 federal-aid programs
financed by 403 separate appropriations. Intertwined, overlapped and indistinguishable
as to beginnings, middles or ends, the programs are like one huge can of worms.
Local officials simply get lost in this tangle. Even when they find a program that seems
to offer needed help, their applications frequently sink into confusion. The National
League of Cities told Congress that federal agencies maintain a “delay by shuffling
process.” . . .
Horn of Plenty
During the period when the Johnson Administration was drum-beating for support of its
multimillion-dollar “model cities” bill, a government official told a mayors’ meeting in
Dallas: “Your time is now! When Vietnam is behind us and the federal treasury is once
again embarrassed by overly large revenue dividends, the surpluses are likely to be
preempted by those with the best prepared and politically most compelling claims.”
With statements like that, it is hard to fault local governments for trying to belly up to the
smorgasbord of federal-aid programs. Indeed there has been so much loose talk about
the vast sums being spent for the cities that one might be excused for thinking the horn
of plenty was inexhaustible.
Just how much IS being spent? Nobody really knows!
In August 1966, for example, Secretary Robert Weaver of the Department of
Housing and Urban Development testified before Sen. Abraham Ribicoff’s
subcommittee that “federal financial commitments making a direct impact on urban
problems increased to over $28 billion in 1966.” The next day, Nicholas Katzenback,
then Attorney General, put the figure for “direct urban spending” at $13 billion. Two
days after that, President Johnson, in the flush of a Congressional campaign, cited the
amount “of federal investment in our cities” as “almost $30 billion.”
On investigation, Senator Ribicoff found that Weaver listed as “urban aid” $185 million
for rural electric and telephone projects, $43 million in rural housing loans and
$1,500,000 for farm-labor housing. The Senator also said that Katzenbach’s tally
seemed to be based on a federal report which included $300,000 for the Pacific
“Something is wrong,” said the New York Times, “when no one in the
Administration knows just how much is being spent and just what it has to show
for its outlays.” . . .
From Reader’s Digest, May 1968:
CLEVELAND IN CRISIS:
AN URBAN-RENEWAL TRAGEDY
By Earl Selby and Robert S. Strother
One Monday evening in July 1966, there was a disturbance in a bar in Hough, a slum
section of Cleveland. Memories differ as to how it started. Some say that a Negro
customer was refused a glass of water; another account claims that a Negro
streetwalker was told by a white man that she wasn’t welcome in the place.
Almost immediately, a rumor began spreading in Hough (pronounced “huff”) that the
bar would no longer serve Negroes. Within hours, the bar was robbed. A fire broke out
nearby. A mob of 300 gathered and, shortly thereafter, rioting began. For the next five
days, Cleveland went through a siege of arson, looting and general mayhem. It took
2000 National guardsmen to restore order....
Investigations mounted by citizens’ groups, newspapers and a special grand jury drew
conclusions that differed little from those reached by investigators of similar outbreaks
elsewhere: the basic cause lay in the frustrations of life in a degenerating ghetto.
Deep-seated bitterness was bred by poverty, unemployment, segregation. In
Cleveland, however, there was an additional reason for frustration: the positive harm
done to the poor by a program specifically designed to help them – urban renewal.
At the time of the riot, Cleveland had commitments from Washington for $60 million in
federal urban-renewal funds. More than half, perhaps as much as two thirds, had
already been spent in the city. Some 6000 acres, double the acreage lined up by any
other city, had been designated for renewal projects. Planners had been confident that,
with the federal government paying most of the bills, Cleveland would wipe out its
It didn’t happen.
Instead of improving the housing available for the poor, urban renewal actually
diminished it! And most of the dispossessed victims of this “progress” were left to
scramble for shelter in the city’s already overcrowded Negro sections.
In addition, real estate worth $26 million that was acquired for renewal was allowed to
remain unused – some of it for years – producing no tax revenues. In 1965, after a
decade of the program, the city’s records showed that renewal, predicted to increase
the tax base by many millions of dollars, had actually decreased it by $2 million.
Anatomy of a Slum
There is much to be learned from Cleveland’s story. In particular, the agony of Hough
illustrates how a badly administered renewal program can speed the decay of an
American inner city instead of arresting it.
Hough was for may years a pleasant residential area, with tree-lined streets, neat
homes, well-kept apartments. Then, after World War II, hundreds began streaming in
from depressed Appalachia, to be followed by a crushing influx of Negro families. Many
of Hough’s middle-class residents fled to the suburbs.
An intelligent plan for housing-code enforcement, renovation and relocation might still
have improved the lot of Hough’s overwhelmingly Negro population. Instead came
Cleveland’s urban-renewal program.
Under urban renewal, a city generally receives from the federal government two thirds
of the net cost of a slum-clearance project. After the land is cleared, the city can sell
ground to private developers, who add to the city’s tax rolls with new construction.
Although the program has benefitted some cities, notably New Haven, in Cleveland it
was for years an unqualified disaster.
The trouble began after the very first project was started in 1954. In clearing a run-down area to make room for a new residential complex known as Longwood, Cleveland
neglected to make reasonable provisions for sheltering the people whose homes were
being bulldozed. Hundreds of Negro families were forced out, all at the same time, so
that they were simultaneously competing for what housing was available.
In rigidly segregated Cleveland, most had only one place to go – deeper into the East
Side’s Negro communities. The sudden influx began the transformation of Hough from
a somewhat dilapidated neighborhood into a vast breeding ground of misery.
When the next project, Garden Valley, was set in motion in 1956, the city promised to
make greater efforts to assist up rooted residents.
The results were not impressive. Many families wound up making their own
arrangements as best they could. The city had no record of what happened to some of
them. Apparently they were so distrustful of the city’s helping hand that they preferred
to wage their own struggle for a new home without even applying for aid.
Both the Longwood and Garden Valley projects proved financial failures in their early
The initial rents, running more than $100 a month, were too steep for the poor, and
middle-class tenants simply weren’t attracted to the area. The projects had to be
refinanced with low-cost government loans. . . .
A third project was begun in the St. Vincent area in 1959. This time, approximately
1200 families moved out even before the city told them to leave. They obviously
expected no effective assistance and decided to beat the traffic to whatever housing
might still be available.
The St. Vincent plan had originally called for a new residential community with 2424
new housing units for upper-income people. The city proceeded to clear the land. But
then no builders came forward to put up the new housing.
And so the land remained vacant....
East Woodland, launched in 1960, presents one of the dreariest of all chapters in the
First, the area was marked for residential purposes. Businesses were chased out, and
the city spent about $2 million to buy 126 buildings, of which 100 were torn down. At
the same time, homeowners were encouraged to invest up to $6800 each to
rehabilitate their residences. But financing couldn’t be found for residential
development, so in 1964 the city switched the area to industrial use. This raised the
threat that the improved homes would have to be cleared away in the effort to lure back
the departed businesses.
Another grandiose plan was Erie-view, a proposed downtown mecca begun in 1961 in
the hope of creating 4,700,000 square feet of new office space and 5500 luxury
apartments. The paper dreams spiraled into disaster. Private developers didn’t rush in,
and instead of the eye-pleasing blend of buildings, fountains, walks and views of Lake
Erie, as envisioned by the city, Erie-view became a wasteland of parking lots dominated
by one new federal building, a commercial skyscraper and an apartment building....
Then there was the University-Euclid project (which includes Hough). As initiated in
1962, the primary goal of this program was to rehabilitate 2011 buildings and houses.
By the end of 1966 ... exactly 226 (11%) of the homes had been repaired. Meanwhile,
blight had overtaken far more properties than that.
The Cure That Didn’t
By this time, most Negroes realized that urban renewal meant Negro removal, and
as project piled on project, about the only possible place to go was Hough.
This was like trying to force two quarts of milk into a pint bottle. Three or four families
were packed into single-family homes; apartments were cut up into cubicles. By the
mid-1960's, Hough had deteriorated into a teeming compound of rotten houses, cheap
bars and littered streets that bred crime, prostitution, illegitimacy and disease.
Unemployment ran as high as 60% on some blocks. Welfare supported nearly one of
every four Hough residents.
Meanwhile, as the squalor increased in this area, thousands swarmed into other
previously stable neighborhoods, setting in motion there the insidious mechanics of
In Hough, it was plain that this involved a breakdown in city services. Slum people said
they often had to wait hours before police responded to a call for help. Trash
collections were so inadequate that the fastest way to unload garbage was out the
window into the nearest yard – a disposal system known to slum dwellers as “air-mail.”
The rat became king.
The city claimed that it lacked funds to increase services and enforce build and
sanitation codes. In fact, however, the problem was the same one that had plagued the
entire urban-renewal program: lax city officials.
Listen to slum property owner Mrs. Josie Davis, a 68-year old widow who, when asked
by she had let her house deteriorate, told the Cleveland Press: “Back in 1953, the city
told us not to fix up our houses – that they were going to be purchased. I’ve waited.
Nothing has happened. Looks like the city is waiting until my house falls down so it can
be had for nothing.”
Mrs. Davis had some basis for her suspicions: in renewal areas, the city for years had
suspended enforcement of housing codes calling for safe and sanitary living conditions.
Reports of code violations were rarely served on property-owners, many of whom were
absentee landlords. Instead, they were held in the Renewal and Housing Department.
Unless the director, James M. Lister, asked for enforcement of the code, the owners
seldom had to make repairs. When tenants asked owners for repairs, a typical
response was, “Why? The place will be junked when renewal comes, anyhow.”
One effect of this policy, a city official speculated in testimony later, was to drive down
property values, thereby cutting city costs in acquiring the land.
It also kept thousands of people living in quarters unfit for safe habitation. State Rep.
Carl Stokes, who has since become Cleveland’s mayor, called the practice
“contemptuous, callous and inhuman.”
Lister resigned in Jan 1966. Surveys subsequently showed that, under his
administration, projects ran one to four years behind schedule, saddling taxpayers with
$2 million in extra interest and administration costs; that $65,000 went uncollected in
rents on properties which had not been torn down after being acquired for renewal; that
the city has no record of where or how 60% of those displaced by Cleveland’s projects
Supervising local renewal programs has been the responsibility of the Department of
Housing and Urban Development (DHUD) and its predecessors.
The law states that before a city can get a renewal grant it must prove to the federal
authorities that adequate housing is available for the displaced – and that the city has
the staff to help them relocate. The government watchdogs apparently accepted
Cleveland’s allegations on faith, although one city official later admitted that figures on
housing available for Negroes were “not completely realistic” and that the “judgment
has certainly been made on a tenuous basis.”
Finally, in Jan 1967, Robert C. Weaver, Secretary of DHUD, took an unprecedented
step. He withdrew $10 million in federal funds that had previously been assigned to
Cleveland and refused to sanction further renewal projects in the city until the mess was
Nevertheless, early this year the General Accounting Office blistered Weaver’s
department for being tardy. GAO charged that DHUD went on approving $7,700,000 in
just one project – University-Euclid – even after DHUD’s own staff had warned that
every phase of project activity was behind schedule and that rehabilitation in the area
was an abject failure.
A Cleveland woman was recently asked her opinion about the city’s future. She
answered by pointing to a bumper sticker that read:
“Pray for Cleveland”
# # #
IRAQ BODY COUNT
t t t t t
National Priorities Project - Cost of War
$ $ $ $ $
A Timeline of Oil and Violence in Iraq
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WASHINGTON D.C. PEACE MARCH
The Dixie Chicks: “I Hope”
THE EAGLE HOODED:
THE 9-11 COVERUP
PART I - PART II - PART III
The Real Cindy Sheehan
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A WEEK IN IRAQ
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X X X X X
THE DARK SIDE
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THERE WAS A CROOKED MAN
X X X X X
THE MOVEMENT TO IMPEACH BUSH
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THE LOGIC OF IMPEACHMENT
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VOTE TO IMPEACH BUSH
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SOME OF THE LATEST NEWS
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For more of the MOOSEHEAD TRUTH ...
ALOHA, HARKEN ENERGY
AN OCTOPUS NAMED WACKENHUT
THE BEAR STEARNS IN THE BUSHES
BIRDS IN THE LOBBY
BIRDS ON THE POWER LINES
THE CARLYLE GROUP: BIRDS THAT DRINK FROM CESSPOOLS
THE CHUBB GROUP
CONFESSIONS OF A WHISTLEBLOWER
DIRTY GOLD IN GOLDMAN SACHS
RON REWALD: FLYING HIGH OVER HAWAII
THE FREEDOM TO SING
HAIL TO THE CHIEF
HENRY PAULSON’S SECRET TREASURY
KROLL, THE CONSPIRATOR
NESTS ALONG WALL STREET
NESTS IN THE PENTAGON
THE OFFICE OF HAWAIIAN AFFAIRS
PARROTS IN THE NEWS ROOM
THE PIMPS TO POWER
PREDATORS IN PARADISE
SONGS OF THE DRUG VULTURES
THE EAGLE HOODED: THE 9-11 COVERUP
THE IMPENDING IMPEACHMENT OF GEORGE W. BUSH
THE KISSINGER OF DEATH
MARSH & McLENNAN: THE MARSH BIRDS
THE MYTH AND THE METHANE
NESTS OF THE INSURANCE VAMPIRES
OF VAMPIRES & DAISIES
THE PEREGRINE FUND
THE PEREGRINE GALLERY
THE PIRATES OF PUNALUU
THE PUNA CONNECTION
THE SECRET NESTS
THE SILENCE OF THE WHISTLE BLOWERS
THE STEPHEN FRIEDMAN FLOCK
THE SECRET AFFAIRS OF FANNIE MAE & FREDDIE MAC
THE STRANGE SAGA OF BCCI
VAMPIRES IN THE CITY
THE VAMPIRES ON GILLIGAN’S ISLAND
VAMPIRES ON JUPITER ISLAND
VULTURES IN THE MEADOWS
VULTURES IN THE NATURE CONSERVANCY
VULTURES IN THE SANDWICH ISLES
WHO'S GUARDING THE HEN HOUSE ???
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Last Update January 17, 2010, by The Catbird