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9/11CommmisionRevised THE SEPTEMBER 11 COMMISSION REPORT Revised December 2008 Final Report of the Investigation Into:  the Murders of Nicholas Berg, Eugene Armstrong and Jack Hensley;  the Individuals Responsible for the Attack on the World Trade Center;  National Security Issues as the Root Cause for the Attack on the World Trade Center. UNPUBLISHED EDITION (Fi f th Edi tion, December 2008) Not for sale by the Superintendent of Documents, U.S. Government Printing Office Internet:.com ISBN:

THE SEPTEMBER 11 COMMISSION REPORT

Page 2 FAIR USE NOTICE: This report contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. The material is being made available in efforts to advance understanding of criminal justice, political, human rights, economic, democracy, scientific, and social justice issues, etc. The belief is this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material in this report is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes, by publicizing contact information.

For more information on this law go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this report for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner (JP Heidner). LIABILITY: The writer(s) disclaims all liability for any loss, damage, injury or expense however caused, arising from the use of or reliance upon, in any manner, the information provided through this report and does not warrant the truth, accuracy or completeness of the information provided. In all likelihood, a few of the hypotheses generated from this information will be shown to be false – when the investigative records are made public, and for that, the writer apologizes in advance.

INTENT: The writer warrants that the information presented in this report is an accurate reflection of information presented on public news sites on the internet. Information on these sites is sometimes presented by individuals or organizations which may be viewed as pursuing objectives which are hateful and malicious. If information on such sites appears to have merit, and that information is consistent with other facts in the investigation, the factual information from that site is included as best possible, without any reflection on the merit of that site’s objectives. The intent of this report is to 1) provide a hypothetical explanation for the events of September 11, 2001 that incorporates currently public information not included in the official government report, and 2) focus public attention on circumstances that strongly suggest there has been wrong doing by public officials and organizations involved in misuse of government resources, 3) explain why officials may have been motivated to mislead the American public, and 4) provide a foundation of research and hypothesis for future research. Information presented in this report documents that the federal institutions responsible for investigating these events are currently involved in efforts to suppress the facts under the guise of National Security. Hence, this information is being made public in the hope that unknown officials with appropriate level of authority can re-institute the appropriate investigation, or that private investigative resources can further substantiate (or disprove) these claims.

Copyright © 2008 THE SEPTEMBER 11 COMMISSION REPORT

Page 3 CONTENTS List of Illustrations and Tables 6 Summary of Findings 8 Preface 25 Methodology 26 1. UNMASKING THE FACES BEHIND THE TERRORIST THREAT 29 2. THE SMOKING GUN – NICK BERG 32 2.1 Nick Berg was not killed by Muslim Terrorists 32 2.2 Nick Berg was executed by the elements of the Mossad 34 2.3 Why the Mossad killed Nick Berg -Motive – Cover-up for the World Trade Center Attack 39 2.4 Al Qaeda and Osama Bin Laden 45 3. EUGENE ARMSTRONG AND JACK HENSLEY 49 3.1 Working for Gulf Services 50 3.2 Eugene Armstrong 51 3.3 Jack Hensley 51 3.4 Abu Musab al-Zarqawi 53 4. CENTRAL ASIAN OIL: MOTIVE FOR 9/11? 56 4.1 Caspian Oil 68 4.2 Azerbaijan 71 4.3 Richard Secord, UBS and the Azerbaijan Connection 74 4.4 Afghanistan 79 THE SEPTEMBER 11 COMMISSION REPORT

Page 4 4.5 Afghanistan and the Intelligence Block 89 4.6 Afghan Heroin 90 4.7 Kazakhstangate 94 4.8 Nazarbayev, The Russian/Israeli Mafiya and Angola 100 5. RUSSIAN AND ISRAELI MAFIYA 107 5.1 Project for the New American Century 107 5.2 Follow the Money 110 5.3 The Threat to German Banking 116 5.4 The Link Between the Mossad and German Banking 119 5.5 Unplanned Consequences: The Invasion of Iraq 125 6. DESTRUCTION OF THE WORLD TRADE CENTER 129 6.1 The Link between the WTC, Illegal Gold and Money- Laundering 139 6.2 The Destruction of Buildings Seven and Six 143 7. GOLD TRADING AND MONEY LAUNDERING INVESTIGATIONS CANCELLED BY DESTRUCTION OF THE WTC 151 7.1 Tonnes of Illegal Gold 153 7.2 Gold Laundering 161 7.3 Burying the Truth 176 8. GOLD BACKED BONDS, CANTOR FITZGERALD AND THE OFFICE OF NAVAL INTELLIGENCE 179 THE SEPTEMBER 11 COMMISSION REPORT

Page 5 8.1 Federal Reserve and the Elimination of Regulatory Control 192 8.2 The Naval Intelligence Threat 199 8.3 Collapse of the Soviet Economy and the Brady Bonds 206 8.4 8.4 Riggs Bank as an Agent for the Collapse of the Soviet Union 206 8.5 8.5 Ambassador Lee Wanta and the Riggs-Valmet Connection 226 8.6 The Yeltsin Family and the Investigations in the World Trade Center 232 8.7 Armageddon 240 9. BANK CARTEL OR OIL CARTEL? A QUESTION OF GREATER MOTIVE 243 9.1 The Swiss-German Banking Connection 244 10. REUNION: IRAN-CONTRA AND THE OCTOBER SURPRISE 252 10.1 The Iran-Contra Syndicate 258 11. WHITEHOUSE ASSASSINS 261 11.1 Threat 1: Texas Whitehouse – August 2001 261 11.2 Threat 2 and 3: Attempts at the Colony Resort –September 10 and 11 261 11.3 Threat 4: In the Air – September 11 263 11.4 Lessons from History 265 11.5 Attempted Assassination of Reagan 269 12. POTENTIAL “PERSONS OF INTEREST” 280 THE SEPTEMBER 11 COMMISSION REPORT

Page 6 12.1 Murder of Nick Berg 280 12.2 Deutsche Bank Executives 283 12.3 Israeli “Fixers”-Arms Merchants 287 12.4 “Fixers” in Florida 292 12.5 Huffman Flight School “Fixers” in Florida 293 12.6 Mohammed Atta 298 12.7 Atta’s Connections to Pakistani and Syrian Intelligence 305 12.8 Iran-Contra Re-Union 311 13. COVER-UP: CREDIBILITY OF THE AMERICAN PRESS AND GOVERNMENT 315 13.1 Control of the Media 316 13.2 Systemic Fear 317 13.3 Media Control – the Facts 329 14. POLICY AND PHILOSOPHY: DEMOCRACY AND PATRIOTISM AS COVER-UPS FOR TERROR AND GREED 341 15. EPILOGUE 350 Appendix A: CIA – Banking Connections 355 Appendix B: Stratesec 357 Appendix C: World’s Greatest Treasure Hunt 361 Appendix D: The Federal Reserve and the Three Card Monte 370 List of Tables and Illustrations Figure 1: Chart of Conspirators 23 Figure 2: Map of Central Asia 56 THE SEPTEMBER 11 COMMISSION REPORT

Page 7 Figure 3: US Bases and the Afghan Pipelines 58 Figure 4: US Bases and the Iraqi Pipeline 59 Figure 5: Central Asian Pipelines 69 Table 1: Unclaimed Stock Options 111 Table 2: World Trade Center Deaths By Building 134 Table 3: Towers One and Two: Deaths By Company/Floor 136 Table 4: Other Buildings: Deaths By Company and Floor 134 Table 5: USA Today List of Deaths by Floor 138 Table 6: Investigative & Evidentiary Agencies in the World Trade Center – Building 7 144 Table 7: Gold Weight/Value Conversion Chart for Purpose of Discussion 163 Table 8: Overview of Gold Price History 163 Figure 6: World Production of Gold (Tonnes) 164 Table 9: Who Owns the Media 340 Examples of CIA – Banking Linkage 355 THE SEPTEMBER 11 COMMISSION REPORT

Page 8 Summary of Findings The September 11 Commission Report: Final Report of the Investigation into the Murders of Nicholas Berg, Eugene Armstrong and Jack Hensley This report uses publicly available information to substantiate a hypothetical explanation of the causes and key conspirators in the attack on the World Trade Center. The findings of this investigation are not meant to be construed as proof or a statement of guilt, but rather are meant to serve as ‘probable cause’ for further investigation. These findings are substantiated, documented and amplified by the report that follows. To that end, this report finds that: I. Murder of Nicholas Berg A. The organization that murdered Nicholas Berg, Eugene Armstrong and Jack Hensley, reported to be terrorists including Abu Musab Zarqawi, was most likely an Israeli intelligence operation - and in all likelihood part of a larger organization responsible for the attack on the World Trade Center; 1. Nick Berg was probably murdered by a group including Steven Stephanowicz, an employee of Titan Corp., a subcontractor to CACI –which has demonstrable links to Israeli Intelligence, Richard Armitage and the CIA. CACI was responsible for interrogation at Abu Ghraib when Nick berg was killed. 2. Stephanowicz was found (by U.S. military investigators) to be directly and indirectly responsible for most of the atrocities at Abu Ghraib, which demonstrates his ability to orchestrate the executions of Berg, Armstrong and Hensley. His presence at the scene of the crime, and a similarity to the tallest executioner in the photos of the execution makes him a likely candidate for suspicion. B. Nicholas Berg was probably operating as an agent for the Israeli government (in the US and Iraq), and possibly as a double agent, working for a US intelligence organization; C. Eugene Armstrong and Jack Hensley were also probably government agents in US intelligence operations; D. Nicholas Berg was probably murdered by Israeli agents to prevent his knowledge of the attack on the World Trade Center (WTC) from being handed over to the FBI, or as revenge for having provided that information to the FBI. II. Attack on the World Trade Center THE SEPTEMBER 11 COMMISSION REPORT

Page 9 A. Israelis have been extensively identified as involved in the WTC attack activities and having inside knowledge of the flights and time of attack. Seven lines of investigation support this claim 1. Two Israelis placed explosives in the twin Towers and Buildings 7 and 6, four buildings that housed multiple investigative agencies of the Federal Government and the State of New York. Khaled Odtallah (from Jerusalem) provided fake ID to Rocky Hammad (from Gaza). Hammad was employed by Sergie Dimitry Davidenko (from Ukraine) to work on the water system the weekend prior to the attack. The attacking plane hit the floor of the South Tower where the 5000 gallon reserve water tank was staged. Sergie Dimitry Davidenko has disappeared since 9/11. Davidenko is a proficient ham radio operator from the Ukraine and an ‘applied mathematician’ whose work is referenced by at least two recent articles on missile test systems. He most likely configured the guidance system which guided the plane into the building. 2. The guidance system on the market that best meets the requirements of guiding a multiple plane attack from a single source is provided by System Planning Corporation, where Rabbi Dov Zakheim, key PNAC (Project for a New American Century) member, is Executive Vice President. Zakheim is on record as having “an abiding commitment to the People and the State of Israel.” 3. Israelis were so close to the operation they knew the flights and time. They were able to warn the employees of Odigo, an Israeli firm, two hours before the attack. The CEO of Odigo has confirmed the advance warning. 4. Israel had agents involved in monitoring the supposed hijackers in both Norman, Oklahoma and Sheridan, Florida, at the flight schools attended by the hijackers. 5. The Israeli Prime Minister has acknowledged providing advance warning of the attack to the Bush administration. 6. The company that manages security at the Boston airport from which two planes departed, is managed by former Israeli intelligence and military personnel. 7. Israeli agents were arrested videotaping the attack from a roof-top, suggesting a-priori knowledge. These agents were released to Israel without charges. B. Israeli intelligence organizations have been found to previously have been responsible for ‘false flag’ operations in multiple locations, presenting themselves as Muslim terrorists. In 2000, 11 Israelis masquerading as Muslims were apprehended by the Indian government in their attempt to hijack an Indian airliner. THE SEPTEMBER 11 COMMISSION REPORT

Page 10 C. The Israeli intelligence organization with responsibility for these attacks has extensive links to the Russian Mafiya and ex-KGB resources, all of which had motive, involvement and knowledge pertinent to crimes being investigated by several agencies in the World Trade Center; D. The Israeli links to September 11th are based on Russian KGB/oligarch émigrés to Israel who have created a rogue operation in the KGB, but are funded through operations born from the September 1991 bonds created by Bush, Greenspen et al. E. Six groups were involved in the attack on the WTC” 1. The group that initiated the attack most likely consisted of an international network of financial executives representing primarily the Bank of New York, the New York Federal Reserve Bank, Riggs Bank, Deutschebank and the Union Bank of Switzerland (UBS), and should include representatives from Bank Menatep, Swiss-American Bank, Credit Suisse, Investor AB, and Allianz, and their respective subsidiaries and major investment partners. This decision was meant to stop multiple money laundering investigations which would have traced illegal money laundering operations to accounts that held stolen national treasuries. Only a very few of the individuals in this group would have participated in or been knowledgeable of the decision. With a decision being made in 1998, the attack on the WTC was probably delayed until September 11, 2001, to allow the Bush Family and Russian Mafiya to cover the settlement of the fraudulent Durham/Brady Bonds . 2. The group which probably planned and set-up the attack on the World Trade Center was most likely a mix of Russian/Israeli Mafiya, ex-KGB and Israeli secret service, with the assistance of David Kimche (Mossad agent), Meir Dagan (head of the Israeli Mossad), Adnan Khashoggi and Sheikh Kamal Adham (former head of Saudi Intelligence), Richard Armitage and Richard Secord. Kimche, Armitage and Secord are the only field intelligence operatives identified in the world press as having field management responsibility for Al Qaeda mercenaries. Khashoggi is documented to have coordinated similar types of false “terrorist” attacks in Russia, with the participation of CIA and Israeli agents working with Chechen Mafya (with its strong likages to the Yeltsin Family.) 3. The group that probably arranged for operational cover in the US, and intelligence support the operation required most likely consists of re-united participants in the Iran-Contra dealings of the 1980’s. This group has been working in concert in Central Asia, using Baku, Azerbaijan as a base of operations since the early 1990s. This group of former Iran-Contra conspirators includes: a) Adnan Khashoggi: whose Azerbaijan banks "played a big part in the formation of terrorist camps and in the opening of laboratories for developing chemical and bacteriological weapons in Nagornyy Karabakh” THE SEPTEMBER 11 COMMISSION REPORT

Page 11 was a major mover of illegal gold; major investor and founder in Barrick; was a major investor in Oryx (financial backer of Huffman Aviation- the flight school that provided training to eleven 9/11 hijackers); and business partner with General William Lyon – founder of diploma mills which are linked to the access to the US for two hijackers. Khashoggi also is linked to the funding of the “9/11 Truth Movement” in an attempt to monitor and control civilian inquiries into the events surrounding 9/11. b) Richard Secord: a former U.S. Air Force major general who had been helping to recruit and train the Azerbaijani army as well as regional secret services in conjunction with David Kimche, and was reported to have assisted in the recruitment of Al Qaeda mercenaries and Osama Bin Laden for deployment in Azerbaijan; c) Richard Armitage: who managed illegal gold funds for George HW Bush during Iran-Contra period; who acted as a consultant to Halliburton and Unocal at the time, and was President of the US-Azerbaijani Chamber of Commerce. Armitage had demonstrated a history of visits to Pakistan and the rest of Central Asia, and was reported to have assisted in the recruitment of Al Qaeda mercenaries and Osama Bin Laden for deployment in Azerbaijan; d) Farhad Azima, a US arms merchant with Iranian background, a member of the US-Azerbaijani Chamber of Commerce, who assisted Richard Secord in recruiting, transporting and training mujahedin mercenaries. He was owner of the Azerbaijan Airlines, and has a twenty year old relationship with the Iran-Contra syndicate. He is significant co-investor with Wally Hilliard of Huffman Aviation in a small California electronics company (Spatialight Inc). e) Khalid bin Mahfouz, owner, with the bin Laden family and members of the Saudi royal family of the Saudi oil companies Delta Oil and Nimir Oil. Both are partners with Unocal in Azerbaijan and partners in multiple Bush family enterprises. He is a major investor along with Khashoggi in Barrick and TrizecHahn. (TrizecHahn was the landlord to the corporate headquarters of Halliburton and Enron.) f) Dick Cheney, as CEO of Halliburton, lobbyist for the Azerbaijan International Operating Company, on US-Azerbaijani Chamber of Commerce; participant in Congressional hearings that let Iran-Contra participants off-the-hook. Dick Cheney’s role in the attack on the WTC is most thoroughly treated in the book Crossing the Rubicon, by Michael C. Ruppert, where Cheney is demonstrated to be fully accountable for the activities of NORAD and FEMA on September 11. John Mann, in Rise of the Vulcans- The History of Bush’s War Cabinet, describes Cheney as “one of the principal defenders of the Reagan administration’s conduct in Iran Contra.” THE SEPTEMBER 11 COMMISSION REPORT

Page 12 g) David Kimche, Israeli Mossad agent who brought Israeli agents and mercenaries into Azerbaijan at the request of Secord, and worked with Secord and the regional secret service organizations of Azerbaijan and Kazakhstan. He was a participant in the October Surprise and Iran-Contra scandal, and consultant to Manuel Noriega. h) Porter Goss, former CIA agent and Congressman, now Director of the CIA. He met with Mahmoud Ahmad, Director of the Pakistani Secret Service (ISI) shortly before and after 9/11. Mahmoud Ahmad was responsible for providing $100,000 in funding to Mohammed Atta. Goss has not been identified with any Azerbaijani activity, but has been identified with Iran-Contra activity. i) George Bush Sr., who (according to several eyes witnesses) authorized the Iran-Contra and October Surprise operations (although Congressional investigators concluded he was not involved), initiated the US covert operations in Kazakhstan and Azerbaijan, authorized the creation of the illegal Durham/Brady Bonds which went secretly to Russia, and authorized the assignment of $10 billion in un-mined gold reserves to Barrick. He later sat on the Advisory Board of Directors for Barrick. j) Robert Mueller, who as US Attorney headed the Iran-Contra and the BCCI investigations and trial found little fault with Bush Sr., also was responsible for the FBI investigation of 9/11. 4. Members of the US group that arranged for the September 11 cover-up most likely used the attack for multiple purposes related to financial gain and obstruction of justice, and set the timing of the attack to resolve a major financial fraud involving $240 billion in securities backed by illegal gold holdings (Durham/Brady Bonds). 5. The organization that managed the details of the US attack operation was most likely an Israeli secret service unit including Mohammed Atta (who organized the aerial attack), Rudi Dekker (responsible mostly for visas), and Khaled Odtllah (who was responsible for arranging explosives in the WTC); a) There are seven pieces of information that suggest Mohammed Atta, identified as the leader of the 9/11 hijackers, was probably a Mossad agent: (1) Comments by his father saying his son was with the Mossad, and alive after 9/11; (2) A number of clues suggesting he may not have been on the flight, and possibly disappeared out a back door at the Boston airport; (3) Atta expressed interest in a company specializing in space technology. This company was later acquired by Israel; THE SEPTEMBER 11 COMMISSION REPORT

Page 13 (4) His ability to speak Hebrew; (5) His involvement with German, Pakistani, Saudi and Syrian intelligence and US military and intelligence organizations; (6) The cover-up of the identity of his German host family by US investigators; and (7) His dual personality attested to by his friends on two continents. 6. The group that actually was set up to take the blame were Muslim radicals recruited by either Yeslam Bin Laden (brother of Osama Bin Laden) or Richard Secord (CIA) and David Kimche (Mossad) at the probable request of Adnan Khashoggi and Sheikh Kamal Adham (business partners of George Bush Sr.). a) At least seven of these hijackers used names and other personal information acquired by identity theft. Five of these seven names had affiliations with US military training institutions. Most of the passports used by the hijackers came from the US embassy in Saudi Arabia. Khaled Odtallah (from Jerusalem) was responsible for establishing false American identities for the group inside the World Trade Center. These facts suggest the attackers were organized by intelligence agencies rather than terrorists. These facts lead to the assumption the attack was a joint effort between Israeli and Saudi Intelligence, with US support. b) Two of the hijackers had records of previous employment by the Saudi Intelligence. c) The individual that most likely acted as intermediary between Iran-Contra syndicate and the bankers was Edgar Bronfman. Bronfman is a significant owner of Barrick and TrizecHahn, and President of the World Jewish Congress (WJC). Acting in the role of President of the WJC, Bronfman negotiated the terms and conditions of the release of the Holocaust gold from the Swiss banks in 1998. It is hypothesized that as part of his negotiations, he was asked by the bankers to facilitate a termination of multiple US federal and NY investigations into Swiss banks. His negotiations brought an immediate end to US Department of Justice and US Congressional pressure to investigate Marcos gold accounts in the Swiss banks, Swiss holdings of Holocaust gold, and Philippine actions against the Swiss for holding the Marcos gold. An investigation of the Marcos accounts (and tracing the final disposition of the gold) would have exposed a broader money and gold-laundering scheme, which would have resulted in further exposures of crimes by the Russian/Israeli Mafiya (in particular, the “Yeltsin Family”) and the Iran-Contra syndicate. d) The plan proposed by Bronfman was probably provided to him by David Kimche, one of the initial Israeli intelligence agents that in 1980 proposed THE SEPTEMBER 11 COMMISSION REPORT

Page 14 the October Surprise plan to prevent the release of US hostages by the Ayatollah Khomeini. That plan subsequently resulted in a series of Iran- Contra deals to covertly fund pro-US revolutionary activity in Iran and Nicaragua. Kimche was actively working with Richard Secord and Richard Armitage (all three were involved in Iran-Contra scandal) in Azerbaijan, with multiple Central Asian Intelligence organizations, at the time the decision to attack the WTC was made. e) The plan proposed by Bronfman provided for the termination of investigations by various agencies of the US government into various Swiss accounts and Deutschebank transactions involved in money and gold laundering. This plan would require the destruction of the entire World Trade Center, which housed the investigative offices of the FBI, SEC, IRS, Secret Service, Department of Defense, US Customs, and bank records for the Export-Import bank, Deutsche Bank, and the investigative arm of the New York State Tax Department. Bronfman, as a major investor in Barrick, stood to benefit directly from a cessation of these investigations (and in his case, the FBI investigation into gold price fixing). The Bush family, as well as the Russian Mafiya, would benefit as well from the termination of these investigations, all linked. Later, Bush intelligence operatives would add the Pentagon to the list of targets, to destroy the Office of Naval Intelligence which was also engaged in a major investigation of money laundering most likely related to the Bank of New York/Russian Mafiya money laundering scandal. f) The detailed plan to crash commercial airliners into the World Trade Center was actually created in 1976 by the C-Battery 2/81st Field Artillery, US Seventh Army in Europe. It would have been provided to Kimche, most likely, by Richard Armitage, who worked in the Defense Intelligence Agency from May 1975 to November 1976, and went on to covert CIA operations. F. There was a diversified group of American, Canadian, Russian, Swiss and German business executives (bankers and traders) and government officials that allowed the attack on the World Trade Center to happen, and prevented the true story of what happened from being told, for the purposes of financial gain and protection from prosecution for complicity in illegal gold laundering activity and the fraudulent sale of gold backed securities. Under Federal law 18 U.S.C. 371 – Conspiracy Statute, they are equally guilty as if they had initiated the decision. This group includes, but is not limited to Adnan Khashoggi; Kamal Adham; George Bush Sr.; Tye Burt- former Chairman of Deutsche Bank Canada and Deutsche Bank Alex Brown Securities Canada; Otto Pohl, former President of the German central bank (Bundesbank) and chief officer of the International Bank of Settlements and IMF; Edgar Bronfman and Mayo Shattuck, who left his position as CEO of Deutschebank America on September 12, 2001 and is financial advisor to Khashoggi and Bronfman. The circumstances leading to this conclusion are: THE SEPTEMBER 11 COMMISSION REPORT

Page 15 1. There are between 6,000 and 280,000 tonnes of illegal, stolen gold stored in bullion banks throughout the world. This gold needs to be laundered. This gold has been stolen from the national treasuries of the Philippines, Soviet Union, France, and Czechoslovakia. There are numerous sources that identify George Bush Sr. and Adnan Khashoggi, with Ferdinand Marcos, as extensively involved in the theft of the Philippines treasury. 2. Commodity experts that watch the gold market have made claims that significant, inexplicable amounts of gold were showing up in the market throughout the 1990s. These increases are attributed to ‘gold futures’ sales - in the absence of any other explanation. 3. There has been no known formal investigation into the possible laundering of this gold other than possibly the FBI investigation buried in the World Trade Center. This investigation was linked to the GATA/Howe lawsuit against the bullion banks, including the Deutsche Bank. 4. A significant group of powerful individuals, with demonstrated links to the movement of illegal gold, have been directly involved in the creation of a gold producing company, which was in a court battle over the legality of some of its trades. (It resulted in a sealed agreement in January of 2006.) A significant group of these individuals have a history of connections to money laundering activity. These groups include George Bush Sr., Adnan Khashoggi, Khalid bin Mahfouz and Edgar Bronfman. 5. The success of this company in gold hedging defies expert industry expert comprehension. The company has been extremely successful mining land that industry experts thought was “doubtful” in its potential. These inexplicable conditions could be explained under a hypothesis of gold laundering. 6. Two of the individuals (Khashoggi and Mahfouz) that started, controlled and owned significant portions of this gold company are the same people that started, controlled and owned a company that staged and ‘trained’ eleven of the 9/11 hijackers, who were involved in the destruction of the World Trade Center. This ‘terrorist’ event effectively ended the FBI investigation of global gold trades this company was involved in. G. German, Swiss, Russian and Saudi financial executives, combined with their U.S. business partners (Carlyle Group) initially requested the attack on the World Trade Center for the purposes of: 1. Stopping a series of on-going FBI and other federal agency investigations which were in the process of exposing multi-billion dollar, illegal, gold and money laundering activities and securities fraud. Tracking transactions into and out of accounts of individuals associated with these investigations would have exposed the THE SEPTEMBER 11 COMMISSION REPORT

Page 16 · illegal retention of the national bullion treasuries of the Soviet Union, the Philippines, France, Czechoslovakia, Japan, Kazakhstan, Angola and more, as well as · the major participation of the “Bush Family” in the Bank of New York/Russian Mafiya money-laundering scandal, with its ultimate source of funding in the Bardy/Durham bond fraud of September 11, 1991; 2. Destroying potentially incriminating Deutschebank and US Export-Import bank records and investigative reports (FBI, SEC, Secret Service, IRS, US Customs, NY State Tax Auditors) associated with those gold and money laundering and securities fraud activities; 3. Enhancing their competitiveness and short term profitability in the European investment banking market; and 4. Revenge against “United States and its economy” for past economic transgressions against the German banking industry. H. The pinpointed targets of the 9/11 hijackers were the North Tower (FBI offices on floors 23 and 24 and the Cantor Fitzgerald offices), Building 7 (various Federal investigative agencies), the Pentagon (Office of Naval Investigation), and the South Tower (Eurobrokers and the NY State Tax Investigation Department). Flight 93, delayed for 40 minutes at the gate and downed in Pennsylvania, was probably intended for Building 7. Building 6 (US Customs) was destroyed by an internal explosion. These buildings were targeted because they housed the investigative offices and evidence of multiple investigations into money and gold laundering and securities fraud. I. There are seven conditions pertinent to the collapse of Building 7 that are not explained by any official explanation of the events at the WTC. These seven conditions are all explained with the theory of ‘targeted destruction.’ This report concludes that within minutes of it being known that Building 7 was not going to be hit by a third plane, it was ordered evacuated by an unknown individual so that incendiary explosions could be ignited without the presence of witnesses. These devices would have targeted federal and bank offices on multiple floors. The 9/11 Commission Report and FEMA have been unable to explain: 1. Source of fires throughout the building; 2. Lack of response by firefighters to those fires; 3. Order for evacuation of the Mayor’s emergency command center on Floor 23 of Building Seven, when no comparable order was given for the WTC command Center in the North Tower. This center was evacuated shortly before the collapse of Tower 1 (10:29), but after the crash of Flight 93 (10:07), when it became clear Flight 93 would not reach its target. No one claims responsibility for the evacuation order; THE SEPTEMBER 11 COMMISSION REPORT Page 17 4. Documented seismic spike just prior to the collapse of the Building 7 in the same magnitude as those preceding the collapse of the North and South Towers; 5. The reason for the tape-recorded “pulling” comment by the building’s owner, who has since refused to explain his comment; 6. Ability to bring down Building Seven with controlled demolitions, when it takes days to place explosives for controlled takedowns; 7. Misleading references to the locations of the fires, which are generally referred to as a couple of lower floors, but occurred throughout the building as documented by photographic evidence; J. The airline attacks on the World Trade Center were cover-up for explosives placed in the building. There are nine categories of evidence which support the statement that the North and South Towers were subjected to “targeted” demolitions: 1. Numerous eyewitness statements of explosions in and throughout the building; 2. Seismographic recording of the incidents showing massive underground explosions just prior to the collapse of Towers 1, 2 and 7; 3. Analysis of videotape of the collapse of the South Tower which shows the order in which floors are collapsing by exploding windows, demonstrating non-sequential explosions on lower floors; 4. Video tape evidence recorded on-site at the WTC by a rescuing fireman; 5. The pattern of deaths in the North Tower reinforces the theory that there were explosives set at lower levels of the North Tower, especially in the vicinity of floors 23 and 24 of the North Tower (Tower 1), which suffered inexplicable and unusually high death rates; 6. Multiple testimonies from a) small rescue team, 2) trapped workers and 3) people leaving the building which help explain events on the 23rd floor –site of a secretive FBI office which housed investigations into illegal gold-price fixing, gold trades and the Kazakhgate investigation linking Dick Cheney and George Bush Sr. to illegal bribes paid to Kazakhstan officials; 7. An FBI agent in the North Tower Operations Center received a call on his cell phone advising him the North Tower would soon collapse. The timing of this call, approximately 15 minutes before the building collapsed, suggests someone was in control of the primary demolitions in the basement; 8. Investigating government agencies have not been able to explain how fires reached required temperatures to melt steel and thus cause the towers to THE SEPTEMBER 11 COMMISSION REPORT Page 18 collapse. An official letter from Underwriter Laboratories to the National Institute of Standards and Technology, explains why the government’s official stance on how/why the buildings collapsed has no merit; 9. Unexplained and forgotten CNN video footage of the explosion inside WTC 6, which housed US Customs Agency, the agency that coordinated multiple federal agency money laundering investigations with its El Dorado task force. K. The attack on the Pentagon was for the purpose of destroying the Office of Naval Intelligence. This Office was investigating a gold backed securities fraud which might have been perceived as a threat to national security, but would link the Bush family to multiple illegal activities. L. The attacks of September 11 were timed to coincide with multiple war-games, which included scenarios of airline hijacking and building attacks. This coincidence creates a scenario of ‘plausible deniability’ under which FAA and NORAD officials can argue there was no air response because they were “confused” as to whether the attacks were part of the games or not. 1. These war games were being monitored by Vice President Dick Cheney at the time of the attack, rather than the Secretary of Defense Donald Rumsfeld. 2. The war games which were usually scheduled for October were rescheduled for early September by an unknown decision-maker. 3. The war games probably included an unreported computer simulation of a financial attack on the US economy (as performed during war games in 1997 and 2000 by Cantor Fitzgerald.) It is hypothesized that this simulation computer program was the source of the illegal trades conducted in the minutes preceding the attack, and those illegal trades were meant to cover the settlement of the 10 year Durham/Brady Bonds which came due on September 11. M. The former heads of at least three Intelligence agencies and a private, commercial intelligence operation, all pro-US organizations - have been linked to funding of the 9/11 hijackers: 1. Mahmoud Ahmad, Head of ISI Pakistani Intelligence (Wired $100,000 to Atta shortly before the attack); 2. Mohamad Majed Said, a former head of Syrian Intelligence (provided employment for Atta in Germany); and 3. Kamal Adham, the former head of Saudi Intelligence (funded Huffman Aviation via Oryx.). 4. Mohammed Atta, while in Germany, was also an employee of, with travel funded by, Carl Duisberg Gesellschaft. This is a joint US-German scholarship program, reportedly controlled on the US side by the US Information Agency THE SEPTEMBER 11 COMMISSION REPORT Page 19 (State Department). The German side of this program is administered jointly with Internationale Weiterbildung und Entwicklung, a commercial intelligence operation that studies global trading in weapons and drugs, money-laundering and, coincidentally, anthrax. It has board members from the Deutschebank and Allianz. Carl Duisberg Gesellschaft also has a fellowship funded by Alpha Bank, represented in the U.S. by ex-Bush administrators Lanny Griffith and Ed Rogers. The leadership of these three Muslim countries (Pakistan, Syria, and Saudi Arabia) is significantly detached from their mainstream population’s conservative beliefs, and their leadership is generally aligned with US leadership on key financial objectives. N. There are five indicators that World Trade Center security management (with the top security manager being George Tabeek) were co-conspirators in the attack: 1. The power shut-down during the weekend prior to the attack could not happen without security approval because it involved shutting off a primary building utility and security surveillance; 2. Permits to work in the building on the water system over the weekend could not happen without security approval because it involved shutting off a primary building utility and safety system. The attacking plane hit the floor where the 5000 gallon reserve water tank for the sprinkler system was staged.; 3. Bomb sniffing dogs were removed from service the day before the unexplained “power down”, during which all internal electronic surveillance (cameras, videos) were turned off. Rocky Hammad’s activity in the Towers occurred during this power down. The person who authorized these activities has not been found. Removal of the bomb sniffing security dogs could not happen without security approval. The dogs were brought back on the day of the attack, probably after any explosives were allowed in the building; 4. A CIA front company known as Stratesec Incorporated, formerly Securacom had a maintenance agreement for ‘access control’ with the WTC. A Director on the Board for this company is Marvin Bush, brother of President George Bush. This company is linked to the aerial attack on government investigative offices in the Pirelli Building in the financial district in Milan, Italy in April of 2002. 5. The New York City Emergency Command Center, located on the 23rd floor of Building 7, was ordered to evacuate hours in advance of the building’s collapse, but within a few minutes after Flight 93 was downed in Pennsylvania. Fires started after the evacuation. In the North and South Towers, there was no order to evacuate, and employees remained until the end. III.Cover-up THE SEPTEMBER 11 COMMISSION REPORT Page 20 A. Representatives of at least three US government agencies (CIA, FBI, and NSA) were aware of the plans for the attack on the World Trade Center after having been advised by the intelligence agencies of Israel, Germany, UK and Russia. B. Key military officials in the US war games seem to have been involved in preventing an air response to the hijackers, thus allowing them to execute their attack. C. At least five employees of US investigative agencies have attempted to make public the level of deception being used to cover up the truth, but have been silenced by court order under the blanket of “National Security.” Numerous New York public employees with testimony relevant to the cover-up have been effectively gagged under the blanket of National Security by having their jobs threatened for speaking out. Another agent, Brad Doucette – 20 year veteran FBI agent in charge of counter-terrorism - was “suicided” in April in 2003, shortly after reporting controversial findings. D. The US government seems unwilling to pursue the true criminals in this case because of the political consequences of exposing the complicity of various key US politicians and political contributors in the various gold laundering activities, or involvement in a cover-up. This group includes, but is not limited to: 1. George HW Bush Sr., who is directly responsible for: · contributing to the success of what could appear to be a major gold laundering operation by approving changes in law which allowed the company to obtain an estimated $10 billion in gold reserves for a cost of $10,000; assisting in the operations acquisition of additional African reserves, and serving as a Director on its Advisory Board; · authorizing the fraudulent Durham/Brady Bonds; · initiating a range of illegal covert activities in Central Asia to support personal business partners in the oil industry. 2. The Bronfman family, with major connections to both the Democratic and Republic administrations; 3. Various executives of financial institutions (named in the report), the Federal Reserve banks, the SEC and other American bullion banks involved in the gold price-fixing practices and securities fraud; 4. Various associates in the Iran-Contra affair, who remained in various political offices. E. There were a series of seven actions undertaken by the Federal Reserve during the days and weeks that followed the attack on the WTC which served the purpose of covering-up the settlement and refinancing the fraudulent 10 year Durham/Brady Bonds which came due on September 11. Those actions include THE SEPTEMBER 11 COMMISSION REPORT Page 21 1. the Commission for the first time invoked its emergency powers under Securities Exchange Act Section 12(k); 2. SEC lifted “Rule 15c3-3 - Customer Protection--Reserves and Custody of Securities” which allowed them to suspend all reporting and identity security controls; 3. The SEC temporarily injected $300 Billion into the US money supply while settling the fraudulent securities; 4. Government Securities Clearing Corporation sent a memo to banks encouraging them to make security ‘substitutions’ on “immediately maturing collateral;” 5. Government Securities Clearing Corporation treated the ‘fails’ as two separate groups, suggesting there was a large group of trades that required ‘special treatment’ for “other” problems; 6. GSCC issued another memo allowing blind broker settlements. A “blind broker” is a mechanism for inter-dealer transactions that maintains the anonymity of both parties to the trade; 7. SEC held an unusual “snap” auction of new ten-year securities to facilitate sale of government securities probably used to refinance the fraudulent Durham/Brady Bonds. F. There were a series of four attempts to assassinate President George Bush (Jr.), orchestrated by the same group that executed the attack on the WTC. This report concludes there was a quid pro quo between the Bush and Bin Laden families to mutually sacrifice sons. When the assassination attempts failed, Bin Laden was allowed to escape. It is speculated that is why George Bush Sr. was dining with Bin Laden on September 11, 2001. This theory is supported by the eerie parallels between these attempts on the life of George Bush Jr. in 2001, and the Hinkley attempt on the life of Ronald Reagan, suggesting that George Bush Sr. is familiar with the concept of family sacrifice. The simultaneous NORAD and FEMA exercises, scheduled to happen the same time as both attempted assassinations, suggests Bush’s concerns about the transfer of Presidential Power during both assassination attempts. On both occasions, a Bush family member was with a family member of the ‘accused shooter,” and the “accused shooter” was a family acquaintance. Each assassination attempt (Reagan and Bush) consisted of multiple attempts, with a final effort layered with contingencies. G. Numerous individuals received significant financial benefit from acting with foreknowledge of this attack, over-and-above protection from criminal investigation. Adnan Khashoggi was a clear beneficiary with his MJK Securities fraud. Other information suggests Israeli investors were responsible for the supposed inside trading profits made that day. Additionally, Russian Mafiya members, who had financially benefited from the default on approximately $240 THE SEPTEMBER 11 COMMISSION REPORT Page 22 Billion in gold backed loans from President George Bush Sr., had their defaults covered by the attack. Investigation of these individuals should be renewed to determine their complicity with the business executives responsible for this attack. H. Two key individuals throughout the entire timeline of this investigation are Adnan Khashoggi, and Sheikh Kamal Adham, most infamous for their role in the BCCI bank scandal and Iran-Contra scandal (Israeli weapons sold to Iran), but also linked to the recent MJK Securities fraud case and multiple Savings and Loans failures in the 1980s, the Harken Energy scandal, and the 1980 October Surprise. They are personal friends and business partners with George Bush Sr. This report finds evidence of them being directly linked to: 1. the theft, illegal hoarding, use and distribution of massive quantities of illegal treasury gold, 2. the creation of a potential international gold laundering operation, the probable investigation into which was halted by the destruction of the World Trade Center, 3. the creation and funding of a flight school used to provide visas for eleven WTC attackers, and 4. The recruitment of flight school trainees either through their family relationships with Yeslam Bin Laden, the brother of Osama Bin Laden, or through long-time business partners Richard Secord and David Kimche, 5. The recruitment of hijackers previously settled in the US. Adnan Khashoggi (owner of Genesis Aviation) is a business partner with retired General William Lyon (on the Board of Kellstrom Industries, Inc., an Israeli owned company) in a venture called Wings of Democracy, an attempt to penetrate the commercial Iraq air business. Lyon is the founder of several university diploma-mill operations in California (American Commonwealth University, also known as William Lyon University) which are speculated to be CIA front operations used for providing US visas to foreign operatives. These operations are directly associated with the entry to the US by two of the 9/11 hijackers in the early 1990s. Lyon is a major Republican fund raiser in Orange County, associate of Karl Rove, financial backer of the swift Boat Veterans, and keynote speaker at the Republican national convention. Conclusion Once the clues have been put together, and the individuals behind the organizations or quasi-organizations are identified and studied, it becomes clear there are three individuals THE SEPTEMBER 11 COMMISSION REPORT Page 23 whose names repeatedly appear: Adnan Khashoggi, Kamal Adham, and George Bush Sr. These three men have strong, personal and business relationships with each other and other individuals whose names appear consistently. These relationships have been defined in the above chart. The attack on the World Trade Center was a complicated operation. These men have the experience and track record to demonstrate that they are capable of efforts to overthrow governments without regard for human life. There is also a group of financial backers behind the individuals identified by this report. They appear on numerous boards involved in these activities, and appear to have no function other than to represent the interests of large holding companies which operate as cover for massive family wealth. The individuals identified in this report can be identified because of their actions, while those not identified are the silent, more powerful individuals who finance these operations. One example would be Lord Powell, who represents the Rothschild family investments, and sits on the Boards of Barrick, as well as Diligence, which does business with a known criminal terrorist operation known as Farwest, Ltd. Figure 1: Chart of Conspirators There are many other incidental findings which are indicative of additional criminal activity. This list includes, but is not limited to: · Placement and detonation of explosive charges in the World Trade Center; · Murder of witnesses; · Terrorist activities; · Obstruction of justice and destruction of Government evidence in a criminal investigation; and · Criminal conspiracy and money laundering activity by US bankers, financial executives and government officials; THE SEPTEMBER 11 COMMISSION REPORT Page 24 · Violations of Foreign Corrupt Practices Act; · Violations of Section 907 of the Freedom Support Act. Evidence supporting these claims is provided. A list of those who could be considered “a person of interest” is identified at the end of this report. Not one is a known member of any officially classified terrorist group. THE SEPTEMBER 11 COMMISSION REPORT

Page 25 Preface This project started with a curiosity about the questionable circumstances surrounding the murder of Nick Berg, a US entrepreneur in Iraq who reportedly was in the wrong place at the wrong time. That curiosity led to research, which led to this report. Herein is a story – a true story - that needs to be told. Even without the ‘need’ for it to be told, it represents a mesmerizing story of intrigue, assassination, mystery, scandal, fraud, theft, cover-up, and twisted patriotism. It is a true story about real individuals, the list of which includes terrorists, spies (KGB, Mossad, CIA, FBI), murder victims, assassinated corporate heads, politicians, billionaires, international bank board members, Russian Mafiya, American mafia, Nazis, an Imperial family, and even a Grand Master of the Teutonic Order (Templars) from the crusades! It is a story about money laundering, illegal gold, securities fraud, conflict diamonds, weapons trading, drugs, espionage and international stock market manipulation. It is a story about a several layers of façade and false leads. It is a story in which the motive for the crime is measured in hundreds of billions of dollars, and has relatively little to do with oil. It is a story which explains the execution of seemingly innocent civilians in Iraq, the attack on the World Trade Center, and the attack on the US economy. It is a story that provides coherent meaning to what has been viewed as a collage of seemingly inconsistent, contradictory, inexplicable and just plain inconvenient facts. The search for an acceptable explanation for the death of Nick Berg in the summer of 2004 engendered more questions than answers – at first. The answers to these questions resulted in an interpretation of current events in the Middle East and the US that seemed far removed from any currently available explanations or hypotheses. The conclusion of this investigation is that Nick Berg was in all likelihood an agent of an Israeli secret service, executed by elements of the Israeli secret service, for reasons that are explained in the report. That hypothesis was so seemingly incredible that it begged “challenging.” The hypothesis has been challenged numerous times, and each time there are multiple accounts in the media that provide answers that are consistent with the conclusions presented in the research. Examples of such “if –then” tests (such as if X happened, then shouldn’t Y happen?) are: • If the hypothesis used to explain the reasons for Nick Berg’s execution is accurate, shouldn’t it also be valid for subsequent executions by the same group? (It is!) · If the Deutsche Bank was attempting to cover-up illicit gold movements, should one expect to find news which links the Deutsche Bank to illicit gold hoardings, measured in hundreds of tonnes? (There are such reports!) · If the German banking cartel had responsibility for initiating the September 11 attack, should one be able to demonstrate their ability to activate Muslim and Mossad agents. (It can be demonstrated, with multiple connections.) In none of the testing of hypotheses did the available information contradict one of the major conclusions of this paper: the official US government interpretation of terrorist activity confronting America is deliberately misleading, and the list of “bad guys” is totally different than what the public has been led to believe. THE SEPTEMBER 11 COMMISSION REPORT Page 26 Methodology Please note that this report generally follows several important rules of research:  This report uses as many independent sources as possible, rather than relying on government press releases and mainstream media. In this report, there is evidence from U.S. agents themselves, that the US government has forced a CIA translator, a CIA agent and three FBI agents to fabricate and distort information on the 9/11 investigation. These people are in court to bring out the truth, and protect themselves from repercussions. These five are only the ones coming forward publicly. The public needs to ask - how many more remain silent? (Internet reports suggest up to 200 government agents are ready to testify against the administration.) There is also evidence from two college professors that the CIA deliberately falsified video-tape evidence. There is evidence presented from Underwriter Laboratories that the government has presented false information.  Questions are best formulated by studying a situation and asking “What information is missing?” With the hundreds of investigative reporters in the world attempting to uncover the truth about 9/11, major points of evidence are totally ignored by the US government and many conspiracy theorists, and treated as ‘inconvenient’ facts. This report does not ignore them. Surprisingly, there is a strong coherency to what are reported as coincidences and inconsistencies – and all the “wild conspiracy theories” actually hang together.  This reports looks at these events as crimes rather than political terrorist activities which are intended to create fear. The basic rules for identifying “who did it” still apply: motive, opportunity, weapon, and ‘follow the money.’  If one uses the same standard of evidence as applied under the Uniform Code of Military Justice to the alleged terrorists appearing before military tribunals, then hearsay evidence is acceptable.  Some readers may conclude this report attempts to establish guilt by association and character, an invalid principle in the U.S. courtroom. Guilt is determined by due process – not a report. There are Constitutional processes for determining guilt, and this report does not seek to supplant them. However, the American criminal justice system has established and sanctioned two practices which are based on guilt by association and characterization: profiling and prosecution under the RICO conspiracy laws. This report assumes that if an organization (or partnership) has several key members that are publicly associated (not necessarily convicted) with similar criminal activity, activities of the entire organization warrant suspicion. If publicly available information about that organization reinforces those suspicions, those suspicions should be investigated and reported. That is what this report does – it summarizes that information and suggests that a different theory explaining the attacks of September 11 is consistent with the facts ignored by the official 9/11 Commission. Current interpretations of events in the Middle East (either that of the US Government or various conspiracy theorists) do not help us understand the facts as they are known today. There are too many dangling leads. This report attempts to THE SEPTEMBER 11 COMMISSION REPORT Page 27 address the ‘loose ends’ in this interpretation of the news. Major crimes have been committed and not one person has been convicted. “Terrorists” charged for supporting 9/11 in Germany and Spain have been found not guilty. Osama Bi Laden is not charged with 9/11 on the FBI’s “Ten Most Wanted” list because the FBI has no evidence connecting him to the crime. This report attempts to redefine leads that might result in holding people accountable for their crimes. This research represents a significant paradigm shift from most of the September 11 research available. That shift is brought about by two very significant challenges created by the information presented. · The first challenge: look at all the information before assigning guilt. Much of the current criticism of American public officials involved in cover-up activities has a tendency to focus on the ‘American and Israeli participants.’ Another large band of criticism is saved for the Saudi royal family, because of their familial relations to Osama Bin Laden and significant financial contributions to American politics. However, if one looks at the record of how these American and Saudi officials actually executed their operations (ranging from criminal to legal, but generally considered unscrupulous) there is a consistent participation by the Russian/Israeli Mafiya and the German banking cartel, which includes certain Swiss banks. As one digs deeper, one finds the Russian/Israeli Mafiya are quite significantly involved in these events, and the bank cartel may well be the greatest benefactor of the crime and cover-up. The research paradigm must include foreign nationals from Germany and Russia. · The second challenge: the timing of the attack on the WTC suggests a pace of events where the planners were comfortable with a two-to-three year execution phase. A decision to destroy the WTC was made in 1999 or 1998, with the key ‘hijackers’ in that plot being assigned in early 1999. The research paradigm needs to be focused on events in 1998 and 1999, not the events in January through July of 2001. Similarly, in suggesting that the maturity date of 10 year gold backed bonds issued on September 11, 1991 was a significant factor in the timing of the attack, that period needs to be understood as well. Addressing these two challenges will lead to the conclusion that a German/Swiss bank cartel undertook a decision in 1998 to destroy a number of US investigations that threatened their illegally gained wealth. Adnan Khashoggi was the common thread in most of those investigations, so the Cartel would have needed to approach him as well as Edgar Bronfman, Khashoggi’s business partner. They in turn, would have most likely approached their old colleagues: Bush Sr., Secord, Armitage, Kimche, and Azima. These five, in turn, would have used the foot-soldiers at their disposal: Al Qaeda and the Russian/Israeli Mafiya. This investigation is not an attempt to support a particular political viewpoint. In the end, there is no final proof and there is no confession. If there was a confession, it would disappear as if it never existed, and every mention of it would be erased. People who present information critical of the Iran-Contra Syndicate often commit suicide within 24 hours, and their reports disappear (e.g., Brad Doucette, John Millis and Gary Webb). A list of nineteen such murdered individuals is compiled in this report. The crimes THE SEPTEMBER 11 COMMISSION REPORT Page 28 described here-in are very complex, and executed by both professional and vicious criminals. The cover-up of these crimes is done by people who cause their accusers and whistleblowers to lose promotions, jobs, freedom and possibly even lives. While “proof” is hard to come by, there is a very compelling case of circumstantial evidence. The explanation provides better answers for more of the open issues than the official 9/11 Commission Report. It also provides a better explanation than suggested by a number of conspiracy theorists who suggest the Bush administration and CIA or Israeli government are at fault. All three of those explanations leave too many unanswered questions, and none really explain the reason the World Trade Center was brought down with a series of explosions, or how suspicious trading indicated there were those with foreknowledge of the crime. Conspiracy theorists also like to conveniently forget that the attack on the World Trade Center was planned and initiated before the Republican National Convention, before George Bush Jr. was even an official candidate for President, much less President. Moreover, there is nothing in the historical record to suggest he is capable of architecting such a solution. At the end of the day, it’s always about the money, and the money trail points to none of the official suspects – Osama Bin Laden or Al Qaeda. However, even after identifying a more realistic suspect, there is no good news in this story for anyone. It is still a story about corrupt and greedy people – however noble they thought their intentions – they are directly responsible for the unnecessary death and suffering of thousands and thousands of innocent people like your parents, children and friends, for no reason other than selfgratification and ego. THE SEPTEMBER 11 COMMISSION REPORT Page 29 1 Unmasking the Faces Behind the Terrorist Threat In the realm of geopolitical turmoil, where political terrorism has taken on an international scope, the world has recently seen the emergence of two major terrorist groups – Osama Bin Laden’s ‘Al Qaeda’ and more recently, Abu Musab al-Zarqawi. Terrorist incidents around the globe have been attributed to both groups, with Abu Musab al-Zarqawi establishing global notoriety with the video-taped beheading of three hostages in Iraq. In October of 2004, Abu Musab al-Zarqawi swore allegiance to Bin Laden, bringing about a merger of what had been seen as separate, but possibly “linked” groups. In a world were the international press had reported that the two leaders were not on friendly terms, and viewed each other as possible rivals, this surprising turn of events drew very little attention in the media. What the Muslim terrorists accomplished, with much fanfare and publicity, was to create the link between Al Qaeda and Iraq that helped justify the US invasion – a link that could not be proven, until someone created it and drew world attention to it. In retrospect, what the world knows about these two groups poses some interesting comparisons, and contradicts the conventional knowledge about these groups. This report attempts to bring a different perspective to the facts as commonly interpreted, and provides an explanation for some significant failures of conventional wisdom. The official U.S. government explanation for the success of Osama Bin Laden is that the foundation for his ability to conduct and support international terror is based on his inherited family wealth, family connections to conservative Saudi philanthropists, and an education that allows him to invest wisely. The conventional ‘unofficial’ explanation is that the CIA and British intelligence made Osama the success he is, and as long as he threatened the stability of Iran, or the Soviet presence in Afghanistan, he received all the arms and money he required. It allowed him to finance an impressive organization, capable of forging passports, moving people across oceans and borders, training 1,000 potential terrorists a month, and making major arms purchases. Subsequent to the sequestering of his funds after the September 11th attack on the World Trade Center, he appears to have been marginalized – with claim to no major terrorist attacks for over five years. Contrast that to Abu Musab al-Zarqawi, who comes from an impoverished family with little education. He is a common criminal street thug, with no known source of funding, and essentially comes out of nowhere with newly discovered politico-religious fervor. Without a funding source comparable to Osama Bin Laden, he is able to launch a multinational assault with purported attacks in Hamburg, Chechnya, Madrid (train bombing), Mombassa (hotel bombing) and now, all over Iraq (kidnappings). “Abu Musab al-Zarqawi, leader of the organisation responsible for the beheadings in Iraq, is regularly portrayed by the US government as a terrorist mastermind, responsible for activity in places as widespread as Hamburg, Chechnya, Madrid and Mombasa. But while there is no doubt that Zarqawi has committed awful crimes, experts say that accusing him has become an easy fall-back for the authorities as they struggle to contain the insurgency. There is no unanimity on whether Zarqawi is a THE SEPTEMBER 11 COMMISSION REPORT Page 30 henchman of Osama bin Laden or a rival.” [A thug who will stop at nothing to create pure Islamic zone in Middle East, Ewen MacAskill and Rory McCarthy, The Guardian, September 23, 2004] By executing three American hostages – Nick Berg, Eugene Armstrong and Jack Hensley - on videotape (the killing of the British hostage, interestingly, was not video taped), he gained as much international recognition as Osama Bin Laden, to whom he reportedly later swore allegiance and loyalty. If funding is a prerequisite to the level of activity supported by terrorists, one is forced to conclude that Abu Musab al-Zarqawi is funded from some unknown source. One is also forced to conclude that al-Zarqawi had access to passport forgery capabilities, and that he had significant connections for the purchase of weapons, explosives, chemicals and more. More simply, the newer, more public Abu Musab al-Zarqawi in Iraq represented a mature, sophisticated intelligence operation. In retrospect, it seems as though the videotaped executions attributed to al-Zarqawi were nothing more than an extremely vicious publicity ploy. The kidnappings never really entailed any negotiations around conditions for release, as if the intent all along had been to execute the hostages. A careful review of the facts which surround these executions suggests that little is at is appears. An alternative interpretation of the events is suggested: 1. Abu Musab al-Zarqawi is most likely a Mossad counter-espionage front (Whether this group is the original al-Zarqawi, or someone assuming his identity becomes immaterial.) This front was probably established under the direction of General Meir Dagan, current head of the Mossad who was responsible for setting up an Israeli intelligence network in Iraq after the Iraqi-Kuwait War; 2. The executed hostages of Abu Musab al-Zarqawi were probably not innocent bystanders and victims, but rather players in the world of espionage. To that point, a number of other, less publicized beheadings were broadcast as the executions of CIA agents. (In passing, one should note that no “Israeli” agents have been publicly executed by this group, although it is reported that Dagan did set up a network in Iraq.) 3. The hostages executed in Iraq were most likely executed by the Mossad for five reasons: 1) to create publicity and credibility for their Muslim front in Iraq, 2) to create American support for Israel against the Muslim threat to Israel’s existence, 3) to clean-up loose ends in their own intelligence world, 4) to send a message to other operatives and intelligence trespassers that the Middle East belongs to the Mossad, and that Mossad deals with its enemies harshly, and 5) to foster divisiveness amongst the Iraqi Muslim population, ultimately resulting in break-up of Iraq into smaller countries – a Balkanization of Iraq. 4. There are, in all likelihood, two arms to the Mossad: one of which is patriotic and public-service oriented, with another that is a more-or-less a rogue operation, heavily infiltrated by Russian mafia, ex-KGB and ex-Israeli Special Forces. This latter side is the ‘dark side’. This group has extensive connections to the international black market in armaments originaring from former Soviet republics. It is linked to the conservative right wing of Israeli politics: Sharon and the Likud Party. The different THE SEPTEMBER 11 COMMISSION REPORT Page 31 sides of the Mossad work together when it serves their own purposes – but neither controls the other. However incredible this may seem, a review of the public record suggests this interpretation is far more credible than the current, common view that the Muslim terrorists are fanatics striking out against America, and these are random executions meant to create fear. The commonly held interpretation offered by US government press agents is not credible under scrutiny. The probability that a terrorist group could coincidently target three (or more) intelligence agents is pretty slim. The probability that the level of sophistication demonstrated by Musab al-Zarqawi is not the product of a well-established intelligence organization is also pretty slim. The contention that Musab al-Zarqawi is a “front” for a Western ally is not isolated to this terrorist group. As shall later be shown, this contention is consistent with the reports that show that most of the Muslim terrorist groups which ring the former Soviet Union (the “Islamic Liberation Party, the World Wide Islamic Front, the Defenders of the Shariat, the Mukhadjiri movement, the Islamic Movement of Uzbekistan, and Al Qaeda) are funded and controlled out of Western capitals by Western diplomats. THE SEPTEMBER 11 COMMISSION REPORT Page 32 2 The Smoking Gun – Nick Berg People who usually turn a blind eye to conspiracies took note of the suspicious nature and inconsistencies of the Nick Berg tragedy. People who have never said “something smells bad here,” were saying just that. Websites across the world were abuzz with observations, supported in some cases by the major media, that suggested that it was not Al Qaeda or Musab al-Zarqawi that executed Nick Berg, but speculated that it was either agents of the US Government or the Israeli secret service. The general trend of the public opinion on websites suggests that because the US had the most to gain by creating a distraction to the Abu Ghraib prison abuse scandals which were filling the front pages of the press at that time, they are the most likely culprits. The clues, however, point to elements of the Mossad. In doing so, the clues suggest that Mr. Berg was no innocent bystander caught between good and evil. Mr. Berg could find his friends amongst terrorists, the Whitehouse staff and the Russian Mafiya. Mr. Berg probably knew exactly what he was getting into, and the risks! In all likelihood, he was a smoking gun that pointed to dark, ugly secrets. Three premises need to be established: 1) Nick Berg was not killed by Al Qaeda or Musab al-Zarqawi, 2) Nick Berg was killed by the Mossad, and 3) the Mossad had motive to kill Nick. It is this last premise that suggests that the Mossad are the real terrorists, and it reinforces the view that the Mossad deliberately tries to manipulate American public at the expense of the lives of American citizens. Knowing that, however, is not enough. The Mossad – as are all intelligence agencies - are middlemen. They always work for a higher authority, and surprisingly, in this case, that authority is not Israel. The higher authority does not represent a ‘Zionist’ threat. The reader may, at this point, be tempted to disregard this analysis, because its premise is almost too unbelievable to be considered as plausible. Please, read on – because the information is truly overwhelming. 2.1 Nick Berg was not killed by Muslim Terrorists Across many websites, one will find various lists of questions, inconsistencies and observations that suggest the credibility of the videotape of Nick Berg’s execution is seriously challenged, and nothing less than food for suspicion. Fourteen significant inconsistencies and coincidences in such a short video should not be casually dismissed. These inconsistencies include: • Why does a man who wears a scarf to hide his identity announce his name to the public? • Why is the Muslim executioner’s face covered with a scarf when tradition suggests that Muslim executioners do not wear facial coverings? • Why would a fanatical Muslim violate other Muslim tradition such as using the left hand to cover a cough, or THE SEPTEMBER 11 COMMISSION REPORT Page 33 • Why would a fanatical Muslim wear a large gold ring? • Why would five Muslim executioners be dressed in all-black commando style outfits (except for the clean white sneakers), when you rarely see terrorists in uniform in other videos and news clips? • Why would five Muslim/terrorist executioners be seen to be ‘stocky,’ when every terrorist you’ve ever seen on news video is gaunt? • Why would there be a general consensus that the dialect spoken by the terrorist in the video was not the same as that of the terrorist identified by the CIA, Al-Zarqawi? (Interestingly, the US Army had reported Al-Zarqawi killed by the bombing of Falluja, a month earlier.) Even more interesting, their Arabic is heavily accented (Russian, Jordanian, Egyptian). An aside comment in the video - in Russian - has been translated as "do it quickly". The Russian presence becomes an increasingly important factor as this story emerges. It is not insignificant. • Why didn’t that same terrorist walk with a limp that the one-legged Al-Zarqawi would have? (Although subsequent news reports contend no one is actually sure if Al- Zarqawi is a double amputee, single amputee or an amputee of any sort.) • Why would someone stage a public execution, by cutting off the head of a man already dead? • How does a prisoner of Muslim terrorists come to be wearing an orange jumpsuit, the garb of US prison inmates? • How does it happen that the white chair shown in the execution video is the same style and color of the chairs shown in videos of Abu Ghraib prison, and the painted wall and floor boards the same color as that of Abu Ghraib? (Interestingly, subsequent news revelations by U.S. General Karpansky about the prison have identified “secret” holding sites, which allowed Israeli interrogators to keep prisoners out of public site.) • Why would the Iraqi Police deny holding Berg as a prisoner when the FBI claimed he was an Iraqi Police prisoner? • Why would the US Military deny holding Berg as a prisoner, when the FBI had notified his parents, after investigating, that Berg was a prisoner of the US military? • Why would firearms experts state that the AK-47 carried by one of the purported terrorists in the video was actually a “Galil” – an Israeli made, enhanced AK-47. It is very expensive and generally unavailable to Muslim “terrorists.” There are just too many coincidences and inconsistencies to be ignored. (Web sites on the Internet list as many as fifty such discrepancies, but these appear to be the most pertinent.) Together, they suggest that someone pretended to be Al Qaeda or Musab al- Zarqawi, and did a relatively poor job at it. THE SEPTEMBER 11 COMMISSION REPORT Page 34 2.2 Nick Berg was executed by the elements of the Mossad The clues to this premise are not found in lists across the internet (although the Israeli manufactured Galil is a pretty specialized clue), but rather in the limited information in the news about Nick Berg. It becomes an exercise in ‘connecting the dots,’ which –after being connected, show a very different picture. The more dots – the better the resolution. When the dots are connected, they suggest Berg was not an innocent businessman who was in the wrong place at the wrong time. What does the world know about Mr. Berg, given subsequent stories and insights into his life? Berg like to travel, and his passport indicated several trips to the Mideast prior to his final visit to Iraq. Berg previously traveled as a ‘good Samaritan’ to Ghana, Kenya and Uganda. In itself, this is a fairly benign statement, unless one is aware of the Mossad’s extensive history of activity in these three countries for strategic military reasons. He also traveled in Iraq, Israel and Iran. For the last thirty years, the Mossad has been involved in all five countries because of the strong Muslim influence in these countries. As a point of reference which helps demonstrate the significance of this travel pattern, the reader might research the history of Tony Weber in the 1970’s, a known double CIA/Mossad agent in Ghana who went there as a US AID worker (an agency with which Mohammed Atta – the alleged leader of the attack on the World Trade Center – has been reported to have had links). Berg traveled to Israel to study Hebrew and Arabic. Again, this is another incidental fact, until you consider a recently released CIA report from 1979, which described Mossad practices: “One of the established goals of the intelligence and security services is that each officer be fluent in Arabic. A nine month intensive Arabic course is given annually…. As further training, these Mossad officers work in the (Israeli controlled Arab lands) for two years to sharpen their language skills.” Berg told friends he was looking for work in Northern Iraq from a “former customer”. The only telecommunications contracts issued by the US occupation government during that year were to the Israeli firm of Iridium Satellite, whose major customer is the US Department of Defense. This then, was the only possible customer he could have. This also means he worked for Iridium Satellite before going to Iraq. The Mossad’s involvement in the Israeli telecommunications industry has been extensively documented, especially with their involvement in such Israeli firms as Verint (formerly Comverse Infosys) and its infamous wiretap computer programs, and Amdoc, which processes the phone data of all the major US phone companies, coincidentally gaining access to all US phone records. The Iridium Satellite connection is complex, because in addition to it being listed as an Israeli owned firm, Mike Ruppert reports (Crossing the Rubicon, 2004, p128) that Iridium was bought by the Bin Laden group in 1999 from Motorola. The Bin Laden group is controlled by the family of Osama Bin Laden. Cooperation between the Saudi elite and Israeli Mossad is based on a common enemy – the fundamentalist Shi’ites. This cooperation will be demonstrated over and over again throughout this report. THE SEPTEMBER 11 COMMISSION REPORT Page 35 Prior to being in Iraq, Nick Berg developed a relationship with Aziz Kadoory Aziz, also known as Aziz al-Taee. In Iraq, he linked up Aziz again. Aziz talked to Nick on the last day he was seen, and reports that Nick had found transportation to Jordan with “friends.” Aziz has a relevant background. Having left Iraq in 1993, he came to Philadelphia, where he got involved with the Russian Mafiya - a network run by a Soviet immigrant named Valery Sigal. (Sigal was arrested at least three times, once for involvement in distribution of drugs, and once for involvement with stolen computers, and once for selling counterfeit disks.) Aziz met Nick in the US, and Nick used his office in Baghdad. This strange linkage to the Russian underworld will continue to become a highly redundant phenomenon as this investigation unfolds, as many of the Israeli secret service are demonstrated to have roots in the underworld of the former Soviet Union. More curious though than the link to the Russian Mafiya is Aziz’s link to Washington DC based, neo-conservative, pro-Israeli group known as PNAC (Project for a New American Century), and a web site fronting for this group having labeled Nick Berg’s company (Prometheus Methods Tower Service) as a “traitor.” (See Section 4.1: Project for a New American Century) This website had trademarked a list known as the “Traitors List,” where those listed are accused of being anti-American. Nick’s father and Nick’s company were both identified on this list as “Traitors.” The owner of this site would later hire Jeff Gannon/(aka Jeff Guckert) as its Media Director. It seems that shortly after the murder of Nick Berg, Joe Aziz returned to the US to make a living with speaking engagements promoting the official US Government position in Iraq. As part of this promotional tour, Joe Aziz was escorted and introduced in US political circles by Jeff Gannon/Jeff Guckert of the Talon News Service. (Gannon/Guckert would later be exposed as a $200 an hour male prostitute who made over 200 trips to the Whitehouse, according to Secret Service log books at the Whitehouse.) Shortly after Nick Berg’s company was labeled “traitor” by the PNAC website, Nick was befriended by a convicted felon who traveled to Iraq with Nick and become the last known person to see Nick alive. After Nick’s murder, this same ‘instant business partner’ was then shopped around Washington DC by the same group that had labeled Nick’s company “traitor,” and promoted by a pro-Israeli website. (The role of the PNAC members in the events of September 11 is discussed in detail in later chapters.) Berg’s execution took place in Mosul. Mosul has been a hotbed of Mossad activity for strategic defense reasons. The Mossad has long worked in this region to promote its strategy of a weaker Iraq, created by supporting and fomenting rebellion in the Kurdish northeast. If the Mossad is active in Iraq at all, it will be active in Mosul. It has been reported by people who knew Nick in Iraq that Nick had the peculiar habit of traveling and working at night. When he was picked up by the Iraqi Police he was held because of "suspicious activity." His residence in Mosul was also suspicious. Staff at Al- Fanar Hotel in Baghdad apparently told The Associated Press that Berg stayed there for several days until April 10. It was reported that a U.S. Consul contract worker checked at the hotel on 4/14, and staff there did not remember Berg. It seems that a lot of people THE SEPTEMBER 11 COMMISSION REPORT Page 36 who knew Nick Berg in his last days also had memory problems and retracted their stories: the police, the military, the hotel staff, and later, the press in Norman, Oklahoma. It would appear that some intelligence organization with influence was “cleaning up” after the execution of Nick berg. Prior to 9/11 and his murder in Iraq, Nick Berg spent time in Norman, Oklahoma at the University of Oklahoma. In Norman, this highly ‘tech-savvy’ student supposedly shared his email password with an Arab stranger, possibly even Zacarias Moussaoui himself. The FBI found Nick’s email password (not his email address – his password that allowed him to send emails) amongst the information it confiscated from Moussaoui, an indicted 9/11 conspirator. "The FBI searched Zacarias Moussaoui's computer after the 9/11 attack and found Nick Berg's email account and password on it. When interviewed by them, Berg reportedly explained that when he was a student at the University of Oklahoma in the fall of 1999, he allowed a stranger on a bus ride to use his email. The stranger turned out to be an associate of Moussaoui, we are told, and gave him Berg's password and email account name. This was reported by CNN and other news organizations. There are several big reasons to be extremely skeptical about this story and to wonder what kind of fools the FBI agents were who bought it. One glaring fact is that, according to his indictment, Moussaoui did not show up in the United States until February of 2001." [Anyone Shopping for a Bridge in Brooklyn? If You Believe Nick Berg's Story to the FBI I'll Sell You One, by Michael Wright] An interesting side-bar note on this event is that it is possible Nick knew more than one of these “terrorists.” “Previous reports spoke of but one, met on the bus. Berg's father, however, alluded to more than one. Ewing2000 quotes NewsMax -- not a reliable source -- to the effect that Berg met with Zacarias Moussaoui himself, an assertion conflicting with previous reports that Berg met a Moussaoui associate. More than that: The FBI apparently thinks that Berg"may have known" Moussaoui's two roommates, also tied to Al Qaeda.” [Unidentified web source- type any text into Google to locate source] The question arises: why was Nick Berg at the University of Oklahoma in Norman, Oklahoma? In Norman OK, one also finds the Norman Flight School, which has also been documented as a gathering location for such terrorists as Mohammed Atta, Marwan al-Shehhi, Nawaf Alhazmi, and Khalid Mohammed. The link between the Norman Flight School and the University of Oklahoma is that students from the Norman Flight School stay in dormitories on the University campus. Students and police have testified to the strange behavior of Mr. Berg – in particular of his sleeping on couches in dormitories around campus. It might be fair to surmise that he was looking for someone by spending time in the dorm lounges. He was also arrested twice by the campus police for trespassing, but these records have disappeared. A couple of other random bits of information put more context to this scenario. The Mossad has been identified as active in Oklahoma City as far back as the Oklahoma City bombing. It is oddly strange that a student who is interested in telecommunication technology transfers to the Norman campus of the University of Oklahoma? One generally goes to a third college when you want to specialize – there is no Telecommunications Program in Norman. Is it possible that Nick (or a close associate) was the unknown “white male student” that made reservations on an Oklahoma University library computer terminal, for Flight 77 THE SEPTEMBER 11 COMMISSION REPORT Page 37 that crashed into the Pentagon on September 11? Was it possible his two arrests for trespassing on the campus (by Campus Police) were associated with his gathering of intelligence? Given that he spent no time in jail as a repeast offender for burglary or trespassing, should one assume he had ‘highly placed’ protection? (Possibly the President of OSU, Mr, David Boren, former CIA Director.) Around the same time, Mr. Berg had work installing telecommunications equipment at the Republican National Convention in 2000. Here, Ellis Kitchen, who managed the telecommunications implementation at the convention, would have pulled him into this assignment. Ellis is an interesting person, with virtually no public record. As a public official without a biography, all we know is that he ran special technology projects for the George Bush Whitehouse between 2001 and 2003, and that he arranged ‘secure satellite communications’ for sixty countries during that time. Two themes emerge on this information: high tech satellite communications, and the need to keep a low personal profile. Even more interesting are the three additional coincidences embedded in this tidbit of information. 1) Mr. Berg had connections in the Bush Whitehouse when he was executed. 2) In the space of less than a year, Nick Berg was bumping up against international terrorists, the PNAC, the Russian Mafiya, and the elite of the Republican Party security apparatus. The closeness of these two activities provided a much more compelling reason for the FBI to be investigating Nick Berg. 3) The security checks of the Republican National party convention – classified by the Secret Service as a National Security Special Event, who therefore vetted all convention personnel – somehow overlooked the public record that Nick Berg had been twice arrested for trespassing just months before. However, maybe this record was overlooked because of the vouching of George Tenet, Bush’s Director of the CIA. Tenet, (who had extremely close, personal ties to the President of the University of Oklahoma at Norman: David Boren - a former CIA director himself,) was in a position to provide a personal reference and introduction for Mr. Berg. Mr. Berg was the supposed owner of an unregistered, non-existent company called Prometheus Methods Tower Service. The fact that his company was not registered anywhere is not a big issue in-and-of-itself. A lot of consulting entrepreneurs do not register as a company. The company name also seems fairly benign: “Prometheus Methods.” The very interesting aspect of this clue, however, is the company name. ‘Prometheus Methods’ refers to one thing only – an extremely sophisticated computer program for solving extremely complex problems, using parallel processing. Again, this would be a benign fact until you learn that the creator of Prometheus Methods works for Sandia International, a weapons research firm, a subsidiary of Lockheed Martin, and a significant player in research and development for US national security. The Prometheus Methods technology is based on MPI programming, which simplifies the generation of code generation for running programs on multiple processors, creating in effect, a large supercomputer. Also, seemingly benign and unrelated, is the Mossad connection to spy ware distributed through its Israeli companies Odigo (instant messaging), Zone Labs and Cydoor (maker of Kazaa, and probably contributing to the core code of Grokster as well). By planting spy ware and backdoors on over 50 million home computers, the Mossad has created the foundation for the largest wide area network computational grid THE SEPTEMBER 11 COMMISSION REPORT Page 38 on the globe. A documented example of this is Zone Labs. Zone Labs is an Israeli owned (Checkpoint Technologies Software Company) provider of “security software product” for home PCs. “A Perfect Spy? It seems that ZoneAlarm Security Suite has been phoning home, even when told not to. Last fall, InfoWorld Senior Contributing Editor James Borck discovered ZA 6.0 was surreptitiously sending encrypted data back to four different servers, despite disabling all of the suite’s communications options. Zone Labs denied the flaw for nearly two months, then eventually chalked it up to a “bug” in the software -- even though instructions to contact the servers were set out in the program’s XML code. A company spokesmodel says a fix for the flaw will be coming soon and worried users can get around the bug by modifying their Host file settings. However, there’s no truth to the rumor that the NSA used ZoneAlarm to spy on U.S. citizens.” [ZoneAlarm phones home, Apple throws Intel a bone Does crabby columnist deserve a raise, or is he just being shellfish? Robert X. Cringely® infoworld, January 13, 2006] The appropriate question is, how does an entrepreneur who repairs communication towers happen to be familiar with a truly obscure algorithm that has no publicly known connection to tower communications, but is a key component of the national intelligence arsenal. It is fair to speculate that he probably learned of this method from Dr. Arthur Breipohl, of the University of Oklahoma at Norman. Dr. Breipohl specializes in the analysis of random data and processes, and was a consultant to Sandia International for many years. (This story will coincidently (?) run into another main character named Dr. Diethart Breipohl of Germany, former CFO for Allianz. Arthur Breipohl, of Norman, was reportedly born in Higginsville, MO in 1931, the son of immigrant parents. If one looks at the pictures of Arthur and Diethart however, one might swear they were brothers. At the moment, their relationship has not been proven, but most likely they are cousins.) In a final piece of irony (?), the essence of Prometheus Methods is to create programs that solve problems on a single processor without communicating with the other processors, until called into play by a master or ‘global’ program – exactly like the organization he was watching, and also part of. A strong case can be made for the argument that Mr. Berg was an agent of the Mossad starting as what is referred to as a sayanim. (These are citizens in countries other than Isarel who have 100% Jewish heritage, can be considered sympathetic to the fate of Israel, and are recruited for specific Israeli intelligence needs.) Nearly everything the public knows about Nick can link him to the Mossad. Most people are murdered by someone they know. The Galil (the Israeli version of the AK47) and the strategic interests of the Mossad puts them at the scene of the crime. There are plenty of documented cases where the Mossad has been caught in the midst of a false flag operation, including the creation of phony Al Qaeda cells. The Mossad deals brutally with those who cross it. Rabbi Dov Zakheim, former Undersecretary of Defense, who has acknowledged knowing Mossad agents, described how Israelis deal with those perceived as traitors: "… I had heard of the virtual brutality with which the Israelis dealt with those who opposed them, especially if they were Jewish. …. Since the Israelis played hardball, and played it personally, I figured THE SEPTEMBER 11 COMMISSION REPORT Page 39 that I would soon be on their hit list." [Dov S. Zakheim, Flight of the Lavi: Inside a U.S. Israeli Crisis, Brassey's, Washington 1996, p 21] From another source, one finds the same approach to guaranteeing silence: “Moser is a Jewish word for "rat-fink" or informer--punishable by death according to historical culture.” [Missile & remote control systems added to small jets before 9-11; same parts found at Pentagon, Tom Flocco, TomFlocco.com, 5/26/2005] The MO (mode of operation) for this crime fits the Mossad. What remains to be determined is motive. 2.3 Why the Mossad killed Nick Berg –Motive There are two possible explanations for motive. At one level, Berg committed a serious breach of security when he publicly created a link between the Mossad and the US telecommunications sector by naming his company after “Prometheus Methods.” By naming the company after this program, he demonstrated a willingness to be cavalier with security and intelligence information. It may be that this name was purposely meant to be a pointer back to Dr. Breipohl, for reason which will become a little clearer, later in the article. On several occasions in the recent past, the FBI has rigorously investigated Mossad penetration of the US telecommunications infrastructure, without any successful prosecution. Berg may have been the link they needed to indict the Mossad on this issue. Maybe that alone was cause for the Mossad to eliminate him. The probable cause is more ominous. A second theory is a founded on – but varies significantly from - research by Michael Phillip Wright and available on his website, and supported by an article in the British magazine Eye Spy (viii, 2002). There are literally dozens of websites that support versions or portions of this conspiratorial view of the WTC tragedy (including a 60 minute special by Fox News that was never aired, but released on CD,) in which the Mossad is demonstrated to be at the core of activity leading up to the attack. This theory suggests that the WTC attack was a FBI/CIA sting operation that went wrong. In this theory, the CIA and FBI, through its informants and through various intelligence agencies, were very well aware of, and allowed, the activities of 9/11. They believed the planes would be hijacked – with nothing more spectacular planned. They had a number of agents on each plane (assuming they knew that four or more planes were targeted) who were unable to prevent the disaster when they discovered the plan was not unfolding as they had been advised. These theories have no explanation as to why the “sting” went wrong. This report suggests the reason the plan failed was because the CIA was being misled by the Mossad, who wanted this event to be fully executed. In this theory, Mr. Nicholas Berg was a small player, but had the knowledge and the willingness to disclose his role. To prevent this, he needed to be silenced. This second theory becomes more viable when one considers that the Russians, Germans, British and Israelis have gone on public record as saying that they had notified the US THE SEPTEMBER 11 COMMISSION REPORT Page 40 administration a couple of months prior to the attack that terrorists were planning on using planes to attack significant national institutions. "Israeli intelligence officials say that they warned their counterparts in the United States last month that large-scale terrorist attacks on highly visible targets on the American mainland were imminent. The Telegraph has learnt that two senior experts with Mossad, the Israeli military intelligence service, were sent to Washington in August to alert the CIA and FBI to the existence of a cell of as many of 200 terrorists said to be preparing a big operation...."[Israeli security issued urgent warning to CIA of large-scale terror attacks, Daily Telegraph, 11/19/2001] "…The Mossad, Israel's feared secret service, gave the US an urgent warning, according to recent reports from Germany. These reports say that on August 23, 2001, the Mossad gave the CIA a list of terrorists living in the US and said that they appeared to be planning to carry out an attack in the near future. Apparently this warning and list were not treated as particularly urgent by the CIA and also not passed on to the FBI." [Deer Spiegel, 10/1/02] "August 23, 2001: According to German newspapers, the Mossad gave the CIA a list of 19 terrorists living in the US and said that it appeared that they were planning to carry out an attack in the near future. It is unknown if these are the same exact 19 names as the actual hijackers or if the number is a coincidence. However, at least four names did refer to actual 9/11 hijackers: Napa Alhazmi, Khalid Almihdhar, Marwan Alshehhi, and Mohamed Atta." [Die Zeit, 10/1/02, Der Spiegel, 10/1/02, BBC, 10/2/02, Haaretz, 10/3/02] "As late as August 24, less than two weeks before the attacks, a Mossad warning, confirmed by German intelligence, BND, said that 'terrorists plan to hijack commercial aircraft to use as weapons to attack important symbols of American and Israeli culture." [Globe-Intel. Number 104, 21/05/02] "On Monday 6, August, 2001, at 17:50, Ambassador Ischinger personally notified the President of the United States that information developed by the Bundesamt fur Verfassungsschutz as well as the BND indicated that an attack by a radical Arab group partially based in Germany was to occur on 10- 11 September, 2001." The information was "gratefully received" by the US President who stated at the time that he was also aware of the same pending assaults. Subsequent to these attacks, the office of the US President, through the US Department of State, made an urgent request to the government of the Federal Republic of Germany that no reference whatsoever should be made to the official warnings given by Ambassador Ischinger." [Translation of BND Report on September 11, 2001] "... According to our intelligence agents among terrorists there were at least two Uzbeks, natives of Fergana who arrived in the USA on forged documents about ten months ago.... The organization of the International Terrorist, according to Russian Intelligence Service agents had been planning an operation against the USA more than a year and a half." [Russia Warned US of Impending 9-11 Attacks, Izvestia (Russian Newspaper), 11/12/2001] "Russian President Vladimir Putin has said publicly that he ordered his intelligence agencies to alert the United States last summer that suicide pilots were training for attacks on U.S. targets."[Clues Alerted White House to Potential Attacks, Fox News, 5/17/2002] “There was a story that ran on the front page of The London Telegraph, The Jerusalem Post, BBC.com and several other news websites on the morning of Sept 12, 2001 that said George Tenet had received a detailed warning of the attack 12 days before from the head of MI-6 on a special line that was only used for fully vetted, verified info that was urgent and impending, requiring immediate action.” If there is any thought that the official explanation for 9/11 makes this type of information moot, that thought should be reconsidered. The 9/11 Commission Report attempts to gloss over reports from other intelligence agencies, and contends that there THE SEPTEMBER 11 COMMISSION REPORT Page 41 was a “major failure” in communications. Willie Brown, former Mayor of San Francisco, knows that is not true. Reported and dropped by the press: "For Mayor Willie Brown, the first signs that something was amiss came late Monday when he got a call from what he described as his airport security -- a full eight hours before yesterday's string of terrorist attacks -- advising him that Americans should be cautious about their air travel." [Willie Brown got low-key early warning about air travel, Phillip Matier, Andrew Ross, San Francisco Chronicle, 9/12/2001] A subsequent report clarifies that the source of the information was Condoleeza Rice, Head the National Security Agency. "According to a report today Friday, May 17, 2002, on Pacifica Radio, the warning to San Francisco's mayor came from squeaky-clean Condoleezza Rice." [http://www.fpp.co.uk/online/02/05/Bush_knew2.html] This suggests the people who were in a position to stop this act were possibly acting negligently. Ms. Rice has denied this claim, the response to which has already been made by a former FBI translator: "A former translator for the FBI with top-secret security clearance says she has provided information to the panel investigating the 11 September attacks which proves senior officials knew of al-Qa'ida's plans to attack the US with aircraft months before the strikes happened. She said the claim by the National Security Adviser, Condoleezza Rice, that there was no such information was "an outrageous lie". 'I saw papers that show US knew al-Qa'ida would attack cities with aeroplanes' " [Whistleblower the White House wants to silence speaks to The Independent, The Independent, Andrew Buncombe, 4/2/2004] Similarly, Congressional Intelligence committee leadership was aware of the specific threat to the World Trade Center towers. Randall Glass, FBI informant on the Kevin Ingram money laundering sting, has gone on record as having advised Florida Senator Bob Graham and his staff that Pakistani agents had specifically identified the Towers as targets in the very near term. It will later be shown that the FBI advised its FBI office in the North Tower of the World Trade Center to “harden” its data storage center in preparation for just such an attack. The data center was “hardened” a few months before the attack. While one can understand how representatives of the Israeli government might be aware of such plans, the fact that the only other national intelligence agencies to warn the US were Russian and German is of particular importance. Why would the Russians, Germans and Israelis be knowledgeable about these plans? This might be viewed as a meaningless question, but the answer is extremely important. The answer to this question is provided later, as the participation of the criminal organizations of these three countries unfold. Berg, as a probable agent of the Mossad, was identified by the FBI as having more than coincidental interplay with the 9/11 terrorists prior to the actual event. There is a large quantity of publicly available information and documented fact which can testify to the Mossad’s foreknowledge of the attack, found in six pieces of evidence: THE SEPTEMBER 11 COMMISSION REPORT Page 42 1. the notices sent to Israeli’s in the WTC two hours prior to the attack, advising them to not be in the building-(The occurrence of this message is now publicly confirmed by the executives of that Israeli company – Odigo.) 2. the five Israelis caught by the police on 9/11, dancing and shouting in joy at the destruction of the WTC, (After being detained for several months, these Israelis were released to the Israeli government, and returned to Israel.) These five were part of a group of 100 detained in the weeks immediately after 9/11. “Five of the Israelis, say Galloway, were arrested after "Angry witnesses had seen the five at a waterfront park in New Jersey apparently laughing and clowning, and photographing themselves in front of the burning towers." An FBI surveillance team had been monitoring the five and took photographs of their activities. One of the five Israeli had assumed a first name of Omer, which is close to the Arabic name Omar. Another had a German passport in addition to his Israeli passport. A third had an international flight booked to Thailand for September 13-two days after the highjackings. Yet another of the five Israelis was discovered by the FBI to be a former paratrooper, assigned to an elite Israeli defense forces unit. Two more Israeli Jews were arrested in a truck on Interstate 80 in Pennsylvania, near the site of the crash of American Airlines flight 93. A box cutter like the ones used in the airliner highjackings was found in their truck along with other incriminating evidence… FBI investigators believe that most of the 100 men detained are part of an Israeli intelligence unit operating out of New Jersey, near where the Anthrax letters were mailed. Israeli officials are desperately trying to paint the incident as a "mere mistake"-just some silly young men clowning around, unconnected to an official intelligence group.” [Israelis trapped in terror roundups cause worry at home, anger at U.S. Jim Galloway, The Atlanta Constitution, November 18, 2001] 3. the coincidental presence of an Israeli anti-terrorist, special forces martial arts training expert, on Flight 77. His name was Daniel Lewin. Even more coincidental, he was the only person shot on all four planes, and he was shot by terrorist sitting next to him. The news of a gun being used on this passenger, initially reported in the media, has since been “retracted” as an erroneous, “officially never happened” message. What are the odds that a terrorist, unassisted, would be sitting next to (or behind) a counter-terrorist expert, have a gun (on a plane!), know that he needed to kill the man next to him, and know that a box-knife wasn’t going to be of much use against a person with Lewin’s combat skills? "The "Executive Summary," based on information relayed by a flight attendant to the American Airlines Operation Center, stated "that a passenger located in seat 10B shot and killed a passenger in seat 9B at 9:20 a.m. The passenger killed was Daniel Lewin, shot by passenger Satam Al Suqami." The FAA claims that the document is a "first draft," declining to release the final draft, as it is "protected information." [See the FAA memo, originally posted at World Net Daily] "A report in Israeli newspaper Ha'aretz on Sept. 17 identifies Lewin as a former member of the Israel Defense Force Sayeret Matkal, Israel's most successful special-operations unit. "[UPI, 3/6/02]. 4. the existence of Mossad living quarters within a block of the addresses known to shelter Muslim terrorists in Florida and Oklahoma City (as documented by the US Drug Enforcement Agency), "Mohammed Atta, the presumed lead hijacker had lived at 3389 Sheridan St, only a few blocks away from the Fake Israeli Art Students! "[Le Monde 3/5/02; Reuters 3/5/02; Jane's Intelligence Digest, 3/15/02; Salon, 5/7/02] THE SEPTEMBER 11 COMMISSION REPORT Page 43 5. the actual arrest and release of Mossad agents in Florida, who were mistaken to be terrorists by local citizens, but were actually tracking Muslim terrorists. These agents were also released and returned to Israel. 6. Actual warnings of the attack from the Israeli secret service to members of the CIA. On this point, it is appropriate to point out that all agencies have their “rogues” – which does not detract from the integrity of honest and committed patriots, who probably sought to prevent this attack. This report contends that rogue Mossad/ex- KGB agents played a significant role in the attack. Moreover, members or associates of the Mossad were in a position to enable the hijackers to get through airport security. Security at Logan Airport, from which two planes were hijacked, is managed by International Consultants on Targeted Security, (ICTS) through its' subsidiary Huntleigh USA. It is run by "former (Israeli) military commanding officers and veterans of government intelligence and security agencies" (according to the Huntleigh Web site). The company was owned primarily by Menachem Atzmon and his business partner Ezra Harel (57%). Atzmon is the former financial controller for the Likud, (the ultra right wing Israeli political party) and spent several years in prison for campaign fraud. The Likud connection will later be shown to be important. "September 11, 2001: Later in the day, weapons are found planted inside three other US airplanes. A US official says of the hijackings, "These look like inside jobs." The only footage of the hijackers boarding airplanes on 9/11 is of two boarding a connecting flight in Maine. Could the reason that no other footage has been released be that the hijackers entered the airplanes via backdoors with the help of accomplices? As a matter of fact, "Sources tell Time that US officials are investigating whether the hijackers had accomplices deep inside the airports' 'secure' areas." [Time, 9/22/01] There is plenty of information to conclude that agents of the Mossad not only knew of the attack far in advance, but may have actually facilitated it. Now, here was Berg – who could directly link the Mossad to the terrorists prior to 9/11, who had a loose lip, had been uncovered by the FBI, and was being pressured by the FBI. That is why Moussaoui had Berg’s email password – Berg and Moussaoui were on the same team. Berg was the smoking gun that had to be eliminated. Berg was the proof of complicity between what is made to appear to be two separate groups: Al Qaeda and the Mossad. There is far too much ‘obviously planted’ information in the official FBI story line that suggests that someone wanted the world to believe Al Qaeda attacked the WTC, and that the real instigators may not have been who they pretended to be. (If you haven’t taken the time to familiarize yourself with the research on the ‘planted information’, conduct an Internet search for one of the many sites that publish the lists). There is documentation in the commercial press regarding how the Mossad sets up phony Al Qaeda cells, and how they have been known to run ‘false-flag’ operations for the past thirty years. Rowan Scarborough, in The Washington Times, on September 10, 2001, reported the release of a 68-page paper by the US Army School of Advanced Military Studies (SAMS). This report commented on the Israeli secret service: “Of the MOSSAD, the Israeli intelligence service, the SAMS officers say: "Wildcard. Ruthless and cunning. Has capability to target U.S. forces and make it look like a Palestinian/Arab act." Evidently the School of Advanced Military Studies did not embrace the Mossad as an organization it could wholly trust. THE SEPTEMBER 11 COMMISSION REPORT Page 44 The information that identifies CIA/FBI involvement with the actual World Trade Center terrorists in the months prior to 9/11 is far too compelling to ignore. • Government officials from Russia, Israel and Germany have publicly stated they shared specific information and warnings with the CIA. (The CIA has denied this.) • The CIA/FBI has had known operatives working in Norman, Oklahoma. "As early as 1996 the FBI began investigating the activities of Arab students at US flight schools. Government officials admitted that “law enforcement officials were aware that fewer than a dozen people with links to bin Laden had attended US flight schools.” FBI agents visited two flight schools in 1996 to get information about several Arab pilots who received training there. The two schools were among those attended by Abdul Hakim Murad, who had told Philippine and US police about plans to fly a hijacked plane into CIA headquarters. In 1998 FBI agents questioned officials from Airman Flight School in Norman, Oklahoma about a graduate identified in court testimony as a pilot for Osamabin Laden. This was the school later attended by Zacarias Moussaoui. A Washington Post article concludes: “Since 1996, the FBI had been developing evidence that international terrorists were using US flight schools to learn to fly jumbo jets. A foiled plot in Manila to blow up U.S. airliners and later court testimony by an associate of bin Laden had touched off FBI inquiries at several schools, officials say.” [Washington Post, 11/23/2001, “FBI Knew Terrorists Were Using Flight Schools,” by Steve Fainaru and James V. Grimaldi] "Beginning in early 2001 a trial was held in New York City of four defendants charged with involvement in the 1998 bombings of US embassies in Kenya and Tanzania. The trial revealed that two bin Laden operatives had received pilot training in Texas and Oklahoma and another had been asked to take lessons. L’Houssaine Kherchtou, a bin Laden associate turned government witness, told the court how he was asked to take flying lessons in 1993. Another bin Laden aide, Essam al-Ridi, testified that he had bought a military aircraft for bin Laden and flown it to Sudan. Al-Ridi became a government witness in 1998, giving the FBI inside information about a pilottraining scheme three years before the September 11 attack. While the proceedings of the trial extended from February to July 2001, they did not produce any heightened alert in relation to US commercial aviation." [Court transcript available at www.cryptome.org[ "(David) Edger "arrived on the OU (Oklahoma University) campus in August 2001 to begin his duties as a visiting professor in the political science department. Up until that month he had responsibility for surveillance of the Al Qaeda cell in Germany, whose membership included Ramzi bin Al-Shibh, paymaster for the Al Qaeda organization, and Mohammed Atta, a hijacker on one of the airliners which crashed into the World Trade Center (WTC). Edger was described by The Norman Transcript as an "expert in intelligence collection, counterintelligence investigations, and political action”. The newspaper also reports that he has directed espionage and counterespionage activities. Edger was in Chile in 1973 when the CIA was overthrowing the Allende government." [Current Results about possible connections between Thomas Volz (CIA) and David Edger (ex-CIA), By Ewing2001, 8/26/2003] • There are FBI agents that have been trying to expose as false the US government claims that it was not aware of the details of the terrorist threat. "David Schippers, the well-respected veteran D. C. lawyer (he served as lead prosecutor for the Clinton impeachment and is admired for his decades of effort fighting organized crime), has gone public with an announcement that he is representing three FBI agents who had evidence of the 9/11 attacks months beforehand and were ready to arrest the suspects, but were blocked by their superiors and taken off the case. Schippers had been in contact with these FBI agents since before the attacks (owing to ongoing investigations he had been making into the 1995 Oklahoma City bombing) and for several months before 9/11 attempted personally to present information about THE SEPTEMBER 11 COMMISSION REPORT Page 45 the upcoming attacks to Attorney General Ashcroft and several members of Congress, including House Speaker Dennis Hastert. In every case, he was stonewalled. After 9/11, he continued to follow up with this issue privately through his own government connections, but to no avail. So, he has taken to the airwaves (talk radio only so far; it looks like there's a blackout on this in the mainstream media). Judicial Watch, a legal reform watchdog organization, is now representing one of the agents (who has filed an official complaint with the FBI, by the way) and is advocating for a full investigation." [http://www.judicialwatch org/ 1075. shtml] There were at least four organizations involved in the planning of the 9/11 attack on the WTC: terrorists, the Mossad, the FBI, and the CIA. (The role of an additional organization will later be elaborated.) These four were pretty much aware of each other’s participation in the scenario that was unfolding. If the CIA and FBI were already aware of the presence of the Mossad, why would they be so interested in Nick Berg? Probably because he could offer the FBI information they did not have – the realization that the WTC terrorists were really Mossad agents to begin with; that the Mossad really were not watching the terrorists, but were there to watch their back, if not to make sure they completed the assignment for which they were recruited. "It is very evident from surveillance conducted against Mossad agents in the Federal Republic as well as interceptions of Israeli diplomatic communication from the Federal Republic to Tel Aviv, that the Mossad has successfully penetrated various extremist Arab groups in both the Federal Republic and the United States. These investigations disclosed in late May of 2001 that an attack was to be made against certain specified targets in the American cities of Washington and New York. But it was apparent that the Mossad was not only fully aware of these attacks well in advance but actually, though their own agents inside these Arab groups, assisted in the planning and the eventual execution of the attacks. That the Israeli government was fully aware of these attack is absolutely certain and proven. Diplomatic traffic between the Israeli Embassy in the Federal Republic and the Israeli Foreign Office made it very clear that Minister President Sharon was fully aware of this pending attack and urgently wished that no attempt was made to prevent the attacks." [Translation of BND Report on September 11, 2001] Why would elements of the Mossad do such a thing? There are multiple reasons for this attack, and these will be explained further on in the report. For the moment, it is safe to say the reasons include the same reason they publicized the death of Nick Berg: to influence the American public to wage war on Israel’s enemies, and support the new, right wing Israeli assault on Palestine. Nick Berg knew that, and had to be silenced. Nick Berg’s father stated that “Al Qaeda had killed their best friend”- which most likely was the case because Nick was the one person who could clear Al Qaeda of responsibility for the attack on the World Trade Center. Clearing the name of Al Qaeda, however, is only a small part of this investigation, because if Al Qaeda did not orchestrate the attack, it begs the question: who did? 2.4 Al Qaeda and Osama Bin Laden With the evidence pointing at Israeli agents, an appropriate question to reflect on is “What about the ‘confession’ of Osama Bin Laden on videotape captured during the invasion of Afghanistan? Did he not admit to being responsible the attack?” Americans probably have all seen the officially translated version of that videotape, where Osama talks about planning the structural collapse of the building with the jet fuel in the THE SEPTEMBER 11 COMMISSION REPORT Page 46 airliners, and about how the operatives knew nothing of the plan until the last minute. With Osama directly implicating himself and Mohammed Atta, how does that fit with this analysis? The answer to this question is a lot easier to establish than some of the other questions presented by this investigation. There are a number of observations found in the foreign press that need to be brought into play, to make four arguments: 1. The videotape “proof” presented by the US Justice Department is a doctored tape. "Whether or not the voice was his can be debatable. The Arabic-speaking contact of Pravda.Ru in Lisbon pointed out that anyone could have dubbed on the voices because there are no close-ups of the lips of the people while speaking. What he could hear was a lot of mumbling and during the mumbling, the supposed translation comes up with some incriminating phrases." [Timothy Bancrofy-Hinche, Pravda.Ru] "Prof. Gernot Rotter, professor of Islamic and Arabic Studies at the Asia-Africa Institute at the University of Hamburg sums it up: "The American translators who listened to the tapes and transcribed them apparently wrote a lot of things in that they wanted to hear but that cannot be heard on the tape no matter how many times you listen to it." [German TV channel "Das Erste", on the show Monitor, 12/20/2001] "Arabist Dr. Abdel El M. Husseini, one of the translators, states, "I have carefully examined the Pentagon's translation. This translation is very problematic. At the most important places where it is held to prove the guilt of Bin Laden, it is not identical with the Arabic." [German TV channel "Das Erste", on the show Monitor, 12/20/2001] If for some reason, someone would not want to believe the US Government would do such things, they should talk to Sibel Edmonds, a translator for the FBI, who claimed, before being legally silenced by the US Attorney General, that her work was distorted: "FBI translator Sibel Edmonds was offered a substantial raise and a full time job to encourage her not to go public that she had been asked by the Department of Justice (DOJ) to retranslate and adjust the translations of [terrorist] subject intercepts that had been received before September 11, 2001 by the FBI and CIA. Edmonds, a ten year U.S. citizen who has passed a polygraph examination, speaks fluent Farsi and Turkish and had been working part time with the FBI for six months--commencing in December, 2001. "In a 50 reporter frenzy in front of some 12 news cameras, Edmonds said "Attorney General John Ashcroft told me 'he was invoking State Secret Privilege and National Security' when I told the FBI I wanted to go public with what I had translated from the pre 9-11 intercepts." “I appeared once on CBS 60 Minutes but I have been silenced by Mr. Ashcroft, the FBI follows me, and I was threatened with jail in 2002 if I went public," Edmonds told tomflocco.com.[DOJ Asked FBI Translator To Change Pre 9-11 Intercepts, by Tom Flocco, 3/24/2004] To reinforce her story, consider the following report in the Washington Post of a former CIA agent, suing in US court, that he was forced to distort information about weapons of mass destruction, and was punished for not complying with the command. "WASHINGTON — A senior CIA operative who handled sensitive informants in Iraq asserts that CIA managers asked him to falsify his reporting on weapons of mass destruction and retaliated against him after he refused. The operative, who remains under cover, claims in a lawsuit made public yesterday that a co-worker warned him in 2001 "that CIA management planned to 'get him' for his role in reporting intelligence contrary to official CIA dogma." ….(The context of the THE SEPTEMBER 11 COMMISSION REPORT Page 47 lawsuit) context make clear the officer's work related to prewar intelligence on Iraq's weapons of mass destruction." [Ex-CIA officer alleges agency retaliated after he didn't falsify report, Dana Priest, The Washington Post, 12/9/2004] So far, the evidence has demonstrated that an FBI translator, two freelance translators, a CIA agent and three FBI agents have publicly stated that the US government has actively falsified evidence in this investigation. For some, this will come as no surprise. 2. Osama, while never claiming responsibility, has actually denied responsibility, and said the video ‘discovered’ by the US forces in Afghanistan is a fake. This reference in the Pakistani press is generally ignored. "(There is) an interview with the real Osama bin Laden, published in a Karachi, Pakistan newspaper, the Daily UMMAT, on September 28. In that interview, bin Laden denied any involvement in the September 11 attacks in the US, and pointed out Islam strictly forbids the killing of women and children, even in the heat of battle. "[www.Public-Action.com] In subsequent messages, he continually seeks to instigate defiance against Western culture – but he has never officially accepted responsibility for the attack on the WTC. 3. Osama, according to a number of intelligence agencies, is not the person to be blaming. Whoever actually runs the terrorist operation is an unknown entity. "Prince Nayef, head of Saudi security observed last week, Osama bin Laden is largely a figurehead. Its real leaders, said the prince, echoing this column's view, remain as yet unknown and are likely outside Afghanistan. "[Toronto Sun, 12/17/2001] 4. If Bin Laden is the guilty terrorist the US Government claims he is, why has the government gone out of its way to avoid capturing him? At least three times (some reports suggest the US avoided arresting him on at least 11 occasions) prior to the WTC attack, and once after, American officials have declined to take the steps necessary when they knew where he was: "…Bin Laden… was originally offered for extradition by Sudan, but then apparently allowed to head for Afghanistan in 1996 with barely a whimper from the US. Here is the world's most wanted man, explaining how he acquired his substantial arsenal during the 1980s: 'I settled in Pakistan, in the Afghan border region. There I received volunteers, trained by Pakistani and American officers. The weapons were supplied by the Americans, the money by the Saudis'....." [Guardian, 12/18/2001] "The Taliban's unprecedented offer to extradite bin Laden to a third country, well before the Sept. 11 attacks, was reported by the Times of London in February. In September, this newspaper reported on the often cozy relationship between Washington and the Taliban. Last month, the Washington Post reported that Sudan had offered in 1996 to extradite bin Laden, who was wanted at that time for attacks on U.S. servicemen in Saudi Arabia.” [Toronto Star, 11/27/2001] "Dubai … was the backdrop of a secret meeting between Osama bin Laden and the local CIA agent in July. A partner of the administration of the American Hospital in Dubai claims that public enemy number one stayed at this hospital between the 4th and 14th of July..... While he was hospitalised, bin Laden received visits from many members of his family as well as prominent Saudis and Emiratis. During the hospital stay, the local CIA agent, known to many in Dubai, was seen taking the main elevator of the hospital to go to bin Laden's hospital room. A few days later, the CIA man bragged to a few friends about having visited bin Laden. Authorised sources say that THE SEPTEMBER 11 COMMISSION REPORT Page 48 on July 15th, the day after bin Laden returned to Quetta, the CIA agent was called back to headquarters]... According to Arab diplomatic sources as well as French intelligence, very specific information was transmitted to the CIA with respect to terrorist attacks against American interests around the world, including on US soil. A DST report dated 7 September enumerates all the intelligence, and specifies that the order to attack was to come from Afghanistan." [The CIA met Bin Laden while undergoing treatment at an American Hospital last July in Dubai, Le Figaro, 11/10/2001] "US generals made it clear by the end of November that they believed senior al-Qa'eda operatives were inside Tora Bora. A convoy of several hundred Arab fighters, including bin Laden and his close associates, entered it from Jalalabad on the night of Nov 12, and the US bombing around the base intensified three days later. The US strategy bore little logic for those suffering the brunt of the attacks. 'When we round up a pack of stray sheep, we send in shepherds from four sides, not just one,' said Malik Osman Khan, a one-eyed tribal chief whose 16-year-old son Wahid Ullah was one of more than 100 Afghan civilians killed in the intense US bombing ....The eastern Afghanistan intelligence chief for the country's new government, Pir Baksh Bardiwal, was astounded that the Pentagon planners of the battle for Tora Bora had failed to even consider the most obvious exit routes. He said: 'The border with Pakistan was the key, but no one paid any attention to it. And there were plenty of landing areas for helicopters had the Americans acted decisively. Al-Qa'eda escaped right out from under their feet.'..."[Daily Telegraph, 2/23/2002] Bin Laden may be a lot of things, both good and bad, but it seems that being the “fall guy” (whether intentional or not) for the WTC attack seems to be the most appropriate interpretation of his role. The US (and British) governments set him up with financing, weapons and connections. They studiously avoided capturing him, both before and after the attack on the World Trade Center, and after his classification as “criminal mastermind.” Unable to find real evidence, they have created fake video evidence of his guilt. The government has not produced a single shred of reliable evidence, after years and billions of dollars of searching. A credible case has not been made for his guilt, other than from a source – American intelligence agencies - that is known by its own employees to fabricate and distort information. These facts should not be construed as denial of obvious: Al Qaeda does exist. There are thousands of angry, young, dispossessed Arab men and women, many of whom are willing to die to strike out against the powers than have disenfranchised them. Are they real? Yes. There are angry young men and women whose lives are filled with anger at seeing their values, families and lives trampled on by what they perceive as greed and exploitation. Are they a threat to the US? Possibly. Are a certain segment of them nothing more than criminals? Yes. Were elements of Al Qaeda involved in the attack on the World Trade Center? Probably. Is Al Qaeda responsible for the attack on the World Trade Center? – It will become more and more obvious as the results of this investigation are revealed that Al Qaeda is not the responsible party. Al Qaeda operatives were clearly used, but by whom, remains unproven by anyone. This report provides testimony to suggest there is plausible reason to believe that Al Qaeda operatives were being used and directed by US and Israeli intelligence as a “false flag” operation. THE SEPTEMBER 11 COMMISSION REPORT Page 49 3 Eugene Armstrong and Jack Hensley The re-occurrence of grisly, videotaped beheadings of two American hostages in Iraq, in a manner very similar to the execution of Nick Berg, provided an opportunity to test the hypothesis that these executions were not quite what they appeared to be. Like the execution of Nick Berg, there is reason to believe the executions of Americans Eugene Armstrong and Jack Hensley were not terrorist attacks on innocent victims, but were in fact, executions administered by the Israeli secret service on individuals who had willingly cast their fortunes and lives on the sea of international espionage. These individuals (and their families) were probably being punished - not to influence US policy, but because they jeopardized the very existence or authority of the Mossad in Iraq. In Section 2, (written prior to the murders of Armstrong and Hensley) it was argued that the execution of Nick Berg was actually a cover-up of the Mossad’s involvement in the United States and the attack of 9/11, and at the same time, a message to their own organization that ‘loose lips’ are dealt with severely. When these two Americans were executed three and a half months later - purportedly by the same individual, Abu Musab al-Zarqawi - it seemed appropriate to test the basic premise of the prior interpretation of events. The initial hypothesis going into the research was that if these latter public executions did not withstand scrutiny similar to that imposed on the Nick Berg affair, it may be possible that the interpretation of events was ‘unreliable.’ The question was: were Eugene Armstrong and Jack Hensley also spies killed by the Mossad? Unfortunately, that appears to be the case. The known facts surrounding this affair are scarcer than those around l’ affaire de Berg but they point to one conclusion: both Eugene Armstrong and Jack Hensley most likely worked in or for the American intelligence world, and were not innocent victims. The analysis starts with the observation that these gentlemen were not average Americans. They were not – as the news would suggest - a couple of normal, civil engineers who were trying to help in the reconstruction of Iraq. They were not normal ‘guys’ who might have worked at one or two local construction or engineering companies, got laid off, and applied for an overseas job. Like Berg, these gentlemen: • Traveled internationally, and extensively so; • Demonstrated exceptional risk-taking behaviors in terms of going places they should not be; • Worked for companies with significant contracts to the US intelligence world; • Consorted with known spies or terrorists; • Had the FBI investigating their lives; and • Left behind puzzling questions and contradictions about them in their life stories. THE SEPTEMBER 11 COMMISSION REPORT Page 50 This is not normal. 3.1 Working for Gulf Services Both gentlemen worked for a major US defense contractor that won the largest of four contracts to build ‘bases’ in Iraq. They were not there to build schools, repair utilities, or rebuild Iraq, as they had informed their friends and family. In fact, their work and the contract won by their employer are ‘classified.’ All we know is what they told their friends and family, and that appears to be contradictory with the official documentation. Why the lies? Second, they were not living on a secure construction site as foreigners usually do under such contracts, but rather “lived in a wealthy Baghdad neighborhood of villas surrounded by walls and protected by metal gates and armed guards outside the high-security area known as the Green Zone.” As one security guard in Iraq noted regarding a contractor that would live under such conditions: “It is unbelievably naïve.” Interviewing a fellow employee, an African newspaper quoted the fellow contractor: “Those who have no military experience almost never travel outside the camps of the military zone designated Multi-National Division (South East) without an escort. The majority are accompanied by soldiers in "snatch wagons" - armoured Land Rovers - providing cover with heavy machine guns and SA80 rifles. Ex-military types, armed to the teeth, also provide escorts. He took an unnecessary risk. We live on camp and travel with green fleet [the British army]. There are no ifs, buts and ands about it. It's company policy, we don't travel without the army. If the army say you don't move, you don't move.” In fairness, it must be noted that the three kidnapped gentlemen had private security guards. They were not totally reckless. However, in the week prior to their kidnapping, they were notified by their guards that the lives of their guards had been threatened, and that the guards then actually abandoned them. This situation raises significant questions: 1. Why would either government or private guards not be replaced or reinforced by their employing agency? The scenario suggests the guards were ‘private’ in nature, and not provided by an agency, but rather by the three hostages themselves. 2. Why would three gentlemen – working hard to send money home (“to make ends meet”) be taking risks and unnecessarily be spending their own cash on ‘guards’? 3. Why would these gentlemen remain at this home, in a war zone, in an unsecured region of the city, after being advised of death threats specifically targeted at them? These are conditions which suggest that the three kidnapped men were involved in activities above and beyond ‘helping the people of Iraq, and taking care of their families.” The company that employed them is Gulf Supplies and Commercial Services. The contract was for $46 million, and was largest of four similar contracts in Iraq, larger than the other three combined. One would think a major defense contractor is subject to public scrutiny – but not so Gulf Commercial Services. They have no website that distributes information, nor is there another single reference to them on the Internet search engines, other than their linkage to this atrocity. When approached by the media, the normal media report is that “GSCS has not replied to requests for further information.” One reporter was able to gain some insight into Gulf Supplies from confidential sources, but this information is not verified by another source. Gulf Supplies is a 13-year-old firm THE SEPTEMBER 11 COMMISSION REPORT Page 51 that provides “technical, logistical and operational support to local and international clients doing business in the Middle East, Arabian Gulf and Central Asia regions.” Its customers include Bechtel, CH2M Hill Cos. Ltd., Fluor Corp., Kellogg Brown and Root, and Parsons Infrastructure and Technology. GSCS has no recorded history of international construction – unlike an international construction company such as Flour City International, which recorded one Eugene Armstrong as a Board Director. Gulf Services maintains itself as a ghost company from the United Arab Emirate. When people and organizations go out of their way to prevent disclosure, it begs the question – what is there to hide? 3.2 Eugene Armstrong Unlike Hensley, Armstrong has not had published the traditional funeral and obituary announcements. His life is fairly well hidden from the news and Internet references. The little information available about Mr. Eugene Armstrong is very telling. His cousin, who managed to avoid the ‘family spokesperson’ control clamped on the families of these two victims, described Armstrong as a traveling worker, who lived as a youngster in Germany, and had major work engagements in Bosnia, Angola, and Thailand. (Is it possible he first crossed paths with Kenneth Bigley in Thailand?) If he was a normal contractor in these areas, his behavior did not demonstrate it. As an acquaintance of Armstong’s reported, "He talked about how in Bosnia no one would ride in a pickup truck with him toward the end because he had so many bullet holes in his truck and he'd had so many windshields blown out that he was considered to be bad luck." This is highly reminiscent of Nick Berg’s behavior – being in places he shouldn’t be, often enough to get caught at it. Evidently, his life-style in Baghdad demonstrated the same tendency towards risk taking. Interestingly, November 1995 finds one Eugene Armstrong testifying in Washington as the spokesperson for the CIA representing of the “Ames Damage Assessment team.” Ames was the Russian mole in the CIA who leaked the names of hundreds of agents, causing the death of more than a few. Armstrong was the CIA agent that summarized the impact of that leak on the CIA field organization. Ames will later be shown (in this report) to have played a key role in promoting George HW Bush’s role in various aspects of the financial scandals associated with the collapse of the Soviet Union. 3.3 Jack Hensley The opening lines of the Jack Hensley story usually read like this: “The past couple of years were hard on Jack Hensley: part-time jobs at a convenience store, a post office and as a substitute teacher were not quite enough to support his wife and 13-year-old daughter, and new opportunities seemed scarce.” This generally strikes us as a story of a normal guy who fell on hard times, and went to Iraq to make ends meet. For a man who left a lucrative, professional position – to spend time with his family – ‘going back’ was THE SEPTEMBER 11 COMMISSION REPORT Page 52 probably not what he wanted. However, he did choose to “go back”- to life a travel and risk-taking. Jack liked to travel. Jack his met wife in Columbia, South America. It has also been noted that he worked for a year and a half in Saudi Arabia. It is also known that Hensley worked for at least 17 years at Getronics, managing large-scale telecommunications projects. Getronics is a global firm with locations in 44 countries. Because nothing is known of these seventeen years, it is speculated that Jack did a number of international projects, and then left the company to spend time his daughter, after having been absent as a father. It is of pertinent interest that in reviewing the 150 pages of messages on the Jack Hensley memorial website that there are numerous people who wrote saying ‘I worked with Jack…’ at Wang, at his bar etc. – but not a single person, in over 1500 messages said, I worked with Jack at Getronics. It suggests a 17 year black hole. Getronics holds a number of contracts with the US Defense Intelligence Agency and National Security Agency, and is described as “one of the leading suppliers of innovative seat management and secure computing to the DoD (Department of Defense)…and the intelligence community.” Then, in the space of about three years, there were a series of acquisitions of the Getronics assets. It was purchased by DigitalNet, which was purchased by the British firm BAE Systems (formerly British Aerospace)– the fourth largest arms manufacturer in the world. BAE North America was then purchased by IDT, (Integrated Defense Technologies), which was then purchased by DRS Technologies. BAE North America is a leading manufacturer of ‘high performance radio frequency surveillance equipment used in signals intelligence operations.” [Aerospace & Defense Market Update, October 2002]. According to DRS’s annual report, DRS is working heavily with Lockheed-Martin on the “Navy’s network centric tactical warfare environment.” Interestingly, Mr. Hensley took interest in conspiracy theorists. In June of 2000, he traveled to North Carolina to join a radio audience at WTZY, to listen to the conservative conspiracy advocate Craig Roberts. Jack Hensley was quoted by the local news after the show: "I like what he's doing, in general – digging and bringing things out that people need to know." This sounds like Jack had a tendency towards ‘loose lips’ – which is what got Berg killed. The second miscellaneous bit of information was shared by his brother, Ty Hensley. Ty “said he felt that despite their demands, the hostage takers always intended to kill the hostages. They never called an embassy to communicate their demands, he said. ‘The terrorists wanted to kill my brother and hurt my family,’ Ty Hensley said.” The third bit of information comes from Jack’s wife. When asked if she could comment on what she new about her husband’s kidnapping, “She said she did not know if there had been any communication between her husband's captors and the Iraqi or American governments. ‘Nothing that I am privy to. I know there is far more superior intelligence behind this, both here in the states and in Baghdad, that they know things that I don't know and, to be honest, I don't need to know them,’ Pati Hensley said. ‘I just need them to follow through and do what they can to save these two gentlemen’." The oddities in the Hensley family messages are this: 1) Ty seems fairly convinced that the attack on Jack is an attack on his family (Was he told this, and if so, why?), and 2) Pati’s use of the words ‘superior intelligence’ and her desire to not know the truth, suggests a familiarity with intelligence operations beyond that of a innocent bystander. THE SEPTEMBER 11 COMMISSION REPORT Page 53 These small bits of information beg a number of questions: • How does a ‘technology expert’ and a ‘professional managing large scale telecomm projects’ for a Defense company end up being hired to supposedly repair barracks in Iraq? One must assume he was doing something else. • Is there a connection with the type of telecommunications work done by Nick Berg? • Why is there an inconsistent message from the public about why he was in Iraq? His acquaintances and family are telling the press he was there to build schools and rebuild Iraq. Why would he tell them that? One must assume it was a cover. • Why does his wife need to spend time with FBI investigators, reported by the press to be at her house? Usually, this type of activity is covered by a representative from the State Department. All the evidence suggests Jack was a great guy – someone you’d want as a friend. At the same time, he was a guy who took risks he did not have to - in terms of where he lived, who he lived with and what he did. There was part of his world his wife didn’t want to know about. 3.4 Abu Musab al-Zarqawi Finally, there should be a discussion of the group taking the blame for this outrage. Looking at a picture of the executioners, the outfits are the same as those from the Nick Berg execution, the physical size is the same, and the orange jumpsuits are back in the picture. The video and pictures suggest are these are the same guys that executed Nick Berg. The US Embassy issued a statement that it’s probably the same group. But… does the world really know who they are, and is it really Abu Musab al-Zarqawi? “Abu Musab al-Zarqawi, leader of the organisation responsible for the beheadings in Iraq, is regularly portrayed by the US government as a terrorist mastermind, responsible for activity in places as widespread as Hamburg, Chechnya, Madrid (train bombing) and Mombassa (hotel bombing). But while there is no doubt that Zarqawi has committed awful crimes, experts say that accusing him has become an easy fall-back for the authorities as they struggle to contain the insurgency. There is no unanimity on whether Zarqawi is a henchman of Osama bin Laden or a rival.”[“A Thug who will stop at nothing to create pure Islamic Zone in Middle East,” Ewen MacAskill and Rory McCarthy, Guardian Unlimited, 11/23/2004] First, the profile presented by the Guardian Unlimited is not the picture of an Islamic fundamentalist terrorist. It is the profile an international hit-man, not unlike Carlos the “Jackal” Ramirez – who, once captured, was buried by the authorities so deep in prison no one could ever hear his story. (Who is hiding what dark secrets in that case?) Second, these Iraqi executions do not follow the modus operandi of Abu Musab al- Zarqawi. His infamous reputation is built on use of weapons of mass murder (bombings and chemicals) used against those whose religions he disagrees with: Shia Muslims and Jews. These executions meet none of the three characteristics of his group’s modus operandi: 1) mass murder, 2) religious affiliation or c) use of bombs and chemicals. Nor THE SEPTEMBER 11 COMMISSION REPORT Page 54 do the other incidents attributed to his group have attributes of the executions: videotape, political extortion and kidnapping. There are two totally different modus operandi here, inexplicable unless there is a totally different agenda or person committing the crimes. More importantly, however, it should be noted that possibly the only other group that would have the same enemies as Abu Musab al-Zarqawi, and have the organization and skill to execute globally – would be the Mossad. In a parallel analysis Michel Chossudovsky has documented and argued that Abu Musab al-Zarqawi was always meant to be a headline for the US war in Iraq. “An internal document produced by U.S. military headquarters in Iraq, states that "the Zarqawi PSYOP program is the most successful information campaign to date." (WP, op cit). The senior commander entrusted with Pentagon's PSYOP operation is General Kimmitt who now occupies the position of senior planner at US Central Command (USCENTCOM), responsible for directing operations in Iraq and the Middle East. "In 2003 and 2004, he coordinated public affairs, information operations and psychological operations in Iraq -- though he said in an interview the internal briefing must be mistaken because he did not actually run the psychological operations and could not speak for them. Kimmitt said, "There was clearly an information campaign to raise the public awareness of who Zarqawi was, primarily for the Iraqi audience but also with the international audience." [Who is behind "Al Qaeda in Iraq"? Pentagon acknowledges fabricating a "Zarqawi Legend", Michel Chossudovsky, Global Research, April 18, 2006] Of great intrigue, Zarqawi’s exit from Iraq was also announced by a major media event. In early 2006, a Christian Science Monitor reporter was “kidnapped” by Zarqawi’s followers. These followers – according to her report - kept her in a sound proof room, but allowed her to overhear that Zarqawi would soon be replaced as leader. A month after the reporter’s release, Zarqawi was reportedly killed in a US bombing. Once again, Zarqawi is linked to a major media event that seems to be suspect in its circumstances, but results in intelligence useful to theose who benefit from the attack on Iraq. A geopolitical explanation is required at this point. Ninety percent of the world Muslim population is Sunni, and ten per cent is Shia, also known as Shiite. (This schism between the Muslims dates back 1400 years.) Although a global minority, the conservative Shia currently controls Iran, and represents 60% of the population of Iraq. Saddam Hussein was secular, favored the Sunni’s and kept the Shia under control. The threat to Israel of “real democracy” in Iraq is that it would allow the Shia clerics to re-gain the control of Iraq that was taken from them by the Sunni’s 500 years ago, and then by the British in 1920. Shia control of both Iraq and Iran, thus creating a Shia ‘power bloc’ would be an unacceptable threat to Israel, because of the Shiite cleric’s religious preoccupation with the holy cities of Mecca, Medina and Jerusalem. However, with Shiites focused on their grievances with Sunnis, and both groups attacking each other, Israel remains safe. With Shiites unable to merge and unify the wealth of Iran and Iraq, Israel remains safe. Hence, it is ‘fortuitous’ for Israel that there are such a groups as Abu Musab al-Zarqawi and Al Qaeda that can fragment Muslim unity and polarize the religious sectors. If these two organizations didn’t exist, Israel might have to invent them. Once again – as in the Nick Berg story – there arises the specter of the Mossad masquerading as Muslim terrorists, dealing out death and horror and fanning the flames THE SEPTEMBER 11 COMMISSION REPORT Page 55 of American outrage, and Muslim disunity. (It is also fortuitous that current efforts in January 2005 at implementing “partial voting” – using Bush’s argument that “some democracy is better than none” – happens to disenfranchise a good portion of the Shia population.) THE SEPTEMBER 11 COMMISSION REPORT Page 56 4 Central Asian Oil: Motive for 9/11? ‘Connecting the dots’ helps demonstrate that the seemingly inconsequential and random executions of Berg, Hensley and Armstrong are not as they appear, and that Nick Berg’s murder, timed as it was, was an attempt to silence an FBI investigation into his past. This report continued the investigation into his past, and discovered his probable involvement with the attackers of the World Trade Center, the Mossad, the Russian/Israeli Mafiya, the PNAC (Project for a New American Century), and the Republican Party. It would seem that someone in one of these groups needed to silence Nick Berg before the FBI got too close to whatever insights Nick Berg could provide. Someone had something to hide. Might the secret be that all five groups were linked somehow? Nick Berg was brought to the attention of the FBI because of his connection to 9/11. It is appropriate to continue the investigative thread around the events of 9/11. How were the groups Nick Berg was linked to associated with the events of 9/11? Having established that Osama Bin Ladin and Al Qaeda are not necessarily the guilty parties in this event, it becomes necessary to determine who else may have been responsible. So begins the quest for understanding the motive for 9/11. Figure 2 Many analysts believe the driving force for the attack on the WTC was the US energy industry’s need, most pertinently headed by Enron’s need, to consummate a pipeline deal THE SEPTEMBER 11 COMMISSION REPORT Page 57 with Afghanistan, and secure access to Central Asian oil and gas reserves. There are two (at least) versions of this theory 1. In one version of this explanation, the first Bush administration, under the guidance of Zbniew Brezinski and Henry Kissinger, formulated and initiated a strategy to control Central Asian Oil. U.S. covert activities in the region were guided by that strategy. Prior to his departure from office of the Presidency, Bush put into motion a number of covert activities that would ensure the continuation of his strategy, despite prohibitive legislation to the contrary. Those activities would include sending his former Iran-Contra operatives (Richard Secord, Richard Armitage and Farhad Azima) into Azerbaijan, and James Giffen in Kazakhstan. 2. In a second version of the Oil cartel explanation, oil industry executives unduly influenced the American political process through massive contributions to political campaigns, thus ‘purchasing’ secret influence over policy, regardless of the law of the land. Under this latter hypothesis, in it’s simplest form, the Taliban government had reneged on a deal with Unocal (US) and Delta Oil (Saudi) in August of 2001, to allow Unocal & Delta to build and control a pipeline from the Caspian Basin through Afghanistan; and awarded the contract to Bridas, an Argentinean firm. The Bush administration - heavily populated by former energy sector professionals (Bush- Bush Exploration, Harken Energy, Spectrum 7 Energy Corp. Arbusto Energy Inc; Cheney- Halliburton; Condoleezza Rice – Chevron; Secretary of the Army, Mr. Tom White – Enron, to list a few), and with the energy lobby representing the single greatest source of Bush campaign contributions, planned, executed and covered-up the attack on the WTC to justify a war with the Taliban government, and a subsequent invasion of Iraq. According to this explanation of the attack on the World Trade Center, the attack provided an all-too-convenient excuse for a series of actions that benefited the oil industry, actions that could not have occurred without the “excuse” of 9/11 being used to mobilize the American public and “justify” attacks on Iraq and Afghanistan. With either theory, there are seven arguments that support the premise that the energy industry was the primary beneficiary of the attack on the World Trade Center. · U.S. companies were allowed to benefit from the regained pipeline construction contracts; · Enron’s investment in an Indian energy plant, and a Pakistani docking facility at the Arabian Sea terminal were to have been salvaged, possibly helping Enron avoid bankruptcy; · The U.S. strategic interests (both economic and defense) were served by preventing the flow Caspian Oil through either Russia or Iran, · The attack allowed the US to create a permanent footprint of US military bases throughout the area, setting up a sphere of influence in the fourth largest oil region in the world and establishing a launching pad for an invasion of Iran. Additionally the establishment of U.S. bases in Afghanistan geographically mirrors the route of the planned natural gas pipeline. The U.S. had been locked out of the bidding for this pipeline, just months prior to the invasion. A major investment by Enron in the region was threatened by the loss of this pipeline. Now, in a fortuitous change of governments caused by the destruction of a THE SEPTEMBER 11 COMMISSION REPORT Page 58 conservative Muslim government (in the name of democracy, for the benefit of specific U.S. oil interests,) these contracts would be awarded to U.S. construction firms. Figure 3 US Bases and the Afghan Pipelines “The Israeli newspaper Ma'ariv astutely notes: "If one looks at the map of the big American bases created (in the Afghan war), one is struck by the fact that they are completely identical to the route of the projected oil pipeline to the Indian Ocean." Ma'ariv also states, "Osama bin Laden did not comprehend that his actions serve American interests... If I were a believer in conspiracy theory, I would think that bin Laden is an American agent. Not being one I can only wonder at the coincidence." [Chicago Tribune, 3/18/02] • As part of the need to secure Central Asian/Middle Eastern oil, the attack on the World Trade Center was also leveraged as an excuse to invade Iraq. There was no proven link between terrorism and the Iraqi government, although a very large segment of Americans believe this to be true, and President Bush has done nothing to counter this belief. “January 31, 2003, when a reporter asked both Bush and British Prime Minister Blair, “Do you believe that there is a link between Saddam Hussein, a direct link, and the men who attacked on THE SEPTEMBER 11 COMMISSION REPORT Page 59 September the 11th?” Bush replied, “I can't make that claim.” Blair then replied, “That answers your question.”[White House, 1/31/2003] A New York Times/CBS poll from earlier in the month indicates that 45 percent of Americans believe Iraqi leader Saddam Hussein was “personally involved” in the 9/11 attacks. [New York Times, 3/11/2003] The Christian Science Monitor notes, “Sources knowledgeable about US intelligence say there is no evidence that Hussein played a role in the Sept. 11 attacks, nor that he has been or is currently aiding Al Qaeda. Yet the White House appears to be encouraging this false impression….” For instance, Bush claims Hussein has supported “Al Qaeda-type organizations,” and “Al Qaeda types.” [New York Times 3/9/2003] Never-the-less, the invasion of Iraq occurred, and while museums, schools and hospitals went unprotected – securing the oil fields and pipelines remained the primary defensive strategy for security forces. There too, as in Afghanistan, the placement of military bases follows the pipeline, as seen in Figure 4. It is fairly safe to assume that the same pattern of military base placement occurs in the rest of Central Asia as well. Figure 4 US Bases and the Iraqi Pipeline Map created by overlaying maps found at the BBC website • The construction of permanent bases in both countries suggests that the US plans to ‘occupy’ in some sense, these countries – thereby laying claim to the governments and mineral privileges. Construction contracts for ‘bases’ went to firms traditionally strong in the petrochemical industry. THE SEPTEMBER 11 COMMISSION REPORT Page 60 "US military bases here (Afghanistan), “originally agreed as temporary and emergency expedients, are now permanent.” [Guardian, 1/16/2002] "It is reported that the US military is drawing up a plan for a long-term military “footprint” in Central Asia. The US says it plans no permanent bases, but the leaders of Central Asia speak of the US being there for decades, and inside US bases temporary structures are being replaced by permanent buildings." [AP, 4/30/2002, Washington Post, 8/27/2002, Los Angeles Times, 4/4/2002] • The observation that a large segment of the Bush administration’s national security and defense planning structure came from the energy industry, and set national defense policy lends some suspicion to the objectivity of that policy. Any and all arguments might easily lead one to conclude that the invasions sparked by the attack on the World Trade Center were conducted more for the benefit of the American oil industry that for the sake of world security against “terrorists.” (Although conspiracy theorists could make a better argument that the invasion of Afghanistan was meant to control the world heroin trade, with Afghanistan producing 80% to 90% of the world’s heroin. The world narcotics industry is larger than the gas and oil industry combined, and more profitable. The current drug war for control of Afghan heroin pits the Russian military against a strange alliance of the Yeltsin crime Family and its U.S. allies.) The hypothesis that the Administration of President Bush “initiated” the attack on the World center as an excuse for war is based on a set of clues that suggest the President - knowing the attack would happen - planned the invasions of Afghanistan and Iraq in advance. This would require that the President, like the authors of the Project for a New American Century, believed that a “Pearl Harbor” event was a necessary condition to invade Afghanistan and Iraq. What will be demonstrated in this report is that the WTC did not have to be destroyed for the Central Asian pipeline deals in Afghanistan and Azerbaijan to be successful. However, the bribes and money laundering behind these pipeline deals were “illegal,” and the investigative evidence pointing to the money laundering was the target of the attack on the WTC. While the actual illegal trading and bribing activity leaves very little physical evidence, money always leaves an audit trail, and that trail was being tracked and documented in Building Seven, the North Tower and Buildings Four and Six– hence the need to destroy the entire World Trade Center. In a manner highly reminiscent of the investigation of the BCCI bank fraud, once the bank’s criminal activities were exposed, bank records in England were destroyed in multiple warehouses by no less than seven separate fires, and sixteen material witnesses were murdered. “There's a lot about BCCI that outsiders will never know. Once the investigations started, there were seven fires in the fireproof London warehouses where BCCI stored records. In one of them, four firemen were killed.” [BCCI: The Case that Kerry Cracked, Lucy Komisar] “The Manhattan D.A. who closed the American branch (of the BCCI) announced that 16 witnesses had died in the course of investigating the bank's entanglements in covert operations of the CIA, arms smuggling to Iraq, money laundering and child prostitution.” [The False Memory Alex Constantine, Copyright © January, 1996] THE SEPTEMBER 11 COMMISSION REPORT Page 61 “There were a lot of BCCI documents in Panama that disappeared because they would have implicated too many people.” [Outlaw Bank: BCCI, Jonathan Beaty and S.C. Gwynne, Random House, New York, 1993, p.79] The individuals involved in the destruction of the warehouses of BCCI evidence and the destruction of the WTC are same the individuals linked to the Central Asian money laundering crimes as well as the theft of Russian and Philippine gold treasuries. Understanding that the invasion of Afghanistan was not a necessary condition for the securing of the pipelines allows the analysis to entertain other theories as to why these individuals felt the need to murder thousands of people in the WTC attacks. Events in Kazakhstan, Azerbaijan, Afghanistan, and related activities in Angola are generally viewed as independent scenarios, but should not be. When approached from the perspective of four separate but linked operations, there is a consistent pattern that is not obvious when analyzing these events one at a time. · Each operation involves brutal warlords or dictators controlling access to oil. · Each operation includes reports of US agents trying to legally control access to that oil by aiding and abetting these dictators and warlords with bribes and IMF loans. · Each operation involves the provision of weapons, mercenaries and bribes in exchange for mineral, oil or pipeline rights. · Each operation involves complex money laundering schemes, involving billions of U.S. taxpayer dollars provided by the US Export-Import Bank and the IMF. · Each opeartion involves Halliburton, Saudi oil and American oil companies. · Each operation involves money flowing through the Deutschebank and/or the Union Bank of Switzerland (UBS.) What is generally found to be missing in the reports on these operations are answers to the questions: “Who is providing the weapons?” and “Where is all the money going?” The answers are always the same. The Russian/Israeli Mafiya provides the weapons; the German/Swiss Banking Cartel moves and hides the money (for very significant profit), and the western oil companies claim the oil revenues. There are generally a number of smaller banks and other financial intermediaries involved, but the final resting place of the stolen treasuries generally appears to be a solid bank with vaults deep in the Swiss Alps. The provision of illegal weapons around the globe is heavily dominated by the Israeli/Russian Mafiya, who source their weapons from former Soviet regimes as well as Israeli firms. Even when the US intelligence agencies wanted weapons for the Contra rebels, they turned to Russian/Israeli traders (Russians seeking protection from international law in Israel, with a good participation by indigenous Israelis.) With the arms merchants, comes the same banking network, the same German banking cartel, generally fronted by the Deutsche Bank. However, and all too often, news reporters and investigators lose track of most of the money. That is because the real profiteers are the bankers, with the old bloodlines of Europe. If every banker that touches the money takes THE SEPTEMBER 11 COMMISSION REPORT Page 62 2-5%, and the crime requires six or seven fixers, the money disappears fast. (The real pay-off to the bankers comes when these dictators and war lords die – leaving secreted accounts in the hands of the bankers.) In that respect, the examples discussed later (Angola and the Bank of New York) are illustrative in that it generally takes at least four or five financial companies operating as middlemen to launder the money, not to mention the bonuses to the buyer and seller. This is probably why Enron and Halliburton have set up so many offshore subsidiaries in the Cayman Islands – to cut out the middleman and circumvent US and international law. (Enron was reported to have over 300 Cayman subsidiaries, Halliburton at least twenty.) “Cheney's leadership also saw a dramatic increase in subsidiaries located in offshore tax havens—at least 20 subsidiaries in the Cayman Islands, alone. —Laura Peterson “Halliburton is now being investigated by the Securities and Exchange Commission for Enron-style accounting practices that took place while Cheney was CEO.” http://www.nytimes.com/2002/05/30/business/30HALL.html “Halliburton has also provided oil services to Iran in contravention of U.S. sanctions by operating through a foreign subsidiary based in the Cayman Islands which opened an office in Tehran in 2000.” —Laura Peterson These oil and gas operations, however, help expose a larger criminal pattern. In this pattern, the leaders of these countries (or in the case of Afghanistan, tribes) allow their national treasuries to be siphoned-off in an array of financial maneuvers abetted by large corporations and international scam artists, and hide this money with the expertise of the German/Swiss Banking Cartel. This pattern is exposed in Germany, the Soviet Union, Kazakhstan, Azerbaijan, Afghanistan, Angola, and Philippines and with all probability, the US. Here is the larger story: the theft of these treasuries is what the destruction of the WTC was meant to cover-up. Investigations into these lesser operations in Azerbaijan, Kazakhstan, Afghanistan and Angola would have stumbled on Swiss and Deutschebank accounts and transfers that if investigated, would expose a grander scheme. In this grand scheme, the Bush ‘syndicate’ are “nickel players” in a “dollar-ante” game, and while their support was provided to the cartel in the form of cover-up, they were paying their dues as ‘wannabe’-players. Their goal – other than the furtherance of the security of the United States- is to become coupon clippers at the Board of Director meetings, to become the guys that bring the money to the meeting, rather than being the guys who leave the meetings with all the dirty work. Had George Bush and his Iran-Contra colleagues allowed the German/Swiss bank scheme to come unraveled, their own involvement in various money-laundering schemes as well as ‘misplacement’ of $3.3 trillion of the US assets would come under investigation. They- as the implementers of these schemes – would be held liable if exposed, while the financial backers walked away clean. Such is the deep pocket methodology that controls the legal system. Not widely reported, the US government has somehow “misplaced” 3.3 trillion dollars during the late 1990s. Donald Rumsfeld announced to the press on September 10, 2001 THE SEPTEMBER 11 COMMISSION REPORT Page 63 that 2.2 trillion dollars was missing from the DOD accounts – but the world was too preoccupied the next day to worry about the world’s largest heist. “the Department of Housing and Urban Development (HUD) and Department of Defense (DOD) and some of the other federal agencies for which … DynCorp manages highly sensitive information systems are reported to be missing…over $3 trillion since fall of 1997….” [ The Hijackers of Harvard, Catherine Austin Fitts (Former Assistant Secretary of Housing, First Bush Administration), On-Line Journal.com, 2/21/2002] The interesting point made by Catherine Fitts (Former Assistant Secretary of Housing, First Bush Administration) is that the “same people” involved in the BCCI fraud, (hence the theft of the Russian and Philippine treasuries) are now associated with what some call the world’s largest money-laundering scheme – Enron – about the same time as 3.3 trillion dollars goes missing from the US Treasury. “Catherine: I was hired by the first Bush administration to help clean up $100 billion sized financial frauds. These had to do with Iran Contra, the S&L crisis, BCCI and the HUD scandal. I was there for 18 months…we've seen the government readily permit the transfer of Enron Online -- which I believe was a money-laundering and slush fund operation -- to the Swiss bank, UBS, one of their largest creditors. So now it's very possible that a great deal of information that would be needed for a proper investigation is under the protection of the privacy laws of a Swiss bank. And by the way, it's very interesting, and perhaps quite significant, to note that the newest Board member of UBS, the bank that purchased the Enron Online operation, is the former chairman of Arthur Anderson. Enron was also permitted to have the gold bullion and gold derivatives trading operation transferred. Understand that to be able make these two transfers, as quickly and quietly as they were, in the middle of an initial bankruptcy filing, was nothing short of miraculous based on what I'm told by bankruptcy attorneys. In combination with the shredding, it permitted the coordination of cover-up of two things: money laundering and a lot of financial fraud between the banks and the entity itself.” [Enron: An Anatomy of a Cover-Up. Dennis Bernstein's interview with Catherine Austin Fitts, 3/12/2002] “We had a huge amount of money disappear from the accounts of all these federal agencies: General Accounting Office (GAO) (and Inspector General) reports and testimony document that $59 billion was missing from HUD in fiscal 1999, and $17 billion was missing in fiscal 1998, and they refused to say how much was missing in fiscal 2000. So I was trying to figure out how you could launder hundreds of billions of dollars (stolen from the federal government) starting in the fall of 1997, because that is so much money that you can't just run it (launder it) through a pizza restaurant. You are talking about a huge amount of money and you are talking about something that JP Morgan, Lockheed, DynCorp and Arthur Anderson would have to be part of.” [Enron: An Anatomy of a Cover-Up. Dennis Bernstein's interview with Catherine Austin Fitts, 3/12/2002] “So, in the fall of 1997 there was an explosion of revenues (at Enron Online), with nobody being able to explain where the revenues came from. They just say it's very complicated, it's "derivatives," you know. Well that's ridiculous. In my experience, if you can't explain something, then something is wrong. So I'm looking for the missing money: there is over $3.3 trillion missing from federal government agencies over a 3-year period, and my big question is, “Is Enron the laundromat," and is that why Congress is covering this up?” “Fitts: As far as I'm concerned, Ken Lay was just the lead patsy. We're talking about a top ten Fortune 500 company with annual revenues exceeding $100 billion---which suddenly fell off the map. What the Enron CEO's made was nothing compared to what the inside-trading investors made---both with corporate assets liquidated out before the implosion or in the pump and dump of stocks. And many of these investors look to be from the same syndicate that I saw playing the Iran-Contra/S&L game in the eighties…. in testimony already, former Chief Accountant of the SEC, Lynn Turner, offered that these banks and investment banks "shopped their structured finance vehicles'' around to other corporations. THE SEPTEMBER 11 COMMISSION REPORT Page 64 Turner indicated that in one case where the SEC was able to intercede on his watch, a bank had people sign privacy agreements as not to divulge details of the scheme proposed to regulators and others.” [The Real Deal About Enron (Part 1), Catherine Austin Fitts, Sanders Research Associates 4/3/2003] Fitts’ questions are pertinent in that besides the obvious energy scams (such as that which created a financial crisis for the State of California) Enron also created Enron Online, the world’s largest on-line trading site. This site traded oil, gas, electricity as energy commodities, but included (surprisingly) gold, gold derivatives and even bundled mortgage derivatives from HUD. During the Enron bankruptcy proceedings, Enron On- Line was reportedly “given” to UBS at no cost, and any potential audit trail fell under the control of a protected Swiss bank. Enron On-line would have been a critical component of a laundry scheme to convert large blocks of stolen wealth into other forms of assets. If Enron On-line didn’t exist, major money launderers would have had to create it to manage the thousands of daily transactions required for major money laundering activity. While Enron On-line allowed computers to create volumes of small trades to avoid regulatory control, the collapse of Enron and it’s bankruptcy assignment to UBS shielded the audit trail from exposure. The rest of the evidence was destroyed with the WTC. The money of the various oil operations involved in Central Asia (including Halliburton and Enron, both key players in Afghanistan,) starts to cross paths at the Deutsche Bank and UBS. Here is where one finds the ‘old men of Europe’ – secretive names that rarely show up in the press, and old family names changed to hide the lineage. Here is where the money stops. When all the investigations spawned by the money-laundering of the late 1990s began to narrow the search to these banks, it was these old men and families of Europe who had to be protected. These are the families that “own” the banks through holding companies based in offshore countries, where the laws are controlled so that the owners’ names do not need to be divulged. The physical assets however, are in Swiss vaults, as the offshore banks can never offer the types of security guarantees offered by a Swiss bank. Here, they can be ‘frozen’ under a new set of anti-money laundering laws that went into effect in 1998, thus magnifying the risk the U.S. investigations posed. Clues that Point to Money-Laundering To fully understand the Afghani events, which many 9/11 writers focus on, one must understand a coordinated set of covert activities being undertaken in Central Asia at that time. Prior to the attack on the World Trade Center, there were a number of seemingly independent, US covert operations occurring in many Central Asian countries, but primarily: Afghanistan, Kazakhstan, Azerbaijan, and Uzbekistan. This report suggests the Kazakhstan operation is also linked to covert activities in Angola. The central figures in these ‘theatres of operations’ are Richard Cheney, Richard Secord, Richard Armitage and George Bush Sr. Research demonstrates that covert activities in these regions were supported by additional participants from the Iran-Contra and October Surprise Scandals of the 1980s. These participants include David Kimche (Mossad), Adnan Khashoggi (Saudi), and Farhad Azima (arms merchant and airline owner). The central institutions in these operations are Halliburton, Unocal, Delta Oil, Enron, Union Bank of Switzerland (UBS), Credit Suisse, the Bank of New York, and the Deutschebank. In the background of these operations one finds the Russian/Israeli Mafiya and arms merchants. Their base THE SEPTEMBER 11 COMMISSION REPORT Page 65 of operations was Azerbaijan. (For the benefit of readers not familiar with the events of the Iran-Contra scandal, and how this group single-handedly turned the Carter-Reagan election in favor of Reagan, and how they subverted the will of Congress – these events are reviewed in Section 4.3 Richard Secord, UBS and the Azerbaijan Connection.) This is an extremely high-powered group of individuals which had been thoroughly tested on more than one occasion in its ability to execute large scale covert operations and maintain silence in the face of being ‘caught in the act.’ They were the “A” team. Their reunion in Azerbaijan demands an answer to the question: “Why was this high powered team working together in a small, impoverished corner of the world?” The answer to that question is revealed in this report. As their activities are disclosed, and the dots connected, it becomes clear that this group – more so than Osama Bin Laden and Al Qaeda - had the wherewithal to direct the events of September 11. More importantly, it will be shown that Osama Bin Ladin (and his mujahedin) was a contractor to this group, and that even up to 2001, the press was reporting that Osama Bin Ladin was a ‘figurehead’ for Al Qaeda, with the real leadership being unknown. Kimche, as an integral member of this “A” team, had developed a loyal following with ex-KGB agents he had helped escape to Israel, and had access to both the Mossad and the Russian/Israeli Mafiya. Together, this “A Team” had access to all the right resources, had connections to the same banks and had a vested interest in helping bring to an end the investigations into their gold and money-laundering, illegal bribes and securities fraud. There are three primary clues in the volumes of 9/11 data that point to the conclusion that the attack on the WTC was an attempt to stop investigations into money-laundering. Each clue reinforces the legitimacy of the other clues. Those clues are: 1. The accusation of Sibel Edmonds, an FBI translator who was silenced with a constraining order from public comment by Attorney General Ashcroft. After the attack on the World Trade Center, the FBI hired extra translators to help with a backlog of taped phone transmissions. One of these translators was Sibel Edmonds who has gone on public record accusing the Bush administration of covering up its knowledge of events which would help explain 9/11. Sibel Edmonds - after reading and interpreting raw intelligence data - contends that the 9/11 perpetrators were protected by Dick Cheney’s “intelligence block” which prevented the investigation into terrorists. Since making her accusations, she has been silenced by a restraining order from US Attorney General Ashcroft, in the name of national security. The essence of her accusation is as follows: “To this date the public has not been told of intentional blocking of intelligence, and has not been told that certain information, despite its direct links, impacts and ties to terrorist related activities, is not given to or shared with Counterterrorism units, their investigations, and countering terrorism related activities. This was the case prior to 9/11, and remains in effect after 9/11. If Counterintelligence receives information that contains money laundering, illegal arms sale, and illegal drug activities, directly linked to terrorist activities; and if that information involves certain nations, certain semi-legit organizations, and ties to certain lucrative or political relations in this country, then, that information is not shared with Counterterrorism, regardless of the possible severe consequences. In certain cases, frustrated FBI agents cited `direct pressure by the State Department,' and in other cases `sensitive diplomatic relations' is cited. The Department of Justice Inspector General received detailed and specific information and evidence regarding this issue THE SEPTEMBER 11 COMMISSION REPORT Page 66 (Please refer to DOJ-IG report Re: Sibel Edmonds and FBI Translation, provided to you prior to the completion of your report). I provided your investigators with a detailed and specific account of this issue, the names of other witnesses willing to corroborate this, and the names of certain U.S. officials involved in these transactions and activities. (Please refer to tape-recorded 3.5 hours testimony by Sibel Edmonds, provided to your investigators on February 11, 2004).” [Letter to Thomas Kean from Sibel Edmonds] “… (Sibel Edmonds) claims that certain well known politicians in this country have been receiving illegal campaign contributions from organizations involved in drugs and arms trafficking, and terrorism. That fact is extremely important because Edmonds claims that she discovered evidence of the 9/11 plot in intercepts that were not part of counter-terrorism investigations, but that were part of counter-intelligence investigations related to money laundering. And that money laundering was for cleansing the proceeds from arms and drug smuggling. Most likely, she was translating intercepts of Azerbaijani businessmen or politicians that were involved in laundering large quantities of cash raised by Afghan heroin smuggling. She has also made clear that the drug dealers and the arms dealers are mixed up together and that the divisions become blurred between these organizations. So, what kind of people have experience in money laundering, arms smuggling, and drug smuggling, but who also are known to have been involved in Azerbaijan? The most famous Americans with such experience are the veterans of the Laos war during Vietnam. Many of them were later implicated in the Iran-Contra affair, which, of course, involved money laundering, arms, and drug smuggling. Among these crafty spooks are such veterans as Richard Secord, Heinie Aderholt, Farhad Azima and Richard Armitage. To this list, we must also add a little known charlatan named Gary Best.” This revelation offers a close link to what FBI translator Sibel Edmonds told TomFlocco.com three weeks ago regarding what she heard during FBI intercept translations, telling us she personally identified ten well-known Americans who are politicians and heads of federal agencies linked to drug-money laundering in the federal banking system which was used for political campaigns--but also linked to financing the World Trade Center/Pentagon 9-11 attacks. She has yet to divulge the names, however. [Missile & remote control systems added to small jets before 9-11; same parts found at Pentagon, Tom Flocco, TomFlocco.com, 5/26/2005] To understand the activities Sibel Edmonds was referring to, operations in both in Azerbaijan and Afghanistan must be understood, because the types of activities Sibel was reporting were happening in both countries. Sibel Edmonds’s language skills as a translator were Turkish, Farsi (Iran) and Azerbaijani, so there is a predisposition to assume she was prevented by the block from translating records from the Azerbaijani region. 2. The co-location in the North Tower of the WTC of the FBI investigation into two seemingly independent crimes: illegal gold trades and Kazakhstangate – the illegal payment of bribes to Kazakhstan officials by Mobil Oil representatives Giffen and Williams. Co-location suggests the two investigations were related, but there is other reason to believe that to be the case. Additional evidence suggests the money laundering involved in both cases crosses paths through the Deutsche Bank and Credit Suisse. Evidence is later presented in the report which indicates that the secret services of Kazakhstan and Azerbaijan were working together, in unison with Richard Secord and David Kimche (Mossad), so any investigation into Kazakhstan bank accounts probably would have carried over into Azerbaijani bank activity. 3. FBI counter-terrorism chief John O’Neill’s accusation that Vice President Dick Cheney officially blocked investigation into Afghan terrorist activities by the FBI so to protect oil industry interests. O’Neill’s accusations, however, are broader than just THE SEPTEMBER 11 COMMISSION REPORT Page 67 Dick Cheney’s “intelligence block.” As early as 1996, the Department of State had been blocking his investigations in the Middle East - Yemen and Saudi Arabia specifically. “Jean-Charles Brisard, who wrote a report on bin Laden's finances for the French intelligence agency DST and is co-author of Hidden Truth, met O'Neill several times last summer. He complained bitterly that the US State Department - and behind it the oil lobby who make up President Bush's entourage - blocked attempts to prove bin Laden's guilt. The US ambassador to Yemen, Ms Barbara Bodine, forbade O'Neill and his team … from entering Yemen. In August 2001, O'Neill resigned in frustration and took up a new job as head of security at the World Trade Centre. He died in the September 11th attack. Brisard and his co-author Guillaume Dasquié, the editor of Intelligence Online, say their book is a tribute to O'Neill. The FBI agent had told Brisard: "All the answers, everything needed to dismantle Osama bin Laden's organisation, can be found in Saudi Arabia." But US diplomats shrank from offending the Saudi royal family. O'Neill went to Saudi Arabia after 19 US servicemen died in the bombing of a military installation in Dhahran in June 1996. Saudi officials interrogated the suspects, declared them guilty and executed them - without letting the FBI talk to them. "They were reduced to the role of forensic scientists, collecting material evidence on the bomb site," Brisard says. O'Neill said there was clear evidence in Yemen of bin Laden's guilt in the bombing of the USS Cole in which 17 US servicemen died, but that the State Department prevented him from getting it." [Oil Interests: Bush Obstructed FBI Investigation, By V.K.Shashikumar, New Delhi, November 21, 2001] These clues (1. the accusations of Sibel Edmonds, 2. the FBI investigations into Kazakhstan, and 3. the accusations of John O’Neill) point to five distinctly separate, but inherently related sets of events, occurring in the same time period – starting in the early 1990s through 2001. Together, these seemingly unrelated events demonstrate a larger pattern of investigation into the German banking cartel by US investigators. · the James Giffen (aka Geffen)/Bryon and the Credit Suisse scandal involving Mobil Oil, Phillips Oil, Chevron and Halliburton in Kazakhstan, which while reported as isolated to the Union Bank of Switzerland (UBS), seems to avoid reporting involvement of Marc Rich (Russian Mafiya/Israeli) and his use of the Bank of New York/Cayman Islands/Deutsche Bank chain for his money laundering and oil swap operations ; · the Mega Oil operations in Azerbaijan, involving the former Iran-Contra guns for drugs operatives and their UBS accounts; · Enron and Unocal operations in Afghanistan and Pakistan, using Deutsche Bank channels to funnel money through the Pakistanis to the Afghanis; · the Kevin Ingram scandal in which this Deutsche Bank executive was convicted of laundering money for weapons purchases for Muslim terrorists through Pakistani agents; and · The Bank of New York Russian money laundering scandal, in which Russian funds were being sent back to Russia via the Cayman Islands, where they were being picked up by the Deutsche Bank and Banker’s Trust. THE SEPTEMBER 11 COMMISSION REPORT Page 68 These were the five incidents brought to light as part of a broader investigation by the agencies housed in the WTC, Together they suggest that consecutive US administrations had sought to further the interests of the US and Saudi Oil companies in Central Asia and Russia, and had undertaken covert operations to do so. In and by itself, while these activities to some may be reprehensible, they are not all illegal (In many countries, money-laundering is not illegal). There is however, a common thread buried in the detail which is illegal: money laundering used for heroin, weapons and bribes, as well as at least three assassinations. Finally, lest not anyone forget, there were probably up to several trillion dollars of stolen national treasuries open to discovery and disclosure in these accounts. With the same ‘players’ being involved in so many of these activities, their German/Swiss bank accounts represents a house of cards, and any one investigation into any one of the aforementioned crimes could lead to a major exposure of the world’s greatest criminals – and their criminal bankers! 4. 1 Caspian Oil Before the Central Asian money-laundering activities can be explained, the Afghan pipeline, and the lesser discussed BTC (Baku-Tblisi-Ceyhan) pipeline from Azerbaijan through Turkey, need to be understood with some geographical context. At one time, the Caspian Sea Basin was considered to be the fourth largest oil reserve in the world, although the actual reserves have been significantly downgraded to between 6% and 25% of the original estimates since 9/11. The oil fields were largely undeveloped by the Soviet Union during its reign of control. Three of the four largest oil fields in the Caspian basin are located in Kazakhstan: Tengiz, Karachaganak and Kashagan. The fourth field is located in Azerbaijan: the Azeri-Chirac-Guneshli field. The region also includes the world’s fourth largest natural gas reserves in Turkmenistan. Kazakhstan, Azerbaijan and Turkmenistan are landlocked, thus requiring pipelines to export the reserves to market. The current pipelines out of the Caspian move oil north, through Russia. An alternative pipeline was planned to the south, through Iran. Having Caspian oil and gas flow through either Russia or Iran was not a situation that the US and Saudi oil companies wished to have happen. Nor was Russia willing to allow US owned oil flow through its pipeline. The only options available to the US and Saudi oil firms were controlling the Afghan and/or the BTC pipeline through Turkey. The Russians were investing in surrogate military forces which they hoped would control the political situations in Azerbaijan and Afghanistan to a point that US and Saudi interests and partners were prevented from controlling the oil and gas. In the meantime, the US and Saudis were investing in surrogate forces in Dagestan, Chechnya and Azerbaijan to help counter Russian forces. Most Americans continue to believe the Chechnyan conflict was a religious, political conflict. The truth however is that the conflict in Chechnya was always about controlling the pipeline (and the heroin traffic). Generally ignored in the economic overview of Caspian Oil, is a discussion of the vast gold wealth, as well as opium and heroin, found in this region. Long before oil became a global battleground, gold and heroin trafficking had attracted the Russian/Israeli Mafiya THE SEPTEMBER 11 COMMISSION REPORT Page 69 to this region. Kazakhstan is reported to hold 20% of the world’s gold reserves. The Caspian basin was Russian Mafiya turf before the oil companies appeared on the scene, and payoffs to the Russian/Israeli Mafiya were absolutely critical. Under American law, Figure 5 Central Asian Pipelines these payoffs were illegal, and punishable by severe penalties. Keeping the payments secret is equally important to the Russian/Israeli Mafiya, who are being prosecuted in French, English, Russian and Nederland’s courts for tax evasion and money laundering. (Historic example – the FBI could only convict Al Capone of tax evasion. The same phenomenon seems to hold for these Russian/Israeli criminals as well.) With regional wealth, one finds significant inroads by Russian and Saudi organized crime: “Kazakhstan's location as a transit point from Central Asia to Russia-and hence to Europe-makes it a channel for drug smuggling and people trafficking, particularly where women are concerned. The president's tight control over the security services and the main lucrative industries in Kazakhstan arguably limits to some extent the ability of Kazakh organised criminal groups to penetrate the official economy. However, Russian mafia groups-with links to the Russian oil and gas industry-are reported THE SEPTEMBER 11 COMMISSION REPORT Page 70 to have played a part in organising some of Kazakhstan's oil deals with both Russian and Western companies”. [Country Profile: Kazakhstan, Economist On-Line Store] “The Mahfouz and Al-Amoudi families are not coincidentally involved in oil field development projects in Kazakhstan, Azerbaijan and Turkmenistan.” [Part 1: Big Oil, the United States and corruption in Kazakhstan, Larry Chin, Online Journal Contributing Editor May 12, 2002] As the Soviet Union faded into history in 1991, the region struggled - as it still does – with different groups competing for control of the resources. Those historic struggles of area ethnic groups were re-surfaced, and added to that mix were elements of Russian/Israeli organized crime, US covert intelligence and Saudi investors. These latter two groups were simply “buying” their way into a territory opening itself up to market forces – much like one buys distribution access to retail in New York City by paying tribute to the Mafia. While US and Saudi oil companies were “buying” access to Caspian oil, many other western companies were being forced out of the region. It was reported that 35 Canadian businesses had been forced to evacuate Russia as a result of Mafiya pressures during the late 1990s. Two companies managed to establish a rapprochement with the Mafiya: one of them was Barrick Gold. Also, from Barrick’s Annual Report, one discovers that Barrick had leveraged for itself a significant position in Kazakhstan, in a partnership with Celtic Resources Holdings Limited PLC: “We have an equity position in Celtic and have back-in rights to participate on an exclusive basis for up to 50% in any assets acquired in Kazakhstan and to certain other assets including the Nezhdaninskoye project.” In connection with Barrick’s plan to develop a business unit in Russia and Central Asia, Barrick acquired a 10% equity interest in Highland Gold Mining Ltd. (“Highland”) in October 2003. In January 2004, Barrick acquired an additional equity interest, bringing its total equity interest to approximately 14% at December 31, 2004, in Highland and certain participation and other rights with respect to properties in Russia. In January 2005, Barrick acquired a 9% equity interest in Celtic Resources Holdings PLC (“Celtic”). In addition, Barrick acquired additional subscription rights for shares in Celtic and certain rights with respect to a property in Russia and certain participation rights with respect to properties in Kazakhstan.” [Barrick Annual Information Form, December, 2004] Barrick’s singular ability to maintain a presence in Russia and Central Asia, when all legitimate companies are being forced out, or taken over, suggests they have a special relationship with the ex-KGB Russian/Israeli Mafiya. This relationship is best explained by the earlier hypotheses of this report that Barrick may be a major gold laundering operation used to launder thousands of tons of gold stolen from various treasuries, including those of the former Soviet Union. It can be further explained by the “partnership” between Barrick and Nelson Gold, noted in the Barrick annual report. Nelson Gold is a subsidiary of Nelson Resources – run by Nazarbayev’s son-in-law, and probably successor to Nazarbayev, President of Kazakhstan. Nazarbayev will later be shown to be extensively involved in money laundering and illegal oil deals, with this same cast of suspicious characters. This relationship does not bring any new evidence to this report other than to validate that the individuals being investigated for Central Asian activities are the same as those involved in the probable Barrick’s gold operation. THE SEPTEMBER 11 COMMISSION REPORT Page 71 4.2 Azerbaijan Because of the restraining order imposed by Attorney General John Ashcroft, analysts can only speculate that Sibel Edmonds is referring to payments and transaction stemming from the Mega Oil/ Azerbaijan International Operating Company (AIOC) operation in Azerbaijan. (Another possible group is the Farwest/Diligence/Halliburton, which is reviewed in a later section, but essentially involves the same players.) This speculation is due to Edmond’s linguistic skills being limited to Turkic languages, with her attention being focused on activities in that region of the Caspian. In Azerbaijan, one finds a large cast of participants all linked through supporting roles in the Iran-Contra Scandal and its cover-up. (The Iran-Contra scandal, the October Surprise manipulation of the Presidential election by George Bush Sr., the deliberate sabotage of a US rescue attempt of US hostages in Iran, and the cover-up of these activities is reviewed in a subsequent section of this report, to demonstrate the collaborative history of these individuals.) In Azerbaijan, these individuals are · Adnan Khashoggi, whose Azerbaijan banks "played a big part in the formation of terrorist camps and in the opening of laboratories for developing chemical and bacteriological weapons in Nagornyy Karabakh.’ · Richard Secord, a former U.S. Air Force major general who been helping to recruit and train the Azerbaijani army as well as regional secret services; · Richard Armitage, acting as a consultant to Halliburton and Unocal at the time, and President of the US-Azerbaijani Chamber of Commerce; · Farhad Azima, arms merchant with Iranian background, member of US-Azerbaijani Chamber of Commerce, assisted Richard Secord in recruiting and training mujahedin mercenaries, owns the Azerbaijan Airlines, and has a twenty year old relationship with the Bush family enterprise; · Khalid bin Mahfouz, owner, with the bin Laden family and members of the Saudi royal family of the Saudi companies Delta Oil and Nimir Oil. Both are partners with Unocal in Azerbaijan. · Dick Cheney, as CEO of Halliburton, lobbyist for the Azerbaijan International Operating Company, on US-Azerbaijani Chamber of Commerce; · David Kimche, Israeli Mossad agent who brought Israeli agents into Azerbaijan at the request of Secord, and worked with Secord and the regional secret service organizations. The essence of the Azerbaijan operation was an effort by former Iran-Contra conspirators to illegally support (support was made illegal by the US Congress) the despotic government of Azerbaijan in its war against Russian backed Armenia. In doing so, they supposedly sought to protect for US and Saudi Oil interests a western access to the Caspian Oil basin, and one of the four largest oil fields in the region. They did so by THE SEPTEMBER 11 COMMISSION REPORT Page 72 illegally recruiting Afghan mujahedin mercenaries to fight for Azerbaijan (against Russian backed Armenians), using Mega Oil as the financial cover. (This approach appears to be part of the CIA handbook. This same approach of using an oil company as cover for covert operations was used in the 1970s, with right wing CIA trained death squads in South America masquerading as Bridas employees. This is the same Bridas that competed for the Afghan pipeline rights.) “Over the course of the next two years, the company they founded procured thousands of dollars worth of weapons and recruited at least two thousand Afghan mercenaries for Azerbaijan - the first mujahedin to fight on the territory of the former Communist Bloc. And they did it under the guise of an oil company… - MEGA Oil - … we have discovered no documentary evidence to tie MEGA Oil, as an entity, definitively to the United States government. There is however considerable evidence that all three prime movers in the company - former Iran-Contra conspirator Richard Secord, legendary Air Force special operations commander Harry "Heinie" Aderholt, and the man known as either a diabolical con-man or a misunderstood patriot, Gary Best - were in the past involved in some of the most infamous activities of in the history of the CIA.” [God Save the Shah: American Guns, Spies and Oil in Azerbaijan; by Mark Irkali, Tengiz Kodrarian and Cali Ruchala; May 22, 2003] It is of small historic note that of the mercenaries procured by Secord, one of them was actually Osama Bin laden: “In the summer of 1993, Azerbaijan’s President Heydar Aliyev hired over 1,000 Islamist mercenaries in the war against Nagorno Karabakh Armenians. They were flown on civilian aircraft from Afghanistan to Azerbaijan. The mercenaries, including Arab veterans of the Afghan war (`1979-89`), took an active role in the Karabakh conflict (Moscow News 9/13/00). One of Bin Laden’s associate claimed that Bin Laden himself led mujahedin in at least two battles in Nagorno Karabakh.” [Associated Press 11/14/99] Secord also brought the Mossad into Azerbaijan, which confirms reports that Israelis fought side-by-side with mujahedin. In the news report of David Kimche’s involvement, is the very important observation that not only are the Mossad in Azerbaijan, but that the secret service organizations of Azerbaijan, Kazakhstan and Uzbekistan are all working in unison with the Mossad and Richard Secord. When trying to understand why such a high powered team as the Iran-Contra/October Surprise team – is reconstructed in a little country like Azerbaijan, it becomes clear that Azerbaijan is merely a base of operations for the broader Central Asian operation initiated by Bush in 1991. “According to Wolfgang Bueschel in BCDX 351, "Mr. Vafa Culuzadeh, adviser of former Azerbaijan President Ebulfez Elicibey, told the Italian press agency IPS in October 1992 from Baku, that the Israelian secret service specialist David Kimche and... Richard Secord, who was involved in the `Iran- Contra`-Affair, visited Azerbaijan, (and) presented a delegation of more Israelian secret service personnel. Mr. Culuzadeh took part on a return visit to Israel, (and) lead a delegation of Azerbaijan/Uzbek/Kazakh secret services." David Kimche is a `30-year` veteran of the Mossad and was an important force behind the Reagan administration's `arms-for` hostages swap with Iran and its secret aid to the Nicaraguan rebels (coined `Iran-Contra`.) In fact, it was Kimche who helped to organize the Contras, who supplied them with Israeli military advisers, who sold the US government Palestinian weapons Israel had seized in 1982, and who claimed he could get access to the `hostagetakers` in Lebanon.” [Voice of Southern Azerbaijan, Nick Grace C., 4/13/1998] Secord’s employer in this operation - President Heydar Aliyev – was no novice in the realm of covert operations, being a former top KGB official. THE SEPTEMBER 11 COMMISSION REPORT Page 73 “The elections confirmed Ilham Aliev as the nation's new ruler. He is the son of Heidar Aliev, a former top KGB official and Kremlin adviser, who became president two years after Azerbaijan became independent in 1991. The elder Aliev died last month while receiving medical treatment in the United States.” [Washington Trades Human Rights for Oil in Azerbaijan, Jim Lobe] The operations were “covert” because American support was illegal according to Section 907 of the "Freedom Support Act" “The Americans' avowed priority in the Caucasus was to find a method to deliver the crude from the Caspian oil shelf to market, avoiding both Russia and Iran as middlemen. Since the oil would flow from Azerbaijan, this strategic goal was quite at odds with the American government's favouritism towards Armenia in the Karabakh War. In fact, providing support of any kind to Azerbaijan was illegal. Congress passed a law (Section 907 of the "Freedom Support Act") effectively banning foreign aid - and, needless to say, all military aid - to Azerbaijan. Thus America's top long-term interest in the Caspian was threatened by the promises of Armenian-American retribution at the polls - a very real threat considering Armenian electoral power in the key state of California. ” [God Save the Shah, Part Three,Mark Irkali, Tengiz Kodrarian and Cali Ruchala, May 22, 2003] Those who allege that MEGA Oil at least began as a project approved by Washington point to the involvement of Richard Secord, whose visit to Azerbaijan in early 1992 came at MEGA's expense and coincided with the company's negotiations with Mutalibov on building Azerbaijan's army. Secord's only public comment on the matter to date was to state that Mutalibov couldn't decide whether he wanted his American friends to build an army or a Praetorian Guard to hold onto power. The fact that Congress had outlawed support to Azerbaijan would not have mattered to Secord. At the heart of the Iran-Contra controversy was a Congressional ban on aid to the Contras strikingly similar to Section 907, and Secord's primary role in that first scandal was as the head of a private corporation which worked at the behest of Oliver North for covert and illegal weapons procurement for the Nicaraguan Contras. Secord appears to have been violating congressional intent in Azerbaijan exactly as he had for the Contras. It should not be assumed that he was just once again demonstrating patriotic fervor. Many forget that Secord's involvement in the Iran-Contra Affair was motivated to a large degree by personal profit. The special investigator's report on Iran-Contra concluded that: "one of Secord's central purposes in establishing and carrying out the operations of the enterprise was the accumulation of untaxed wealth in secret overseas accounts... that [Secord] received at least $2 million from his participation in the enterprise during 1985 and 1986, that he set up secret accounts to conceal his untaxed income, and that he later lied and encouraged others to lie to keep it concealed." [God Save the Shah, Part Three, by Mark Irkali, Tengiz Kodrarian and Cali Ruchala, May 22, 2003] Secord was reportedly investigated by the US Department of Justice for his involvement in Azerbaijan, but there has been no mention of this report in the US press, and the investigation appears to have been ‘buried.’ The collapse of the Azerbaijan regime was prevented by this tactic long enough so that when the 9/11 tragedy occurred, the Bush administration was able to remove the law that prevented the US from giving aid to despotic governments. THE SEPTEMBER 11 COMMISSION REPORT Page 74 “The only thing preventing the Americans from offering the same sort of "help" to Azerbaijan had been Section 907. In the interest of national security, and to help in "enhancing global energy security" during this War on Terror, Congress granted President Bush the right to waive Section 907 in the aftermath of September 11th. It was necessary, Secretary of State Colin Powell told Congress, to "enable Azerbaijan to counter terrorist organizations." [God Save the Shah, Part Four, by Mark Irkali, Tengiz Kodrarian and Cali Ruchala, May 22, 2003] 4.3 Richard Secord, UBS and the Azerbaijan Connection The key player in the operation to control Azerbaijan politics was Richard Secord, and Mega Oil. Richard Secord is the same individual who was intimately involved in multiple sets of illegal activities with George Bush Sr.: the alledged sabotage of the US attempt to rescue 52 US citizens in Iran; the October Surprise scandal, and the Iran- Contra scandal. It is through Secord that one realizes that Adnan Khashoggi had a second viable connection which would allow him to recruit the 9/11 hijackers. Secord was recruiting mercenaries for Azerbaijan that had the exact same profile as the 9/11 hijackers, and while doing so, he was working with a Mossad agent (David Kimche) who had placed Israeli mercenaries in Azerbaijan and Nicaragua. In recruiting these mujahadin, Secord was pushing the funding through UBS, thus exposing the bankers at UBS to further investigation. “…found this cluster of accounts buried in the Union Bank of Switzerland, including General Richard Secord's Mega Oil Corporation. There was a cluster of two or three hundred accounts, controlled by all of the aforementioned, wherein money continuously passed back and forth, almost in a loop, in these accounts. Where the money was coming from, where those dollars were being generated, was oil. Kurdistan, Azerbaijan, Dagestan. Uzbekistan. That’s where the money is." [Kurds Get Saddam; Next - Kurdistan or Cabalistan? Al Martin] Richard Secord and Mega Oil have a long history which intertwines with the Bush Family Trust, Harken Energy (George Bush Jr.’s insider trading scandal and ‘pump and dump’ scheme), UBS and the BCCI group of Saudi investors. “Saudi European Investment Corp was basically a dummy company set up to launder all the stolen money from Lincoln savings. Gaith Pharon, Head of Saudi Intelligence & Harken Energy Saudi European Director … also acted as registered agent for numerous Bush-controlled corporations for Bush interests in the Middle East. These involved Bahrain oil interests controlled by Richard Secord's Mega Oil. These would then get sold back to Harken Energy. Of course most of them were worthless. The leader of Bahrain, Prince Abdullah, was also one of the directors of the Saudi European Investment. This entire daisy chain fraud and money laundering is actually a global fraud network because of its offshore and transnational connections. Saudi European Investment Corp was laundering money into Union Bank of Switzerland and also into BCCI accounts. BCCI of course is the notorious worldwide CIA-criminal bank, Bank of Credit and Commerce International. ….Years later it would be revealed that Agha Hasna Abedi (the founder of the Bank of Credit and Commerce International -BCCI)and accomplice Gaith Pharon went right ahead anyway succeeding with the takeover in 1982 of the National Bank of Georgia (Corporate Crime Reporter, July 22, 1991). Abedi used front man Gaith Pharon to act as his intermediary, taking over Lance's stake in the National Bank of Georgia for BCCI.” [Waste Not, Published: July 1997 Author: Brian Lipsett and Ellen Connett Posted on 09/10/1999] THE SEPTEMBER 11 COMMISSION REPORT Page 75 “In 1987, Stephen’s deal [Jackson Stephens, head of Stephens, Inc., a large investment bank in Little Rock, Arkansas] made arrangements with Union Bank of Switzerland (UBS) to provide $25 million to Harken in return for a stock interest in Harken. As part of the Stephens-brokered], Sheikh Abdullah Bakhsh, a Saudi real estate tycoon and financier, joined Harken's board as a major investor. Stephens, UBS, and Bakhsh each have ties to the scandal-ridden Bank of Credit and Commerce International (BCCI). It was Stephens who suggested in the late 1970s that BCCI purchase what became First American Bankshares in Washington, D.C. BCCI later acquired First American's predecessor, Financial General Bankshares. At the time of the Harken investment, UBS was a joint-venture partner with BCCI in a bank in Geneva, Switzerland.” [The Harken Connection, "The Family That Preys Together” Jack Colhoun, Covert Action Quarterly, Issue No. 41, Summer, 1992] In actuality then, the Azerbaijani Mega Oil operation – if it is the investigation referred to by Sibel Edmonds– would have involved the same cast of illegal money launderers as associated with the Barrick gold laundering hypothesis: the BCCI Saudis and Adnan Khashoggi, the Bush enterprise, and illegal weapons merchants. As with the Giffen/Williams scandal in Kazakhstan, this operation began under President George Bush Whitehouse sponsorship. “In 1991, Azerbaijan began negotiating with Amoco, BP, McDermott, Pennzoil, Ramco, Unocal, TPAO, Statoil and other corporations on a deal to develop the Azeri, Chirag and Gunashli fields in the Azeri sector of the Caspian Sea. Azerbaijan's State Oil Company (SOCAR) is to have a 20 percent share in the project and the Russian company Lukoil will take a 10 percent holding. The deal was signed in September 1994, and in December the consortium had formed as the Azerbaijan International Operating Company (AIOC), with Terry D. Adams as chairman. American corporations (Amoco, Pennzoil, Unocal, Exxon) have a 40 percent interest in the $8 billion AIOC. British corporations (BP, Ramco Khazar) have a 19 percent interest. SOCAR (Azerbaijan), Lukoil (Russia), Den Norske Stats Olieselscap (Norway), Turkie Petrollari (Turkey), Itochu (Japan), and Delta Nimir Khazar (Saudi Arabia) are also involved. The AIOC consortium's plan to build a pipeline from Baku to Ceylon, Turkey, has gotten lobbying assistance from former British Energy Minister Tim Eggar (now CEO of the British corporation Monument Oil), former British Foreign Minister Malcolm Rifkind (now a director of the British oil corporation Ramco), two former U.S. National Security Advisors, Zbigniew Brzezinski and Brent Scowcroft (now a director of AIOC), as well as former U.S. Secretary of State James Baker (oil corporation attorney), former U.S. Secretary of the Treasury Lloyd Bentsen, former U.S. Defense Secretary Dick Cheney (then CEO of oil services corporation Halliburton, now candidate for U.S. Vice President), and former White House chief of staff John Sununu. Iran-Contra figure and former U.S. Air Force major general Richard Secord has been helping to train the Azerbaijani army.” [Oil Wars: The Balkans, George Draffan, www.endgame.org,a case study for the report The Corporate Consensus] “Giffen’s lawyers contend that “his actions were taken with the knowledge and support of senior officials of the U.S. intelligence and national security agencies,” including the CIA, the National Security Council (NSC), the Department of State and the White House, which could effectively “immunize Giffen” as the judge phrased it.” [Manhattan Judge Rules On Pre-Trial Motions In “Kazakhgate” Case, Marlena Telvick, 09/07/2004] The connection is fairly explicit, with Giffen being responsible for a meeting between Nazarbayev and George Bush Sr. in May of 1992 “Giffen was consolidating his position as a trusted adviser to Nazarbayev. According to U.S. officials, he helped set up Nazarbayev's first presidential visit to Washington in May 1992, when he met with President George Bush. His company, Mercator, took charge of many arrangements for the visit, from making appointments to paying bills. Such was Giffen's pull that he began traveling to and from Kazakhstan on a Kazakh diplomatic passport, even though he remained a U.S. citizen. ...According to THE SEPTEMBER 11 COMMISSION REPORT Page 76 foreign law enforcement sources, Swiss investigating magistrate Daniel Devaud examined between 50 and 60 accounts in at least four different banks: Credit Agricole Indosuez, Credit Suisse, Pictet and United European Bank. Many of the most controversial transactions went through Credit Agricole Indosuez, an affiliate of the French bank Credit Agricole. (Author’s note: Credit Agricole Indosuez would later absorb the operations of the scandal ridden BCCI as it was shut down.)” [American at Center of Kazakh Oil Probe, Michael Dobbs, David Ottaway and Sharon LaFraniere, Washington Post Staff Writers] In addition to covert Whitehouse sponsorship, significant lobbying assistance was provided by The United States Azerbaijan Chamber of Commerce (USACC). “Azerbaijan is key to understanding the region and the power. During the past decade the only western source of power and force projection into the region was with the USACC. The United States Azerbaijan Chamber of Commerce. It was this body that has, and remains, the source of negotiations, planning and structure in the region. Prior to many of its board members entering the present White House along with Mr. Bush, they were the force behind the U.S. Congressional effort called the Silk Road Strategy of `1996-1998`; the Caspian initiative; Black Sea pipeline routes and the division of the Caspian Sa, etc. The USACC Advisory Board consisted of "only" these seven men: Dr. Henry Kissinger, James A Baker III, Lloyd Bentsen, Zibigniew Brzezinski, Dick Cheney, Brent Scowcroft, John Sununu. It is noted here that the current Vice President’s daughter, Elizabeth `Cheney-Perry`, has been named Assistant Secretary of State for Near East Affairs for regional economic issues; she left Armitage Associates for the job. The USACC `Vice-Chairman` of the Board is James A Baker IV (Baker Botts, L.L.P.); Chairman Emeritus is T. Don Stacy (VP, Amoco); with Richard Armitage as Board President, until he resigned to become Colin Powell’s Deputy, which rounds out the US elite running the USACC. The remaining Board of Directors are a who’s who of the oil and gas multinational corporate interests of the west and specifically the United States. On the Board of Trustees or USACC the latter interests hold sway again with three primary exceptions: Senator Sam Brownback (`R-KS`) and Joseph R. Pitts (`R-PA`) (whose efforts formed the 1996 legislative backbone of the House/Senate Silk Road Strategy for Afghanistan, [Unocal, Texaco] et al) and Richard Perle (US Defense Policy Board). The Legal Counsel for USACC is Ted Jones of the Texas Law firm Baker Botts L.L.P. (James A Baker III & IV’s law firm.); Treasurer is Karl Mattison (VP, Riggs Bank, NA). It was the James A. Baker III Institute of Rice University which outlined the Cheney Strategic Energy Initiative which later became the Administration’s Strategic Energy National Security Policy. (Clearly Dick Cheney wouldn’t be interested in giving Congress the names of who he consulted on the Energy Initiative as they would amount to the remainder of the Board of Directors and Board of Trustees of USACC.)” [U.S. political objectives in the Middle East will Fail, Creating a New Cold War with China and Russia; Target is Iran not Iraq., By. Craig B Hulet] From the point of view of this group, the grander ‘Silk Road’ strategy was one of capturing the Caspian Oil: “…what are Bush’s political objectives? It is not so much Iraq’s WMD as we are led to believe; it is more about Iran. Bush will try to outflank Iran and not allow oil and gas pipelines to run through Iran from the Northern Caspian region, Russia, Caspian Sea, and Turkmenistan/ Kazakhstan, South to the Persian Gulf and into Pakistan. Bush, inextricably tied to western oil interests, wants to run their pipelines through Afghanistan into Pakistan as the counter weight on the Eastern front. Then pipelines through Iraq, an Iraq controlled by the U.S., is the counterweight on the Western front. Control Baghdad, you control the Euphrates and Tigris rivers’ trade waterways. But Russia will try to dominate in the North, with pipelines running North and Northwest into Russia and across to the Black Sea; China will try to dominate the East with pipelines running East and Southeast into China, "The Silk Road" route. Put succinctly: Russia wants the Black Sea routes, China the Silk Road routes, Bush wants everything to flow South from the entire region into his deep pockets via the Persian Gulf routes. Geography rules even if borders no longer matter. Also, recently reported (Jan.14, 2003 NYT), Russia is negotiating massive pipeline routes from its Siberian oil fields: one from Angarsk into the northern industrial region of China and a separate one which would bypass China. Negotiating with the THE SEPTEMBER 11 COMMISSION REPORT Page 77 Japanese for a pipeline which would run from Lake Baikal to the port of Nakhodka, near Vladivostok on the Sea of Japan. Oil is the Great Game and everyone is in on it. Russia and China have already opened dialogue on security issues with India, and Japan will not remain in economic doldrums forever. [U.S. political objectives in the Middle East will Fail, Creating a New Cold War with China and Russia; Target is Iran not Iraq, Craig B Hulet, 7/9/2003] The grander strategy however seemed to find a way to enrich the business partners, going as far back as Iran-Contra, and resulted in a series of coincidences that suggests that the Iran Contra group of businessmen could have been responsible for the attack on the World Trade Center. The Secord/Armitage foray into Azerbaijan introduces some relatively curious coincidences pertinent to the attack on the WTC. Two of the reported hijackers were reported to be Uzbek; a number of other hijackers traveled to, and fought in, Chechnya, Bosnia and Afghanistan. Secord, and his 1,000 Afghan Mujahedin fought along side of Chechen, Turkish and Israeli forces as well as American mercenaries. The Afghan Mujahedin mercenaries hired by Secord are reported to have also fought in other regions of the Caucuses: in Chechnya and Georgia and Dagestan, and to have been a destabilizing force in the entire Caucuses region. Additionally, Secord had twice traveled to Uzbekistan, and the CIA had recently set up a sizable operation in the area: “Only belatedly have major outlets like the Wall Street Journal (Oct. 2), The Associated Press (Oct. 5), and the Washington Post (Oct. 5) begun to acknowledge, in stories placed well back in the paper, and with much less emphasis, that the Northern Alliance – our allies against the Taliban – are now in real control of the heroin trade. Smuggling routes have shifted from south through Pakistan northward through Uzbekistan, Tajikistan, and Turkmenistan. They acknowledge the obvious – that the Taliban is no longer the primary supplier of heroin. How could they be?... In March 2001 FTW reported from Moscow that Uzbekistan was “awash” in a sea of poppies. Since September 11 we have seen Uzbekistan not surprisingly become the hub for all U.S. military operations going into Afghanistan. It was, in fact, the very first place that U.S. military and “special operations” forces deployed – within days of the attacks. Unmentioned in press stories is the fact that firms like Southern Air, Evergreen and other CIA proprietary or contract operations have been establishing a presence in the Uzbek capital of Tashkent for more than a year. …as we are hearing the first reports that the Uzbeki government, fighting its own battle against a Muslim insurgency, will permit offensive operations from its military bases, FTW has had two reports that CIA operative Richard Secord has recently traveled to Tashkent. Secord’s documented history of involvement in heroin smuggling, from Vietnam, Laos and Thailand in the 1960’s and his criminal involvement in illegal operations, including drug smuggling during the Iran-Contra years, tells us exactly what is happening. These same intelligence sources have also reported that many other CIA veterans of Iran-Contra and Vietnam – despite their age – are converging on Tashkent like bees to a field of flowers – poppy flowers.” [Russia and Oil the Real Objectives With Heroin As A Weapon of War, A Replay of CIA’s Vietnam-era Drug Dealing - FTW Revises Its Map On Economic Impacts, by Michael C. Ruppert http://www copvcia.com/stories/oct_2001/heroin.html, FTW, 10/10/2001] Another “Neocon” active in the region and supporting Muslim “terrorists” was Richard Perle: “Perle was also a major player in the Bosnia Defense Fund, which acted as a financial liaison to funnel money between Muslim nations and the government of Bosnia. An adviser for the now-defunct Riggs Bank, which handled the finances for the Bosnia Defense Fund and its accounts at the Bosnian Central Bank in Sarajevo, claimed that Perle was not alarmed when he was told that some of the Bosnian Defense Fund money was bleeding over into the hands of people connected with terrorism in Bosnia. THE SEPTEMBER 11 COMMISSION REPORT Page 78 Perle's response to the concern of the adviser was reportedly, "Just make it fucking happen." [http://waynemadsenreport.com/2007_01010110.php] Assuming these reports about Secord and Perle to be true, Secord, Perle and the neoconservative group is in a position to be considered as much a logical source for the 9/11 hijackers as is Osama Bin Laden. Another ‘coincidence” would be Adnan Khashoggi’s role as a banker in that conflict, funding the anti-Armenian “terrorists”: “… in Armenia. Banking fraud was rampant there, Global News Wire reported in August, 2004, "thanks to the Arab millionaire Adnan Khashoggi-- an active partner of Armenian businessmen in the illicit drug and arms trades." Khashoggi's first bucket-shop banking operation was a branch of the Caucasus Investment Bank in Susa. In quick succession, with the assistance of Abu Muslum, an Arab businessman, he opened the Hamaz and Beit ul-Muqaddas banks. Rovsan Novruzoglu, a political scientist and director of the International Strategic Research Center in Azerbaijan, observes that Adnan Khashoggi's banks "played a big part in the formation of terrorist camps and in the opening of laboratories for developing chemical and bacteriological weapons in Nagornyy Karabakh."11 1) M. Macidli, "Azerbaijani Daily Outlines Activities of International Armenian Haybun Organization," Global News Wire, August 27, 2003. [Saudi Entrepreneur Adnan Khashoggi Linked to 9/11 Terrorists (Part 1-7) By Alex Constantine ] Finally, this report would also be remiss in not bringing to the reader’s attention the role of some other Iran-Contra and BBCI bank fraud players not often identified with the Azerbaijan operations: including Dick Cheney, Brent Scowcraft, Khalid bin Mahfouz and Farhad Azima. The first two are former Congressmen who were involved in Congressional Committees that investigated the Iran Contra scandal, and found no involvement by Vice President Bush. (This involvement is further discussed in Section: 10 Iran-Contra Scandal and October Surprise) “You might be interested in a lobbying group known as the US-Azerbaijani Chamber of Commerce. You can learn about it here. http://elitewatch.9/11review.org/USACC.html The members include James Baker, Henry Kissinger, Brent Scowcroft, Zbiniew Brezinski (the mastermind of arming Islamic militants in Afghanistan to fight the Russians), and Lloyd Bentsen. Dick Cheney resigned from the board when he was elected to VP. Richard Armitage resigned from the Presidency when he was appointed to the state dept. Armitage seems like one of the few upright and honest members of this administration, but he has a dark history of drug trafficking for the CIA in Laos, among other things. Which leads us to the most notorious member of the board, Farhad Azima. Farhad Azima has smuggled guns, drugs, weapons systems, and mujahidin for the CIA for over 35 years, as the head of about a dozen different cargo airlines. He leased the plane Ollie North took to Tehran. He also was involved in the Savings and Loan scandal, and the Clinton fund raising scandal, and he recently gave Dick Gephardt $4000 in his run in the primaries. He knows how to grease the skids. Back in 1992, he [Farhad Azima ]and infamous AF Gen. Richard Secord flew Afghans into Azerbaijan and trained them to fight against Armenia. These soldiers wound up in Chechnya and Georgia and Dagestan and have destabilized the entire Caucuses region.” [http://elitewatch.9/11review.org/USACC.html] It is not coincidence that Secord’s CIA mercenaries went to Chechnya. The Chechnyan conflict too, was part of a grander strategy to control Caspian Oil, and deter it from entering Russian markets. THE SEPTEMBER 11 COMMISSION REPORT Page 79 "With regard to Chechnya, the main rebel leaders Shamil Basayev and Al Khattab were trained and indoctrinated in CIA sponsored camps in Afghanistan and Pakistan. In this regard, the involvement of Pakistan's ISI and its radical Islamic proxies are actually calling the shots in this war. "Russia's main pipeline route transits through Chechnya and Dagestan. Despite Washington's perfunctory condemnation of Islamic terrorism, the indirect beneficiaries of the Chechen war are the Anglo-American oil conglomerates which are vying for control over oil resources and pipeline corridors out of the Caspian Sea basin." [Chossudovsky] “One of the main goals of the Russian attack on Chechnya in December of 1994 was to ensure control of the oil pipeline which runs from Baku, via Grozny, the Chechen capital, to the Russian city of Tikhoretsk. The pipeline ends at the Russian Black Sea port of Novorossiysk, designed by Russia to be the terminal for the proposed Kazakh and Azerbaijani pipelines. In addition, Grozny boasts a large refinery with a processing capacity of 12 million tons per year. During its brief self- proclaimed independence under President Jokhar Dudayev from 1991 to 1994, Chechnya illegally exported crude oil and refined products worth hundreds of millions of U.S. dollars. The rebel government worked closely with corrupt politicians in Moscow to obtain export licenses. Partly to cut off this activity, Russia launched a massive but covert military action in the fall of 1994 to support opponents of Dudayev. In 1994, Dudayev turned to radical Islamic elements in the Middle East and Central Asia for support. This exacerbated the religious aspect of the conflict between the Muslim Chechens and Christian Orthodox Russians. The overt military action began on December 12, 1994, when the Russian army marched on Grozny, destroying Chechnya's capital city by brutal aerial, tank, and artillery bombardment. Since the start of the campaign, over 30,000 people have been killed, and more than 300,000 have become refugees. Hostilities continue, with hostage-taking crises erupting in July 1995 and January 1996.” [Turkmen Oil and Natural Gas: The Viability of Delivering Prosperity to Global Markets , Turkmen Oil and Natural Gas. The Manadal Projects, American University] Additionally involved in Azerbaijan is Iran-Contra participant and Barrick co-founder Khalid bin Mahfouz, as a major investor in Delta Oil and Unocal (both also involved in the Afghanistan pipeline operations) “French sources have located Khalid bin Mahfouz and his family at the center of a nexus involving other firms owned by his family, the bin Laden family and members of the Saudi royal family. Some of these were oil companies, like the Saudi companies Delta Oil and Nimir Oil. Both are partners with UNOCAL in Azerbaijan, and Delta was a partner in UNOCAL's efforts in 1996 to build a pipeline through Afghanistan. Bin Mahfouz himself was named to the governing council of the Saudi oil giant Aramco by King Fahd in 1989 (Brisard 187).” [Synopsis: The "Truth" Which Is Now "Forbidden" on Bin Mahfouz, Bin Laden, the CIA, BCCI, & Saudi Regime, Source: socrates.berkeley.edu via mailarchive. com , Published: January 1, 2002 Author: Peter Dale Scott, For Education and Discussion Only. Not for Commercial Use.] 4.4 Afghanistan The Afghan pipeline from the Caspian, through Afghanistan to India and the Arabian Sea, was originally conceived and proposed by Bridas, the Argentine energy company, in 1991. For many years, Bridas invested and promoted the pipeline, in the midst of great political instability in Afghanistan. Bridas initially approached Unocal to be a partner, but Unocal decided that a partnership with Bridas was unnecessary. Unocal marshaled a heavy campaign to change the hearts and minds of Central Asian politicians, and where they could not change their minds, Unocal replaced the politicians. All this was occurring in a country preoccupied with tribal warfare, where warlords maintained personal armies of between 15,000 and 30,000 warriors. These armies were fed by weapons and cash from the Russian and US intelligence operations, and where possible, THE SEPTEMBER 11 COMMISSION REPORT Page 80 self-funded through the sale of heroin, opium and female slaves using either the Soviet military or the CIA as a middleman. The initial conquest of Afghanistan by the Taliban was initially viewed by the US, Pakistani and Saudi politicians as a favorable development. “The Taliban conquer Kabul, establishing control over much of Afghanistan [Associated Press, 8/19/02]. A surge in the Taliban's military successes at this time is later attributed to an increase in direct military assistance from Pakistan's ISI. [New York Times, 12/8/01] The oil company Unocal is hopeful that the Taliban will stabilize Afghanistan and allow its pipeline plans to go forward. According to some reports, “preliminary agreement [on the pipeline] was reached between the [Taliban and Unocal] long before the fall of Kabul . . . . Oil industry insiders say the dream of securing a pipeline across Afghanistan is the main reason why Pakistan, a close political ally of America's, has been so supportive of the Taliban, and why America has quietly acquiesced in its conquest of Afghanistan.” [Daily Telegraph, 10/11/96] The 9/11 Commission later concludes that some State Department diplomats are willing to “give the Taliban a chance” because it might be able to bring stability to Afghanistan, which would allow a Unocal oil pipeline to be built through the country. [9/11 Commission Report, 3/24/04] Recognizing the significance of the pipeline for its many military and economic benefits, the US –under both Clinton and Bush – encouraged the Afghan and Indian participants in the pipeline to support the US effort rather than the previous Argentine contracts. “Bridas officials are stunned when they witness Turkmenistan's President Niyazov sign an agreement with Unocal and its partner, Delta Oil Company (owned by Saudi Arabia) to build a pipeline through Afghanistan, thus essentially abrogating Turkmenistan's earlier contract with Bridas. On Oct. 21, (1995) the nod went to the Americans as Niyazov announced the selection of Unocal. Looking on at the announcement ceremony was former secretary of state Henry A. Kissinger, now a Unocal consultant."[Gas Pipeline Bounces Between Agendas, Washington Post, 5 October 1998] “In the Spring of 1996 the United States pressured Prime Minister Bhutto to change her allegiance from Bridas to Unocal. Her failure to comply was "one of the factors" in her downfall, according to the Herald of Pakistan.” Part of the list of wealthy individuals trying to promote this Unocal pipeline was none other than Adnan Khashoggi: “Hank Greenberg has had a long time relationship with Henry Kissinger, the partner of Richard Perle in Trireme Partners, the firm that, according to Seymour Hersh, attempted to negotiate deals with Saudi Arabia using Saudi billionaire arms dealer Adnan Khashoggi as an intermediary. Greenberg and Khashoggi, according to CIA sources, have long had an interest in exploiting the oil and natural gas reserves of Uzbekistan and the construction of pipelines across the Uralskaya region of Russia. Uzbekistan has also featured prominently in oil and natural gas plans of Enron and UNOCAL. According to Enron insiders, on Saturday, September 7, 1996, 42 representatives of Enron and UNOCAL met in Tashkent, the Uzbek capital, with Khashoggi, Taliban representatives, and Uzbek government officials. The subject was the CentGas pipeline through Afghanistan to Pakistan, a project that involved UNOCAL, Enron, and Saudi support. Current Afghan President Hamid Karzai was a consultant on the pipeline for UNOCAL…. The Tashkent meeting was followed by a spring 1997 meeting between Enron, UNOCAL, and Taliban representatives at the posh Houstonian Hotel in Houston.” [Intelligence Whispers, Wayne Madsen Report, June 20, 2005] THE SEPTEMBER 11 COMMISSION REPORT Page 81 Two years later, another historic milestone occurred that would change what appeared to be a new-found, amicable relationship between the US and Afghanistan. In 1998, (the same year the decision to destroy the WTC was made) Osama Bin Laden – exiled from Saudi Arabia - issued a fatwa, or religious proclamation, calling for the death of all Americans, including civilians, men, women, and children. This fatwa is reported to have resulted in attacks on the USS Cole and US embassies in Kenya and Tanzania. While the Taliban was not responsible for the attacks, the relationship between Afghanistan and the US started to sour after President Clinton ordered the bombing of terrorist camps in Afghanistan in response to the attacks on the USS Cole and US embassies. Understanding the fatwa bombings Because of the suspicious and questionable nature of the evidence presented regarding Osama Bin Laden, the question was investigated: Is it possible the US Embassy bombings were not what they appeared to be? The evidence available suggests the embassy bombings may have been CIA operations, planned by CIA operative Ali Mohammed, and supported by MI5 (British Intelligence). "U.S. investigators are concentrating on a possible U.S. Army connection between John Muhammad and former U.S. Army Sergeant Ali Mohammed. A former Egyptian Army officer, Ali Mohammed left the US Army Special Forces in 1989 after a three-year enlistment. He was arrested by U.S. authorities after the U.S. embassy bombings in East Africa and pleaded guilty to charges of aiding Osama bin Laden. Ali Mohammed was the chief planner of the 1998 U.S. Embassy bombings in Nairobi and Dar es Salaam and, more interestingly, entered the United States under a covert CIA visa program. Ali Mohammed received an M-16 Expert Badge and a Secret clearance from the Army and was a special instructor at the JFK Special Operations Warfare School in Fort Bragg, North Carolina." [http://libertythink.com/2003_09_14_archives.html] ”An alleged member of Osama bin Laden's al-Qaida network wanted in connection with the bombings of US embassies in Africa claimed yesterday he was in frequent touch with British security services, including a named MI5 agent. Khalid Al-Fawwaz, 38, whose fight against extradition will be heard by the law lords today, has demanded to see MI5 intelligence reports which his lawyers insist are crucial to his defence. Mr Al- Fawwaz, a Saudi, says his meetings with an MI5 officer took place at the Old War Office building in Whitehall, and will reveal the limited extent of his involvement with Bin Laden's organisation.” [Suspect claims MI5 can clear his name: Man wanted over embassy bombs takes case to lords, Richard Norton-Taylor and Nick Hopkins, The Guardian Unlimited, 10/22/2001] This evidence is reinforced by reports that high ranking US and British authorities actively discouraged and prevented investigations into the crimes. "In a dramatic interview with ABCNEWS, FBI special agents and partners Robert Wright and John Vincent say they were called off criminal investigations of suspected terrorists tied to the deadly bombings of two U.S. embassies in Africa. U.S. officials say al Qaeda was responsible for the embassy attacks and the Sept. 11, 2001, attacks in the United States.... The suspected terrorist cell in Chicago was the basis of the investigation, yet Wright, who remains with the FBI, says he soon discovered that all the FBI intelligence division wanted him to do was to follow suspected terrorists and file reports — but make no arrests.... 'The supervisor who was there from headquarters was right straight across from me and started yelling at me: 'You will not open criminal investigations. I forbid any of you. You will not open criminal investigations against any of these intelligence subjects,' ' Wright said. Even though THE SEPTEMBER 11 COMMISSION REPORT Page 82 they were on a terrorism task force and said they had proof of criminal activity, Wright said he was told not to pursue the matter.... even after the bombings, Wright said FBI headquarters wanted no arrests. 'Two months after the embassies are hit in Africa, they wanted to shut down the criminal investigation,' said Wright. 'They wanted to kill it.' ... The move outraged Chicago federal prosecutor Mark Flessner, who was assigned to the case despite efforts Wright and Vincent say were made by superiors to block the probe....'There were powers bigger than I was in the Justice Department and within the FBI that simply were not going to let it [the building of a criminal case] happen. And it didn't happen,' Flessner said. He said he still couldn't figure out why Washington stopped the case... On Sept. 11, 2001, the two agents watched the terror attacks in horror, worried that men they could have stopped years earlier may have been involved.'"[Called Off the Trail? ABCNews, 19 Dec 2002] “ The Observer has obtained a copy of a personal memo sent from Sudan to Louis Freeh, former director of the FBI, after the murderous 1998 attacks on American embassies in Kenya and Tanzania. It announces the arrest of two named bin Laden operatives held the day after the bombings after they crossed the Sudanese border from Kenya. They had cited the manager of a Khartoum leather factory owned by bin Laden as a reference for their visas, and were held after they tried to rent a flat overlooking the US embassy in Khartoum, where they were thought to be planning an attack. US sources have confirmed that the FBI wished to arrange their immediate extradition. However, Clinton's Secretary of State, Madeleine Albright, forbade it.... Sudan held the suspects for a further three weeks, hoping the US would both perform their extradition and take up the offer to examine their bin Laden database."[Resentful west spurned Sudan's key terror files, Observer, 30 September 2001] “The Libyan al-Qaeda cell included Anas al-Liby, who remains on the US government's most wanted list with a reward of $25 million for his capture. He is wanted for his involvement in the African embassy bombings. Al-Liby was with bin Laden in Sudan before the al-Qaeda leader returned to Afghanistan in 1996. Astonishingly, despite suspicions that he was a high-level al-Qaeda operative, al- Liby was given political asylum in Britain and lived in Manchester until May of 2000....."[MI6 'halted bid to arrest bin Laden', Observer, 10 November 2002] Another example of this unwillingness to detain key Al Qaeda mercenaries is the case of Abu Haf (aks Abu Hafs, Abu Hafsi). Abu Haf was a significant Al Qaeda operative in the original US strategy to deploy Al Qaeda against the Russians. Al-Qaida emerged from another organisation, Maktab al-Khidamat, the services bureau that Abdallah Azzam set up in the early 1980s to support Afghan resistance. Azzam was assassinated in 1989; he was succeeded by Bin Laden, one of his leading disciples, who transformed the organisation into al-Qaida. “During a recent interview in Amman, Azzam’s son Hudayfa, who has spent almost 20 years among Arab militants in Afghanistan and Pakistan, told me: “Most Yemeni fighters, simple minded warriors whose only ambition was martyrdom, left Afghanistan after the fall of the Communist government. The Egyptians stayed because they had other ambitions as yet unfulfilled. When Osama bin Laden joined them, after he left Sudan in 1996, they focused on shifting his basic thinking from opposition to American hegemony in the Middle East towards a Takfirist perspective.“When I met Osama bin Laden in 1997 in Islamabad, he was flanked by three members of the Egyptian camp: the Somali Abu Obaida, and the Egyptians Abu Haf and Saiful Adil..” [Global jihad splits into wars between Muslims: Al- Qaida: the unwanted guests, Syed Saleem Shahzad, Le Monde Diplomatique, July 2007] In 1994, he joined the US operation to disrupt Russian control of oil in Chechnya. At the end of 1994, this Jordanian, together with a group of his associated, moved to Chechnya, joining military activity against the Russian troops. [World Secret Services and the Caucasian Emissary of Al- Qaeda, Michel Elbaz , 30.11.2006] THE SEPTEMBER 11 COMMISSION REPORT Page 83 “In 1996, Abu Hafs relocated to Georgia "on Osama Bin Laden's order" to take charge of al-Qaeda operations in the Pankisi Gorge. Abu Hafs is allegedly in charge of the distribution of all al-Qaeda funds sent to Chechnya. (Before his death last year, Russian intelligence usually attributed this role to al-Walid.) Abu Hafs is also described as having been in charge of weapons supplies to the fighters in the Pankisi Gorge. (This statement implies that arms were being shipped in to the fighters. Aside from the practical difficulties of such international shipments, it is known that Gelaev arranged the reoutfitting of his men from Georgian sources in exchange for joining the fighting in Abkhazia. Russian arms are also available from the cash-strapped Russian rump garrisons in Georgia.) In the FSB's account, Abu Hafs returned to Chechnya in 2002 … There were numerous reports of Abu Hafs' largesse, building both a mosque and hospital in the Pankisi Gorge.” [Abu Hafs Al-Urdani: The Quiet Mujahid, Andrew Mc Gregor, Chechnya Weekly, Volume 6, Issue 5 (February 02, 2005)] Even after the fatwa embassy bombings in 1998 and the September 11, 2001 attack, Abu Haf was allowed to continue his work against the Russians unimpeded by the US, until the Russians killed him in 2006. The US allies in Georgia never attempted to arrest him during his many years in Georgia, even though the National Security Agency identified his location by a cell phone call to him in 2001. A US financed operation in 2002 to ‘clean up’ the Pankisi Gorge allowed him to escape. “…since 1996 and till his very death, Abu Hafs’ activity was closely related with Georgia, its secret services did not pay any attention to him for quite a long time. In the second half of the 1990s, they showed almost no interest towards the Arab Islamists, who, like Abu Hafs, were basing in the Akhmet region (Pankisi Gorge), in the northern part of the country. At that time the local secret services were occupied by operations directed against the inner opposition and against the separatist enclaves in the territory of the republic. Moreover, given its complicated relationship with Russia, Georgia was showing silent empathy to the Chechen separatists, and therefore did not cause particular obstacles to the Arab mujahideen connected with them. Only following September 11 attacks, and as a result of Moscow’s growing pressure, in 2001-2002 Tbilisi, with the help of Washington, somehow began coping with the foreign mujahideen’ issue. In spring 2002 Abu Hafs moved to Chechnya, and in February of the following year the Georgian Minister of Interior Koba Narchemashvili publicly announced that the Jordanian is not in the country any more. He also affirmed that the local secret services had not collected intelligence about this person during the six years of his stay in Georgia. In spite of the fact that later Abu Hafs had repeatedly visited Georgia, and even stayed here for the most part of 2005, no effort of his arrest was ever made.” [World Secret Services and the Caucasian Emissary of Al-Qaeda, Michel Elbaz , 30.11.2006] “At the same time, Georgian officials described an incident in which an Arab fighter with apparent links to Al Qaeda might have been allowed to get away. Georgian officials said they believed that the man, Abu Hafsi, had been running financial operations in the gorge and had supervised the building of a military hospital there. He slipped away, presumably to Chechnya, officials said.” [U.S. Entangled in Mystery of Georgia's Islamic Fighters, Dexter Filkins , June 15, 2003, NYTimes] Similarly, Peter Lance, in his 2006 research into the FBI’s mishandling of terrorist investigations title Triple Cross, documents how the FBI failed to bring to justice: · Ihab Mohammed Ali Nawawi, who trained at Airman Flight School in Norman Oklahoma and became Bin Laden’s personal pilot; · Ali Mohammed, a major Al Qaeda operative in the US and abroad linked to the embassy bombings; · Mohammed Jamal Khalifa: Osama Bin Laden’s brother-in-law who was connected by evidence to multiple Al Qaeda operations, but was extradited to Jordan to be set free; THE SEPTEMBER 11 COMMISSION REPORT Page 84 · Khalid Shaikh Mohammed, a major Al Qaeda operative considered the ‘mastermind of the September 11 attacks; · Al-Midhar Nawaf al-Hamzi, 9/11 hijacker; · Khalid al Midhar, 9/11 hijacker. At one point, Lance attributes these failures to a “stovepiping” between U.S. agencies in their failure to share intelligence before 9/11.” (Page 333). Elsewhere, he suggests “If they failed to connect the dots, it wasn’t because a legal barrier or “wall” had been erected. It was because of management interference, incompetence, or sheer lack of will.” (Page 72). Lance however is able to tell his readers that the “Malaysian Summit ... that set the stage for not only the Cole bombing and the 9/11 attacks” “was monitored, as it took place, at the highest levels of the intelligence community – even at the White House. White House National Security Advisor Sandy Berger was reportedly kept up to speed on the conference and …FBI director Louis Freeeh himself was briefed.” (Page 337). The simplest explanation is not government incompetence. There are so many examples of Al Qaeda operatives being released so many times, that one can only conclude that these men were and are protected by the US intelligence world, because they serve the US National Security apparatus. Understanding the attack on the USS Cole also provides insights, with indications the attack required a complicated and sophisticated bomb, which was built in Lebanon by the Hezbollah, and transported with the assistance of the Syrian Intelligence. “The Oct. 12 bombing of the USS Cole in Yemen is the work of network headed by Osama bin Laden. However, the sophisticated nature of the bomb--which was placed within a metal container to channel the blast into the Cole's hull--suggests state involvement. The bomb-makers were Hezbollah terrorists led by Imad Mughniyah. Everything was done in Lebanon under the protection of the Syrian army who then helped the transfer of the bomb to the terrorists. Iran delivered the first material necessarily to make the bomb. This delivery cannot be done without the agreement and the help of Damascus.” [Syria – Al Qaida Connection, Dr. J. R. Albani, Senior Official in the Guardians of the Cedars, May 24, 2003] The evidence suggests there are multiple intelligence organizations (known to have cooperated with U.S. intelligence in the past) involved in these fatwa bombings. In an earlier decade, agents from Iran and Syria worked directly with US intelligence to execute the October Surprise and the Iran-Contra weapons deals. Syrian troops fought along side US troops in the first Gulf War. The rhetorical question that might be asked is: would agencies that have been traditional allies of the US now be part of an attack on the US? Even the agencies of United States’s avowed enemies do not attack the U.S. This multi-national conspiracy known as the fatwa bombings was coordinated by the same team now operating in Azerbaijan. This is a consistent theme with the evidence. Mohammed Atta was involved in multiple intelligence organizations, the same as those identified as backing the US embassy bombings. The 9/11 hijackers had histories with multiple western intelligence agencies. Moreover, a number of them, including Mohammed Atta, seemingly had links to the US Military. THE SEPTEMBER 11 COMMISSION REPORT Page 85 “Three of the alleged hijackers listed their address on drivers licenses and car registrations as the Naval Air Station in Pensacola, Fla.—known as the “Cradle of U.S. Navy Aviation,” according to a highranking U.S. Navy source. Another of the alleged hijackers may have been trained in strategy and tactics at the Air War College in Montgomery, Ala., said another high-ranking Pentagon official. The fifth man may have received language instruction at Lackland Air Force Base in San Antonio, Tex. Both were former Saudi Air Force pilots who had come to the United States, according to the Pentagon source.” [The Pentagon has turned over military records on five men to the FBI, George Wehrfritz, Catharine Skipp and John Barry, Newsweek, 9/15/2001] “As the investigation gathered strength yesterday, unusual leads began to surface, among them the possibility that some of the hijackers may have received training at Pensacola Naval Air Station in Florida or other U.S. military facilities. Two of 19 suspects named by the FBI, Saeed Alghamdi and Ahmed Alghamdi, have the same names as men listed at a housing facility for foreign military trainees at Pensacola. Two others, Hamza Alghamdi and Ahmed Alnami, have names similar to individuals listed in public records as using the same address inside the base. In addition, a man named Saeed Alghamdi graduated from the Defense Language Institute at Lackland Air Force Base in San Antonio, while men with the same names as two other hijackers, Mohamed Atta and Abdulaziz Alomari, appear as graduates of the U.S. International Officers School at Maxwell Air Force Base, Ala., and the Aerospace Medical School at Brooks Air Force Base in San Antonio, respectively.” [Washington Post, 9/16 2001] The observation that 9/11 required involvement by multiple intelligence agencies has been made by at least two well-respected intelligence observers from Russia and Germany. “(General) Ivashov hits the nail square on the head. “The organizers of [the nine eleven] attacks were the political and business circles interested in destabilizing the world order” because they “were not satisfied with the rhythm of the globalization process or its direction.” As others have explained—most notably Andreas Von Bulow, Bundestag member of a parliamentary commission which oversaw the three branches of the German secret service—only “secret services and their current chiefs” (or retired staff with “influence inside the state organizations”) have the “ability to plan, organize and conduct an operation of such magnitude. Generally, secret services create, finance and control extremist organizations. Without the support of secret services, these organizations cannot exist—let alone carry out operations of such magnitude inside countries so well protected.” Thus the obvious patsy “Osama bin Laden and ‘Al Qaeda’ cannot be the organizers or the performers of the September 11 attacks” because they “do not have the necessary organization, resources or leaders” (or the military and intelligence experience and knowledge required). Instead, “a team of professionals had to be created and the Arab kamikazes are just extras to mask the operation.” [Russian General - 9/11 a Globalist inside Job, January 22,2006] Moreover, the more one looks at these Muslim ‘terrorist’ organizations, one finds they are generally headquartered in Western capitals. The ring of ‘terrorist groups’ (including Al Qaeda) supported by the US and its allies and which ring the former Soviet Union have a consistent funding and support from the US and its allies. In addition to Syrian, Saudi and Pakistani intelligence support for Muslim terrorist groups, one also finds extensive British support. “A terrorist network whose purpose is to undermine Russia is organized and coordinated from London. There, under the wing of British intelligence, thrive the world's most radical Islamic terrorist organizations, such as the "Islamic Liberation Party", the "Worldwide Islamic Front", the "Defenders of Shariat", the "Mukhadjiri" movement, the Islamic Movement of Uzbekistan and others. I've named only those organizations which are forbidden in the majority of Islamic countries. In London also are THE SEPTEMBER 11 COMMISSION REPORT Page 86 located the nerve centers of Chechen terrorism along with the bank accounts of the terrorists.” [Who's Noticing the NATO danger? General Leonid Ivashov , Sovetskaya Rossiya , April 8, 2004 ] Even after the World Trade Center attack of September 11, Britain was ‘protecting’ known Al Qaeda officials. “Investigators from Spain, Germany and Italy are desperate to question Abu Qatada, who they claim is a pivotal figure in cells they have under arrest in their own countries. Their requests to question him and some of the other suspects directly have been rejected by the Government. Investigators in Spain who named Abu Qatada as 'the spiritual leader of al-Qaeda in Europe', say their own terror trials are hindered by Britain's refusal to let them interrogate the cleric. The Jordanian Government has sentenced him to life imprisonment for his role in planning a bombing campaign to coincide with the millenium celebrations and cannot understand why Abu Qatada is not extradited. In spite of holding most of the terror suspects for many months, the men are providing the security services and police with little intelligence on terrorist activity in the United Kingdom."[ London Times 19 December 2003] "Described by some justice officials as the spiritual leader and possible puppet master of al-Qaeda's European networks, Abu Qatada has been missing since mid-December after British authorities confiscated his passport, froze his assets and ordered him confined to his London home. With Jordan seeking his return to serve a life sentence for terror-related crimes, some observers figured Abu Qatada went underground—and perhaps left Britain—to avoid extradition. But senior European intelligence officials tell TIME that Abu Qatada is tucked away in a safe house in the north of England, where he and his family are being lodged, fed and clothed by British intelligence services".['Sheltering A Puppet Master?' Time Magazine 7 July 2002] The Mujahedin mercenaries hired by Richard Secord to fight in Azerbaijan fought for multiple causes in multiple countries. Their use as instruments of US policy in Afghansistan, Kosovo, Chechnya, Georgia, Azerbaijan has been documented in hundreds of reports. Their protection by US and British policy makers long after the fatwa proclamation is equally well documented. The reader needs to suspend judgment when it comes to accepting at face value the claim that the hijackers and fatwa bombers were in the service of Osama Bin Ladin. The timing of the fatwa and the embassy bombings is consistent with the timing of a decision to destroy the World Trade Center, in such a way that it is possible that the fatwa and bombings were part of a larger plan to blame the WTC attack on ‘terrorists’. Evidence has been presented that the individuals responsible for these bombings were US trained, and belonged to a resource pool available to Secord, Armitage and Kimche. This is another in a list of hundreds of coincidences that support the conclusion that the Al Qaeda explanation offered by the US investigation is a falsehood. U.S. Control of Afghanistan In December 1998, following the US bombardment of Afghanistan and the anti-Taliban campaign of the Feminist Majority that was directed against Unocal, that company withdrew from the pipeline consortium. Unocal, in a related news release, also announced a 40 percent drop in capital spending for 1999 because of low oil prices, which it suggested, would prevent moving ahead on the pipeline in a timeframe required by the Taliban. The Taliban wanted the financial rewards associated with a pipeline, and THE SEPTEMBER 11 COMMISSION REPORT Page 87 Unocal was not in a position to provide it in the desired timeframe for political and financial reasons. Hence, the Taliban opened the door once again to Bridas. The Unocal move, however was purely a political response to US public opinion, and the true intentions never were to give up on the contract. When the Taliban indicated a renewed willingness to work with Bridas, the US negotiators responded with threats of invasion. The timing of these threats is a critical clue. The July, 2001 threats could only be made with a pre-knowledge of a “Pearl Harbor” event by at least one of the three negotiators: Tom Simons, Karl Inderfurth or Lee Coldren. “Three former American officials, Tom Simons (former US Ambassador to Pakistan), Karl Inderfurth (former Deputy Secretary of State for South Asian Affairs), and Lee Coldren (former State Department expert on South Asia) meet with Pakistani and Russian intelligence officers in a Berlin hotel. [Salon, 8/16/02] This is the third of a series of back-channel conferences called “brainstorming on Afghanistan.” Taliban representatives sat in on previous meetings, but boycotted this one due to worsening tensions. However, the Pakistani ISI relays information from the meeting to the Taliban. [Guardian, 9/22/01] At the meeting, Coldren passes on a message from Bush officials. He later says, “I think there was some discussion of the fact that the United States was so disgusted with the Taliban that they might be considering some military action.” [Guardian, 9/26/01] Accounts vary, but former Pakistani Foreign Secretary Niaz Naik later says he is told by senior American officials at the meeting that military action to overthrow the Taliban in Afghanistan is planned to “take place before the snows started falling in Afghanistan, by the middle of October at the latest.” The goal is to kill or capture both bin Laden and Taliban leader Mullah Omar, topple the Taliban regime, and install a transitional government of moderate Afghans in its place. Uzbekistan and Russia would also participate. Naik also says, “It was doubtful that Washington would drop its plan even if bin Laden were to be surrendered immediately by the Taliban.” [BBC, 9/18/01] One specific threat made at this meeting is that the Taliban can choose between “carpets of bombs” —an invasion—or “carpets of gold” — the pipeline. [Brisard, Dasquie and Madsen, 2002, pp 43] Naik contends that Tom Simons made the “carpets” statement. Simons claims, “It's possible that a mischievous American participant, after several drinks, may have thought it smart to evoke gold carpets and carpet bombs. Even Americans can't resist the temptation to be mischievous.” Naik and the other American participants deny that the pipeline was an issue at the meeting. [Salon, 8/16/02] Creative Commons Just prior to the time these statements were being made to the Taliban, Richard Armitage was in Islamabad, and it is speculated by this report that the above three agents were working under his direction. Armitage’s expertise in the Afghan region was substantial in that he holds the ‘highest Pakistani civil decoration that could be awarded to a foreigner’ for his role during the Afghan war in the 1980s. While Unocal publicly appeared to back away from any association with the Taliban, it maintained a presence in Afghanistan, and the US intelligence agencies worked on behalf of Unocal (and Enron) to promote an environment that would support a re-instatement of the pipeline. At that time, there were twenty CIA agents working for Enron using a leave-of-absence from the agency. They all managed to return to their positions within the agency when Enron went under. A key player in facilitating that covert operation was Dick Cheney. “A chief benefactor in the CentGas (Central Asian Pipeline) deal would have been Halliburton, the huge oil pipeline construction firm that also had its eye on the Central Asian oil reserves. At the time, Halliburton was headed by Dick Cheney.” [Provisional leader Karzai links to US Oil, Indymedia Somewhere, Wayne Madsen, 2002-01-21] THE SEPTEMBER 11 COMMISSION REPORT Page 88 Cheney was initially involved in the pipeline negotiations while CEO of Halliburton. As newly elected Vice President of the U.S, he would intercede in January of 2001, supposedly at the request of Enron, to impose an “intelligence block” that would prevent numerous US investigative agencies from interfering with or monitoring discussions between Afghan, Saudi and US covert operatives who were “fixing” the situation. During this time while the block was in effect, two key leaders of the Northern Alliance (Abdul Haq and Ahmad Shah Masoud (Masood)) were assassinated, and the Taliban leadership was “courted” with cash. “Abdul Haq, the assassinated former mujaheddin leader from Jalalabad, and the leadership of the Northern Alliance… When Haq entered Afghanistan from Pakistan last October (2001), his position was immediately known to Taliban forces, which subsequently pinned him and his small party down, captured, and executed them….” [Provisional leader Karzai links to US Oil , Indymedia Somewhere, Wayne Madsen, 2002-01-21] "The Taliban's execution of Afghan opposition leader Abdul Haq will be a subject of contention at a congressional hearing today and could lead to new scrutiny of the CIA's close ties to Pakistan’s intelligence service. A House International Relations subcommittee is expected to air charges that Pakistani agents betrayed Abdul Haq, and the CIA didn't do enough to save him. Recriminations are rising in the aftermath of Abdul Haq's execution Friday in Afghanistan. His champions say the hero during the war with the Soviet Union was a potential unifying force for anti-Taliban opposition factions... Abudul Haq's death has prompted some of the strongest criticism of the U.S. war effort. 'A lot of people are very upset,' says Al Santolly, an aide to Rep. Dana Rohrabacher, R-Calif. 'The whole episode shows a lack of coherence in the (Bush administration) policy.' The crux of the criticism over his death is the CIA's relationship with Pakistan’s Inter-Services Intelligence (ISI)... The CIA went along with the ISI, including the ISI's creation of the Taliban, critics say... Vince Cannistraro, a former CIA director of counterterrorism, says there is 'credible information' that the ISI tipped off an Afghan tribal leader about Abdul Haq's whereabouts, and the tribal leader told the Taliban. A senior official of the anti-Taliban Northern Alliance made the same charge on Tuesday, as did several congressional aides." [Taliban foe's death sparks criticism of U.S. goals," USA Today, 10/31/2001] “September 9, the leader of the Northern Alliance, Commander Ahmad Shah Masood, was assassinated. The Northern Alliance informed the Bush administration that the ISI of Pakistan was implicated in the murder.”[ Mahmoud Ahmad and The Secret Cult of 9-11, Laura Knight-Jadczyk] A significant amount of money was spent in courting the Taliban leadership. There are accounts that both the US and Russian fixers were each plowing $20 million per month into the Afghan leadership. What is widely perceived as a collapse of negotiations is thought to be the impetus for the invasion of Afghanistan. However, key Northern Alliance resistance leadership had already been removed. The Taliban, to a large degree, supported a US pipeline, and only this fact can explain the limited assault on Taliban forces by US troops, once the invasion began, and the willingness of US forces to let thousands of Taliban fighters to escape. With the dispersal of the Taliban and the elimination of Northern Alliance leadership, it was easy for the US to install as president its own candidate, an oil industry executive who formerly worked for Unocal - Hamid Karzai. Coincidentally, it also created conditions allowing for a change in heroin traffic through Northern Afghanistan, THE SEPTEMBER 11 COMMISSION REPORT Page 89 switching traffic from the Russian military routes through Moscow to the more southern routes controlled by the Chechen Mafiya and Yeltsin Family. 4.5 Afghanistan and the Intelligence Block John O’Neill was confounded by the same ‘intelligence block’ as Sibel Edmonds, and before his murder indicated the ‘block’ was preventing investigation into arms and drug smuggling and money laundering because it was connected to the Taliban and the need for Enron to salvage its Indian electrical generating plant investment. Without the pipeline, the plant was a financial failure with an estimated at $3 billion price tag. Salvaging its value might have prevented Enron’s bankruptcy, but most likely only would have delayed it. “… in January 2001, Vice President Cheney allegedly reinstated the intelligence block and expanded it to effectively preclude any investigations whatsoever of Saudi-Taliban-Afghan oil connections. Former FBI counter-terrorism chief John O’Neil resigned from the FBI in disgust, stating that he was ordered not to investigate Saudi-Al Qaida connections because of the Enron pipeline deal. Loftus has confirmed that it was O’Neill who originally discovered the AL Qaida pipeline memo after the Embassy bombings in Africa….” [What Congress does not know about Enron and 9/11, John Loftus] “Loftus asserts that the Enron block, which remained in force from January 2001 until August 2001 when the pipeline deal collapsed, is the reason that none of FBI agent Rowley’s requests for investigations were ever approved. As numerous British and French authors have concluded, the information provided by European intelligence sources prior to 9/11 was so extensive, that it is no longer possible for either CIA or the FBI to assert a defense of incompetence.” [May 31, 2002 For Immediate Release, By Atty. John J. Loftus ] “During the investigation of the August 7, 1998, US embassy bombings, FBI counterterrorism expert John O'Neill finds a memo by Al Qaeda leader Mohammed Atef on a computer. The memo shows that bin Laden's group has a keen interest in and detailed knowledge of negotiations between the Taliban and the US over an oil and gas pipeline through Afghanistan. Atef's analysis suggests that the Taliban are not sincere in wanting a pipeline, but are dragging out negotiations to keep Western powers at bay.” [Salon, 6/5/02] “Their ongoing terrorist investigations appear to have been hindered during the same sensitive time period while the Enron Corporation was still negotiating with the Taliban. An inadvertent result of the Taliban pipeline cover-up was that the Taliban's friends in Al Qaida were able to complete their last eight months of preparations for 9/11 while the Enron secrecy block was still in force….” [What Congress does not know about Enron and 9/11, John Loftus] The real need for the ‘intelligence block’ becomes confusing, because there was a public courting between the Taliban and Enron, and the US government was inviting Taliban leaders to the United States through July of 2001 to negotiate successful closure to the pipeline deal. If the discussions were public, what might be the need for an “intelligence block?” Indeed, Enron felt it had successfully achieved its objectives. “The Enron Corporation gave the Taliban millions of dollars in a no-holds-barred bid to strike a deal for an energy pipeline in Afghanistan -- while the Taliban were already sheltering terror kingpin Osama Bin Laden! Enron executives even met with Taliban officials in Texas, where they were given the red-carpet treatment and promised a fortune if the deal went through.… As The ENQUIRER revealed two weeks THE SEPTEMBER 11 COMMISSION REPORT Page 90 ago, Enron secretly employed CIA agents to carry out its dealings overseas. And a CIA insider disclosed: "Enron was wooing the Taliban and was willing to make the Taliban a partner in the operation of a pipeline through Afghanistan. Three days after the terrorist attacks on the World Trade Center and the Pentagon, Unocal announced it had withdrawn from the Afghanistan pipeline project. But the CIA insider said Enron and its CEO Kenneth Lay held on, waiting for the Taliban to give up Bin Laden as the Bush administration was demanding. "Enron figured the Taliban wanted to stick to their deal, that they wanted riches the same way Enron did.” [March 4, 2002, American Patriot Friends Network] The evidence suggests: 1. The intelligence block was unnecessary to protect Enron and Unocal, unless their agents were engaged in negotiations that could not be made public because they were illegal. The pipeline was a done deal, despite common perceptions in the press; 2. The attack on the WTC was not required to cement the pipeline deal. · The pro-Russian opposition leadership of the Northern Alliance had been assassinated (Abdul Haq and AhmadShah Masood), as had key Taliban resistance. · the Taliban had been bought off; “the chief Taliban leader based in Kandahar, Mullah Mohammed Omar, now on America's international Most Wanted List, was firmly in the UNOCAL camp.… Mullah Omar knew UNOCAL had pumped large sums of money to the Taliban hierarchy in Kandahar and its expatriate Afghan supporters in the United States. Some of those supporters were also close to the Bush campaign and administration. And Kandahar was the city near which the CentGas pipeline was to pass, a lucrative deal for the otherwise desert outpost…” [Provisional leader Karzai links to US Oil, Indymedia Somewhere, Wayne Madsen, January 21, 2002] · The Pakistanis while very pro Taliban, were more pro-Pakistani, and knew the pipeline meant large dividends for them. Payoffs to the Pakistanis – especially the by the Saudis measured in the hundreds of millions. This should suggest that if the intelligence block and the attack on the WTC were unnecessary to secure the Afghan pipeline, both were needed for something else. This report concludes that while the attack on Afghanistan was part of a larger strategy, the attack was not a necessity as reported by a large school of conspiracy theorists. The deal was sealed. It was a fait accompli. An attack on the WTC was not necessary to secure the pipeline, but was more of a coup de grace for any vestige of resistance. It was not the oil negotiations that were being covered up by the “intelligence block” –but the illegal money behind the negotiations. Most importantly, the decision to destroy the WTC was made long before the crisis in pipeline negotiations occurred in mid-1999. The recruitment of Atta’s hijackers was already underway. 4.6 Afghan Heroin Unocal – as part of the negotiations with the Taliban up until the attack – had a documented record of supporting local warlord business enterprises in Asia, which resulted in dealing with drugs and money laundering THE SEPTEMBER 11 COMMISSION REPORT Page 91 “An article in The Nation magazine asserts that Unocal's pipeline partner, the Myanmar Oil and Gas Enterprise (MOGE) is the main conduit for the laundering of drug money by the junta. Secretary of State Madeleine Albright has said, "Burma's drug traffickers, with official encouragement, are laundering their profits through Burmese banks and companies -- some of which are joint ventures with foreign businesses." The State Department reports that Burma exports 60% of the heroin found on US streets…” [Unocal, Heroin and Forced Labor, Rogue Oil Company Undermines US Foreign Policy, Free Burma Coalition, Los Angeles, 9/1/1998] The “leap” of faith that needs to be made, and the hypothesis here, is that if Unocal and Enron were comfortable in laundering money for drugs in Burma, wouldn’t they also be likely to do so in Afghanistan? It appears as though the same mujahedin dealing with the US team in Azerbaijan were moving heroin, and laundering the funds through the Deutsche Bank: “Additional direct CIA and Deutschebank ties to heroin smuggling and money laundering were also revealed by the FT story. "In the 1980's, at the insistence of the Central Intelligence Agency, the Internal Political Division of the [Pakistani] Inter-Services Intelligence (ISI), headed by Brig Imtiaz... started a cell for the use of heroin for covert actions. This cell promoted the cultivation of opium and the extraction of heroin in Pakistan as well as in those parts of Afghanistan under Mujahedeen control for being smuggled into the Soviet-controlled areas to get the Soviet troops addicted.” [Part III in a Special FTW Series on Insider Trading and September 11th: All Roads Lead to Deutschebank and Harken Energy, W’s Own 1991 Insider Trading Scam – the Mother of All Enrons, by Tom Flocco and Michael C. Ruppert, Edited by Michael C. Ruppert, © Copyright 2002, From The Wilderness Publications] “Just 32 days before the attack on the World Trade Center and Pentagon, a Financial Times of Asia (FT) Wire-Business Line report linked Deutschebank to the United States Central Intelligence Agency (CIA), Pakistani and Afghani heroin smuggling, and money laundering of narcotics proceeds (8-10- 2001). Retired Pakistani intelligence chief Brig Imtiaz was jailed for eight years on July 31, 2001 for laundering heroin profits -- for covert actions -- via a CIA-linked drug smuggling cell, using Deutschebank and other financial entities and properties.” "[In Dec. 2001] Pakistan and the United States have turned to a tried and trusted 'friend' in their efforts to exert control over events in Afghanistan - convicted Pakistani drug baron and former parliamentarian, Ayub Afridi.... Without fanfare, Afridi was freed from prison in Karachi last Thursday after serving just a few weeks of a seven-year sentence for the export of 6.5 tons of hashish, seized at Antwerp, Belgium, in the 1980s. No reasons were given for Afridi's release..... It is a matter of record that top US Central Intelligence Agency (CIA) officials believed in the early 1980s that they would never be able to justify a multibillion-dollar budget from the government to provide support to the mujahedin in the fight against the Red Army. As a result, they decided to generate funds through the poppy-rich Afghan soil and heroin production and smuggling to finance the Afghan war. Afridi was the kingpin of this plan.... "[US turns to drug baron to rally support, Asia Times, 12/5/2001] Quite simply, these were the illegal deals being hidden by the intelligence block. These are the conversations that could put executives from Enron and Unocal in prison, as well as Deutschebank executives and US intelligence operatives. These deals were hidden. The US oil companies got the oil. The Mafiya got the heroin. The Deutsch Bank got its 20% laundering fee. "Criminals now pay around 20 percent in laundering commissions. Just a few years ago, they were paying only five to six percent. That change is the result of better legislation, better regulation, better enforcement and better international cooperation."[Russia: U.N. wants Russian help in $3 trillion crime fight, By Konstantin Trifonov ,06/05/2001, Reuters English News Service , (C) Reuters Limited 2001] THE SEPTEMBER 11 COMMISSION REPORT Page 92 It was this “better legislation, better regulation, better enforcement and better international cooperation” that indirectly brought about the destruction of the World Trade Center. The Pakistani-Deutschebank money-laundering story was indicative of a broader, ongoing investigation of money laundering involving weapons and drugs being undertaken by US agencies, which named the Deutsche Bank in at least three indictments across separate crimes. Initially, the US Department of Justice indicted two American executives of the Bank of New York in September 1999 for laundering money for the Russian Mafiya– an investigation started in 1998 at the request of the Russians. The investigation was dropped prematurely (which was then picked up by European investigators), the Deutsche Bank connection to the laundering was not publicized in the US press, and the only person punished for a multi-billion dollar fraud was a bank secretary who went to jail for two weeks. The investigation was initially associated with nothing more than illegal money transfers. After the Swiss investigators revitalized the investigation a couple years later, the involvement of Marc Rich, an international arms merchant was identified, as were other associates of the Yeltsin Family. The extensive connections between Jonathon Bush, the Riggs Bank and the Russian money-laundering scandal were totally ignored by the U.S, press. Subsequent investigations produced an unrelated, but second money-laundering conviction in July of 2001 (that of General Imtiaz), and was still generating leads. A few weeks after convicting Imtiaz the Deutsche Bank was named in a third indictment of money laundering and weapons sales: “In the trial of a former Deutschebank executive Kevin Ingram, who pled guilty to laundering drug money to finance terrorist operations linked to Al Qaeda just two weeks before the 9-11 attacks, indications surfaced that the Justice Department had penetrated the terrorists’ financial network. A Nov. 16 Associated Press story by Catherine Wilson stated, "Numerous promised wire transfers never arrived, but there were discussions of foreign bankers taking payoffs to move the money to purchase weapons into the United States, said prosecutor Rolando Garcia." [The Case for Bush Administration Advance Knowledge of 9-11 Attacks, Michael C. Ruppert, FTW Publications © COPYRIGHT 2002] “On August 28, 2001, 14 days before the Trade Center attacks, former Deutschebank senior bond investment trader Kevin Ingram, pled guilty in a $2.2 million dollar money laundering conspiracy, resulting from a government sting operation investigating the illegal sale of night vision goggles, Beretta machine pistols, M-16 machine guns with silencers, rocket-propelled grenade launchers, mortars, surface-to-air missiles (SAMs), TOW anti-tank missiles, and Stinger missiles, according to court papers examined by the New York Post.” [Profits of Death (A Special FTW Series) Part II -- Trading with the Enemy, Tom Flocco - Edited by Michael C. Ruppert, Copyright 2001. From The Wilderness Publications] “Interesting confirmation of the U.S. government's familiarity with banking operations connected to terrorist activities was revealed in an 11/16/01 AP story by Catherine Wilson. In describing events in a Florida prosecution of Egyptians connected to Ingram's case she wrote, "Numerous promised wire transfers never arrived, but there were discussions of foreign bankers taking payoffs to move the money to purchase weapons into the United States, said [federal] prosecutor Rolando Garcia." This is yet another clear indication that intelligence agencies routinely monitor banking transactions in terroristrelated cases. It has not been disclosed whether Ingram's plea bargain produced testimony in this case.” THE SEPTEMBER 11 COMMISSION REPORT Page 93 [Profits of Death (A Special FTW Series) Part II -- Trading with the Enemy, Tom Flocco - Edited by Michael C. Ruppert, Copyright 2001. From The Wilderness Publications] However, it should be noted that the US Justice Department investigations were significantly less than thorough and addressed substantially less than the tip of the iceberg. The original Bank of New York investigation found $500 million to be laundered for the Russians. After the Swiss re-opened the case, the actual amount laundered was reported to be closer to $10 billion. Subsequent estimates provided at the Russian criminal trials suggested the amounts might be closer to $15 billion. “An aggressive European investigation of international crime has revealed alleged Russian mafia leaders operating in the United States. The U.S. Justice Department, write PNS contributors Lucy Komisar and Ivan Feranec, dropped the ball three years ago during the Bank of New York scandal, which now threatens to explode. Nearly three years ago, the Justice Department called the Bank of New York (BoNY) money-laundering scandal "just" a Russian tax-evasion scheme. Now, European investigations show that BoNY was a channel for organized crime. And according to a document obtained by Pacific News Service, some of the alleged Russian mafia leaders have operated freely in the United States. The widening scandal reveals Washington's dangerous reluctance to confront international criminal networks.” [U.S. Investigators Missed Russian Mob in N.Y. Bank Scandal, Lucy Komisar And Ivan Feranec, Pacific News Service, 8/6/2002] In fact, there are grounds to assume that the Justice Department was under similar instructions from the administration to initially “block” the sharing of information on this case, just as the CIA put a block on FBI investigations: “In June, at a conference on dirty money at Washington's Brookings Institution, New York District Attorney Robert Morgenthau questioned whether the Justice Department "thoroughly investigated" the case (Bank of New York). A top official in the district attorney's office said the Justice Dept. would not provide his office with information and told them to drop the case. Morgenthau ran into similar federal displeasure a decade ago when he brought criminal charges against leaders of the Pakistan-based Bank of Credit and Commerce International (BCCI), which collapsed in a mega-fraud that made $8 billion "disappear." [U.S. Investigators Missed Russian Mob in N.Y. Bank Scandal, Lucy Komisar And Ivan Feranec, Pacific News Service, 8/6/2002] A similar lack of aggressiveness on the part of the Justice Department also may have contributed to the success of Adnan Khashoggi’s GenesisIntermedia to defraud MJK securities in September 2001. It appears that GenesisIntermedia, and its Pakistani promoter Rafi Khan, had been under intensive investigation by a number of U.S. authorities, including the United States Securities and Exchange Commission, more than a year before those stocks mysteriously disappeared, forcing MJK into bankruptcy: “As noted in SEC court filings, the period of investigation dates back to June, 2000, less than a month after Mr. (Rafi Mohamad) Khan signed his consent settlement with the regulator.” [Street Wire, Brent Mudry, 11/14/2002] Finally, of ‘interesting’ historical note, there was another trial related to the Kevin Ingram money laundering investigation. A New Jersey surgeon, who was a brother to one of the terrorists in the Ingram deal, was indicted for fraud and accused of diverting government funds to terrorists. Although $15 million dollars of taxpayer funds were never recovered, he was released without conviction. His lawyer was a de jure Israeli citizen named THE SEPTEMBER 11 COMMISSION REPORT Page 94 Michael Chertoff, who would later head up the official 9/11 investigation, and become Secretary of Homeland Security. On one hand, in the US, Europe and Central Asia, Deutschebank executives were being identified by the US Department of Justice– a key indicator that a major investigation of the Deutsche Bank was under way or being threaded together. On the other hand, it appears as though the investigations were deliberately constrained in their thoroughness, at the direction of the US Attorney General. Whatever results were being realized, the attack on the WTC certainly help put an end to that investigation: “Michigan Senator Carl Levin's Minority Banking Report of February 2001 calls correspondent banking the "gateway to money laundering," a financial technique wherein illicit money is moved from bank to bank with "no questions asked," thereby cleansing funds prior to being used for legitimate purposes. Via correspondent banking relationships, banks not licensed in the U.S. may gain access to American financial markets by establishing a correspondent relationship with banks that are. Deutschebank is licensed in the U.S. and maintained offices at the World Trade Center. All U.S. Deutschebank records were destroyed in the September 11 attacks.” [Part III in a Special FTW Series on Insider Trading and September 11th, All Roads Lead to Deutschebank and Harken Energy, W’s Own 1991 Insider Trading Scam, Tom Flocco and Michael C. Ruppert, Edited by Michael C. Ruppert, © Copyright 2002, From The Wilderness Publications] “But more importantly WTC 7…. housed high-level government offices including the FBI, CIA and the Secret Service. WTC 7 was also the storage facility for millions of files pertaining to active cases involving international drug dealing, organized crime, terrorism and money laundering.” [PBS Documentary: Silverstein, FDNY Razed WTC 7, Jeremy Baker] Conclusion: there were honest and diligent investigators who were getting too close to the German cartel’s key customers. Despite efforts by high level politicians to constrain investigations, progress could not be prevented without raising too much suspicion. The evidence was destroyed in a manner similar to the destruction of the BCCI fraud records, and the investigators were re-assigned to the war on “terror.” 4.7 Kazakhstangate The location of FBI files in the North Tower of the WTC related to the Giffen and Williams bribery case has lead to the speculation that the attack on the WTC might have been an attempt to silence this investigation. Indeed, information presented in Section 6 of this report suggests that the FBI offices were specifically targeted for destruction. In researching the set of events leading to this investigation, the evidence shows the Giffen/Willimas Kazakhstan operation was a key component of the Caspian Oil pipeline strategy. The relationship between Kazakhstangate, and the war on Afghanistan, can be understood by the following US announcement in December 2001: “During a visit to Kazakhstan in Central Asia, Secretary of State Powell states that US oil companies are likely to invest $200 billion in Kazakhstan alone in the next five to ten years.” [New York Times, 12/15/01 Creative Commons] The motive for that investment was the knowledge that the US would be able to finalize and control a pipeline through Afghanistan, to the immensely rich Tengiz oil field. THE SEPTEMBER 11 COMMISSION REPORT Page 95 “The Tengiz oil field on Kazakhstan’s Caspian coast is one of the 10 largest oil deposits in the world, and was first developed in 1993 in a joint venture headed by Chevron, which owns 50 percent of the consortium. The resulting enterprise, Tengizchevroil, was later joined by Mobil (now ExxonMobil), a 25 percent owner. The government of Kazakhstan owns another 20 percent, and Russian-American joint venture Lukoil holds a 5 percent share.” [blog] US oil company control of this field (75%) is largely attributable to three gentlemen: James Giffen (an independent agent) and Bryan Williams of Mobil Oil, and Dick Cheney, of Halliburton. (The role of Condoleezza Rice, who by her credentials, surely had a role – remains unreported.) “Chevron’s involvement throughout the region is quite ubiquitous. Alexander’s Gas and Oil Connections reported the company has invested more than $20 billion in Kazakhstan alone. From 1989 to 1992 National Security Adviser Condoleezza Rice was on the board of directors of Chevron, and was its main expert on Kazakhstan. [The Forging of "Pipelineistan", Dave Allen Pfeiffer, From The Wilderness (FTW) Publications, www.copvcia.com, July 2002] During the course of acquiring rights to this oil field, it appears that Giffen and Williams acted illegally in the manner in which they won these contracts. That story is the essence of Kazakhstangate! But there is much more to the story than initially published. It appears that Dick Cheney, as CEO of Halliburton, may have also been involved in illegal activity in Kazakhstan (in the same manner as French investigators suggested he was in Nigeria.) Just as intriguing, government prosecutors attempted to gloss over the involvement of President George Bush Sr.in the Giffen/Williams investigation, by limiting the period of activity in the indictment to after 1995. Giffen’s lawyers argued that there were documents showing his instructions from the Whitehouse going back as early as 1992, and earlier, suggesting involvement of George Bush Sr.! “THE COURT: … I am looking at Exhibit S to your motion papers, which was a letter dated May 22, 2003, to Mr. Neiman in which you asked for documents relating to communications between Mr. Giffen and a series of individuals at the Central Intelligence Agency, the National Security Council, the Department of State and the White House. What timeframe – MR. SCHWARTZ: It appears, your Honor, if I look at this, we did not specify a timeframe. Your Honor, I would suggest that an appropriate timeframe would be going back to the creation of the Republic of Kazakhstan in 1992, that that's when Mr. Giffen was in routine contact -- THE COURT: That is three years before the time period covered by this Indictment. MR. SCHWARTZ: But the documents, your Honor, will corroborate the very important relationship he had. If there was evidence in this case that over a period of time he formed the state of mind that it was very, very important to keep the CIA abreast of what was going on in Kazakhstan, that wasn't something that occurred starting in 1995. That was something that occurred long before -- I would suggest even going back, your Honor, to the days of the Soviet Union, when Mr. Giffen was very active on behalf of American interests in the Soviet Union. But we RT would be prepared to take documents from 1992, from the creation of the Republic of Kazakhstan.” [UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK, UNITED STATES OF AMERICA, New York, N.Y. v. 4 JAMES H. GIFFEN, June 3, 2004, Eurasia-Internet, 6/21/ 2004] This relationship to the Bush Sr. Whitehouse should not be viewed as coincidental. MEGA Oil, with its ties to the Bush family and Saudis, (Section 4) also initiated its covert activities on the opposite side of the Caspian - in Azerbaijan - in 1992 under George Bush Sr. THE SEPTEMBER 11 COMMISSION REPORT Page 96 Information will later be presented in this report (Section 6) as to the destruction of the FBI office on the 23rd floor of the North Tower of the World Trade Center. That office not only contained investigative documents relating to the illegal gold trades of numerous banks, but also included an investigation into the bribery and money laundering charges brought against James Giffen and Bryan Williams of Mobil Oil, who made illegal payments to Kazakhstan officials – President Nazarbayev in particular – on behalf of Mobil oil. “As Cheney, a millionaire petroleum executive who served as defense secretary in the administration of George Bush, the candidate's father, rose to accept the vice-presidential nomination from the cheering Republican convention in Philadelphia, Swiss prosecutors quietly moved to impound over $130 million in allegedly laundered funds deposited in Swiss banks. According to preliminary findings of the Swiss inquiry, the frozen funds represent under-the-table payoffs slipped to the top government officials of Kazakhstan by giant U.S. petroleum companies seeking favored access to that oil-rich country, a former Soviet province that attained independence after the collapse of communism. Advised by Swiss authorities that the suspect accounts -- more than $85 million found hidden in private numbered accounts controlled by Kazakh President Nursultan A. Nazarbayev in a single Geneva bank, Banque Pictet -- may violate the U.S. Foreign Corrupt Practices Act, federal authorities in New York launched an investigation of their own. According to this memorandum, the Giffen probe was triggered by the findings of FBI agents in New York indicating that the millions impounded at Banque Pictet and other Swiss money-centers represented illegal payoffs to Kazakh officials by three major U.S. oil companies: Exxon Mobil, BP Amoco, and Phillips Petroleum. Giffen’s alleged role was that of the go-between who secretly transferred these huge bribes from the U.S. oil corporations along circuitous international money-laundering routes to Kazakhstan's president and his top aides.” [Martin Mann, August 14, 2000] “A federal grand jury in Washington has been hearing evidence on the swap allegations, along with allegations of money laundering and bribery… In Mobil's case, the company's in-house investigators came to believe that the proposed swap between Kazakhstan and Iran was but one element in a complex of seemingly high-risk business deals that were devised by Bryan Williams. Kazakhstan's desire to swap oil with Iran was widely known in the oil industry. Kazakhstan's only ports are on the Caspian Sea, which has no route by water to the ocean, whereas Iran can ship oil south through the Persian Gulf and on to the Indian Ocean. In May, 1995, however, the Clinton Administration had issued an executive order strengthening the sanctions against Iran. Under the executive order, American companies were prohibited from trading with Iran, which included any involvement in a swap, without a license from the Treasury Department”. [The Price of Oil, Seymour M. Hersh, The New Yorker, July 9, 2001] Included in the investigation were William’s accounts at Credit Suisse: “The Department of Justice criminal division’s supplemental request for assistance to the Swiss Federal Office of Justice dated April 27, 2001 states “On March 4, 1998 after the executive ceased employment at Mobil, Mobil inventoried the contents of his office. Among the items found in the executive’s office at Mobil was information suggesting that he had control over three bank accounts at Credit Suisse in Geneva.” [Manhattan Judge Rules On Pre-Trial Motions In “Kazakhgate” Case Marlena Telvick, 09/07/2004] THE SEPTEMBER 11 COMMISSION REPORT Page 97 Giffen and Williams were found guilty in 2003 of money laundering, and no one else was charged. Williams was sentenced to 5 years, and no report of Giffen being sentenced has been found as of February 2007! According to sources in Kazakhstan, the FBI investigation extended to much more activity than the illegal swaps with Iran, leaving investigators to speculate what had been dropped from the indictments: “The contracts investigated in the Kazakhgate trial, (were) first of all regarding the Tengiz, Kashagan, and Karachaganak fields and the Caspian Pipeline Consortium.” [The end of the “controlled” democracy, Interview with Akezhan Kazhegeldin, Prime Minister of Kazakhstan] Dick Cheney was extensively involved in at least two of the four areas of the Kazakhstan investigation: the Caspian Pipeline Consortium and the Tengiz oil field contracts. As the CEO of Halliburton, his company was a direct beneficiary of construction of the pipeline. As a member of Kazakhstan’s Oil Advisory Board, with Giffen, he helped broker the Chevron Oil deal for the Tengiz oil fields. Interestingly, the Chevron press release distinctly mentions the payment of bonuses to Kazakhstan. “Cheney sits on Kazakstan's Oil Advisory Board, a sounding board for the country's president. ... Dick Cheney helped broker the Chevron-Kazakhstan deal when he sat on the Kazakhstan Oil Advisory Board in the mid-'90s….” [Amarillo Globe-News, June 13, 1998] “REPUBLIC OF KAZAKHSTAN AND CHEVRON CORPORATION ANNOUNCE FORMATION OF THEIR JOINT VENTURE Almaty, April 6, 1993 -- The Republic of Kazakhstan and Chevron Corporation today announced the formation of their joint venture company, Tengizchevroil (TCO), to develop the Tengiz and Korolev oil fields on the northeastern Caspian Sea coast. …. Tengizchevroil is owned 50/50 by Tengizneftegaz, a subsidiary of Kazakhstanmunaigaz, the national oil company, currently operating the field and by Chevron Overseas Company, a unit of Chevron's international exploration and production subsidiary. The joint venture has been formed as an export project to generate hard currency revenues in international oil markets. To acquire its 50 percent interest in the joint venture, Chevron will pay the government of Kazakhstan bonuses as well as provide funds for development….” [Chevron Press Release Archives] To shed more light on Cheney’s role, just a Giffen and Williams cheated their partner (Farhat Tabbah), so did Cheney ‘cheat’ his original partner: Scott Van Dyke of Anglo Dutch Tenge – an oil company. As part of his efforts to get Chevron into Kazakhstan, Mr. Cheney breached his confidentiality agreement, for which Halliburton was later found guilty: “A jury has awarded $70 million to a Houston man who claimed that Halliburton and another oil company cheated him out of the chance to develop an oil field in Kazakhstan in the late 1990s. . . . Scott Van Dyke and his company, Anglo Dutch Tenge, sued the Halliburton and Ramco Oil in 2000. A jury found in favor of Van Dyke's company on Friday. Van Dyke's attorney John O'Quinn said his client was promised a concession for an oil field near the Caspian Sea when he met the Turkish president. When he was unable to fund development of the field, Van Dyke sought out an equity partner. Halliburton contacted him in 1997 and signed a confidentiality agreement not to disclose data that Van Dyke allowed the company to review, O'Quinn said. After opting not to invest, Halliburton located another company with ties to the Kazakhstan government and bought the field out from under THE SEPTEMBER 11 COMMISSION REPORT Page 98 Van Dyke, according to the lawsuit. Halliburton will appeal $77 million jury verdict.” [OilOnline, 11/4/2003] Because of Mr. Cheney’s involvement on the Advisory Board to President Nazarbayev in the creation of these various contracts being investigated by the FBI, it probably seemed appropriate for President Nazarbayev to approach Cheney and request that Cheney run interference on the FBI investigation. Evidently, there was an effort by the Department of Justice to keep Nazarbayev’s name out of the trial, so it is possible Cheney encouraged the Justice Department to “exempt Mr. Nazarbayev from prosecution” despite Whitehouse claims to the contrary: “WASHINGTON — Federal prosecutors have said that President Nursultan Nazarbayev of Kazakhstan accepted large bribes in connection with dispensing his country's oil concessions during the 1990's, and later tried to obstruct the federal inquiry into the payments, which came from American oil companies, according to legal documents. The allegations were made by the Justice Department in a sealed motion and described recently in a letter of complaint from Kazakhstan's lawyers to the deputy attorney general. The letter was part of a quiet effort to exempt Mr. Nazarbayev from prosecution. Mr. Nazarbayev and his representatives have raised the issue with Vice President Dick Cheney and other senior officials several times, but the effort to curb the investigation has been unsuccessful, according to court records and officials of both governments. Administration officials said Washington had rebuffed the Kazakhs' efforts.” [Bribery Inquiry Involves Kazakh Chief, and He's Unhappy, New York Times, Jeff Gerth, 12/11/2002] To a large degree, Mr. Nazarbayev’s name was not mentioned in the indictment, and he was referred to as “co1” in the court documents (suggesting that contrary to what the administration reported, the administration influenced the prosecutor to keep Nazarbayev’s name out of the documents.) It is worth noting that while the Bush administration publicly announced that Nazarbayev’s request to stifle the investigation had been “rebuffed,” the facts suggest that is not what happened, and that the administration actually did go out of its way to control the results: “A source familiar with the grand jury investigations… said Ashcroft has quietly moved… to exert control over the New York grand jury from Washington and to exercise “unusual” influence over the Washington investigations. FTW has also received multiple reports that several high-ranking career prosecutors in both New York and Washington have raised serious objections to Ashcroft’s actions and his failure to publicly recluse himself in these cases. Channing Phillips, speaking for the U.S. Attorney’s office in Washington, D.C. told FTW, “I checked with [Assistant U.S. Attorney] Wendy Wysong and she confirmed that the investigation is still ongoing. There are three aspects to these investigations: one in New York, one in Washington [at the U.S. Attorney’s office] and one at main Justice [DoJ headquarters]. If the attorney general had reclused himself, we would know about it, and we are not aware of any such development.” ….Ashcroft’s decision in this case had an impact on the grand jury process. According to the Times, “Officials in Washington have not said where grand juries investigating the attacks will sit, or where the indictments may eventually be brought.…” The two grand juries have been investigating allegations that ExxonMobil, the world’s largest corporation, and BP-Amoco paid cash bribes to the president of Kazakhstan, Nursultan Nazarbayev, and his oil minister, Nurlan Balgymbayev, and that Mobil engaged in an illegal oil swap of Kazakh oil through Iran in 1997. Vice President Dick Cheney’s energy task force -- now the center of a constitutional battle over the release of its records -- was meeting representatives of both companies after the grand juries had been empanelled as a result of information received from a Middle Eastern source in 1997 and inquiries from Swiss banks in 1999. The fact that these known targets of criminal THE SEPTEMBER 11 COMMISSION REPORT Page 99 investigations had access to the vice president’s energy task force would be comparable to having allowed Manuel Noriega, while under indictment for drug smuggling, to consult in the war on drugs. At issue is a 25 percent stake purchased by Mobil in Kazakhstan’s Tengiz oil field, following an earlier purchase of 50 percent by Chevron and an apparently desperate attempt a year later to start making money from the fields by engaging in an illegal swap with Iran as a means of getting the Tengiz oil to market…. it is clear that Kazakhstan-related issues were discussed behind Cheney’s closed doors. In an analysis of the final report of the vice president’s energy task force, released in May, The Washington Times on July 20 wrote, “While saying private investors must lead the way, the Cheney report devotes considerable time to the Kazakh market, urging U.S. government agencies to ‘deepen their commercial dialogue’ with Kazakhstan.” [The Elephant in the Living Room – Part I, Michael C. Ruppert © Copyright 2002, From The Wilderness Publications, 3/ 26/2002] Nazarbayev also turned to the Russian/Israeli Mafiya to help keep the matter quiet, as reported by a Prime Minister under Nazarbayev: “…members of the Eurasia Group (the Alexander Mashkevich syndicate) have promised the President that they (will) hush up the Kazakhgate investigation through their ethnic contacts in the U.S.” [The end of the “controlled” democracy, Interview with Akezhan Kazhegeldin, Prime Minister of Kazakhstan] The Mafiya boss that made the claim to be able to “protect” Nazarbayev from US courts with his US contacts was Alexander Mashkevich. Also known as Alexandr Mashkevic, he holds both Kazakh and Israeli citizenship, and is President of the Euro-Asian Jewish Congress. Mashkevich and other members of the Trio (Patokh Chodiev and Alijan Ibragimov) worked with U.S. businessman and former Exxon Mobil executive, James Giffen, who is awaiting trial in a New York court under the United States Foreign Corrupt Practices Act. Passed in 1997, the F.C.P.A. cites it is unlawful for any American to bribe foreign officials, either directly or through an agent, "for the purpose of obtaining or retaining business." Swiss investigators found that Japan Chrome, one of Trio’s companies registered in the British Virgin Islands, transferred millions of dollars into the accounts of another offshore company, Hovelon, owned by Giffen. These funds along with millions more were then transferred into an offshore account of a company owned by Nazarbayev. Mashkevich and fellow Trio members are awaiting pending trials in Belgium for money laundering, falsifying documents and criminal association. Even though these charges were filed five years ago, legal proceedings have been slow and the cases haven’t started. [http://en.wikipedia.org/wiki/Alexander_Mashkevich] Turning to the Mafiya and other Washington DC channels for assistance in keeping this scandal quiet was probably consistent with the scope of this scandal, as the Russian Mafiya was considered by Mobil executives to be significant recipients of the funds: “The Orenburg losses were noticed by financial analysts at Mobil's headquarters, in Fairfax, Virginia, but they didn't take their concerns to the C.E.O. "These accountants went to Williams and said 'What's going on?' "a former company officer recalled. "He said Noto (ex-Mobil President) knew all about it and had approved it." Nothing more was done. The losses soon became known throughout headquarters. "It wasn't that the money was lost but the specifics of how it was handled that shook Fairfax up," Don Voelte, the former Mobil vice-president, told me. "When I ran into Bryan and said, 'What happened?' he said the Russian mafia had got hold of it, and it was gone." [The Price of Oil, Seymour M. Hersh, The New Yorker, July 9, 2001] “Giffen also arranged to do all the legal work and lobbying through his white-shoe law firm, Shearman and Sterling. Nazarbayev poured millions of dollars into the firm, even though no one seemed to know THE SEPTEMBER 11 COMMISSION REPORT Page 100 where the money ultimately ended up.” [Part 1: Big Oil, the United States and corruption in Kazakhstan, Larry Chin, Online Journal Contributing Editor, May 12, 2002] At a superficial level, the FBI was able to prosecute two American business executives for violating the law with an oil swap between Iran and Kazakhstan. Dick Cheney’s role in this particular set of crimes, and his efforts to have Nazarbayev exempted from prosecution remained unreported in the press. There were extraordinary measures taken by Bush’s Attorney General to influence the outcome of this grand jury investigation – the reason for such an important intervention has never been explained. The question remains: what were they trying to hide? The answer to this question is provided in Section 8, where George HW Bush’s Russian strategy is clarified. There is however, at least one other set of activities that Cheney was most probably involved in which were unreported oil swaps between Kazakhstan and Angola, with a significant shipment of Russian weapons. This deal included the Russian/Israeli Mafiya, and two individuals later identified with the laundering of Russian diamonds by passing them off as blood diamonds or conflict diamonds: Lev Leviev (Leveyev) and Arcadi Gadamayek (aka Arcadi Gaidamak, Arcady Gaydamak, Gaydamac or Arye/Ari Barlev). (The blood diamond connection was originally reported in the press to be an Al Qaeda money laundering operation. The ‘blood diamond’ investigation was just another investigation dropped by the FBI, most likely when it became apparent it was really a Mossad operation, with a potential link between the Mossad and the US hijackers. This subject is explored in Section 12.3 Israeli “Fixers”) There are two sets of clues, which lead to the hypothesis that Halliburton was involved in illegal oil swaps with Angola. First, Halliburton (under Cheney) apparently was involved in bribery in that region of Africa, with enough evidence for the Department of Justice to open an investigation: “Feb. 4 - The Justice Department has opened up an inquiry into whether Halliburton Co. was involved in the payment of $180 million in possible kickbacks to obtain contracts to build a natural gas plant in Nigeria during a period in the late 1990’s when Vice President Dick Cheney was chairman of the company” [Another Halliburton Probe, Michae Isikoff and Mark Hosenball, Newsweek, February 4, 2004] Granted that Nigeria and Angola are different countries, it demonstrates that Halliburton under Cheney was amenable to methods that were not above suspicion. Second, Halliburton and the oil companies in Kazakhstan are the same companies that benefited from major contracts from questionable activities in Angola, using the same financial conduits used by Giffen and Williams and the US oil companies in Kazakhstan. These activities are explored in the following Section. 4.8 Nazarbayev, the Russian/Israeli Mafiya and Angola-gate The evidence presented thus far indicates: THE SEPTEMBER 11 COMMISSION REPORT Page 101 · US oil companies in Kazakhstan were in need of moving oil out of Kazakhstan because their oil pipeline was not finished, the Russians were not allowing oil to be moved through Russia, and US law prohibited moving it through Iran; · The individuals arranging swaps to move oil out of the country ran a large number of swaps, but the swap with Iran drew the most attention because of the illegality of trading with Iran; What will now be demonstrated is that: · These same businessmen were running oil deals between Angola and Russia. Like Iran, Angola had it’s own maritime access, so a swap between Kazakhstan and Angola would serve the same purpose as a swap between Iran and Kazakhstan – except the Angola swap would not violate the law. · These same oil businessmen in Angola and Kazakhstan were dealing with the same Russian/Israeli Mafiya oil and weapons traders. President Nazarbayev, besides being an absolute source of authority in Kazakhstan, has been in close league with the Russian Mafiya for many years. Three of the world’s foremost Russian/Israeli Mafiosi – Arcady Gadamayek, Alexander Mashkevich and Grigori Loutchansky, all have had major deals with Nazarbayev and his family. What the records shows is that Nazarbayev was involved with Arcady Gadamayek during the same time frame that Gadamayek, Lev Leviev and Pierre Falcone (a French criminal) were running their Angola-gate scam. Seymour Hersh reports that there are thousands of illegal oil transactions involving Kazakhstan that never come to public attention – and that the Giffen/Willams Iran swap only came to light because they attempted to “stiff” a partner, (Farhat Tabbah) who then complained to the UK authorities. The facts suggest Nazarbayev may have been part of an Angola deal on the basis of an oil swap, with Halliburton benefiting in both Angola and Kazakhstan. If true, this would implicate Halliburton and Cheney as complicit in multiple frauds, violation of international law and murder in Angola, and that the investigation into Angolan financial fraud would be linked to the same German and Swiss bank accounts that the entire house of cards was built with. An intelligence block and court intervention by Cheney in Kazakhstan may have been necessary to cover-up linkages to additional crimes related to activities in Angola. This investigation begins with an understanding that Nazarbayev – the key contact for Giffen and Halliburton – had significant Mafiya connections: 1) Nazarbayev’s daughter and son-in-law are employed by the Russian Mafiya at Nordex, a well documented Russian/Israeli Mafiya front: “By 1994, Nordex's turnover had reached some $3 billion and it had 40 subsidiaries and jointventure firms in the West, and some 100 such affiliates in the former Soviet empire. It employs close to 8,000 people. Among the big names associated with Nordex are Robert Maxwell's sons Kevin and Ian in London, the daughter and son-in-law of President Nursultan Nasarbayev of Kazakhstan, and until recently former Israeli finance minister Yitzhak Moda'i.” [Maxwell - THE SEPTEMBER 11 COMMISSION REPORT Page 102 Mogilevich -Russian Mafia in Bulgaria -5 Guilty in Lukanov Murder –Part 2,Stefan Lemieszewski, December 1, 2003] The role of Nordex in the larger Bush and Yeltsin conspiracy to defraud the Soviet economy of hundreds of billions is clarified in Section 8. 2) The Prime Minister of Kazakhstan reported that the Russian Mafiya was seeking to intercede to keep Nazarbayev’s name out of the American Kazakhstan scandal, also – while working for Nazarbayev- was receiving Mafiya funds: “And RFE Turkmen Service reported on the alleged bribe of $100 million made by Loutchansky to Akezhan Kazhegeldin, the prime minister of Kazakhstan.” [http://www.rferl.org/bd/tu/reports/2001/04/0-080401.html ] 3) A large portion of the Mobil funds sent to Kazakhstan went to the Mafiya. (See Previous reference: The Price of Oil, Seymour M. Hersh, The New Yorker, 2001-07- 09) 4) Nazarbayev was a business associate of Arcadi Gaydamak. “Gaydamak cultivated relations with Russian leaders and the country's emerging tycoons. His contacts in the post Soviet power structure came to include Russian Foreign Minister Igor Ivanov; the president of Kazakhstan, Nursultan Nazarbayev; the former military chief and later governor of Russia's Karatchevo Cherkesia province, Vladimir Semenov; and the Russian oil magnate Mikhail Khodorkovsky, president of Yukos Oil. In December 2000, Gaydamak was appointed chairman of the Russian Credit Bank, a post that was filled when he stepped down in 2001 by the economics minister and adviser to former President Boris Yeltsin, Aleksandr Livsits.” [The Influence Peddlers, from the 11-part series: Making a Killing, The Business of War, The Center for Public Integrity] Gaydamak was actively involved, on at least two occasions, in moving Russian and Eastern bloc weapons into Angola in exchange for oil. Gadamayek, Lev Leviev and Pierre Falcone arranged to provide Russian weapons for Angolan oil and conflict diamonds. No one has asked how Russia got the Angolan oil, but there is an extremely high probability that Gadamayek arranged an oil swap with Kazakhstan, and then moved Kazak oil –purchased from US companies - through the Russian pipeline. If true, the key US companies used to facilitate this swap would have been Mobil Oil (ExxonMobil), Phillips and Halliburton. This would allow the US oil companies to sell their landlocked Kazak oil without the need of a pipeline. The Angolan oil was probably swapped for Kazakhstan oil and sold on the Russian market to pay for weapons. Before this could happen, the Russians demanded that the Angola ‘debt’ to Russia be resolved. Hence, Angola had to arrange for a large loan to pay back previous Russian aid loans, with a payback arrangement established somewhere in the range of 30 cents on the dollar. This loan appears to have been arranged by Dick Cheney and Halliburton at the US Export Import Bank, and moved by Marc Rich through Glencore International, through Sonangal (the Angolan treasury), UBS (Gaydamak’s account) on to Bank Agricole Indosuez (formerly BCCI), Unicom Bank (Russia) and various offshore accounts. Along the way, hundreds of millions disappeared. Naturally, part of the deal was large oil and construction contracts for Phillips Oil, Exxon Mobil and Halliburton in THE SEPTEMBER 11 COMMISSION REPORT Page 103 Angola. Unfortunately, while the swap may have been legal, the arms portion of the deal was prohibited under International Agreement: “arms purchases by the government and UNITA remained prohibited under the 1991 Bicesse Accords negotiated in Portugal” “Perhaps the most ironic link described in the Global Witness report is one involving the former "fugitive financier" Marc Rich. He appears as a major player in the arms-for-oil scandal through a Swiss-based oil trading company named Glencore. The firm played a major role in guaranteeing a total of $1 billion in oil-backed loans for Angola in 1998. The first set of oil-backed loans in 1993 involved Glencore, Falcone, and Gaydamak. Soon after, Gaydamak arranged for the sale of Russian helicopters and ammunition through a Slovak company called ZTS-OSOS. The 1998 billion-dollar loan deal included the Export-Import Bank loans being pushed by Halliburton and Cheney.” [Report Alleges US Role in Angola Arms-for-Oil Scandal, Special to CorpWatch, Wayne Madsen, May 17, 2002] “Glencore UK Ltd. is to obtain loans for future Angolan oil sales from commercial banks … The proceeds of these oil-backed loans is transferred by Glencore UK Ltd into our accounts for use by Sonangol, the Angolan state oil export company, so that it can finance the repurchase of these [debt] obligations. Sonangol then transfers through our bank to the buyer, Abalone Investements [sic] Limited, its remuneration for its role as determining intermediary in this operation to buy back the Angolan debt and the price fixed by the Russian Finance Ministry for the repurchase of its obligations. Then, UBS will transfer the amount corresponding to the cost of these obligations to Unicombank. In return and simultaneously, Abalone Investments Ltd receives from the UBS the obligations purchased and their repayment certificates, and returns them to Sonangol on behalf of Angola which can cancel them and thus progressively erase its debt to Russia.” [TIME FOR TRANSPARENCY, Coming clean on oil, mining and gas revenues: A report by Global Witness. March 2004] As a point of historical reference, it is appropriate to document at this time the Marc Rich was not a ‘novice’ in this business, and had decades of experience, including some participation in the Iran-Contra deals of the 1980s. Paul Klebnikov, Russian expert and Senior Editor at Forbes Magazine, has documented Marc Rich's early years as one of the Russian oligarchs involved in plundering Russia’s treasury through ‘privatization.’ Rich also had a business relationship with David Kimche of the Mossad, previously shown to have been helping Richard Secord move mercenaries and weapons into Azerbaijan, and Al Schwimmer, implicated in numerous Savings and Loans scandals in the 1980s. “In 1988 the Iranian journalist Amir Taheri revealed that in the Victoria district of London Schwimmer operated an arms procurement operation along with his partners David Kimche, the British born Israeli diplomat and longtime intelligence operative, and Yaacov Nimrodi, the former Iranian Jew who had been Israel’s main operative in the court of the Shah for many years. It was from this office that the huge Iran arms and illegal oil traffic was directed from 1981-1987, including the activities of Marc Rich. There is another knot of connections between Schwimmer and Rich, as well. Before becoming .… an arms procurer in the 1940s, Schwimmerhad been a shady American business man with connections to Mafia figures including Miki Cohen and Meyer Lansky, as well as Hank Greenspun, who was the most important “legitimate” front man and ‘fixer’ for the Mafia takeover of Las Vegas.All of the men mentioned participated in the 1940s Zionist arms network, as well as in the European crime network which the Mossad organized in the … temporary refugee camps of postwar Europe.” [Fallujah 101: A history lesson about the town we are currently destroying, Rashid Khalidi, 11/12/2004] Also for historical reference, it should be noted that an apparent bonus was given to Angola’s President Dos Santos by Halliburton. That bonus was the targeted assassination of Jonas Savimbi, previously hailed by Ronald Reagan as the “George Washington of Angola.” THE SEPTEMBER 11 COMMISSION REPORT Page 104 “The net effect of the Angolan arms buildup was the scrapping of the 1994 Lusaka Peace Agreement between Angolan President Jose Eduardo dos Santos and long-time UNITA rebel leader Jonas Savimbi, a one-time favorite of the Central Intelligence Agency and a person who President Reagan once hailed as the "George Washington of Angola." Jardo Muekalia, who headed UNITA's Washington office until it was forced to close in 1997, says that that the military forces that ultimately succeeded in assassinating Savimbi were supported by commercial satellite imagery and other intelligence support provided by Houston-based Brown & Root, Cheney's old outfit…. According to Global Witness, the links between Angola's corrupt government and the Bush administration are just as odorous as those linking Luanda's leadership to past and current members of the French government, both Socialist and Gaullist. In addition to the French oil giant Total-Fina-Elf, oil companies like Chevron, Texaco, Philipps Petroleum, Exxon Mobil, and BP-Amoco -- all with close links to Bush and his White House oil team -- were heavily involved in propping up dos Santos in return for profitable off-shore oil concessions.” [Report Alleges US Role in Angola Arms-for-Oil Scandal, Special to CorpWatch, Wayne Madsen, May 17, 2002] The Marc Rich (Glencore) connection is insightful because it identifies the probable link between the Russian/Israeli Mafiya and the oil swap industry, and the structure of its money laundering methods. These methods demonstrate involvement by the Deutsche Bank. During the US Justice Department 1998-1999 investigation of the Bank of New York’s money-laundering on behalf of the Russian Mafiya, Marc Rich was implicated: “The probe, one of the largest in recent history, was born out of the U.S. Justice Department investigation of the Bank of New York's role in large-scale money laundering from Russia in 1999. The "Spiderweb" probe focused on the repatriation of funds from the Bank of New York and offshore centers to Russia through Italian and other European front companies…. "Basically, the Russians were sending all the money that they could out of the country, and at one point, many of the same people decided they wanted to bring the money back," one Italian investigator said…. "I have an Interpol report that states that Marc Rich was one of the founding partners of Nordex," he said. According to prosecutors, Nordex, a company based in Vienna, Austria, with offices in Germany, Ireland, Lithuania, Russia, Switzerland and Ukraine, is accused of having had a central role in the money-laundering operation uncovered by the "Spiderweb" operation…. …Mr. Rich, as the principal director of Glencore International AG, had a direct relationship with Benex. Although the true owners of Benex were never conclusively identified in Miss White's investigation, Benex's offices, located on Queens Boulevard in Forest Hills, N.Y., shared the same building with two companies connected with Mr. Loutchansky…. U.S. and Italian authorities say that a good part of the money laundered on behalf of the Russian mafia and businesses passed through Benex's Bank of New York account and that from June to December of 1998 there had been a number of wire transfers from the "Glencore of Rich" to Benex for a total of $178,000.…” [Marc Rich Linked To $9 Billion Money Laundering Investigation, P.K. Semler, Washington Times, June 23, 2002] Marc Rich’s Glencore was involved in laundering Russian Mafiya money through the Bank of New York. (Pierre Falcone, the French/Algerian arms merchant indicted in the Angola-gate arms deal also maintained an account at this bank as well.) According to Australian sources, from the Bank of New York, the money was moved to the Pacific island country of Nauru. What is interesting is the revelation that at the same time that the Bank of New York was required to shut down relations with Nauru as a result of the investigation so did the Deutsche Bank and Banker’s Trust. (Banker’s Trust is a Deutsche Bank subsidiary, whose CEO-Buzzy Krongard went on to be the No. 2 Director at the CIA), The simultaneous cessation of relations of these banks with Naura suggests these THE SEPTEMBER 11 COMMISSION REPORT Page 105 banks were part of the same money-laundering investigation, and conduit used by Marc Rich, on behalf of the Angolagate gang and the Russian Mafiya. “Melnikov said Nauru "has the most attractive regime" for Russians trying to hide money offshore. Most of the operation is via the Internet through the government’s Nauru Agency Corporation in the main village of Yaren. It was central to the laundering of between 7-10 billion dollars through the Bank of New York (BNY)last year. Following that Deutsche Bank and Bankers Trust, which operate a global money transfer system for retail banks, and by the US Republic National Bank and BNY placed a ban on any US dollar trades with Nauru, as well as Palau and Vanuatu.” [Accused of Russian Mafia connections, Pacific’s Nauru to clean up its banks, Michael Field, AFP, 4/26/2000] These banks are also reportedly used in laundering the heisted Philippines, and probably Russian treasury gold: “REPUBLIC NATIONAL BANK OF NEW YORK: The bank is a reputed money laundry for smuggled gold as used by the intelligence agencies, such as the American CIA.” [Reputed Cocaine Bank Money Laundry Wizard for George Bush Family Arrested in Chicago, Sherman H. Skolnick] The elegance and complicated nature of the Angola oil scam does not stop with these revelations. After moving these funds through offshore accounts to Angola, and then to UBS before hitting the Russian banks as repayment, the funds were then stolen from the Russian bank in a scam quite similar to the one Adnan Khashoggi used to defraud MJK Securities in 2001. The money was loaned by the Russian Banks and transferred to accounts in the Cayman Islands, using stock for collateral which then turned out to be worthless. The net result would be US taxpayer dollars being transferred to the Russian/Israeli Mafiya, oil contracts for US oil companies (including Halliburton) and the dictators of Angola and Kazakhstan taking a personal percentage on the swap, and the Russian banks losing their debt repayment. Deals such as these are the foundation of “the New World Order,” proclaimed by George Bush on September 11, 1991. The US Export-Import Bank funding was used to buy weapons and towards the end of its journey, was put in the Bank Rossiisky (third largest bank in Russia), where Gaydamak was a director. (Bank Rossiisky is later documented to be a part of the Riggs-Valmet banking network, run by Jonathon Bush, brother of President Bush Sr.) The money was then loaned to Russian and Angolan officials using securities as collateral. The collateral turned out to be worthless, and the Bank nearly went Bankrupt. “BANK ROSSIISKY KREDIT: Stole eXile's money. President Vitaly Malkin said to control bank account that helped funnel $700 million in Angolan money intended to pay back Soviet-era debt which instead was kicked back to Russian and Angolan officials. Vavilov was also involved.” [The Man Behind The Man, Alexander Makarkin, The Exile, Issue #167, May 29, 2003] Lending credibility to the claim that there was most likely a link between Angola-gate and Kazakhstan-gate, reports indicate that the bribes to Kazakhstan officials involved three of the same banks as the Angola-gate money laundering operation: Bank of New York, Banker’s Trust (aka Deutschebank) and Credit Agricole Indosuez. Credit Agricole THE SEPTEMBER 11 COMMISSION REPORT Page 106 Indosuez was a correspondent bank with Bankers Trust in New York, New York – and was operated using the assets of the closed BCCI bank. . "According to a formal request filed under a treaty between the United States and Switzerland, the Justice Department says that on March 19, 1997, Amoco Kazakhstan Petroleum, one of the companies involved in the big offshore project in the Caspian Sea, transferred $61 million from Banker’s Trustin New York in two payments to account 1215320 at Credit Agricole Indosuez, a bank in Geneva. (The Amoco unit is now part of BP). [THE ELEPHANT IN THE LIVING ROOM - PART I, Michael C. Ruppert, © Copyright 2002, From The Wilderness Publications, 3/26/2002] “One such document, a letter of credit from a Republic National Bank of New York account in Switzerland, shows that Mobil transferred 100 mln usd in May of 1997 to a Swiss bank account held by the Treasury of Kazakhstan but which Kazhegeldin believes to have been controlled exclusively by treasury director Saouat Mynbaev.” [Ex-Kazakhstan premier says US firms' oil fees diverted to ministers, Interview with Akezhan Kazhegeldin, Justin Cole, AFX, 7/17/2001] “A recent book by S. Mendybayev and V. Shelgunov under the title "Cleptocrats" contains more detailed information regarding the accounts controlled by Nazarbayev-Balgimbayev-Giffen (Moscow, Sputnik Co., 2001): "Reporters provided information on the Nazarbayev family foreign accounts, including the names of banks and the amounts on those accounts. In Swiss Pictet - over $300 mln, $150 - 200 mln in Credit Suisse, hundreds of millions of dollars in the National Republic Bank of New York. In these and other cases those amounts were detected or frozen in the course of investigation. Naturally, much more money could have passed through those accounts in previous years.” [Total claimant, Tsentralno-Asiatskiy Bulletin, International Eurasian Institute for Economic and Political Research, Valery Steshin, 9/6/2001] Russia got the oil. Angola got the weapons. The whereabouts of about a half million dollars is known – and the rest (About $1.4 billion) disappeared, and in a bizarre twist of fate, the Angolan debt to Russia was transferred to the US taxpayers under the guise of loans, compliment of Halliburton and Cheney. Somewhere in between, brutal dictators and corrupt businessmen got “bonuses.” THE SEPTEMBER 11 COMMISSION REPORT Page 107 5 Russian and Israeli Mafiya Before Nick Berg traveled to Israel and Iraq, he was engaged with Joe Aziz, a business partner that had connections to the Russian Mafiya and the Project for a New American Century. Joe Aziz is reported to be the last person to see Berg alive before he was kidnapped and executed. To investigate the death of Nick Berg, one must understand the Russian/Israeli Mafiya and the PNAC. Like the terrorists and the Mossad, both the PNAC and Russian/Israeli Mafiya have been accused of having a role in the attack on the World Trade Center. What these latter two groups have in common is a strong affiliation to Israel. Because of the reported Israeli role in various events and circumstances leading up to the attack on the World Trade Center, and because of the reported ties of these groups to Israel, this investigation pursued an understanding of those allegations. The result of the investigation was the discovery of a set of business and political relationships that started in Russia in the 1980s and moved to Israel in the 1990s. These relationships created a bond between elements of the Russian Mafiya and elements of the CIA involved in economic warfare operations which facilitated the collapse of the Soviet Union. This alliance has evolved into the dark side of the current Neocon movement. The destruction of the World Trade Center targeted with pinpont precision those offices that held evidence of their relationships. 5.1 Project for the New American Century There is a group of independent writers that claim the attacks on the World Trade Center were conducted not by a U.S. oil cartel, but rather by right-wing elements of the Mossad with the intent of providing a justification for a U.S. attack on Iraq. Under this scenario, writers refer to the bulk of evidence presented earlier in this article, as well as the history of the policy making group that can claim responsibility for swaying George Bush to attack Iraq. This group is referred to under several names – neo-conservatives, neocons, neokons, PNAC, and Hillary Clinton’s unidentified “right wing conspiracy.” "In 1997 a group of neo-conservatives founded the 'Project for the New American Century' (PNAC) - A year later PNAC called for the removal of Saddam Hussein's regime in Iraq - In 2000 they predicted that the shift in US foreign policy towards that aim would come about slowly, unless there were "some catastrophic and catalyzing event, like a new Pearl Harbor". That event happened on September 11th 2001 - Ten people in the Bush administration are currently members of PNAC. They include Dick Cheney, Donald Rumsfeld, Paul Wolfowitz, Richard Armitage, John Bolton, Zalmay Khalilzad and member of the advisory Defense Science Board, Richard Perle" [The Dossier, ukonline.co.uk] The publicly acknowledged intent of the PNAC group is the ‘furtherance of democracy,’ in a manner that was inconceivable under prior U.S. administrations. Essentially, the PNAC model for U.S. foreign policy is one of unilateral aggression, putting the U.S. foreign policy in the company of many historical imperialist powers: the Christian Crusaders, the Ottoman Turks, the British Empire, Napoleon’s France, Hussein’s Iraq, Hitler’s Germany, and Stalin’s Russia, to mention a recent few. THE SEPTEMBER 11 COMMISSION REPORT Page 108 "Bill Kristol, (is) one of the most sought-after political commentators in the US, editor of The Weekly Standard, and President of The Project for a New American Century. In his talk, entitled “US Foreign Policy after 9-11: The Bush Doctrine,” Kristol declared that “for the US, the world really changed on September 11. We are no longer prepared to rely mainly on negotiations, trade pressures, arms control regimes and international institutions in order to solve critical world problems. The Israeli operation against the Iraqi nuclear reactor in Osirak is our new paradigm. Time is not on our side. We need to act soon, act preemptively, and act alone if necessary. Osirak is now the model of how foreign policy has to be conducted,” said Kristol. “Indeed, today the US is committed to forcing regime change in Iran, Iraq, and North Korea,” continued Kristol “We will be much more aggressive in pursuing this goal; no longer are we content to wait for history to work things through. Unfortunately, Europe does not yet seem to understand our new world. They wish to return to pre-September 2001 rules.” [Begin –Sadat Center For Strategic Studies, May 2002 No. 14 ] "Later in the year, Bush's influential advisor Richard Perle states, “No stages. This is total war. We are fighting a variety of enemies. There are lots of them out there. All this talk about first we are going to do Afghanistan, then we will do Iraq … this is entirely the wrong way to go about it. If we just let our vision of the world go forth, and we embrace it entirely and we don't try to piece together clever diplomacy, but just wage a total war … our children will sing great songs about us years from now.” [New Statesman, December 16, 2002] While the praises for the victory of democracy in these conquered countries of Afghanistan and Iraq are sung by the Bush administration, those who visit these countries are aware of the realities of this new policy, which do little to change the ways these countries operate: "Apart from notional freedoms, little has changed. The warlords installed to power by America are as bad as the Taliban, terrorising whole communities, and ensuring that 90 per cent of Afghan women remained oppressed and that pledges of Western reconstruction aid remain empty promises."[The Betrayal Of Afghanistan, John Pilger, The Guardian, November 22,2003] The background of many of these key policy players however, suggests they are far more interested in the security of Israel than that of the US. Two of the key architects of this group – Richard Perle and Paul Wolfowitz- have a well documented (both Congressional and FBI investigations) past of being alleged agents for the Israeli government, and have been directly responsible for the employment by US Policy making groups (Office of Special Plans- OSP) of at least four other similarly documented and alleged agents of Israel: Douglas J. Feith (Undersecretary of Defense for Policy), Lawrence Franklin (currently under investigation by the FBI as being a potential Israeli spy), Michael Ledeen and Dr. Stephen Bryen. Lawrence Franklin works in an office overseen by Douglas J. Feith, the Defense Undersecretary for Policy. Feith is an influential aide to Defense Secretary Donald Rumsfeld. Also included in this list is Dr. Rabbi Dov Zakheim, who at the time was acting as chief-financial officer for the Department of Defense. A signer of the “Pearl Harbor” statement and an original member of the PNAC, Dr. Dov Zakheim’s personal and family’s significant involvement in Yeshivat Sha’alvim is a clear demonstration of his loyalties. "Sha'alvim is a dynamic and comprehensive educational community where … students are imbued with …an abiding commitment to the People and the State of Israel.”[www.shaalvim.org] From all available evidence it was these “unofficial” political advisers organized by Wolfowitz, Feith and Rumsfeld in the US Office of Special Planning (OSP) who were the THE SEPTEMBER 11 COMMISSION REPORT Page 109 source of the fabricated evidence, which was used to “justify” the invasion and occupation of Iraq. "Precisely because of the qualms the administration encountered, it created a rogue intelligence operation, the Office of Special Plans (OSP), located within the Pentagon and under the control of neoconservatives. The OSP roamed outside the ordinary inter-agency process, stamping its approval on stories from Iraqi exiles that the other agencies dismissed as lacking credibility, and feeding them to the president. At the same time, constant pressure was applied to the intelligence agencies to force their compliance. In one case, a senior intelligence officer who refused to buckle under was removed." [NEWS BRIEF: "There was no failure of intelligence: US spies were ignored, or worse, if they failed to make the case for war", The Guardian (London), February 5, 2004, carried in Daily News Updates 2/8/2004.,http://www.guardian.co.uk/comment/story/0,3604,1141116,00.html ] These fabrications which took America to war with Iraq were based on a long standing Likud policy paper authored by Perle and Feith in 1996. "The OSP and the other members of the networks that operated throughout key US agencies shared a right-wing, pro-militarist ideology and are fanatically pro-Israel. Feith and Perle authored an infamous policy paper in 1996 for the Likud Party extremist, Benjamin Netanyahu, entitled “A Clean Break: A New Strategy for Securing the Realm.” This strategy called for the destruction of Saddam Hussein and his replacement by a Hashemite monarch. Syria, Lebanon, Saudi Arabia and Iran would then have to be overthrown or destabilized for Israel to be secure in a kind of ‘Greater US-Israel Co-Prosperity Sphere.’ The OSP was an arm of the Wolfowitz-Feith policy of furthering the policies of the most extremist groups of the Sharon regime, forging close ties with a parallel ad hoc intelligence operation in the Israeli regime according to a report from the British newspaper, The Guardian" [“Who fabricated the Iraq War Threat: An Inside View” James Petras, Centre for Research on Globalisation, August 22, 2003] To that end, the invasion of Iraq was as much a foregone conclusion as was the invasion of Afghanistan. It was a decision made by this group years before ‘weapons of mass destruction’ were presented to the public as the excuse for invasion, and years before the attack on the World Trade Center. Nothing would have prevented the invasion, because it could easily have been prevented – and spared thousands of lives and injured. According to the Chicago Tribune, Saddam Hussein was more than ready to leave Iraq, just like the Taliban was ready to surrender Bin Laden, but the US Government chose to start a war instead. "As Trireme (Richard Perle’s and Henry Kissinger’s venture capital firm)solicited investors at the end of 2002, Harb al-Zuhair (a wealthy and politically connected Saudi businessman) made a trip to his native Iraq, and met with government officials including Saddam's intelligence chief -- Tahir Abd' Jalil Habbush al-Tiktriti, head of Iraq's Mukhabarat, or General Intelligence Service. He returned with an important message for the U.S. government: On the eve of war, Saddam wanted to throw in the towel, Zuhair reported to Khashoggi. The Iraqi dictator sought back channel negotiations with America that might offer him a safe exit. Harriman and Khashoggi decided to arrange for Zuhair to tell his story to Perle…."[Hersh uncovered Pentagon adviser Richard Perle’s role in securing homeland security contracts, David Jackson, Chicago Tribune, June 25, 2004] Both so called “conspiracy” interpretations (one in which oil interests are responsible, another in which pro-Israeli Neocons are responsible) provide compelling insights, and may explain the Bush administration’s behavior after the WTC tragedy, but do little to explain events leading up to the attack. The hard truth is, this tragedy was beginning to unfold long before Bush won the election, and before he won the Republican National THE SEPTEMBER 11 COMMISSION REPORT Page 110 convention. President Bush initially declined the recommendations of the PNAC, preferring to invade Afghanistan before paying attention to Iraq. Information suggests that Bush may have been knowledgeable and supportive of allowing what he was probably told would be a ‘controlled’ terrorist attack, but there is nothing to suggest he was responsible for its initiation. (The circumstance of him not actually making the decision would not exonerate him of conspiracy in murder. However, by focusing solely on the Bush administration involvement in a cover-up, more powerful criminals may be over-looked. Bush and his father had very significant responsibility for the attack on the WTC, but no one has ever suggested he is capable of being its mastermind.) The Republican National Convention had not even occurred when the actual perpetrators of the attack on the World Trade Center were organizing in the US. Similarly, all the credible information available and reviewed elsewhere in this report suggests Osama Bin Laden was not responsible. Who then was? There is a need to identify a new and viable master criminal behind these tragedies. For all the effort being put into the search for who is responsible, there are no alternatives being offered other than Osama Bi Laden or the Bush administration: but neither of these is a credible suspect. President George W. Bush and Osama Bin Laden were involved, but neither were calling the shots, nor capable of calling the shots. The search should pick up on a trail dropped by nearly everyone doing research long ago. 5.2 Follow the Money Without a serious investigation into the financial aspects of the attack of 9/11, it is difficult to understand who benefited, and therefore, who had motive. This report hypothesizes that the participants and planners of the 9/11 events profited by over several hundred billion U.S. dollars, and stopped investigations into financial crimes, securities fraud and bank fraud valued at a comparable amount. The press often refers to illegal stock trades that occurred at the time the towers were attacked. These - however significant - will turn out to be relatively small earnings when compared to motive associated with the other incentives. This report will investigate four sources of financial motive: · Illegal stock trades; · Brady Bond (See Section 8 of this report) and MJK Securities Fraud; · Gold price-fixing and probable laundering of stolen gold; and · Control of equity banking market share. An often forgotten set of events leading up to the WTC attack include the financial market “put” options placed up to four days before the attack. These were initially the most obvious trades with the “unclaimed” payout. THE SEPTEMBER 11 COMMISSION REPORT Page 111 Table 1 Unclaimed Stock Options Target Put Options Time when trades were placed Of Interest Merrill Lynch & Co 12,215 four trading days before the attacks Occupied 22 floors of the World Morgan Stanley Dean Witter & Co 2,157 three trading days Occupied 22 floors of the World Trade Center United Airlines 4,744 two and three trading days American Airlines 4,516 one trading day These are the data points one always sees in the news, but there were other trades – significant trades, mostly in financial companies! • "Citigroup Inc., which has estimated that its Travelers Insurance unit may pay $500 million in claims from the World Trade Center attack. It had a jump in trading of October options that profit if shares fall below $40 apiece. Almost 14,000 of those options contracts were traded from Sept. 6 to Sept. 10 -- about 45 times the previous daily average. Citigroup shares fell $2.85 today to $39.60. " • " Bear Stearns & Cos., where investors traded 3,979 contracts from Sept. 6 to Sept. 10 on September options that profit if shares fall below $50. The previous average volume for those options was 22 contracts. Bear Stearns shares fell $3.79 today to $46.45. " • " Marsh & McLennan Cos., the biggest insurance brokerage, which had 1,700 employees working in the World Trade Center. Traders on Sept. 10 exchanged 1,209 contracts on options that profit if company shares fall below $90 through the third week of September. Previously, 13 contracts had traded on an average day. Marsh & McLennan shares fell $2.50 today to $84.50.' • "The Wall Street Journal reported on October 2 that the ongoing investigation by the SEC into suspicious stock trades had been joined by a Secret Service probe into an unusually high volume of five-year US Treasury note purchases prior to the attacks. The Treasury note transactions included a single $5 billion trade. As the Journal explained: “Five-year Treasury notes are among the best investments in the event of a world crisis, especially one that hits the US. The notes are prized for their safety and their backing by the US government, and usually rally when investors flee riskier investments, such as stocks.” The value of these notes, the Journal pointed out, has risen sharply since the events of September 11. The article went on to quote Michael Shamosh, a bond-market strategist for Tucker Anthony Inc., who said, “If they were going to do something like this they would do it in the five-year part of the market. It’s extremely liquid, and the tracks would be hard to spot.” The SEC has been extremely tight-lipped about its probe, in which it has enlisted securities firms and government agencies in Europe, Canada and other countries. But on Tuesday the Investment Dealers Association, a trade association for the Canadian securities industry, posted on its web site a list sent by the American SEC of 38 stocks. The US agency had asked the Canadians to look into trading in these stocks between August 27 and September 11. As soon as US officials became aware of the Internet posting, they demanded that the Investment Dealers Association yank it from the web site, and the Canadian organization complied. However, reporters and others were able to copy the list before it was pulled. The list includes the parent companies of American, Continental, Delta, Northwest, Southwest, United and US Airways, as well as Carnival and Royal Caribbean cruise lines, aircraft THE SEPTEMBER 11 COMMISSION REPORT Page 112 maker Boeing and defense contractor Lockheed Martin. Several insurance companies are on the list— American International Group, Axa, Chubb, Cigna, CNA Financial, John Hancock and MetLife. The SEC list also includes several big companies that were tenants in the collapsed Twin Towers of the World Trade Center: investment firms Morgan Stanley, the complex’s largest occupant; Lehman Brothers; Bank of America; and the financial firm Marsh & McLennan. Other major companies listed include General Motors, Raytheon, LTV, WR Grace, Lone Star Technologies, American Express, Bank of New York, Bank One, Citigroup and Bear Stearns. [Suspicious trading points to advance knowledge by big investors of September 11 terror attacks, Barry Grey, October 5, 2001] It is also fair to speculate that the breadth of the pre-attack investments trades was far broader than ever admitted to by the investigators. The general literature suggests trading in four companies, using one mentioned bank – the Deutschebank. Generally excluded from discussions of those reports is a subsequent report from a survivor of the World Trade Center. "...Convar, a German firm hired to retrieve data from damaged computer systems left in the rubble of the World Trade Center, found that there was a deluge of electronic trading just minutes before the first plane struck. Quoting a December 16 report from Reuter's, writer Kyle Henry found a compelling quotation from one of Convar's directors: Peter Henschel, director of Convar...said, 'not only the volume, but the size of the transactions was far higher than usual for a day like that.' Richard Wagner, a data retrieval expert, estimated that more than $100 million in illegal transactions appeared to have rushed through the WTC computers before and during the disaster….The Reuter's story was partially confirmed for me when I was contacted by a Deutsche Bank employee who had survived the attacks by fleeing the WTC after the first plane hit. According to the employee, about five minutes before the attack the entire Deutsche Bank computer system had been taken over by something external that no one in the office recognized and every file was downloaded at lightening speed to an unknown location." [Crossing the Rubicon, Chapter 14, Michael Ruppert] The four stock trades usually mentioned, however, are the “unclaimed’ trades – suggesting a potentially larger number of successful trades having taken place. The reality was far greater than generally reported. Trades were placed across the globe, far in excess of the few million dollars of “unclaimed” trades. More simply, a lot of the trades were successfully claimed. "ABC World News reported on Sept. 20, "Jonathan Winer, an ABC News consultant said, 'it's absolutely unprecedented to see cases of insider trading covering the entire world from Japan, to the U.S., to North America, to Europe." "How much money was involved? Andreas von Bülow, a former member of the German Parliament responsible for oversight of Germany's intelligence services estimated the worldwide profits amount at $15 billion, according to Tagesspiegel on Jan. 13. Other experts have estimated the profit at $12 billion. CBS News gave a conservative estimate of $100 million." [The Case for Bush Administration Advance Knowledge of 9-11 Attacks, Michael C. Ruppert, April 22, 2002] "According to Phil Erlanger, a former Senior Technical Analyst with Fidelity, and founder of a Florida firm that tracks short selling and options trading, insiders made off with billions (not mere millions) in profits by betting on the fall of stocks they knew would tumble in the aftermath of the WTC and Pentagon attacks." [http://www.erlangersqueezeplay.com] A very important element of this trading “mystery” is that the “pre-September 11” stock trades are the trades commonly discussed, and generally ignored are the trades that occurred on September 11, during the course of the attack. THE SEPTEMBER 11 COMMISSION REPORT Page 113 "Richard Wagner, a data retrieval expert estimated that more than $100 million in illegal transactions appeared to have rushed through the WTC computers before and during the disaster." “Henschel said the companies in the United States were working together with the FBI… to piece together what happened on September 11 and that he was confident the destination of the dubious transactions would one day be tracked down. ``We have been quite surprised that so many of the hard drives were in good enough shape to retrieve the data,'' he said. ``The contamination rate is high. The fine dust that was everywhere in the area got pressed under high pressure into the drives. But we've still been able to retrieve 100 percent of the data on most of the drives we've received. ``We're helping them find out what happened to the computers on September 11 as quickly as possible. I'm sure that one day they will know what happened to the money…”[German Firm Probes Final World Trade Center Deals. Erik Kirschbaum, Reuters, 12/16/2001] Richard Wagner – a security expert – included in his assessment that the transactions were illegal. Henschel describes the transactions as trades. These small observations are important for two reasons: 1. At the time of the attack, neither the stock exchange nor the commodity exchange had opened. The put options were placed before September 11. This should lead to the conclusion that the transactions being referred to are securities trades, probably being run through computers at Cantor Fitzgerald, Garbon Inter-capital (now ICAP PLC), or Euro Brokers. Most of their day’s business had been conducted by 9:00 am. Cantor Fitzgerald and Euro-Brokers would take almost direct hits by jets attacking the North and South Towers. 2. In noting that the transactions were illegal “trades”, Wagner shares a piece of information not released by the FBI or 9/11 Commission. Hence, we are forced to conclude he was referring to illegal securities transactions. This assumption is supported by information that suggests it took the Federal Reserve’s Government Securities Clearing organization over a month to rectify the accounting caused by these trades. “As GSCC has previously informed you, however, during the period immediately after the September 11 events, many securities clearances were processed successfully through the Fedwire book entry system without GSCC's knowledge. As GSCC did not know that these items had been delivered, it continued to mark the transactions as if they were fails. As a result of these "incorrect" fails, certain members are owed fail marks by GSCC, and other members owe fail mark amounts to GSCC. GSCC has a complete database of all obligations and clearance transactions for the entire period, and will attempt to identify all adjustments required by early next week. GSCC staff will be in touch with all affected members.” [Reconciliation Process, GSCC087.01, October 5, 2001] The issues around these bond trades (as opposed to stock trades) will be discussed thoroughly in a separate section of the report (Section 8). There are so many coincidences and ambiguities surrounding the settlement of these trades, that there is reason to believe that they are related to the true reason for the attack, rather than being what the Federal Reserve refers to as technical errors. If nothing else, for now, it is noted that according to Henschel, the information regarding these illegal securities trades was recovered and given to the FBI. Neither the FBI nor the 9/11 Commission have reported on these findings. During the week of September 11, demand for almost 86 tonnes of gold, or almost $900 million dollars, was created by demands in the Far East. These purchases did not go into the jewelry market, but were primarily targeted at investment hedge funds. THE SEPTEMBER 11 COMMISSION REPORT Page 114 "While hedge funds are a rapidly growing part of the financial industry, the fact that they operate through private placements and restrict share ownership to rich individuals and institutions frees them from most disclosure and regulation requirements that apply to mutual funds and banks. Funds legally domiciled outside the main financial market countries are generally subject to even less regulation." [Hedge Funds: What Do We Really Know? Barry Eichengreen, Donald Mathieson, ©1999 International Monetary Fund] It is proposed that to launder the profits of the anonymous trades, the profits from the attack on the World Trade Center were shifted into gold certificates purchased by hedge funds (probably via Enron On-Line) - both of which are easy to conceal ownership with, especially in places like Thailand and Vietnam, which is where this gold went. With the range of leverage currently used by financial institutions (between 100:1 and 400:1, although it does go as high as 600:1), it might be fair to say the people responsible for this crime converted it into a leveraging of between $75 and $200 Billion dollars. Additionally, as will be discussed in Section 7.2, there were individuals like Adnan Khashoggi and institutions like Deutsche Bank Securities that may have made other types of investments that benefited from the effects of 9/11, as discovered during the MJK Securities fraud suit in 2005. Khashoggi and the Deutschebank were both found liable for the losses in 2006. These options suggest a number of observations being made in advance about who stood to “lose” or “gain” during the aftermath of the attack: • The first target and primary target (as determined by the level of investment and number of days preceding the attack) was Merrill Lynch. • The secondary targets were Morgan Stanley and insurance companies. • It appears as an afterthought that someone decided the airlines stood to lose as well. It is very possible that these airline trades were not placed by the true criminals, but were the product of normal, but sporadic trading. Given that nearly all airlines were spiked during the time period – not just those involved in the attack – the following explanation makes more sense. "Adam Hamilton of Zeal LLC, a consulting company that does research on markets worldwide, has crunched the numbers and recently told Insight magazine: "The market was in bad shape in the summer and early fall, and you know there were a lot of people who believed that there would be a sell-off in the market long before Sept. 11. For instance, American Airlines was at $40 in May and fell to $29 on Sept. 10; United was at $37 in May and fell to $31 on Sept. 10. These stocks were falling anyway, and it would have been a good time to short them." The downward trend in the airline stocks was backed up in the pre-Sept. 11 trading picture." "Insight reported that there were repeated spikes in put options on American Airlines during the year before Sept. 11 (June 19 with 2,951 puts, June 15 with 1,144 puts, April 16 with 1,019 and Jan. 8 with 1,315 puts). In the same period, United Airlines had slightly more action (Aug. 8 with 1,678 puts, July 20 with 2,995, April 6 with 8,212 and March 13 with 8,072)." [Dave Eberhart, “Still Silence From 9-11 Stock Speculation Probe”, NewsMax, June 3, 2002] THE SEPTEMBER 11 COMMISSION REPORT Page 115 On the other hand, almost always, if investors believe the airline industry is due to drop, they will short all three major carriers. This was not the case here because Delta did not see spikes similar to UAL and AMR. • It appears financial companies were the focal point of investors with apriori knowledge of the attack on the WTC. These criminals were sophisticated investors, with inside knowledge which identified the insurers of these building and financial targets. Inside knowledge of this sort might easily be established by a competitor who worked that market – a competitor like Allianz, one of the primary corporate entities in the German/Suisse Bank Cartel. • The attack was on financial companies (especially investment banking) in the World Trade Center as well as financial companies in general, including Citibank, Bear Stearns & Cos., Marsh & McLennan Cos. American Express, Bank of New York, and Bank One, which are not in the World Trade Center. The plan was to create an event that would shake the American economy to its core, and cripple the highly leveraged investment banks. In another of a long list of strange co-incidents, all of these banks have a unique and special relationship with the President Bush when it comes to economic policy. "President George W. Bush played host to the heads of several top US banks at a private meeting in the White House this week, in an effort to persuade the markets of his commitment to deficit reduction. Mr. Bush's invitation underscores his desire to secure Wall Street's support for the ambitious economic reform agenda planned for his second term. Vice President Dick Cheney, political strategist Karl Rove, chief of staff Andrew Card, outgoing commerce secretary Don Evans and the White House economic team were also present for the talks with the heads of Merrill Lynch, Goldman Sachs, Bank of America, Wachovia, Credit Suisse First Boston, Morgan Stanley, Citigroup, and American Express." [Bush Holds Private Meeting With Bank Chiefs, Copyright 2004, InvestmentsMagazine.com, November 18, 2004] • Interestingly, if oil was the objective as claimed by so many, someone might have invested in ‘Call options’ on companies who would obviously benefit –such as Halliburton. This didn’t happen, because an invasion of Iraq was not contemplated. (More on this later.) Moreover, in one story that received no follow-up, oil related companies were traded with “calls” shortly after the attack. "Sadi, a Geneva-based investment group that is controlled by the Bin Laden family, is under investigation for an appalling interpretation of insider-trading. Twenty minutes before the terrorist attacks on New York and Washington, the Sadi group instructed to sell certain stock portfolios at several European stock markets. In the days following the attacks, large buying-orders, especially in the oil and chemical sector, were placed. The world-wide investigation in the Sadi-group's actions have been felt also on the Italian stock market based in Milan. "[Stock Speculations of Bin Laden Investment Group Investigated] Another set of clues that have been commented on, and again generally ignored – is a series of articles in Pravda during the summer of 2001, and comments by Vladimir Putin. In these comments, Russian intelligence was predicting a catastrophic financial event in late August of 2001 (a couple weeks before September 11). This unidentified event was expected to bring about the collapse of the dollar, and Russians were being advised to get out of dollars. Similarly, the chief economic strategist for Dresdner Wasserstein was predicting a major crash in the American stock-market for that same time-frame, in a sense, encouraging the Dresdner Wasserstein customer base to get out of dollar based THE SEPTEMBER 11 COMMISSION REPORT Page 116 assets. (Dresdner is part of the German Bank cartel.) These are clear indicators that the financial impact of the attack was a consideration by those with pre-knowledge. (There is another conclusion to be drawn from the Russian and German financial forecasts, which stood alone in the midst of other financial forecasts at that time– that a financial collapse was actually possible. This forecasted collapse actually was a very real possibility, and the prevention of this collapse was one of the specific reasons for the attack on the World Trade Center. This possibility is analyzed in depth in Section 8 of the report, where it is hypothesized that $240 Billion in fraudulent 10 year bonds under the control of Cantor Fitzgerald needed to be re-issued to prevent the financial collapse of the US securities market.) The first and cardinal rule of any criminal investigation has been totally ignored in an attack on the headquarters of three of the world’s largest investment banks. That rule is “Follow the money.” The 9/11 Commission Report does not even acknowledge the occurrence of any of this crime. The terrorist gambit has convinced most of the world this atrocity was the responsibility of fanatics with little concern for wealth. As a result, what little thought was given to the “apparent” money trail – the put options – was dropped as incidental to a bigger evil –global terrorism. What if, however, the attack was about “the money?” The original hypothesis of this investigation was that the financial beneficiaries of these crimes were part of a German and Swiss banking cartel. Subsequent investigation of that cartel and the cover-up it required, resulted in findings that suggested that an American financial cartel of commercial banks may have participated in the planning and execution of the attack (the Federal reserve Banks). These two cartels were interlocked by a common customer base of money launderers, heroin dealers and corrupt politicians. 5.3 The Threat to German Banking For the moment, please assume the actual targets were the three largest equity banking firms of Merrill Lynch & Co., Morgan Stanley Dean Witter & Co (MSDW), and Goldman Sachs – filling 22, 22, and 15 floors of the WTC respectively. (Goldman Sachs had a significant presence in the WTC, but the instigators did not take “put options” on Goldman Sachs.) In the course of a normal investigation, one might ask – who stood to gain from the direct disruption of these financial giants. These giants, along with Citibank and JP Morgan Chase represented the five major threats to the German banking market, and as a result the Dresdner Bank (a subsidiary of Allianz) and Deutsche Bank stood to gain from a temporary disruption of the capabilities of Merrill Lynch, MSDW, Goldman Sachs, Citibank and JP Morgan Chase. A brief bit of background on these two German banks, and the German banking industry in general, is relevant. Banks have created a bank-center culture, with banking centers created in New York, London, Paris, Tokyo and Frankfurt. These centers have become fairly ‘incestuous,’ swapping employees and favors. These centers represent common interests and policies generally based on their country’s primary currency values. Today, Paris and Frankfurt are creating a unity around the Euro, and incorporating Basel into the Frankfurt center, while London and New York operate around the dollar. THE SEPTEMBER 11 COMMISSION REPORT Page 117 During World War II, the two German banks represented the primary banking powers in Nazi Germany. There are three events that occurred during the last 50 years which have provided a basis for resentment on their part with the American banking community. When the Allies took over Germany, the British generally left the banking structure in their zone as they found it. The Americans, however, broke up these banks into 30 autonomous regional banks and put in place a number of regulations to prevent these banks from ever re-establishing themselves as major global powers. Those rules, however, were ultimately circumvented, and the banks manage to re-establish themselves in the 1960’s. Just as these banks were re-emerging as global players, the Richard Nixon administration unilaterally took the dollar off the Bretton Woods System of Fixed Exchange Rates, which then created an advantage for the American banks and economy that has taken the rest of the world several decades to recover from. It seriously undermined the German competitiveness in the export market, which took the Germans years to recover from. The advantages that came with the move off the Bretton Woods agreement – in terms of enhanced perceived value of the dollar– has given a global advantage to the New York bank center for almost two decades. Over the next three decades, Europe was able to muscle its way back to a position where the banks were almost on par with New York. Together, the two banks represented a coordinated and balanced global strategy: Deutsche Bank had 21 of its 28 foreign affiliates in Africa and Asia, Dresdner had 16 of its 21 affiliates in Latin America. Not all of this “comeback” can be attributed to the inherent attractiveness of the Euro or European currencies. At one point, Tokyo banks, representing the growth of the orient, stood to overwhelm European banks in the 80’s. In response to this threat, the International Bank of Settlements (heavily weighted by participants from Paris, Frankfurt and Basel, and taking advantage of the unfortunate absence of the American delegate) voted to establish new bank capitalization requirements which targeted the Tokyo banking practices of defining property value as equity with which to create loans. This redefinition of the asset base with the stroke of a pen essentially drove the collapse of the Tokyo banking system, and subsequently, the rest of the Pacific Rim. (Currently, this same group is driving another round of re-defining capitalization requirements which are designed to cripple the US banking industry by regulating the use of government debt as a capital base. Given that a devaluation of the dollar is globally perceived as inevitable, requiring the US banking system to hold large amounts of US government debt will automatically devalue the reserves of the American banks. American bankers watching this regulation emerge over the years have converted their primary strategies from traditional banking to equity banks, hence the battle with the German equity banks.) A third American attack on the German banking industry took place in 1993, led by George Soros and George Bush Sr. “His US contacts put Soros very close to the financial and secret service circles around George Bush. His most important deposit bank and main lender during his attack on the European monetary system in Sept. 1993 was CITICORP, America's largest bank. Soros called upon the international investors to unhinge the Deutsche Mark. When in late 1989 a reunification became probable, a high ranking Citicorp manager who before had been advisor in the Dukakis campaign said: "German unity will be catastrophic for our interests. We have to take action to insure a decline of the Deutsche Mark by about 30% so that Germany will not be able to built up Eastern Germany to become the economic factor THE SEPTEMBER 11 COMMISSION REPORT Page 118 within a new Europe." [George Soros and the Rothschilds Connection, Jan Von Helsing ("Secret Societies and their Power in the 20th Century")] One might conclude from the financial banking history of the last 50 years that the German bankers play hard, and have some legitimate reason for resentment of the US banking circles. This brings the analysis back to new threats to the German banking center in 2001. • Merrill Lynch was in the process of bringing electronic banking to the European market, being the first overseas bank to directly attempt to challenge the German’s lock on their traditional customer base. As a German foundation, Merrill Lynch had acquired Sannwald Jaenecke Bank, and was heavily recruiting German resources. Neither Dresdner (a subsidiary of Allianz), Commerzbank nor Deutsche Bank were in a position to counter that technology. • The US banks were positioning themselves for a major penetration of the European equity market. In the US, equity banking fees were at 6-7% less than 1998 levels, while in Europe, the market was expected to be 44% above 1998 levels. The profitability on this business had increased due to the introduction of the Euro, which simplified and encouraged cross border banking. Because of a history of national banking, cross border trades were allowed to increase commission rates, thus making the European business even more attractive. • Five US banks were seen as threatening the equity banking market formerly dominated by Germany: Merrill Lynch, Morgan Stanley Dean Witter, Goldman Sachs, Citibank and JP Morgan Chase. Goldman Sachs had 15 floors in the WTC, Merrill Lynch had 22 floors as did Morgan Stanley. (Investment Banking in Europe, August 2001, Freeman and Co. LLC) • More importantly though, in 2000, both Goldman Sachs, Merrill Lynch and MSDW had risen to the top three investment banks in Europe, bumping Dresdner out of the top 5 and pushing the Deutsche Bank to the number 4 slot. The European market for equity underwriting was expected to generate $913 billion in new offerings, which would have generated $23 billion in revenue. Twenty three billion dollars, while significant, is relatively small in comparison to the larger losses if Merrill Lynch, Morgan Stanley and Goldman Sachs cemented themselves into the European market. Dresdner was already suffering financially due to this competition. Faced with insolvency, it had to be rescued by a white knight investor named Allianz – the one major insurance company that remained untouched by the WTC attack. That being said, the German banking group, after years of planning a comeback and revenge, was anticipating a collapse of the US economy within a month of the date of the WTC attack. The chief economic strategist for Dresdner Wasserstein was publicly predicting a major crash in the American stock-market for that same time-frame, publicly covering Dresdner Wasserstein’s (and other Germans’) retreat out of dollar based assets, when other forecasters saw little reason to move away from the dollar at that time. So far, one might say the German banks had specific motivation for seeing a collapse of the US bank challengers: 1. $23 Billion in banking revenues at risk to American competition; THE SEPTEMBER 11 COMMISSION REPORT Page 119 2. seething resentment due to U.S. attempts to destroy them after WWII and take unfair advantage of them in the 1970’s. 3. There is a third reason. At stake was –and remains – the discovery of hundreds of billions of dollars of stolen national treasuries held in the German/Swiss vaults. This discovery was imminent, based on U.S. investigations under way in the late 1990s. This premise will be developed in Sections 4 and 9. Motive, however, is not enough. One needs to be able to demonstrate that these “old men of Europe” had the means and connections to execute this deed. These old men that virtually rule the world banking environment needed to be able to reach deep into the Mossad, and finance the attack on the American equity banking establishment. Once the dark side of the Mossad was involved, its criminal elements used it’s pre-knowledge of the attacks to benefit from this knowledge by manipulating the stock market across thirty eight stocks. They used the Deutsche Bank subsidiary of AB Brown, and made investments in exchanges that were weak in control: Canada. (As a small historic note, Alex Brown Deutschbank is the result of a merger between the Deutschebank and Alex Brown Investments, long associated with the Harriman and Bush families across four generations.) 5.4 The Link between the Mossad and German Banking There is a common perception that the Mossad is an organization of extremely efficient and dedicated patriots of Israel. Most likely, most agents are just that. There is however, another side of the Mossad. Since the collapse of the Soviet Union, there has been a steady stream of ex-KGB agents and Russian Mafiya thugs into the Mossad. This has resulted in a unique relationship between the Mossad and former KGB intelligence groups. When the Cold War came to an end, and the Soviet Union started to collapse economically, the KGB did exactly what the Nazis did towards the end of WWII. They started stripping national and party assets and bank accounts, and investing the funds in foreign companies. At the same time, millions of Soviet citizens were allowed to immigrate to Israel, to the point where one in five Israelis is Russian or of Russian heritage. "Starting in December 1990, Vladimir Ivashko and Nikolai Kruchina, and senior officers of the KGB, organized a new department of the KGB which began transferring of a major part of Communist Party money to the bank accounts of dozens of foreign enterprises created by the KGB for laundering money. The classic example of this relationship is found in a company called Nordex, an international company based in Austria. Nordex is widely recognized as having been a front for post Cold War KGB money-laundering. " "A classified report from the German intelligence agency BND on Loutchansky, obtained by Time, charged that Nordex had been created as an espionage front "to earn hard currency for the KGB." The report continued, "Nordex subsidiaries are alleged to be defrauding Russian firms, i.e., the Russian state, of several millions in hard currency annually." [Time, July 8, 1996] In return for laundering money through Israel, Nordex (a company owned by Robert Maxwell, a widely recognized Mossad agent) provided cover for Israeli agents applying THE SEPTEMBER 11 COMMISSION REPORT Page 120 for access to Eastern Europe and Russia. This interplay between rogue agents of the KGB, Russian Mafiya and Israeli secret service soon resulted in a major corruption of the Israeli secret service. "By the time Netanyahu was running for Prime Minister in 1996, in the wake of the Rabin assassination, the Russian Mafiya factor had become so prominent, that some top Israeli law enforcement officials broke their code of silence and went public with their concerns. Moshe Shahal, the country's chief of internal security, warned that "Elements of the Russian Mafiya are effectively trying to control Israel. The gangsters are now trying to buy and influence politicians," he warned. Shahal and others warned of credible reports that the Russian Mafiya was prepared to spend between $1.5 and $4 billion to "secure political power," according to Robinson." [Sharon and His Mafiya Allies Plot Israel Election Theft, Jeffrey Steinberg, Executive Intelligence Review, January 10, 2003.] Using Nordex as the example, and knowing other such companies existed, the search started for a link between German banking and the Russian/Israeli underworld. Another such KGB money-laundering company in Austria and Bulgaria is reputed to be MG Corp. or Multi-Group. Just like in other countries (e.g. Nordex in Austria), Multigroup was involved in the scheme to loot the country after the breakup of the USSR. The scheme involved the highest levels of the Communist Party and the KGB/Mafiya with help from Westerners. This former Maxwell subsidiary came into the public light in 1996, when the President of MG (Iliya Pavlov), was assassinated the day after he testified in the trial of the murder of the Bulgarian Prime Minister, Andrei Lukanov. The BBC (3/8/2003) reported that: “Mr. Lukanov, who masterminded the downfall of Bulgaria's long-serving communist leader Todor Zhivkov in 1989, was found shot in front of his Sofia home in October 1996. At the time, Bulgarian media said Mr. Lukanov's death was a contract killing related to his business activities.” Pavlov – the President of MG Corp. - was ranked as the wealthiest person in Bulgaria and the eighth richest in Eastern Europe. Pavlov’s wife, Toni Chergelanova, was the daughter of Chergelanov, the chief of the Bulgarian Intelligence Service, according to the Nova Makedonija (11/2/1995). This connection identifies Multigroup’s links to the KGB and Mafiya, as well as intelligence organizations in Macedonia and Serbia. In looking at this revolving doorway for the Mossad into Eastern Europe, and KGB/Russian mafia into Israel, the Board of Directors and current ownership of Multi- Group is quite interesting. Allianz, (owner of Dresdner Bank) owns 10.1% of MG, Deutsche Bank owns 9.04%, and the Kuwait Investment Office owns 7.9%. On its board we find: • Dr. Diethart Breipohl, Icking, (until June 3, 2003) Former Member of the Management Board of Allianz AG, former CFO of Allianz, (and in the all-too-small world, probable cousin to Dr. Arthur Breipohl of Norman Oklahoma.) • Dr. Jürgen Krumnow, Königstein/Ts., Member of the Advisory Board of Deutsche BankAG • Bernhard Walter, Bad Homburg v.d.H., Former Spokesman of the Board of Managing Directors of Dresdner Bank AG THE SEPTEMBER 11 COMMISSION REPORT Page 121 • Board representatives from ThyssenKrupp and Siemens. (These are mentioned only because it is of interest to those who track the financial lineage of where the Nazi’s put their stolen assets at the end of the war. All of these were heavy recipients of Third Reich funding: Deutsche Bank, Dresdner, Allianz, Krupp, Siemens, and Thyssen. Deutsche Bank was founded by Georg von Siemens.) This interest in MG by such banking luminaries really places munitions and explosives in the ‘key competencies’ of German bankers. If Board Members are usually selected so they can bring the appropriate experience and expertise to the direction of the company, why would so many financial types be sitting on the board of a company whose primary holding (at the time) was Dynamit Nobel – defined in the company literature and press as a “specialty chemical company” – whose specialty was munitions and land-mines. This is not an unimportant factor. Directing a company whose product is highly desired by terrorists and war lords allows one to come into regular contact with warlords of various sorts who are willing to arrange just about anything to get the weapons that allow them to stay in power. Through its sales and distribution channels of independent distributors, the Board can set up nearly anyone it chooses to represent the product line, while claiming to maintain total lack of accountability for its sales. Deutsche Bank seems to have had a number of such arms merchants using its banking services. "Just 32 days before the attack on the World Trade Center and Pentagon, a Financial Times of Asia (FT) Wire-Business Line report linked Deutschebank to the United States Central Intelligence Agency (CIA), Pakistani and Afghani heroin smuggling, and money laundering of narcotics proceeds (8-10- 2001). Retired Pakistani intelligence chief Brig Imtiaz was jailed for eight years on July 31, 2001 for laundering heroin profits -- for covert actions -- via a CIA-linked drug smuggling cell, using Deutschebank and other financial entities and properties." [Tom Flocco and Michael C. Ruppert, Edited by Michael C. Ruppert, © Copyright 2001, From The Wilderness Publications] "On June 15, 2001, the New York Post, reported that experts said the most likely buyers (of weapons) connected to the former Deutschebank securities trader and the two Pakistanis were current U.S. ally Pakistan or Osama bin Laden." The German bankers had financial and emotional motive to attack the World Trade Center, and they had the connections and capability. At any time they could reach directly into any number of the organizations that used Russian/Israeli Mafiya or Muslim ‘muscle’:1) using their drug connections in Pakistan and Afghanistan; 2) using their Mossad connections; 3)using their Saudi family connections, including Bin Laden, or 4) using their old Iran-Contra connections- Secord, Armitage, Kimche and Khashoggi. The choice will lean towards the final group for five reasons. 1. First, many of the mercenaries hired by Richard Secord and David Kimche fit the travel profile of the suspected hijackers: Afghanistan, Azerbaijan, Chechnya, Bosnia, Uzbekistan and Dagestan. This was Secord’s and Kimche’s theatre of operations more so than Osama Bin Ladin’s. 2. Second, only the Iran-Contra team could provide a mix of Saudi, Israeli, and Muslim terrorists, with support by US officials, that matched the profile of the hijackers who participated in the attack on the WTC; 3. Third, Adnan Khashoggi is known to have funded the Huffman Flight School in Florida that 11 of the hijackers used to get visas, and funded the Al Qaeda THE SEPTEMBER 11 COMMISSION REPORT Page 122 mercenaries in Azerbaijan. Another Iran-Contra/Azerbaijan figure - Farhad Azima - is a partner with the US owner of Huffman Aviation, whose name is Wally Hilliard. Hilliard and Azima are both major owners of a small electronics company in California (Spatialight Inc). 4. Fourth, two of the hijackers who had been in the US since the early 1990s are associated with American Commonwealth University, (aka William Lyon University) in San Diego. This diploma mill was set up by General William Lyon (financier for the Swift Boat Veterans in the 2004 Presidential Campaign) largely as a method for applying for education visas to the US. A number of CIA agents are linked to this back door into the US. a. “Still, we are left with the question of why both Bush Jr. and Clinton would hold back disclosure of Saudi funding of terror. I got the first glimpse of an answer from Michael Springmann, who headed up the US State Department's visa bureau in Jeddah, Saudi Arabia, during the Reagan-Bush Sr. years. "In Saudi Arabia I was repeatedly ordered by high-level State Department officials to issue visas to unqualified applicants. These were, essentially, people who had no ties either to Saudi Arabia or to their own country. I complained bitterly at the time there." That was Springmann's mistake. He was one of those conscientious midlevel bureaucrats who did not realize that when he filed reports about rules violations he was jeopardizing the cover for a huge multicontinental intelligence operation aimed at the Soviets. Springmann assumed petty thievery: someone was taking bribes, selling visas; so he couldn't understand why his complaints about rulebreakers were "met with silence" at the Bureau of Diplomatic Security.” [Greg Palast Interview by Bruce David, Hustler, On-line] This doorway would only have been known to recruiters like Khashoggi, Armitage and Secord. Adnan Khashoggi (Genesis Aviation) is a business partner with retired General William Lyon (on the Board of Kellstrom Industries, Inc., an Israeli owned company) in a venture called Wings of Democracy, an attempt to penetrate the commercial Iraq air business. 5. Fifth and finally, the Iran-Contra team was and is the “A” team. These operatives have been proven and trustworthy over numerous scandals and illegal operations – never having been caught, and never having broken silence. They were the team that could handle “big ticket” ops, and had a vested interest in protecting the Bank Cartel as well. It is important to recall that it was the Israelis (via Kimche) who originally approached these same people with the plan for preventing President Jimmy Carter’s October Surprise, and illegally selling arms to the Iranians. George Bush Sr. recognized the opportunity as a chance to secure the Presidency for Reagan and Vice Presidency for himself. In this case, the Bush family would recognize the opportunity to use such an event to advance its previously illegal oil industry strategy. (Providing U.S. aid to Azerbaijan was illegal until after 9/11.) There is far more evidence implicating the original Iran-Contra group (which includes the lawmakers and administrators that let them go unpunished.) The scenario is summed up like this: two top German banks closley linked with two Swiss banks, working with four other companies who all benefited immensely from the Nazi looting of German government accounts (Allianz, Thyssen, Krupp and Siemens), THE SEPTEMBER 11 COMMISSION REPORT Page 123 have purchased major ownership positions of a company formerly owned by a Russian/Israeli Mossad agent (Robert Maxwell), managed by the son-in-law of the Bulgarian Secret Police, and invested in by the KGB and Russian Mafiya. (Now there is one hell of a company picnic!) This group uses its contacts to set up a false flag operation to destroy (murder) its key banking competitors: Merrill Lynch, Morgan Stanley and Goldman Sachs, Citibank and JP Morgan Chase. The Iran-Contra/Azerbaijan recruiters set up a rogue Mossad/false flag operation to attack the WTC, and monitor their recruits closely to ensure the success of the attack. These same rogue agents – barely distinguishable from the Russian Mafiya – capitalize on this knowledge in their own manner by shelling short 38 stocks on the stock market. "Between August 26 and September 11, 2001, a group of speculators, identified by the American Securities and Exchange Commission as Israeli citizens, sold “short” a list of 38 stocks that could reasonably be expected to fall in value as a result of the pending attacks. These speculators operated out of the Toronto, Canada and Frankfurt, Germany, stock exchanges and their profits were specifically stated to be “in the millions of dollars.” [SEC Secret Probe of Stock Dealings Before 9/11] There is a bit of a jump from “Israeli citizens” to “Russian Mafiya” that is made with the presented information. The actual clues which allow this assumption are the trade exchanges used for the suspicious trades. The Toronto Exchange is extremely well known for it’s listing of mining and mineral companies. At the end of 1996, there were about 1400 mining companies listed on Canadian stock exchanges. The Canadian financial services sector appears to have raised more equity capital for the mineral industry than was raised in Australia, the United States and South Africa combined. These companies are heavily traded by players in gold and diamonds – of which there are more than a few in Israel. These are companies that hone the skills of a speculator. The reality of the Israeli role in the minerals and mining market is that it is dominated by black marketers and Russian Mafiya. These are the folks that ‘trade’ arms for gold and diamonds. These are the distributors for companies such as MultiGroup’s Dynamit Nobel. People such as Shaptai Kalmonovitch or Yair Klein (with ten more identified in Section 11): "Russian-born Shaptai Kalmanovitch and his Israeli-based enterprise, the LIAT construction and Finance Company. While in Sierra Leone, Kalmanovitch brought in other money launderers, drug traffickers and arms dealers, all scrambling to gain access to diamonds. In 1986, Marat Balagula, considered the ‘Godfather’ of Russian mafia in Brooklyn, N.Y., found a safe haven in Sierra Leone and was known to be operating with Kalmanovitch. Balagula was considered one of the initiators of the Antwerp operations of the Russian Mafia. He and Kalmanovitch became involved briefly in the importation to Sierra Leone of gasoline, in a deal reportedly backed by a fugitive American businessman, Marc Rich, and guaranteed by the Luccheses, an old-time American crime family…. Kalmanovitch was reportedly expelled later from the South African ‘homeland’ of Bophutatswana and arrested in Israel, where he stood trial as a spy for the Soviet Union. He was released in 1993 and is currently thought to be living in the Baltic region. A more credible and better organized Israeli company appeared in Sierra Leone soon after Kalmanovitch's arrest. The N.R. SCIPA Group, owned by Nir Guaz (known as ‘The Skipper’), set up diamond buying offices in Freetown and Kenema." [The Heart of the Matter: Sierra Leone, Diamonds & Human Security, Ian Smillie, Lansana Gberie, Ralph Hazleton] "In January 1999, the West African ECOMOG force apprehended an Israeli named Yair Klein attempting to sell helicopter spare parts to the Freetown authorities just after the devastating attack by the RUF on the capital. Klein is a former Israeli military officer. He was (at the time of writing this THE SEPTEMBER 11 COMMISSION REPORT Page 124 report) facing trial in a Freetown court, accused of spying for the rebels, and supplying them with arms through Liberian networks directly linked to the Liberian President. Klein had been involved in the training of Taylor’s elite fighters and before that, through his company, Spearhead Inc., he worked in Colombia. He is still wanted by Colombian authorities for providing ‘instruction and training in terrorist activities’ to paramilitary and vigilante groups in Colombia’s Magdalena valley region between 1987 and 1989, according to the warrant issued by Colombian judicial authorities for his arrest in February 1994. The trainees later joined the Medellin drug cartel. Freetown authorities say that Klein provided them with information about the RUF’s drug and arms trade, implicating the Liberian president. Curiously, the same informant claimed that Israel has been quietly putting pressure on the authorities to have Klein, a former senior member of the Israeli reserve force, released.' [The Heart of the Matter: Sierre-Leone, Diamonds and Human Security, Ian Smillie, Lansana Gberie, Ralph Hazleton] Here is the perfect win-win scenario for everyone except the victims in the WTC and the citizens of the U.S. The German/Swiss financiers eliminate their competition. The Mossad whips up American public support for the Israeli counter-terrorist assault on Palestine, the Russian/Israeli Mafiya exploits the stock market, and a group of exploited Muslims get to die as martyrs. George Bush and his administration of oil industry executives ignore numerous warnings of the attack because they are expecting a hijacking they think they can both control and leverage as an excuse to further their own aims. These warnings come from the same intelligence groups whose darker side is populated with thugs and criminals. By not stopping the event – the U.S. oil oligarchs conveniently had an excuse to invade Afghanistan and secure their takeover the natural gas and pipeline construction contracts, where previously they had been frozen out of by the Taliban. "The BBC reported that Niaz Niak, a former Pakistan foreign secretary, was told by senior American officials at a meeting in Berlin in mid-July 2001 that 'military action against Afghanistan would go ahead by the middle of October'. Until July 2001 the US government saw the Taliban regime as a source of stability in Central Asia that would enable the construction of hydrocarbon pipelines from the oil and gas fields in Turkmenistan, Uzbekistan, Kazakhstan, through Afghanistan and Pakistan, to the Indian Ocean. But, confronted with the Taliban's refusal to accept US conditions, the US representatives told them 'either you accept our offer of a carpet of gold, or we bury you under a carpet of bombs' .... The 9/11 attacks allowed the US to press the 'go' button for a strategy in accordance with the PNAC agenda which it would otherwise have been politically impossible to implement. (It allowed the US to build and control two pipelines, one of which) would extend eastwards through Afghanistan and Pakistan and terminate near the Indian border. This would rescue Enron's beleaguered power plant at Dabhol on India's west coast, in which Enron had sunk $3bn investment and whose economic survival was dependent on access to cheap gas..."[The Guardian, September 6, 2003] "Niaz Naik, a former Pakistani Foreign Secretary, was told by senior American officials in mid-July that military action against Afghanistan would go ahead by the middle of October.... he said it was doubtful that Washington would drop its plan even if Bin Laden were to be surrendered immediately by the Taleban." ["US planned attack on Taliban," BBC Online, September 18, 2001] In addition to an excuse to invade Afghanistan, the attack on the WTC provided the “Pearl Harbor” catalyst that was envisioned by the tight-knit group of neo-conservative defense analysts (PNAC) as the necessary and sufficient condition to invade Iraq, and then the rest of the Middle East. This invasion was required for the ‘security’ of Israel. The explanation and hypotheses in this report addresses many of the strange information coincidences and contradictions that exist in the world as we know it: THE SEPTEMBER 11 COMMISSION REPORT Page 125 • How is it that Russian, German and Israeli intelligence organizations knew in advance of the attack on the WTC? • How is it that Russian and German financial advisors could forecast such a pinpointed time for a collapse of the dollar, which coincided with an attack on the WTC? • Why would the Israeli secret service – purportedly an ally of the United States – go to such extensive lengths to execute this attack on the WTC and US intelligence agents in Iraq? • How can so much evidence point to Osama Bin Laden and Al Qaeda without them being the responsible parties? • Why were large investment banks targets of the WTC conspiracy? • How is it that Nazi sympathizers and Israeli patriots could find themselves on the same side of a fight? • Why would the Bush Whitehouse cover-up the warnings it had received? • Why would the Bush Whitehouse attack Iraq, when Saddam had nothing to do with the international terrorists? This hypothetical explanation seems to fit together previously contradictory and inconsistent pieces of information known about the attack. This explanation however, is only the tip of the iceberg. The attack was meant to cover-up far more than moneylaundering and illegal gold trades. It was meant to accomplish far more than cripple American banking competition. It was meant to preserve for its owners the greatest treasure on earth – the stolen national treasuries of the world, and prevent investigators from auditing the bank records leading to that treasure. 5.5 Unplanned Consequences: The Invasion of Iraq Here is the ironic twist in the story. The invasion of Iraq was not part of the original plan of the banking executives that required this attack. This same group that planned and financed the WTC attack had a vested interest in Saddam Hussein staying in power, and keeping the US and Israel out of Iraq. As this report later unveils Adnan Khoshoggi’s involvement in the attack on the WTC, it should be noted that in a meeting arranged by him with Richard Perle (the Whitehouse ‘neocon’ advisor), Khashoggi tried to broker a deal that would prevent the attack on Iraq. The American government ‘nixed’ the deal. “According to both Khashoggi and Zuhair, there were two items on the agenda. The first was to give Zuhair a chance to propose a peaceful alternative to war with Iraq; Khashoggi said that he and Perle knew that such an alternative was far-fetched, but Zuhair had recently returned from a visit to Baghdad, and was eager to talk about it…. Perle, in a series of telephone interviews, acknowledged that he had met with two Saudis at the lunch in Marseilles, but he did not divulge their identities. (At that time, I still didn't know who they were.) "There were two Saudis there," he said. "But there was no discussion of Trireme. It was never mentioned and never discussed." He firmly stated, "The lunch was not about money. It just would never have occurred to me to discuss investments, given the circumstances." Perle added that one of the Saudis had information that Saddam was ready to surrender. "His message was a plea to negotiate THE SEPTEMBER 11 COMMISSION REPORT Page 126 with Saddam." [Why Was Richard Perle Meeting With Adnan Khashoggi? Seymour M. Hersh, The New Yorker, March 11, 2003] The financial organization behind Total Elf Fina – the major oil company representing European oil interests in Iraq – is inextricably linked to the same old men of Europe than requested the attack on the WTC, and the Russian/Israeli Mafiya that helped execute it. The group that started the series of events that precipitated the Invasion of Iraq wants Iraq for its own. The Mossad wants to keep other intelligence organizations out of its sphere of influence. Hence, it executes American agents. The bankers – whose fortunes are heavily linked to the Euro – want the Iraq oil revenues to use Euros as the reserve currency rather than the dollar. The Russian Mafiya, who has a significant ownership in the Russian oil industry, had the balance of the oil contracts being offered by Saddam that were not taken up by the French Total Elf Fina interests. The Bush White House needed to invade Iraq, not so much for the oil – but to prevent the further erosion of the value of the dollar – which was heightened by the attack on the WTC, the American banking system, and the American economy. This attack was discussed in the very first National Security Agency meeting held by President Bush on January 31, 2001, and planned long before the attack on the WTC, the attack on Afghanistan, and the warnings from foreign intelligence. The following memo has been released from White House archives, and shows WhiteHouse planning in regards to Iraq starting as early as January 2001. (As a side note, when inspecting the document it is an amazing point of interest that the NSA was using a briefing from the Deutschebank to help create the Bush administration policy for Iraq.) THE SEPTEMBER 11 COMMISSION REPORT Page 127 “I got the document here, on the website about Ron Suskind's book about Paul O'Neill, The Price of Loyalty. It is the agenda for President Bush's first National Security Council meeting. The agenda is stamped "January 31, 2001." That was less than two weeks after the inauguration. The purpose of the meeting was "To review the current state-of-play (including a CIA briefing on Iraq) and to examine policy questions on how to proceed." The third item on the agenda: "Tab C: Executive Summary: Political-Military Plan for Post-Saddam Iraq Crisis." This indicates that the Bush administration thought that planning for Post-Saddam Iraq was the most important security issue they faced. Why else would it be the topic at the very first NSC meeting? It would be a matter of interest to see what conclusions they reached "on how to proceed," but that remains secret information.” [Question: What is this, and why is it important? trots.blogspot.com, Sunday, May 29, 2005] Morevover, the attack on Iraq was part of a larger strategy, as later related by four star General Wesley Clark in his 2006 book, Winning Modern Wars: "As I went back through the Pentagon in November 2001, one of the senior military staff officers had time for a chat. Yes, we were still on track for going against Iraq, he said. But there was more. This was being discussed as part of a five-year campaign plan, he said, and there were a total of seven countries, beginning with Iraq, then Syria, Lebanon, Libya, Iran, Somalia, and Sudan." [The Secrets Clark Kept: What the General Never Told Us About the Bush Plan for Serial War, Sydney H. Schanberg, The Village Voice, September 29, 2003] Saddam Hussein threatened to break the US stranglehold on the oil market, which required US Dollars as the reserve currency for trading oil. If he had been successful, the THE SEPTEMBER 11 COMMISSION REPORT Page 128 value of the dollar would have dropped precipitously. Bush had to prevent that, and create a managed decline. Whether deliberate or not, by invading Iraq, Bush parried the financial attack on the US economy created by the attack on the World Trade Center. This may have been the issue that put George Bush in alignment with the PNAC, whereas he had not been earlier. It is fair to conclude that just as the Bush ‘machine’ was used by the German Bank Cartel in their attack on America, so was the German plan turned against themselves, when the attack was used to deny them the benefits of their investments in Iraq. There is testimony and documentation that Bush planned the attack on Iraq before September 11. There is evidence he planned the attack on Afghanistan before September 11. The Bush administration avoided opportunities in both instances which would have made the attacks unnecessary. In both instances, he used the attack on the World Trade Center as an excuse for attacking countries he planned to invade before the attack on the World Trade Center. He was advised of the plan to attack the World Trade Center by the intelligence agencies of foreign governments, yet he did nothing. In fact, some would argue that his government took actions that made it difficult to respond to an aerial attack. Who “used” who in this conspiracy is debatable? Did the Germans use Bush, or vice versa? Did the Israelis use both? Most certainly. THE SEPTEMBER 11 COMMISSION REPORT Page 129 6 Destruction of the World Trade Center Since September 11, 2001, there has been an undercurrent of testimony that the collapse of the WTC Towers was preceded by a series of explosions inside the towers, which appeared to those fleeing as totally unrelated to the holocaust created on the upper floors by the jet airliners. To a very large degree, those statements have been “sealed” by the FBI along with statements by the NY Fire Department and rescue workers. That information will never see the light of day for the next twenty years. There are however, ten sets of publicly available information which strongly suggest other explosions occurred in conjunction with the airline attacks on the WTC: 1 Public knowledge of numerous eyewitness statements that there were multiple explosions. No one ever expected these statements to be sealed and kept off the record, but everyone knows multiple statements were made. Some witnesses have gone public: “A second WTC maintenance worker has now come forward with eye-witness testimony that a massive explosion erupted in the lower levels of the north tower at approximately the same time the jetliner struck the tower’s top floors. Jose Sanchez, 45, of New Jersey in a never-released tape recorded statement made in early 2002 to William Rodriguez, the first WTC maintenance man to claim a bomb exploded in the north tower basement, said he heard what sounded like a “huge bomb,” causing lights to flicker on and off, while he worked in a small sub-level 4 workshop.” [2nd Janitor Comes Forward With Testimony About Bombs In Towers, Greg Szymanski, July 12, 2005, www.politicalsoundoff.com] “Louie Cacchioli, 51, told People Weekly on Sept. 24: "I was taking firefighters up in the elevator to the 24th floor to get in position to evacuate workers. On the last trip up a bomb went off. We think there were bombs set in the building." Auxiliary Lieutenant Fireman and former Auxiliary Police Officer, Paul Isaac Jr. “many other firemen know there were bombs in the buildings, but they’re afraid for their jobs to admit it because the ‘higher-ups’ forbid discussion of this fact.” Paul further elaborated that former CIA director Robert Woolsey, as the Fire Department’s Anti-terrorism Consultant, is sending a gag order down the ranks. “There were definitely bombs in those buildings.” [“Bombs in the Building: World Trade Center ‘Conspiracy Theory’ is a Conspiracy Fact,” Randy Lavello, PrisonPlanet.com] “Jim Marrs, an award-winning journalist and author on the New York Times bestseller list, relays these words from Ross Milanytch, who stared in horror from the 22nd floor of a building near the WTC: “I saw small explosions on each floor.” (Source: The War on Freedom: The 9/11 Conspiracies) Likewise, Teresa Veliz, a facilities manager who fled from the 47th floor of the North Tower, described the scene as she made it down to street level: “There were explosions going off everywhere. I was convinced that there were bombs planted all over the place and someone was sitting at a control panel pushing detonator buttons.” (Source: September 11: An Oral History by Dean E. Murphy – Doubleday Books, 2002) Phillip Morelli, a construction worker, told reporters at a New York television station (NY1 News) that on the morning of 9-11 when the North Tower was struck, he was thrust to the ground by two explosions in the fourth sub-basement. Somewhat later, another explosion (which made the walls explode) once again THE SEPTEMBER 11 COMMISSION REPORT Page 130 hurled him to the ground. Morelli then exited that building and went inside the South Tower’s subbasement, where once again he felt the same type of underground explosions. “Chief Engineer magazine also ran an article in their We Will Never Forget commemorative issue on those who were eyewitnesses to the 9-11 terrorist attacks. One of these men was Stationary Engineer Mike Pecoraro, who worked in the WTCs second sub-basement. After hearing some loud explosions, they ventured to a machine shop and found, much to their amazement, “There was nothing there but rubble. We’re talking about a 50-ton hydraulic press – gone!” Pecoraro then went on to say that “he was convinced a bomb had gone off in the building.” [Bombs in the World Trade Center, Victor Thorn, Copyright © 2005, Newsday, Inc.] 2. The reference to the possibility of planting explosives in the building should draw attention to an internet posting by an IT worker from that Tower: "On the weekend of 9/8, 9/9 there was a 'power down' condition in WTC tower 2, the south tower. This power down condition meant there was no electrical supply for approx 36 hrs from floor 50 up. I am aware of this situation since I work in IT and had to work with many others that weekend to ensure that all systems were cleanly shutdown beforehand ... and then brought back up afterwards. The reason given by the WTC for the power down was that cabling in the tower was being upgraded. "Of course without power there were no security cameras, no security locks on doors and many, many 'engineers' coming in and out of the tower. I was at home on the morning of 9/11 on the shore of Jersey City, right opposite the Towers, and watching events unfold I was convinced immediately that something was happening related to the weekend work."[San Francisco Indymedia, Allen Aslan Heart, April 23, 2004 © 2004] In a similar vein, other suspicious work on the WTC was reported after the fact: “A photo ID pass for Sept. 5 found on one of the men charged with fraudulently obtaining a Tennessee driver's license from a Memphis woman gave him access to the six underground levels of the One World Center building. But which tenant hired Sakher 'Rocky' Hammad, 24, to work on its sprinklers is lost, said Port Authority of New York and New Jersey spokesman Alan Hicks on Friday. Hammad told federal authorities that he was working on the sprinklers six days before the twin towers were brought down by terrorists, court testimony revealed this week. But Hicks said the Port Authority, which owned the building, did its own sprinkler work, and that any other work involving sprinklers would have been arranged by an individual tenant. "We don't know (which one) because all our records were destroyed in the World Trade Center, as were some of the people who know that," Hicks said. [License Suspect Had WTC Repair Pass, But Port Authority Did its Own Work, GoMemphis, Bartholomew Sullivan, February 16, 2002] The September 5th date is important, because that is the day after the WTC bombsniffing dogs were removed from service, without reason. "The World Trade Center was destroyed just days after a heightened security alert was lifted at the landmark 110-story towers, security personnel said yesterday. Daria Coard, 37, a guard at Tower One, said the security detail had been working 12-hour shifts for the past two weeks because of numerous phone threats. But on Thursday, (Sept 4) bomb-sniffing dogs were abruptly removed. "Today was the first day there was not the extra security," Coard said. "We were protecting below. We had the ground covered. We didn't figure they would do it with planes. There is no way anyone could have stopped that.” [Heightened Security Alert Had Just Been Lifted, Curtis L. Taylor and Sean Gardiner, September 12, 2001] Also reported in the world of coincidences, the woman (Katherine Smith) who provided the false ID to Rocky Hammad was killed in a bizarre auto accident the day before she THE SEPTEMBER 11 COMMISSION REPORT Page 131 was to testify in court about her role in the fake IDs. A suicide note was found, but the FBI determined that gasoline was poured on her clothes before she died. [AP, 2/13/2002, Reuters, 2/15/2002] In most news reports, this was left to the world of intriguing coincidence. Once again, the general reports have not emphasized certain pieces of information because they are inconvenient to the common perspective. Further investigation into the facts indicates that Katherine Smith was also the witness of record into a trial of individuals providing false identification to two of the hijackers. She was killed before being able to testify in this trial as well. The middle-man between Rocky Hammad and Katherine Smith who procured the false identification was Khaled Odtllah. Odtallah had come to the US from Jerusalem, Israel where his wife, son and ten siblings still live. Katherine Smith was murdered in his car. While Rocky Hammad is generally reported to be from Jordan, his mother lives in Gaza, Israel and his father in New York City, under a name other than Hammad. Hammad’s employment letter which covered his access to the WTC was from Denko Mechanical, Ltd. This company is actually a small shop run by Sergie Dimitry Davidenko, who has disappeared since 9/11. Research on his name indicates he is most likely a proficient ham radio operator, Ukrainian, and an ‘applied mathematician’ – whose work is referenced by at least two recent articles on missile test systems. Later on, when evidence is presented that the planes which flew into the WTC towers were guided by radio guidance systems, the involvement and disappearance of man with these skills becomes increasingly suspect. The link between the work on the sprinkler system and the attack on the WTC becomes even more compelling when one realizes that a major component of that system – a 5,000 gallon water tank – was located on one of the floors of the South Tower struck by the attacking jet. The appropriate suggestion is that Rocky Hammad was given access to plant signal transmitters in the utility room that held the water tanks, and the jets were guided into their targets by this signal. (This information is elaborated in Section 6.6.). Another intriguing hypothetical possibility is that Hammad – if working on the sprinkler system in the basement – may have been creating a “poor man’s nuclear bomb,” in which a liquid combustionable agent (such as 50,000 gallons of fuel oil) is vaporized (with a sprinkler system) and ignited. This might possibly explain the disappearance of that 50 ton hydraulic press, or a nuclear like explosion in the basement of the towers. Similary, there are other references to the possibilities of explosives being planted. The recovery of a MSNBC newscast from the morning of September 11, 2001, which was either totally overlooked by the investigating commission, or purposely buried (until recent discovery). “MSNBC news anchor Rick Sanchez on the morning of September 11th 2001…’Police have found what they believe to be a suspicious device and they fear that it may lead to another explosion….I spoke with some police officials moments ago, Chris, and they told me they have reason to believe that one of the explosion at the (WTC) besides the ones made with the planes, may have been caused by a van that was parked on the building that may have had an explosive device in it.” [Police Found Suspected Bombs In WTC On 9/11, Paul Joseph Watson/Prison Planet, December 5, 2005] THE SEPTEMBER 11 COMMISSION REPORT Page 132 3 The investigating government agencies have difficulty in explaining how the towers collapsed. The WTC towers were designed to withstand a direct hit from a Boeing airliner, as testified to by the architect. There is at least one demolition expert who stated in the press that the collapse of the buildings looked controlled, but later mysteriously and without explanation recanted that opinion after being visited by the FBI. Even the FEMA report suggests the only possibility it could find for the ignition of the huge diesel fuel tank under Building 7 was statistically improbable, if not impossible. 4 An official letter from Underwriter Laboratories to the National Institute of Standards and Technology, saying the government’s official stance on why the buildings collapsed has no merit. “We know that the steel components were certified to ASTM E119. The time temperature curves for this standard require the samples to be exposed to temperatures around 2000F for several hours. And as we all agree, the steel applied met those specifications. Additionally, I think we can all agree that even un-fireproofed steel will not melt until reaching red-hot temperatures of nearly 3000F (2). Why Dr. Brown would imply that 2000F would melt the high-grade steel used in those buildings makes no sense at all. …Your comments suggest that the steel was probably exposed to temperatures of only about 500F (250C), which is what one might expect from a thermodynamic analysis of the situation. However the summary of the new NIST report seems to ignore your findings, as it suggests that these low temperatures caused exposed bits of the building’s steel core to "soften and buckle." (5) Additionally this summary states that the perimeter columns softened, yet your findings make clear that "most perimeter panels (157 of 160) saw no temperature above 250C."…. This story just does not add up.” [The collapse of the WTC, Kevin Ryan, Underwriters Laboratories, November 11, 2004] The issue of the jet fuel causing the steel infrastructure to melt is a hypothesis offered by the government that does not appear to have merit. As a secondary line of evidence on this issue, please refer to the following: “One worker who had tunneled into the debris said he had found the remains of people strapped into what seemed to be airplane seats. Another, in one of the most searing discoveries among the ruins, found the body of a flight attendant, her hands bound.” [The Trade Center, Heart-Rending Discoveries as Digging Continues in Lower Manhattan, Susan Sachs, The New York Times September 15, 2001] It is difficult to imagine that an explosion creating temperatures hotter than a blast furnace would leave these types of remains. 5 Seismographic recording of the incidents, which suggests there were at least two subsequent explosions, and possibly three, after the planes hit the towers. At 9:06, three minutes after the second attack, there is a reading which exceeds the norm and equals the magnitude of the first two impacts. There are also readings which suggest smaller explosions consistent with the timing reported for the devastation on Floor 22 of the North Tower, approximately 9:07. Prior to the collapse of Towers 1 and 2 and Building 7, there are very sizeable explosions, accompanied by eye-witness testimony, of explosions in the basements of those towers; THE SEPTEMBER 11 COMMISSION REPORT Page 133 6 Analysis of videotape of the collapse of the South Tower, which shows clouds of dust and smoke blowing out from floors in a nonsequential manner, which would be inconsistent with a theory of floors collapsing sequentially. “The evidence showing that the World Trade Center towers were demolished is compelling. Here are a few photos of explosives detonating during the collapse of the South Tower. Each frame is numbered by its position in the video. The video was shot at 30 frames per second. So an eight frame interval covers about one quarter of a second. Frame 147 shows a row of explosives detonating right across the east face at the 79th floor. Frame 203 shows a row of explosives detonating right across the east face at the 75th floor. It has been claimed that the explosions of dust that span the east face of the tower, were caused by air being forced from the windows as each of the floors above collapsed. This explanation is obviously incorrect. If it was correct, such lines of dust would have been expelled from the windows of each floor in succession. That is, we would have seen such lines of dust expelled from floors 79, 78, 77, 76 and 75 in succession, but what we observe is an explosion of dust at floor 79, no new clouds of dust for a few floors, then another explosion of dust at floor 75. “It is worth noting that the second line of (much larger) explosions occur at the center of a section of mechanical floors (the three mechanical floors appear as a slightly darker gray band across the building and are important for the strength they impart to the building). It is possible that the mechanical floors 76 and 75 (and also 74) have no windows, but of course, if this is so, it raises many more questions than it answers. In particular, if the mechanical floors have no windows, then the explosions of dust from floor 75 cannot be caused by air being forced from them as the floors above collapsed. There should have been dust from the windows on floors 78, 77, 76, 74, 73 etc. ……. it would be feasible to gain covert access to the mechanical floors of the WTC to plant demolition charges. Even the 79th floor could be reached via the elevator shafts at the core of the building. Since the World Trade Center is a series of floors suspended from the core and stabilized by the external columns, it should only be necessary to rig the demolition charges where the floor supports connect to the core columns. The dust due to the visible explosions is a whitish grey. The dust from the demolition of the upper section (which is disintegrating as it falls) is dark grey. One wonders what caused this difference." [http://www.the7thfire.com/Politics%20and%20History/DemolitionWTC.htm] 7 Video tape evidence recorded on-site at the WTC by a rescuing fireman: “When the above-noted fire crew and cameraman Jules Naudet arrived at WTC's tower one along with other fire crews and entered the building's ground floor lobby, they were to a one completely puzzled -- actually astonished -- to find SIGNIFICANT and widespread damage to the entire lobby area; although NOT of a deep, structural kind. Moreover, NOWHERE was there ANY indication whatsoever of an incendiary-type explosion or ANY kind of fire in this area. Yet the incredible number of blown-out windows and other extensive though rather superficial damage throughout the lobby area was profoundly perplexing to these EXPERIENCED professional firefighters in relation to the impact of the plane eighty stories above. As one put it: "The lobby looked like the plane hit the lobby!" But it DIDN'T: it hit EIGHTY STORIES ABOVE. There is NO WAY the impact of the jet caused such widespread damage eighty stories below. [www.apfn.org] 8 The pattern of casualties in the Towers reinforces the theory that there were explosives set at lower levels of the building, especially in the vicinity of floors 23 and 24 of the North Tower (Tower 1). In the following charts, the casualties are summarized by company, and then by the building and floor those companies were THE SEPTEMBER 11 COMMISSION REPORT Page 134 associated with. The remarkable aspect of those tables is that in addition to the widespread devastation of the top floors one would expect, one also unexpectedly finds significant clusters of casualties in the vicinity of the 23rd and 24th floor of Tower 1, and the 10th – 12th floors in Tower 2. These two clusters, as well casualties from two companies in the basement are consistent with reports of explosions from within lower levels of the Towers, and from the basement. World Trade Center: Deaths by Building Total World Trade Center Deaths Tower 1 1275 Tower 2 490 1 Liberty Plaza 11 2 World Financial 4 3 World Financial 6 Building 4 2 Building 5 3 Building7 7 Total WTC Employees 1798 Non Employees 731 2529 Other Buildings: Deaths by Company and Floor Company Reported Deaths Floor Building Genuity 3 20 1 Liberty Plaza Zurich American Insurance 4 21,28,53 1 Liberty Plaza Compaq 4 27 1 Liberty Plaza Merrill Lynch 3 Unknown 2 World Financial Nomura Research Institute Ltd. 1 Unknown 2 World Financial American Express 5 1,2,22,23,30-51 3 World Financial Marriott World Trade Center Hotel 1 3 World Financial New York State Supreme Court 2 8 Bldg 5 Deutsche Bank 2 4,5,6 Bldg 4 Credit SuisseFirst Boston 1 7,8,9 Bldg 5 Federal Home Loan Mortgage Corp. 1 22 Bldg 7 Internal Revenue Service 1 24,25 Bldg 7 American Express 5 7,8,13 Bldg 7 THE SEPTEMBER 11 COMMISSION REPORT Page 135 THE SEPTEMBER 11 COMMISSION REPORT Page 136 Tower One: Deaths by Company/Floor Company Reported Deaths Floor Building CBS 2 110 Tower 1 Bronx Builders 5 107 Tower 1 Risk Waters Group 17 106 Tower 1 Windows on the World 72 106 Tower 1 Cantor Fitzgerald 661 101-105 Tower 1 Nishi-Nippon Bank 2 102 Tower 1 Kidder Peabody-Paine Webber 2 101 Tower 1 Marsh & McLennan Cos. Inc. 281 93-100 Tower 1 Fred Alger Management 35 93 Tower 1 Carr Futures 69 92 Tower 1 Metropolitan Life Insurance Co. 2 89 Tower 1 May Davis Group 1 87 Tower 1 Julien J. Studley Inc. 2 86 Tower 1 LG Insurance Co. 1 84 Tower 1 General Telecom 13 83 Tower 1 Bank of America 3 81,9-11 Tower 1 First Liberty Investment Group 1 79 Tower 1 International Office Centers 2 79 Tower 1 Alliance Consulting 7 77 Tower 1 World Trade Center 2 77 Tower 1 subtotal for floors 77-110 1180 Sidley Austin Brown & Wood 1 54, 56-59 Tower 1 Hill International 1 52 Tower 1 Rohde & Liesenfeld 2 32 Tower 1 Empire Health 11 17,19,20,23,24, 27-31 Tower 1 Lehman Brothers 1 2,4-21,24- 26,29* Tower 1 Port Authority of NY and NJ 76 3,14,19,24,28,3 1 Tower 1 Garban Intercapital 1 25,26 Tower 1 Instinet (Reuters) 4 13,14 Tower 1 subtotal for floors 32 and below 95 Tower 1 Total 1275 THE SEPTEMBER 11 COMMISSION REPORT Page 137 Tower Two: Deaths By Company/Floor Company Reported Deaths Floor Building Sandler O'Neill & Partners 67 104 Tower 2 Aon Corp. 170 92,99,100 Tower 2 Fiduciary Trust International 78 90,94-97 Tower 2 Regus 5 93 Tower 2 Washington Group International 13 22, 91st Tower2 New York State Department of Taxation and Finance 39 86,87 Tower 2 Harris Beach LLP 5 85 Tower 2 Euro Brokers Inc. 60 12, 84 Tower 2 Chuo Mitsui Trust and Banking Co. 2 83 Tower 2 IQ Financial Systems 3 83 Tower 2 Fuji Bank 15 79-82 Tower 2 First Commercial Bank 1 78 Tower 2 Baseline Financial Services 4 77-78 Tower 2 Morgan Stanley 9 43-46,56,59-74 Tower 2 Seabury & Smith Co. 1 49 Tower 2 Lee Hecht Harrison 1 21 Tower 2 The Westfield Group 1 17 Tower 2 Verizon 2 LL,9-12 Tower 2 Deloitte Consulting 1 10 Tower 2 Summit Security Services 11 B2 Tower 2 Xerox Corp. 2 BSMT Tower 2 Tower 2 Total 490 The above charts were calculated from the CNN final list of causalities. The chart on the following page, from USAToday, seems to be a gross miscalculation, but is presented as the only other attempt to look at casualties in this manner. THE SEPTEMBER 11 COMMISSION REPORT Page 138 USA Today List of Deaths by Floor North- Tower 1 Floors South- Tower 2 203 106-110 30 744 101-105 148 Plane struck 93rd to 192 96-100 92 98th 221 92-95 102 6 86-90 105 20 81-85 92 9 76-80 26 Plane struck 78th to 84th 2 71-75 1 5 66-70 1 6 61-65 1 1 56-60 1 0 51-55 0 4 46-50 0 0 41-45 0 3 36-40 0 4 31-35 0 8 26-30 0 0 21-25 0 1 16-20 0 0 11-15 0 2 6-10 0 1 1-5 0 1432 599 [http://www.usatoday.com/news/attack/2001/12/19/usatcov-wtcsurvival.htm Special Report: World Trade Center , Interactive graphic: For thousands, a sealed fate] http://www.capnhq.gov/nhq/capnews/02-01/feats.htm 9 Testimony from a small rescue team, (with a great deal of corroborating testimony) that ventured onto the 22nd floor of Tower 1 prior to the collapse of the tower. “The 48 Hours anchor was interviewing the Head of Security of the WTC about the evacuation who had received a call, after the South tower was down, from the Port Authority's Command Center on the 22nd floor asking for rescue. The Head of Security himself traveled to that floor in the company of a NY Fireman where they found the offices devastated to the point where they had to "tunnel through debris" to "dig out" the two or three Port Authority workers who were trapped there. All of this happened 73 floors below crash bombing impact.” [Dick Eastman, 223 S. 64th Ave, Yakima, Washington] It is with the realization that explosives were planted in the Towers, and that they were targeted at certain floors, that the deeper motives for this crime become apparent. THE SEPTEMBER 11 COMMISSION REPORT Page 139 6.1 The Link between the WTC, Illegal Gold and Money Laundering The first nine pieces of information only lend credence to the tenth data point, which is where the interest needs to focus. The testimony comes from the Security Manager - George Tabeek - who was accompanied by a fireman -Andy Desperito - during a reported rescue effort on the 22nd floor. The two had reported via radio a massive amount of debris they had to crawl over and through during the course of their search. The conclusion of this effort was that the debris came from above the 22nd floor, i.e., the 24th and 23rd floors. There is significant corroborating testimony for this. There is additional information which suggests that these floors were inhabited by the FBI, and used to store their records regarding the investigations into an alleged, international gold price-fixing scheme and international drug money-laundering. Two witnesses document the presence of FBI agents in the vicinity of the alleged explosion. The co-location of these records should not be viewed as co-incidental. This report later argues that the alleged gold price-fixing scheme was in fact a gold laundering scheme. “The contention that the destruction of the WTC was used to destroy evidence contained on the 23rd and 24th floors of the North Tower is now incontrovertible. …Here is evidence supplied by the Head of Security of the World Trade Center on network television indicating that the floors used by the FBI (22nd, 23rd and 24th floors) of the North Tower -- 70 floors below the crash-bombing impact -- had been devastated and reduced to debris. This same Head of Security himself dug through the debris to save persons who were trapped there. It was on these floors that the evidence and investigation briefs on two highly important cases were being stored: 1) The case against Mobil Oil and James Giffen on illegal oil swaps between Iran and Kazakhstan (at that time before a New York grand jury as described in great detail by Seymour Hersh in the July 9 New Yorker magazine); 2) The evidence in the investigation of Gold Price Fixing which stemmed from charges brought against Alan Greenspan, Morgan & Company and Goldman Sachs At noon I received a phone call from New England from Steve. He was reviewing recorded footage of coverage of the destruction of the WTC on NBC's program "48 Hours." Steve has reviewed the footage many times and taken detailed notes. I took notes at my computer as he spoke. After the south tower collapsed, men went up to the 22nd floor of the WTC and "dug" someone out of the "rubble" he found there. It is known that these floors contained the New York FBI offices. Peter Jennings actually did a two-day network news story on the effects of the destroyed evidence and files on American financial crime investigations around the world. The 48 Hours anchor was interviewing the Head of Security of the WTC about the evacuation. He had received a call, after the South Tower was down, from the Port Authority's Command Center on the 22nd floor asking for rescue. The Head of Security himself traveled to that floor in the company of a NY Fireman where they found the offices devastated to the point that they had to "tunnel through debris" to "dig out" the two or three Port Authority workers who were trapped there. All of this happened 73 floors below crashbombing impact.” [WTC Attack Destroyed Criminal Evidence , Dick Eastman, http://www.conspiracyplanet.com, 10/26/2001] Eastman’s report is substantiated by other reports from CBS News and an individual chronicler of events. These reports suggest that while one drama unfolded throughout the WTC conplex, another drama was unfolding on the 22nd Floor of the North Tower. "... George Tabeek, who was the Trade Center's security manager... got a call that three Port Authority workers were trapped in a command center on the 22nd floor. He informed a fire battalion chief that he was going up to rescue them. The chief assigned a group of firefighters, led by Lt. Andy Desperito. The men walked up to the 22nd floor. Tabeek didn’t know that a second jet had just struck Tower 2. When they reached the 22d floor of Tower 1, Desperito and his men tunneled through the debris and THE SEPTEMBER 11 COMMISSION REPORT Page 140 opened up a path for those trapped inside. ..."[http://www.cbsnews.com/now/story/0,1597,315156- 412,00.shtml ] "...we hit a major bottleneck as we got close to the 24th. In fact, we came to a total standstill. I could see that the holdup was due to the fact that people from the 24th were trying to make their escape into the stairwell too. White smoke seeped in slowly through the open door, and it was getting harder to breathe in there by the minute. I looked around at the pure concrete surrounding us. God, we've got to get the hell out of here... if this place caves, we're in big trouble. I was counting the minutes. When we finally got to the door at the 24th, two women were holding the door open and screaming as they looked down the hall. Morbid curiosity got the best of me. I peeked my head through the door and saw that ceiling had caved in from the above floors. It looked like a tornado had come through the place. [http://groups.yahoo.com/group/PASCDiscuss/message/7,"From: [email protected], "Date: Mon Sep 17, 2001 5:25 pm , "Subject: Personal Account] Moreover, it was reported that there were two FBI agents in that area and on Floor 22 of the North Tower until the end. This reinforces the argument there was a “secreted” FBI office in that vicinity. "An FBI agent told Mr. Cho his job was done that he too needed to escape. Pumping with adrenaline, Mr. Cho ignored the warning. Instead, he helped the agent clear floors. Then, at 9.50am, the south tower collapsed, taking thousands with it. When the FBI agent received a call saying their tower (North) would soon also fall, Mr. Cho joined the mad rush down the final 20 flights.... [http://special.scmp.com/aua/ZZZQTXCVJRC.html] "Sometime around 9:30 I noticed the pedestrian traffic slowing down and decided it was time to get to the SCC. I managed to climb the 22 flights of stairs with only two short breaks and arrived at the 22nd floor about 9:45. I thought that was pretty good for a 67-year-old "geezer." A few fire fighters were there to challenge my presence, and then helped me move more of the debris away from the door and assist me in getting to the sally port without falling through the now-open elevator shaft. Evidently, this wall had exploded into the corridor and was the stuff that had blocked the staff from exiting the SCC. When I got into the SCC, I found several of my co-workers, including George Tabeek (manager of security operations), Tom Comerford (information services project manager - system), Fire Lt. Andy Desperito (who later died when the North Tower collapsed), an unidentified FBI agent and my SCC staff. We all conferred on the status of the SCC, the two towers, and the various security and building management systems." [http://www.capnhq.gov/nhq/capnews/02-01/feats.htm] The pattern of increased death in the vicinity also reinforces Eastman’s contention that area was “targeted.” In the vicinity of the blast was Empire Blue Cross/Blue Shield, a company that lost eleven people: nine employees and two consultants. They have no explanation for the deaths. “At Empire Blue Cross Blue Shield, nine employees and two consultants died. Some deaths are understood: One man, for example, stayed on the 27th floor with a disabled friend; both died. Other deaths remain a mystery. "We suspect some were in elevators" when the plane hit, vice president Deborah Bohren said. "But we don't really know." [World Trade Center Locked Stairwells/Evacuation Problems, Accumulating Comments on…. (c) 2001, Mike Barkley] Similarly, Summit Security Services, Inc., reported to be headquartered in the basement of the South Tower also was reported to have an office on the 22nd floor of the North Tower, with a number of employees working in that command center rather than the basement. They lost 11 employees in the blast. [Nico Haupt on WTC "Security Connections".2004, 9/11research in NYC, THE SEPTEMBER 11 COMMISSION REPORT Page 141 http://sync.democraticunderground.com/discuss/duboard.php?az=view_all&address=169 x2228] Whatever happened on the 22nd, 23rd and 24th floor is clearly a mystery. At one level, there is confirmed and inexplicable death and extraordinary destruction. At another level, we find deception and inconsistency. There are at least three mysteries: 1. What happened on the 22nd Floor Command Center? As the WTC drama unfolded, CBS was reporting a “rescue mission” was happening on the 22nd floor of the North Tower. In a related Internet journal, a firefighter’s interview suggests there might not have been the rescue previously described by CBS news: “So we started up the stairs. We’d go up six stories and then we’d rest, our third rest was gonna be on the 22nd floor, we get up to the 22nd floor, our lieutenants had heard that there was some sort of command center on that floor and they wanted to go see what was going on and what we were gonna do when we got up a little higher or if they even had a destination for us. But we were told in the lobby, get up as high as you can. So I guess they were gonna play it by ear and see what happened you know as we got up, as things progressed. At that time the two officers went away to try to talk to somebody at the command station where at the end of the hall there was a partial collapse that came out of the elevator shaft, so they had to climb through some rubble to get to where that command center was.” [Interviews and introduction, Fire Department of New York Firehouse 16-7. 234 East 29th Street, Manhattan. Edward Helmore, September 11, 2001] The revelation which suggests a rescue was not required is that two officers were not so much on a rescue as they were going “to talk to somebody” at a previously undisclosed Port Authority “command center,” and that they went alone – leaving the firefighters behind. This observation is supported by other testimony, where Tabeek is seen standing and conversing for an extended period on the 22nd floor by someone who arrives at 9:45. Tabeek arrived at the 22nd floor just as the South Tower was being hit (9:02). At about 9:45, he is seen standing and talking with an FBI agent and the Information Technology Manager. The South Tower collapses at 9:59, and Tabeek is still there: "...the bomb resistance, bullet proof glass put in the Security Control Center on the south wall of the 22nd floor of One World Trade Center months earlier withstood the blast of Two World Trade Center coming down immediately outside those windows. Undoubtedly this saved my life and the lives of at least seven others in the room with me." [George Tabeek, Eulogy for Douglas G. Karpiloff] The reason for standing in one place and having a “meeting” for nearly an hour, while everyone else is evacuating, and the building is burning, remains a significant mystery. The contention that there may not have been a rescue is also suggested by Alan Reiss, who reported that the occupants of the command center freed themselves from the inside of the control room, rather than requiring rescue! "The ceiling came down and some of the walls and we realized we were trapped," says Reiss, who thought he might die. "But I wasn't gonna give up that easy. There was two or three feet of debris in front of this heavy, bulletproof door." Reiss and others used an ax to push the door open, and then ran THE SEPTEMBER 11 COMMISSION REPORT Page 142 through the clouds of dust. Says Greene: "It just completely engulfed the north tower where I was and I started crawling." [Port Authority Heroes: Part 2, CBS News, New York, October 19, 2001] Here is where the mystery and questions begin. Tabeek, who supposedly received a call for help, volunteered to go on a rescue mission that apparently didn’t need to happen. He was given resources to assist in the rescue that he did not need, and which he left behind. The one resource (Desperito) that continued on the mission with him did not return. There are conflicting stories about how Desperito died. Tabeek testified that he was with Desperito when he died, that he died when the South Tower collapsed, and that he was in the control room during the collapse of the South Tower. Tabeek also reports that seven others plus him survived when the South Tower collapsed because of the hardened glass in the command center. However, the “67 year old geezer” testified that Desperito died later, and Tabeek elsewhere testifies that Desperito and he were elsewhere when the South Tower collapsed! Moreover, Tabeek would later change his story so that Deperito died on the West Street “overpass” rather than on the 22nd floor. From Tabeek’s story below, one might also come to the conclusion that he feigns sincerity “too much.” “Security Manager George Tabeek and Firefighter Andy Desperito were continuing to rescue others. They raced into an overpass above West Street, just as the second tower began to collapse. "All of a sudden, all hell broke loose," says Tabeek. "We got hit with debris, couldn't see. I couldn't get air. I was choking. He was there one second. Next second, he was gone from my side or from behind me." Tabeek held onto a column while debris rained down on him: "It kept building up on me when it was coming down, almost up to my shoulder blades. And I kept pushing it off. All of a sudden, everything just stopped. Dead silence. I got hit with a blast of heat and I got burnt on my face and my hand." Shaking free of the rubble, he looked everywhere for the firefighter who'd been at his side for the past hour. Desperito was nowhere to be found. "I started calling, 'Andy, Andy. Where are you? Tell me where you are. Let me help you. Where are you?'" says Tabeek. Desperito, 44, died on that overpass. He was married with three children.” [Port Authority Heroes: Part 2, CBS News New York, Oct. 19, 2001] Evidence suggests that the mission involved an FBI office that was targeted for destruction. Desperito was an ‘expert’ witness to that destruction. He died standing next to the person who had to be involved in authorizing the removal of the bomb-sniffing dogs, and the approvals required for turning off the sprinkler systems for repair work by Rocky Hammad. There are no witnesses to his death other than Tabeek. Another potential witness (Cho) who stopped to help the FBI ‘pick up’ was told to leave. The floors officially reported to be occupied by the Port Authority do not include the 22nd floor. There is a report of an FBI agent ‘clearing the floor’ in an area where there are no reported FBI offices, and there is another report of an FBI agent seen on the 22nd Floor. Nine minutes before the Tower collapses, the FBI receives an advisory call that the Tower was about to come down! Who knew that? 2. Why was the FBI center hardened, while the rest of the building was not? The FBI facility had been recently upgraded with additional security to protect itself from just such a terrorist attack. The 22nd floor was a hardened, bomb-proof, highly secured computer center, which seems consistent with Dick Eastman’s claim that this location THE SEPTEMBER 11 COMMISSION REPORT Page 143 was used for storing files and evidence. There is probably every reason to believe these files were backed-up in an off-site facility, and are available yet today. "Security guard Hermina Jones said officials had recently taken steps to secure the towers against aerial attacks by installing bullet proof windows and fireproof doors in the 22nd-floor computer command center. “[Heightened Security Alert Had Just Been Lifted, Curtis L. Taylor and Sean Gardiner, September 12, 2001] As to why the facility had been upgraded, one discovers the FBI was planning for such an attack. “Alan Reiss, former director WTC and Bernard Kerik both testified, that they knew ex-FBI anti terror chief John O'Neill, who told them that there would be a pending attack on the Twin Towers. In fact, Larry Silverstein hired O'Neill (on behalf of Jerome Hauer, ex-OEM.)” [INN World Report Panel Round 11: Updates incl. tripod, May 19, 2004] 3. Why had bomb-sniffing dogs been removed between September 5th and 10th? Adding to the mystery however, just in time to miss the crews from a weekend power shutdown and sprinkler system repair, the bomb-sniffing dogs were removed on September 5th. "The World Trade Center was destroyed just days after a heightened security alert was lifted at the landmark 110-story towers, security personnel said yesterday. Daria Coard, 37, a guard at Tower One, said the security detail had been working 12-hour shifts for the past two weeks because of numerous phone threats. But on Thursday, bomb-sniffing dogs were abruptly removed. "Today was the first day there was not the extra security," Coard said. "We were protecting below. We had the ground covered. We didn't figure they would do it with planes. There is no way anyone could have stopped that.” [Heightened Security Alert Had Just Been Lifted, Curtis L. Taylor and Sean Gardiner, September 12, 2001] There is testimony that on the day of the attack, the dogs had been re-instated and were present. The question remains – why were they removed for the weekend? In an eerie manner, the ad hoc internet testimonials and death notices from that day support the argument that bombers targeted that section of the North Tower to destroy FBI files. There were strange activities associated with those floors. There was an extremely high death count for these floors some fifty stories below the attack. If the security protection against bombs was removed, one cannot say for certainty there were no bombs. If the facility was hardened to protect against an attack from the outside, the destruction had to be caused from the inside. The one outsider who witnessed the destruction, and could professionally testify as to how it occurred, died in manner which has multiple versions. 6.2 The Destruction of Buildings Seven and Four Building Seven has never been a focal point of the media or any remarkable investigation. This report contends that there is plenty of evidence suggesting that THE SEPTEMBER 11 COMMISSION REPORT Page 144 Building Seven was a primary target, and a small amount of evidence suggesting Building 4 was a target as well. Building Seven housed government offices of the CIA, SEC, IRS and Secret Service, which held documents for thousands of investigations of financial crime. The center also housed the El Dorado group, an interagency moneylaundering group of specialists under the control of the US Customs agency. Never explained fires raged for hours on the floors of those offices, and seismic recording show the same burst of energy prior to the building coming down, as was experienced just prior to the collapse of both Towers 1 and 2. There has never been even a plausible explanation for the deliberate destruction of Building Seven. Building Seven was probably the target for United Airlines Flight 93, delayed at the gate for 40 minutes, and downed in Pennsylvania, before it could reach its unknown target. Just a very few minutes after Flight 93 downed, Building 7 was ordered evacuated by parties unknown today. After everyone had evacuated, the fires started! There are a number of anomalies regarding the collapse of Building Seven that remain unanswered by anyone. These unexplained occurrences include: 1. Unexplained source of fires throughout the building; 2. Unexplained lack of response by firefighters to those fires; 3. Unexplained order for evacuation of the Mayor’s emergency command center on Floor 23 of Building Seven, when no comparable order was given for the WTC command Center in the North Tower; 4. Unexplained seismic spike just prior to the collapse of the building in the same magnitude as those preceding the collapse of the North and South Towers; 5. Unexplained reason for “pulling” the building; 6. Unexplained ability to bring down Building Seven with controlled demolitions, when it takes days and weeks to place them; 7. Unexplained misleading references to the locations of the fires; The result of the loss of this building was a major loss of investigative documentation by US agencies. Agencies known to have lost evidence include the Export-Import Bank (source of loans to Afghanistan and Angola), CIA, SEC, IRS and Secret Service. Investigative & Evidentiary Agencies in the World Trade Center – Building 7 Export-Import Bank of the US Floor 6 US Secret Service Floors 9 & 10 Securities and Exchange Commission Floors 11,12 &13 Internal Revenue Service Floors 24 & 25 CIA Floor 25 Department of Defense Floor 25 THE SEPTEMBER 11 COMMISSION REPORT Page 145 The key matter for consideration and inquiry is that, according to John O’Neal, and Sibel Edmonds, the FBI (whose files were in the North Tower) was denied information by the CIA and Secret Service, whose files would have been kept in Building Seven. One has to presume that any files relating to financial investigations of money laundering related to “intelligence” operations and the Russian/Israeli Mafiya around Azerbaijan, Kazakhstan and Afghanistan were kept in Building Seven or Tower 1. These Towers also held investigative information for the Bank of New money laundering scandal, which will later be shown to be intricately linked to covert oil operations in the aforementioned countries. From another perspective, three of the agencies involved in the Enron investigation were housed in the WTC: SEC, the Justice Department, and the FBI. (With a great deal of certainty this report concludes that Enron was a major money-laundering vehicle for the financial rape of Russia, buying and selling petrochemical contracts from the U.S. subsidiaries of the Russian oligarchs.) Both DoD and HUD had contracts with Enron, and those agencies were reported by Rumsfeld (on September 10, 2001) to be unable to account for some $3.3 trillion in funding. The IRS, in Building 7 was looking at Barrick’s offshore hedge book. What is suggested about the collapse of Building 7 by reports other than FEMA’s report? Unexplained Evacuation of the Control Center In the key emergency control center of New York in Building 7, someone gave the order to evacuate the building and the control center. No one knows who gave that order. In the Buildings that were hit by planes, personnel were not given that order, and remained in the control centers until the end. “WTC7 has received a lot of attention because of its inexplicable collapse at 5:20 PM on September 11.WTC7 purportedly burned for hours before collapsing, but the source of the fire remains a mystery, as does the complete failure of the building's modern fire-protection systems. Another interesting fact is that the entire twenty-third floor of WTC7 was a state-of-the-art command center, reportedly set up by Mayor Giuliani. That floor was designed to serve as a base of operations during times of crisis. It was reinforced to withstand winds of 160 miles per hour, and had an independent air and water supply. On September 11, 2001, the command center was monitoring the situation in lower Manhattan -- until personnel there received an order to evacuate. One official told the filmmakers: "to this day, we don't know who gave that order." [www.davesweb.cnchost.com/nwsltr43.html] Lost Documentation Investigators of financial crimes throughout the U.S. lost evidence in thousands of cases, including original SEC filings falsely reporting the Deutschebank’s lack of involvement in the Cayman shell companies of Enron. “So very unfortunately, lots of documentation and evidence was lost with the collapse of WTC 7. The CIA's clandestine New York station was lost, seriously disrupting United States intelligence operations…. Unfortunately, "Some further email records the committee has requested cannot be retrieved," wrote Citigroup Deputy General Counsel Jane Sherburne in an Aug. 7 letter to House Committee on Financial Services. "The backup tapes were lost when the building in which they were stored (7 WTC) was destroyed in the terrorist attack on September 11, 2001." [www.thestreet.com/markets/matthewgoldstein/10041194.html] (Author’s note: No IT professional THE SEPTEMBER 11 COMMISSION REPORT Page 146 stores back-up tapes in the same building as the hardware they are sourced from. Off-site storage for the WTC was vigorously pursued after the 1993 attack.) “But more importantly WTC 7…. housed high-level government offices including the FBI, CIA and the Secret Service. WTC 7 was also the storage facility for millions of files pertaining to active cases involving international drug dealing, organized crime, terrorism and money laundering.” [PBS Documentary: Silverstein, FDNY Razed WTC 7, Jeremy Baker] “WTC 7 had a clandestine CIA bunker on the 23rd floor, and offices were occupied by the Department of Defense (DOD), INS (Immigration & Natural Services), the IRS (Internal Revenue System), as well as some of the banks involved in shady wire transactions to the supposed Arab terrorists involved in 9/11. Additionally, the SEC had much of its filings in WTC 7 - including Enron's SEC filings. WTC 7 was likely a central planning station for what really happened on 9/11.” [9-11 Science Report, Dr, Stefan G.E. Grossman, Appendix D] "Maybe no financial institution lost more critical documents than the Securities and Exchange Commission, which had its New York regional office at 7 World Trade Center. While the regulatory agency was fortunate in that it lost no employees in the terror attacks, it suffered setbacks in a number of long-running securities investigations." [www.thestreet.com/markets/matthewgoldstein/10041194.html] "Regardless of what the regulators say, they lost a ton of files," says Bill Singer, a New York securities lawyer, who says one case he had pending before the SEC quickly settled because so many of the original documents were destroyed. "In my opinion it was a wholesale loss of documents." [www.thestreet.com/markets/matthewgoldstein/10041194.html] “What's curious, especially given all the Wall Street scandals later in the year, is that Building 7 was where the SEC was storing files related to numerous Wall Street investigations. All the files for approximately 3,000 to 4,000 SEC cases were destroyed. Some were backed up in other places, but many were not, especially those classified as confidential. [National Law Journal, 9/17/01] Lost files include documents that could show the relationship between Citigroup and the WorldCom bankruptcy. [The Street, 8/9/02] The Equal Employment Opportunity Commission estimates over 10,000 cases will be affected. [New York Law Journal, 9/14/01] The Secret Service also lost investigative files. Says one agent: "All the evidence that we stored at 7 World Trade, in all our cases, went down with the building." [Tech TV, 7/23/02] It is also eventually revealed that there was a secret CIA office in Building 7. [CNN, November 4, 2001]” [http://www.thenewliberator.com/wethepeople.htm, Douglas R Page, April 3, 2003] Inexplicable Fires and the Absence of Firefighters There has been no explanation of how the fires started all over the building, or why there was no firefighting assistance, especially after the other buildings collapsed hours earlier. “The 9/11 Commission report discusses inextinguishable fires on the 5th through 7th floor. Other sources report fires on 7, 8, 10, 11, 12, 19, 27 and 28, but a “photo seems to have smoke pouring out of the windows on almost every floor.” “Second, a fifth-floor fire burned for up to 7 hours. "There was no firefighting in WTC 7," Sunder says. Investigators believe the fire was fed by tanks of diesel fuel that many tenants used to run emergency generators. Most tanks throughout the building were fairly small, but a generator on the fifth floor was connected to a large tank in the basement via a pressurized line. Says Sunder: "Our current working hypothesis is that this pressurized line was supplying fuel [to the fire] for a long period of time." How can a fire burn for seven hours without spreading to other offices or other floors? Perhaps some diesel fuel was dripping from a supply pipe. Since the fire was small, and since the building had a steel THE SEPTEMBER 11 COMMISSION REPORT Page 147 frame with concrete floors, the fire could not travel to other offices. So how could such an insignificant fire bring down an entire skyscraper?” Controlled “Pulling” of Building Seven The owner of the building is recorded on tape referring to decision to “pull” the building. The building comes down in a totally controlled manner – without any attempt to explain how that happened. “In a PBS documentary “America Rebuilds," Larry Silverstein admitted that WTC 7 was "pulled," that is, intentionally demolished: "I remember getting a call from the, er, fire department commander, telling me that they were not sure they were gonna be able to contain the fire, and I said, 'We've had such terrible loss of life, maybe the smartest thing to do is pull it. And they made that decision to pull and we watched the building collapse." [http://www.pbs.org/americarebuilds/] Note: Silverstein does NOT say they actually “pulled” the building. Note that intentional demolition undermines the FEMA assessment: "The specifics of the fires in WTC 7 and how they caused the building to collapse remain unknown at this time." “How did the owner of the WTC Building 7 manage to have the building pulled (a term meaning the application of a controlled demolition) when no one could have safely entered the burning building to do so, even if there were time to do so - which there was not. Set up for a demolition requires many days of preparation and work. In addition, why would he want this done. What of importance was in the building, which was relatively new? ….. In the documentary 9/11 In Plane Site, you will see the statement by the developer that he decided to have the building pulled. The website, www.WTC7.net, gives you the background, and asks many questions about how this building, which suffered limited fire damage form unknown sources, collapsed almost 8 hours after the Trade Center Towers collapsed. Other steel frame buildings adjacent to WTC 2, suffered severe damage and burned for almost 24 hours after the Towers collapsed, but they did not collapse. We have no other answers. If you do, contact us at [email protected].” “Why would the Real Estate magnet, Mr. Silverstein buy the WTC properties from the Port Authority of NY/NJ, only 2 months before 9/11, knowing that the original buildings were all in need of a major costly renovation to rid them of asbestos? Perhaps he knew that if the buildings were destroyed, he could collect the insurance, rebuild and still make a big profit? Did he know what was about to happen and know that it would be a very profitable investment?” Recently, witnesses have come forth saying there was plenty of discussion by fire officials saying that Building 7 would be ‘pulled.’ “Two more ground zero emergency rescue personnel are on the record as stating they were told Building 7 was going to be brought down on 9/11 hours before its symmetrical implosion, completely contradicting the official explanation of accidental collapse….Yesterday we reported on the testimony of an anonymous EMT named Mike who told Loose Change producer Dylan Avery that hundreds of emergency rescue personnel were told over bullhorns that Building 7, a 47 story skyscraper adjacent the twin towers that was not hit by a plane yet imploded symmetrically later in the afternoon on 9/11, was about to be "pulled" and that a 20 second radio countdown preceded its collapse. Indira Singh was a volunteer civilian Emergency Medical Technician at the World Trade Center on September 11th. She was a Senior Consultant for JP Morgan Chase in Information Technology and Risk Management. Singh was responsible for setting up triage sites for the seriously injured and walking wounded. These sites were closed down and consolidated one by one as the day wore on. Appearing on the Pacifica show Guns and Butter, Singh describes her experience to host Bonnie Faulkner. Click here to listen with commentary by Alex Jones. SINGH: "After midday on 9/11 we had to evacuate that because they told us Building 7 was coming down. [More Ground Zero Heroes On The Record: Building 7 Was Deliberately Brought Down, Paul Joseph Watson & Alex Jones, Prison Planet, February 9, 2007] THE SEPTEMBER 11 COMMISSION REPORT Page 148 Seismic Spike Prior to Collapse Much attention is paid to the “seismic spike” that preceded the collapse of the North and South Towers. Rarely mentioned, if the explosions in North and South were deliberate – so was that of Building 7. “As with the Twin Towers, the seismic of the building 7 collapse indicates the release of a strong underground explosion energy just prior to the collapse, see chart from the data of Columbia University…”[ Massive pre-attack ‘insider trading’ offer authorities hottest trail to accomplices, Kyle F. Hence, Centre for Research on Globalisation (CRG), globalresearch.ca , April 21, 2002] The End of Building 7 and Investigative Effort Building Seven was targeted for destruction, no more or less that the North and South Towers. If one assumes 1) the fires were targeted, as were the explosives in the North and South Tower; 2) planted explosives brought down the building; 3) the key reason for the attack was to destroy investigative evidence – and all the evidence suggests that is the case – the reason for the “pulling” of Building 7 becomes obvious. Virtually every destructive symptom experienced by the North and South Towers was experienced by Building 7, except that there was no assault by a plane to explain them away. No less important than the destruction of the information in Building 7 and the rest of the WTC, however, was the associated direction by the Bush administration to refocus the efforts of the US federal investigative apparatus: “On page B1 of the Sunday New York Times [NYTimes "Trial Balloon" 10/21/2001], Philip Shenon and David Johnston reveal that the Bush administration is "discussing proposals that would lead to the most fundamental reorganization of the Federal Bureau of Investigation in its history, shifting its focus to counterterrorism and away from crime fighting, senior officials said…. Also in the article: "...Attorney General Ashcroft and the bureau's director, Robert S. Mueller III, have agreed that the emphasis on counterterrorism will be permanent and that other major changers are inevitable. ..." "...Mr. Mueller, as the bureau's new director. Mr. Mueller had earned a fearsome reputation from previous jobs, for shaking up government agencies, notably the United States attorney's office in San Francisco, where he forced out most of the senior management." [Ending of FBI anti-drug trafficking & banking "white-collar" crime role, Dick Eastman, October 22, 2001] The Curious Loss of Building 4 There are three curiosities to the destruction of Building 4, which was destroyed mostly when The South Tower collapsed on it. There has been a remarkable lack of substantive reporting on whether or not there was a significant amount of gold bullion stored under and missing from this building. “WTC 4's basement housed precious metal vaults, the apparent disappearance of most of whose billion-dollar contents has gone curiously unreported.” “There appear to be no reports of precious metals discovered between November of 2001 and the completion of excavation several months later. It would seem that at least the better part of a billion THE SEPTEMBER 11 COMMISSION REPORT Page 149 dollars worth of precious metals went missing. It is not plausible that whatever destroyed the towers vaporized gold and silver, which are dense, inert metals that are extremely unlikely to participate in chemical reactions with other materials. “ “The circumstances surrounding part of the gold that was recovered offer clues to what may have happened to the unrecovered gold. According to reports, two truckloads of gold were found in a delivery tunnel under 5 World Trade Center in a 10-wheel lorry which had been crushed by falling steel. The vault was under 4 World Trade Center, which was closer to the South Tower, and more heavily damaged. There were no bodies discovered with the lorry, suggesting that whoever was removing the gold was warned of the imminent collapse of the South Tower.“ The intriguing aspects of this loss are: 1) There are photos of the remnants of Building 4, which comment on the appearances of damage done by raging fires: “The portion of WTC 4 that remained standing had a blackened appearance suggesting that it sustained severe fires. However, FEMA's report does not describe the fires in WTC 4….” Given the debates over the causes of fires in the Twin towers and Building 7, it becomes apparent there is no reason that there should have been fires in Building 4. (The fact that almost half the building was occupied by the Deutschebank, a target of many federal investigations, has been overlooked.) 2) The picture of standing walls however suggests the damage done by the collapse of the adjacent tower was less than complete. Vaults like that in the basement are designed to withstand direct nuclear attack, suggesting that if the vault was destroyed, it probably wasn’t by the collapse of the adjacent tower. 3) The only gold found in the recovery that was reported to be at that site was actually on the move at the time of the attack, and considerably less that reported to be on-site. This may suggest the vault wealth had been removed, and the vault emptied (!) in advance, but there has been no reporting on this matter. These are insignificant observations, in the total scheme of things. However, they add to the list of inexplicable circumstances which suggest that the destruction of the buildings other than the Twin Towers was planned well in advance. The Unmentioned Loss of WTC 6 A key hypothesis of this report is that the attack on the World Trade Center was intended to stop investigations into various forms of money laundering by officials of the US and the Russian/Israeli Mafiya. It would not be appropriate to avoid a discussion of Building 6, which housed U.S. Customs – one of the key U.S. Agencies with responsibility for investigating money laundering. The fate of Building 6 is ignored in virtually every report available, but the couple of references found are totally aligned with the hypothesis that these agencies were targeted. “CNN broadcast the image of smoke rising up from street level near the base of Building 6, the Customs House. This video footage had originated at 9:04, about one minute after United 175 struck the South Tower. Remember that WTC 6 was on the north side of the north tower, so any explosions THE SEPTEMBER 11 COMMISSION REPORT Page 150 there cannot be regarded as having been generated by the impact to the South Tower. A powerful explosion inside WTC 6 had hurled a cloud of gas and debris 170 meters high. A CNN archivist commented, “We can’t figure it out.”(Marrs 36) This incident was soon eclipsed by the collapse of the South Tower, and has tended to be forgotten. The various official reports have had precious little to say about WTC 6. Overhead views of the ruins later showed a large crater in the steel structure of WTC 6; it was clear that this crater could not have been caused by fire.” [The Collapse of World Trade Center 1, 2, and 7, Webster Tarpley, http://www.reopen9/11.org/Tarpley_ch_6.pdf.] “there was a giant explosion that shot 550 feet into the air above the U.S. Customs House at WTC 6, just northwest of the towers before they fell, a totally separate event that clearly had nothing to do with the plane crashes or hijackings, incontrovertible evidence that something else was going on? Neither did I, but 9/11 IPS has the footage from CNN.” [Michael Dare, http:// www.9/11inplanesite. com/9/11review_disinfotainment.html] There is also eyewitness testimony to the deliberate destruction on this facility. “Explosions Inside WTC 6 Lobby KT: You mentioned you were running west on Vesey Street, what happened after that? PO: I just kept running. I was aware there were other people running as well. After passing the cars on fire, I was trying to find someplace safe. I tried to run into the lobby of 6 World Trade, but there were federal police -- maybe 4 to 6 of them -- standing in the open doorways. As I tried to run in, they wouldn't let me, waving me out, telling me "you can't come in here, keep running." As I turned to start running west again, I saw a series of flashes around the ceiling of the lobby all going off one-by-one like the X-mass lights that "chase" in pattern. I think I started running faster at that point. KT: Did you hear any "popping" sounds when each of these flashes in the WTC 6 lobby were going off? PO: Yes, that part was like a movie. The pops were at the same time as the flashes. KT: Can you estimate either how many flashes you saw or how many of these "pops" you heard inside this lobby? PO: At least 6 before I was turned away.” [Ground Zero EMT Patricia Ondrovic talks about her harrowing day at the WTC on 9/11, February 10, 2006] THE SEPTEMBER 11 COMMISSION REPORT Page 151 7 GOLD TRADING AND MONEY LAUNDERING INVESTIGATIONS CANCELLED BY DESTRUCTION OF THE WTC The 23rd floor of the North Tower of the WTC held FBI records pertinent to investigations of international gold movements and violations of the US Foreign Corrupt Practices Act. The stimulus for the FBI investigation was a lawsuit initiated by GATA against a number a major bullion international banks and the former US Secretary of the Treasury. The lawsuit alleged that these banks conspired to manipulate and artificially depress the price of gold. The evidence presented by GATA was quite compelling, and suggested that 1) these parties had used national gold reserves to illegally regulate the price of gold, 2) these banks had created a significant risk that threatened the liquidity of all of the key players, and 3) that the national gold reserves had been illegally depleted as a result. The basis for this suit was analysis of gold market prices and trades that suggested approximately 14,000 tonnes of paper gold had been artificially created to keep gold prices depressed. This report speculates that gold prices were not being manipulated, but rather 14,000 tonnes of stolen gold was being illegally laundered. The logic of what GATA called a scam ‘on the American citizens and individual gold buyers’ was this. Bullion banks “loan” gold to each other at 1% or 2% interest. When they borrow gold to cover needs, they buy a gold future and assign it the lender. Thus the lender always has the “same” amount of gold, except some is ‘paper gold.’ According to GATA, these banks would loan gold to each other, and then sell the real gold, using the proceeds to invest in equities, which paid a higher return. This is a good deal when the investment’s return on the equity is greater than the costs of the increased price of gold. The GATA claim is that this process had been going on secretly for a number of years, with US private banks making hefty profits using US treasury gold. This process is not illegal – fixing-prices is. At some point in the process, these banks had loaned out more gold than could be produced by all the gold mines in the world in the next two and a half years. Because the world started viewing the dollar as overvalued, there was a move towards gold, which stood to drive the price of gold up – dangerously so. These banks then had to borrow and sell even more US gold, and then (it is contended) brought in the London banks to support them, to keep the price of gold artificially down. The prices had to be kept artificially low because if there was an actual call on the gold loans by one bank, it would bring them all down like a house of cards. There was not enough physical gold available to make good all the futures being held by the banks. It has been speculated that it was these banks – with a focus on the American banks -that somehow brought about an attack on the FBI office, using the cover of the airliner assault to destroy the evidence against them. According to this theory, the attack needed to happen before October 9, 2001, when this lawsuit opened in court. It may be fair to speculate that U.S. bank executives were not worried about being convicted for violation of dubious and ambiguous laws. However – win or lose, this report speculates there was at least one group of bank executives that had plenty of reason to worry if this lawsuit THE SEPTEMBER 11 COMMISSION REPORT Page 152 saw the open courtroom, and that is the group that set out to destroy the World Trade Center. These are the executives who were worried that an investigation and trial would expose their gold laundering activity. This report speculates that gold being sold on the market was not ‘artifically created,’ but rather illegal, stolen gold that needed to be laundered. If the illegal gold was confiscated by the judicial system, the bankers responsible for protecting the gold would be help responsible, and their lives – most likely – would be forfeit. The argument that the attack on the WTC was an attempt to silence an investigation into gold transactions and money laundering has never seriously been considered. In a world that has recently seen reports of the disappearance of 4,000 to 60,000 tonnes of illegal gold stolen from various national treasuries, no one seems to have asked: how is this gold being laundered. The selling behavior demonstrated by the bullion banks could also be interpreted as selling off huge, illegal gold hoards at a previously agreed upon price point. The hypothesis that a large portion of this may be laundered by the Deutsche Bank becomes more compelling when one focuses on the Deutsche Bank, and its possible reasons for wanting this investigation quashed – which no one, except maybe the FBI, has focused on. The Deutsche Bank (along with Dresdner, and US banks) had been conducting gold sales for years, and indeed, it was speculated in the GATA suit that the European banks in general had illegally dumped large amounts of their reserve gold to buoy up bank profitability. "Deutsche Bank, the largest German bank, which had precious metals derivatives at the end of 1996 with a total notional value under US$5 billion, by the end of 1999 had grown this business to a total notional value in excess of $50 billion, or by more than 10 times in three years. What is more, a huge amount of this growth came in 1999, especially in the last half, as can be seen by comparing the average notional value for 1999 ($37.7 billion) with the year-end notional value ($51.2 billion). Note also that this growth was almost all in the longer maturities. Nor can the 1999 growth in Deutsche Bank's precious metals derivatives be ascribed in any major way to its acquisition of Banker's Trust. Its OCC report for March 31, 1999, listed precious metals derivatives with a total notional value of around $6 billion, which by June 30 were just over $1 billion….." "The only major gold fund manager that I know who never owned a single share of Bre-X told me that he never bought the stock because: (1) even if you believed the company's story, the stock almost always looked too expensive; and (2) however great the ore deposit, large gold reserves are not built as quickly or as easily as Bre-X claimed to do. So too, the amazing emergence of Deutsche Bank from almost no gold derivatives business in 1996 to a book with a notional value approaching 5000 tonnes, larger by far than the book of any of the three principal U.S. commercial banks in this business, does not pass the smell test. Indeed, it is very hard to see any reason for the rapid creation of this huge position in gold derivatives other than to try to manipulate and control gold prices. [www.goldensextant.com, MPEG Commentary] The question needs to be asked, however: what if the German banks, but primarily the Deutsche Bank – and possibly some American banks - were not selling its gold reserves, but rather was laundering gold for its clients from the dark side? Until this report, there has been no mention of this possibility. Not too long ago, several previous board members of the Deutsche Bank were indicted for helping high profile clients avoid taxes by laundering money into Switzerland. The bank certainly also had a reputation for the less dignified money laundering activity associated with ‘organized crime’ and the THE SEPTEMBER 11 COMMISSION REPORT Page 153 Chairman of the Deutsche Bank Board admitted the bank was “possibly” had been “misused” by these same Russian Mafiya types, previously linked to the Mossad by this report. "On September 5, 1999, the German newspaper Weld am Sonntag quoted Deutschebank CEO Rolf Breuer saying that "It could be that we were abused as an intermediate coordinating point" in the fastdeveloping Russian money laundering scandal. Deutschebank and its U.S. affiliate Bankers Trust (BT) filed "suspicious transaction" reports about Russian clients, as BT had "correspondent banking" relationships with Russia's Inkombank, which "allegedly had ties to organized crime," according to USA Today ( 8-27-1999 ). Moreover, an Inner City Press story (9-11-1999) also revealed that German magazine Der Spiegel quoted Breuer as admitting that it was "possible" his bank was "misused" as an intermediary for money laundering." [The Profits of Death, Part III, Tom Flocco and Michael C Ruppert, From The Wilderness Publications, 2002] "On August 28, 2001, 14 days before the Trade Center attacks, former Deutschebank senior bond investment trader Kevin Ingram, pled guilty in a $2.2 million dollar money laundering conspiracy, resulting from a government sting operation investigating the illegal sale of night vision goggles, Beretta machine pistols, M-16 machine guns with silencers, rocket-propelled grenade launchers, mortars, surface-to-air missiles (SAMs), TOW anti-tank missiles, and Stinger missiles, according to court papers examined by the New York Post." [The Profits of Death, Part III, Tom Flocco and Michael C Ruppert, From The Wilderness Publications, 2002] Any serious investigation into illegal gold laundering by the FBI probably would have exposed transactions no one wanted to make public. Any FBI evidence would have to be destroyed, and the investigation stopped. One of the more convenient aspects of the attack on the WTC is that while destroying relevant FBI investigation materials, it also destroyed all US Deutschebank records: "Michigan Senator Carl Levin's Minority Banking Report of February 2001 calls correspondent banking the "gateway to money laundering," a financial technique wherein illicit money is moved from bank to bank with "no questions asked," thereby cleansing funds prior to being used for legitimate purposes. Via correspondent banking relationships, banks not licensed in the U.S. may gain access to American financial markets by establishing a correspondent relationship with banks that are. Deutschebank is licensed in the U.S. and maintained offices at the World Trade Center. Deutschebank is licensed in the U.S. and maintained offices at the World Trade Center. All U.S. Deutschebank records were destroyed in the September 11 attacks." [The Profits of Death, Part III, Tom Flocco and Michael C Ruppert, From The Wilderness Publications, 2002] The original GATA lawsuit was dismissed, and the FBI investigation was ended. A reorganization of the FBI in 2002 refocused agency attention on terrorism, leaving bank crime to “other agencies.” Another civil suit seeking to avoid the shortcomings of the first suit, was initiated in 2003, and was scheduled to be heard in April of 2005 – after successfully surviving the defendant’s motions to dismiss. It was settled out-of-court, under sealed conditions in 2006. 7.1 Tonnes of Illegal Gold What the GATA and the subsequent suit never considered was that while “large, inexplicable” amounts of gold (estimated at 6,000 to 14,000 tonnes) were being released on the market by the bullion banks, possibly this was a gold laundering operation. Certainly enough stolen gold had poured into Germany and Switzerland from various THE SEPTEMBER 11 COMMISSION REPORT Page 154 sources to explain a majority of the German trades (and possibly trades by US banks as well), and these flows will be documented in this report: · 3,000 tonnes of gold stolen from Russia by the KGB, a theft made public in September 1991 by Grigory Yavlinski; • 40 tonnes of Czech gold; • an undisclosed amount of Third Reich (Nazi) gold stolen from the Holocaust victims and their survivors as well as undisclosed treasury gold removed from the banks of conquered countries; • at least 1,000 tonnes of Philippines gold from the Marcos family, which had previously been the wealth of the Japanese Imperial family hidden during World War II.. (Some estimates of this Golden Lily treasury reach up towards 60,000 tonnes.) "Approximately 1,000 tons of the loot was liberated by Ferdinand Marcos before his ouster. Billions of dollars worth were shipped overseas by American intelligence agents and the Mafia. Much of the horde was cabbaged away in a high-security, subterranean storage cache buried beneath the Zurich airport. This vault was once used to conceal European gold from Hitler’s greedy SS scavengers. Fifty years later, some of the same bullion has found its way into the campaign coffers of ultraconservative political candidates in the U.S., according to the Las Vegas Sun. But Marcos didn’t recover the lion’s share of the pelf. A six-month series in the Sun reported in 1993 that Marcos abandoned thousands of tons of gold hidden in his homeland. Gary Thompson, the newspaper’s former managing editor, and journalist Steve Kanigher published copies of gold certificates from Credit Suisse, deposit records from the Union Bank of Switzerland the correspondence of Corazon Aquino and letters to Reagan administration officials documenting witness accounts that lackeys of the CIA and Army Special Forces carted off an unknown quantity of the bullion…. Citibank was drawn into the operation to negotiate ownership of a Philippine gold horde secreted in the Bahamas…. From the balmy islands, Imelda Marcos was heaving billions of dollars in gold on the black market, frantically, before the remains of their tin dictatorship was seized by the courts. The sudden infusion of Philippine gold on the world market threatened to depress the already-sagging price of the metal. This cabal settled on a drastic solution - a strategic terrorist act staged to drive up the price of gold. " [Saudi Entrepeneur Adnan Khashoggi Linked to 9/11 Terrorists, Alex Constantine] While the early reports of this Philippine treasure were generally regarded by the media as rumor, the story was subsequently well substantiated by the reporting of David Guyatt and others. A major source for this documentation was a death bed statement by Brigadier-General Erle Cocke, in April 2000. Cocke was a banker before he became a black operative. He had worked as a “fixer” for "every President since Truman." Additionally, he was an Alternate Executive Director of the World Bank for four years, a member of the US delegation to the UN for two years running, with the pay and rank of a US Ambassador, a Knight of Malta and a Shriner Mason. According to these sources: "the OSS--the wartime forerunner of America's spy agency, the Central Intelligence Agency (CIA)-- began recovering the bullion plundered from a dozen or so nations. This bullion formed what became known as the "Black Eagle" fund, which was part of a secret agreement eclipsed behind the 1944 Bretton Woods Agreement. Consequently, the metal was placed under the care of OSS (and later CIA) operative Severino Garcia Santa Romana, who put it under the control of numerous corporate entities he formed for the purpose. These entities, in turn, proceeded to establish 176 bank accounts in 42 different countries in which to deposit these assets under private treaty agreement……. Santa Romana died in 1974, and following his death his former attorney and trustee was able to "acquire" THE SEPTEMBER 11 COMMISSION REPORT Page 155 considerable portions of Santa Romana's estate by illicit means. The lawyer was Ferdinand Marcos, who went on to become President of the Philippines and a favourite friend of the United States until his overthrow in 1986. The acquisition of these assets helped give rise to stories of "Marcos gold"--a legend that was supplemented by additional later recoveries of WWII gold and other loot using a Filipino Army battalion under the overall command of Marcos henchman General Fabian Ver." [Project Hammer Reloaded ,Part 1 of 2, Extracted from Nexus Magazine, Volume 10, Number 5 (August-September 2003), by David G. Guyatt] "Additional evidence of Marco’s recovering the Golden Lily treasure comes from the Filipino newspaper, The Inquirer. In 1998 the paper published an article entitled "Soldiers of Fortune." The article revealed that all members of the 16th Infantry Battalion had signed a joint affidavit declaring that, together with members of the 51st Engineering Brigade, they had recovered 60,000 metric tons of gold from thirty sites between 1973 and 1985. Both units operated in strict secrecy under Marcos’ henchman Fabian Ver." [Nazi Gold, Part 10: The Emperor's Golden Lily, Glen Yeadon , Copyright 2001-2004] There are other versions of this story. From an individual who provided a day of testimony to the lawyers who went after the gold: “I was frankly stunned to read, in Lear's own typed wording, that he was supposed to secure the planes for the gold shipment for a company in Amsterdam called Kindrich International, and that 106 tons of gold were to be flown from Guam to Taiwan, where it was to be smelted down, and then to Zurich, Switzerland via Dubai or Abu Dhabi. According to his memo, there were several other people involved in the operation: Juanita Hanson was the managing director of Kindrich International; Bob Kerkez was instrumental in some way from West Germany; Hank Warton of Miami, Florida was in charge of the operation; Vern Peoples in Las Vegas was in charge of coordinating with Lear, and Jack Taggert was to receive a "10% cut" for setting it up. I couldn't help but wonder what Lear's slice was to be for his participation in the deal.” [The Marcos Gold Mystery, Lars Hansson] In the version provided by Paul Manning, many of the details of the “Golden Lily’ are reconfirmed, and indicate yet another – this time, British – group moved gold to Switzerland as well. “In his transfer plan of 1944, Lord Privy Seal Kido was con-fronted with the problem of physically moving the emperor's gold kilo bars from the Imperial Palace to some safe haven where their value would be credited to the imperial account in Switzerland. In 1944, when Japanese fighter planes still con-trolled the air space of northern Asia, this proved a soluble problem. The major Swiss banks, such as Swiss Bank Corpora-tion, have five key areas throughout the world where gold and silver bars can be deposited in Swiss controlled vaults, with a credit then telegraphed to the relevant bank in Switzerland. These key localities are known in the Swiss banking business as "Loco," so once Kido had dispatched a Japanese imperial courier plane with fighter escort to Hong Kong and Macao and other sites with imperial kilo bars they quickly became a deposit credit in the Swiss receiver bank. By the end of the war the deposits on hand were astronomical, and during the postwar rehabilitation of Japan, the imperial fortune kept increasing from the interest charges for loans to various zaibatsu companies who were struggling-as were German firms-for a comeback in world markets. As a result of these tranfers, American SOAP* fiscal investigators found the imperial vaults pretty nearly bare when they went poking through the recorded assets in the imperial palace following Japanese surrender aboard the U.S.S. Missouri on September 2, 1945. They found jewelry, gold, silver, coins totaling 3,010,066 yen, and as the yen at that time was worth about 360 to the U.S. dollar, it was a token $2 million.” [Martin Bormann – Nazi in Exile, Paul Manning] “…by 1944 Japan had taken 25 tons of gold from the vaults and mines of various Asiatic countries it had overrun. Like so many other moveable assets, the 25 tons of gold bullion disappeared in 1944, and THE SEPTEMBER 11 COMMISSION REPORT Page 156 this is a secret known only to a cadre of top leadership among the zaibatsu.” [Martin Bormann – Nazi in Exile, Paul Manning] As part of this illegal gold movement, it is extremely important to notice where at least 50 tonnes of it went, because it starts a chain of events involving the banks of Bankers Trust, JP Morgan and the Deutschebank Alex Brown. It is also important to note that the gold started to be moved into the market place in the early 1980’s by Marcos himself and in the late 1980’s by his wife. It was during this time that George Bush Sr. got involved. "In 1982, Ferdinand Marcos arranged via his right-hand man, General Fabian Ver, to transfer 50 tonnes of gold bullion to Switzerland via two chartered 747 aircraft. These were arranged by an individual using the name Ron Lusk, who had been retained by Ver to deliver the gold to Bankers Trust, Zurich." [Project Hammer Reloaded, Part 1 of 2, Nexus Magazine, Volume 10, Number 6 (October-November 2003), David G. Guyatt] "(in) 1983…, according to U.S. intelligence insiders, then-Vice President Bush authorized a Boeing 747 with a special "carriage" to airlift several tons of gold bars from Clark Air Force base in the Philippines to LaGuardia Airport in New York." [Texas to Florida: White House-linked clandestine operation paid for "vote switching" software, Online Journal, Wayne Madsen http://www.politrix.org] "(David) Guyatt goes on to claim that a letter from Henry Kissinger …demanded that Marcos sell "63,321 tons of gold to 2000 US and European banks ….." The letter was dated February 21, 1986. Marcos refused and was overthrown as a result of his refusal. Imelda Marcos, however, chose to sell the gold to avoid criminal charges, and the gold was transferred aboard the US Eisenhower to the United States." [Nazi Gold, Part 10: The Emperor's Golden Lily, Glen Yeadon , Copyright 2001-2004] The question may be asked: how and why did George Bush Sr. get control of a portion of that gold. The answer is reported by Wayne Madsen. “The Bush family off-shore money tranches originated with gold bars and jewels spirited out of the Philippines upon the overthrow of Ferdinand Marcos in 1986. The Marcos fortune was the price exacted by Vice President Bush for his being granted asylum in Hawaii. The gold bars were transported from the Philippines to the International Diamond Exchange Vaults near Rockefeller Center. A CIA proprietary firm called Oceaneering International of Houston procured barges to move some of the gold from secured warehouses to a specially-configured Boeing 747 which then flew the cargo to New York. Oceaneering sealifted the remaining gold to Oregon. After George W. Bush’s victory in 2000, the last of the gold and jewels stored in New York was moved to UBS Bank in Zurich. Marcos and Saudi billionaire Adnan Khashoggi set about to create Five Star Trust in 1983 as a means to create a vehicle to use the Philippine wealth to create and funnel fungible assets abroad. In 1989, Five Star Trust was officially established in the Isle of Man by a Houston-based attorney who was a close friend of the Bush family.” [https://www.waynemadsenreport.com] Is should be of historic note that it was three of George Bush’s key aids who played primary roles in convincing President Ronal Reagan to withdraw his support for Marcos, thus forcing Marcos to seek asylum and deal with George Bush Sr. “Armitage, Wolfowitz and Sigur were at the center of what was in many ways the most surprising change in the Reagan administration’s foreign policy; the decision to encourage Philippine President Ferdinand Marcos to give up power in 1986.” [Rise of the Vulcans- The History of Bush’s War Cabinet, James Mann, Penguin, 2004, p128.] In answering the question as to “why?” the records point to the conclusion that George HW Bush set up a private funding mechanism for his own personal, ‘dark-ops’ foreign policy. This was a fund THE SEPTEMBER 11 COMMISSION REPORT

Page 157 protected from Congressional oversight and a fund that would allow him to authorize and fund operations that violated United States law. This fund would subsequently be used to wage war against the former Soviet Union by financing Muslim terrorists and Russian Mafiya oligarchs in his continued efforts to destabilize the Soviet Union. It would be used illegally to fight “Communists” in South America. Some of the Marcos/Bush gold was even considered for use in the Iran-Contra dealings: “In 1985, [Oliver North] attempted to sell 44 tons of Marcos bullion, worth $465 million, on the black market. He blithely suggested skimming $5 million to finance the Nicaraguan contra war, but the deal fell through when North, true to form, stiffed the Israeli middlemen on the Marcos payroll. Tapes and documents implicating American officials in the gold transfers were withheld from the Iran-contra committee by Major General Colin Powell, Defense Secretary Caspar Weinberger and William Odom, director of the NSA. "It wasn't so much the mention of gold that concerned them," say Thompson and Kanigher. "It was Marcos talking (on tape) about contributions to U.S. presidential campaigns and the use of the gold proceeds to fund illegal arms deals." [Iran-Contra Connections to the Oklahoma Bombing, by Alex Constantine © 2000 Alex Constantine. All rights reserved] This Marcos gold would be a fund the use of which had to be protected from ever being exposed to the world. It would be a fund that investigators housed in the World Trade Center were on the path to uncover. It would provide the basis for the “National Security” rationale for all the cover-up associated with the government investigation of the destruction of the WTC. Bankers Trust, where Marcos placed his gold in 1982, becomes an important name in this report in that the merger of Bankers Trust (formed by JP Morgan in 1903) and Deutschebank Alex. Brown was conducted by “Buzz” Krongard, with the assistance of his primary staff assistant, Mayo Shattuck. What it suggests is that Krongard, Shattuck, executives of JP Morgan, and executives of the Deutschebank were in a position to be knowledgeable about the illicit gold movements that ultimately were covered up by the destruction of the World Trade Towers. Krongard has been implicated as a potential “person of interest” in the alleged cover-up by the US Government of what really happened on September 11 because of his association to the bank to which many illegal stock trades were traced, and the unexplained ‘shutdown’ of that investigation. "By profession, Krongard is a banker and formerly was the Chairman and CEO of investment bank Alex. Brown, Inc. In September 1997, Krongard engineered the merger of Alex. Brown with Bankers Trust and became the Vice Chairman of the board of directors of Bankers Trust. A few months later, in January 1998, he was recruited as a "counselor" to CIA boss George Tenet. In March 2001, he was promoted to Executive Director, making him the No. 2 man of the spy agency." [Project Hammer Reloaded, Part 1 of 2, Nexus Magazine, Volume 10, Number 6 (October-November 2003), David G. Guyatt] What is not recognized by many is that Krongard’s main assistant at Alex Brown was Mayo Shattuck. Mayo – who was also the personal financial advisor to Edgar Bronfman and Adnan Khashoggi - resigned as CEO of Deutschebank, America on September 12, 2001, and went on become CEO of the company that would replace the bankrupted Enron as the primary energy market maker. Mayo’s Deutschebank operation in the WTC was buried on September 11. Also rarely mentioned is the fact the Senator Carl Levin’s Senate Hearings into US money-laundering identified AB Brown – where Krongard, Shattuck and Beese were the top three executives - as one of the top twenty US banks involved in money-laundering. Finally, one should note that Krongard was mentor to another placement from the CIA training facilities of the U.S. War College and John THE SEPTEMBER 11 COMMISSION REPORT

Page 158 Hopkins. That protégé was named J. Carter Beese, who was one of George Bush appointees to the board of directors of the Overseas Private Investment Corporation in 1992, and later would become Chairman of Riggs Bank, as well as an SEC Commissioner (appointed by Bush.) J. Carter Beese Jr. was Chairman at Alex from 1994 to 1997, and would move from there to also be vice-Chairman of Bankers Trust. Beese went from Banker’s Trust to become President of Riggs Capital Partners, which will later be demonstrated to play a major role in George’s Bush’s 1991 10 year bond fraud, one of the major drivers behind the September 11 tragedy. Beese was the son of an FBI agent, and would live the life of a “made” man: “In the annals of charmed lives, the Honorable J. Carter Beese had made an improbable and Algeresque journey from son of an FBI agent in New Jersey to the rarified halls of government and business. From afar, his life seemed miraculously blessed. The road to Alex Brown in the early 80s had three typical entry points: Gilman, Griswold or The Harvard Business School, rather than his New Jersey and Rollins College roots.” [A Tribute to the Honorable J Carter Beese Jr., Edwin Warfield, April 12, 2007, http://www.citybizlist.com/blog/warfield/2007/04/tribute-to-honorable-j-carter-beesejr. html] Beese, like many CIA trainees, would have his life ended in April 2007 with a reported suicide, at the age of 50. It also suggests that the management of the JP Morgan syndicate of financial institutions was in a position to be aware of these illegal gold transactions, as were other American financial institutions such as Citibank and Drexel. "Drexel, Burnham, Lambert, New York, was a recipient of gold bullion from Philippine dictator Ferdinand Marcos in January 1984." [Project Hammer Reloaded , Part 1 of 2, Extracted from Nexus Magazine, Volume 10, Number 5 (August-September 2003), by David G. Guyatt] Another potential source of illegal gold in the market was uncovered in the 1990’s by the WJC. (World Jewish Congress). Recent disclosures from World War II documents released in the 1990’s demonstrated that the Swiss banks had understated the amount of gold received from Nazi Germany during the war. This gold appears to have originated with holocaust victims and the national treasuries of conquered nations. Technically, this gold was to have been returned to those nations and families it was confiscated from. Swiss banks denied the existence of this and the Marcos gold, despite historical evidence to the contrary. It was only when a janitor for one of the banks discovered and saved records of this gold in the process of being destroyed by the banks, and handed over these records to the press, did the whole Swiss denial begin to crumble. At that point, the World Jewish Congress began to apply more pressure on the Swiss banks, and on the US Congress to penalize the Swiss banks. At about the same time, the Philippine government was pressuring the banks for a return of the Marcos gold, and the American legal system was seeking billions from the Marcos accounts on behalf of victims of Marcos torture that had won a lawsuit against the Marcos estate in Hawaiian courts. On top of these legal probes into the illegal gold holdings of the Swiss banks came the GATA lawsuit and its associated FBI investigation. (This is elaborated in Section 9.1) THE SEPTEMBER 11 COMMISSION REPORT

Page 159 The amounts of illegal gold from all of these various sources may have been adequate to explain the “inexplicable” gold volume being sold in the gold market, as suggested by GATA statistics. This illegal gold is also of interest because one of the key individuals heading the international law suit against the Swiss banks was the President of the WJC – Edgar Bronfman. The Bronfman family, along with executives of JP Morgan, (as will later be demonstrated), were key investors in a Canadian company called Barrick – named as a defendant in the second gold price-fixing suit, and the largest producer of “paper” gold in the world. This report speculates that Barrick was operating as a ‘front’ for moving stolen gold into the market. Winning or losing this lawsuit would be quite immaterial to a large number of people unless the banks had to reveal the sources of their gold, which generally had been funneled into Swiss accounts by German banks and its global network of banks. A substantial future revenue stream would be lost to the German banks if the underworld lost trust in them. It would also be fair to speculate that a few bankers would suffer cruel deaths if the details of these gold thefts were revealed. It is hypothesized that the exposure of this gold laundering activity was the ‘issue’ that allowed German banking executives and Russian KGB/Mafiya lords to sit at the same table and discuss a mutual interest in destroying the World Trade Center. It created the incentive to leverage Russian/Israeli Mafiya relationships within the Israeli Mossad, and initiate the attack on the World Trade Center. Interestingly, it was also this same type of interest in ‘preventing public disclosure, or exposure’ that may have encouraged Bush to divert attention away from this economic motive for a crime. "There is substantial evidence suggesting that a detailed investigation into Deutschebank's connection to Islamic terrorists and 9-11 might reopen a mysteriously closed 1991 investigation of criminal insider trading connected to Harken Energy, a Houston company where George W. Bush served on the board of directors as a major stockholder with his some of his father's key campaign contributors. On January 30, 1990 Harken, with a remarkably unsuccessful history of drilling projects, signed major oil drilling contracts with Bahrain. Five months later, Bush's company suffered an unexplained huge loss of stock value just prior to the Gulf War -- but not before the future president had already cashed out, making close to a million dollars selling his own stock. The future president completed his key insider trade eight days before Harken announced a $23 million second quarter corporate loss and about six weeks before the invasion. Having just profited by nearly $1 million--representing a 200 % insider windfall-- the SEC investigation of George W. was led by general counsel James R. Doty who, according to a UPI report, mysteriously neglected to interview any of the Harken directors --including the younger Bush -- regarding "enforcement" oversight. Moreover, Doty had previously served as George W. Bush's personal lawyer to Bush 43's purchase of the Texas Rangers baseball franchise. So, in the end, a future president--George W. Bush -- was cleared of insider trade wrongdoing by his personal attorney and by his father's counsel " [The Profits of Death, Part III, Tom Flocco and Michael C Ruppert, From The Wilderness Publications, 2002] The argument made by Flocco and Ruppert, while valid, misses the real cover-up. An investigation into the Deutsche Bank connection to the terrorists would have demonstrated that at the heart of the connection was a need to cover-up probable illegal gold movements. Moreover, the names of two banks (JP Morgan and Deutschebank) and three individuals (George Bush Sr., Adnan Khashoggi and Edgar Bronfman) reported to THE SEPTEMBER 11 COMMISSION REPORT

Page 160 be involved in these probable illegal gold movements are linked to a single gold company: Barrick. These names are not linked as a group to any other gold company. These individuals, along with Shiek Kamal Adham, (the former head of the Saudi intelligence agency and a regular business partner of Khashoggi) have been widely reported as involved (but not convicted) in money laundering schemes and illegal gold movements: · George HW Bush: the Iran-Contra scandal, the Marcos gold; · Adnan Khashoggi: the BCCI-Vatican Bank money laundering scandal, Iran-Contra, MJK securities fraud, and the US savings and loans bankruptcies, the Sand casino bankruptcy, and the Marcos gold; · Shiek Kamal Adham: the BCCI-Vatican Bank scandal, Iran-Contra; and · Edgar Bronfman: Harris Bank and Household Bank money laundering, the Nazi gold hoards, as well as the family history in Canada of bootleg alcohol smuggling. If four suspected money-launderers, at least two of which are involved in prior movements of this gold, are all financially involved in a company responsible for the generation of billions of dollars of paper gold, and producing bullion from mining deposits with a history of dubious value, then should not those facts warrant suspicion of that company’s intent? In fact, the Barrick gold operation is a phenomenon that could not have occurred without the assistance of President George Bush Sr. In his last days as President, Bush pardoned his former political colleagues convicted in the Iran-Contra Scandal, including Adnan Khashoggi. The Iran-Contra conspirators executed their crime with the heavy involvement of three individuals who continue to appear throughout this report: · Adnan Khashoggi; · Khalid bin Mahfouz, owner of 20% of BCCI; and · Shiek Kamal Adham, who belonged to a group that owned approximately 55% of BCCI, and was on the board of directors with Mahfouz. At the same time that Bush pardoned the convicted Iran-Contra conspirators, he authorized a procedural change which allowed Barrick (a company started with funding from Khashoggi and Shiek Kamal Adham as an original investors) to claim $10 billion in unmined reserves in Nevada, for the meager cost of $10,000. It is speculated this process needed to be expedited because it was anticipated the Clinton administration would not approve transaction without sizeable royalty requirements. This report speculates that Bush expedited the approval so that laundering of gold could happen much sooner – that having the reserves on the books was a necessary step to begin laundering the stolen treasuries. Not often reported, Barrick claims it paid $63 million for the company that owned those rights, although the details of that investment are not known. Even at that rate, $63 million for $10 billion in assets seems like a suspicious arrangement. THE SEPTEMBER 11 COMMISSION REPORT

Page 161 About the same time Khashoggi and Adham were investing in Barrick, a partner of their BCCI partner (Khalid bin Mahfouz) was becoming a 12% investor in Harken, which would later be identified with George Bush Jr.’s insider trader. "In 1987 an obscure Saudi financier named Adbullah Taha Bakhsh invested in Harken, a Texas oil company of which George W. Bush was a director from 1986 to 1993. The deal consisted of recapitalizing the company, which was going through difficult times. This Saudi investor is none other than the partner of Khalid bin Mahfouz and Ghaith Pharaon. And so Taha Bakhsh became an 11.5 percent shareholder in Harken Energy Corp. Between 1976 and 1982, Abdullah Taha Bakhsh – an investor in Harkin Energy, recall – was the representative for the bin Laden family." [The Real Intelligence Cover-Up: America's Unholy Alliance, Joe Trento's Column, 8/6/2003] The current Bush administration has dropped all investigations of potential financial crimes associated with the destruction of the WTC. It has forced the FBI to drop the GATA/gold price-fixing investigation so as to focus on ‘terrorism.’ The Bush administration dropped the investigation of illegal stock trades once they were traced back to Israel. The 9/11 Commission report does not mention them, and there is no SEC nor FBI report on the investigation. Any formal announcement of the findings disappeared a long time ago, and an only inadvertent leak let the world know what really happened. An investigation into the destruction of the WTC as a classic criminal act rather than an act of political terror would most likely result in exposure bringing disrepute to the Bush family, and some of the most powerful banking executives in the world. Criminal charges would also be possible. It would also start in motion actions required to return billions of dollars of illegal gold to their rightful national treasuries. It would probably bring about the collapse of a number of major financial institutions. Therein lays the heart of real the National Security issue. 7.2 Gold Laundering – A Hypothesis Before attempting to unravel the mechanism by which the laundering of illegal gold may have been perpetrated, one needs to understand the magnitude and difficulty of this crime. Gold, because of its scarcity and value, is a closely monitored commodity. Gold traders across the world monitor supply and demand, and report regularly on web sites. They watch it so closely, that when unexplained amounts of gold on the market in the 1990s started to depress prices, they traced it to bullion bank sales of reserves. The annual mining and production of physical gold contributes only about 2,500 tonnes per year (See Figure 4 for annual production rates). The price of gold has remained relatively stable from 1992 to 2003 (See Table 4). Had there been a significant ‘dump’ of illegal gold in the magnitude of 2,000 to 3,000 tonnes or more in a short span of time, the transaction would have been easily identified by the market watchers as laundering activity. Hence, illegal gold from Russia, Switzerland or the Philippines would have had to been moved into the market slowly, with a credible paper trail. The strategy for laundering gold without depressing prices would have been a rate of laundering in the range of 10% of market supply and demand, possibly 200 to 300 tonnes per year. Anyone sitting on stolen gold could not dump it immediately, but would require institutional help in laundering 5% to 10% of the hoard per year, over ten to fifteen years – unless they got greedy, and wanted a faster payout. THE SEPTEMBER 11 COMMISSION REPORT

Page 162 The following Table 3 demonstrates the range of value for 1,000 or 2,000 tonnes of gold. Based on market conditions, estimated illegal gold from the Philippines (at least 1,000 tonnes) and Russia (3,000 tonnes) might be worth up to $40 to $50 billion if unlaundered. If it was laundered and converted into the foundation for derivatives, at a ratio between 100:1 and 400:1, the managed value falls somewhere potentially between $4 trillion and $20 trillion. THE SEPTEMBER 11 COMMISSION REPORT

Page 163 Gold Weight/Value Conversion Chart for Purpose of Discussion Troy Ounces Tonnes Low Value High Value 1 $270 $320 32,150.7 1 $8,680,689 $10,288,224 1,000,000 31.1 $270,000,000 $320,000,000 24,000,000 746.5 $6,480,000,000 $7,680,000,000 32,150,700 1,000 $8,680,689,000 $10,288,224,000 64,301,400 2,000 $17,361,378,000 $20,576,448,000 Overview of Gold Price History Year High Low Year High Low 1972 $70 $44 1988 $485 $389 1973 $126 $64 1989 $417 $359 1974 $195 $117 1990 $424 $346 1975 $185 $135 1991 $403 $344 1976 $142 $102 1992 $360 $330 1977 $168 $127 1993 $407 $326 1978 $244 $166 1994 $398 $370 1979 $524 $217 1995 $397 $372 1980 $850 $474 1996 $416 $367 1981 $599 $391 1997 $368 $283 1982 $489 $297 1998 $315 $273 1983 $512 $374 1999 $324 $253 1984 $407 $303 2000 $326 $264 1985 $341 $284 2001 $291 $257 1986 $443 $326 2002 $343 $278 1987 $503 $390 2003 $417 $320 THE SEPTEMBER 11 COMMISSION REPORT Page 164 Figure 6 World Production of Gold (Tonnes) How might a bank launder $10 billion dollars, or 1,000 tonnes in gold? (Ten billion is a nice, round number, which conveniently matches the ‘market rumors’ of how much gold the Deutschebank has borrowed from the Bundesbank, i.e., how much gold the Deutschebank has put into the market. This is about half of the amount reported stolen from the Russian treasury in 1991.) There are two possible ways. 1. If laundering gold, a German bank would “borrow” $10 billion in gold from the Bundesbank with the publicly acknowledged intent to sell it on the open market, (to facilitate the carry trade, producer hedging, etc.) Then it would put the Bundesbank gold in its own vault and launder $10 billion in Russian bullion. Ultimately, the German bank would have to re-purchase $10 billion in gold, to create a record of repayment to the Bundesbank. Unfortunately, doing so would create a physical gold imbalance on its own balance sheet. What would need to happen is that the bank would need to create the financial transaction of a gold purchase, without ever actually receiving the physical gold. A gold future from a gold producer or bullion bank would work for this. 2. Another option for laundering gold would be to turn over to the buyer of the gold a “gold future certificate” saying the purchaser could take delivery of gold from a producer that had promised the gold to the bank, and then launder the stolen gold through the mining and production company. The mining and production company could claim the gold came from either the mine or a bank. How could this be done? Quite simply, by buying, creating or corrupting a major gold producing company, that would be willing to facilitate such a fraud. The steps to doing so might be: 1. Create a major gold mining and producing company. 2. Attract capital from a few significant investors that would have a tendency to avoid intense scrutiny of operations. 1980 1983 1986 1989 1992 1995 1998 2001 3000 2500 2000 1500 1000 500 0 THE SEPTEMBER 11 COMMISSION REPORT

Page 165 3. Create credibility for the company by giving it the reserves large enough to accommodate the appearance of being able to support large volume trade. 4. Install trusted management to establish credibility and respectability in the investment market while watching over the company’s less reputable activity. 5. Create a ‘flood’ of small transactions to cover larger gold movements. 6. Scale up the gold laundering volume based on market limitations. In reviewing recent history, there are familiar names (with a few mentioned elsewhere in this report in relation to other activities) who appear to have undertaken exactly the six steps outlined above, by creating and using Barrick Gold. Barrick is easily worthy of suspicion, but note that this is an unproven hypothetical scenario: · It has attracted investors and management who have a public history of being associated with in illegal or potentially fraudulent activity; · It has passed the smell test of the American judicial system that says it should go to trial over gold price-fixing charges; "GATA consultant Reginald H. Howe brought a similar federal lawsuit in Boston in 2000. It was dismissed on jurisdictional grounds in 2002. Since then GATA has documented and publicized evidence of manipulation of the gold market by Barrick, Morgan Chase, other bullion banks, and the U.S. government." [Class-Action Suit Seeks Damages For Gold Investors from Barrick and J.P. Morgan Chase, Business Wire, 11/27/2004] · It demonstrated financial performance in accomplishingwhat no other gold or derivatives trading company had been able to do: it has achieved financial success that seems inexplicable to industry experts: unparalleled growth in volume, 62 straight financial quarters of profitability in the extremely risky futures commodity market, and growth while all competitors are in decline or closing. For the record, GATA’s charges have been neither upheld nor denied by the US courts system, although the charges had enough merit to have survived requests from the Barrick legal team to dismiss the suit. A review of the six steps will demonstrate the involvement of various individuals and companies in the creation of a potential gold laundering machine. Step 1: Create a major gold mining and producing company. In 1983, two investors of international renown, worked with Peter Munk to establish Barrick. "At its inception, Barrick’s principal investors were Saudi Arabians who had close ties to the Saudi Intelligence Services, or to the CIA, or to both. Those Saudi Investors were Sheikh Kamal Adham, the head of Saudi Intelligent Services at the same time that President Bush was head of the CIA; Adnan Khashoggi, the first of the Saudi investors in Barrick; and Prince Nawaf bin Abdul Aziz, one of the biggest of the initial shareholders in Barrick and now head of Saudi Intelligence Services. Sheikh Adhamwas the CIA’s principal liaison to the Middle East and was so closely tied to the CIA that he THE SEPTEMBER 11 COMMISSION REPORT

Page 166 even had an agency codename: “Tumbleweed.” [J. Taylor's Gold and Technology Stocks, Jay Taylor, 1/3/2004] One of these same investors – Khashoggi – was a primary money mover for the Marcos family, thus linking him to the origins of one of the major sources of gold at the heart of this crime, and linking Barrick to a source of knowledge of illegal gold. "Khashoggi had long been associated with Ferdinand and Imelda Marcos and the so-called Marcos gold. Indeed, so trusted was he that Marcos had him fronting for two "eclipsed" Marcos accounts--one in the name of Etablissement Mabari with the private Swiss bank of Lombard Odier & Cie, and the other in the name of Etablissement Gladiator at COGES Corraterie Gestion SA, Geneva." [Nexus Magazine, Volume 10, Number 6 (October-November 2003), David G. Guyatt ] "Marcos and Khashoggi set about to create Five Star Trust in 1983 as a means to create a vehicle to use the Philippine wealth to create and funnel fungible assets. In 1989, Five Star Trust was officially established in the Isle of Man by a Houston-based attorney who was a close friend of the Bush family… Five Star entities, active and dissolved, have been discovered in the Isle of Man, the island of Nevis, the Bahamas, Florida, Kentucky, and Texas. Other Five Star-related entities stored large sums of money in the Cook Islands, according to U.S. intelligence sources, and these funds were directly linked to Khashoggi and BCCI …. Five Star's accounts are said to funnel more funds from Saudi Arabia as well as cash reserves hidden away in offshore artificial shells by Enron before it collapsed ." [Texas to Florida: White House-linked clandestine operation paid for "vote switching" software, Online Journal ,Wayne Madsen http://www.politrix.org] Khashoggi’s acquaintance with Munk is reported to go back as far as 1974, when they were investment partners. Peter Munk is a Hungarian who fled from Hungary to Switzerland with his parents to escape the Holocaust. Peter Munk was brought into business prominence by Sir Henry Keswick, with an able assist from Sir Peter Abeles. Peter Abeles was a business partner of Bernie Houghton and Michael Hand of the Nugan Hand Bank in Australia. Nugan Hand was a major CIA front for moving Marcos gold and laundering narco trade profits weapons. Keswick himself appears as no stranger to the money-laundering world. “According the the author’s of the book “Dope Inc,” the Keswick family control a substantial part of the world’s narcotic trade and use HSBC, the bank they are said to control, to ‘provide centralized redsicounting facilities for financing of the drugs trade.” [David Guyatt, Project Hammer Reloaded, 2003] Munk’s origin’s with the ‘Hungarian Mafia’ in Australia easily could have provided him with a connection to the Marcos/CIA gold stores. “Munk's approved biography reports that this Vansittart activated the formidable Sir Henry Keswick, who made arrangements to lift Munk into a new career. Keswick's family merchant banking firm, Jardine Matheson, had long been the British Empire's leading, out-in-the-open organizer of Asian illegal narcotics trafficking and drug-money-laundering. (Keswick, Jardine Matheson, and their cohorts are central figures in {EIR'}s book {Dope, Inc.} (Washington, D.C.: Executive Intelligence Review, third edition, 1992.) Jardine Matheson made Munk the chief executive of a Bahamas-registered hotel corporation called Southern Pacific Properties (SPP), with Jardine money, and Jardine's chief executive, David Newbigging, as a director. Then, Jardine's historical dope partner, the Peninsular and Oriental Steam Navigation Company (P&O), joined the Munk enterprise; P&O's Lord Geddes himself joined Newbigging on the Munk-SPP board. In future years, as Munk rose to world prominence in the gold business, the Hongkong and Shanghai Banking Corp. and the Royal Bank of Canada, two ``Dope, Inc.'' financial agencies, would provide credit in the billions of dollars for Munk's expansion. THE SEPTEMBER 11 COMMISSION REPORT

Page 167 Munk-SPP became a giant hotel owner in Australia and the South Pacific islands, and seized control of the Travelodge chain. Munk's rise in Australia was aided by his lifelong close association with fellow Hungarian emigre Sir Peter Abeles, Australia's transport mogul. Munk's stepfather had been secretary and assistant to Abeles's father in Vienna in the late 1940s. Abeles is reportedly known in Europe as ``the White Knight,'' in reference both to his British knighthood, and his reported large role in the cocaine trade…. In 1974, Munk signed an investment partnership agreement with arms-trafficking billionaire Adnan Khashoggi of Saudi Arabia. According to Munk's approved biography, the new alliance was cemented when Munk and Khashoggi were summoned to the London headquarters of Peninsular and Orient. P&O's hereditary boss was Lord Inchcape, whose predecessor in the 1920s (also Lord Inchcape) had directed Britain's India Commission to continue the Empire's opium production. Munk later told his biographer that he was nervous--Khashoggi was late and perhaps ``the P&O directors wouldn't wait for us and it would seriously harm the relationship. It was already remarkable that they should have a Jew and an Arab together in their dining room.'' But, the mighty Lord Inchcape convinced Khashoggi to plunge in, and Khashoggi now provided most of the cash for the Munk enterprise Khashoggi and his associates, backers of the British- and Bush-linked faction of the arms trade, created Barrick Petroleum Corp. in 1981, registered as a Delaware, U.S.A., corporation. Junior partner Munk, having returned from London, set up a parallel ``Barrick Resources'' in Canada. But Munk's name was anathema to Canadian investors. So, Khashoggi was brought in to lend his prestige to Munk. Khashoggi made a televised publicity tour of the Toronto stock exchange, and announced that he had purchased 10,000 (Canadian) Barrick shares. At that point, in fact, Khashoggi, his brother, and their international associates already controlled the company, partially through Khashoggi's Lichtenstein-U.S.A. conglomerate, ``Triad.'' Munk was now launched as a corporate chairman in Canada. But this first Barrick, an oil development firm, went bust and lost all its money. In 1983, the Khashoggi-led group formed the gold company whose name was soon changed to Barrick Gold Corp. Sheik Kamal Adham was reportedly one of the new company's founding co-owners. Adham, the chief of Saudi intelligence, had coordinated royalist guerrillas in Yemen, with British arms secretly provided through Khashoggi. [Inside story: the Bush gang and Barrick Gold Corporation, Anton Chaitkin, Afrocentric News Network, http://www.afrocentricnews.com/html/bush_gang.html] Barrick Gold was reportedly started in 1983, but remained inconspicuous for the period between 1983 and 1988. What is known is that in 1986, prior to his involvement in Barrick, Khashoggi failed in his attempts at another gold start-up company as chairman of a Denver-based exploration group called Mali American Mines. Investors were not impressed with the offering, and Khashoggi left Las Vegas without the necessary capital. (Elizabeth Taylor is reported to have been at the intial attempt to solicit investors in Las Vegas.) Khashoggi’s partner on the Barrick investment - Sheikh Kamal Adham – also has a checkered past of being involved in money laundering business deals: "The great Afghan expert on Muslim strategy, General Kamal Adham, also the former head of the Saudi intelligence agency, is now under house arrest. He was responsible for arranging the meeting between Hekmatyar and a Soviet representative, Yu Voroustsov, in Taif Saudi Arabia. The meeting was requested by Dr. Najeebullah, the former President of Afghanistan in 1989. The reason for the arrest of Kamal Adham is said to be his role in heroin money laundering and recycling of drug money through BCCI." ['Gulbuddin Hekmatyar had links with KGB', The News International, Imran Akbar, 10/8/1992] THE SEPTEMBER 11 COMMISSION REPORT

Page 168 Sheikh Kamal Adham was a co-investor in the BCCI bank with Khalid bin Mahfouz (Mahfouz owned 20% and Kamal Adham was part of an Arab group that owned 55%. Both were BCCI bank directors. This bank was documented by the USDEA as responsible for over 120 money laundering incidents.) This relationship is of note because Mahfouz is the brother-in-law of Osama bin Laden. Additionally, one finds “Abdullah Taha Bakhsh … represents Khalid bin Mahfouz’s financial interests in the Middle East.” Bakhsh, amongst other roles, was a 12% owner of Harken Energy - George Bush Jr’s company. Khashoggi and Shiekh Kamal Adham would combine forces eleven years later to create the Oryx Corporation (Dubai). Oryx would be the owner of Rudy Dekker’s flight school in Florida, where Mohammed Atta and many of the supposed 9/11 hijackers received flight training. This report finds both Khashoggi and Shiek Kamal Adham (now deceased) both having criminal records, both having been linked to financial fraud, and both directly linked to: 1. the distribution of massive quantities of illegal gold, 2. the creation of potential gold laundering operations, the investigation into which was covered up by the destruction of the World Trade Center, 3. the funding of a flight school used to train WTC attackers, and 4. the recruitment of flight school trainees through Khashoggi ’s relationship with Yeslam Bin Ladin, the brother of Osama Bin Laden, or Adham’s relationship with Osama Bin Laden as brother-in-law. At this point in time, Khashoggi remains protected by agencies of the US government (in the name of National Security) against arrest and prosecution by several nations. Step 2: Attract capital from a few significant investors that would have a tendency to avoid intense scrutiny of operations. During the late 1980’s and early 1990’s, there would be at least two additional major investors brought into Barrick, as Khashoggi backed out. Khashoggi used his stock in Barrick as collateral to finance the arms sent to Iran by the US under President Reagan, and CIA Director George Bush. The second group – after the Saudis - would be the Bronfman family, who merged its mammoth real estate firm, Trizec, with Barrick Gold. Today, the Bronfman family of New York is a widely respected name. "To Montrealers, Charles Bronfman is the shy former owner of the Expos baseball team. In Israel, he is the country's most important foreign investor. But in Manhattan, where he now resides, Charles is merely the Big Apple's third-most-famous Bronfman. Nephew Edgar Jr. gets most of the attention as president and CEO of family-controlled Seagram Co. Ltd., which he has transformed from a purveyor of premium spirits into an international film and music powerhouse (through its Universal Studios and Polygram divisions). Elder brother Edgar Sr. is president of the World Jewish Congress and led the public battle to force Swiss banks to settle the claims of Holocaust survivors. But despite his low profile, Charles Bronfman has an array of interests: he controls Israel's largest conglomerate, Koor Industries Ltd., and is chairman of The Jerusalem Report. He is a renowned philanthropist, dispensing more than US$20 million annually through his personal foundation. Two years ago, he moved from Montreal to Manhattan after growing weary of the unstable political climate in Quebec. In 1991, Revenue Canada allowed his family trusts to move $2 billion offshore without paying taxes." [The rich THE SEPTEMBER 11 COMMISSION REPORT

Page 169 100, Ellen Himelfarb; Laura Janeshewski; Carolyn Pritchard; Cynthia Reynolds; Et al, Copyright UMI Company 1999, 07/30/1999] After that recognition though, comes the recognition of other relationships which help explain how a ‘family’ like the Bronfman family might get involved in a business that might have links to illegal gold laundering. First, the Bronfman family uses the legal services of White & Case, who also represented the Marcos family, JP Morgan, and Banker’s Trust. (Bankers Trust reportedly was in possession of illegal gold from Marcos requiring laundering, and JP Morgan later – as shall soon be demonstrated – surreptitiously invested in Barrick.) The Bronfman’s also have reported connections to the Israeli Mafia and the Bush administration through Arie Genger. "Israeli Prime Minister Ariel Sharon's "back channel" to the Bush Administration is Israeli-American businessman Arie Genger. Genger has been used to send messages between U.S. Secretary of State Colin Powell and Sharon. Genger met Sharon in 1981 when he was working for Sharon's good friend, Meshulam Riklis, one of the top operators in the Israeli Mafia. Genger heads the privately held, New York-based, Trans-Resources Inc, which owns Haifa Chemicals in Israel. He has numerous business connections to top Z-lobby and other notorious types. He sits on the investment committee of The Challenge Fund-Etgar LP which is chaired by Edgar Bronfman." [Sharon’s “Private Channel” to Bush Administration is a Riklis Man, Ha'aretz, 12/30/2001] The most telling report regarding the Bronfman’s proclivity for possibly turning a blind eye to illegal money laundering is their involvement in Bank of Montreal, Harris Bank and Household Bank. If the following report is true, recruiting the Bronfmans for ownership of a gold laundering operation would have been ideal. "In Chicago, is a branch of a huge Canadian octopus, the Bank of Montreal, owned by the … Bronfman family. … Their branch in Chicago, Harris Bank, has for some time been THE heavy weight in foreign currency trading, handling and exchanging most every type of money instrument. Several years ago Harris Bank merged with a known reputed money laundry, Household Bank, with units of Household International, headquartered in the Chicago-area. Household is the successor and alter ego to Nugan Han Bank that operated in California, Australia, Manila, Saudi, London, and a few other places. The General Counsel of Nugan Hand was William Colby, former Director of Central Intelligence. Former Generals and Admirals, close to CIA, operated Nugan Hand's worldwide offices. It was a CIA proprietary operation, transferring clandestine funds, for "national security", for Southeast Asia secret operations, including assassinations, such as the Phoenix Program, murdering some 63,000 Viet Namese civilians who opposed the Saigon government. Also disguised as something else were the skimming off of U.S. weapons shipped to Viet Nam, some 20 per cent of which were stolen upon being off-loaded. Dope funds from the "Golden Triangle". Large U.S. military gambling pools. The dark underside of the real financial world. Nugan Hand was "The House". Colby became the unlisted general counsel of Household, Nugan Hand's alter ego. Amid a scandal starting with the assassination of one of its founders in 1980, and the shredding of its financial records, Nugan Hand disappeared. Rising from the espionage ashes, to continue the reputed money laundering, was Household, which had previously been mostly a loan shark operation, Household Finance Corporation. At about the time Harris Bank took over many of the units of Household Bank, 1996, the unlisted "general counsel" of Household, William Colby, was assassinated, covered up, his friends say, as a supposed "boating accident". Colby was about to make public statements about Nugan Hand, about Household, and a few other entities which he began to realize were not really carrying out a "national security" purpose but were a vast dirty money machine. Major owners of Harris Bank were the Peter Fitzgerald family of Chicago. He was ahead by between 25 to 50 million dollars when Harris Bank became a unit of Bank of Montreal.(His mandatory financial disclosure was reported in the Washington Post, 6/12/99, page A-3). Fitzgerald also reportedly has a sizable interest in one or more Mexican Banks, reportedly major THE SEPTEMBER 11 COMMISSION REPORT

Page 170 dope money laundries, including Grupo Financiero Bancomer which was reportedly involved in a federal "sting" resulting in indictments May 19, 1998. [www.usdoj.gov/criminal/tost8ind.htm] Bancomer with branches in New York and Los Angeles reportedly operates through Harris Bank, by postal and wire transmissions, in what is called tri-national cash management system of Harris. The prosecutions were called "Operation Casablanca". The Chicago Tribune, sensitive to bank scandals, played down Bancomer's problem. (Head of Tribune Company for many years was board chairman of the Federal Reserve District Bank in Chicago.) "[Clinton's Money Laundry, Sherman H. Skolnick, June 13, 1999] The third major group that would invest in Barrick in a significant way did so rather surreptitiously. In 1994, the controlling shareholder of Barrick was Horsham. The President of Horsham was Tariq Kadri, Khashoggi’s long-time lawyer. That year, Horsham joined with Argo Partnership (in which J.P. Morgan had a partnership interest), and acquired controlling interest of Trizec Corp. In 1996, Horsham acquired the remaining equity in Trizec Corp, and merged with Argo to become TrizecHahn Corporation – which became the controlling shareholder of Barrick with about 16% of its stock. A subsequent investigation by Donald W Doyle (CEO of Blanchard & Company) showed that Argo was owned jointly by JP Morgan Capital Corp and JP Morgan Securities Inc. The Managing Director of JP Morgan Capital Corp. was appointed to the Board of Directors of TrizecHahn, which in turn controlled Barrick. JP Morgan in turn, has a vested interest in Citibank, which was also reported to be one of the larger recipients of illegal gold from Marcos. "Citibank's largest stockholder was J. P. Morgan, which in December 2000 merged with Chase Manhattan to form the all-powerful J. P. Morgan Chase. Bankers Trust was a J. P. Morgan creation from day one." [Nexus Magazine, Volume 10, Number 6 (October-November 2003), David G. Guyatt] The three major investment groups associated with Barrick each have a history of being linked – but not convicted – with money laundering schemes and illegal money movements. Should the convergence of these three groups in the financial control of Barrick be considered coincidental? Step 3: Create credibility for the company by giving it the reserves large enough to accommodate the appearance of being able to support large volume. If a new gold mining and producing company was going to be required to sell futures in the magnitude of $10 to $30 billion, it would need to demonstrate significant reserves to provide a credible offering in the international marketplace. In 1983 Barrick Gold Corp. was a start-up company with a single mine in Canada and a founder with no experience in the gold business – Peter Munk. According to his biography in the Canadian Mining Hall of Fame: "…in 1983 … he bought a stake in an Alaskan placer mine and half the Renabie mine in Ontario. Gold production was a mere 3,000 oz. that year; revenue, roughly $1.7 million. He then purchased the Camflo mine in Quebec, which gave him a stellar technical team led by mining engineer Robert Smith. Munk then turned his attention to a Nevada heap-leach project producing a mere 40,000 oz. gold each year. The industry doubted its potential…"[Canadian Mining Hall of Fame] THE SEPTEMBER 11 COMMISSION REPORT

Page 171 By 2001 Barrick had amassed off-balance-sheet assets that were worth more than the market capitalization of the next five biggest gold-mining companies in the world combined. Barrick did not do this alone. "At the very end of his presidency (President) Bush gave a sweetheart deal to the Canadian company Barrick Goldstrike. They got the rights to US land worth $10 billion in return for a nominal payment to the treasury of $10,000. In one of his last acts as president Bush pardoned Khashoggi's alleged (Iran- Contra) co-conspirators, who were key members of Bush's own cabinet. As a result, no case could be made against Khashoggi – or against Bush himself…..To express its gratitude for these favors Barrick Goldstrike hired (Bush) right after he left office and donated $148,000 to the Republican Party, at least that is the amount that can be traced." [Bush the Elder’s Scheme to Sell Pardons and Get a Payoff – Where is the Outrage Over a 10 Billion Dollar Taxpayer Ripoff?, Jock Gill, February 26, 2001] Again, for the record, Barrick bought the American company (for $63 million) which in turn, purchased the land rights. In 1996, Barrick is again reported as having received help from the elder George Bush in getting the Congo’s government monopoly reserve – the Gold Office of Kilomoto, worth 100 tonnes of gold reserve. If the reports of the 1992 purchase are correct, that would mean the mineral deposits acquired by Barrick for $10,000 represent about 32 million troy ounces. In 1997, the Annual Report of Barrick reported that the company’s gold reserve in 1994 was 37.6 million ounces. This would imply that without the ‘Bush bonanza’, Barrick might not have the credible reserves to engage in the transactions it did over the next seven years. It is also possible that the Bush gift is what brought the Americans and JP Morgan into the game plan. It is reported that Khashoggi sold his investment in Barrick to finance his portion of the Iran-Contra guns for drugs deal, hence the Reagan/Bush administrations complicity in Barrick may go back even further than the 1992 sweetheart deal. Khashoggi and Bush, both deeply implicated in the Iran Contra scandal (laundering drugs and money for weapons) – created Barrick. Any serious investigation into the gold dealings of the bullion banks would have exposed this complicity. Prevention of this exposure may have been a primary motivation for misdirecting or stunting the investigation into the attack on the World Trade Center. Even worse - it may also have been a motive for allowing the carnage to take place. Step 4: Install trusted management to establish credibility in the investment market while watching over the company. Barrick, started by several individuals with documented histories of fraud or unscrupulous behavior, has had the ability to attract a board of Directors that includes more than a few of the most powerful men in the world. As far back as the Annual Reports for Barrick’s can be located, one of the most consistent members of the Advisory Board has been Karl Otto Pohl, former President of the German central bank (Bundesbank) and chief officer of the International Bank of Settlements and IMF. This would be pretty powerful talent for a start-up company, but would make sense if the Bundesbank had an interest in staying close to the management and activities of Barrick. In a potential gold laundering scheme by a German bank, complicity by the Bundesbank would be a requirement, as the Bundesbank would be the initial provider of legal gold being used to cover the sale of illegal gold. THE SEPTEMBER 11 COMMISSION REPORT

Page 172 In 2002, just after the Deutsche Bank Alex Brown Securities Canada and Adnan Khashoggi were being sued by MJK Securities for fraud, former Canadian CEO of Deutschebank became an Executive Director board member of Barrick’s. That individual was Tye W. Burt - the former Chairman of Deutsche Bank Canada and Deutsche Bank Alex Brown Securities Canada, and Managing Director and Head of Deutsche Bank’s Global Metals and Mining Group. Again, an executive of Khashoggi’s financial partner (Deutsche Bank Canada) is brought into a control position. Barrick’s Advisory Board Additionally, one will discover that the Advisory Board of Barrick has brought in a large number of board members that create “credibility” for Barrick: Former President George Bush (Sr.) served as Honorary Senior Advisor, Senator Howard H. Baker, a former Majority Leader of the U.S. Senate and White House Chief of Staff; and Senator William Cohen, a former U.S. Secretary of Defense have also served. Senator William Cohen, as vice chairman of the Senate Select Committee on Intelligence, was responsible for negotiating the “most significant reforms to result from the Iran/Contra hearings.” In 1989, he was the vice-chairman of the Select Committee on Intelligence in the Senate. President Bush's ambassador to Canada (1989-92), Edward N. Ney, had been for many years a Bush political operative and an international coordinator of Bush's “privatized'' intelligence activities. In 1992, Ney quit as ambassador and became a director of the Barrick Gold Corp. As long time Chairman, President and CEO of Young & Rubicam Inc., the world’s largest independent advertising communications company, he founded Burson-Marsteller, a subsidiary used extensivley by groups that have been exposed as infringing on the public interest. “Burson-Marsteller (B-M) is the world's largest PR firm, with 63 offices in 32 countries and almost $200 million in income in 1994. Although its name is unknown to most people-- even to many in activist circles-- B-M is fast becoming an increasingly important cog in the propaganda machine of the new world order…. On the human rights front, B-M has represented some of the worst violators of our age. These include: · The Nigerian government during the Biafran war, to discredit reports of genocide. · The … junta that ruled Argentina during the 70's and early 80's, to attract foreign investment. · The totalitarian regime of South Korea, to whitewash the human rights situation there during the 1988 Olympics. · The Indonesian government, which got into power through a CIA- sponsored bloodbath. (It should be pointed out, however, that B-M denies that it is handling the issue of genocide in East Timor) … · the late communist Romanian despot Nicolae Ceaucescu. · Other third world human rights violators that have been represented by B-M include the governments of Singapore and Sri Lanka…. One of The Brock Group’s (TBG- a subsidiary of Burson-Marsteller) top executives happens to be former Miami businessman and ambassador to Venezuela Otto Reich. During the Reagan administration, the Cuban-born Reich headed the US state department's Office of Public Diplomacy (OPD), whose task was to disseminate disinformation about the Sandinistas and discourage reporting critical of the contras. This outfit, whose operations were later found to be illegal by the US General THE SEPTEMBER 11 COMMISSION REPORT

Page 173 Accounting Office, was staffed with five psychological warfare specialists from the 4th Psychological Operations Group of Fort Bragg. According to John Stauber and Sheldon Rampton, the OPD...helped spread a scurrilous story that some American reporters had received sexual favors from Sandinista prostitutes in return for writing slanted stories. In 1987, after the US Congress shut down the OPD, congressman Jack Brooks called it an important cog in the (Reagan) administration's effort to manipulate public opinion and congressional action.” [Burson-Marsteller: PR for the new world order, Carmelo Ruiz, July 6, 1997, http://www.hartford-hwp.com/archives/27/061.html] Additionally, one more recently finds Andrew Young and Vernon Jordan on the Advisory Board. In wondering how these two Washington “fixers” added to the value of the company, one discovers their role in silencing a request for a congressional investigation into Barrick. … was Barrick’s Congo gold mine funding both sides of a civil war and perpetuating that bloody conflict? Only one Congressperson demanded hearings on the matter…Cynthia McKinney.... it wasn’t covered at all in the U.S. press. The New York Times wrote about McKinney that Atlanta’s prominent Black leaders -- including Julian Bond, the chairman of the NAACP and former Mayor Maynard Jackson -- who had supported Ms. McKinney in the past -- distanced themselves from her this time. Atlanta has four internationally recognized black leaders. Martin Luther King III did not abandon McKinney. I checked with him. Nor did Julian Bond (the Times ran a rare retraction on their website at Bond’s request). But that left Atlanta’s two other notables: Vernon Jordan and Andrew Young. Here, the Times had it right; no question that these two black faces of the Atlanta Establishment let McKinney twist slowly in the wind -- because, the Times implied, of her alleged looniness. But maybe there was another reason Young and Jordan let McKinney swing. Remember Barrick? George Bush’s former gold-mining company, the target of McKinney?s investigations? Did I mention to you that Andy Young and Vernon Jordan are both on Barrick’s payroll? Well, I just did. Did the Times mention it? I guess that wasn’t fit to print. [The Screwing of Cynthia McKinney, Greg Palast, AlterNet. June 18, 2003] Representing the Bronfman family on the Advisory Board is J. Trevor Eyton. “Eyton started his career in British intelligence's Argus-Hollinger nexus, next to media magnate Conrad Black. Since 1979, he has managed Brascan and other entities for the Bronfman family. He was appointed a Canadian senator as a reward for channelling the Bronfmans' money into buying the 1984 election for Mulroney's party, and to help get the Bush- and Mulroney-backed NAFTA three-way accord with the United States and Mexico through the Canadian Parliament. When the Bronfmans fused with Barrick, Eyton joined its board.” [http://members.tripod.com/~american_almanac/bushgold.htm] One also finds Lord Robert Powell, representative of the Rothschild family wealth. (His name will also appear on the Board for Diligence/New Bridge, which is connected to the events of 9/11 described in Section 8.) Brian Mulroney, former Prime Minister of Canada, and Paul G Desmarais Sr, probably the wealthiest individual in Canada are also on the Board. Of special interest is Mr. Brian Mulroney, former Prime Minister of Canada. Mr. Mulroney appears to be more than a passive participant who garners respectability for Barrick. Besides being on the advisory board of Barrick, he has been a Director of TrizecHahn Corporation since 1996. In 1992, prior to President’s Bush executive change to the procedures which allowed Barrick to contractually lock-up the gold reserves, Mr. THE SEPTEMBER 11 COMMISSION REPORT

age 174 Mulroney met with President Bush on three occasions. Mr. Mulroney, at this time was working closely with Karlheinz Schreiber, an infamous German-Canadian arms dealer. "… shortly after stepping down as prime minister in 1993, Brian Mulroney accepted $300,000 over 18 months from Karlheinz Schreiber, an infamous German-Canadian arms dealer. In cash. To help promote a fresh pasta business and develop international contacts, said a spokesman for Mr. Mulroney." [Canada’s Mulroney Baloney, Stevie Cameron, Globe & Mail, November 22, 2003] Discovery of payments from Schreiber to Mulroney was later used by the Royal Canadian Mounted Police to accuse Mr. Mulroney of accepting kickbacks to facilitate a $1.5 billion deal with Franz Josef Strauss, then head of the Bavarian government and chairman of Airbus Industrie. Mr. Mulroney sued for defamation, and won. "In 1995, with the RCMP digging into the circumstances surrounding the deal, a government lawyer wrote to the Swiss authorities asking them for help. The letter alleged that Mr Schreiber had used a Zurich bank account to pay the former prime minister, Brian Mulroney, a C$5m (£2.1m) kickback. Mr Mulroney sued and two years later won an apology and a settlement of C$2m. The government also apologised to Mr Schreiber, but did not offer him any compensation." [Schreiber: The man who would topple kings, The Guardian, John Hooper, January 14, 2000] The key piece of information in this story is that Mr. Mulroney had a business relationship with Karlheinz Schreiber. The question then becomes, what type of businessman is Mr. Schreiber? "Although Germany has been trying to extradite him from Canada since August, 1999, on fraud charges involving three government contracts in Canada and one in Saudi Arabia, it was Mr. Schreiber's 1991 secret political contribution of one million Deutsche marks (DM) to Germany's Christian Democrats that brought him international infamy. Delivered in a suitcase to the party's treasurer, and as usual in cash, the undeclared donation brought down Helmut Kohl, the former chancellor of Germany, in the worst political crisis in that country since the war. Known as the Spendenaffare or slush-fund scandal, it spawned two parliamentary inquiries. Investigations showed it was Mr. Schreiber who organized the payment of secret commissions on a DM 446-million deal to sell Thyssen tanks to the Saudis in the 1991 gulf war. Half the money went for secret commissions to pay bribes and kickbacks. None of this money was his own; it was provided by German munitions companies. Mr. Schreiber's job was to spread it where needed and by his own admission, his main beneficiaries were politicians. He took a percentage as his fee." [Schreiber: The man who would topple kings, The Guardian, John Hooper, January 14, 2000] Once again, a key participant in the Barrick organization is linked to individuals who have been linked to money laundering and weapons deals. Wouldn’t it seem as more than coincidence if one of the German munitions firms bank-rolling Schrieber was Dynamit Nobel, controlled by the German bank Cartel? This is a very credible group of individuals, all working to support the image of respectability for a company started by individuals repeatedly associated with investor fraud and financial misrepresentation. It is probably also of coincidence that in the months prior to acquisition of American mineral rights by Barrick, Brian Mulroney met with President Bush on three occasions. This contact may or may not have been necessary, because court documents from the Iran/Contra trials have shown that THE SEPTEMBER 11 COMMISSION REPORT Page 175 Khashoggi on at least two occasions had direct phone contact with George Bush Sr. The two were not strangers. Step 5: Create a ‘flood’ of small transactions to cover larger gold movements. In the second suit which accused the bullion banks of illegal price fixing, initiated by Blanchard in 2003, Blanchard alleged that: "…Barrick used private derivative contracts and engaged in off-balance sheet accounting to conceal the addition of billions of dollars worth of gold…..Barrick's actions made it "virtually impossible for gold analysts and investors to determine the size and the market impact of its trading positions”….J.P. Morgan financed Barrick's alleged short selling with remarkably advantageous terms not available to others. None of the lawsuit's allegations have been proven in court." [Barrick Gold, J.P. Morgan Chase accused of manipulating gold market, CBC News Online, December 18, 2002] Analysts were essentially saying that billions of dollars of gold had been added to the market in a series on transactions that were virtually impossible to analyze. In one year alone, according to the annual report, Barrick placed over 6.8 million options – a haystack of transactions. It is speculated by this report that most of these transaction were managed through Enron’s gold trading desk, with the records of those transactions now protected by UBS, Switzerland. Step 6: Scale up the gold laundering volume based on market limitations. In 1988, when Barrick started, it reported sales of 341 thousand ounces (10 tonnes) of gold. By 2001 its annual sales of gold equaled 6.3 million ounces (194 tonnes). Its short positions for 2000 and 2001 totaled 14.3 million ounces, which is significantly more than the annual gold sales of all the central banks in the 1990’s. Global investment demand for 2000 and 2001 combined was 6.7 million ounces. (J Taylor’s Gold and Technology Stocks, Donald W Doyle, Vol. 22, No 15, 12/15/2003). Clearly, with a large assist from Bush, this fledgling gold company became the major gold mover in the world. All of these suspicions may be unfounded, but the circumstantial evidence certainly warrants thoughtful consideration and investigation: There are thousands of tonnes of illegal, stolen gold in bullion banks throughout the world, which need to be laundered.  Commodity experts that watch the gold market have made claims that significant, inexplicable amounts of gold are showing up in the market.  There has been no known formal investigation into the possible laundering of this gold other than the FBI investigation buried in the World Trade Center.  A significant group of powerful individuals, with demonstrated links to the movement of illegal gold, have been directly involved in the creation of a gold producing company, which is now in a court battle over the legality of some of its trades. THE SEPTEMBER 11 COMMISSION REPORT

Page 176  A significant group of powerful individuals with reputed connections to money laundering activity are associated with the management and ownership of this gold producing company.  The success of this company in gold hedging defies expert industry expert comprehension. The company has been extremely successful mining land that industry experts thought was “doubtful” in its potential.  Some of the same people that started, controlled and owned significant portions of this gold company started, controlled and owned a company that staged and ‘trained’ eleven of the 9/11 hijackers, who were involved in the destruction of the World Trade Center. This ‘terrorist’ event effectively ended the investigation in global gold movements. 7.3 Burying the Truth Someone wanted to make sure that the buildings of the World Trade Center came down, and that no one was able to remove information from the 23rd and 24th floor of the North Tower before it happened. The evidence that these floors were targeted is very substantial. There is also substantial evidence presented that other buildings in the WTC –in addition to the Twin Towers - were “targeted” as well. A key investigation into global gold movements was halted first by the destruction of evidence, and then by the removal of investigative resources. Continuing that investigation would have brought to light a host of crimes against the nations of the world. While many organizations would benefit from the closure of that investigation, one group (so far) stands out in terms of motive and capability, and a demonstrated past for involvement in comparable crimes. This is the German-Swiss bank cartel, which is connected to multiple investigations of corruption, bribery, and money laundering that were terminated by the destruction of the WTC. Other organizations stand out as being involved in activity that benefited from the cessation of the investigation, but do appear to have the same degree of motive or capability. To that extent, these other organizations and their respective leadership had a “capability” (contacts to other ‘black ops’ groups) to execute the destruction of the WTC, but the heavy involvement of rogue Israeli agents suggests a different buyer for this cover-up than a U.S. buyer. The financial organization most associated with these rogue Israeli agents, ex-KGB and Russian Mafiya figures is a group of German/Swiss banking executives. However, the German-Swiss cartel had an American partner. In Section 8, this report will demonstrate how George Bush Sr. operated through Valmet SA (a Swiss subsidiary of Riggs Bank) to penetrate the KGB and help launch the Russian oligarchs which brought about the collapse of the Soviet Union. George Bush Sr., and remnants of his 1980s “Activity Group”- also known as the Iran-Contra conspirators, are also seen at the core of the motive and planning for the 9/11 conspiracy. “Conspiracy” is more than a ‘theoretical boogeyman,’ or a word which can be used as an ad hominum argument in an attempt to sidestep the real issue. “Conspiracy” is a crime recognized by 18 U.S.C. 371. "CONSPIRACY - 18 U.S.C. 371 makes it a separate Federal crime or offense for anyone to conspire or agree with someone else to do something which, if actually carried out, would amount to another THE SEPTEMBER 11 COMMISSION REPORT

Page 177 Federal crime or offense. So, under this law, a 'conspiracy' is an agreement or a kind of 'partnership' in criminal purposes in which each member becomes the agent or partner of every other member. In order to establish a conspiracy offense it is not necessary for the Government to prove that all of the people named in the indictment were members of the scheme; or that those who were members had entered into any formal type of agreement; or that the members had planned together all of the details of the scheme or the 'overt acts' that the indictment charges would be carried out in an effort to commit the intended crime. What the evidence in the case must show beyond a reasonable doubt is: First: That two or more persons, in some way or manner, came to a mutual understanding to try to accomplish a common and unlawful plan, as charged in the indictment; Second: That the person willfully became a member of such conspiracy; Third: That one of the conspirators during the existence of the conspiracy knowingly committed at least one of the methods (or 'overt acts') described in the indictment; and Fourth: That such 'overt act' was knowingly committed at or about the time alleged in an effort to carry out or accomplish some object of the conspiracy." [The 'Lectric Law Library's Legal Lexicon On Conspiracy] Using this definition, there has been, according to the hearsay and circumstantial evidence presented in this report, six major conspiracies: 1. Conspiracy to destroy the World Trade Center. 2. Conspiracy to fix gold prices. This conspiracy is currently be adjudicated in the US courts. 3. Conspiracy to launder illegally obtained gold. 4. Three conspiracies to cover-up complicity in each of the aforementioned conspiracies. The investigative departments of the U.S. government probably know the names of the bankers and the investors who profited from pre-knowledge of the attack, and have gone to great length to cover this up. The cover-up has not been for the benefit of the German or Israeli governments, but rather for the benefit of the German-Swiss banks, U.S. banks, the U.S. oil industry, and coincidentally, two Presidents from the Bush family, and their business partners. To reveal the truth would: · invalidate any reasons the US had for invading Afghanistan and Iraq, thus bringing to end huge profits being made in the Defense and Oil industries; · put administrators of the Bush and Clinton administrations at risk of charges and conviction of various crime ranging from price-fixing to conspiracy; · put the legacy of the Bush Presidencies at risk; · put various financial executives at risk for prison; and · expose billions of dollars of hidden slush funds, stolen from the banks and citizens of numerous countries. THE SEPTEMBER 11 COMMISSION REPORT

Page 178 Most of the truth was buried with the World Trade Center –but not all! THE SEPTEMBER 11 COMMISSION REPORT

Page 179 8 Gold-Backed Bonds, Cantor Fitzgerald and the Office of Naval Intelligence A small and unseemly clue opened the door to an investigation which suggests that Cantor Fitzgerald, at the top of the North Tower of the World Trade Center, and the Office of Naval Intelligence (ONI), in the Pentagon, were specific and related targets of the 9/11 attacks. This theory is corroborated by a wide range of information, which taken together suggests that while the attacks on the WTC may have been initiated to bring to an end investigations into money and gold laundering, the actual timing of September 11 was set by George Bush Sr. to cover his tracks left by a ten year old securities fraud in which he partnered with the Russian oligarchs and rogue KGB that overthrew the Soviet government. This fraud is linked to the banks and accounts which were a part of the Bank of New York money laundering scandal, and the Marcos gold theft, which served as the collateral for the securities. When one begins to ponder why investigations into what may be the world’s largest money-laundering scandal – the Bank of New York/Russian Mafiya scandal - was completely sidestepped by the U.S. judicial system, or why the Enron losses were never fully tracked down, the answer is found in the revelation that these were extensions of a Bush family foreign policy to decimate the Soviet Union. A normal day on September 11 would have begun the exposure of an illegal foreign policy and crimes that have enriched the Bush family, their political and business network and, of course, the German-Swiss bankers, and with it, their US counterparts. Just as the FBI offices on the 23rd floor of the North Tower seem to have been targeted with explosives, both Cantor Fitgerald (North Tower) and the ONI (Pentagon) seem to have been targeted for assured destruction by near-direct hits from hi-jacked airliners. A new target needs to be added to this list: Eurobrokers (South Tower). The small clue which led to further investigation and this hypothesis was found in the observation of the Director of Convar, a German company responsible for recovering data from computer hard drives recovered from the World Trade Center: "...Convar… found that there was a deluge of electronic trading just minutes before the first plane struck. Quoting a December 16 report from Reuter's, writer Kyle Henry found a compelling quotation from one of Convar's directors: Peter Henschel, director of Convar...said, 'not only the volume, but the size of the transactions was far higher than usual for a day like that.' Richard Wagner, a data retrieval expert, estimated that more than $100 million in illegal transactions appeared to have rushed through the WTC computers before and during the disaster….The Reuter's story was partially confirmed …by a Deutsche Bank employee who had survived the attacks by fleeing the WTC after the first plane hit. According to the employee, about five minutes before the attack the entire Deutsche Bank computer system had been taken over by something external that no one in the office recognized and every file was downloaded at lightening speed to an unknown location." [Crossing the Rubicon, Chapter 14, Michael Ruppert ] The illegal ‘put’ options discussed earlier in the report and by all other independent reports were “stock-related.” Now, a whole new type of transaction is being unwittingly revealed. At that time of day, the only transactions being processed in the World Trade THE SEPTEMBER 11 COMMISSION REPORT

Page 180 Center were bonds and government securities. The US stock market did not open that day, and even if it had, would not have been open at the time of the attack. “The New York Stock Exchange and the Nasdaq Stock Market never opened for trading the day of the attacks. The facilities of the New York Board of Trade in Four World Trade Center were destroyed. Regional stock exchanges, the Chicago Board of Trade, and the Chicago Mercantile Exchange all closed as well. European markets remained officially open but “most traders found it difficult to do much business.” (Schroeder 2001) Equity markets reopened on Monday morning, September 17.” [Payment System Disruptions and the Federal Reserve Following September 11, 2001, Jeffrey M. Lacker, Federal Reserve Bank of Richmond, Richmond, Virginia, 23219, USA, Federal Reserve Bank of Richmond Working Paper 03-16, December 23, 2003] “Trading in U.S. government securities starts at 8 a.m. in New York, and repo trading starts as early as 7 a.m. 3 “(T)he bulk of government securities cash and repo trading takes place before 9:00 a.m., … so September 11 was close to a full trading day.” (Green 2003, p. 3) According to Jeff Ingber, the general counsel for the Government Securities Clearing Corporation, on the morning of September 11, some $500 billion in repo transactions and about $80 billion in government securities trades had already been executed when the planes hit. (Shephard 2002) Reconciling these trades would occupy backoffice personnel for weeks.” [Payment System Disruptions and the Federal Reserve Following September 11, 2001, Jeffrey M. Lacker, Federal Reserve Bank of Richmond, Richmond, Virginia, 23219, USA, Federal Reserve Bank of Richmond Working Paper 03-16, December 23, 2003] There were only three companies in the WTC that serviced government securities and “repos” (A repurchase agreement -“repo” or “RP”- is a sale of securities coupled with an agreement to repurchase the securities at a higher price on a later date): · Cantor Fitzgerald, (which lost 661 of its employees when the high-jacked airline hit the tower immediately below its offices in the North Tower.) · Garbon Inter-capital (now ICAP PLC, on the 25th and 26th floor of the North Tower, sitting right over the destroyed FBI offices), and · Euro Brokers (a much smaller broker, which lost 60 employees when the high-jacked airline hit the tower immediately below its offices in the South Tower). Had the towers not collapsed, it is fair to surmise that the three government bond operations would have been effectively compromised. Of the three bond traders, Cantor Fitzgerald was by far the largest, being the largest government securities trader in the world and moving up to a half of the U.S. securities. “the Federal Reserve Bank of New York, which also keeps tabs on primary-dealer trading activity (but on a delayed basis), says primary dealer trades with interdealer brokers averaged $101 billion a day last year, while primary dealer trades with others averaged $86 billion a day. Cantor doesn't disclose volume numbers, but it claims to do more than 50% of all interdealer trades in the Treasury market and more than 90% of all interdealer trades of the 30-year Treasury bond.” [http://www.thestreet.com/tsc/basics/tscglossary/govpx.html] Co-incidentally, in August of 2001, the Deutschebank – the bank of origin for numerous illegal stock trades or “put options” made in the days preceding the attack- had just signed an agreement with Cantor Fitzgerald to install Cantor Fitzgerald’s eSpeed trading system. THE SEPTEMBER 11 COMMISSION REPORT

Page 181 “On August 1, 2001 eSpeed announced that it had signed an agreement with Deutsche Bank, one of the world's leading international financial service providers, whereby the European bank will channel its electronic market-making engines and liquidity for a broad range of European fixed income products through the eSpeed® system. The agreement makes eSpeed a primary distribution channel for Deutsche Bank in the wholesale market. This liquidity arrangement with Deutsche Bank furthers eSpeed's goal to become the leading fixed income trading platform in Europe.” [eSpeed Reports Record Second Quarter 2001 Results, August 1, 2001 - eSpeed, Inc.] At the same time, Cantor Fitzgerald was reported to set up operations with Buttonwood International Group and PNB Paribas. “…the eSpeed New Jersey office provided electronic trading services in derivatives and commodities using a software package called TreasuryConnect, which had been bought from an Enron subsidiary and licenced on August 1, 2001 to …Global Custodian and …BNP Paribas. By September 11, 2001, BNP Paribas had a network of about 70 global trade centers operating 24/7 around the world…. By hitting the 89th floor of One World Trade Center, al-Qaeda’s first-time pilot hijacker of American Airlines Flight 11, managed to miss the Buttonwood ‘Global Custodians’ offices on the 79th floor below, while killing all of their Cantor-eSpeed competitors on the 101st floor and above.” [9/11 and the mob, Judi McLeod & David Hawkins, July 11, 2005] Without the actual trade data (which the FBI has, according to Convar) it stands to reason that most, if not all, of these ‘illegal trades’ on September 11were being pumped through Cantor Fitzgerald – the largest of the US bond traders, the only company which had no on-site survivors that day, and the company that had just set up computerized trading with the source bank of the illegal stock trades. Information on these reported ‘illegal’ trades was recovered by Convar and given to the FBI, and subsequently “buried” by the FBI and the 9/11 Commission. “Henschel said the companies in the United States were working together with the FBI… to piece together what happened on September 11 and that he was confident the destination of the dubious transactions would one day be tracked down....we've still been able to retrieve 100 percent of the data on most of the drives we've received. We're helping them find out what happened to the computers on September 11 as quickly as possible. I'm sure that one day they will know what happened to the money…” [German Firm Probes Final World Trade Center Deals. Erik Kirschbaum, Reuters, December 16, 2001] With a small clue leading to two strange coincidences and a potential cover-up, all of which point to Cantor Fitzgerald, the question should be asked: Was there specific reason for Cantor Fitzgerald to be targeted? In researching the background of Cantor Fitzgerald, there are five reference points that provide further grounds for suspicion that the Cantor Fitzgerald office was a specific target. These include: 1. At least seven of the top Cantor Fitzgerald executives were absent from the office at the time of the attack. The President of Cantor Fitzgerald was taking his child to a first day of kindergarten, and six more executives were scheduled for a fishing trip that day. The trip was reportedly cancelled due to inclement weather at 8:00 am, but every picture of the WTC that day shows cloudless skies. Moreover, theses charters THE SEPTEMBER 11 COMMISSION REPORT

Page 182 generally leave between 4:30 and 5:30 in the morning, and if the charter was to be cancelled, it would have been cancelled a lot earlier. “… a six-member eSpeed carbon-credit trading team escaped death. Their annual one-day fishing trip had to be cancelled about 8 a.m. on the fateful morning of September 11, due to alleged bad weather over the Atlantic. Can anyone confirm the weather? New York looked pretty sunny. Hearing that the Twin Towers had been hit, the six lucky fishers hightailed it to New Jersey, to what Joseph Noviello, executive vice president said of Rochelle Park, N.J., "where we had duplicates of everything that was destroyed at our offices in the world Trade Center.” [9/11 and the mob, Judi McLeod & David Hawkins, July 11, 2005] What then seems so out-of-place about seven executives being absent from work during peak trading hours? Three of these executives had been key participants in a US Navy/Cantor-Fitgerald sponsored, wargame simulation of an attack on US securities just a year earlier. One of the three, Retired Admiral William ( aka Bud or Bill) Flanagan, is identified as a member of the Board of Directors of the Washington Group International. Bill Flanagan’s role in this theory is of import because he seems to have 1) had a major role in the ‘economic war games’ which should have been conducted simultaneously with the other six simulations being executed that day, 2) had corporate responsibility for two firms that benefited financially from the tragedies of 9/11 (Titan and CACI), and 3) had responsibility for a third firm that may have played a role in the actual attack (Raytheon). · Washington Group International had just purchased the Engineering Division of Raytheon. Raytheon had five executives die on three of the four attack flights that day, and Raytheon would be reported to have been responsible for retrofitting planes on behalf of the Defense Department (in secured civilian hangars,) to look like the plane that hit the Pentagon. “According to two civilian defense contractor employees working at commercial corporate facilities at Fort Collins-Loveland Municipal Airport (left), in the months before the September 11 attacks U.S. Air Force defense contractors brought in A-3 Sky Warrior aircraft under cover of darkness to be completely refitted and modified at the small civilian airport in Colorado. The revelations are important evidence for a reportedly ongoing secret 9/11 probe because widely available Federal Emergency Management Administration (FEMA) photographs taken during the attacks clearly show that the few aircraft parts found at the Pentagon belonged to a small jet very similar to a modified A-3 Sky Warrior--not the American Airlines Boeing 757…. Air-traffic controllers from the Washington, DC sector originally said the incoming plane was a military jet according to reports; but no grand jury has called them to testify and they have been strangely gagged from speaking out. "Only the Raytheon executives and the Air Force would have known which team installed a particular system on the A-3 and who was involved in the operation," said Schwarz. Coincidentally, five key Raytheon executives died on 9-11: Stanley Hall--Director of Electronic warfare program management (American 77), Peter Gay--VP of Electronic Systems on special assignment at the El Segundo, CA division office where the Global Hawk UAV remote control system is made (American 11), Kenneth Waldie--Senior Quality Control Engineer for Electronic Systems (American 11), David Kovalcin--Senior Mechanical Engineer for Electronic Systems (American 11), and Herbert Homer--Corporate Executive working with the Department of Defense (United 175). THE SEPTEMBER 11 COMMISSION REPORT

Page 183 Curiously, the five Raytheon executives chose three of the four doomed jets and all happened to fly on September 11.” [Fort Collins, Colorado, May 26, 2005, TomFlocco.com] · Washington Group International would later benefit significantly from military contracts in Afghanistan and Iraq. “On April 4, 2003, the U.S. Army Corps of Engineers' Transatlantic Programs Center announced that it had awarded three contracts "to rapidly execute design and construction services as needed anywhere" in the area of operations for the U.S. military's Central Command (CENTCOM). The one-year contracts, awarded to Fluor Intercontinental, Perini Corporation and Washington Group International, are indefinite delivery/indefinite quantity (ID/IQ) contracts with a guaranteed minimum value of $500,000 and a maximum of $100 million. In late September 2003, the U.S. Army Corps of Engineers issued additional task orders totaling $278 million on the three contracts, and the Corps decided to raise the contract ceiling from $100 million to $500 million.” “According to the Pentagon, the same U.S. Army Corps of Engineers contracts won by Washington Group International, along with Fluor Continental and Perini, will cover work performed by the companies in Afghanistan. There, they will rebuild damaged roads and replace a destroyed bridge in Afghanistan as part of their individual contracts to support CENTCOM. Those contracts have a minimum value of $500,000 and a maximum of $500 million.” [Center for Public Integrity] · Flanagan would then become a VP of Titan Corp., the Defense contractor responsible for those contractors charged in the Abu Ghraib torture cases, and according to this report’s speculation, the murder of Nick Berg. Titan Corp. is also a major owner of Skyways Aircraft, a business partner with another shell company called Royal Sons Inc. of St Petersburg, FL. This latter company used a mailing address which was the same as Huffman Aviation, which was the flight training school used by 9/11 hijackers. According to SEC documents, in early February of 2000 Titan put up $72,386 for restricted shares of a shell company Farkas created which later became SkyWay. …Several top executives of SkyWays Aircraft, the American firm which owned the DC9 in partnership with Royal Sons Inc. of St Petersburg, FL. including the company’s President, James Kent, are former members of U.S. military intelligence….The plane's registered owner, “Royal Sons LLC,” a Florida air charter company, at one time used the address of a hanger at the Venice Fl. Airport owned by infamous flight school Huffman Aviation. No one at the Venice Airport remembered them. [Dusty & 'the boys' II: Secrets of the Black Budget Scandal, Daniel Hopsicker, MadCow Morning News, May 7 2007] The “war games” connection is important and disturbing. As documented later in this report, Cantor Fitzgerald had, in 1997 and 2000, participated in official US war games. At least six major U.S. war games were under way on September 11, having been “rescheduled” from their original date in October. (The question needs to be asked and answered: why were the games rescheduled, and why was the September 11th date chosen?) There has to be an assumption that in a major war game exercise, Cantor would have been involved again. Flanagan and the other executives involved in supporting those games should have been at the office, but were not. THE SEPTEMBER 11 COMMISSION REPORT

Page 184 2. Cantor Fitzgerald has what is described in the press as a long-standing relationship with the Office of Naval Intelligence, the one and only intelligence group that had offices remaining in the section of the Pentagon that was struck by the attacking flight. “Mr. Barnett's work with Cantor Fitzgerald…stemmed from a long-standing relationship between the firm and the Naval War College.” [At The Pentagon, Quirky PowerPoint Carries Big Punch: In a World of 'Gap' States, Mr. Barnett Urges Generals To Split Forces in Two, Greg Jaffe, Staff Reporter Of The Wall Street Journal, May 11, 2004] What defines the nature of the long-standing relationship has yet to be defined. At least one internet blogger has commented that Cantor-Fitzgerald was able to somehow provide an alternative source of funding for defense projects that somehow were not approved by Congress. There has been no verification of this claim. Nevertheless, the Navy had worked with Cantor-Fitzgerald over the prior four years in at least two war games: 2000, and 1997. The 1997 participation by Cantor Fitzgerald is documented in: “Jeffrey Sands, The Critical Link: Financial Implications of Threats to National Security (a report on the Economic Security Exercise, cosponsored by the U.S. Naval War College and Cantor Fitzgerald, Newport, R.I., December 1997.”) A relevant piece of information notes that it was William Flanagan, as a representative for Cantor Fitzgerald, that approached Mr Barnett to lead this work. 3. A group of Cantor Fitzgerald executives and traders had been the primary ‘financial/private sector’ participants in economic war games the year earlier, and in 1997 as well. These war games had been set up, and participated in by various U.S. intelligence agencies and the Council on Foreign Relations, and run out of the Cantor Fitzgerald offices. It is of notable coincidence that the few published notes on the games indicated the primary trades analyzed during the games were trades in government securities, oil and gold. The coincidence is rooted in the observation that it is these three types of assets that have become the focal point of nearly any and all contrarian theories explaining the events of 9/11. “Early in the year 2000, I was approached by senior executives of the Wall Street bond firm Cantor Fitzgerald. They asked me to oversee a unique research partnership between the firm and the Naval College that would later yield a series of high-powered war games involving national security policymakers, Wall Street heavyweights, and academic experts. Our shared goal was to explore how Globalization was remaking the global security environment-in other words, the Pentagon's New Map.” [Thomas P.M. Barnett, the Pentagon's New Map] “On Jan. 22, 2000, the CFR (Council on Foreign Relations) Project held its second big event: a scenario of a global financial meltdown, run as a war-game simulation at its Manhattan headquarters. For the simulation, the CFR conscripted 75 people, including bankers, former Treasury Secretaries, and former State Department officials. Participants were divided into four teams, sent into four rooms, with the ability to communicate with each other and with a command headquarters through the computers. The four teams covered 1) monetary-financial, which dealt with the functions of the Federal Reserve Board of Governors; 2) economic and trade, which dealt with the functions of the U.S. Treasury Department; 3) regulatory matters; and 4) national security—…former CIA director James Woolsey played the role of Secretary of Defense. … a major objective of the exercise was to bail out the financial markets. According to an article in the THE SEPTEMBER 11 COMMISSION REPORT Page 185 March 10 issue of Euromoney magazine, written by an eyewitness reporter during the simulation, two of the largest mutual funds in America went to the Securities and Exchange Commission saying that they were experiencing redemption rates that could threaten their firms. The article reported, "They need an injection of cash to meet the payments without having to dump their portfolio on the market at fire-sale rates. . . . on the panel was four-star Adm. William Flanagan (ret.)” [CFR Bankers Plan for Financial Crash, Richard Freeman, Executive Intelligence Review, July 28, 2000] A list of participants in the economic war game, suggests that Cantor Fitzgerald, the U.S. Navy and various intelligence operations dominated the simulation. (Note that the Cantor Fitzgerald ‘executives’ involved in the games “survived,’ and the Cantor Fitzgerald ‘traders’ were victims.) - ADM William Flanagan, USN (ret), securities director, Cantor Fitzgerald LP - Philip Ginsberg, financial director, Cantor Fitzgerald LP - Calvin Gooding, trader, Cantor Fitzgerald LP (Died in 9/11 attack) - Kent Karosen, director, Cantor Fitzgerald LP - Glenn Kirwin, senior trader, Cantor Fitzgerald LP (Died in 9/11 attack) - Norm Green, deputy national intelligence officer for science & technology, National Intelligence Council - Damian Harte, vice president, Westdeutsche Landesbank G.Z. - Carolyn Landry, banking and finance analyst, National Intelligence Council - RADM Peter Long, Provost, U.S. Naval War College - John Rice, U.S. Treasurer, Citicorp Bank - CDR Gary Shrout, public affairs officer, U.S. Naval War College - Robert Stevens, National Information Protection Center, FBI - Robert S. Wood, dean, U.S. Naval War College. - Charles Nemfakos, Senior Civilian Official for the Office of the Assistant Secretary of the Navy for Financial Management and Comptroller (ASN (FM&C). - Leif Rosenberger, Economic Advisor to Admiral Blair, Commander-in-Chief, U.S. Pacific Command.’s chief economic intelligence analyst. , Soviet foreign policy/Asian analyst at CIA - Douglas H. Paal, senior analyst for the CIA The disturbing element of this information is that on September 11, there were a number of officially sanctioned war games under way. “During the September 11, 2001 attacks the US was holding multiple annual and one-time war games with at least one resembling the actual attacks. The war games included: · a National Reconnaissance Office exercise on September 11, in which a small corporate jet would crash into one of the four towers at the agency's headquarters building after experiencing a mechanical failure. The NRO, whose name was classified until 1992[1], is the branch of the CIA in charge of spy satellites.[2] · Global Guardian, an annual exercise that would pose an imaginary crisis to the United States Strategic Command. It had been running for several days. The exercise allegedly involved a simulated Russian bomber attack. [3] Global Guardian is performed in conjunction with Vigilant Guardian, the annual training exercise (usually occurring in October) conducted by NORAD as well as exercises under the direction of Air Combat Command (Crown Vigilance) and US Space Command (Apollo Guardian)[4]. "Vigilant Guardian" is a HQ-sponsored CPx (Command Post Exercise), meaning it is conducted in offices and with computers, but without actual planes in the air. All of NORAD was involved in "Vigilant Guardian"[5]. However, it did include radar injects, or false blips, which could explain the FAA's observation of a 'phantom flight 11' on FAA radar well after the plane struck the WTC and after NORAD claims to have called off all war games. THE SEPTEMBER 11 COMMISSION REPORT Page 186 · Vigilant Warrior, a NORAD live-fly (confirmed by its second name 'warrior') exercise mentioned in Richard Clarke's Against All Enemies page 4-5 (possibly the same as Vigilant Guardian, or possibly the complementary "offense" or "red team" portion of the drill involving real planes acting as simulated hijacked plane) · Operation Northern Vigilance, which involved deploying fighter jets to locations in Alaska and northern Canada. According to the Toronto Star: " Part of this exercise is pure simulation, but part is real world: NORAD is keeping a close eye on the Russians, who have dispatched long-range bombers to their own high north on a similar exercise." Planned on September 11, it was called off when the Federal Aviation Administration had evidence of a hijacking [6]. · Operation Northern Guardian "In late August 2001, two-thirds of the 27th Fighter Squadron are sent overseas. Six of the squadron's fighters and 115 people go to Turkey to enforce the no-fly zone over northern Iraq as part of Operation Northern Watch. Another six fighters and 70 people are sent to Iceland to participate in "Operation Northern Guardian." These were real-world operations which resulted in many fighters from Langley AFB to be unavailable for scrambling on 9/11.[7] · TRIPOD II, a joint FEMAand Department of Justice biowarfare vaccination exercise, scheduled for September 12 at New York's Pier 29, and revealed in testimony by former New York Mayor Rudy Giuliani at the 9/11 Commission. The command center assembled at Pier 29 was used for FEMA response to the events of 9/11 after Giuliani's Office of Emergency Management offices were evacuated and later destroyed in WTC 7. The Vigilant Guardian war game was discussed in chapter 1, footnote 116 of the 9/11 Commission Report: "116. On 9/11, NORAD was scheduled to conduct a military exercise, Vigilant Guardian, which postulated a bomber attack from the former Soviet Union. We investigated whether military preparations for the large-scale exercise compromised the military's response to the real-world terrorist attack on 9/11.” [War games in progress on September 11, 2001, From Wikipedia, the free encyclopedia.] Other than the curious coincidence of these war games being re-scheduled for September 11 is the learning that the normal practice for these war games is to schedule them in October. “Thompson (Paul Thompson, the 9/11 Timeline) cites multiple reports (see 8:30 am) indicating that Global Guardian is normally held in October, and that the run-through in 2001 was in fact originally scheduled for late October and then re-scheduled for early September at some point after March 2001. Who made that scheduling decision? That may be the most crucial question of all in determining the criminal culpability for 9/11 among US officials.” [New Wargames Findings, Nicholas Levis, 9/11Truth.org, Aug. 2005] Additionally, it is noteworthy that the New York Federal Reserve was coincidentally operating out of its back-up data facility on September 11. “On September 11, we at the Federal Reserve never had to shift our Fedwire operations. On that day the operations were being managed by staff at our backup facility, a procedure we undertake regularly. Fedwire was up and running at all times.” [Jamie B. Stewart, Jr., First Vice President and Chief Operating Officer of the Federal Reserve Bank of New York, remarks before the Bankers' Association for Finance and Trade, April 25, 2002] If the Navy had this relationship with Cantor-Fitzgerald, and had made economic attacks a part of their war gaming drills during two prior occasions, it seems appropriate to assume that on September 11, an employee(s) of Cantor-Fitzgerald might have been tasked with running computer simulations of an economic attack on the US securities market, not knowing a real attack was underway. In the simulaton, one would have a computer program the simulates an “attacking” server and a THE SEPTEMBER 11 COMMISSION REPORT Page 187 “response” server. One server simulates buys, and the other simulates sells. It does not take a lot of effort to switch simulations from targeting test database servers to real-life production database servers. However, if the war game servers are simulating banks, none of the originating bank trade data ever gets copied to a disaster recovery server (test servers are not copied to disaster recovery sites), nor does it get found on an originating bank server. Hence, under a scenario like this, one half of the clearing and settlement data would be missing – which is exactly what caused and led to the US securities settlement problems in the weeks that followed the attack. (This situation is described at length further on in this Section.) At least two of the traders who knew how to run those programs were present and died in the attack. One of the many strange observations from the technology reviews of the events September 11 is that the government security trading system(s) never went down and trade data was never lost! Much is made on Convar’s observation that there was lost data of illegal trades, but subsequent reports suggest the data was never really lost! "All the data and software was mirrored to Rochelle Park," said Noviello, adding that the facility was established as a full-fledged data center, not just a recovery site, in February. Many Rochelle Park systems are primary, as well as backup… A triangular architecture, with points at the WTC, Rochelle Park and London connected by DS 3 pipes, worked exactly as planned. "When one corner went down, we never stopped trading," Kiewel said. "The system kept functioning in Europe and Asia." …said Noviello, adding, "we did not lose any data." [Cantor Fitzgerald - Forty- Seven Hours, Edward Cone, CIO Insight and Sean Gallagher, October 29, 2001, Copyright © 2004 Ziff Davis Media Inc. All Rights Reserved. Originally appearing in eWEEK] “With many key facilities for the fixed income markets located in or near the World Trade Center, the loss of communication services prevented market participants from interacting with one another and with clearing and settlement providers, such as the GSCC and the Bank of New York (BONY). Clearing and settlement of fixed income transactions in general was a major problem in the days and weeks after the attacks, especially since the bulk of government securities cash and repo trading occurs early in the day – meaning that significant amounts of data from the IDBs on almost a full day’s trading in this area was lost and had to be meticulously reconstructed. BONY, which was the clearing bank for many major market participants and maintained some ofGSCC’s settlement accounts, had to evacuate four facilities including its primary telecommunications data center and over 8,300 staff located near the WTC. BONY conducted processing activities as part of clearing and settlement of government securities transactions at several of these facilities. …The critical payment systems, such as Fedwire and CHIPS, continued to operate with minimal disruption on September 11, 2001. While both Fedwire and CHIPS (as well as some of their customers/users) were affected by communications disruptions in the aftermath of the terrorist strikes, transactions could continue being processed because the actual processing facilities are not located in lower Manhattan. Retail payment systems, including check clearing and ACH transactions, also generally fared well following the attacks and continued to operate without significant disruptions. Some check clearing functions were delayed, however, due to the grounding of air transportation. The U.S. banking system as a whole continued to function relatively smoothly on and after September 11, 2001.” [Survey and Analysis of Security Issues in the U.S. Banking and Finance Sector – September 2003 Institute for Security Technology Studies AT Dartmouth College , Copyright 2003] What a detailed review of the technology experts review of activities that day suggests is that the primary trading systems did not go down and data was not lost THE SEPTEMBER 11 COMMISSION REPORT Page 188 because of system redundancy, mirroring, and extensive back-up centers. What did fail was the telecommunications infrastructure which prevented buyers and sellers of securities from making “subsequent” trades. Hence, the settlement and clearing data should have been “whole,” and a securities buy record and sell records should have been able to be matched in the setllement process. There is one last element of the settlement process that was disrupted by the attack on the WTC. The actual certificates for the securities were destroyed. “The difficulty with lost certificates was dramatically demonstrated during the September 11,2001, tragedy when thousand of certificates were destroyed in vaults maintained by brokerdealers.” [Federal Register / Vol. 67, No. 151 / Tuesday, August 6, 2002 / Notices] “Settlement: The Central Securities Depository (CSD) implements the settlement instructions: securities are delivered, and funds paid. The depository controls the actual securities, and so can register and transfer ownership. …. However, some trades, such as mortgage-backed securities, still require physical movement of paperwork. The deal is not complete and “irrevocable” until this is done.” [Harvard Research Group Experience- Expertise- Insight- Results Harvard Research Group, Inc. Copyright © 2003 Harvard Research Group] (There will be some readers who observe that securities no longer require ‘physical certificates,’ and in many cases this is true. In fact, many US government securities are managed that way. Unfortunately, the certificates that were at the core of this plot had to be physical, because they were originally created for cross-border transactions, and the evidence cited from the Federal Register indicates they did indeed exist. One internet blogger argued that if the certificates needed to be destroyed, that would not warrant destroying the whole complex. In fact, all indications are, including on-line testimonial from a Garbon employee, that the certificates were held in vaults in the basement of the Tower.) An overview of this situation is worth providing:  Illegal trades were reported on September 11, which had to be government securities trades, as the stock markets had not yet opened.  Computers at Cantor Fitzgerald are known to have hosted programs that simulate attacks on US securities.  These programs should have been operational on September 11 as part of a broader synchronization of Department of Defense War Games.  The terrorist attack on the financial center of the US failed to bring down any core trading system or Cantor Fitzgerald’s eSpeed trading system.  The only trading system that reported problems was the securities clearing and settlement system, which publicly attributed its problems to communication failures with the Bank of New York.  As will be demonstrated in Section 8.1 Federal Reserve and the Elimination of Regulatory Control, the Clearing process was hung up for weeks on an inability to “match”, although the matching data is reported to have been whole. This issue has never been publicly addressed in any article or speech by the Federal Reserve, and can only be identified by the ‘orders’ issued by the Federal Reserve in the aftermath of September 11. This ‘matching’ had nothing to do with the Bank of THE SEPTEMBER 11 COMMISSION REPORT Page 189 New York’s telecommunications problems, and had everything to do with missing seller data and certificates. 4. Cantor Fitzgerald has been reported as the “holder” of $240 billion of ten year old ‘Durham/Brady Bonds’ that were due on or around September 11th. (There are no officially classified, “Brady Bonds” from the “Brady Plan” for the Russian debt, – but because of the similar purpose of these $240 Billion in bonds, they are continually referred to in the press as such.) These bonds were reported to have been put into the market by Alan Greenspan, Oliver North, and George Bush Sr. in 1991, backed by gold securities and Swiss gold bullion, backed (in full or part) by the “Durham Trust”. The interesting aspect of these accusations is that the Chairman of the Federal Reserve– a privately held, commercial group of banks – and the President of the United States are reported to have illegally created these securities, and the ONI – destroyed in the attack on the Pentagon – was hot on the trail of these securities. “Sioux City, Iowa -- July 25, 2005 TomFlocco.com -- According to leaked documents from an intelligence file obtained through a military source in the Office of Naval Intelligence (ONI), on or about September 12, 1991 non-performing and unauthorized gold-backed debt instruments were used to purchase ten-year "Brady" bonds. The bonds in turn were illegally employed as collateral to borrow $240 billion--120 in Japanese Yen and 120 in Deutsch Marks--exchanged for U.S. currency under false pretenses; or counterfeit and unlawful conversion of collateral against which an unlimited amount of money could be created in derivatives and debt instruments…. The illegal transactions are also linked to the murder of a U.S. Army colonel charged with overseeing approximately 175 secret CIA bank accounts, according to the officer’s wife, Mrs. V. K. Durham. During multiple interviews, Durham told TomFlocco.com that Bush 41 and Clinton administration officials visited her husband Colonel Russell Hermann several times in the months prior to and three days before his torture and murder on August 29, 1994. Durham told us that Colonel Hermann told her "Bush, Greenspan and North were trying to get me to sign off on the CI Ltd., the Central Intelligence, Ltd. Iran and Latin American contra accounts. They held about $13-17 billion in physical gold." Durham told us the $240 billion in stolen currency was obtained resulting from George H. W. Bush’s presidential abuse of power, when he authorized former Treasury Secretary Nicholas Brady and former Secretary of State James Baker III to make fraudulent use of the Durham Family Trust collateral without her permission. There is evidence that Colonel Hermann’s and V. K. Durham’s signatures were forged on a Goldman-Sachs bank account certification requesting the conversions to U.S. currency. The money was never repaid since the ten-year Brady bonds--purchased before September 13, 1991 using the fraudulent collateral and gold bullion as security came due on September 12, 2001--the day after the 9.11 attacks, having allegedly been underwritten and held by the trustee, Cantor-Fitzgerald bond brokerage firm [whose offices on floors101-105 in the North Tower of the World Trade Center (WTC) were destroyed on 9.11 along with the Brady bond evidence…. Durham called Dave Ehler, a staff-member to her congressman, Iowa Representative Steve King (R-5-IA), to tell him that Bush, Greenspan and North were in her husband’s hospital room three days before his murder and to introduce him to three separate witnesses who identified the three and described the encounters to Ehler--one who saw North in Hermann’s hospital room on a separate occasion, one who witnessed (along with Durham) Colonel Hermann’s statement regarding the Bush Sr--Greenspan--North visit to his hospital room, and one who saw the actual murder contract on Colonel Hermann’s life and told Ehler he is in possession of the transcript. Durham said the conversations with Ehler were tape recorded and moved to multiple secure locations to protect the evidence.” “Durham, 69 and living in Iowa, has also contacted her senator, Banking Committee Chairman Charles Grassley (R-IA) and along with her congressman, Representative Steve King (R-5-IA), THE SEPTEMBER 11 COMMISSION REPORT Page 190 provided both with all the evidence in this report and much more; however, Durham said both legislators were told "not to investigate" by officials at the very highest levels of government. Dave Ehler, the aide from Congressman King’s Storm Lake, Iowa office (tape-recorded by Durham) told her that "orders had come down from the top: ‘do not investigate.’" Durham told us that a Central Intelligence agent said Cantor-Fitzgerald held the 10-year Brady bonds; and her secure family trust was the owner of Bonus Commodity Contract 3392 and Certificate of Debt Number 181 of May 1, 1875 [Special Bonus Certificate No. 3392/181], originally issued by the government of Peru in 1875 and illegally used by the U.S. government as the collateral to purchase the bonds which secured the currency transfers--all of which came due in the middle of the September 11 attacks. ONI officials themselves--some of whom were probing the fraudulent 10-year debt instruments allegedly held by Cantor-Fitzgerald in the doomed North Tower--also perished along with the investigation files, all of which were curiously in the path of the 9.11 Pentagon impact.” [Cash payoffs, bonds and murder linked to White House 9/11 finance, Tom Flocco, tomflocco.com] It appears that someone in the ONI was investigating these transactions, and released the same evidentiary documents to multiple sources: “In fact, it appears that such bogus gold certificates are being used in some interesting ways by certain Wall Street and Washington types to artificially prop up the U.S. economy to cover up the fraudulent numbers…. I now have in my possession evidence, and sent it out overnight to 10 other secure sources to protect the information, that a 10-year Brady Bond deal was being worked on and closed toward in the end of 1991, or was to have matured and been due somewhere on or after September 11, 2001.… Part of the story can be found by looking into Securities and Exchange Commission v. John D'Aquisto Securities. The name of John D'Aquisto (convicted) also appears numerous times as do Merkav International and Marion Aiken (convicted), First Guilford Financial Limited, London, but domiciled in Isle of Man … along with three of its officers Steve Billand, Charles A.M. Duncan, Jeff Muller, and others related to other companies in Russia, Australia, Ireland, the Canadian provinces of British Columbia and Ontario, all patterns to look for in picking up the trails of such scams. It is the "multi-jurisdiction" facet that makes these deals hard to detect, track and litigate for fraud. It is by design and intent so they can perpetrate fraud and get away with it. One of the D'Aquisto documents was from a "Bay State Trust" based in Zurich, dated 10 September 1991, and just more of a trail that needs to be fully investigated due to the contents of that letter.” [Part 4: More reasons to not investigate 9-11, Karl W. B. Schwarz] The exposure of these bonds, which lend new meaning to Alan Greenspan’s oft referred to “unconventional” monetary tools, and the testimony that their settlement date coincided with 9/11, support a theory that Cantor Fitzgerald was a specific target of the attack. It would certainly provide a compelling argument of motive for administration complicity in the attack. Having $240 Billion in bonds fail in public might cause a crisis, such as that predicted by the Russian Intelligence and the Dresdner bank. The Russians and Germans were forecasting a financial catastrophe for late August of 1991. Their ability to do so is consistent with the documentation that the bonds were made payable in Deutschmarks and Yen, and were used by George Bush Sr. to buoy (or buy) the Russian economy in early September 1991, a few days after the collapse of the Soviet Union. The Russian and German ability to forsee this matter is also consistent with the not widely reported ‘fake advice notices’ used to steal $220 billion from the Soviet Treasury. (See Appendix C of this Report.) Both the Russians, who received the funding, and the Germans (via the Deutschbank), who were also involved in the transaction, were in a position to understand the magnitude of the financial crisis created by the inability to settle these THE SEPTEMBER 11 COMMISSION REPORT Page 191 bonds. (As an interesting note, at the time, Germany and Japan, whose currency was used to finance the fraudulent transactions, were considered “enemies” of the US foreign policy team. Zalmay Khalizad, who was drafting US policy statements at the time for Wolfowitz and Bush, suggested that “competition with Japan and Germany should be confined to economics; the United States should make sure it had no military rivals.” [Rise of the Vulcans- The History of Bush’s War Cabinet, James Mann, Penguin, 2004, p211.]) 5. Cantor Fitzgerald had a track record of willingness to ignore multiple aspects of legal and financial regulations. In 1997 and 1999, Cantor Fitzgerald was found guilty in false representation of securities ownership, false documentation and related illegal activities. “The CFTC order finds that Cantor violated the Commodity Exchange Act (CEA) by aiding and abetting the fraud and registration violations of First Republic Financial Corporation, formerly known as Vancorp Financial Services (VFS), an unregistered commodity pool operator. The CFTC order finds that, although Cantor became aware that VFS falsely represented the ownership of a securities trading account VFS had opened in its own name, Cantor allowed the account to be traded in VFS' name. The account was actually owned by a commodity pool, the order finds. The order also finds that Cantor failed to determine the ownership of the VFS account, and failed to obtain the trading authority needed to allow VFS to enter trades in this account. In addition, the order finds that Cantor assisted VFS in obtaining $950,000 to which VFS was not entitled by making wire transfer payments to First Republic Securities, a wholly owned subsidiary of VFS, out of customer funds held in the account at Cantor.” [CFTC ACCEPTS SETTLEMENT OF CANTOR FITZGERALD & CO. CHARGED WITH AIDING AND ABETTING FRAUD AND REGISTRATION VIOLATIONS OF FEDERAL COMMODITY LAW, Release: # 3987-97 (CFTC Docket No. 94-14), January 28, 1997] “Factual Summary: In connection with its activities as a Nasdaq market maker, Cantor Fitzgerald & Co. engaged in the following activities …1. The Fraudulent Coordination of Quote Movements….2. Undisclosed Arrangements to Coordinate Quotations….3. Best Execution Violations (Cantor Fitzgerald & Co. failed, or caused the failure,to provide best execution in the handling of customer orders in one or more of the respects) ….4. Failure to Honor Quotations….5. Failure to Keep Accurate Books and Records….6. Failure to Reasonably Supervise Nasdaq Trading….7. Unlawful Profits and Other Gains….” [SECURITIES AND EXCHANGE COMMISSION, ADMINISTRATIVE PROCEEDING, File No. 3-9803, January 11, 1999] These facts support the reports there were $240 billion in fraudulent securities being handled by Cantor Fitzgerald, an organization proven to have abetted similar frauds across multiple accounts. A year earlier, a group of Cantor Fitzgerald’s traders and executives participated in providing analysis to the Office of Naval Intelligence and the Council on Foreign Relations on the impact of a financial attack on the US. To do such, they would have needed to create a massive computer simulations of trades, the programs for which could easily be used to pump volumes of actual illegal trades into the real-life system. With war games being held on September 11, staff at Cantor Fitzgerald may have been running those simulations again. To anyone else, running those programs during the actual war games would seem appropriate and justified. The only variable that such a plot would require is an ability to totally disregard the SEC’s legal “settlement process,” which could only be accomplished one way: to declare a national emergency THE SEPTEMBER 11 COMMISSION REPORT Page 192 and enact a clause in the Securities and Exchange Act which allows it to be suspended in case of a national emergency. Once the illegal trades were in the system, they would have to be settled with Federal Reserve. $240 billion in illegal transactions might be a little difficult to sweep under the carpet. Coincidentally, the attack on the World Trade Center has been the only occasion in which the emergency powers of the Securities and Exchange Act have been enacted, which allow the Chairman of the Federal Reserve to not only over-ride the formal settlement process, but virtually every control on reporting and ownership as well. If the transactions had to be swept under the carpet, September 11 was the only time in US history that it could be done. 8.1 Federal Reserve and the Elimination of Regulatory Control A review of actions taken by the Federal Reserve in the days and weeks following the attack on the World Trade Center reinforces the theory that the attack was used to coverup illegal trades with the support of the Federal Reserve. (Please note, that contrary to popular belief, the Federal Reserve is not an agency of the US Government, but a commercial affiliation of privately held banks.) “The Court of Appeals, Poole, Circuit Judge, held that federal reserve banks are not federal instrumentalities for purposes of the Act, but are independent, privately owned and locally controlled corporations. …Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stockholding commercial banks elect two thirds of each Bank's nine member board of directors. The remaining three directors are appointed by the Federal Reserve Board. The Federal Reserve Board regulates the Reserve Banks, but direct supervision and control of each Bank is exercised by its board of directors.” [Lewis v. United States, 680 F.2d 1239 (1982), No. 80-5905, United States Court of Appeals, Ninth Circuit., Decided April 19, 1982, As Amended June 24, 1982.] Hence, the SEC activities following the attack on the WTC could only have happened with the approval of those who owned the Federal Reserve Banks. “According to the N.Y. Fed itself, as of June 30, 1997 the top eight shareholders were • Chase Manhatten Bank • Citibank • Morgan Guaranty Trust Company • Fleet Bank • Bankers Trust • Bank of New York • Marine Midland Bank • Summit Bank.” [Myth #5. The Federal Reserve is owned and controlled by foreigners, Edward Flaherty, Ph.D. Department of Economics College of Charleston, S.C, http://www.geocities.com/CapitolHill/Senate/3616/flaherty5.html]. Of these eight banks, five of them were extensively involved in the 1989 Russian currency destabilization program: Chase, Citibank, Morgan, Bank of New York and Marine Midland. One of them - the Bank of NewYork – was extensively reported to be involved in the laundering of Russian accounts owned by the very individuals this report THE SEPTEMBER 11 COMMISSION REPORT Page 193 links to the 1991 fraud. It was also one of two clearing and settlement operations which would have cleared and settled $240 billion in fraudulent notes under the relaxed rules about to be discussed. While the rouble destabilization program has never been officially recognized, the evidence for its occurrence has been documented. “The national debt rose steeply, and there was no source that could increase government revenue. The currency came under great pressure. In 1991, Prime Minister Pavlov warned that foreign forces were engineering an organised attack on the rouble. Reddaway and Glinsky point out that in the prevailing atmosphere of euphoria, he was ridiculed. But now this attack on the rouble between 1989 and 1991 is a documented matter. Authors quote from a book by an American journalist, Claire Sterling, which gives details of the senseless traffic in roubles. She described how trucks and railway cars full of rouble notes were seen in France, Belgium, Holland, Germany, Switzer-land, Italy and Poland. The Soviet embassy in Rome was actively involved in the transportation and sale of these bank notes. Sterling's book also describes a worldwide operation of currency dealers and money launderers involving several Western banks. Reddaway and Glinsky think that there must be more than profitmaking to this criminal activity. They maintain that anyone interested in the break-up of the Soviet Union would also have a keen interest in subverting the Soviet currency. Furthermore, those involved in the narcotics trade wanted to invest in Russian property, and they wanted some front-men in Russia who could launder their money.” [“Russia's decade of tragedy, A Review of The Tragedy of Russia's Reforms by Peter Reddaway and Dimitri Glinsky and Failed Crusade by Stephen F. Cohen,” Govind Talwalkar, Frontline, Volume 18 - Issue 22, Oct. 27 - Nov. 09, 2001] The cost of that effort is estimated to be between $500 billion and one trillion US dollars. “…finance capital fled Russia at an estimated $10-billion to $15-billion per year (Fidel Castro estimated it 2-to-4 times higher,14 former President Gorbachev estimates a total of $1-trillion)….” Subversive funds flowed in through the collapsed Russian borders (much of it from the National Endowment for Democracy (NED) and George Soros’ destabilization foundations [George Soros, “Imperial Wizard: Master Builder of the New Bribe Sector, Systematically Bilking the World,” CovertAction Quarterly (November 2002), pp. 1-7.] to organize political parties and coordinate a media to promote Adam Smith “free trade.” [WHY? The Deeper History Behind the September 11, 2001 Terrorist Attacks on America, Containing and Destabilizing the Soviet Federation and Eastern Europe (3rd Edition, 2005), J.W. Smith, http://www.ied.info/books/why/contain.html#endNote19] What the public record demonstrates is that both the Federal Reserve and the Bank of New York were closely involved with the Yeltsin family as early as 1990. · Kagalovsky and Yeltsin travelled to Vienna together: “In a Moscow airport in 1990, Natasha Kagalovsky, a Bank of New York Co. executive, struck up a chance conversation with Boris Yeltsin, soon to be Russia's president. As they waited to board a flight both had booked to Vienna, she says, Mr. Yeltsin asked: "How come you don't have a bank office in Moscow?" [Natasha Kagalovsky Rose Fast, Fell Hard at Bank of New York, Ann Davis and Paul Beckett, Wall Street Journal, November 23, 1999] · Gerald Corrigan (President of the New York Federal reserve) also met “discreetly” with Boris Yeltsin before the August coup “In the summer of 1991, Treasury Secretary Nicholas Brady, Fed Chairman Alan Greenspan, Mr. Corrigan and several other Western officials traveled to Moscow to assess the "economic reforms" required for Russian membership in the International Monetary Fund and the eventual release of billions of dollars in loans a year later. … THE SEPTEMBER 11 COMMISSION REPORT Page 194 One evening, as Secretary Brady and Chairman Greenspan went off to dine with Mr. Gorbachev, an aide to Mr. Corrigan, who was not invited along for dinner, suggested that he meet "discreetly" with Mr. Yeltsin…. "Mr. Yeltsin deeply appreciated the courtesy of Mr. Corrigan's visit," according to one official familiar with the details of the trip. About a month later, when the attempted military coup against Mr. Gorbachev thrust Mr. Yeltsin to the forefront, the Russian president did not forget his newfound dining companion and billiard partner, Gerald Corrigan. In November 1991, the New York Fed chief began a series of "technical assistance" trips to Russia, and in January 1992 hosted a dinner for 200 bankers and other close friends in Mr. Yeltsin's honor at the New York Fed's Italian-revival building in lower Manhattan. The two nowintimate friends reportedly danced and tossed back shots of vodka until the wee hours of the morning.” Corrigan’s real assignment - the role neither he nor the Bush administration will discuss openly - is to float Moscow on a multibillion dollar tide of multilateral loans [Propping Up Russia’s Finances, Christopher Whalen, JoC Newspaper, September 29, 1992] · Gerald Corrigan has also been associated Bush progran to destabilize the Russian currency in a quiet partnership with BCCI banker Alfred Hartmann and Mark Palmer “(Soros) has been controlled for some time by a fellow called Hartmann. Hartmann was operating out of Zug, Switzerland, which is one of the banking centers, through the N.M. Rothschild Continuation Trust. Hartmann was the man who controlled the BNL and BCCI simultaneously, or coordinated it, which were not Pakistani or Gulf banks; they were British Commonwealth banks, controlled through this Rothschild intermediation. He worked for them, and still does. Now on the American side, his controller or coordinator has been Gerald Corrigan, who's going to work for him on the Russian side, and a State Department official, R. Mark Palmer, who went to work for Soros even before he fully quit his job at the State Department.”[There Is a Worldwide Crash in Progress; We Are In A Depression Already'', Lyndon Larouche, interviewed by Mel Klenetsky, August 4, 1993, Shofar FTP Archive File: people/l/larouche.lyndon/eir.080493] Soros, as it would turn out, was working with known Mossad agents Shaul Eisenberg and Marc Rich, representing to a large degree the Rothschild family interests. “The friends of Soros lost no time in capitalizing on this situation. Marc Rich began buying Russian aluminum at absurdly cheap prices, with his hard currency. Rich then dumped the aluminum onto western industrial markets last year, causing a 30% collapse in the price of the metal, as western industry had no way to compete. There was such an outflow of aluminum last year from Russia, that there were shortages of aluminum for Russian fish canneries. At the same time, Rich reportedly moved in to secure export control over the supply of most West Siberian crude oil to western markets. Rich's companies have been under investigation for fraud in Russia, according to a report in the Wall Street Journal of May 13, 1993. Another Soros silent partner who has moved in to exploit the chaos in the former Soviet Union, is Shaul Eisenberg. Eisenberg, reportedly with a letter of introduction from then-European Bank chief Jacques Attali, managed to secure an exclusive concession for textiles and other trade in Uzbekistan. When Uzbek officials confirmed defrauding of the government by Eisenberg, his concessions were summarily abrogated. The incident has reportedly caused a major loss for Israeli Mossad strategic interests throughout the Central Asian republics. “[The Secret Financial Network Behind "Wizard" George Soros , William Engdahl, Executive Intelligence Review (EIR), November 1, 1996] “Soros's circle includes indicted metals and commodity speculator and fugitive Marc Rich of Zug, Switzerland and Tel Aviv; secretive Israeli arms and commodity dealer Shaul Eisenberg, and "Dirty Rafi" Eytan, both linked to the financial side of the Israeli Mossad; and, the family of Jacob Lord Rothschild. THE SEPTEMBER 11 COMMISSION REPORT

Page 195 Understandably, Soros and the Rothschild interests prefer to keep their connection hidden far from public view, so as to obscure the well-connected friends Soros enjoys in the City of London, the British Foreign Office, Israel, and the U.S. financial establishment. The myth, therefore, has been created, that Soros is a lone financial investment "genius" who, through his sheer personal brilliance in detecting shifts in markets, has become one of the world's most successful speculators. According to those who have done business with him, Soros never makes a major investment move without sensitive insider information. On the board of directors of Soros's Quantum Fund N.V. is Richard Katz, a Rothschild man who is also on the board of the London N.M. Rothschild and Sons merchant bank, and the head of Rothschild Italia S.p.A. of Milan. Another Rothschild family link to Soros's Quantum Fund is Quantum board member Nils O. Taube, the partner of the London investment group St. James Place Capital, whose major partner is Lord Rothschild. London Times columnist Lord William Rees-Mogg is also on the board of Rothschild's St. James Place Capital.” “[The Secret Financial Network Behind "Wizard" George Soros , William Engdahl, Executive Intelligence Review (EIR), November 1, 1996] · At a dinner party thrown by Corrigan for Yeltsin in June 1992, guests on the invitation list who have been mentioned as persons of interest in this review were: - President Bush - Nicholas F. Brady, Secretary of the Treasury - Defense Secretary Dick Cheney - Alan Greenspan, chairman, Federal Reserve - Condoleezza Rice, associate professor of political science, Stanford University. - Brent Scowcroft, national security adviser. · Ms. Natasha Kagalovsky, of the Bank of New York money-laundering scandal, was part of Gerald Corrigan’s (then President of the New York federal Reserve Bank) ‘offthe- record’ mission requested by George Bush to ‘rescue’ the Russian banking system. Corrigan made six trips to visit Yeltsin starting in September 1991, before he ‘muscled’ other large banks into bankrolling the Russian drain [see Natasha Kagalovsky Rose Fast, Fell Hard at Bank of New York, Ann Davis and Paul Beckett, Wall Street Journal, November 23, 1999] The Bank of New York would continue to be at the center of virtually every moneylaundering scandal coming out of Russia, including Alexander Konanykhine’s European Union Bank (of Antigua) and Mikhail Khodorkovsky’s Bank Menatep, and Nordex. Now, it would be identified as the bond clearing house to be at the center of failed communications as $240 billion in fraudulent bonds were settled under suspicious circumstances in the aftermath of September 11. The Federal Reserve would be reported by records unoffically released from the Office of Naval Investigation as having been involved in a number of secretive transactions in 1990 and 1991 that ranged between $60 and $100 billion dollars. In these transactions, the money moved through the Hong Kong Shanghai Bank (London), Chase Manhattan Bank, Key Bank (Ogden) and the MidAltalntic National Bank. The Bank of New York has been able to fend off any serious investigation from Federal agencies regarding these various money-laundering schemes, but only with a tremendous amount of poltical support, and lack of outcry from the American public. As far as the public was concerned, this was Russian money – and therefore had little effect on their THE SEPTEMBER 11 COMMISSION REPORT

Page 196 lives. The exposure of the Brady/Durham bond fraud would have been too impactful for the Americanpublic to ignore. The regulations of the SEC would have resulted in an immediate exposure of this crime during settlement. Hence, the only option available to the people that pulled this fraud together was to create a national emergency which would allow the Federal Reserve board to suspend the SEC regulations, and the clearing agencies (Bank of New York and GSCC) to mask their operations. This national emergency was the attack on the World Trade Center As a result of having had a dry run at this situation only the year before during the naval war games, the management of the Federal Reserve had a precise strategy of how to deal with this situation. Within hours of the attack on the WTC: “…the Commission for the first time invoked its emergency powers under Securities Exchange Act Section 12(k) and, on Friday September 14, issued several orders and an interpretive release to ease certain regulatory restrictions temporarily. Last Friday, September 21, we extended this relief for an additional five business days.” [Testimony Concerning The State of the Nation's Financial Markets in the Wake of Recent Terrorist Attacks, Harvey L. Pitt, Chairman, U.S. Securities & Exchange Commission Before the Committee on Financial Services United States House of Representatives, September 26, 2001] Section 12k – “Trading suspensions; emergency authority”- of the Securities Exchange Act, when invoked, allows the Federal Reserve to do essentially and literally whatever it thinks appropriate. “The Commission, in an emergency, may by order summarily take such action to alter, supplement, suspend, or impose requirements or restrictions with respect to any matter or action subject to regulation by the Commission or a self-regulatory organization under this title, as the Commission determines is necessary in the public interest and for the protection of investors…to maintain or restore fair and orderly securities markets (other than markets in exempted securities)” Recall, though: this national emergency was declared even thoughthe entire system remained whole, and as documented earlier, none of the trading data was lost: “…the U.S. financial system largely remained open throughout the day and thereafter. Banks and other financial intermediaries stayed open. Key wholesale and retail payments system remained operational, like other financial activities, except to the extent that telecommunications disruptions had a temporary or local effect. Even firms in the World Trade Center were able to resume business from other offices or from contingency sites within hours of the attack.” [Implications of 9/11 for the Financial Services Sector , Remarks by Vice Chairman Roger W. Ferguson, Jr. At the Conference on Bank Structure and Competition, Chicago, Illinois, May 9, 2002] On the first day of the crisis, the SEC lifted “Rule 15c3-3 - Customer Protection-- Reserves and Custody of Securities,” which set trading rules for the following processes: - The [seller] is not permitted to substitute other securities for those subject to this agreement an therefore must keep the [buyer's] securities segregated at all times, unless in this agreement the [buyer] grants the [seller] the right to substitute other securities - Notification in the event of failure to make a required deposit. - Physical possession or control of securities. - Required Disclosure - Control of securities/Requirement to reduce securities to possession or control. THE SEPTEMBER 11 COMMISSION REPORT Page 197 In addition to suspending rules which controlled substitution, reporting, disclosure and control in the matching process, the Federal Reserve immediately injected $120Billion into the system, and kept injecting until it reached $300 Billion in incremental money supply. “Banking system balances went from $13 billion on September 10 to over $120 billion on the 13th….Federal Reserve credit extension following September 11 was unsterilized, in the sense that it resulted in a net increase in the monetary base.” [Payment System Disruptions and the Federal Reserve Following September 11, 2001, Jeffrey M. Lacker, Federal Reserve Bank of Richmond, Richmond, Virginia, 23219, USA, Federal Reserve Bank of Richmond Working Paper 03-16, December 23, 2003] The lifting of these rules, and the immediate infusion of over $120 billion in Reserve funds was inadequate to resolve what was identified as the “fail” problem: the inability to match the buyer’s funds and seller’s certificates. Hence, on the 19th of September, after lifting the constraint, the Government Securities Clearing Corporation (GSCC) sent a memo to banks encouraging them to make substitutions on “immediately maturing collateral”, which is what the Brady Bonds were. In other words, the Fed enabled participants to replace any older, allegedly illegal 10 year notes with new notes. “…collateral substitutions can and should be made with regard to immediately maturing collateral.” [Reminder of Bond Market Association Recommendations, GSCC073.01, September 19, 2001] Then, it treated the ‘fails’ as two separate groups, suggesting there was a large group of trades that required ‘special treatment’ for “other” problems. “GSCC has listed, on two new, separately re-created databases, those deliveries from members that were bought into our account last week without our ability to view those transactions. This will allow us to identify with confidence those "fails" that are in fact incorrect, as well as other problems such as erroneous deliveries made to GSCC.” [GSCC075.01, September 20, 2001] Subsequent to that ruling, the GSCC issued another memo allowing blind broker settlements. A “blind broker” is a mechanism for inter-dealer transactions that maintains the anonymity of both parties to the trade. The broker serves as the agent to the principals' transactions. “The only repo transactions entered into by blind brokers should be those done in direct furtherance of clean-up and reconciliation efforts. No new blind brokered business should be executed.” [GSCC080.01, September 25, 2001] At this point in time, the Federal Reserve and its GSCC had created a settlement environment totally void of controls and reporting – where it could substitute valid, new government securities for the mature, illegal securities, and not have to record where the bad securities came from, or where the new securities went – all because the primary broker for US securities had been eliminated. These clearing operations were being run in one of three ‘temporary’ facilities set up by the Bank of New York. (A more technical explanation of how this process was deployed is described in Appendix D,) This act alone, however was inadequate to resolve the problem, because the Federal Reserve did not have enough “takers” of the new 10 year notes which this report suspects THE SEPTEMBER 11 COMMISSION REPORT Page 198 were substitutes for the fraudulent notes. Rather than simply having to match buy and sell orders, which was the essence of resolving the “fail” problem, it appears the Fed was doing more than just matching and balancing – it was pushing new notes on the market with a special auction. “Acute settlement problems with the on-the-run ten-year note led the U.S. Treasury to reopen the issue on October 4 and hold an unusual “snap” auction of new ten-year securities.” [Payment System Disruptions and the Federal Reserve Following September 11, 2001, Jeffrey M. Lacker, Federal Reserve Bank of Richmond, Richmond, Virginia, 23219, USA, Federal Reserve Bank of Richmond Working Paper 03-16, December 23, 2003] If the Federal Reserve had to cover-up the elimination of $240 Billion in bogus securities, they could not let the volume of capital shrink by that much in the time of a monetary crisis. They would have had to push excess liquidity into the market, and then phase it out for a soft landing, which is exactly what appears to have happened. In about two months, the money supply was back to where it was prior to 9/11. The need for an extra $300Billion in liquidity at the time of the “crisis” seems to be a bit of a mystery, and there has not been a significant effort to explain it. The immediate demand for cash (ATM machines, checking accounts etc.) never exceeded $2 Billion. The U.S. banks had already agreed amongst themselves to not force balance settlements, so the Federal Reserve ‘loans’ which were supposedly necessary to save the banking system never needed to happen. The SEC had indicated the financial companies could continue financial reporting as if any transactions from that day had never occurred. Most importantly, all the transactions pumped into the WTC financial centers were replicated in their Disaster Recovery sites, which were up and running in two days. All the original settlement data from buyers and sellers should have been there, unless someone electronically tunneled into the trading systems masquerading as a bank and unloaded bogus data, which is what Convar suggested had happened. Given security on inter-bank financial transactions, the likelihood of this borders on impossible. With the regulatory changes that followed in the immediate aftermath of the attack on the WTC, it was not the banking system that required a $300 billion monetary infusion. The $300 billion was required for something else. This report hypothesizes that the delays in structuring settlements of “fails” were caused by an absence of matching buy/sell records, because the trade data was actually provided by a program run from a war game simulation server from within the World Trade Center, and connected to the trading system. The fraudulent bonds were put up for a settlement that was not forthcoming, and in the settlement process at the Fed, were replaced with new Federal Reserve securities. Hence, the bogus bonds were replaced with legitimate U.S. debt, and the $240 Billion in bogus bonds were written off the books as the Fed’s reduction in the temporary boost in M3 required to “prevent a crisis.” The only conclusion one could reach is that if there were $240 billion in illegal securities in circulation, all due at once, one could not imagine a more opportune moment to make those securities disappear than the suspension of all regulations and the perceived justification to increase the monetary supply by at least twice that amount. The THE SEPTEMBER 11 COMMISSION REPORT Page 199 coincidence of these two situations happening at the same time, by accident, can only be described as highly improbable. This report hypothesizes that once it was determined to support the destruction of the World Trade Center to derail investigations into Swiss and German gold accounts, the actual attack was postponed and timed to coincide with the need to resolve the fraudulent bond deal. Given that the same international banking cartel was involved in all the crimes mentioned, and that the Bush covert operations of 1991 stood as the source of all of them, it probably matters little if one or more of these crimes provided the key motivation. 8.2 The Naval Intelligence Threat There are a number of public sources of information that suggest that the Office of Naval Intelligence (ONI) represented a threat to the Bush administration, and the alleged Greenspan/Bush $240 Billion security fraud. The threat manifested itself in a number of different manners, through a number of individuals – suggesting that the friction between the Bush organization and the Office of Naval Intelligence was more than personal, it was institutional. Al Martin, former ONI operative testified to this friction: "The ONI already had a deep existing covert illegal structure. They had a mechanism before the CIA even existed. They had contacts in foreign intelligence services and in foreign governments that the CIA never could have hoped to obtain." "Also ONI controlled its own assets, which the CIA had to build from scratch later on. The CIA can't control any of its own assets domestically because it's against the law for it to do so, thus the ONI is obviously in a superior position. For instance, you don't see an airfield that says 'Owned by the CIA' on it in the United States. The ONI doesnt have any such restrictions because it's part of the US Navy." "ONI is where the real deep control is. It's where the real deep secrets are kept. That was what ONI always did the best. Keeping secrets. Accumulating secrets. Warehousing secrets for the purposes of control." When I asked him 'what secrets?' he (Al Martin) replied, "One thing I can tell you is the ONI was instrumental in dethroning former Mexican President Louis Portillo. Portillo got very friendly with George Bush and the CIA, and ONI had never alligned with the Bush faction. I know what people think, but that's not true. From what I can tell, it has never been alligned, but has always been hostile to that Eastern Country Club Bush Cabal and their friends in the CIA. The Bill Casey faction is the George Bush-Allen Dulles Faction." [The Man Who Knows Too Much , An Interview with Al Martin, author of "The Conspirators: Secrets of an Iran Contra Insider," Uri Dowbenko] Because of that, it is speculated that the entire ONI needed to be seriously disrupted. The attack of Flight 77 did just that, taking out not only the Navy Command Center, but a small Navy intelligence group as well. “When hijacked American Airlines Flight 77 hit the Pentagon at more than 500 mph, slamming through concrete and corridors, spewing fuel and fire, it destroyed much of the Navy Command Center. It smashed directly into the offices of the CNO-IP. …Even in the acronym-happy Pentagon, the term CNO-IP is obscure. It stands for Chief of Naval Operations Intelligence Plot. Its small, typically young staff keeps a round-the-clock watch on geopolitical developments and military movements Brilliant futures were forged in the CNO-IP. Adm. Bobby Ray Inman, later deputy CIA director, served there; so did Sen. Richard Lugar (R-Ind.). Radi, who stood the Intelligence Plot watch in his twenties, later moved to the White House Situation Room. THE SEPTEMBER 11 COMMISSION REPORT Page 200 In mid-August, …the CNO-IP was moving to renovated offices in the Navy Command Center, on the first floor of the D-Ring, on the Pentagon's west side. One hundred twenty-five Pentagon workers were killed that day. Forty-two died in the Navy Command Center. Seven served in the Intelligence Plot.” [The Last Watch, Richard Leiby, Washington Post, 1/20/2002] “As pointed out by Carol Valentine and Dick Eastman, the first floor of the western wedge of the Pentagon was occupied in part by the office of the "Chief of Naval Operations Intelligence Plot", who had moved into their new offices (early) and many were killed, as reported by the Washington Post, 1/20/2002 (quoted by Valentine, not independently confirmed by the authors.) Valentine noted that this Naval Intelligence office was responsible for breaking open the Jonathon Pollard affair, and Eastman speculated that had they survived, they might have had the responsibility to mount an independent investigation of all the events of 9-11 and its associated "intelligence failures".[anonymous internet blogger] The agency know as th “Naval Operations Intelligence Plot” was responsible for production of daily intelligence briefing and other intelligence materials for the Chief of Naval Operations, Secretary of the Navy, and other senior military and civilian officials, including the Director of the ONI. ONI was also part of the Command Center. At an organizational level, it is reported that the ONI was at odds with Bush and his primary enforcement agencies- the CIA and NSA. “Tom Heneghen, . . . who claims an intelligence network ranging from Gore to France, made several stunning claims about 9/11: --- According to Heneghen, a missle shield over Washington, DC was deactivated several weeks before 9/11, . . . in preparation for the upcoming 'wargames' that served as cover for the Bush/Pentagon coup of 9-11. The Office of Naval Intelligence, which has never been on particularly good terms with the NSA, the CIA, or its offshoots, is investigating this angle and emails on the CyberNet system that can prove this.”[9/11 Whispers: Washington Defense Shield Deactivated Due to Wargames? Liberty Think, 1/4/2005] This general friction between the groups is demonstrated by several examples. At an individual level, there were several individuals who threatened to expose the Bush administration ‘shortcomings’ – if not crimes: officers Vreeland, Russbacher, and Phillport. The case of Mr. Delmart “Mike Vreeland has been debated and disputed, with serious allegations of fraud made against him by a “number” of U.S. citizens. These allegations have been reviewed and set aside by a Canadian court as without merit. The essence of the story is that Vreeland was apprehended by Canadian authorities on his way back from Russia to the U.S. Previous to that, Vereeland had been a US agent in Iraq. Vreeland, while in jail, told Canadian authorities he was with the ONI, and documented - before September 11 - that the attack on the WTC would happen. Unfortunately, his reported ONI ‘handler’ died in the attack on the Pentagon. Vreeland himself has disappeared, and is assumed to be in hiding, after finally being released. “Sometime around August 11 or 12, Vreeland wrote a set of notes. They listed a number of potential terrorist targets including the Sears Towers, World Trade Center, White House, and Pentagon. The notes also included the phrase, "Let one happen. Stop the rest!!!" He sealed them in an envelope and handed them to his Canadian jailers.” [Down the rabbit hole with the man who says he tried to warn the world about 9/11, Sander Hicks, Guerilla News Network, Sept. 26, 2002] THE SEPTEMBER 11 COMMISSION REPORT Page 201 “Lt. Vreeland gave clues that his main contact/control was Jack Punches. From the memorial pages: U.S. Navy Capt. (Ret.) Jack Punches worked in the Pentagon as deputy head, Navy Interagency Support Branch. Punches was killed in the attack of Flight ” “I was sent (to Moscow) by the U.S. government and the ONI [Office of Naval Intelligence]. I got my orders between Sept. 4 and Sept. 7, 2000. Marc Bastien departed for Russia on Sept. 7, 2000. I had orders to meet him. Bastien was going to work at the Canadian embassy regarding diagrams and blueprints of a weapons defense system. The U.S. government had a direct influence on his mission. The name of the defense system is SSST [Stealth Satellite System Terminator]. There are five different individual and unique defensive and strike capabilities of the system. The only portion that I have publicly spoken on is one frame regarding actual current orbiting satellites, which are not at this time owned by the US government. On advice of counsel I cannot discuss the other components. This one component is a satellite system. Within the confines of the system there are multiple, deployable space/orbital EMP [Electromagnetic Pulse] missiles that are not aimed at the ground. They are targeted at everyone else's satellites. These would kill worldwide communications. The satellites of some countries that are shielded with titanium are protected from these weapons. The protected countries are Russia and China, but U.S. satellites are vulnerable and Putin has told Bush that the U.S. missile defense system doesn't work, and that Bush knows it. The reason why I went to Russia was because I needed to meet with Bastien and another individual from the Russian Ministry of Defense named Oleg. The purpose was to get the Canadian diplomat who had made contact with Oleg to get the book of designs out of the ministry's R&D. That was done. We copied the entire book. Then we took certain documents, and we changed serious portions of the defense design so the program wouldn't work. They know this now.” [FTW Interview: Delmart "Mike" Vreeland, What the CIA Doesn't Want You to Know, Michael C. Ruppert, FromTheWilderness.com] What is generally ignored by most writers is that Vreeland claimed to have documents (over 100 pages of bank transactions with 6 transactions per page, with one on Aug 11, 1989 for $100 Billion.) exposing a massive, fraudulent theft of billions of dollars from the U.S. Treasury. He shared these documents with Michael C. Ruppert, who discusses them in his report Crossing the Rubicon. What is important to note is that these transactions start as early as 1989, and the ONI documents were also released to Ruppert and others by another Navy Intelligence agent. These documents suggest that the ONI was probably investigating a large money-laundering scheme, as rumored in some of the press. In reviewing these documents, it becomes clear that for the 18 months covered by these documents, Robert Hermann (later to become Vice President and the principle tax strategy architect for Enron, although the ONI documents may be referring to Robert Hermann of the National Security Agency, who worked extensively in the White House.) was working with international banking cartels to refinance third world debt in the urgent need to prevent the collapse of the US banking system. (Michael Bowe and James Dean provide an excellent overview of this period in their report: “Has the Market Solved the Sovereign-Debt Crisis?” Princeton Studies in International Finance, No. 83, August 1997.) Working with a strategy labeled “concerted market-based debt relief” Hermann, Brady, Bush and Greenspan were apparently creating securities ironically named “Exit Bonds.” “Exit bonds are new bonds issued at discount in exchange for old debt. Exit bonds, like buybacks, were rare before Brady, because of similar coordination challenges reinforced by legal clauses in syndicated loan agreements. Because exit bonds are generally either collaterized or made senior to the reminaing old debt, they can be exchanged for old debt at a fraction of its value. If the bonds are fully collateralized, for example, they are as good as cash…” [Michael Bowe and James W Dean, Has the Market Solved the Sovereign-Debt Crisis?, Princeton Studies in International Finance, No. 83, August 1997] THE SEPTEMBER 11 COMMISSION REPORT Page 202 The public record on the refinancing of Soviet debt is largely undocumented, but there is no doubt that it was being refinanced, with the secretive or “quiet” process largely under way in early 1991. Also, the individual reporting the news, and knowledgeable of the discussions, was aware that the U.S. was doing the financing. "The Soviet Union is already in a piecemeal debt rescheduling with a series of 'quiet' Western government 'refinancings' likely this year -- all in the interest of avoiding a more formal and debilitating Paris Club process," Center Board member Robinson said….Robinson added, "Under present circumstances, it only makes sense that the appropriate authorities conduct a thorough investigation of Moscow's banking activities and loan and interbank deposit portfolios before any further Western taxpayer guaranteed credits are pledged to Moscow." ["Moral Hazard ": Moscow’s Dubious Banking Operations May Make the BCCI and BNL Affairs Look Like Small Change, Center for Security Policy, July 23, 1991] During this global debt-forgiveness/restructuring process, the Bush administration would have needed to force the Durham Trust to relinquish control of its gold-collateral Peruvian debt bonds, which is what Durham claims did happen. According to the Vreeland and ONI documents, during the refinancing process, significant portions of the collaterized bonds of numerous international financiers “disappeared” for a large number of months while under control of the Bush Whitehouse, which also fits with Durham’s claims. Because of the delays in refinancing, a number of foreign countries took the Whitehouse to court to demand their collateral back. These proceeding were sealed (as have been 9/11 lawsuits against the government) from public disclosure for reasons of ‘national security.’ During this same time period, the financial markets experienced one of their rare “interest rate inversions,” where short term rates provided better yields that long term rates. Between inversion earnings and interest, investment of the “lost” collateral would have generated over $300 billion in profits during the period of their absence. What this report speculates is that two years later, these earnings and lost collateral would re-emerge as collateral and funding for the re-financing of the Russian/Soviet debt (private and government), default on which was imminent. This debt (along with that of Peru, Brazil, Mexico and a dozen other states) had to be refinanced to prevent the collapse of the American banking system. The cash generated by refinancing the Soviet debt was withheld from Gorbachev until the coup which ousted him, and only then was funneled to the Russian Menatep Bank. Menatep Bank, with its relations with Bank of New York, Nordex and the Riggs National Bank subsidiary Riggs-Valmet, would be at the core of the plundering of the Russian economy, pumping Russian, Kazak and other CIS international trade flow through the aforementioned financial conduits. The Bush administration’s attempts to minimize and ignore the Bank of New York money-laundering scandal have been documented elsewhere in this report. What is now suggested is that in attempting to protect the German and Swiss bankers, the Bush administration was protecting its own family. Jonathon Bush was a key executive director of Riggs at the time, and its Chairman, Robert L. Allbritton, was a family friend and major financial backer of the Bush family. The Russian Mafiya connection to Riggs and the Bush family is explored in Section 8.3. Vreeland’s story, attacked for its credibility by several writers, is consistent with other known facts. It is of related note that in 1999, on two occasions the American press and THE SEPTEMBER 11 COMMISSION REPORT Page 203 Congress expressed concern about Russian EMP capabilities, suggesting that Vreeland’s claim to be collecting information in Russia about an EMP system has some merit: “Pentagon intelligence sources tell us that Russia in early April resumed testing a high-altitude weapon that fires off an electromagnetic pulse, or EMP. The EMP bursts are similar to the disruption of electronics caused by a nuclear blast that can shut down everything from computers to cars. The Pentagon views the Russian EMP weapon as a serious development that may be part of Moscow's ongoing anti-satellite weapons development program. U.S. satellites are the Achilles' heel of the U.S. military's high-technology force used for sending orders to forces around the world as well as communicating with troops and organizing logistics. A recent test of a ground laser against a U.S. satellite shocked military leaders by demonstrating how vulnerable U.S. satellites are to disruption.” [The Washington Times 06/18/1999; pp A5 by Bill Gertz and Rowan Scarborough] "The PRC is believed to be developing space-based and ground-based anti-satellite laser weapons. Such weapons would be of exceptional value for the control of space and information. The Select Committee judges that the PRC is moving toward the deployment of such weapons." "Based on the significant level of PRC-Russian cooperation on weapons development, it is possible that the PRC will be able to use nuclear reactors to pump lasers with pulse energies high enough to destroy satellites." "In addition, Russian cooperation could help the PRC to develop an advanced radar system using lasers to track and image satellites." [The Cox Report, House Select Committee on U.S. National Security and Military/Commercial Concerns with the P.R.C., Christopher Cox, Chairman, January 3, 1999] When asked about how he learned of the pending attack on the World Trade Center, Vreeland indicated he learned of the attack from notes from a US agent found in a document “sent to Vladimir Putin by K. Hussein, Saddam Hussein's son.” “When did you first learn details of the attacks that were to happen on Sept. 11? In the first week of December 2000. How did you learn of the details? One document was written in English by a U.S. agent, who had picked up a copy of a document that had been sent to V. Putin by K. Hussein, Saddam Hussein's son. This is what the translation of the doc indicates. The Iraqis knew in June 2000 that I was coming. I didn't get my orders until August. The letter said that Bastien and Vreeland would be dealt with "in a manner suitable to us." The letter specifically stated on page two, "Our American official guarantees this." [FTW Interview: Delmart "Mike" Vreeland,What the CIA Doesn't Want You to Know, Michael C. Ruppert, FromTheWilderness.com] It would be appropriate to assume that the son referenced (“K”) is actually Qusay who ran the Iraqi secret service. Qusay, as the official leader of the Iraqi military and intelligence was known to be engaged in extensive relations with the Syrians and the Syrian intelligence. It will be documented elsewhere in this report that that Syrian Intelligence had long been aware of the plans for the attack on the World Trade Center, and had actually been linked to the financing of Mohammed Atta while he was in Germany, through the former head of Syrian Intelligence. It would not be unexpected to have Qusay being informed of the attack by the Syrian intelligence, who were and still are playing both sides of the American-Iraq conflict. In providing the 100 pages of documents, Vreeland was demonstrating knowledge of an international re-financing process that has remained extensively “cloaked” from the public press, and exposed to several others by reported ONI officers. (One might suspect that a global event as momentous as refinancing several trillion in world debt would have THE SEPTEMBER 11 COMMISSION REPORT Page 204 been authoritatively studied in economic and business journals, and at least commented on in the media news. The event happened, but there is no reported news of it!) There is nothing in his story to indicate that Vreeland is lying, and several clues in his story which suggest it to be true. It also suggests there was another agent in US intelligence that knew of the attack, and that Vreeland was sent to collect the evidence to make sure it didn’t see the light of day. In doing so, his Canadian colleague in the operation was ‘suicided’ shortly after Vreeland’s mission was completed. The allegations of Vreeland’s fraud and misconduct which are being used to discredit him are “well documented claims” but before the validity of Vreeland’s case is discounted, the reader should bear in mind the example of U.S. Navy Captain Gunther Russbacher. Russbacher is the Navy pilot who came forth and testified to Congress that George Bush Sr. did indeed go to Paris as alleged in the October Surprise/Iran-Contra plot. “In 1968, he was assigned to the Office of Naval Intelligence with a permanent commission…. In October 1980, he was command pilot for the aircraft used allegedly to fly George Bush to Paris.From March to July 1982.… His group met with Mossad (Israeli intelligence) people in Alicante for the final delivery of weapons to Iran. In March 1985, he was incarcerated at Segoville, TX for an escape from federal conviction resulting from 1973 where he was caught with numerous bags of bearer bonds while dressed as a U.S. Air Force major.” [Who Is this Man Who Claims He Flew Bush to Paris, Harry V. Martin , Napa Sentinel, 1991 ] Subsequent to their turning on the Bush presidents, both Vreeland and Russbacher found themselves incarcerated for numerous crimes which they and their lawyers claimed were trumped up fabrications. The point to be made is that Vreeland’s claims, if true, can only be discounted by the U.S. Government if he is locked away and made to be a fraud, just as was done with Russbacher. (It is of some note that the Canadian legal system finally released Vreeland, suggesting the claims of fraud lacked credibility.) The coincidence here is that this generally happens to anyone who turns on the Bush administration. This pattern of “setting up” and eliminating whistleblowers by the Bush administration is more thoroughly addressed, with more examples, such as LT Colonel Anthony Shaffer and four star General Kevin Byrnes in Section 12 of this report. Another loose cannon in Navy Intelligence turned out to be Navy Capt. Scott Phillpott, a 22 year active duty serviceman who stepped forward and brought the Able-Danger Operation to light, after the 9/11 Commission ignored testimony from several individuals of this group’s awareness of Mohammed Atta as a known terrorist operating in the US a year before 9/11. “Navy Capt. Scott J. Phillpott, a U.S. Naval Academy graduate who managed the program for the Pentagon's Special Operations Command, confirmed "Atta was identified by Able Danger by January- February of 2000."[An Incomplete Investigation: Why Did the 9/11 Commission Ignore `Able Danger'?, Louis Freeh, Wall Street Journal., November 17, 2005] THE SEPTEMBER 11 COMMISSION REPORT Page 205 More important than loose cannons like Vreeland, Russbacher, and Phillport, someone in ONI was leaking the story of the Brady (Durham) Bonds to the public, and conducting its own money-laundering investigation: “Sioux City, Iowa -- July 25, 2005 TomFlocco.com -- According to leaked documents from an intelligence file obtained through a military source in the Office of Naval Intelligence (ONI), on or about September 12, 1991 non-performing and unauthorized gold-backed debt instruments were used to purchase ten-year "Brady" bonds. The bonds in turn were illegally employed as collateral to borrow $240 billion--120 in Japanese Yen and 120 in Deutsch Marks--exchanged for U.S. currency under false pretenses; or counterfeit and unlawful conversion of collateral against which an unlimited amount of money could be created in derivatives and debt instruments. Moreover, Durham alleges from conversations before her husband’s murder, that any 10-year Brady bond payoff for notes due on 9-12-2001 would have led to additional evidence of trillions in stolen funds from the U.S. Treasury and the identity of the perpetrators--providing an important reason to take out Cantor-Fitzgerald offices in the North Tower and a Pentagon ONI file section on September 11. Besides the intelligence file leaked to Durham, other documents were obtained by TomFlocco.com from whistleblower Stewart Webb’s intelligence sources. Durham’s documents were delivered to the door of her home in February, 2000 by a uniformed Naval intelligence officer who told her, "the officer who asked me to bring these documents to you said you will know what to do with them," whereupon he quickly turned and left before she could see his uniform ID name tag. The same documents from the leaked file were separately compared and authenticated by another unnamed (for personal safety reasons) intelligence officer who provided identical copies to Independent Presidential Candidate Karl Schwarz, who said that agent did not know the identity of the original Naval intelligence officer who passed the intelligence file through V. K. Durham to TomFlocco.com…. ONI officials themselves--some of whom were probing the fraudulent 10-year debt instruments allegedly held by Cantor-Fitzgerald in the doomed North Tower--also perished along with the investigation files, all of which were curiously in the path of the 9.11 Pentagon impact.... Keith Johnson, the Queen’s signatory at Wachovia Bank told her about the Office of Naval Intelligence being hit at the Pentagon on September 11--that there had been an ongoing investigation of money laundering.” [Cash payoffs, bonds and murder linked to White House 9/11 finance Documents point to attack on America by White House crime families, Tom Flocco, tomflocco.com., September 4, 2005] In the public discussion of the Brady (Durham) Bonds, there has been no attempt to ascertain the reason why the ONI would be investigating the Brady Bonds. This report suggests two possible reasons why ONI could be involved in an investigation: 1) That officials in ONI determined that the maturity of the bonds represented a threat to the security of the U.S., (the level of involvement of various Intelligence operations in economic security has already been shown); and 2) the Bonds were used to invest in Russian defense companies to make their technology available to the U.S. However, the privatization of these defense firms actually put them in the control of the Russian Mafiya, which allowed the weapons to continue to be used against the U.S. by selling them to drug cartel czars, Iraq, Syria, North Korea, China and anyone else for that matter who could afford them. A final note, in the small world of all-to-many coincidences: the Office of Naval Intelligence received a new General Counsel 90 days prior to its destruction. It was an appointment by the Bush administration from the Greenberg Traurig law firm. This was Bush’s attempt to put a member of the Bush political network in control of a potentially loose cannon. (Rest assured that lawyers from firms as successful as Greenberg Traurig THE SEPTEMBER 11 COMMISSION REPORT Page 206 do not view appointments to government agencies as income enhancing ‘rewards.’) The Greenberg Traurig law firm has played key roles in various aspects of the Bush agenda on five prior occasions: “[1] represented President Bush in the Bush-Gore 2000 Florida election vote recount, --- [2] personally represents Governor Jeb Bush, --- [3] hired son of Supreme Court Justice Antonin Scalia on election day 2000--after which Justice Scalia cast one of the 5 to 4 deciding votes which placed Bush in presidency, --- [4] Miami-headquartered firm partially funded/sponsored delegation to Israel by House- Senate Armed Services Committee members and government contractors to witness and be briefed on interrogation resistance procedures and torture techniques....One of lobbyists joining them to Israel included Jack London, CEO, CACI Int'l Inc., firm implicated in outsourced Iraqi torture at Abu Ghraib prison, --- [5] firm has prominent administrative positions in Massachusetts 9/11 Fund which also involves Bush family banking house Brown Brothers Harriman, --- [6] one appointed as General Counsel of the Department of the Navy and its Office of Naval Intelligence just 90 days before the attacks.” [IN THE 9-11 NETWORK] A pro-Bush General Counsel would be able to control an amazing amount of information released by ONI, and provide an instant counter-weight to years of Naval tradition and relationships that has made the Navy a force of the highest integrity. 8.3 Collapse of the Soviet Economy and the Brady/Durham Bonds As the story of the Brady Bonds unfolds, there is an unsettling re-occurrence of references to Russia. · Russia is identified in the released ONI documents as the recipient of the funds. · Russia’s secret service was predicting a collapse of the U.S. financial system in August of 2001, a timing commensurate with the maturity of the fraudulent bonds. · Vreeland was returning from Russia with knowledge of the 9/11 attack. · In other sections of this report, the Russian Mafiya is constantly identified as having a presence in 9/11 activities via their significant presence in the Israeli Mossad. · The Russian Mafiya is shown with a connection to the last person that saw Nick Berg. · The Russian Mafiya is reported to be the last group that had contact with the individual that flew a plane into the Pirelli Building in Milan, in an event viewed as all-too-similar to the WTC tragedy. (See Appendix B). · The Russian Mafiya is noted to have threatened to use their American connections to end the investigation into Nazarbayev’s illegal activites. There are over 100 counties on this planet that could be referenced as the source of these incidents, but there is a persistent reoccurrence of “Russians” in the reports of activities related to the events of September 11, 2001. This anomaly warranted an exploration and discussion of “Russia” in general and specific terms. 8.4 Riggs Bank as an Agent for the Collapse of the Soviet Union THE SEPTEMBER 11 COMMISSION REPORT Page 207 What the record shows is that the $240 Billion in Durham/Brady Bonds – assuming the multiple reports of their existence to be accurate – did not originally show up in the American money market, but were most likely used to re-finance private and government Russian debt and buy into key industries. It is generally thought that prior to the collapse of the Soviet Union, the Soviet debt never exceeded $70 billion, and hence the idea that $240 billion in Brady bonds was required has been a reason for ignoring Durham’s claims. More recent research however by Pierre Verluise, indicates this debt was actually more in the range of $200 billion. “… Between 1985 and 1991, Soviet debt tripled from $22.5 billion to $70 billion. Calculating theses figures is an extremely difficult task (one which Mr. Verluise has accomplished admirably for the period under study), but the total debt is now estimated at between $80 billion and $ 200 billion.” [The New Russian Loan, by Pierre Verluise, "The New Russian Loan", review by John Laughland, in The Wall Street Journal Europe, April 26 - 27, 1996] Verluise, a French researcher, as well as the Centerfor Security Policy points out that the refinancing actually began in 1991 “Between 1991 and 1994, according to Mr. Verluise’s sources, successive rescheduling simply led to direct subsidy of Russia by the West.” [The New Russian Loan, by Pierre Verluise, "The New Russian Loan", review by John Laughland, in The Wall Street Journal Europe, April 26 - 27, 1996] This report speculates that the cash generated by refinancing that debt was with-held from Gorbachev and the Soviet system, thus helping to precipitate its collapse – a collapse initiated by US covert financial operations set in motion by George HW Bush, and executed by Lee Wanta. Upon the collapse of the Soviet system, the cash was released to Yeltsin, who then pushed it into Bank Menatep. Menatep was controlled by Mikhail Khodorkovsky. Menatep, Khodorkovsky, Berezovsky, Abramovich, Konanykhine and the Yeltsin family of soon-to-be oligarchs, were being advised by the Valmet Group, a subsidiary of the Riggs Bank which is widely recongnized as a CIA operation controlled by the Bush ‘family.’ “… (the ) Valmet Group was part of an extensive network that spread from Russia to the secretive financial system of Dubai, then on to Africa, London and the United States. Wrapped up in the network was not only Khodorkovsky's Menatep, but the founders of Rossiisky Kredit and Stephen Curtis, a former Dubai-based lawyer who via Samuelson became a consultant to Berezovsky and Khodorkovsky, setting up a legal framework for their offshore transactions. … The company's reputation was in tatters following a series of scandals in the late 1990s in which it was alleged to have been part of an extensive money-laundering network involving the Bank of New York and Menatep…” [Biography Of Mikhail Khodorkovsky from The Moscow Times, Catherine Belton, The Moscow Times, May 17, 2005] “…Valmet, a Geneva-based global trust business… agreed in early 1989 to advise Khodorkovsky's group of young businessmen. Valmet later held the key to the Group Menatep fortune, holding shares via nominee ownership schemes and organizing the transfer of vast sums of money via its network.” [Biography Of Mikhail Khodorkovsky from The Moscow Times, Catherine Belton, The Moscow Times, May 16, 2005] THE SEPTEMBER 11 COMMISSION REPORT Page 208 “…Valmet was also one of the first companies that US and Swiss investigators looked at during the Bank of New York money laundering scandal that erupted in August 1999 after more than $7bn in suspect Russian funds was found to have been funnelled through the venerable bank. It didn't help that Valmet had been moving the funds alleged to have been looted from Avisma though accounts at the bank.” [Truth and Beauty... (and Russian Finance) The Summer of our Discontent, Eric Krause, July 22, 2004] The documentation that shows the relationship of Riggs to Valmet suggests it was more than just an “investment” by Riggs, but rather a partnership vehicle between Riggs and Menatep, between the Bush family and the Yeltsin family, which provided guidance, a foundation for tax evasion, and special favors such as visas to the U.S. In the beginning, Riggs had controlling interest. Valmet, as a Riggs “investment,” would have been under the control of Jonathon Bush, brother of George Bush Sr. Valmet also would have been under the influence of J. Carter Beese, Vice Chairman and Director of Riggs, who was an executive at Alex Brown, where A.B. Krongard (Executive Director of the CIA mentored him during the period of the Federal Reserve cover-up.) “Press reports have also noted that George W. Bush's uncle, Jonathan Bush, heads a subsidiary of the bank. However, other significant ties between the Bush administration, federal banking regulators, and Riggs officials have never been publicly disclosed Riggs & Co. Vice Chairman and Director J. Carter Beese is a close associate of George W. Bush and the Bush family. He was a Bush Pioneer in 2000 and a leading donor to the Bush Florida recount effort. He holds a presidential appointment and has served as a confidential advisor to George W. Bush on the nomination of high-level regulators at the Securities and Exchange Commission. In 1992, following more than a decade of service to the Bush family's political endeavors, George H. W. Bush appointed Beese to the post of SEC Commissioner. Beese also helped to found the Carlyle Group, a conglomerate with historical ties to the bin Laden family and George H. W. Bush. While serving as an executive at Alex. Brown, Beese was mentored closely by A. B. Krongard, appointed by George W. Bush as Executive Director of the CIA, the third highest-ranking position at the Agency.” [New Evidence in the Riggs Case: The Bush Administration's Links to the "Bank of Presidents"A Public Accountability Initiative Report, 10/15/2004] Riggs bought controlling interest of Valmet in 1988 and immediately began business contacts with Russian KGB operatives Aleksey (aka Alexei) Kondaurov and Fillipp (aka Phillip) Bobkov. (Kondaurov was also a sponsor of Col. Anton Surikov, who would later help found Farwest, which partnered with Diligence and Halliburton.) Through Valmet, Riggs engaged with the Russians and KGB as their “consultant” in 1989, and helped them set up Bank Menatep. This was during the same time period that the Russian debt was entering into the refinancing process. “Until 1994, Riggs National Bank in Washington owned 51 percent of Valmet Group, which operates through a chain of corporate entities in the Dutch Antilles, Switzerland and elsewhere ….” [The Isle of Man as an Enclave of Intrigue,Alan Cowell and Edmund L. Andrews, New York Times,September 24, 1999] “But even though Riggs' stake was reduced in 1994 when the increasingly powerful Menatep bought a 20 percent share, it retained a 5 percent stake.” [The Friends and Foes of a Rising Oilman, Catherine Belton, Moscow Times, May 27, 2005] THE SEPTEMBER 11 COMMISSION REPORT Page 209 “Until 1998, Riggs owned a share of Valmet, an Isle of Man operation that set up shell companies and accounts to hide and launder money for companies controlled by the oil mogul Mikhail Khodorkovsky, now in a Russian jail….”[Profit Laundering and Tax Evasion, Lucy Komisar, Dissent, Spring 2005] “Riggs Bank had been around for more than 160 years. It was known as the "bank of presidents" served 21 first families over the years and financed the purchase of Alaska. Since 1981 it was owned by the Texan Joe L. Allbritton and his family. Allbritton is close to the Bush family and has contributed (along with Riggs' client Saudi Prince Bandar) over $100,000 to the Bush Presidential Library. (And sshhhh!; President George Bush's uncle, Jonathan Bush, was the CEO of Riggs Bank's investment arm).” It is reported that Riggs-Valmet offered US citizenship to its clients, and that its Rusian criminal clients did indeed receive US citizenship. “Riggs Valmet announced in 1991 it was getting into the business of arranging for wealthy people to obtain U.S. citizenship by making large investments in the U.S.” [Joe L. Allbritton, the Riggs Chairman Wanted Washington & International Clout….” 'Bank of Presidents' Stumbles’ Glenn R Simpson, Wall Street Journal, Apr 10, 2004,] One of Riggs key clients –Alexander Knonaykhine – was apparently a beneficiary of this program, “The complaint was filed with Attorney General Valentin Roschacher in Bern; the Swiss anti-money laundering law allows such private actions….The complaint alleges that Khodorkovsky, Lebedev, and Golubovich are or were owners in Switzerland of the Swiss companies Menatep SA, Freiburg, Menatep Finances SA, Geneva and Valmet SA, Geneva. (insert: also known as Riggs-Valmet, SA)It claims that since its creation, “the Bank Menatep SA has been mixed with the affairs of members of the Russian oligarchy and criminal organizations, such as Mikhail Khodorkovsky and Alexander Konanykhine. (Konanykhine got asylum in the U.S. in 1999, was ordered deported last fall to face charges in Russia, then had the order stayed and will have a new asylim hearing. American and Russian law enforcement officials believe he was in charge of moving billions of dollars out of Russia for the KGB; Konanykhin denies it.) It is also related to another mafia figure, Semyon Mogilvich, called the godfather of organized crime in Russia.” [Khodorkovsky's High Stakes Gamble, Catherine Belton, The Moscow Times, May 16, 2005] The records shows that Riggs-Valmet – and Konanykhine – were assisted in this effort to procure access to the U.S. by a company run by George Bush’s former Chief of Staff. “Concurrently, I was a business partner of the late U.S. Attorney John M. Mitchell, Chairman of Global Research International, and a principal in the firm of Murphy and Associates, Inc., founded by Admiral Daniel J. Murphy, U.S. Navy Retired and former Chief of Staff to then-Vice President Bush. … This project was brought to me by Carter Cornick, Eugene Propper and Jonathan Ginsberg of the Washington, DC. based law firm of Ginsberg, Feldman and Bress. Cornick, Propper and Ginsberg wanted my help in assisting them in accessing officials who could facilitate a favorable negotiation climate for the establishment of a bank and expedite the procurement of the passports.” [Statement of Karon von Gerhke-Thompson, Vice President, First Columbia Company, Inc.] Note: all traces of Karon Von Gerhke-Thompson and First Columbia Company had disappeard by 2004, according to Alan Block and Constance Weaver. (All Is Clouded By Desire: Global Banking, Money Laundering and International Organized Crime, 2004, p134.) THE SEPTEMBER 11 COMMISSION REPORT Page 210 More important than demonstrating the ‘partnership’ between the Bush organization and the Russian crime organization, the Riggs-Valmet/Konanykhine affair demonstrates that the Bush organization actively attempted to ‘bury’ and hide the Russian moneylaundering scheme on multiple occasions. Miss Gerhke-Thompson, upon learning Konanykhine’s intent, went to the CIA and volunteered to report his money-laundering activities. Her efforts to voluntarily report the activities of Khonankhine were brought to an abrupt end when she was “outed” to the KGB as a U.S. operative by double-agent Aldrich Ames. Khonankhine “fired” Miss Gerhke-Thompson upon being informed by the KGB that she was feeding information to the CIA. “The operation was abruptly ended in September of 1993 when Konanykhine telephoned his Washington associate Elena Cidorchuk-Heinz-Volevok from Turkey to instruct her to terminate the contract with First Columbia Company, Inc., and to cut off all further communications with us. She cited Konanykhine's decision to terminate the contract was based on his belief that I was a phoney. In April of 1994, I was advised by two CIA intelligence officers that the operation had been compromised by convicted spy Aldrich Ames. Mr. V corroborated that I had been compromised on the operation. He personally had routed the traffic on the operation to Ames who was responsible for monitoring money laundering operations at the CNC—the CIA's Counter Narcotics Center. An FBI report submitted to the Senate Select Committee on Intelligence confirmed that Ames and Konanykhine were in Turkey in September of 1993 at the same time, in the same location, and at the precise time that Konanykhine telephoned his assistant from Turkey to terminate the contract with First Columbia Company, Inc.” [Statement of Karon von Gerhke-Thompson, Vice President, First Columbia Company, Inc.] The matter might have ended there, but in a subsequent report of the damage done to the US intelligence operations by Ames, the CIA illegally excluded from its report to the Congressional Oversight Committees (as mandated under the National Security Act of 1947) any mention of Miss Gerhke-Thompson’s activities. “The failure of the CIA's money-laundering investigation, she said, was the only operation compromised by Ames that was not reported to Congress as required by US law.” [White House under fire for 'covering up' Russian corruption, Julian Borger, The Guardian (UK), September 23, 1999] When Miss Gerhke-Thompson discovered that the CIA had omitted her operation from its damage assessment, she directly reported it to Congress, against great political pressure. “Since my involvement with the Central Intelligence Agency and my efforts to bring the issues of Russian money laundering operations to the attention of appropriate oversight committees, Washington has been ever a city at my throat. And my career has been dormant.” [Statement of Karon von Gerhke- Thompson, Vice President, First Columbia Company, Inc.] At this point of the inquiry, the appropriate question might be posed: why did Ames use the KGB to “protect” Konanykhine? If Ames’ Soviet handlers were protecting Konanykhine, who was clearly and publicly aligned at this time with George Bush, it suggests that Ames, his Soviet handlers, and Konanykhine were all part of larger Bush plan. It is speculated that Bush tried to keep his operation quiet by suppressing the Gerhke-Thompson incident during congressional hearings, and had pressure put on her to THE SEPTEMBER 11 COMMISSION REPORT Page 211 remain quiet. If Ames was exposed in the congressional hearings and press as protecting a pro-Bush oligarch, that alliance would expose all his other “revelations” of American agents as an effort to eliminate Soviet patriots rather than American agents. Could it be that rather than exposing pro-American KGB agents who were then executed, Ames was actually setting up for slaughter KGB agents that posed a risk to the Bush strategy? There is additional information about Ames that suggests that while he posed as a Soviet “mole” and was convicted as such, he was actually part of a larger operation to eliminate a faction of the KGB that Bush and his rogue KGB colleagues needed out of the way. This theory of rogue KGB operatives aligned with Bush certainly helps explain the large number of ex-KGB agents that were immensley rewarded for their defection from the Soviet Union, and Konanykhine’s need for over 100 visas, part of a larger 300 visa requirement: “When Frank (Carlucci ) and Dick (Armitage) left the Government, they immediately went to Moscow and opened up an office of the Blackstone Investment Group. Although it was supposed to be an investment office, it was essentially a conduit for money coming out of Washington to purchase KGB documents. In 1991, an enormous sale from the KGB files was consummated for $36 million. It always struck me as somewhat humorous that the sheer volume of documents purchased was so large that it took the entire cargo bay of a Southern Air Transport C-130, which was used to fly the stuff out of Moscow. The purchased documents were a real grab bag of what would have been very politically damaging documents, especially for Republicans in the United States - had they ever been made public. . . . It's interesting to note that the only general in the KGB who objected to the sale (now chief of the North American Desk) was the very loyal and patriotic General Alexander Karpov. Included in the deal, by the way, was a package (let's call it a travel package) wherein over 300 KGB generals and colonels were allowed to enter the United States and were provided with very comfortable homes, mostly in northern Virginia. Most KGB generals now get a check for $12,000 a month from the Agency. KGB colonels get $8,000 a month plus a panoply of favors. Most of these guys are now in the import-export business. The have offices in and around McLean, Virginia. It's also interesting to note that four former KGB generals have import-export offices in the same building in McLean where Oliver North has his office.“ [From The Conspirators: Secrets of an Iran-Contra Insider, by Al Martin] It’s also important to note two other items around Blackstone involvement in this analysis: 1) Blackstone has been accused by a former ONI operative of being involved in the theft of Russian assets, and profiteering from their involvement in Russia, and 2) Blackstone was the financial backer for Larry Silverstein’s purchase of Building 7 of the WTC six weeks before the attack. “Because of Blackstone's involvement in many high-level high-profile frauds like the Russian Bailout and the Mexican Bailout, one could assume that the company itself was a CIA "cut-out," an actual propretary of the Agency. "No, it's not," says Martin. "They're just sympathizers. They're an asset of the agency. They're not a cut-out. They're just one of the legion of financial companies, mostly domiciled in Washington or northern Virginia, which the CIA turns to, on occasion, to launder money, or for some other illegal purpose." [ The Man Who Knows Too Much , An Interview with Al Martin, author of "The Conspirators: Secrets of an Iran Contra Insider, " Uri Dowbenko] In explaining how the Russian fraud worked, Al Martin explained how Blackstone opearte in Mexico and seemingly in Russia: THE SEPTEMBER 11 COMMISSION REPORT Page 212 …. You would buy essentially worthless Mexican bonds, and you could give a Mexican company in a file drawer a face lift, and then you could get Brady Bonds in exchange for them, which were backed by the US Government." "Or, to back those up, to securitize essentially worthless Mexican corporate securities -- you could take a security that was essentially worth two or three cents on the dollar and make it suddenly worth thirty or forty cents on the dollar in the marketplace. The only thing Brady Bonds are is a collateral guarantee." "A Brady Bond is essentially a strip-down, what's called a strip or a stripped down US Treasury bond that essentially guarantees the ultimate mature capital value of a note. It does not however guarantee the interest of that note. It only guarantees the return of capital.” [ The Man Who Knows Too Much , An Interview with Al Martin, author of "The Conspirators: Secrets of an Iran Contra Insider, " Uri Dowbenko] Maybe the most puzzling and intriguing aspect of this attempted cover-up of Riggs involvement in money-laundering is the possibility that this normal CIA operation (using Gerhke-Thompson) was shut-down by Aldrich Ames who was a member of a rogue CIA operation, thus making Ames a “false” double agent. This suggests Ames was not a mole at all, but rather instructed by a ‘hidden’ superior to provide specific information to the Soviets. The official damage assessment report on Ames shows that he was clearly “protected” for years, receiving promotions his superiors thought were unwarranted, having investigations into his life-style and income delayed on multiple occasions by reassigning investigators to other projects, omissions in the investigation of his bank accounts, and disregarding other bank reports that Ames was depositing large sums of cash. While the on-and-off internal investigation which lasted four years went through only one of his bank’s records, it conveniently ignored his accounts in two other banks: the Riggs National Bank, and the Dominion Bank of Virginia, which later became the First Union National Bank of Virginia. Domion’s major bank executive would subsequently move to Riggs, and become Vice President of Administration at Riggs. Finally, it might be mentioned that one of the agents responsible for the damage assessment – Jack Armstrong - was murdered in Iraq by a group linked to the people Ames was protecting (See Section 3). If one looks hard enough, there is substantial reason to believe that Ames was operating under the direct instruction of George HW Bush, and as one of his last acts as a mole, prevented the exposure of Bush’s rogue Riggs-Valmet operation to the rest of the CIA. There is no doubt that Riggs-Valmet had set up a wide net of partnerships with elements of the KGB. The question is: did Ames really out US agents to the KGB, or was he really damaging hard-line KGB under a pretense they were double agents. A second take on the Karon von Gerhke-Thompson also suggests there were two CIAs. If Khonankhine was working with quasi-official U.S./Bush administration channels, why was it that his activities needed to be shielded from the CIA? One part of the Bush/CIA network was working with working with Khonankhine and the Yeltsin family, while another faction of the CIA was unaware of this alliance. When the “non-Bush” faction of the CIA discovered the Russian activity, the non-Bush operation was shut down by the Bush/Russian alignment faction in the CIA, working through Ames. The entire episode was shielded from congressional oversight by CIA management, until an indignant citizen (Gerhke-Thompson) took the matter directly to Congress. The outake of this information is that the Valmet-Riggs operation was ‘favored’ and ‘protected’ by elements of the Bush network. The Russian/Israeli Mafiya was directed to THE SEPTEMBER 11 COMMISSION REPORT Page 213 a company owned by Bush's former chief-of-staff for passport priveleges. When a patriotic citizen took the truth to the CIA, the operation was halted by a rogue CIA operation aligned with elements of the KGB. The existence of the investigation into Riggs-Valmet was then illegally covered-up by the CIA in their report to Congress, and the citizen’s efforts to bring this to the attention of Congress were harshly discouraged. One might conclude – just by the protection received – that the Riggs- Valmet/Menatep/Bank of New York money laundering operation was being treated as a “CIA” national security operation. There is more information that suggests Riggs- Valmet was in part, an intelligence operation. Most importantly, in Novemebr, 1898 Alton G Keel Jr left the Whitehouse to take a position in the international banking group of Riggs Bank and worked directly with Valmet’s Christian Michel. Keel had worked for Admiral John Poindexter, of the Iran/Contra scandal as Acting Deputy Assistant to the President for National Security Affairs, and later became Director of National Security Council. By 1992, he had left Riggs and subsequently worked for Kissinger Associates and became CEO and founding partner to Carlyle International. Keel left the operation in December 1991. It is also disclosed that Valmet was funded by contracts from the World Bank (now managed by Paul Wolfowitz, leading PNAC member and neo-conservative) to conduct what might be considered economic espionage: the touring and documentation of Russian manufacturing operations under the guise of “audits.” “As the government prepared to sell off part of its oil industry in the controversial loans for shares auctions of 1995, Samuelson and Michel were already getting a bird's-eye view of the choicest assets. Via a consulting arm of Valmet, GT Valmet, they won a contract in 1995 from the World Bank to make sure that $1.6 billion it had extended in loans was being spent properly by production units such as Yuganskneftegaz and Purneftegaz. These units, which were visited by Valmet consultants, formed the backbone of the soon-to-be-privatized oil companies Yukos and Sibneft. By that time, Valmet was also acting as a consultant to Berezovsky, the Kremlin intriguer who won close ties with the Yeltsin family. Both Khodorkovsky and Berezovsky ended up big winners in the auctions of Yukos and Sibneft, gaining controlling stakes for just over $300 million and just over $100 million, respectively.” [Biography Of Mikhail Khodorkovsky from The Moscow Times, Catherine Belton, The Moscow Times, May 17,2005] With this ‘consulting’ role of the World Bank being referenced, the reader must keep in mind that it was the British disclosure that IMF/World Bank loans were being used illegally by the the Yeltsin family that first initiated the Bank of New York moneylaundering scandal. Management of the IMF & World Bank are intimately involved in spiderweb of intrigue. There was other activity being undertaken at Valmet SA which reinforces the argument that it was a covert operations being run by George Bush Sr. If Valmet’s involvement with the Russians seemed to largely focus on acquiring the petrochemical resources of the former Soviet republics, it was also involved with another group which played a comparable strategic role in the grand strategy for the Middle East. The group would be the PKK – the Kurdistan Worker’s Party –whose support would be critical in any attempts to destabilize Iraq. If Iraq was to be “Balkanized,” with Kurdistan becoming an THE SEPTEMBER 11 COMMISSION REPORT Page 214 entity owning the major oil assets of Northern Iraq, the PKK was the group to court. Valmet SA was used to launder the funds to the PKK “The "Kurdish Foundation Trust" and the "Mamoian (aka Mamoyan) Foundation" are the most important ones among them. These foundations, one established on the island of Jersey in the Channel Islands and the other in Switzerland are claimed to launder the money the PKK earns from drug trafficking and other illegal means in order to finance MED TV. These foundations have transferred their legal and financial administration to the VALMET SA company in Switzerland to hide their relationship with the PKK. Proof is available on the fact that the supporters of the PKK are investing large amounts of money in the accounts of this company in National Westminster bank of London. …. On September 1996 and January 1998, following raids on to the studios of the television station, MED TV's accounts were seized by the authorities because they could not show the source of their income.” [ Behind Closed Doors, Sebahattin Onkibar (Turkiye), Turkish Press Review, May 20,1999 from Directorate General of Press and Information, Office of the Prime Minister of Turkey] “According to December 13, 2000, testimony by Frank Cilluffo, to the U.S. House Committee on the Judiciary Subcommittee on Crime, the Kurdistan Workers Party (PKK) “is heavily involved in the European drug trade, especially in Germany and France. French law enforcement estimates that the PKK smuggles 80 percent of the heroin in Paris.” Cilluffo is Deputy Director, Global Organized Crime Program Counterterrorism Task Force at Washington, D.C.'s Center for Strategic and International Studies.” [Not In Our Name and the World Wide Terrorism Web, Michael Tremoglie, FrontPageMagazine.com, March 19, 2003] While the reference to the PKK is meant to help make credible the argument that Riggs- Valmet was a CIA covert operations, it is important to mention that the Kurdistan link to the Bush family was initially provided by the same gentleman that initiated the Iran- Contra scandal and October Surprise, other Bushmanaged operations: Israeli Mossad agent David Kimche. “The history of Kurdish-Israeli contacts is well documented. It was Israel´s Middle East man, the former Mossad official David Kimche, who established direct contacts with the Kurdish leadership back in the mid-1960s. In 1997, the London-based Al-Hayat published my interview with Kimche in which he explained that, when the contacts were made, Israel´s then Prime Minister Levi Eshkol had taken a strategic decision to establish relations with ethnic minorities in the Arab world. Kimche met with then Kurdish leader Mustafa Barzani, and shortly afterwards Israel began delivering aid to the Kurds. Othman, who was at the time Barzani´s trusted liaison with the outside world, confirmed Kimche´s account. He pointed out, however, that Barzani was hoping that the contacts with Israel would help him establish relations with the United States.” [Kamran Karadaghi is an Iraqi political commentator based in London. He wrote this commentary for The Daily Star, http://www.rojname.com/lastnews/cache-archive/9259/] At the same time as Valmet was working covertly with the Russians and Kurds, Riggs Bank had a Vice President acting as treasurer of the US Azerbaijan Chamber of Commerce (Karl Mattison), demonstrating yet again Riggs involvement in Middle Eastern/Central Asian politics: “The USACC Advisory Board consisted of "only" these seven men: Dr. Henry Kissinger, James A Baker III, Lloyd Bentsen, Zibigniew Brzezinski, Dick Cheney, Brent Scowcroft, John Sununu. It is noted here that the current Vice President’s daughter, Elizabeth `Cheney-Perry`, has been named Assistant Secretary of State for Near East Affairs for regional economic issues; she left Armitage Associates for the job. The USACC `Vice-Chairman` of the Board is James A Baker IV (Baker Botts, L.L.P.); Chairman Emeritus is T. Don Stacy (VP, Amoco); with Richard Armitage as Board President, until he resigned to become Colin Powell’s Deputy, which rounds out the US elite running the THE SEPTEMBER 11 COMMISSION REPORT Page 215 USACC. The remaining Board of Directors are a who’s who of the oil and gas multinational corporate interests of the west and specifically the United States. On the Board of Trustees or USACC the latter interests hold sway again with three primary exceptions: Senator Sam Brownback (`R-KS`) and Joseph R. Pitts (`R-PA`) (whose efforts formed the 1996 legislative backbone of the House/Senate Silk Road Strategy for Afghanistan, [Unocal, Texaco] et al) and Richard Perle (US Defense Policy Board). The Legal Counsel for USACC is Ted Jones of the Texas Law firm Baker Botts L.L.P. (James A Baker III & IV’s law firm.); Treasurer is Karl Mattison (VP, Riggs Bank, NA). It was the James A. Baker III Institute of Rice University which outlined the Cheney Strategic Energy Initiative which later became the Administration’s Strategic Energy National Security Policy. (Clearly Dick Cheney wouldn’t be interested in giving Congress the names of who he consulted on the Energy Initiative as they would amount to the remainder of the Board of Directors and Board of Trustees of USACC.)” [U.S. political objectives in the Middle East will Fail, Creating a New Cold War with China and Russia; Target is Iran not Iraq., By. Craig B Hulet] In summarizing the role of Riggs-Valmet (referred to in Russian press as ‘Rigs Valmet’), what the timeline of world events shows is that as George Bush steered the re-financing of Third World debt under the astute guidance of the soon-to-become Enron Vice President Robert Hermann. During this refinance process (according to ONI released documents), an undisclosed amount of financial collateral “disappeared” into the U.S. banking system, thus delaying the re-settlement of the Third World debt. In the meantime, George Bush’s brother Jonathon, who was in charge of “investments” for Riggs Financial Management, took controlling interest in a company called Valmet, and opened a Swiss subsidiary, which became the “financial consultants” to the KGB and future criminal oligarchs of Russia and other criminal groups. The Riggs-Valmet “consultants” helped the KGB and oligarchs create Bank Menatep, which later became a business partner with Riggs, in owning an undisputed money-laundering, tax evasion vehicle for its Russian and U.S. customers. It is speculated that the third world debt collateral was withheld long enough that the Soviet economy collapsed due to lack of capitalization, the goal of the destabilization program. The collateral funds – or part of the $300 billion plus that could have been generated in interest by the missing third world debt collateral - were then restored to Yelstin by George Bush Sr. Yeltsin then moved the collateral funds into Bank Menatep, that proceeded to use the funding with the Yeltsin oligarchs to “buy-up” Russian industry for pennies on the dollar. Through an array of financial actions, that wealth was then transferred through Nordex, Marc Rich, the Bank of New York, Riggs-Valmet (and its shell companies) and several other banks identified collectivly by Ambassador Wanta, Vreeland and the Office of Naval Intelligence, to Swiss and German banks, while nominally ‘held’ in off-shore banks. In creating the “cash” that was to fund the oligarchs’ takeover of Russian industry in 1991, a $240B jump in the M3 measure of money would have to occur if regular Federal Reserve or large bank channels were used, and there was no such jump. Having the bonds backed by “private” collateral – such as the Durham Trust or Swiss gold – the generation of the money supply did not need to settle through any bank linked to the Federal Reserve, especially if they were shopped overseas, which is what happened. They were funded via Israel and supposedly backed by gold from Switzerland, according to the released documents. Hence, the Marcos gold confiscated by George Bush (and acknowledged to exist in records from Congressional hearings as a source of funding for Iran-Contra operations) or the Russian treasury gold (theft of which was facilitated by Leo Wanta), probably served as collateral for these loans. The interesting thing to keep in THE SEPTEMBER 11 COMMISSION REPORT Page 216 mind is that if Brady type bond payments are defaulted, the maturity value is guaranteed by US Treasury Bonds, thereby explaining the need for the Federal Reserve intervention if 2001. “The initial asset securitisation formula that converted international bank loans into dollar denominated, high yield, tradable sovereign bonds was named the Brady Programme, after the US Treasury Secretary Nicholas Brady in 1989. The objective of the Brady Bond programs was to create liquidity for the giant American banks by enabling them to remove their troubled Third World sovereign loans off their books, albeit at a haircut to face value. Morever, the Brady Programmes also provided sovereign borrowers with debt relief because they reduced their interest burden, extended the payback maturities and Uncle Sam guaranteed the principal via collateralised zero coupon US Treasury bonds. The Brady Bond is therefore a blend of zero coupon US Treasury securities and Third World sovereign risk paper. This has enormous valuation implications for an investor in Brady Bonds because its value is based not just on a sovereign borrower's credit or willingness to repay but also the movement of long US Treasury bond interest rates, since zero coupon bonds are an intrinsic component of the Brady collateral. The US Treasury maintains the zero coupon collateral at an account with the New York Fed. Rolling interest rates guarantee "rolling" forward every time a coupon payment is made to bondholders. This is another quirk of a Brady Bond. If a borrower defaults, say, in year 6 of a 30-year bond, the US Treasury zero coupon collateral still provides a positive yield to maturity. Brady Bonds have fixed, step, floating rate or even hybrid coupon that payout semi-annual payments and are generally amortising. They are issued as both Bearer or Registered instruments. Certain Par and Discount Brady are even issued with warrants. Brady Programmes now cover a spectrum of nations worldwide 13 years after the landmark Mexican deal. In Latin America, Brady's exist for Mexico, Brazil, Argentina, Costa Rica, Venezuela, Panama, Ecuador, Dominican Republic, Nicaraguan, and Uruguay. Elsewhere, Poland, Bulgaria, Morocco, Jordan, Nigeria and Russia have Brady Bonds in existence. While most Brady's are dollar instruments, they are also available on occasion in the Euro, sterling, Swiss francs and the Canadian dollar. [Matein Khalid, Strategist, Capital Markets and Research, www.pressreleasenetwork.com/newsletter/nlfin_view.phtml?nl_id=40] That recognized, $240B is not an amount that can be hidden anywhere in the world with having a major impact on the financial markets – except for Russia in 1991 and 1992, where there was virtually no financial reporting during the chaos of the collapse. However incredulous this statement may seem, that is exactly what happened with the collapse of the Soviet Union and its banking system – money just “disappeared.” Prior to the collapse, $30 Billion in new German credits just disappeared from the Soviet banks into Swiss and other offshore banking entities. “…West Germany had compensated the USSR very handsomely in cash for allowing Germany to be reunited, and the cash had been embezzled. As the Russian deputy finance minister admitted in 1991, “A gigantic sum was received...from Germany--64 billion Deutsche marks [about $30 billion]--and it all slipped through our fingers.” [The IMF Behind the Scenes] As documented earlier in this report, the entire national treasury of gold was reported (in August 1991) by the Soviets to have simply disappeared. “Valued at $35 billion, Russia's gold reserves were estimated to be 100 million troy ounces - just under 3000 tonnes. Then in September 1991, a palpitating Grigory Yavlinski, the economic supremo, revealed to delegates at the Group-of-Seven industrial countries meeting in Bangkok, that a mere 240 tons were all that was left. Two months later, in November, even that had disappeared. "Not a gram of THE SEPTEMBER 11 COMMISSION REPORT Page 217 gold remains; the vaults are empty," said Victor Geraschenko, chief of Gosbank, the Russian Central Bank.” [Gangster’s Paradise, David Guyatt, 1997] What Guyatt reports next about the disappearance of this Russian gold is critical – the gold is reported to have been used as security for a financial scam. This report contends that this Russian gold was merged with Bush’s Marcos gold to serve as collateral to fund the oligarch’s take-over of Russian industry, once the Bush/Wanta destabilization program achieved its goal of cutting off other sources of capital to the Soviet economy. “In one operation valued at $4 billion, over 300 tons were secretly shipped to Switzerland, some of it subsequently arriving in London. Unlike Britain, the Swiss authorities do not keep records of gold imports which makes it a favourite centre for disguising the point of origin - a very effective method of laundering suspicious transactions. The bullion, some sources now believe, was used as collateral in a secondary scam that set-out to vacuum-up all the available Rouble bank-notes in existence at the time and sell them at knock down prices to organised crime syndicates from around the world.” [Gangster’s Paradise, David Guyatt, 1997] In 1991 the Soviet Union was totally bankrupt. Yeltsin came to the US in August of 1991 (and again in 1992) for loans to prevent economic and social chaos in the former Soviet countries. Gorbachev met with Bush on the same subject in Helsinki on September 9. President Bush, with a failing U.S. economy and an upcoming election was not is position to publicly offer U.S. taxpayer assistance to the Soviets. The Gramm-Rudmann Act had forced congress into a public confession that it was unable to balance the budget. Hence, no representative of the US was going to officially approve loans to the collapsing Soviet economy because at that time, the U.S. budget had not been balanced. Officially receiving no ‘announced’ promises of assistance, (it was not until April 1992, that Bush and Kohl promised a meager $24 billion in loans) Yeltsin returned to Russia where he graciously announced the US would be the primary partner in the privatization of former Soviet firms, even though no funding had been publicly “provided” for this opportunity. “The first detailed statement of Russian economic policy issued by the Yeltsin-Gaidar government was addressed not to the Russian people but to the IMF in Washington. This was the “Economic Policy Memorandum” of February 27, 1992. From that point on, Russia was bound by IMF conditions and by the encroachments on national sovereignty that they implied. With this document, as Nelson and Kuzes say, “the Russian government was acknowledging the West’s leading role as a participant in Russian reform planning. The Western approach had prevailed in the Kremlin.” Because the IMF was recommending fast-track privatizations, the Russian memorandum stressed that the privatization process would be “considerably speeded up.” Gaidar’s priority was clearly to obtain foreign financial support, not domestic political backing. But even this task was not successfully fulfilled, since what Russia got in early 1992 was IMF conditions in exchange for (at least initially) no money.” [The Tragedy of Russia's Reforms: Market Bolshevism Against Democracy, Peter Reddaway and Dmitri Glinski, United States Institute of Peace Press, www.usip.org] Something however, must have transpired in Washington. On September 11, 1991 Bush addressed Congress and first spoke a new partnership between the U.S. and the former members of the Soviet Union. Immediately after Yeltsin’s trip to Washington, on September 14, 1991 - three days after the bonds were issued - the greatest moneylaundering machine in Russian history came into existence: Nordex and the International Foundation for Privatization and Private Investment. THE SEPTEMBER 11 COMMISSION REPORT Page 218 “On 14 September 1991, Vladimir Shcherbakov, the last First Deputy Prime Minister of the Soviet Union, formed with two other partners, one of which was the now notorious Austrian firm, Nordex GmbH, the International Foundation for Privatization and Private Investment [FPI]. FPI’s charter was legitimized by Gorbachev’s signature and approved by 13 heads of what were still constituent republics…. The CIA has determined that through Nordex, FPI seized the export earnings from Russia’s natural resource companies – oil, gas, platinum, gold, diamonds – and from industrial firms exporting items such as steel and aluminum and then stashed the hefty profits in Western bank accounts.” [The Rape of Russia, Anne Williamson, testimony before the Committee on Banking and Financial Services of the U.S. House of Representatives, presented Sept. 21, 1999] “Nordex had been founded by the Russian/Israeli Mafiya criminal Loutchansky, who after 1991 would become a key business partner with Boris Yeltsin in Russia and Nazarbayev in Kazakhstan. On December 14, 1989, when working for Adazhi (Loutchansky) went to Vienna to establish a company - Nordex GmbH, which later became the in-between in funneling raw resources from the east to the west". [The Loutchansky phenomenon, from the book "The Nazarbayevs: Sources of Prosperity" Sagyndyk Mendybaven, Nikolai Fomin, Victor Shelgunov, IAC Eurasia-Internet, 27 July 2000 ] “Nordex’s relationship with Kazakhstan President Nursultan Nazarbayev was oiled by various favors according to documents obtained by TIME. In early 1992, Nordex shipped a Mercedes to the President’s office in the capital of Almaty (the document doesn’t indicate who paid for the car). When Nazarbayev visited London in 1994, it paid 25,000 in public relations expenses. He company’s business dealings in Kazakhstan included a joint trading company, a gold-mining venture and, in 1995, management of one of the largest steel mills in the world: Karmet in Karaganda, Kazakhstan. Grigori Loutchansky’s friend Oleg Soskovets, the First Deputy Prime Minister of Russia, allegedly pressured a local firm that managed Karmet to bring Nordex in as its partner. The government of Kazakhstan later tore up the management contract and drew up a new one for a partnership that was to include Nordex, a subsidiary of American steel giant USX and Israel’s Eisenberg Group.” [The Russia Connection, S.C. Gwynne and Larry Gurwin, Time, July 8, 1996] (Research note-Please see the documented reference linking the Eisenburg Group to Stratesec Incorporated, formerly Securacom- the CIA front company that held a maintenance contract for equipment controlling access to the WTC-Appendix B.) Shortly after Yeltsin’s visit to the U.S., the recently created Bank Menatep - having no capital and no performing loans - all of a sudden was dispersing credit from a Central Russian government, that had reportedly no treasury, no credit and was unable to collect taxes. Naturally, there are no financial or economic records for the period because of the economic chaos. The great mystery then is, where did the funding for the new Russian privatization program come from? Funds that officially were loaned to Russia in 1992 just disappeared in the ensuing fraud, just as the previous funding had. “There is also some question about what finally happened to the foreign loans Russia received during the second half of 1992. A Russian observer has concluded that “their scale, as well as the total absence of any form of public control over their granting, objectively strengthens the point of view, according to which the reasons for seeking this loan were political and even criminal.” [The Tragedy of Russia's Reforms: Market Bolshevism Against Democracy, Peter Reddaway and Dmitri Glinski, United States Institute of Peace Press, www.usip.org] "In July 1994, Nordex company was granted the credit of $5 mln. The credit was granted without any collateral, purposes of the credit were not defined either. In 1995, re-crediting was made. As a result, the credit was not repaid.” [The origin of the Kazakh vestige in Swiss banks, Victor Svetin, Rossiiskaya Gazeta, March 2, 2000] THE SEPTEMBER 11 COMMISSION REPORT Page 219 Somehow, however, during the next two to three years $167 Billion in new credit was generated, and $500 Billion in exports left the country. Even Cathrine Belton - Khodorkovsky’s biographer - admits that no one is able to explain where Bank Menatep received its funding. As for the exports, it turns out they consisted largely a combination of clever money laundering arrangements constructed as gas, oil and weapons exports. (The sale of weapons by the Soviet military was similar in nature to the sales of U.S. military weaponry left behind in Vietnam after that war – a sale which is reported to have propelled Armitage and Secord into the weapons-for-heroin-for-money trade. Later, the same Russian military responsible for the sale of weapons to Columbian drug dealers and third world war lords would be linked to the Afghan heroin trade, and a strange distribution partnership with the US heroin conduits. This report speculates that the ongoing business partnership in Russia between Farhad Azima (Iran-Contra conspirator) and Victor Bout (Russian arms smuggler) is at the foundation of this distribution alliance.) It was the FPI/Nordex operation that started selling off Soviet weaponry to African states and Columbian drug barons. This is one of several links between the Yeltsin crime family and the Columbian drug cartels. “Shcherbakov even boasted about FPI’s "new approach to the problem of the property of the Western Army Groups in Eastern Germany that comes down to its joint exploitation by Russian and German businesses", an eyepopping admission since a year after the interview was published, the Russian scandal was Bonn’s claim that Soviet weaponry sales to rogue regimes originating in the Western Army Group had amounted to a $4 billion criminal take.” [The Rape of Russia, Anne Williamson, testimony before the Committee on Banking and Financial Services of the U.S. House of Representatives, presented Sept. 21, 1999] The magnitude of money generation that occurred in the newly formed states of the former Soviet Republic would not be achieved without collateral. The Russians had none and there was no one who was willing to put any collateral into what was perceived as a ‘black hole’ named Russia, at least publicly. The question remains unanswered in the press: who funded the privatization of Russian industry? Enter George HW Bush Sr. and Alan Greenspan. In 1991, the U.S. economy was in its own recession, the Congress could not balance the budget, and Alan Greenspan was balking at providing monetary stimulus to the U.S. At that time, given the domestic needs of the US economy, the American voting public would not tolerate a major multibillion dollar bailout of Russia, and the 1992 presidential race between Bush and Clinton was already under-way. Because of the ‘currency destabilization program’, there was no commercial or government group willing to back loans to the Soviet Union, except George H.W. Bush. Simultaneously, Boris Yeltsin came to the U.S. in August of 1991 with hat in hand, looking for a bailout that would prevent total anarchy in the former Soviet republics. Boris Yeltsin was turned away - at least publicly. In the background however, starting August 26, 1991 and within days of Yeltsin’s visit, the Bush money machine started sending daily cash infusions to Russia. On the basis of documents provided by the ONI to several reporters, these loans: THE SEPTEMBER 11 COMMISSION REPORT Page 220 · Funded a “joint venture” with Russia (document source: Hamilton & Hyun Investment Corp., memo to William Sommerville, August 26, 1991; Addendum 1 to Joint Venture Agreement, Contec Development Pty., 9/26/91); That partnership most probably was the International Foundation for Privatization and Private Investment: “On 14 September 1991, Vladimir Shcherbakov, the last First Deputy Prime Minister of the Soviet Union, formed with two other partners, one of which was the now notorious Austrian firm, Nordex GmbH, the International Foundation for Privatization and Private Investment [FPI]. FPI’s charter was legitimized by Gorbachev’s signature and approved by 13 heads of what were still constituent republics…. The CIA has determined that through Nordex, FPI seized the export earnings from Russia’s natural resource companies – oil, gas, platinum, gold, diamonds – and from industrial firms exporting items such as steel and aluminum and then stashed the hefty profits in Western bank accounts.” [The Rape of Russia, Anne Williamson, testimony before the Committee on Banking and Financial Services of the U.S. House of Representatives, presented Sept. 21, 1999] · Were backed by Swiss gold held in Kloten, Switzerland (document source: Robert Perry, Bay State Trust, memo to D’Acquisto and Peterson, September 10, 1991; Hamilton & Hyun Investment Corp., memo to William Sommerville, August 26, 1991); It is imporatnt to note this is where the Marcos gold hoard was stashed by President Bush. "Approximately 1,000 tons of the loot was liberated by Ferdinand Marcos before his ouster. Billions of dollars worth were shipped overseas by American intelligence agents and the Mafia. Much of the horde was cabbaged away in a high-security, subterranean storage cache buried beneath the Zurich airport." [Saudi Entrepeneur Adnan Khashoggi Linked to 9/11 Terrorists, Alex Constantine] · Consisted, in part, of payments of currency from Lehman of at least $100 million per day for an indefinite period of time (document source: Daniel International Fax of THE SEPTEMBER 11 COMMISSION REPORT Page 221 12/16/1991) (It is of interest to note that at that time, Lehman was a subsidiary of American Express, of which Dick Ceneny’s wife, Lynn, is a board member.); · Consisted (in part) of cash funneled to Russia through the Deutschbank (document source: Hamilton & Hyun Investment Corp., memo to William Sommerville, August 26, 1991). As the clues provided by the ONI documents are detailed, one recognizes the name of a familiar organization identified with most of the illegal activity in this report - the Deutschebank. A key question becomes: did the US get involved in a joint venture with Russia? The answer is yes! – through the “Russian American Enterprise Fund” set up at the request of George Bush and Gerald Corrigan, President of the Federal Reserve Bank of New York In subsequent economic negotiations with the G7 heads of state, what resulted was an amazing concession by Yeltsin to the US, allowing it to be the chief architect of its privatization plan by which state industries would be ultimately owned by anonymous shell companies in off-shore banks. The amazing aspect at the time was there was no immediately apparent financial concession from the U.S. in exchange for this very significant opportunity. Palms & Co. had profiles of over 200 Russian defense enterprises which were eligible for acquisition. Funding for this privatization was arranged to come from: · Sovlink Fund (Solomon Brothers, Investment Banker, New York) · Russian Partners Fund (Paine Webber) · Russian American Enterprise Fund (Lehman Brothers Fund) · Barings Securities Fund · Defense Enterprise Fund · CS First Boston · Fidelity Investments · The World Bank · International Finance Corporation · CCF-Moscow (Credit Commerciale de France, Paris) · First Russian Investment Fund (Framlington Investment Managers, London) · All State Insurance Co. Venture Capital Department · L & A Juice Company, Los Angeles (through them Coca Cola Foods) · Russian American Investment Fund - Strobe Talbott Ambassador at Large for Russian Affairs · John I Haas Co. (for breweries revitalization and through them August Busch, Sam Adams, Sam Koch A.B. Miller) · Defense Nuclear Agency Washington D.C. (defense plant conversion) · Newstar Fund (Att&T & General Motors Pension Plans) · European Bank for Reconstruction & Development · U.S. Trade Development Agency · Overseas Private Investment Corporation · U.S. Department of Commerce "BISNIS" · Center for International Private Enterprise · U.S. Agency for International Development · European Union Technical Assistance Programme ($500 million) · Russian Venture Capital Fund of America (Palms & Company) · Ukrainian Venture Capital Fund of America (Palms & Company) · United States Interbank Currency Exchange (Palms & Company) · Russia And The Republics Equity Partners LP. (RARE) THE SEPTEMBER 11 COMMISSION REPORT Page 222 · Baltic American Enterprise Fund · Bulgarian American Enterprise Fund · Templeton Russia Fund · BEA Associates Russia Fund · Vladivostok Fund · Scudder Stevens & Clark, Inc. · Smith New Court PLC The above list was part of the official privatization program which began in the spring of 1992: “In May 1992, former Gorbachev economic adviser Grigoriy Yavlinskiy moved his think tank "Epitsentr" to the region and himself spent 100 days there formulating a systematic plan for the region's privatization program.” [Russian Defense Indusrty Conversion Investment Program, Dr. Pyotr Johannevich van de Waal, Palms, Sovetnik Pravitelstva CWA, Tovarichestvo Palmsa, Inc. ] The unofficial privatization program had begun much earlier. What is not generally reported though generally understood in Russia is that the privatization of former state owned property started long before the G7 meeting in 1992, and long before the official western loans of 1992. Privatization started with the creation of the FPI on September 14, 1991 – 3 days after the Brady Bonds were reportedly issued. “A former employee of FPI, speaking through clenched teeth, reported, "It [FPI] is not a well-known organization, but it’s one of the most wealthy and most powerful organizations in Russia," and their work was engineering commission-paying deals for money or privilege with the Kremlin, thereby organizing a pipeline of tribute typical of corrupt regimes. "I can’t say it publicly, I can’t prove my position with documents, but I know they were privatizing companies, the very best companies, before we had a privatization program." [The Rape of Russia, Anne Williamson, testimony before the Committee on Banking and Financial Services of the U.S. House of Representatives, presented Sept. 21, 1999] The unofficial privatization program was seemingly orchestrated by the new oligarchs under the guidance of the Riggs-Valmet consultants, controlled by Jonathon and George HW Bush. (One would not want to overlook the significant role of Bruce Rappaport in this major crime. Rappaport, former owner of the Bank of New York, working through his Swiss-American Bank, had been a major financier of Bush’s Iran/Contra Deals, and was now intimately connected to the Yeltsin family through Bank Menatep.) Simultaneously, during September of 1991, the laws in Russia were changed by Yeltsin to allow the immediate transfer of state resources to “foreign firms.” “In September 1991, a foreign investment law promoting the transfer of capital, technology, and knowhow went into effect. Nonresidents may acquire partial shareholdings or form wholly owned subsidiaries in Russia. Foreign firms may obtain licenses to exploit natural resources. Foreign investors can be exempted from import duties and export taxes, and there is limited relief from profits tax, varying by sector and region.” [http://www.nationsencyclopedia.com/Europe/Russia-Foreign-Investment.html] In this privatization of Russia over the next several years, newly created banks were provided with funding (credits) from a central source that had no visible means of generating capital, and then loaned money to key industries, being taken over by the THE SEPTEMBER 11 COMMISSION REPORT Page 223 “oligarchs.” In doing so, the Yelstsin administrators (the “Family”) took hefty profits up front. “Borovoi gave an example of how government funds are looted: If a government ministry wants funding, it must allocate up to 3 percent of the requested sum for bribes to lawmakers and officials. The lawmakers then approve the request, and the ministry must then pay up to half of the funding to the lawmakers and officials to get the money.” [Organized Crime Thriving in Russia, Barry Renfrew, AP Wire, August 31, 1999] As those companies defaulted on their loans, the banks (and not surprisingly, the Board Directors of those banks) became the primary owners of Russian industry, with significant percentages held by various off shore ‘holding companies.’ (At this point, it may be fair to speculate that the Bush family and affiliates own a share of those “holding companies,” given the role of Jonathon Bush and Valmet in the financial plundering of Russia, and Neil Bush’s ongoing relations with Russian investors.) Subsequent, “official” loans from the IMF, went to cover investment banker’s fees and bank interest “Russia’s bankers made serious money on Yeltsin’s electoral weakness by buying government bonds at distressed prices using cheap money handed over from government deposits. The lion’s share of the domestic bonds’ high yields have always been paid with IMF loans. Russia’s first representative to the World Bank, Leonid Grigoriev, explained, "Of course, the government was to return this money and that is why the yields on 3-month paper reached as much as 290 percent. The government’s paying such huge, impossible rates on treasury bills, well, it’s completely unbelievable. It had nothing to do with the market and therefore such yields can only be understood as a payback, just a different method." [The Rape of Russia, Anne Williamson, testimony before the Committee on Banking and Financial Services of the U.S. House of Representatives, presented Sept. 21, 1999] The U.S. arranged for additional funding to be provided to Russian Defense firms through a collection of banks and financial institutions. U.S. Defense firms and financial agencies started buying into former Soviet firms. The first official US program began in 1992: “The Cooperative Threat Reduction Program was initiated in FY 1992 to reduce the threat posed by weapons of mass destruction remaining in the former Soviet Union. In June 1994, DoD (Department of Defense) established the Defense Enterprise Fund to assist Belarus, Kazakhstan, Russia, and Ukraine in the privatization of defense industries and conversion of military technologies and capabilities for civilian use.” At the same time in Russia, defense firms and energy companies were being consolidated under the banner of privatization: “Military Industrial Investment Company (VPIK): Also known as the Defense Industrial Investment Company (DIIC), VPIK was organized by a combination of government and industry to aid the defense industry in adjusting to the transformation to a market economy. Its major goal is to finance complete and partial conversion of defense enterprises throughout Russia and promote the development and production of dual-use technologies. Several large defense plants, including major aerospace and communications firms are among its founding members. The most prominent members are listed below.” · Russian groups involved in this conversion were led by Viktor Chernomyrdin, and included: · The Military Industrial Stock Exchange THE SEPTEMBER 11 COMMISSION REPORT Page 224 · The Russian Commodity-Raw Material Exchange · The Moscow Central Stock Exchange · The Central Scientific Research Institute of Machine Building · The Plleshakov Scientific Production Association · Khrunichev Plant · The Economic News Agency · The KAMI stock Exchange · Military Unit 57275 · The Impluse Scientific Production Association · Drzerzhinskiy Military Academy” This was the beginning of the era of the “oligarchs” - “The really good stuff - oil companies, metals plants, telecoms - was distributed to essentially seven individuals, "the oligarchs", on insider auctions whose results were agreed beforehand. Once effective control was established, directors - uncertain themselves of the durability of their claim to the newlyacquired property - chose to asset strip with impunity instead of developing their new holdings.” [The Rape of Russia, Anne Williamson, testimony before the Committee on Banking and Financial Services of the U.S. House of Representatives, presented Sept. 21, 1999] One of the chief oligarchs associated with the Yeltsin Family was Boris Berezovsky, who would later become a business partner with Neil Bush in a company called Ignite. “Berezovsky, described as “a former Kremlin kingmaker,” served as executive secretary of the CIS under former President Boris Yeltsin… Berezovsky was one of the chief oligarchs in Russia who acquired massive wealth by taking control of the Soviet Union’s state assets after the fall of communism. Berezovsky owned several banks and TV stations in Russia when he was accused of defrauding a regional government of $13 million. In 2000, he fled the country and moved to London, where he now lives under the name Platon Elenin. In fact, Berezovsky has Israeli citizenship, a fact that caused a scandal of Watergate proportions in Russia in 1996 when it was exposed by a Russian newspaper. [Israeli Oligarch’s Ill-Gotten Loot Channeled to Dubya’s Brother, Christopher Bollyn, AmericanFreePress.net, Issue #43, October 24, 2005] Neil Bush would establish another indirect link to the Yeltsin Family by his involvement with Diligence, a relationship discussed in the next section. Berezovsky brought to the Yeltsin “Family” a key relationship with the Chechen mafia, whose revolutionary counter-parts were trained in CIA funded camps in Afghanistan. “…in the conditions of Russian gangster style capitalism Berezovsky managed to take control over major Russian enterprises. This was accompanied by murders, most of them have not been exposed, writes Bernstein. Khlebnikov "reveals the important elements of closely-intertwined banking structures, industrial enterprises and Swiss holding companies, created by Berezovsky and others to snatch large shares of Russian wealth. He examines the critically important role of what he calls the Chechen mafia in ensuring the force used by criminal capitalism and shows the close contacts between Berezovsky and the leaders of the Chechen rebellion against Russian rule, notes the New York Times analyst.” [Pravda.RU ,2001-05-31] The relationship between the Yeltsin “Family” of Russian bureaucrats, the Russian/Israeli Mafiya, Loutchansky, Marc Rich, Berezovsky, Khodorkovsky, Kazakhstan President Nazarbayev, and the Chechen Mafia is a critical piece of the puzzle in understanding the willingness of both the Russian/Israeli Mafiya and the Bush Family in facilitating the THE SEPTEMBER 11 COMMISSION REPORT Page 225 events of 9/11, and the decision taken in 1998 to destroy the WTC. It is critical for three reasons: 1. It demonstrates joint motive for the Russian/Israeli Mafiya and Bush Family business partners to destroy the numerous investigative offices in the World Trade Center; 2. It demonstrates a willingness by both the Bush Family and Yeltsin Family to employ groups of ex-military professionals that can arrange for major political terrorist activities 3. It demonstrates an ongoing linkage between the Bush Family and the Yeltsin Family which has been demonstrated to fund and arrange political terrorism by Chechen Mafia for political gain in Russia. In this respect, both political Families seem to have sponsored major terrorist acts. They both publicly attributed those acts to ‘Al Qaeda’ terrorists. They both used the same intermediary Adnan Khashoggi – to arrange it them. (Documented in Section 8.6) All of these groups are linked to the same set of banks used to launder gold and other assets. They have done business with each other, and hence their illegal assets are traceable through these various accounts. Having investigators have probable cause to investigate some of these accounts put them all at risk. All pressure for investigations, all investigations, disappeared after September 11, 2001. Notes: 1. Of interesting historic note, this is the same timeframe in which President Bush, by Executive Order (rather than Congressional law) authorized the selling of US Government assets. “President Bush's Executive Order (No. 12803) on Infrastructure Privatization of April 30, 1992 cleared away federal barriers to cities and states selling or leasing existing public works infrastructure to private investors….President Bush's Executive Order on Infrastructure Privatization offers state and local government the option of selling or leasing any infrastructure enterprise that had previously received federal aid, as long as it repays the depreciated value of the federal grants. And it directs the relevant federal agencies—principally the Environmental Protection Agency, the Federal Aviation Administration, and the Federal Highway Administration—to work with their grantees in removing obstacles, should they opt to pursue privatization.” [What Cities and States Have to Sell, Robert W. Poole, Jr., David Haarmeyer, and Lynn Scarlett, April 1992] 2. Simultaneously, Adnan Khashoggi directed his Barrick operation to file its applications for 1,144 acres of land in Nevada during March and April 1992. “Barrick filed its applications for 1,144 acres of land in March and April 1992. That summer, a pilot program for ``expedited processing'' of Nevada patents was instituted by BLM chief Delos Cy Jamison, a Republican who had been appointed to that post by President George Bush in 1989. Jamison concocted this speed-up procedure with the BLM Nevada state director, without informing his own staff. ``Bells went off in my head when I heard about it,'' a former BLM staffer told EIR. Philip M. Hocker, president of the Mineral Policy Center, an environmentalist outfit, testified to a Congressional subcommittee on March 11, 1993: ``Under a new and unpublicized `pilot project,' the BLM allowed Barrick to hire outside mineral examiners to perform the evaluation of `discovery' on Barrick's mining claims. The specialists who determined whether these claims should be patented for $5 per acre received payment for their work directly from the company THE SEPTEMBER 11 COMMISSION REPORT Page 226 which wanted a `yes' answer. This is a flagrant conflict of interest, which BLM is not only allowing, but encouraging. Barrick is the only company to complete this process so far.'' Only Barrick got expedited treatment. Its patenting was rushed through in record speed; the BLM district manager approved the report of the outside consultant hired by Barrick the day after it was filed, in February 1993. Other companies remained stuck in the BLM backlog.” [George Bush's $10 billion giveaway to Barrick Gold, Mark Sonnenblick, Executive Intelligence Review] 3. As an interesting side note another firm that started buying into the former Soviet satellite industry was Iridium, formerly identified in this report as the satellite company operating in Iraq, with heavy ownership out of Israel and the Bin Ladin family. Might this have been the firm Vreeland was investigating? Just as significant, with the Department of Defense officially investing in Russian defense firms, might this have been the basis for ONI running its own money-laundering investigation? 4. The quiet role of Jonathon Bush through the years has been over-looked by investigators to date. It is important to recall that in addition to directing the covert activities of Valmet, he was the ‘money-man’ for the Bush family. It was Jonathon who provided campaign investors for all of the Bush candidates, and it was Jonathon who brought the initial Wall Street money to the initial George Bush Jr. companies that were to fail later. To contend that Jonathon avoided politics would be incorrect, as the record shows he officially represented his brother in 1989 during a tour of Eastern Europe and the Ukraine. (See American Dynasty, Kevin Phillips, 2004, p72.) 8.5 Ambassador Lee Wanta and the Riggs-Valmet Connection The strange case of Lee Wanta, a U.S. citizen and covert operative for almost thirty years and Somalian Ambassador to Switzerland and Canada, is a saga that serves to validate the theory that George H.W. Bush was pumping massive, illegal funding into rogue elements of the Soviet KGB, which then spawned the Russian oligarchs. Wanta has produced for the public record a large volume of bank records which he claims were authorized by George H.W. Bush in an effort to destabilize the Russian ruble. The records of the bank transfers in themselves seem meaningless. However, when one studies some of the foreign banks receiving the funding, and their subsequent loan losses to the Russian oligarchs, whose financial empires were designed under the construction of the Valmet-Riggs consultants, one finds a pattern that would indicate that money was pushed to the oligarchs for their use in buying up Russian industries. As one follows Wanta’s documents back to the U.S., one finds an elaborate pattern of cover-up. Credo (aka Kredo) Bank Classic examples of the type of ‘Russian destabilization’ driven by the Bush plan as headed by Lee Wanta are found in the bank transfer documents made public by Wanta, who was later imprisoned for his indiscretions of making public his activities. In those transfers, one finds reference to transfers from the New Republic/USA Financial Group to the Credo (aka Kredo) Bank in Moscow. The Credo Bank would fund the privatization of the Russian steel/iron/aluminum firms under the reported control of Roman Abramovich, a major oligarch in the “Yeltsin Family.” In 1996, Credo Bank was faced with failure for lack of payment from one major lender – the Western Siberian Steelworks. The downsizing at Credobank follows in the wake of serious cash flow problems brought on by the default of one of its largest creditors, Western Siberian Steelworks, which has failed to pay back a loan THE SEPTEMBER 11 COMMISSION REPORT Page 227 of 600 billion rubles made earlier this year. [Credobank Exiting City As Assets, Deposits Fall, Richard Sleder, The St Petersburg Times,] In understanding the ownership of “Western Siberian Steelworks,”(aka ZapSib), ownership is traced to the Evraz Group S.A., supposedly controlled by Roman Abramovich (now using the name Abramov): “– Evraz Group S.A. (LSE: EVR), one of the leading vertically integrated steel production and mining businesses with operations mainly in Russia, today announces the commissioning of a double-strand slab continuous caster with annual capacity of up to 2.5 million tonnes at OAO West Siberian Iron and Steel Plant (ZapSib). This investment is in line with Evraz Group’s strategy….” [NOVOKUZNETSK, Russia RNWire] Evraz Group S.A. (“Evraz Group”) is a limited liability company registered under the laws of Luxembourg on December 31, 2004. The registered address of Evraz Group is 1, Allee Scheffer L- 2520, Luxembourg. Evraz Group’s parent is Crosland Global Limited (“CGL” or the “Parent”) which is under control of Mr. Abramov. Evraz Group was formed through a reorganisation in which 95.83% of the shares in Mastercroft Limited (“Mastercroft”), a limited liability company registered in Cyprus, directly owned by Crosland Limited (“Crosland”), the parent of CGL, were contributed into Evraz Group in April 2005. [Evraz Group S.A., Notes to the Consolidated Financial Statements, Year ended December 31, 2005] Unfortunately, Abramovich seems to have had a number of U.S. and Israeli “backers,” who remained unreported in this deal (just like Khodokovsky turned out to have a hidden partner with Jacob Rothschild). “The Kurbanov claim was the first to intimate publicly that Abramov may not have been the controlling shareholder he claimed. Since the December filing, the lawyers involved in the Kurbanov case have been negotiating with him for weeks, but they no longer return calls to discuss the case. Before they fell silent, one of them told The Russia Journal that she believed Abramov’s purported control shareholding in Evraz included other trusts. One which had come under Russian media scrutiny was the estate of a senior executive of the group, Andrei Sevenyuk, who was killed in an aircraft crash in September 2004. Before his death, Sevenyuk had hinted to The Russia Journal that he was in control of a sizeable stake in the company. Subsequently, uncorroborated reports suggest that his survivors accepted Abramov’s payment of $124 million for a shareholding of 4.17%, leaving what Morgan Stanley estimated as a residual 0.8% bloc of shares still in the Sevenyuk estate’s control. Moscow newspaper reports have speculated, however, that when he was alive, Sevenyuk controlled at least 15%. If true, then together, Sevenyuk and Kurbanov may have been the beneficial owners of approximately half the shares Abramov claimed for himself. Until and unless he settled with them, or with their heirs, Abramov ran the risk of trying to sell what wasn’t his. Other court claims dispute the ownership which Evraz claims in its prime assets. A claim filed in federal and local courts last November in the US state of Delaware four companies representing an Israeli and US investors had once controlled about 72% of the shares of the Kachkanarsky oreprocessing combine (GOK), an iron-ore and vanadium mine that is today Evraz’s most important source of the raw material. The claimants say that between 1999 and 2001, they were forcibly deprived of their asset. According to the plaintiffs’ complaint in Delaware’s Chancery Court, Evraz, one of the eleven listed defendants, is described as having been “owned, directly or indirectly, by [Mikhail] Chernoi, [Oleg] Deripaska, [Iskander] Makhmudov, and [Mikhail] Nekrich, and operated and managed by them, or under their direction and control.” [Abramovich Kicks a Ghost, Ft Puts Foot in Mouth, John Helmer, The Russia Journal, March 22, 2006] THE SEPTEMBER 11 COMMISSION REPORT Page 228 So the question them becomes, who put together this complex web of financial ownership and offshore holding companies, initially funded with 600 billion rubles from the Credobank? What one learns is that Abramovich was a client of Valmet and Menatep, who structured his other financial operations. The first link has emerged between the Bank of New York money-laundering scandal and a member of President Yeltsin's "family", a mysterious businessman known as a kingmaker in the Kremlin. The Times has learnt that Roman Abramovich, a tycoon, controls the trading arm of one of Russia's largest oil companies through an Isle of Man company that has figured in the Bank of New York affair. Mr Abramovich runs the Siberian oil giant Sibneft, which sells its oil through a company called Runicom. His name has emerged after speculation that Swiss investigators are looking into the role of Runicom as part of the widening investigation into the laundering of up to $15 billion of Russian money through American banks. Runicom is owned by at least two offshore companies set up by the Valmet Group, a financial services concern partly owned by Menatep, a failed Russian bank that used the Bank of New York. [Yeltsin 'Family' Tycoon Linked to Cash Scandal , James Bone, David Lister, Fiona Flick, The Times (UK), September 7, 1999] Moreover, it should be noted that Runicom was under the ownership of Valmet when it was originally controlled by Riggs, according to Alan Block and Constance Weaver, All is Clouded by Desire, p.141. Altalanos Ertekforgalmi Bank (AEB) A second financial conduit for the Wanta ‘ruble destabilization’ program was the Altalanos Ertekforgalmi Bank (AEB) in Budapest, Hangary. AEB had an evolving role in this financial scheme starting in 1990, when 50% of AEB was bought by the CEDC (Central European Development Corporation.) The CEDC is actually operated out of Singer Island, Florida, and was created in 1989 apparently for the sole purpose of procuring the AEB, as it has not done a lot else. “R. Mark Palmer, the United States Ambassador here, is resigning from the State Department to manage a new consortium of North American financiers that today announced the purchase of half interest in a Hungarian bank, the first in what was projected as a series of ambitious investments in Eastern Europe. R. Mark Palmer, the United States Ambassador here, is resigning from the State Department to manage a new consortium of North American financiers that today announced the purchase of half interest in a Hungarian bank, the first in what was projected as a series of ambitious investments in Eastern Europe. The chairman of the group, the Central European Development Corporation, is Ronald S. Lauder, a former American Ambassador to Austria … The announcement of the $10 million bank deal…will turn 50 percent of the General Banking and Trust Company, one of prewar Hungary's most venerable institutions, over to a group of high-profile businessmen, several of Hungarian descent. The deputy chairman is Andrew Sarlos, a Toronto-based real estate developer. Other major investors include Melvin Simon, the American shopping mall magnate, and Albert Reichmann, owner of Olympia & York Real Estate Company in Canada. Mr. Lauder, whose family owns the Estee Lauder Cosmetics Company, holds 50 percent of the shares.” [U.S. Envoy in Hungary Quits To Handle Investment in East, Celestine Bohlen, The New York Times, January 26, 1990] In addition to being a Bush appointee, R. Mark Palmer, it turns out appears to have been a collaborator with George Soros in his efforts to unhinge Eastern European currencies. THE SEPTEMBER 11 COMMISSION REPORT Page 229 “(Soros) has been controlled for some time by a fellow called Hartmann. Hartmann was operating out of Zug, Switzerland, which is one of the banking centers, through the N.M. Rothschild Continuation Trust. Hartmann was the man who controlled the BNL and BCCI simultaneously, or coordinated it, which were not Pakistani or Gulf banks; they were British Commonwealth banks, controlled through this Rothschild intermediation. He worked for them, and still does. Now on the American side, his controller or coordinator has been Gerald Corrigan, who's going to work for him on the Russian side, and a State Department official, R. Mark Palmer, who went to work for Soros even before he fully quit his job at the State Department.”[There Is a Worldwide Crash in Progress; We Are In A Depression Already'', Lyndon Larouche, interviewed by Mel Klenetsky, August 4, 1993, Shofar FTP Archive File: people/l/larouche.lyndon/eir.080493] “So Soros, the big derivatives speculator operating in central Europe, the man who ran the run against the pound, the run against the franc, and so forth, is a creature of this. This involved Gerald Corrigan of the New York Fed, now retiring to join Soros's Russian operation; and this involved R. Mark Palmer, a State Department official. So this is an Anglo-American operation by those interests which ran BCCI, BNL, to try to bankrupt European currencies.” [How Europe's Economic Crisis Could Become the Worst Crisis in Six Centuries, Lyndon Larouche, interviewed by Mel Klenetsky, August 18, 1993] Ronald Lauder, (heir to the $4.2 Billion Estee Lauder estate) was the major investor in the operation, apparently, and also is connected to groups previously referred to in this report. He would turn out to be a major western investor in subsequent privatization investments. Lauder became a Reagan appointee as Ambassador of Austria largely as a result of his work as New York Finance Campaign chairman for the Republican Party, and is linked closely to the Bronfman family in his role as Treasurer of the World Jewish Congress. “Ronald Lauder: heir of his mother Estée Lauder's cosmetic billions, rightist ideologue, and leading Likud contributor and funding coordinator. Ronald Lauder is treasurer of the World Jewish Congress and a Trustee of the Special Reserve Fund of the Anti-Defamation League (ADL) of B'nai B'rith. His Ronald S. Lauder foundation, operating in the former East Bloc, paid for the ADL to open an office in Vienna, Austria, where Lauder was U.S. Ambassador in the 1980s. One of the WJC and ADL's top priorities in Central and Eastern Europe is the protection of hedge fund operator George Soros. The Lauder Foundation works in tandem with Soros's Open Society Institute, which advocates legalization of all narcotics and support for the Columbian FARC and other narco-terrorist agencies. After serving as U.S. Ambassador to Austria in the 1980s, Lauder personally became a major investor in "privatized" Eastern European properties. Lauder was named (by Secretary of State Sir Lawrence Eagleburger, former President of Kissinger Associates), to head the Central European Development Corporation (CEDC) that was created under a Federal act to function as a kind of pig trough for those with influence around the diplomatic community. CEDC is a consortium that mingles U.S. Congress-appropriated monies with those from private businessmen. With offices in Berlin and Budapest, CEDC invests in "privatized" Eastern European businesses for a nickel on the dollar.” [A Bigger Scandal: Illegal U.S. Funding of Sharon's Likud, Anton Chaitkin, Executive Intelligence Review, January 24, 2002] As it would turn out, AEB was a bank asset which, while half owned by U.S. investors, was apparently controlled by the Yeltsin family. The bank was later was absorbed by Gazprom, which in turn was controlled by Khodorkovsky and Viktor S. Chernomyrdin, long-time aide to Boris Yeltsin. In 1996, the U.S. investors would hand over their 50% of the bank to Gazprom for an undisclosed sum. The bank would then become a moneylaundering conduit for Yeltsin family, just as Valmet SA was transferred to the Yeltsin family from Riggs bank ownership. In both cases (Valmet and AEB) the U.S. partners THE SEPTEMBER 11 COMMISSION REPORT Page 230 ‘took the money and ran.’ This aspect of the overall strategy suggests that rather than being involved in a program to enhance democracy and capitalism, and to provide for ‘national security,’ the sole purpose, as so keenly summarized by Anne Williamson, was the financial ‘rape of Russia.’ As in Yukos Oil ownership, the ownership of Gazprom has been purposefully murky. Khordorkovsky’s role has long been hidden from the public, while most believed that Chernomyrdin was the key controller. AEB was one of their two banks, with AEB having no real assets, but serving primarily as a passthrough operation for moving funds offshore. Khordorkovsky (aided by consultants from Riggs-Valmet) was a significant architect of the financial structure from the earliest days. “All along, Mr. Khodorkovsky cultivated relationships with the powerful. As early as 1991, he had an office in the Russian government building, where he advised officials and charmed them with his quiet displays of respect. Ivan S. Silayev, Prime Minister of Russia before the Soviet Union's fall, was one of his first employers. … In a brief but crucial period in 1993, Mr. Khodorkovsky became a deputy to the energy minister, who was reorganizing Russia's oil industry into groupings that would later become companies, setting the stage for privatization. Alfred Kokh, the official responsible for running privatization, recalled that Prime Minister Viktor S. Chernomyrdin frequently called him about the sale of Yukos. "I felt that Khodorkovsky influenced Chernomyrdin strongly," Mr. Kokh said.” [Russian Tycoon Moves Into Politics and Then Jail, Sabrina Tavernise and Timothy L. O'Brien, The New York Times, November 10, 2003] “According to Eric Kraus of Sovlink, another investment house, Khodorkovsky may have already been indirectly controlling a good-sized stake in Gazprom, the state gas monopoly and the largest company in Russia.” [Robber Baron, Gideon Lichfield, New Republic On Line, November 17, 2003] Just as Yukos used Menatep Bank and Valmet SA, Gazprom used AEB for its capital flight transfers. “When Gazprom bought it, AEB was a loss-maker. But within a year it was turning a profit and posted a $31 million profit in 2000. The secret of its success? AEB handles all payments for Gazprom's gas exports to Central and Eastern Europe. In the last year alone, AEB handled $2.3 billion in payments to Gazprom. Kent Moors, who has studied Russian capital flight for years as the head of the East European investment consultancy Asida, which is based in the United States, says that AEB is one of the ways Gazprom management move their cash out of Russia. "AEB is a small part of a widely distributed system of offshore companies and foreign partners, with whom the Gazprom managers shift their cash abroad or park it there," Moors said. Which may explain why the more profit AEB makes the more stakes Gazprombank sells to obscure holding companies — and to Rakhimkulov. Gazprombank has now parted with three-quarters of its original 100-percent stake in AEB. Hungary's official financial watchdog, PSZAF, said that Gazprombank in May 1997 held only half of AEB — 20 percent belonged to the Singapore-registered holding company ACMA Investments and its subsidiary Citycom. At the same time, the companies Interenergo and Intergazprom Invest, which belongs to the British Virgin Islands-registered Undall, each held a 10 percent stake. In May 1999 another 10 percent stake went to IGM Kereskedelmi, which is owned by Cubbaren Ltd., registered on the Isle of Man. Rakhimkulov has also become an AEB shareholder after Gazprombank sold him an 8.5 percent stake on Dec. 21, 2000, according to PSZAF.” [Gazprom Assets A Family Affair, Florian Hassel, Moscow Times, May 21, 2001] Most of these transfers appear to have constituted illegal transfers, which suggests why the key architects are facing prosecution and prison terms. THE SEPTEMBER 11 COMMISSION REPORT Page 231 “Often called a "state within a state," Gazprom controls a quarter of the world's natural gas reserves with eight times the energy reserves of Exxon Mobil Corp. Gazprom accounts for 7 percent of Russia's economy. It also represents the most visible symbol of the struggle to establish Western-style rules of corporate governance and investor rights a decade into Russia's experiment with capitalism. Minority shareholders complain that Gazprom insiders benefit from shady deals while the company has been stripped of valuable properties.” [A 'Crossroads' Battle in Russia: Fight for Gas Firm Seen as Test for Putin and Reform, Peter Baker, Washington Post, May 21, 2001] “Outspoken Gazprom board member and critic Boris Fyodorov, a former finance minister, said that by his estimation some "$2 billion to $3 billion disappears from Gazprom each year through corruption, nepotism and simple theft." He was quoted by Itar-Tass as saying in Washington this week that when he first demanded an independent audit of Gazprom last year, Gazprom management threatened to throw him in jail.” [Gazprom Assets A Family Affair, Florian Hassel, Moscow Times, May 21, 2001] It is important to remember that the World Trade Center was destroyed to cover up and terminate investigations in a wide array of illegal banking transactions linked to the policy and programs of George HW Bush Sr. Transactions at Altalanos Ertekforgalmi Bank (AEB) would/should have been a target for investigation, linking Bush to the Bank of New York Money Laundering scandal. Westdeutsche Landesbank Similarly, another bank that was a recipient of Wanta controlled funding - Westdeutsche Landesbank, had moneys routed to the Khodorkovsky group, and found itself with difficulty trying to collect that loan. Khodorkovsky's group urged the foreign banks to accept a three-year repayment plan, secured by oil exports rather than Yukos shares. But the two largest creditors, Daiwa Bank and West Merchant Bank (a subsidiary of Westdeutsche Landesbank), refused. [The World's Billionaires: The Oligarch Who Came in from the Cold, Paul Klebnikov, Forbes, March 18, 2002] “It began after the ruble's collapse last summer, when one of Russia's key financial institutions, Menatep, defaulted on $236 million in loans to Germany's Westdeutsche Landesbank, Daiwa Securities of Japan and Standard Bank of South Africa. The loans had been collateralized by a pledged 30 percent stake in the enormous oil company Yukos that was also controlled by Menatep's billionaire owner, Mikhail Khodorkovsky. But before the foreign institutions could act, Yukos — whose reserves are considered by some to be equal to Texaco's — received local court approval to bar minority investors from shareholders meetings of its key subsidiairies. Meetings were then held where the subsidiaries were transferred almost free of charge to obscure offshore companies also suspected to be part of Khodorkovsky's empire. That left the foreign banks with nothing more than shares in a holding company that suddenly had no holdings — and thus was almost worthless.” [Corporate Governance Goes Global: Riding the Rising Tide, Rob Wright, IFC Corporate Relations Unit, Impact, Summer 1999] It is also clearly reported that the Landesbank was included into the investigation of the Bank of New York activities. “Though the exact figure has not been determined, this vast sum not only lined the pockets of the new Russian kleptocracy, but also flowed into the coffers of US and European financial institutions. (The BNY case may well involve a number of major European banks. On Tuesday, the Wall Street Journal, THE SEPTEMBER 11 COMMISSION REPORT Page 232 citing sources familiar with the investigation, said that Credit Suisse, Union Bank of Switzerland, Dresdner Bank, Westdeutsche Landesbank and Banque Internacionale of Luxembourg are being scrutinized for their role in the matter.)” [Bank of New York probe exposes ties between Western financiers and Russian Mafia, James Brookfield, 27 August 1999, wsws.org] Deutsch Landesbank, however was connected to a second, later investigation into the holdings of Boris Berezovsky and Roman Abramovich. In 2001, both of these investigations were ongoing, and centered in the World Trade Center. “According to recent media reports, Russian companies allegedly controlled by Boris Berezovsky and Roman Abramovich were responsible for laundering up to $7.2 billion in Russian "funny money" mostly through German banks over the past four years. It is not yet clear whether the scheme involved "just" tax evasion or more serious criminally related money-laundering activity. This scandal, if confirmed, involves the venerable Westdeutsche Landesbank, known as WestLB, and a slew of other German financial institutions. Outwardly, this case is reminiscent of other money-laundering schemes such as those involving the Bank of New York and Citigroup. All of them involve moving large sums of money between Caribbean offshore locations such as the British Virgin Islands or even more exotic places like Nauru and Western Samoa….. The investigation may soon be handed over to the FBI however…. Several venerable banks, including the Bank of New York and Republic Bank of New York, were at the center of a much larger scandal in the fall of 1999, in which transactions in excess of $6 billion were uncovered. The transfer originated in Russia and involved some 10,000 transactions since October 1998. The federal investigation - involving the FBI, the New York Federal Reserve Board, the New York Banking Commission and the British law enforcement and national security agencies - is still going on.” [Coming Clean, Ariel Cohen, Moscow Times, January 23, 2001] This report emphasizes that the German /Suisse banks referenced in the investigation include those very banks reported to be at the heart of the need to cover up investigations at the World Trade Center: Credit Suisse, Union Bank of Switzerland, Deutsch Bank, Dresdner Bank, and now, including Westdeutsche Landesbank. 8.6 The Yeltsin Family and the Investigations in the World Trade Center There were at least seven active investigations into the Yeltsin family when the World Trade Center – home of the U.S. major financial investigative organizations – went down. In all probability, there might have been up to fifteen or twenty investigations opened, and most of them would never see the light of day. All of these investigations are tied to accounts that would ultimately link back to the Bush family financing. 1. In 1998, Loutchansky, Marc Rich and Berezovsky (Berezovskii) – all associates of the Yeltsin family - were being investigated in conjunction with the Bank of New York money-laundering scandal that the Bush administration, (through Ashcroft) first tried to bury as insignificant – only to have it put back on the front page of the press by Swiss investigators, and then Russian investigators. (To put the Yeltsin “Family” in context, it should be noted that the crime organization named after him ousted him shortly after he lost value as anything other than a figurehead.) THE SEPTEMBER 11 COMMISSION REPORT Page 233 “It is not the Yeltsin family in a literal sense: Boris Yeltsin was "thrown out" a long time ago; it is a group that holds the real power. And Chernoi can cover its crimes and develop its business with the help of the state.” [Le Monde: French Editorial Says Russian President Putin Unable To Effect Changes, Counter Mafia, Corruption] This investigation opened inroads into accounts at Menatep Bank, Runicom, Inkombank, EuropeanUnion bank, Riggs-Valmet, Bank Rossisky-Kredit, Alpha Bank, many of which were linked to Bush operatives and the Yeltsin Family counterparts going as far back as 1991. 2. Nazarbayev and his Swiss accounts were being investigated by the Swiss for illegal activities, linked to Bush Sr. and Richard Cheney in the Griffen scandal. 3. Later Mikhail Khodorkovsky would be implicated in the Bank of New York moneylaundering scandal because of his control of Menatep Bank, but would be more closley tied to use of the Riggs-Valmet money-laundering conduit. His imprisonment for tax evasion would be portrayed in the U.S .press as “political” repression by the Putin regime, and hardly a mention of the Riggs Bank connection would be published. The Bush family remained loyal to Khodorkovsky after his arrest, with George Bush Jr. acting on his behalf. US President George W. Bush used a meeting Friday with Russian non-governmental groups to express concern over the fate of the jailed founder of Russian oil firm Yukos, participants said. "He talked about Khodorkovsky, he talked about his wife," said Maria Gaidar, head of the liberal Russian youth movement Da (Yes), who attended the meeting with Mr Bush at the residence of the US consul general in Saint Petersburg. "He said that … he was concerned" about the welfare of Mikhail Khodorkovsky, she said, referring to the Yukos founder sentenced in May 2005 to eight years in prison after conviction on tax evasion, massive fraud and embezzlement charges. [Bush 'concern' over jailed oil baron, correspondents in St Petersburg, Herald Sun (Queensland), July 15, 2006] Upon his arrest, Khodorkovsky’s secretive business arrangement with the Rothschild family was exposed, as Jacob Rothschild took over Khodorkovsky’s 26% control of Yukos. Khodorkovsky’s seat on the board of directors for Yukos went to former Halliburton executive Edgar Ortiz, a former Halliburton vice president during US Vice President Dick Cheney's time as Halliburton CEO, and as President and CEO of Halliburton, took over the relationship with the State Oil Company of Azerbaijan Republic (SOCAR). (See Halliburton Man to Sub for Khodorkovsky, Simon Ostrovsky, Moscow Times, April 30, 2004.) 4. Yeltsin’s accounts in UBS were being investigated by the Swiss at the same as the 1998 decision to attack the World Trade Center was made. “There were the first names, the last names, and the accounts accessed at the Banca del Gottardo in Lugano and at the UBS in Geneva.” [Investigation of Yeltsin's Swiss Accounts, Milan's Corriere della Sera in Italian, 25 August 1999 (translation for personal use only) Article by Carlo Bonini and Giuseppe D'Avanzo: "Switzerland, Credit Cards Accuse Yeltsin"] 5. Loutchansky, as shown earlier, was being investigated by the Swiss as well. THE SEPTEMBER 11 COMMISSION REPORT Page 234 “Time Magazine reporters …took up Loutchansky's offer to examine his books in July 1996. Time's report detailed deals involving PM Viktor Chernomyrdin, Moscow Mayor Yury Lyuzhkov and former Soviet Minister of Metallurgy and hometown Yeltsin crony Oleg Soskovets, scud missiles, nuclear smuggling and multimillion dollar transfers through a network of Swiss bank accounts and dummy companies set up in tax havens like the Isle of Man and Liechtenstein.” [Russia's X mysteries, Anne Williamson, WorldNetDaily.com, September 17, 1999] 6. The missing Russian treasury gold was probably under scrutiny by the FBI investigation of gold-price fixing, an investigation that would have encompassed accounts from Barrick Gold and Deutschebank. 7. The Westdeutsche Landesbank realated mney-laundering of Boris Berezovsky and Roman Abramovich All of the investigations targeted individuals who were at some point financed by Bush Sr. and his business associates, and used government funds to fraudulently enrich various business partners and themselves. All the investigations were housed in the World Trade Center. All of these Russian/Israeli Mafiya frauds were being investigated by agencies in the WTC and had their investigative resources refocused on “Al Qaeda.” It should not be forgotten that Al Qaeda has been a documented CIA front established under George Bush Sr. when he was CIA Director, vice President and officially the chief of National Security under Reagan, and as President. As the senior US Intelligence czar for 20 years, if anyone ever ‘owned’ Al Qaeda, it was George HW Bush. “George Bush, who, as vice president, beginning in 1981, carried out Executive Order 12333, which placed all U.S. intelligence operations under Bush's personal control.” [Executive Outcomes ties lead to London and Bush, Roger Moore and Linda de Hoyos, Executive Intelligence Review January 31, 1997, pp. 42-43] All of these individuals are linked in multiple ways to the Bush and Yeltsin “Families.” The Yeltsin Family Partnership in State Sponsored Terror The Yelstin Family has on multiple occasions, demonstrated a willingness to use personally funded, private military force for political reasons. (This technically fits the definition of terrorism.) For example, and most recently, when Vladimir Putin ejected most of the oligarchs and the Yeltsin Family from their seats of political power, Berezovsky countered by threatening a coup! “…Putin has also fired Aleksandr Voloshin, his chief of staff (formally, it is Voloshin who resigned). Voloshin was one of the architects of Russia's capitalism. This completes the political clean-up: now the Putin government is entirely run by Putin men (many of whom are veterans of the old KGB, the Soviet secret police). [October 2003) Putin vs the oligarchs. TM, ®, Copyright © 2005 Piero Scaruffi] “Wanted Russian tycoon Boris Berezovsky has gone public with his plans to seize power in Russia by force. The London-based oligarch said in an interview with the Ekho Moskvy radio station Wednesday that he had been working on the coup plan for 18 months. THE SEPTEMBER 11 COMMISSION REPORT Page 235 Berezovsky, a notorious critic of Putin’s regime, said he aimed to replace the “anti-constitutional regime” in Russia. “The regime has lost its legitimacy. Neither Putin nor the parliament are legitimate. They are anti-constitutional, because they have made a number of anti-constitutional decisions, such as replacing elected governors by appointed ones. This is absolutely against the spirit and the language of the constitution.” Today’s regime would never allow a fair election, Berezovsky added, so the only way out is a coup.” [January 26, 2006 mosnews.com] This however, is not the first time the Yeltsin Family has demonstrated a willingness to resort to political terror for its own agenda. This willingness to use terrorists for their political agenda is best understood by understanding the ‘muscle’ in the Yeltsin Family, starting with Aleksander Voloshin. “Who are the strong men of the Yeltsin "family?" (Khaydarov) Roman Abramovitch represents them. He manages their shares, for example 50 percent of Russal, based on the agreement signed with the Chernoi group in early 2000. Then, there is of course Vladimir Voloshin, head of the presidential administration under Yeltsin, and whom Putin was not able to get rid of. His story is known, starting with the scandal of the AVVA financial pyramid (created with Boris Berezovskiy). He controls the "family's" interests and takes care of anything that could harm it. If he cannot do so, he turns to Roman Abramovitch, to Oleg Deripaska, or Valentin Yumashev (former head of the presidential administration, author of Boris Yeltsin's books, and husband of the former president's daughter Tatiana Diachenko).” [Le Monde: French Editorial Says Russian President Putin Unable To Effect Changes, Counter Mafia, Corruption] “Voloshin, 47, was considered the Kremlin's "gray eminence" by many, mediating the interests of the Russian state and the country's oligarchs. Officially, Voloshin ranked third in the Russian power hierarchy, after the president and prime minister. However, Voloshin is believed to have decided many sensitive political issues on Putin's behalf, effectively making him the second most powerful political figure in the country. Voloshin became head of then-President Boris Yeltsin's administration in March 1999 on the strength of heavy lobbying from now-exiled Boris Berezovskii, with whom he worked during the 1990s to build that oligarch's vast business interests. After Putin's election as president in 2000, Voloshin opted to support his new boss and helped ease Berezovskii into exile instead of a likely prison term.….It was Voloshin who brokered deals between bureaucrats and the business world and applied the necessary influence to enforce agreements.” [Filling Russia's Voloshin Vacuum, Peter Lavelle, RFE/RL Newsline, November 03, 2003] “… the Russian Prosecutor-Generals Office announced that it had launched an inspection into the prior commercial activities of one the country’s most powerful officials, presidential chief of staff Alexander Voloshin. Prosecutor-General Vladimir Ustinov said that the initial probe may or may not result in a criminal case. In the early 1990s, Voloshin worked with Berezovsky on the so-called "pyramid" schemes, say Russian media outlets. According to the reports, Voloshin ran several companies that were accused of embezzling millions of US dollars, but the case never led to criminal charges. Ustinov eventually backed down and said there was no criminal investigation relative to Voloshin.” [Transparency International: Putin undertakes apparent crackdown on corruption, Toni Schönfelder , Asia Times, Jan 23, 2002, Moscow] “…during the spring and summer of 1999 members of Yeltsin’s close entourage (the so-called Family) were as prepared … to violate the letter of the Russian Constitution as well as Russian law in order to prevent a transfer of power to persons they did not trust to look out for their physical well-being or their financial interests. … the Yeltsin Family were more than ready to involve Russia in a “short victorious war” as well as to destabilize Moscow and various regions of Russia to the point where the parliamentary elections of 1999 and the presidential vote of 2000 would need to be canceled or postponed for several years. As in 1994, a military conflict was in fact launched (the incursions into Dagestan), but due to unanticipated contingencies, it did not prove necessary to cancel the upcoming THE SEPTEMBER 11 COMMISSION REPORT Page 236 elections.” [“Storm in Moscow”: A Plan of the Yeltsin “Family” to Destabilize Russia , John B. Dunlop , The Hoover Institution , October 8, 2004 ] Understanding that Aleksandr Voloshin is one of the key figures in the Yeltsin Family allows the report to define the context for the meeting in the summer of 1999, in which Adnan Khashoggi coordinated a meeting between Voloshin, the Chechen-Muslim separatist Basayev (who trained in US funded Al Qaeda camps), and a representative of the Columbia cocaine network, and a former KGB agent ‘connected’ to the CIA (Surikov). “French intelligence sources report, via the Russian press : according to these source Basayev met in summer 1999 in France with Aleksandr Voloshin, chief of staff for then- president Yeltsin (and later Putin), and Anton Surikov, a former Soviet military intelligence officer who worked with Basayev when he was leading the Abkhaz separatist movement in Georgia, with Moscow's blessing. Voloshin is claimed to have provided $10 million to Basayev in order to fund the invasion in Dagestan….. The most thorough study, by John Dunlop of the Hoover Institution, blames the plotting on three protégés of the Russian oligarch Boris Berezovskii – Valentin Yumashev, Alexander Voloshin, and Roman Abramovich – who at this point were members of Yeltsin's "Family" in the Kremlin. (As for Berezovskii himself, Dunlop writes that by mid-1999 "all of his real but beginning-to-dwindle political influence was obtained through the intercession of D'yachenko” [Yeltsin's daughter] and Yumashev.") [The Global Drug Meta-Group: Drugs, Managed Violence, and the Russian 9/11, Peter Dale Scott, October 29, 2005] “In March of 2002 Interfax reported that, through his long-time business partner Badri Patarkatsishvili, Berezovskii had “supplied Chechen figures Kazbek Makhashev and Movladi Udugov with money to purchase the raid against Dagestan. According to witnesses, Berezovskii contributed 30 million rubles for the purpose.” This payment, amounting to more than $1 million, if it occurred, may have been only one of several intended to underwrite a “short victorious war” in Dagestan.” [“Storm in Moscow”: A Plan of the Yeltsin “Family” to Destabilize Russia , John B. Dunlop , The Hoover Institution , October 8, 2004 ] “The investigative weekly then went on to summarize what it had learned from French and Israeli intelligence, as well as from its own journalistic digging: “A luxurious villa in the French city of Beaulieu, located between Nice and the principality of Monaco. This villa, according to the French special services, belongs to the international arms dealer Adnan Khashoggi. He is an Arab from Saudi Arabia, a billionaire with a complicated reputation. According to the French special services, and also to the French press, in June of 1999 there took up residence at the villa a Venezuelan banker named Alfonso Davidovich. In the Latin American press, he is said to be responsible for laundering the funds of the Columbian left insurrection organization FARC, which carries out an armed struggle with the official authorities, supported by the narcotics business.” “It soon emerged,” Versiya continued, “that a very frequent visitor to Davidovich was a certain French businessman of Israeli-Soviet origin, a native of Sokhumi [Abkhazia], 53-year-old Yakov Kosman. “Soon,” the account continues, “the special services succeeded in establishing that Kosman and Tsveiba went to the Nice airport, where they met two men who had arrived from Paris. Judging from their documents, one of those who arrived was Sultan Sosnaliev, who in the years of the Georgian- Abkhaz war served as the minister of defense of Abkhazia. Second there emerged from the airport one more native of Sokhumi—Anton Surikov. According to rumors, during the years of the war in Abkhazia, he was subordinated to Sosnaliev and was responsible for questions of the organization of sabotage and was friendly with field commander Shamil’ Basaev, who at that time headed the Chechen battalion.” The next arrival came by sea: “According to the precise information of the French and the Israelis, on 3 July at the port of Beaulieu a private English yacht ‘Magiya’ [Magic] arrived from Malta. From it to the shore came two passengers. If one is to believe the passport information, one of the ‘Englishmen’ was a certain Turk, in the past an advisor to the Islamicist premier of Turkey, [Necmettin] Erbakan, a THE SEPTEMBER 11 COMMISSION REPORT Page 237 rather influential figure in the Wahhabi circles of Turkey, the Middle East, and the Caucasus. From sources in the Russian special services we learned that Mekhmet is also a close friend of the not unknown Khattab.” “The second person,” the account goes on, “to the surprise of the intelligence officers, was the Chechen field commander Shamil’ Basaev.” [“Storm in Moscow”: A Plan of the Yeltsin “Family” to Destabilize Russia , John B. Dunlop , The Hoover Institution , October 8, 2004 ] Yakov Kosman would also be identified as part of the Russian/Israeli Mafiya. “Yakov Abramovich Kosman (b. 1946), resides in Nice, France. Has German and, possibly, Israeli citizenship. Involved in real estate operations and banking. Has contacts with Kosovo Albanian criminal societies in European countries. In 1997-2000 he served as financial consultant to Hashim Thaçi, the chief commander of KLA. The new president of Far West, Ltd.” [The Global Drug Meta- Group: Drugs, Managed Violence, and the Russian 9/11, Peter Dale Scott (18,734 words) October 29, 2005] Also, one needs to understand that one of Farwest’s key partners who arranged the Khashoggi villa meeting of June 199 – Anton Surikov – was an apparent American agent in the Soviet Union, and it was Surikov that mentored Basayev, who had received his initial training in CIA sponsored camps in Afghanistan. As noted earlier in this report, Surikov is also a protege of KGB leaders Alexie Kondaurov and Fillipp Bobkov, who sponsored Khordokovsky in his early days. Surikov’s other employer (IPROG) is funded by grants from Khordokovsky. (Surikov’s involvement in Farwest may help explain how Halliburton received – according to the Halliburton spokesperson – CIA clearance to use Farwest as a recruiter in Central Asia and Africa.) “Anton Surikov is well-known person…. I’ve known him since Afghanistan. … I think Anton went over to the Americans already back then…. He has a distant relative in the United States who, basically, held very high post in the CIA and was in Peshawar in the 1980s. Anton always kept this fact in secret, back in the Soviet time and later on. After all, he occupied very high positions in the Department, in the government and in the Duma. Just imagine, he worked in all these high-level jobs and nobody cared! As a matter of fact, our bosses used his connections as the informal channel of communication with the Americans. That’s why Anton could have his way. And later on it was Anton who groomed Basayev in Abkhazia as early as in 1992. Everyone knows about this. Even nowadays, last summer he called Basayev on the satellite phone in my presence. He sounded very friendly: “Shamil, dear brother, I hug you…” [Revelations of the Fugitive Kremlin Financier, recorded Vadim Andreev, Translation and comments by burtsev.ru, January 19, 2004] Basayev’s Muslim separatists later would be accused in the world press of the Moscow Dubrovka theater tragedy in November 2002, and the September 2004 Beslan school attack in which hundreds of children died. Despite the charges, there would be widespread reports in the independent press, and a documentary, based on eye-witness testimony, that these attacks were actually orchestrated by Russian secret police for the intent of fanning the flames of Russian nationalism, to the political benefit of the Yeltsin Family. These witnesses were arrested and held until they recanted their testimony. What is intriguing about these events, like the World Trade Center tragedy, is that American intelligence, in the U.S. and Russia, created Muslim terrorists, made them the “public enemy” and then blamed them for events which served their personal, political interests. THE SEPTEMBER 11 COMMISSION REPORT Page 238 The group of ex-military rogues that Voloshin worked with to orchestrate these acts of political terrorism would be the same group of Russian expatriates that would form a Swiss company called “Farwest.” In the French meeting at Khashoggi’s villa, this group was represented by Anton Surikov and Alfonso Davidovich. Farwest is mainly comprised of ex-Russian military officers closely linked to the Afghan heroin trade. The Davidovich connection is a starting point for explaining the well reported cocaine-forweapons trade between the Columbians and the Russian military. Farwest appears to be a group of ex-military professonals that provides “buyers” like the Yeltsin Family with heroin, cocaine and terrorist muscle. As one understands the service offering of a group like Farwest, it is important to see who else their customers are. Farwest has two key customers whose management shows up repeatedly in the plan to destroy the World Trade Center. Those customers are Halliburton (during the Cheney era) and a pair of companies known as Diligence and New Bridge, which share the same board members. These may well be a few of the “important politicians” that Sibel Edmonds claims are associated with the Central Asian drug and money laundering trade. “Diligence LLC (http://www.diligencellc.com/index.html) was formed by past members of the CIA and Britain's MI5 Intelligence Services. They have included experts in international law, journalism and intelligence services from post-Cold War which enables them to vet all sorts of future investment projects while providing security advice. They are related to New Bridge Strategies, sharing addresses and many of the same board members. “ “About Diligence LLC Headquartered in Washington, D.C with offices in Miami, London and Geneva, Diligence LLC specializes in the provision of timely and accurate commercial and competitive information, pre-employment vetting services, analysis, due diligence, and security services to Fortune 500 companies and leading financial institutions around the world. For more information, visit www.diligencellc.com” Here are some of the key players in Diligence/New Bridge – which shows an ongoing business involvement of the Bush Family as well as Shiek Kamal Adham and Adnan Khashoggi. · Joe Allbaugh, the deputy chairman of Diligence, resigned his post as head of FEMA on March 1, 2003, a post granted to him after serving as National Campaign Manager for the Bush-Cheney 2000 election and chief of staff to then-Gov. Bush of Texas. · Neil Bush has been paid a $60,000 annual consulting fee. Neil’s role is to "help companies secure contracts in Iraq," the Financial Times reports. · Lord Powell of Bayswater (also on the Board of Barrick, with Adham and Khashoggi), representative of the Rothschild family investment firms, · Richard Burt: chairman of Diligence, was a Director of Deutsche Bank-Alex Brown fund, former U.S. Ambassador to Germany. · Ed Rogers and Lanny Griffith, former George H.W. Bush aids. Ed Rogers has been a lobbyist for Shiek Kamal Adham and Adnan Khoshoggi, as well as the Russian Alpha Group/Alpha Bank owned by Mikhail Friedman. · President of the company, John Howland, and principal Jamal Daniel were business partners of first brother Neil Bush · Whitley Bruner, formerly head of the CIA Baghdad station, is now director of the Iraq branch of Diligence. THE SEPTEMBER 11 COMMISSION REPORT Page 239 Again, the report demonstrates that Farwest – a Swiss company comprised of Russian/Israeli Mafiya terrorists and drug dealers – openly admits to having Halliburton and Diligence as their customers, which is mostly comprised of senior Bush apparatus operatives! What is equally as interesting is the second appearance of Lord Powell in this network of Bush apparatus companies. Powell was first identified with this group as a Board member of Barrick – and now in Diligence. Powell is a major representative of Rothschild family holding companies. In one of the more rare occasions of the Rothschild family, their role and benefit in this scenario was later revealed in the press. Essentially, Jacob Rothschild has had secret agreements with at least one of the oligarchs (Khodorkovsky), which suggests that there may be more of these "previously unknown arrangements." “LONDON (Agence France-Presse) — Control of Mikhail Khodorkovsky's shares in the Russian oil giant Yukos have passed to renowned banker Jacob Rothschild, under a deal they concluded prior to Mr. Khodorkovsky's arrest, the Sunday Times reported. Voting rights to the shares passed to Mr. Rothschild, 67, under a "previously unknown arrangement" designed to take effect in the event that Mr. Khodorkovsky could no longer "act as a beneficiary" of the shares, it said…. Mr. Rothschild now controls the voting rights on a stake in Yukos worth almost $13.5 billion, the newspaper said in a dispatch from Moscow. Mr. Khodorkovsky owns 4 percent of Yukos directly and 22 percent through a trust of which he is the sole beneficiary, according to Russian analysts.” [Arrested oil tycoon passed shares to banker, Washington Times, November 03, 2003, http://washingtontimes.com/world/20031102-111400-3720r.htm] Farwest, despite the reports of its ‘private military and security capabilities,’ is primarily a drug syndicate, as testified to by a Russian source with inside information: "The distribution of responsibilities in the OPS as follows. Filin, partly Likhvintsev, Davidovich, and Kosman, the four of them are at the top and excersize general leadership. Filin is responsible for the headquarters of Far West, Ltd. in Switzerland. Filin and Davidovich are responsible for purchasing cocaine in Colombia and the FLW office in Bogotá.Likhvintsev is responsible for cocaine traffic through the port of St. Petersburg and its delivery to the Azeris. Saidov is in contact with Jamaat Shariat and is responsible for purchasing Afghan heroin coming through Turkmenistan to Dagestan. He is also responsible for the port of Novorossiisk and the FWL office in the Crimea. Surikov is responsible for contacts with Hizb-ut-Tahrir in Udmurtia, Tatarstan and Bashkiria, as well as for purchasing there the Afghan heroin that comes through Tajikistan and Uzbekistan. He is also responsible for the FWL office in Izhevsk 7 and for shipping of "special merchandise" (i.e.,. heroin - burtsev.ru) to the port of Novorossiisk (for this he uses the Adygei ethnic criminal group). Kosman is responsible for the transfer of the heroine, delivered to Europe from the Novorossiisk, to Kosovo Albanians in Mediterranean and for the FWL office in Kosovo. Filin, Kosman, and Davidovich are responsible for financial transactions related to drug trafficking and for laundering the proceeds in Caribbean offshores. Saidov is responsible for financial transactions and money laundering in the Gulf and for the FLW office in Dubai. Filin and Likhvintsev are in communication with their accomplices in their former directorate (GRU - burtsev.ru). Likhvintsev is in contact with their "protection" at "the top" (in the Kremlin - burtsev.ru). Butkevichius supervises the FWL office in Georgia and is responsible for the OPS communication with Berezovsky and Patarkatsishvili. Surikov is responsible for receiving intelligence from the corrupted officers of secret services about the information which these services gather about the OPS and their competitors. Surikov (and Baranov) is also responsible for politics, informational campaigns in mass media (presently Filin, Saidov, and Roeva also take part in these activities) and for communication with YUKOS (through Kondaurov). Lunev is responsible for physical actions against their opponents. He is also responsible for the FWL offices in Iraq and Afghanistan and for their business there with KBR/Halliburton (formerly headed by Dick Cheney), hiring for them mercenaries. They closed their office in Angola. Before, Likvintsev was responsible for it. Filin and Surikov are responsible for their connections in the United States, Davidovich with THE SEPTEMBER 11 COMMISSION REPORT Page 240 Venezuela, Saidov with Saudi Arabia, Saidov and Surikov with Turkey, Saidov with the Chechens and Hizb ut-Tahrir in Central Asia." [Alfonso Davidovich Ochoa, from the dossier compiled by burtsev.ru] With the groups links to Kondaurov and Bobkov, the claim they are linked to the drug trade is re-inforced by Bobkov’s continued involvement in the same: “The case of Filipp Bobkov, the former First Deputy Chairman of the KGB, exemplifies the role of the mobbed-up KGB networks. Bobkov was "cashiered" from the KGB for his role in the bloody KGBSpetnaz crackdown on the Lithuanian capital of Vilnius in 1991. As a "private" citizen, Bobkov pursued the KGB-ordained strategy of marketing his services to Western investors, and quickly assumed control of a banking group in Moscow. Bobkov swiftly assembled a collection of KGB veterans who had been stationed in Burma, Cambodia, Laos, and Korea. This was the nucleus of what has become known as the "Moscow Narco-Group," which coordinates drug-running operations in Romania, Colombia, Peru, and Cuba. Its main base of operations is the Russian naval base at Cam Ranh Bay in Vietnam - a communist regime which is next in the queue for "joint ventures" and American foreign aid.” [Russia's Global Crime Cartel, William Norman Grigg, The New American, Vol. 12, No. 11, May 27, 1996, Copyright 2004 American Opinion Publishing Incorporated, http://www.thenewamerican.com/tna/1996/vo12no11/vo12no11_russian_crime.htm] If Farwest is primarily a drug operation, there are some very well placed members of the Bush apparatus dealing with them. It might be easy to conclude that this Russian Mafiya- Farwest-Diligence network is irrelevant and proves nothing regarding 9/11. With some reflection however, the implications are very significant: · It demonstrates that Adnan Khashoggi, a key participant in multiple aspects of the 9/11 motive and planning, clearly has no hesitation to facilitate operations which result in political terror and mass murder, and a documented track record of doing just that! · It demonstrates that the Bush family financial apparatus, including Dick Cheney, conducts on-going business with an organization (Farwest) that arranges contract political terror using Muslim terrorists with the same background as Al Qaeda, and is a major drug conduit! · It demonstrates that the Russian/Israeli Mafiya family (the Yeltsin Family in particular) that has reaped billions of dollars from Bush largesse since 1991 uses the same political terrorist professionals as the Bush Family! · It demonstrates that the Bush Family had other channels besides Armitage and Secord to hire Al Qaeda trained mercenaries! · It demonstrates that Sibel Edmonds could easily have translated conversations which demonstrated major U.S. political connections to drug deals and money laundering in Central Asia. The Chechnyan crime operation is linked to the Yeltsin Family, Farwest, and Diligence, and hence in many ways to the Bush political and family network. 8.7 Armageddon Two highly incredible and widely ignored stories crossed paths in three places: the World Trade Center, Russia and the Pentagon – the Derk Vreeland story and the Brady Bond THE SEPTEMBER 11 COMMISSION REPORT Page 241 story. On the surface of those stories, as commonly presented on the Internet, there seemed to be more reason to discount them than pursue them. To a large degree, these stories appear to have been dismissed by independent 9/11 investigators, with the exception of acknowledgement by Flocco, Schwarz and Ruppert. However, an investigation pursuing the smaller details of those stories, (e.g., reading the specifics of the alleged ONI documents, attempting to validate Vreeland’s statements) suggests that these stories not only fit the world circumstances, but they provide explanations for gaps in the understanding of what really transpired on September 11, 2001. Without these stories, there would be open issues as to why the Pentagon was a target, why was September 11 the chosen date after literally years of planning, and what was behind the illegal trades that the FBI refuses to release? Equally important, this information reinforces the theory that the attack was an attempt to cover up massive money and gold laundering activity by destroying multiple investigations in the World Trade Center. It is now clear that additional investigations were being conducted by the ONI which was housed in the section of the Pentagon hit by Flight 77. It is now clear that the actual gold used to kick-off the Durham/Brady Bond scam came from Swiss accounts managed by the individual responsible for the 1991 Brady Bonds – George HW Bush. In that sense, an investigation of those accounts for any reason would have brought global visibility to a $240Billion “scam” in which the Russian Mafiya and George HW Bush, with support from major American financial houses, attempted to take over major segments of Russian industry during the privatization of the collapsing Soviet economy, a collapse largely facilitated by a Bushmanaged currency destabilization program. It sheds new light on the growing relations between the Russian Mafiya and the Bush family personal investments. Finally, it provides a basis for understanding why so many individuals have kept quiet about what they know about the truth behind 9/11. These are the people who do not have all the facts, but have enough information from their small role in attack to know the official “Al Qaeda” story does not ring true. However, these are people who personally have benefited from the tragedy, though corporate bonuses, promotions and investments. These were the World Trade Center executives invited to celebrity golf games and fishing trips on 9/11 so they need not be present when their firms went down into the rubble. “Business executives, some of whom worked in the WTC, were in Nebraska to attend a meeting at Offutt Air Force Base hosted by billionaire Warren Buffett on the morning of September 11th. The same base would be visited later that day by George W. Bush.” [http://9/11research. wtc7.net/sept11/analysis/anomalies.html] These are the bankers, accountants, the traders, consultants and executives who get to keep their jobs, bonuses and very fat paychecks and support their families while others slide into poverty, or are murdered. These are the officers and generals that use their skills to murder the very people they swore to protect from the very evil they have now become. They have traded their souls to keep their lives and comfort. They quell their consciences by convincing themselves of the lie that the people in the World Trade Center, Pentagon and on four airlines had to die to save the U.S. economy, and are THE SEPTEMBER 11 COMMISSION REPORT Page 242 collateral damage in a final round of the “Cold War.”. They tell themselves that thousands of innocent citizens needed to die so that America could continue to fund the Russian/Israeli Mafiya in a war against an enemy that ceased to be a threat decades ago. They tell themselves that witnesses need to be murdered and wars need to happen so that ‘the chosen’ Americans can maintain their lifestyles, not because their lives are endangered by “terrorists.” They justify the misery and deaths of thousands with their own self-gratification. These are people across the globe, in the US, Canada, Switzerland, Germany, Israel, Russia, Syria, Saudi Arabia, UK and more. These are executives that feed from stolen national treasuries, burden taxpayers with debt that has no social value and steal from the poor and unfortunate so that they can drive bigger cars, own more luxurious homes, and indulge their desires. They know, yet they continue to feed this growing corruption. For them, this is ‘realpolitik.’ For them, the world is either good or evil, black or white, winners or losers. They are the absolutists rooted in dualism. For them, self-indulgence at the expense of others is winning, is good and wears a white hat! However, these are the people every major western and eastern religion has – for thousands of years – argued are evil, black and losers. It is a debate as old as mankind, and it’s parallel is the parable of Cain and Able. The only difference here is scale. It is no longer enough to steal from your neighbor and kill a person to cover it up. It is no longer enough to raid a village and burn it down to enhance your wealth. It is no longer necessary to send an army to steal the wealth of a nation. It is about ever-increasing scale. The events of the World Trade Center represent a modern morality play no different than Cain and Able, with brother killing brother to control his wealth in order to be seen more favorably in the eyes of his god, and then trying to hide the crime. As the scale grows, the world darws closer to another Armegeddon. Note: The great irony of the parallel between the WTC and the parable of Cain and Able, is that heritage of Cain is traceable to the Bush family. “…it came to pass that the posterity of Cain became exceedingly wicked, every one successively dying one after the other, more wicked than the former. They were intolerable in war, and vehement in robberies; and if any one were slow to murder people, yet was he bold in his profligate behaviour, in acting unjustly, and doing injury for gain. “ [Josephus, Antiquities of the Jews, A.D. 93] While most readers would respond to the aforementioned claim by suggesting that the linkage Josephus references is several thousand years distant from the current Bush family, there are some that have researched this type of linkage in depth. Suffice it to mention that the name of the son of Cain (Tubal) is traced through the ages to the Free- Masons (with 13 of 43 presidents), and accordingly to its Skull and Bones offshoots, and the Bush family. THE SEPTEMBER 11 COMMISSION REPORT Page 243 9 Bank Cartel or Oil Syndicate – A Question of Greater Motive Merriam Webster defines cartel as “a combination of independent commercial or industrial enterprises designed to limit competition or fix prices.” A syndicate is defined as “a loose association of racketeers in control of organized crime.” A syndicate can also be called a ‘cartel.’ In this investigation, there is bank cartel allegedly attempting to control gold prices, and an oil syndicate allegedly attempting to limit competition in the Central Asian region. Both of these cartels seem to have “motive” for disrupting the money laundering investigations initiated in the late 1990s, and continuing into the present. Both of these cartels had extensive contacts in the murky underworld of the Russian/Israeli Mafiya and U.S. Intelligence. They work together, and use each other’s services. The over-riding question appears to be: which cartel bears responsibility for the attack on the WTC? When the details of Central Asian covert oil operations are explored one finds the same criminals involved as in the Harken Energy, Iran Contra and BCCI scandals, the Barrick operation and the rape of the Soviet and Philippine treasuries. The Oil Cartel money laundering paths clumsily and inadvertently intersect at several places: the Deutsch Bank and the Union Bank of Switzerland (UBS), the Bank of New York and an interesting parallel involvement by Barrick. These banks continuously “appear” and have an active role in billion dollar deals which over time are shown to involve fraud, theft, expropriations, illegal drugs and weapons or some other illegal activity that leaves some national treasury poorer for their involvement and hundreds of millions of dollars unaccounted for. By facilitating and negotiating these deals, these bankers are coconspirators. (The person who drives the get-away car is just as guilty of the crime, even if that person contends he or she had no knowledge of a crime being committed, and the role of a banker’s due diligence requirements generally suggests they fully understand the crimes they are supporting.) These companies have facilitated the theft of treasuries from the Soviet Union, France, Czechoslovakia, Kazakhstan, the Philippines, Angola, and possibly the U.S. These banking organizations - joined with Enron On-line - have the infrastructure for both rapid global distribution and high volume capacity required to mask the flow of illegal funds, and convert them into physical assets (bearer bonds, commodity futures and gold certificates) which cannot be traced. Time and again, these same financial institutions are identified as conduits for illegal activity and actively engaging known criminals as business partners, and hence become criminals themselves. Because of their widespread criminal activity, they have been the object of numerous investigations by agencies across the world. In most of these cases, the witnesses recant, die inexplicably or are ‘suicided.’ Massive heart attacks also seem to afflict these people more frequently than the normal citizenry. However, the trail left by the flow of money cannot be erased. (Although the destruction of the WTC, the BCCI records in London warehouses, the allowed shredding of Enron records suggests that these trails can be erased with proper financing.) Additionally, the citizens of the US, France, Germany and Switzerland are comparably socially minded, and have recently passed laws to allow THE SEPTEMBER 11 COMMISSION REPORT Page 244 investigators into those banks to help bring to an end what is commonly recognized as criminal activity. The investigators from the US agencies at the WTC may never have known how close they were getting to the criminal core of this Cartel – but the bankers and owners of those accounts would have known. 9.1 The Swiss-German Banking Connection There are a number of Swiss banks that regularly are mentioned in reports of moneylaundering and protection of stolen national assets. Amongst them, one stands out: UBS, but often mentioned as well is the Credit Suisse Bank. UBS (Union Bank of Switzerland or Schweizerische Bankgesellschaft, formerly Banque Federale or Federal Bank of Switzerland) is the long time banker to the Marcos family, Adnan Khashoggi and the Saudi Royal family, and assorted international criminals. This Swiss bank is one of several strongly attached to the German industrial and banking cartels, with a history traceable back to the Third Reich. “Deutsche had as its principal connection Credit Suisse, and also did business with the Swiss Bank Corporation and the Banque Federale (UBS). Funds transferred from Berlin for a client list approved by Bormann went into numbered accounts, and were either held there for local investment or soon shifted to neutral nations elsewhere in Europe or overseas, to be credited to the accounts of appropriate German corporate subsidiaries, or else to entirely new corporations awaiting these start-up monies that would enable them to go into business using German patents. As these new corporations prospered, they generated more money and profits, becoming important elements in the Bormann global economic scheme. Seven hundred and fifty new corporations were established in the last months of the war under the direction of Reichsleiter Bormann, using the technique perfected by Hermann Schmitz.” [Martin Bormann – Nazi in Exile, Paul Manning] UBS operated with the Deutschebank to funnel laundered Third Reich funds into many of the subsidiaries created by German industrialists at the end of the war, especially I.G. Farben and Thysssen A.G. This was done to protect assets from confiscation by the Allies. In 1978, these two banks would create UBS-DB Corporation, an American firm. It would later become Atlantic Capital Corporation (wholly owned by the Deutsche Bank), and continue to help UBS customers place investments in the U.S. UBS was one of the few banks used by the Germans during WWII to launder and hold “holocaust victim gold” as well as the stolen treasuries of Europe, including gold reserves from France and Czechoslovakia. At the time the Nazis stole the French treasury, the gold holdings of France were reported to be greater than the combined holdings of Fort Knox and the Bank of England. It is often reported that most of the Nazi gold treasury was recovered by the allies and redistributed, as per agreement, to the countries from which it had been stolen. “At the end of the war, total gold deposited at the Reichsbank amounted to RM655.4 million valued at the official price of RM2,784 per kilo. In February-March 1945, most of these stocks were transferred to the Merker’s salt mine in Thuringia. This gold was confiscated by Eisenhower’s army in April THE SEPTEMBER 11 COMMISSION REPORT Page 245 1945. It was redistributed later to countries whose own gold stocks had been taken over by the Third Reich.” [David Marsh, The Bundesbank: The Bank that Rules Europe, Mandarin Press, 1992, p300.] In actuality, very little of the gold was ever returned, and is reported to have been kept by UBS. “In 1940, the gold reserves of the Banque de France by far exceeded the combined reserves of Fort Knox and the Bank of England. The Nazis stole the entire French reserves before the end of 1940, and much of it ended up in Swiss vaults. After WW2, the Swiss Government came visibly under pressure from the Allies and consented to various demands, including the turning over some SFR 250 mio worth of Nazi gold to the United States. According to findings by the Swiss historian Werner Rings, much of this gold was of French origin (foundry markings). Not only are the circumstances and conditions murky, but it is also still far from clear how much French gold was returned to France, how much found its way to the American reserves, and how much was turned into "Swiss gold". Interestingly, some European historians suspect that several parts of the U.S. and other Allied governments participated in the post-war disappearance of Jewish and non-Jewish assets confiscated by the Nazis.” [Observations concerning the Memorandum of Understanding (MOU) between the World Jewish Congress et al. and the Swiss Bankers Association signed May 2 1996 in New York, by anonymous, 5/25/1996 ] “…the Kennedy Administration, in 1963, found it opportune and possible to lend a helpful hand for UBS to become Switzerland's biggest bank by almost doubling its equity overnight with confiscated Nazi assets.” [Who Wants To Sack Heidyland? Anton Keller, Secretary, Philip Wainwright, Legal Adviser Swiss Investors Protection Association, Geneva - e-mail: [email protected], 1/1/1998] After the war, the Swiss banks took elaborate measures to ‘hide’ the Nazi gold and prevent confiscation by the Allies. Although the Allies were able to seize some, the actual amount deposited by the Nazi government and German industrialists could not be ascertained. The ‘undiscovered’ gold in the banks would be the gold pursued in 1990s in international courts and world public opinion by the Jewish World Congress and Edgar Bronfman. Shortly after the war, the Swiss passed laws to ensure that they would be able to hold on to whatever the Allies did not confiscate. “The most famous case of stolen art which has occupied art historians, journalists and politicians since the 50ies is the origin of the private collection of the Swiss arms manufacturer Dieter Bührle (Oerlikon-Bührle). The Bührle dynasty has provided Germany essential weapons in both world wars. In WW2 some 80 % of all German anti-aircraft weapons and ammunition were manufactured in Switzerland [particularly by Oerlikon-Bührle], with deliveries continuing [into] 1945. For these last deliveries Germany paid with stolen art treasures, much of which collected by Feldmarschall Hermann Göring. One large and clearly identifiable Jewish collection stolen in Paris thus found its way to the Dieter Bührle collection and - due to Swiss law and practices - Mr.Bührle has been able to fend off French government-supported recovery attempts over the last 40 years. The Swiss penal code gives good title to anybody who managed to hold on to stolen art for more than 30 years. Moreover, Swiss wartime emergency legislation and postwar judgements presume good title for any asset, irrespective of criminal or non-criminal origin, acquired by Swiss citizens from Germany during the Nazi period. The only limitation seems to have been robbery committed by the Swiss acquirer himself.” [Observations concerning the Memorandum of Understanding (MOU) between the World Jewish Congress et al. and the Swiss Bankers Association signed May 2 1996 in New York, anonymous, May 25, 1996] The next great gold bonanza to get channeled to the Swiss banks was the Marcos gold. THE SEPTEMBER 11 COMMISSION REPORT Page 246 “Gary Thompson, the newspaper's former managing editor, and journalist Steve Kanigher published copies of gold certificates from Credit Suisse, deposit records from the Union Bank of Switzerland, the correspondence of Corazon Aquino and letters to Reagan administration officials documenting witness accounts that … the CIA and Army Special Forces carted off an unknown quantity of the bullion.” [Iran-Contra Connections to the Oklahoma Bombing, gathered by Alex Constantine © 2000 Alex Constantine. All rights reserved] In both instances of the holocaust victim and Philippine gold, the Swiss banks adamantly resisted years of effort by the governments of Israel and the Philippines to have the gold returned to its rightful owners. Interestingly, UBS and other Swiss banks reversed their position on ‘not returning’ holocaust gold to family survivors in August of 1998, after several months of negotiations with Edgar Bronfman, a co-investor of Adnan Khashoggi in Barrick Gold and President of the World Jewish Congress. Surprising, the release of the holocaust gold plays a key role in understanding why the World Trade Center was attacked on September 11. The reason the Swiss banks relinquished in this, after more than 50 years of denial was not so much a result of newly defined morality, but rather the result of pressure from U.S. investigators and lawmakers on three separate fronts, and by Swiss lawmakers on a fourth front: 1. There were claims by the Philippine government that the Marcos family had secreted away $13.4 billion of the Philippine treasury. In 1991, at the end of the Marcos presidency in the Philippines, there were a number of reports that Marcos had secreted away in UBS, large quantities of the Philippine national treasury. There are reports that these funds came from multiple sources: the looted Japanese treasury, Nazi gold money-laundering, and embezzlement of US aid. The point that has not been disputed is that regardless of the source, there was “a lot” of illegal gold and money moved to Switzerland by Marcos, with the assistance of Adnan Khashoggi. George Bush Sr., as CIA director, would also be involved in helping Marcos move bullion out of the Philippines. Investigators from the Philippines starting making claims on these funds, providing proof the funds were secreted away at the UBS, but because of the banking laws of Switzerland, the bank would never confirm to the Philippine government of President Aquino that it had the missing Philippine funds. 2. The U.S. Department of Justice, representing eight U.S. nationals that had won a lawsuit against the Marcos estate for torture and deprivation of rights, was pressing for an investigation into the Swiss accounts. A number of human rights groups took on the Marcos family in US courts for violation of human rights, and won a major, billion dollar settlement against the Marcos family. Ferdinand Marcos had died in 1989, but the judgment was levied on his estate. After losing the suit, the Marcos family claimed it did not have the resources to settle the claim. That is when the Department of Justice was brought in to investigate the accounts identified in the Swiss banks as Marcos accounts. When the possibility of the estate being hidden in UBS was exposed by the efforts of the Philippine government, the Department of Justice began an investigation. 3. The search for holocaust gold was re-activated in 1996 when newly declassified documents of the Swiss government inadvertently suggested the banks were still THE SEPTEMBER 11 COMMISSION REPORT Page 247 holding on to financial assets that belonged to holocaust victims and their families. The search erupted into a scandal in 1997, when a janitor at UBS discovered and retrieved documents being shredded that supported the claims of the holocaust victims and their families. U.S. lawmakers initiated hearings and an investigation on behalf of the U.S. families involved, which then reviewed the claims of the Philippines, as the lawmakers made a case against the Swiss banks. The product of these hearings and investigations was the Eizenstat Report and Related Issues Concerning United States and Allied Efforts to Restore Gold and their Assets Looted by Nazis During World War II, June 25, 1997, House of Representatives, Committee on Banking and Financial Services. 4. The final front was new anti-money laundering regulations which took hold in Switzerland in late 1998. This new legislation put criminal penalties on bankers who knowingly supported money-laundering activities. As state local and national lawmakers from the U.S. began to lobby in favor of sanctions against the Swiss banks as a penalty for withholding the gold, Edgar Bronfman, as the new president of the World Jewish Congress, negotiated a settlement with the banks. The contention of this report, based on the circumstances and no actual proof, is that Bronfman, as a significant owner of Barrick, which was the primary beneficiary of the Khashoggi - conceived gold laundering operation and connections to the German bank cartel, went to Switzerland to establish a settlement that would stop the investigation, and prevent further disclosure of the true assets being held in accounts at UBS. This report alleges that the threat posed by the three sets of claimants was that allowing investigators into the accounts of Marcos and the transfers from the Deutschebank, the true magnitude of the holdings would be disclosed, additional transfers out of those accounts would be traced, and the whole gold laundering operation would be unraveled. Further investigation would have resulted in having the Department of Justice pursuing assets into accounts that moved gold into or through Barrick for laundering. With the exposure of more that one laundering operation, the entire operation would come undone. The inevitable question should be: If Bronfman convinced the Swiss bankers to hand over roughly $8 billion ($1.25 billion to the holocaust victims, $ 4.6 to the Philippine government, and another $2 billion to the 8 U.S. victims of the torture suit) compared to less than the $1 billion they were originally planning on paying ($185 million to the holocaust victims and $800 million to the Philippine government)- what did the UBS get in return? Was the question: could Bronfman satisfactorily bring to end investigative pressure on the Swiss banks? Did Bronfman turn to his long-time partner of twenty years -Adnan Khashoggi (whose name was attached to most of these investigations) – and ask if he could “fix” a solution? There was another complicating factor in bringing closure to the “bullion” issues. The Swiss and Deutschebank knew that resolving the Holocaust and Marcos gold disputes was not the end of the pressure on the banks. There were three more open investigations: THE SEPTEMBER 11 COMMISSION REPORT Page 248 · In 1998, Russian investigators traced a $300,000 ransom payment from the Bank of New York, which opened up the Bank of New York/Russian Mafiya bank scandal. This scandal would later be shown to be connected to the Swiss banks and the Deutsche Bank. “The plundering exemplified in the BNY case is of an immense magnitude, particularly in its relation to the size of the Russian economy. One analyst estimated that the $10 billion allegedly laundered over the past year constitutes fully 6 percent of the Russian gross domestic product, and 40 percent of the Russian federal government's budget. And this is only the sum that may have passed through one channel over one year. An article in Saturday's Financial Times of London cited a report prepared by Fitch IBCA, an international credit rating agency, that estimated a total of $136 billion was taken out of all of Russia between 1993 and 1998. Another estimate, provided in Lloyd's article for the Times, puts the total in the neighborhood of $200-500 billion. Though the exact figure has not been determined, this vast sum not only lined the pockets of the new Russian kleptocracy, but also flowed into the coffers of US and European financial institutions. (The BNY case may well involve a number of major European banks. On Tuesday, the Wall Street Journal, citing sources familiar with the investigation, said that Credit Suisse, Union Bank of Switzerland (UBS), Dresdner Bank, Westdeutsche Landesbank and Banque Internacionale of Luxembourg are being scrutinized for their role in the matter.)” [Bank of New York probe exposes ties between Western financiers and Russian Mafia, World Socialist Website, James Brookfield, 8/27/ 1999] It is of significant note that two primary owner-investors in two of the key banks involved in the Russian money laundering scandal were Bruce Rappaport, a Swiss- Israeli banker who was involved with Khashoggi and George Bush Sr. in the Iran- Contra, October Surprise and BCCI scandals, and Dr. Alfred Hartmann. “…what has never been identified in a single major Western press investigation was that the Rothschild group was at the heart of the vast illegal web of BCCI. The key figure was Dr. Alfred Hartmann, the managing director of the BCCI Swiss subsidiary, Banque de Commerce et de Placement SA; at the same time, he ran the Zurich Rothschild Bank AG, and sat in London as a member of the board of N.M. Rothschild and Sons, Hartmann was also a business partner of Helmut Raiser, friend of de Picciotto, and linked to Nordex. Hartmann was also chairman of the Swiss affiliate of the Italian BNL bank, which was implicated in the Bush administration illegal transfers to Iraq prior to the 1990 Iraqi invasion of Kuwait. The Atlanta branch of BNL, with the knowledge of George Bush when he was vice president, conduited funds to Helmut Raiser's Zug, Switzerland company, Consen, for development of the CondorII missile program by Iraq, Egypt, and Argentina, during the Iran-Iraq War. Hartmann was vice-chairman of another secretive private Geneva bank, the Bank of NY-Inter-Maritime Bank, a bank whose chairman, Bruce Rappaport, was one of the illegal financial conduits for Col. Oliver North's Contra drugs-for-weapons network during the late 1980. North also used the BCCI as one of his preferred banks to hide his illegal funds.” [The Secret Financial Network Behind "Wizard" George Soros, William Engdahl, EIR Investigation Executive Intelligence Review (EIR), November 1, 1996] Another key player already linked to the Bank of New York/Russian Mafiya money laundering scandal was Jonathon Bush and his invlovement with Valmet SA, A thorough investigation into these Swiss accounts probably would have uncovered links involving Richard Cheney, and Marc Rich, amongst others, to the Nigerian and Angolan oil scandals, in which dollars flowed from the U.S. to Russia. (See Section 4.8. A relevant note on this point, it is reported that Richard Cheney’s Chief-of Staff was Scooter Libby, formerly known as Liebowitz. Prior to becoming Cheney’s singular most THE SEPTEMBER 11 COMMISSION REPORT Page 249 powerful advisor, he was Marc Rich’s US lawyer for fifteen years, and a signer of the famous neo-conservative document which identified the need for a new “Pearl Harbor” to bring America into a new era of unilateral domination by use of force.) Additional investigations that might have exposed this network of accounts included: · In 2000, Reginald Howe introduced his GATA lawsuit, naming the Deutschebank as a key party to the gold price-fixing lawsuit, prompting an investigation by the FBI into Swiss and Deutschebank gold trading accounts. The FBI records for this investigation were co-located with records to the Giffen/Mobil Oil investigation, which may or may not be meaningful. · In the Fall of 1997, The UK courts began inquiries into claims about the Kazakhstan breach of contract claim made by Farhat Tabbah against James Giffen, which opened a Pandora’s box on illegal bribes. (See Section 4.7 for more detail.) Shortly thereafter, the investigation spilled over to Switzerland (1999), and then to the U.S. courts (2000). “In the fall of 1997, an international businessman named Farhat Tabbah filed suit in London against three American businessmen, the oil minister of Kazakhstan, and a subsidiary of the Mobil Corporation.” [The Price of Oil; What was Mobil up to in Kazakhstan and Russia? Semour M. Hersh, New Yorker (Magazine), 7/9/2001 Pp. 48-65] “Switzerland first launched investigations earlier, in 1999, during which time it froze over 12 Kazakh bank accounts, upon suspicions of money laundering. When the Kazakh government tried to lean on the Swiss to back off, the Swiss responded by sending the US Department of Justice documents from the case.” [From Angola to Kazakhstan: How to Cure Corruption in Oil Rich States, by Jonathan Reingold, 5/14/04, The Upside Down World news] “Kazhegeldin said that Swiss regulators informed the US authorities last year that "substantial amounts of money belonging to certain prominent US oil companies, including Amoco Kazakhstan Petroleum Company, Amoco Kazakhstan Inc, Mobil Oil Corp and Phillips Petroleum Kazakhstan Inc" were transferred to a Swiss bank account controlled by Kazak government advisor James Giffen between 1997 and 1998.” [Ex-Kazakhstan premier says US firms' oil fees diverted to ministers, Interview with Akezhan Kazhegeldin, Justin Cole, AFX, 17 July 2001] Only the Swiss bankers would have seen these investigations unfolding in such a way that would find them involved and potentially guilty under new Swiss laws. “In March 1998, the Swiss Federal Banking Commission (SFBC) adopted modified Guidelines concerning the prevention and combating of money laundering which came into force on 1 July 1998 (Circ. 98/1) to bring them into line with the new Money Laundering Act ” The Barrick-Bank Cartel Connection The relationship between Enron, Cheney, Bush and U.S. intelligence has already been presented. The relationship between U.S. intelligence and UBS goes back for 60 years. Since WWII, UBS, notably stands out as part of a mix of Swiss banks heavily involved with the U.S. Intelligence community, far removed from Congressional oversight: THE SEPTEMBER 11 COMMISSION REPORT Page 250 “Various Swiss banking scandals have brought to the surface the tip of the iceberg of long-standing post-WW2 links between the 3 big Swiss banks and the American intelligence community. Some of these links - notably that with the Union Bank of Switzerland - seem to have their origins in the U.S. exploitation of the cavalier treatment of Jewish pre-WW2 deposits. The outgrowth of these cancers is manifest in the BCCI affair (over-lapping directorship of Dr. Alfred Hartmann), in the SASEA affair and in the Shakarchi affair which was not only admitted, by the U.S. Embassy in Berne, as a CIA affair, but even brought down Switzerland's Minister of Justice Elisabeth Kopp. Another CIA link was amply documented in the case of Colonel North and other U.S. officials operating through the Credit Swiss which was found to have been blackmailed by the intelligence community since the fourties.” [OBSERVATIONS concerning the Memorandum of Understanding (MOU) between the World Jewish Congress et al. and the Swiss Bankers Association signed May 2 1996 in New York , by anonymous, May 25, 1996 ] The interplay of Barrick, the Bank Cartel and the Oil Cartel crisscross in a manner that strongly suggests ongoing partnership rather than coincidence. There are three pieces of evidence that identify a linkage between the management/ownership of Barrick, the Oil Cartel and the German Bank Cartel. Like Catherine Fitts, this report finds the individuals involved in planning, executing and covering the WTC attack to be the same as those involved in Barrick and covert oil operations in Central Asia. 1. Of first note, the Houston office building that housed both Enron and Halliburton corporate headquarters was owned by Trizec Hahn. As earlier discussed, Trizec Hahn was a merger of Peter Munk’s (Barrick Gold) and the Canadian Bronfman family: “Barrick was controlled by Peter Munk, who was set up as chairman, he claimed, by Adnan Khashoggi who owned the company stock. Until recently the entire section of office buildings in downtown Houston where Enron and Halliburton (through its subsidiary, Dresser Industries) leased space was owned by TrizecHahn. The acquisition of this real estate was accomplished in a manner similar to the way Lonrho acquired Hondo--debentures, secured by stock options, not repaid. Munk had merged his company with Trizec, a company created by William Zeckendorf and a syndicate composed of Hill Erlanger of Boston and a branch of the Canadian Bronfman family.” [Follow the Yellow Brick Road: From Harvard to Enron, Part One, Linda Minor, Newsmakingnews.com, © 2002] This may seem trivial at first glance, but the CEO’s of both companies (Kenneth Lay and Dick Cheney are close associates of the Bush family, whose relationship to the founder of Barrick– Adnan Khashoggi – are extensive and stretched over at least two decades. 2. Barrick is also directly linked to UBS and the German bank cartel, through use of it’s subsidiary gold refinery: Argor-Heraeus S.A. Owership of this refinery was transferred from UBS to Commerzbank, also part of the German bank cartel in 1999. “Barrick's gold is refined to market delivery standards by MKS Finance S.A. in Switzerland and Argor-Heraeus S.A. also in Switzerland (Goldstrike production)” “1999: UBS announces the selling of its 75% position in the Argor-Heraeus SA to W.C Heraeus, Hanau, Germany, which already has a 25% stake in the UBS subsidiary. Argor-Heraeus in Mendrisio, Switzerland, operates in the precious metal processing business, mainly gold (March 11). (UBS web site)” THE SEPTEMBER 11 COMMISSION REPORT Page 251 “London--Apr 29/99--Germany's Commerzbank has acquired a 35% interest in Argor-Heraeus SA, a Swiss gold refinery with an annual refining capacity of 400 tonnes and a production capacity for cast ingots of 2.5 million per year. "The acquisition has made Commerzbank into one of the few banks worldwide which are directly involved not only in precious metals trading but also in purchasing unmarketable physical gold, thus covering the whole spectrum of preciousmetals transactions," a press release issued today said.” 3. Barrick is linked closely to the Banking Cartel through, one of the most longest members of the Advisory Board - Karl Otto Pohl, former President of the German central bank (Bundesbank) and chief officer of the International Bank of Settlements and IMF. Also on the Barrick Board was former Canadian Deutschebank executive Tye W. Burt - the former Chairman of Deutsche Bank Canada and Deutsche Bank Alex Brown Securities Canada, and Managing Director and Head of Deutsche Bank’s Global Metals and Mining Group. Burt was involved when the Canadian Deutschebank backed Khashoggi in the MJK Securities fraud. Burt left the bank shortly after the fraud was discovered. Note also, two of the initial big investors in Barrick – Khashoggi and Bronfman – used the same personal financial advisor: Mayo Shattuck of the Deutschebank Alex Brown. Mayo Shattuck was the chief assistant to Buzzy Krongard when he worked at Deutschebank Alex Brown. Both, through their executive roles at Deutschebank Alex Brown were in a position to be familiar with the Khashoggi/Marcos gold deposits at that Bank. Remember that Krongard managed the merger between Bankers Trust and Deutschebank Alex Brown, and that Banker’s Trust is the bank that received significant amounts of the Marcos gold with the assistance of Khashoggi. 4. The Deutsche Bank was identified as a major gold trading partner with Barrick in both the Blanchard and Howe law suits. 5. Enron - an energy trading company - had created a gold bullion and gold derivatives trading operation. When Enron went bankrupt, Enron On-Line was bought by UBS. A competitive market for trading energy and gold bullion was set-up by former Deutschebank executive Mayo Shattuck as new CEO at Constellation Energy, using former Enron employees. These five points suggest that if it doesn’t exist already, there exists the potential for a cozy relationship between the US oil cartel, the German Banking cartel and Barrick. THE SEPTEMBER 11 COMMISSION REPORT Page 252 10 Reunion: Iran-Contra Scandal and October Surprise It is difficult to understand the personal relationships which unite those who had motive and opportunity for the bombing of the World Trade Center, and the cover-up of their involvement, without understanding the events of the early 1980s known as the Iran- Contra scandal and the October Surprise. This section of the report is meant to provide that understanding. It is a story about how a number of individuals defied the will of the American public to provide weapons to brutal dictators, influenced the American presidential election by killing American soldiers, supported the South American drug trade, and pocketed hefty profits - all in the name of “patriotism.” There are a series of events which initiated the illicit trade of Israeli weapons sent to Iran and the Nicaraguan Contras, in exchange for CIA sponsored drug money, funneled through the BCCI over a period of years. The first of these events was a series of three meetings meant to prevent the “October Surprise” – the rumored release of 52 American hostages by the government of Iran in October, 1980 as a display of cooperation with the Carter Administration. Bush and Reagan, in their campaign against Carter, feared the an October release of the hostages would provide Carter with a burst of popularity adequate to win the election. The “October Surprise” story is one of George Bush preventing the release of hostages as means of helping ensure that he and Reagan won the election. The Iran Contra scandal began with a group of U.S. and Israeli intelligence operatives attempting to remove the Shiite Iranian government of the Ayatollah Khomeini, and replace it with a more moderate and friendly regime. The Israelis had already begun a covert program of selling weapons to Iran to counter what they believed was a more immediate threat of Iraq, but President Carter attempted to halt that program. “Late July: A clandestine meeting between American and Iranian officials takes place in Hamburg, Germany. Former CIA operative Larry Kolb, present at the meeting, says it will become one of the most "investigated, reinvestigated...misreported, misunderstood, and infamous" meetings in American foreign policy history. The purpose seems to be part of an attempt to either destabilize the radical Shi'ite government of the Ayatollah Khomeini, or to plan for a more moderate, US-friendly regime to follow Khomeini. Some of the participants include businessman and Saudi operative Adnan Khashoggi, Iranian arms dealer and SAVAK member Manucher Ghorbanifar, CIA operatives Kolb and Miles Copeland, NSC consultant and hardline neoconservative Michael Ledeen, Israeli Foreign Minister and intelligence head David Kimche, Israeli arms dealer Al Schwimmer, former Israeli military attache to Teheran Jacob Nimrodi, and Hassan Karrubi, a confidante of Iranian moderate Ali Akbar Hashemi-Rafsanjani. Karrubi proposes that the US, in contradiction to its arms embargo against Iran, agree to sell Iran a variety of aircraft parts and TOW missiles in return for Khomeini toning down his opposition to US influence in Iran, along with an agreement to broker the release of the four remaining American hostages in Beirut and a decrease in Iranian support of terrorism. (Hostage Benjamin Weir will later be released, apparently as a resut of the meeting.) Khashoggi says that, to avoid any trail of arms deals from the US to Iran, that the deal be brokered through Israel The Israelis initiated arms shipments to Iran as a counter to Iraq. When President Jimmy Carter ordered a halt to the Israeli weapons sales the Israelis may have set up the October Paris meeting that William Casey, Donald Gregg and George Bush allegedly attended in 1980.” [Did Bush go to Paris?, Harry V. Martin, Copyright, Napa Sentinel, 1991, Last in an Ten Part Series] THE SEPTEMBER 11 COMMISSION REPORT Page 253 President Carter did initiate a rescue attempt of the hostages, which failed when the helicopters carrying the rescue teams crashed in the desert. Later, it would be rumored that the rescue attempt was sabotaged: “Reports that have surfaced from the intelligence community indicate that the rescue attempt may have been sabotaged…” [Hostage deal, Inslaw cases connected in Congressional probe, Harry V. Martin, Copyright, Napa Sentinel 1991 ] In asking who may have sabotaged the attempt to rescue 52 American citizens, Barbara Honnegger, former Whitehouse staff in the Reagan administration suggested it was some of the same people that planned and executed the October Surprise and the Iran-Contra deals. “Honegger: ... and then of course we have Richard Secord, Oliver North and Albert Hakim. Richard Secord was one of the chief planners for the so- called failed Desert 1 rescue attempt, North was involved in that rescue attempt, in the mother ship, which was on the Turkish border awaiting the cue from Secord to fly in and rescue the hostages, and Albert Hakim was in charge of the ground operations of the rescue attempt, in particular, obtaining the trucks and other vehicles which were going to be needed. Hakim skipped town, left Tehran 24 hours before the rescue was to take place, and the reason for that, as detailed in my research documentation, was that Secord, North and Hakimhad no intention of seeing Desert 1 carry through, and so sabotaged the operation.” The sabotage of the rescue attempt, as was the October Surprise, was part of a bigger effort to prevent the re-election of Jimmy Carter and place Ronald Reagan in the Presidency. “Richard Wirthlin, the pollster for the Reagan-Bush campaign, said that if the hostages were released before the election Carter would gain a boost of 5 or 6 percentage points in the polls, or even as much as 10 percent, giving him a sure victory for that election.” [Hostage deal, Inslaw cases connected in Congressional probe, Harry V. Martin,Copyright, Napa Sentinel 1991 ] “What is also known, is that the Carter Administration, according to Gary Sick, was on the verge of obtaining the release of the hostages in October 1980, which probably would have assured his reelection. After the date that Bush allegedly went to Paris, the negotiations with the Iranians collapsed.” There were two subsequent clandestine meetings, one at L'Enfant Plaza Hotel in Washington, D.C, and a second in Paris. During these meetings, a number of American, Israeli and Iranian officials and arms dealers negotiated and executed the prevention of an “October Surprise” release of the hostages by Iran. Harry Martin has best related the account: “The Israelis, because of their role of mediator between the United States and Iran and also as the deliverers of U.S. weapons to Iran after the conclusion of the meetings, are believed to have arranged the meetings in the first place.” “Russbacher (CIA operative and one of the pilots of the plane that took Bush to Paris) states that Bush, while in Paris, met with Hashemi Rafsanjani, the second in command to the Ayatollah and now the president of Iran, and Adnan Khashoggi, a Saudi Arabian businessman who was extremely powerful. Arrangements were apparently made to pay Iran $40 million to delay the release of hostages in order to THE SEPTEMBER 11 COMMISSION REPORT Page 254 thwart President Jimmy Carter's re-election bid. The $40 million was the beginning of terms that created the Iran-Contra scandal that is now being reopened by Congress.” “A total of $40 million was transferred from a Mexican account and Bush presented a draft of the transfer to the Iranians. Within six weeks after Ronald Reagan was inaugurated, covert shipments of arms were sent to Iran. When the shipments were discovered around 1985, it became known as the Iran-Contra scandal….” “Strangely enough, Bush made no public appearances during that time, three week's before the election, and has yet to prove where he was during the "missing" 21 hours. According to the pilot, Bush only stayed a few hours in Paris and was flown back to the United States. On October 21, the Iranians changed their entire negotiating position with the Carter Administration, the results of a completed deal with the Republicans.” “Right after the alleged Paris meeting, the Iranians not only backed away from negotiations with the Carter administration for the release of hostages, but they also dispersed the hostages throughout Iran to prevent a second rescue attempt, a rescue attempt that was apparently leaked to them from the Reagan campaign headquarters and probably by Richard Allen. … Moments after Ronald Reagan became President, the hostages were released. Within weeks, shipments of military equipment and spare parts were flown to Iran. Mossad agents have testified to the Iran weapons deal. The French have memos about the plan. The former President of Iran confirms the Republican-Iranian deal to delay the release of the hostages, and even former President Jimmy Carter, who had preferred to remain silent, has come forward to indicate that Gregg was a mole and was possibly responsible for the October Surprise. Gregg worked for Bush when Bush was head of the CIA.” [Did Bush go to Paris?, Harry V. Martin, Copyright, Napa Sentinel, 1991, Last in an Ten Part Series] As events unfolded over time, it was George Bush Sr. who advocated a more pro-Arab policy, which in turn, irritated the Israelis, who now had the ability to blackmail the Bush family at whim. “But once the Reagan-Bush team came to power, Bush began to push a pro-Arab position within the government, or, in essence, a pro-oil position. This irritated the Israelis and they felt the United States was beginning to betray them. Israel made a deal with the Soviet Union for closer relationships and also sought more Soviet Jews for immigration, thus keeping the Likud Party in power. Israeli agents are the ones who broke the story of the Iran-Contra scandal in a Lebanese newspaper, as retaliation against Bush. It is also the Israelis who witnessed arms deals, including the transfer of INSLAW's PROMIS software, in a Chilian meeting. The same names, Dr. Earl Brian and Donald Greggs come up in those testimonies.” [Bush Made Deal With Iranians, Pilot Says, Harry V. Martin, Copyright FreeAmerica and Harry V. Martin, 1995] “If the Paris meeting did take place, the Israeli government may have been able to blackmail the Reagan and Bush administrations. Richard Curtiss writes in the Washington Report on Middle East Affairs, "Whenever the Reagan administration and the hard-line Israeli governments of Menachem Begin and his successors went eyeball-to-eyeball, it was always the U.S. that blinked. The U.S. declined to press Begin on such topics as the Golan Heights, East Jerusalem, the invasion of Lebanon, the occupation of West Beirut, the Sabra-Shatila massacres, and even the Reagan Plan for Middle East peace. The Reagan administration apparently was vulnerable to highly damaging Israeli blackmail, and at least some top officials of both governments knew it." He adds, "It also explains how and why the Reagan administration so easily fell into the catastrophic series of arms-for-hostages blunders, clearly instigated as well as carried out by Israel, that became known as Irangate, or the Iran-Contra scandal. The renewed arms shipments in 1985 and 1986 were initiated by reopening exactly the same channels used in 1980 and 1981 by some of the same principals on both sides." [Did Bush go to Paris?, Harry V. Martin, Copyright, Napa Sentinel, 1991, Last in an Ten Part Series] THE SEPTEMBER 11 COMMISSION REPORT Page 255 The entire Iran-Contra affair fell apart and became public when the Nicaraguan government shot down a U.S. plane carrying weapons to the Contra rebels, and captured the U.S. pilot. The discovery of these shipments - a violation of U.S. law - initiated a series of Congressional investigations and an investigation by an Independent Counsel. The meetings held to prevent an October Surprise were never mentioned, and the two pilots who flew Bush to Paris were immediately imprisoned and discredited when they sought to testify in front of Congress. A court would later find the charges against the pilots to be without support, but their testimony had been blocked. “Gunther Russbacher.. claimed to have videotape proof and sixteen witnesses to his having flown George Bush to one of the October Surprise meetings.” [The Death of my Friend and Investigator of Government Corruption Paul Wilcher, Sarah McClendon, Sarah McClendon’s Washington Report, July 4, 1993] Ari Ben-Menashe a major Israeli coordinator of these deals, would also testify that he had personally seen George HW Bush at the Paris meeting “ In June, I also testified under oath, in closed session, before the Senate Foreign Relations committee. I stated unequivocally that I had, seen Bush in Paris.” [Ari Ben-Menashe. Profits of War, Inside the Secret U.S.-Israeli Arms Network, Sheridan Square Press, 1992, p344.] According to Ari Ben-Menashe, a major Israeli coordinator of these deals, four of the five supply chains set up to arm Iran were never investigated, and continued to operate right through the Congressional Hearings on Iran Contra. “…Tower knew perfectly well there was an ongoing arms channel. Yet the Tower Commission made no mention of it. In February 1987, while Tower was investigating a minor part of the sales to Iran, the Joint Israel-Iran Committee, together with Robert Gates, ran the biggest ever arms supply operation to Iran. The official inquiry was better than any smokescreen we…could have dreamed up.” [Ari Ben-Menashe. Profits of War, Inside the Secret U.S.-Israeli Arms Network, Sheridan Square Press, 1992, p191.] There were a few indictments and convictions as a result of the Iran-Contra affair, but generally those involved were exonerated. Bush later pardoned the few lower level government officials that were indicted and convicted. Dick Cheney was one of the Congressional committee members that decided that no crimes had been committed, and Bush was not involved. Extensive reporting on this very successful operation to deceive the American public and to implement a foreign policy which can only be defined as “Bush’s personal foreign policy,” has provided some additional insights into additional aspects of the operation, which only become meaningful when considered over a greater time period. Involved in the background of Iran Contra and the October Surprise this report finds the same individuals showing up in the activities surrounding the destruction of the World Trade Center: Gaith Pharon (very heavily involved in managing the Bush family investments) and BCCI: THE SEPTEMBER 11 COMMISSION REPORT Page 256 “BCCI also served as a conduit for the Iran-Contra operation, largely through Gaith Pharon, former head of Saudi Intelligence, who operated out of Islamabad, Pakistan. The Saudis played a major role in funding the Mujahadeen and [via the request of Secord and McFarlane] the Contras.” [Iran-Contra Connections to the Oklahoma Bombing , gathered by Alex Constantine © 2000 Alex Constantine. All rights reserved] Oliver North trying to use Marcos gold to finance the Contras: “In 1985, [Oliver North] attempted to sell 44 tons of Marcos bullion, worth $465 million, on the black market. He blithely suggested skimming $5 million to finance the Nicaraguan contra war, but the deal fell through when North, true to form, stiffed the Israeli middlemen on the Marcos payroll. Tapes and documents implicating American officials in the gold transfers were withheld from the Iran-contra committee by Major General Colin Powell, Defense Secretary Caspar Weinberger and William Odom, director of the NSA. "It wasn't so much the mention of gold that concerned them," say Thompson and Kanigher. "It was Marcos talking (on tape) about contributions to U.S. presidential campaigns and the use of the gold proceeds to fund illegal arms deals." [Iran-Contra Connections to the Oklahoma Bombing , by Alex Constantine © 2000 Alex Constantine. All rights reserved] Richard Armitage later becoming a consultant of Unocal; coordinating Al Qaeda in Azerbaijan and Pakistan, and dispersing cash to the Russian KGB in 1991: “Deputy Defense Secretary Richard Armitage is another Iran-contra conspirator who worked for Unocal.” [ONLINE JOURNAL™ www.onlinejournal.comSpecial Report Saudis, Enron money helped pay for US rigged election,Wayne Madsen Online Journal Contributing Writer 11/25/2004] Congressmen Cheney and Scowcraft directing committees to find Bush “not involved” in the Iran-Contra scandal, and later being incorporated into the Central Asian deals: “The Tower Commission was appointed to investigate the Iran-Contra affair, chaired by Texas Senator, John Tower. This is the same John Tower who, according to CIA man Gunthar Russbacher, was on the plane with Bush when he flew to Paris for the October Surprise meeting with the Iranians! …Also on the Tower Commission was Brent Scowcroft a Kissinger 'yes man' and an executive of Kissinger Associates; and Ed Muskie, … Muskie was himself implicated in both the October Surprise and Iran-Contra.… Bush appointed Brent Scowcroft as his National Security Advisor. The Senate refused to accept Tower's appointment (as Secretary of Defense) and he began to speak of the injustice he believed had been done to him. He died in a plane crash on April 5th, 1991. When the Senate turned down Tower, a decision Bush probably engineered, he selected Dick Cheney as defense secretary. Cheney was the senior Republican member of another committee which cleared Bush of involvement in Iran-Contra, the House Select Committee to Investigate Covert Arms Transactions with Iran.” [ “and the truth shall set you free”, David Icke] Farhad Azima in the 1990’s not only running freight airlines in Azerbaijan and Central Asia, but having his airlines involved in moving Mujahadin merecenaries in and out of the Chechnyan conflict. A number of alleged hijackers would be connected with that conflict. Additionally, Azima would become friends and co-investor with Wally Hilliard, who would later be a financier in Huffman Aviation, where a number of 9/11 hijackers trained. Congressman Porter Goss involved with Iran-Contra activities. Goss was the Chairman of the House Select Committee on Intelligence who met with Mahmoud Ahmad, the head of Pakistani Intelligence (ISI) who sent $100,000 to Mohammed Atta. Goss is reported to have met with Ahmad both shortly before and after the 9-11 attacks. THE SEPTEMBER 11 COMMISSION REPORT Page 257 “Porter Goss was a young CIA officer assigned to JM/WAVE. Goss had, by his own accounts, been recruited to the CIA while in his third year at Yale University. His two years of military service were, in all likelihood, actually CIA assignments. In 1961, Goss was officially brought into the CIA and sent to JM/WAVE. He later would continue to participate in the anti-Castro operations, based out of CIA stations in Haiti, the Dominican Republic, and Mexico. Later, Goss was sent to London and then Paris, where he was involved in the infiltration of labor organizations, until he developed a near-fatal infection and was forced, officially, to retire from the spy world. In his role in JM/WAVE, Goss served with some of the CIA's most hardened Cold Warriors, including Miami Station Chief Theodore G. Shackley, later a central figure in the Iran/Contra debacle; (and) Felix Rodriguez, another leading Iran-Contra player;….” [The Coming Senate Battle: Open the Porter Goss File Part 1,Jeffrey Steinberg, Michele Steinberg and Scott Thompson, Executive Intelligence Review September 3, 2004] “According to Al Martin, in 1983 Goss was involved in Iran-Contra profiteering with Jeb and Neil Bush’s Destin Country Club development fraud – a fraud out of which he made about $3 million illegally. He then became involved with Carlos Cardoen and Swissco Management, and the fraud that Swissco Management committed, not only in Florida, but throughout the United States, in those socalled illicit 'tax-swap deals,' which Senator Bob Graham of Florida also profited in.” [Prime Suspect of the Largest Mass Murder in U.S. Nominated to Head C.I.A., Carol Brouillet, Fourth of July, 2004 ] “Chalmers is a longtime denizen of the Labyrinth. In the mid-1980s, he joined up with Chilean gunrunner Carlos Cardoen, the Financial Times reported. Cardoen was a CIA frontman used by Presidents Ronald Reagan and Bush I to funnel cluster bombs and other weapons secretly to Saddam Hussein during the Iran-Iraq War.” [UN oil for food scandal, Global Eye, Gut Check, Chris Floyd, April 22, 2005] Bankers (Dr. Alfred Hartmann and Bruce Rappaport) and lawyers (Willard Zucker and Kenneth Bialkin) involved in financing this illegal trade and laundering money through Swiss accounts to be the same individuals who manage funds for the Bin Laden and Mahfouz families, and having corporate pilots for SICO (Saudi Investment Company) being trained at Huffman Aviation along with known 9/11 hijackers. “(Dr. Alfred) Hartmann was also chairman of the Swiss affiliate of the Italian BNL bank, which was implicated in the Bush administration illegal transfers to Iraq prior to the 1990 Iraqi invasion of Kuwait. The Atlanta branch of BNL, with the knowledge of George Bush when he was vice president, conduited funds to Helmut Raiser's Zug, Switzerland company, Consen, for development of the CondorII missile program by Iraq, Egypt, and Argentina, during the Iran-Iraq War. Hartmann was vice-chairman of another secretive private Geneva bank, the Bank of NY-Inter-Maritime Bank, a bank whose chairman, Bruce Rappaport, was one of the illegal financial conduits for Col. Oliver North's Contra drugs-for-weapons network during the late 1980. North also used the BCCI as one of his preferred banks to hide his illegal funds.” [The Secret Financial Network Behind "Wizard" George Soros, William Engdahl , EIR Investigation Executive Intelligence Review (EIR), November 1, 1996] “Kenneth Bialkin, the attorney for Saudi billionaire Adnan Khashoggi, whose money purchased arms for Iran via the good offices of Col. Oliver North, as part of the arms-for-hostages negotiations; Willard Zucker, who ran the Lake Resources front company in Geneva, Switzerland, which laundered the Iranian arms profits to the Contras; Edmond Safra, who, with Willard Zucker, owned the corporate jets used by Oliver North and National Security Advisor Robert MacFarland in traveling to secret conferences in Iran.” [The Hour of the Time,Tape No. 480,: "ADL #7"November 10, 1994] “Charles Rochat and Baudoin Dunand—two SICO directors—liquidated some financial entities in early 2001 in partnership with Willard Zucker, one of Oliver North’s cronies in the Iran-Contra machinations. SICO trained pilots for its aviation subsidiary at tiny Huffman Aviation in Venice Florida. (Huffman was the school through which Mohamed Atta and several of the 9/11 hijackers infiltrated the United States.)” [ http://www.spitfirelist.com/f498.html] The bin Laden family: THE SEPTEMBER 11 COMMISSION REPORT Page 258 October 1980: Salem bin Laden, Osama’s eldest brother, is later described by a French secret intelligence report as one of the two closest friends of Saudi Arabia’s King Fahd. As such, he often performs important missions for Saudi Arabia. The French report speculates that he is somehow involved in secret Paris meetings between the US and Iranian emissaries this month. Frontline, which published the French report, notes that such meetings have never been confirmed. Rumors of these meetings have been called the October Surprise and some have speculated Bush Sr. negotiated in these meetings a delay of the release of the US hostages in Iran…(PBS Frontline, 2001).” [Paul Thompson, “The Complete 9/11 Timeline: Introduction, Credits and Links (v1.7,) October 28, 2002, from Michael C Ruppert, Crossing the Rubicon, 2004, p133 New Society Publishers] 10.1 Iran-Contra Syndicate The aspects of the Iran-Contra scandal and October Surprise which are relevant to the WTC tragedy is that they demonstrate the origins of over 20 years relationships between individuals that carried though the 1990s into the twenty-first century. However, it was not just a matter of excessive political fervor as was often suggested by political commentaries and editorials. Many of these same individuals would later be demonstrated to have personal business relationships with each other, and would be reported to be involved in other activities resulting in criminal charges and laws suits. Table 8 constructs an overview of individuals who are involved in activities discussed in this report, including the Harken Energy, the Marcos gold heist, the Barrick gold trading operation, the October Surprise, Iran-Contra, BCCI, Kazakhstan-gate, Azerbaijan, and Afghanistan. What stands out is the continued involvement of several individuals of substantial notoriety, and a few banks: Table 8 Iran-Contra/Azerbaijan Individuals Banks Adnan Khashoggi UBS Union Bank of Switzerland George Bush Sr. & Jr . Deutschebank Richard Secord Credit Suisse Richard L Armitage BCCI ( later Indosuez) Farhad Azima Bank of New York. Richard Cheney Potomac Capital Inc. Porter Goss Khalid bin Mafhouz All the reports seem to suggest this group represents the core of an organized, criminal syndicate operating over a twenty year span, across the globe. As a syndicate, they probably had a great deal to hide, and much benefit to be gained by the destruction of evidence in the various investigative offices of the World Trade Center. In that respect however, they had no more - and maybe even less - incentive than the Russian Mafia, the Italian Mafia or the Columbian drug cartel. What all these syndicates had in common, THE SEPTEMBER 11 COMMISSION REPORT Page 259 besides criminal activity, is their use of these banks. The Deutschebank represented a global pipeline for money, and the UBS was the primary holding tank and refinery. Other, smaller Swiss banks were under intense investigation that involved transactions from New York and the Deutschebank, and accounts that had secreted away the treasuries of many nations – but these can be best described as the criminel nouveau riche (the New World Order), skimming a small piece- “table scraps” - from the German cartel take. Prior to 1998, the Swiss banks had never had to give up the criminal proceeds of its many customers. If it hadn’t been for a negotiated ‘deal’ by Edgar Bronfman on the Marcos and Nazi gold, independent investigators would have continued to drill down into those accounts and their audit trails. That deal, however, was not enough to shut down other investigations: the GATA lawsuit and FBI investigation, Kazakhstan-gate, Angolagate, Pakistani/CIA heroin trafficking and more. The attack on the WTC diverted the attention the entirety of the world’s largest investigative bodies, and destroyed whatever working papers they may have had. Given the evidence known today, planning for the attack started in 1998 [USA Today, 6/18/2002]. The cover story offered by the leadership of a probable criminal syndicate is that Al Qaeda orchestrated this attack, when the truth is more likely that the attack was orchestrated by a bigger, more powerful cartel that could easily blackmail the US government into support and a cover-up if it needed to do that. Finally, it is worth noting that as time passes, the Bush directed oil related activity in Central Asia may turn out to be a massive replay of the Harken Energy scam, or just a remarkably co-incidental similarity. More widely recognized as a demonstration of George Bush Jr.’s inability to manage and properly report insider trading, Harken Energy is not often given credit for being the large pump and dump scheme it was. "George Bush, Sr. and James Baker and Senator Tower would heavily short Harken stock. I have a list of everybody because I was one of them but to a much smaller extent. Harken stock was trading at 7- 3/4 or 8, when George Jr, was put in charge of it. A year later, the stock was trading at 1-1/8 bid, 3/8 offer. They pumped the stock back up through a lot of bogus press releases and by using essentially worthless leases in Bahrain and essentially worthless South American oil leases and through sympathetic geologists making them appear to be really worth something and making it appear that Harken's about to make a strike when in fact it's all made up. It's all fictitious. And through carefully crafted broker releases and broker statements and press releases, you can pump the stock back up. This has happened sixteen times to my knowledge. Harken would get pumped back up from the dead, from say a buck, buck and a half, back to seven, seven and a half, then it would get dumped again. [The Man Who Knows Too Much, An Interview with Al Martin, author of "The Conspirators: Secrets of an Iran Contra Insider" (PART 1), by Uri Dowbenko] With the success of Harken behind him, and towards the end of his Presidency, the record will show that President Bush Sr. sent trusted operatives (Secord, Armitage and Giffen) into Central Asia. They made significant inroads into bringing investment capital to the region, and building trusting relationships with the corrupt dictators that ran those countries. The record will show that key members of the Iran-Contra group controlled major information resources for this area: The Azerbaijan American Chamber of Commerce, and the Kazakhstan Oil Advisory Council. They pumped the opportunity to justify loans of billions of U.S. taxpayer dollars in the region from the Overseas Private Investment Corporation and the U.S. Export-Import Bank. This opportunity was significantly overstated by 93% to 96% according to more recent, third party estimates: THE SEPTEMBER 11 COMMISSION REPORT Page 260 “Early estimates of Caspian Sea oil reserves ranged from 115 billion to 200 billion barrels. These estimates have been rightfully viewed with scepticism as they were based on a 10 percent probability of recovery -- that is, they were considering oil that could not be recovered. Now this assessment has been severely downgraded by oil industry insiders. Speaking on April 8 in Almaty, Kazakhstan at the Eurasian Economic Summit, Gian Maria Gros-Pietro, chairman of Italy's Eni oil company, said the Caspian contains 7.8 billion barrels of oil, the Interfax news agency reported. This is confirmed by Agip’s statement in Energy Day of May 30 that the recoverable reserve potential of Kashagan is only 1.2 billion barrels. With these revisions, it is questionable whether the Caspian Sea region will ever approach the importance of the Middle East with regard to energy reserves, according to the Association for the Study of Peak Oil’s (APSO) June newsletter.” [The Forging of "Pipelineistan", Dave Allen Pfeiffer, From The Wilderness (FTW) Publications, www.copvcia.com, July 2002 ] With the price of oil being pumped to all time highs in 2005, properties in Central Asia are now being sold-off to Russian and Chinese investors. Central Asia – the world’s largest pump and dump scam! THE SEPTEMBER 11 COMMISSION REPORT Page 261 11 Whitehouse Assassins Someone in the Whitehouse was involved in the orchestration of activity of the WTC attackers. It was not President Bush, but rather someone trying to assassinate him. In the days prior to September 11, another crime was planned that would have fundamentally changed the response to the attack on the World Trade Center. That crime was the planned assassination of George W. Bush Jr. The pre-scripted response of the Secret Service to this type of claim would be that the President is always a primary target, which is undoubtedly true. However, in the days leading up to the attack on the World Trade Center, there were a series of clues suggesting an assassination was planned, by someone with inside knowledge of the President’s routine. Four assassination scenarios were planned by someone with inside knowledge – all four failed. These scenarios are intrinsically linked to the attack of the World Trade Center: same people, same techniques, and same objectives. These scenarios do not fit with a conspiracy theory that suggests President Bush was responsible the attacks. They do suggest however, that someone with inside knowledge was responsible. 11.1 Scenario 1: Threat to the Texas Whitehouse For some unknown reason, after all the warnings from foreign and domestic intelligence agencies during the summer of 2001 that an attack on America was imminent, President Bush decided to place “special” protection around his Texas ranch in the month prior to 9-11. "Former US Congresswoman Cynthia McKinney said she was disturbed about the implications that ‘24-hour fighter cover was placed over the Bush ranch in Crawford, Texas’ during his vacation there from August 4-30, 2001." [Counterpunch, 9/18/02] It’s fair to state this is not normal procedure, because this type of protection was not in place over Washington D.C., which we know to be the case, for no other reason than the fact that the Pentagon, a few miles from the Whitehouse, was hit on September 11. It is then important to ask – what changed for the President? Why the additional protection? Was the President warned he would be the target of an air attack? The coverage was started the very day of his vacation, indicating the knowledge of the attack was received prior to that time. Which mean that the attack was planned, and discovered by intelligence agencies, prior to August 4th. This then would mean that someone would have to know when and where the President was planning vacation. Also, because the attack did not occur as warned, it might be fair to surmise that the attackers were forewarned of the defensive measures taken. 11.2 Scenarios 2 and 3: Attempts at the Colony Resort Scenario 2 occurred the morning of September 11, at 6:00 AM, the hotel at which President Bush was staying, in Sarasota, Florida. As reported in the local press, the President received a visit from a “news crew.” THE SEPTEMBER 11 COMMISSION REPORT Page 262 "At about the same time Bush was getting ready for his jog, a van carrying several Middle Eastern men pulled up to the Colony's guard station. The men said they were a television news crew with a scheduled "poolside" interview with the president. They asked for a certain Secret Service agent by name. The message was relayed to a Secret Service agent inside the resort, who hadn't heard of the agent mentioned or of plans for an interview. He told the men to contact the president's public relations office in Washington, DC, and had the van turned away." [Possible Longboat terrorist incident Is it a clue or is it a coincidence? By Shay Sullivan, City Editor, The Longboat Observer, 9/26/2001] The fascinating aspect of this forgotten news is found in another event on the other side of the world, just two days prior. Ahmed Shah Massoud, leader of the Afghani resistance against the invading Soviets during the 1980s and then against the repressive Taliban regime that sheltered bin Laden, was assassinated by a suicide squad of two Tunisian operatives posing as journalists, using a bomb inside a video camera during an interview at his headquarters. Given the coincidence, one must assume the intent of the Florida news journalists was comparable to that of Tunisian journalists that assassinated Massoud. Scenario 3 was scheduled as a back-up plan. President Bush is reported to be a regular jogger. What is not widely known (but reported twice in the press), and is certainly commonly known amongst his staff, is that the President loves to jog on the beach, with about a four mile jog. A couple of miles up the beach from the Colony Resort, (and 4.28 miles by road) is the Holiday Inn, which was checked into by none other than Mohamed Atta – the accused organizer of the September 11 attack. "Just three nights before President George W Bush arrived at the swank Colony Resort on Longboat Key on the evening of Sept 10, 2001, Mohamed Atta was staying at a slightly-less tony hotel just two miles down the beach, the Holiday Inn Hotel & Suites—Longboat Key, according to eyewitnesses who contacted the FBI in the immediate aftermath of the attack." [Bush and Atta Visit Same Resort in the Hours Leading to 9-11, Daniel Hopsicker, Venice, FL, 7/29/2002] While publicly written off to coincidence by the FBI, under scrutiny this event seems more than coincidental. The location of the hotel on the same beach would have been perfect for sniper or suicide assassination while the President was reaching the half-way mark of his normal jog. The timing of Atta’s check-in is not a coincidence either. The scheduling for the tour of schools that the President was taking was deliberately left open. “Potential’ schools on the tour were not identified until August 28, and not selected until possibly September 6th. Because the date of each school’s visit was not disclosed, Atta would need to be in place at one of the schools starting the 7th. "On August 28, 2001 we got the news that Emma Booker had finished the preliminary offerings for the Presidential visit. We knew that we were on the list for a visit, and the final selection would be in a week. We were informed that we would not know the exact date because of security reasons. We were advised to "keep the news close to home."[Kathy Williams, EEB Classroom Teacher, www.sarasota.k12.fl.us/emma/9.11.01/essay.williams.htl] Bush’s visit to Emma E. Booker Elementary School in Sarasota, Florida, on September 11, 2001 had been in the planning stages since August but was only publicly announced on the morning of September 7, the same day that Attachecked into the hotel. For Atta to THE SEPTEMBER 11 COMMISSION REPORT Page 263 know the cities on the tour, much less the hotel being stayed at, and the start date, would definitely require insider knowledge. Ignoring probabilities, there are over 150 hotels in Sarasota, with possibly five that have a location on the beach where President Bush would probably take his morning jog. Atta would have had to have known, in advance, where the President was staying. He also would have needed advance knowledge of the President’s visit to arrange travel to arrive in Sarasota on the 7th and meet a co-conspirator. He would also have needed to know the President’s itinerary for the day, to have ‘coincidentally’ sent a faux news team at 6:00 AM, precisely the time the president was waking. There is too much insight into the closely guarded plans and schedule of the President to claim all this is coincidence. · Coincidence that having previously resided in Sarasota, Atta did not stay with friends. · Coincidence Atta was on the same beach as the President. · Coincidence Atta was on the President’s probable jogging course on the beach. · Coincidence that the Presidential morning routine coincided with the news team visit. · Coincidence that the timing of Atta’s arrival in Sarasota was optimal to cover the President’s just announced tour schedule. The Secret Service was aware of an active plot to assassinate the president, and were taking extra precautions. • It is public record that the Secret Service set up surface-to air missile defense on the roof of the hotel, which is not by any means a normal practice for a presidential visit. • They dissuaded President Bush from jogging on the beach, as was his intent – instead taking him to a more secure golf club. • Once the attack on the World Trade Center had occurred and the scope of the attack was apparent, the President was swept away by the Secret Service. They were in such fear, they boarded Airforce One and took off with out air protection. "… incredibly, Air Force One took off without any military fighter protection. This defies all explanation. Recall that at 9:03 a.m., one of Bush's security people said, "We're out of here. Can you get everyone ready?" [Sarasota Herald-Tribune, 9/10/02] Certainly, long before Bush left the elementary school at 9:35 a.m., arrangements would have been made to get fighters to Sarasota." Maybe there is an argument that suggests that air coverage for Air Force One was not deemed necessary because acording to some, the President knew of the plans of attack in advance, and knew he was not in danger. This, however, would imply the entire Secret Service contingent was equally aware of the plans to attack the WTC, which is a difficult assumption to grant. Something transpired between the time they left the school and reached the Airport– something that heightened their need to protect the President, and created a sense of urgency that did not exist at the school. 11.3 Scenario in the Air THE SEPTEMBER 11 COMMISSION REPORT Page 264 During this flight, the President received a message that indicated that he would be a target. This information is provided by the Whitehouse - that there may have been a plan to assassinate the president – but no subsequent information about this threat has ever been released. "White House spokesman Ari Fleischer said there was "real and credible information that the White House and Air Force One were targets." [White House, 9/12/01] On September 13, New York Times columnist William Safire wrote - and Bush's political strategist Karl Rove confirmed - that there was an "inside" threat that "may have broken the secret codes (showing a knowledge of presidential procedures)." [New York Times, 9/13/01] "In the New York Times on September 13, entitled “Inside the Bunker,” Safire described a conversation with an unnamed “high White House official,” who told him, “A threatening message received by the Secret Service was relayed to the agents with the president that ‘Air Force One is next.’” Safire continued: “According to the high official, American code words were used showing a knowledge of procedures that made the threat credible.” Safire reported that this information was confirmed by Rove, who told him Bush had wanted to return to Washington but the Secret Service “informed him that the threat contained language that was evidence that the terrorists had knowledge of his procedures and whereabouts.” All four of these scenarios point to an insider’s attempt to assassinate the President. If it is accepted that the attacks of September 11 were conducted under the watchful eye and planning of elements of the Israeli Mossad, it should be fair to assume that the Whitehouse insider has connections to the Mossad. Unfortunately, these suspects are plentiful, and have been previously identified in this report: "Perle and Wolfowitz- have a well documented (both Congressional and FBI investigations) past of being known agents for the Israeli government, and have been directly responsible for the employment by US Policy making groups (Office of Special Plans OSP) of at least four other well demonstrated agents of Israel: Douglas J. Feith (Undersecretary of Defense for Policy), Lawrence Franklin (currently under investigation by the FBI as being as Israeli spy), Michael Ledeen and Dr. Stephen Brye. Lawrence Franklin works in an office overseen by Douglas J. Feith, the Defense undersecretary for policy. Feith is an influential aide to Defense Secretary Donald Rumsfeld. Also included in this list is Dr. Rabbi Dov Zakheim, who at the time was acting as chief-financial officer for the Department of Defense." Many – if not all - of these men were in position to have the inside information required to execute these threats. As employees of the Defense Department, all one of them had to do was watch the schedule and movements of the Secret Service surface-to-air missile launcher, and they would know the whereabouts and plans of the President. This group already had won the hearts and minds of Cheney and Rumsfeld- both hypocritical cowards who would advocate war while hiding from the need to serve. The President had not yet bought into their rhetoric, and had his own agenda. By eliminating President Bush, this group would have moved forward with their own plans more expeditiously under the Presidency of Cheney. Claiming that one of these Whitehouse advisors had less than honorable intentions may be characterized by some as being ‘without foundation and unwarranted’, but in 2004, it became a matter of public record that the FBI also believed there was an Israeli mole working at the highest levels of the US Government. THE SEPTEMBER 11 COMMISSION REPORT Page 265 "The FBI believes Israel has a spy at the very highest level of the Pentagon who may have sought to influence U.S. policy on Iran and Iraq CBS News reported on Friday. …"The FBI has a full-fledged espionage investigation under way and is about to ... roll up someone agents believe has been spying, not for an enemy, but for Israel, from within the office of the secretary of defense (Donald Rumsfeld)," the network reported." [FBI Suspects Israel Has Mole in Pentagon, Reuters, 8/27/2004] 11.4 Lessons from History The attempted assassination attempts on George Bush Jr. represent what may be the most difficult aspect of this plan to understand. There might have been plausibility to the argument that the assassination attempts were arranged by the Mossad as some sort of revenge for the betrayals of Israel by the father, or because George Bush Jr, was not totally aligned with the PNAC. A lesson from recent American history however, suggests there was another rationale. For this lesson, the attempted assassination of Ronald Reagan is referenced. There is a fascinating clue buried in the volumes of 9/11 data that has a significance not mentioned by any report to date. On September 10, 2001 – the day before attack, consistent with the timing of the attempts to assassinate the President – the Federal Emergency Management Agency (FEMA) was activated and called to New York. On September 11, with the top management of FEMA already gathered at the Big Sky Resort in Montana, all ten regions of FEMA were activated by an already standing meeting of the regional directors above the underground security facility built for national emergencies. [see Michael C Ruppert, Crossing the Rubicon, p416-417.] Big Sky Resort hosts the famous underground bunkers built by Oliver North under the direction of Vice President George Bush Sr., for the emergency “shadow government.” In the last 20 years, FEMA has been activated at a national level for other than disaster related matters four times: 1. In 1981 when President Reagan signed Presidential Director Number 54 that allowed FEMA to engage in a secret national "readiness exercise" –scheduled for the day after the attempted assassination of Reagan. This exercise was cancelled by Vice President George Bush after he became acting President. 2. In 1990 when Desert Storm was enacted; 3. In 1987 after the Rodney King verdict; and 4. In September 2001, the day before the attack on the World Trade Center and attempted assassination of George Bush. The general populace considers FEMA a benign government institution created by Congress to help state and local governments in case of an emergency. The reality, and the law behind the organization, is that FEMA is what is called into play when martial law is being considered. “As Russell R. Dynes, director of the Disaster Research Center of the University of Delaware, wrote in The World and I, "...The eye of the political storm hovered over the Federal Emergency Management Agency. FEMA became a convenient target for criticism." Because FEMA was accused of dropping the ball in Florida, the media and Congress commenced to study this agency. What came out of the THE SEPTEMBER 11 COMMISSION REPORT Page 266 critical look was that FEMA was spending 12 times more for "black operations" than for disaster relief. It spent $1.3 billion building secret bunkers throughout the United States in anticipation of government disruption by foreign or domestic upheaval. Yet fewer than 20 members of Congress , only members with top security clearance, know of the $1.3 billion expenditure by FEMA for nonnatural disaster situations. These few Congressional leaders state that FEMA has a "black curtain" around its operations. FEMA has worked on National Security programs since 1979, and its predecessor, the Federal Emergency Preparedness Agency, has secretly spent millions of dollars before being merged into FEMA by President Carter in 1979. These Presidential powers have increased with successive Crime Bills, particularly the 1991 and 1993 Crime Bills, which increase the power to suspend the rights guaranteed under the Constitution and to seize property of those suspected of being drug dealers, to individuals who participate in a public protest or demonstration. Under emergency plans already in existence, the power exists to suspend the Constitution and turn over the reigns of government to FEMA and appointing military commanders to run state and local governments. FEMA then would have the right to order the detention of anyone whom there is reasonable ground to believe...will engage in, or probably conspire with others to engage in acts of espionage or sabotage. The plan also authorized the establishment of concentration camps for detaining the accused, but no trial. … On July 5, 1987, the Miami Herald published reports on FEMA's new goals. The goal was to suspend the Constitution in the event of a national crisis, such as nuclear war, violent and widespread internal dissent, or national opposition to a U.S. military invasion abroad. Lt. Col. North was the architect. National Security Directive Number 52 issued in August 1982, pertains to the "Use of National Guard Troops to Quell Disturbances." The crux of the problem is that FEMA has the power to turn the United States into a police state in time of a real crisis or a manufactured crisis. Lt. Col. North virtually established the apparatus for dictatorship. Only the criticism of the Attorney General prevented the plans from being adopted. But intelligence reports indicate that FEMA has a folder with 22 Executive Orders for the President to sign in case of an emergency. It is believed those Executive Orders contain the framework of North's concepts, delayed by criticism but never truly abandoned …under the FEMA plan, there is no contingency by which Constitutional power is restored. [FEMA - The Secret Government, By Harry V. Martin with research assistance from David Caul, Copyright: FreeAmerica and Harry V. Martin, 1995] “Reagan’s secret program set aside these constritutional and statutory requirements under some circumstances; it established its own process for creating a new American president, ignoring the hierarchy of presidential succession established by law….’It was decided that it would be easier to operate without them (Congress).’ If Congress did reconvene, then it might elect a new Speaker of the House, who would then conceivably have a rival claim to the presidency, one with greater legitimacy tha a secretary of agriculture or commerce set up as “president” under Reagan’s secret program.” [Rise of the Vulcans- The History of Bush’s War Cabinet, James Mann, Penguin, 2004, pp 141-142.] “Executive Order 11051 gives FEMA the authority to execute all Exceutive Orders granting…powers in event of a crisis. Executive Order 11310 requires the Justice department to enforce any and all powers granted to FEMA in a crisis. Executive Order 11921 declares that when a state of emergency is declared by the president, Congress cannot review the action for six months.” [William R. Pitts, “Only Cowards Cancel Elections,” Truthout Perspective, July 14, 2004.] What seriously needs to be entertained is that FEMA was engaged with the idea that a Constitutional change of government would be required by the events of that day – March 30, 1984 (when Reagan was shot) and September 11, 2001(with assassination atempts on Bush.) If there is any doubt that this was part of the strategy, one only needs to refer to the actions of President Bush’s brother, Florida Governor Jeb Bush, who on September 7, 2001, with an Executive Order, paved the way to declare martial law in Florida. THE SEPTEMBER 11 COMMISSION REPORT Page 267 “I hereby declare that a state of emergency exists in the state of Florida...The Authority to suspend the effect of any statute or rule governing the conduct of state business, and further authority to suspend the effect of any order or rule of any government entity...The authority to seize and utilize any and all real or personal property as needed to meet this emergency...The authority to order the evacuation of any or all persons from any location in the State...The authority to regulate the return of the evacuees to their home comunities...I hereby order the Adjutant General to activate the Florida National Guard for the duration of this emergency.” ~Florida Governor Jeb Bush, September 11, 2001 TALLAHASSEE, Fla. -- Florida Governor Jeb Bush signed Executive Order 01-261 September 7, 2001, four days before the WTC tragedy of Sept. 11, which paves the way for a declaration of martial law in his state. The governor, in his EO, delegated to, “...the Adjutant General of the state of Florida all necessary authority....to order members of the Florida National Guard into Active Service.” Immediately after the second WTC tower fell, Governor Jeb Bush signed EO 01-262 to make Florida the first state to declare a state of emergency although his state did not experience any terrorist events that day. Governor Bush is reportedly the only governor in the U.S. outside of NY and D.C. to make a declaration of martial law in the wake of the WTC tragedy. Interestingly, Governor Bush's declaration came before authorities in New York or Washington, D.C. declared states of emergency. What is being suggested in this action is a level of treasonous, criminal intent not seen since John F Kennedy assassination or the attempt on the life of Ronald Reagan. There is no statute of limitations on murder – and some day the individuals responsible for the attack on the WTC may be prosecuted. For many reasons however, the plot by Vice President George Bush to assassinate Ronald Reagan will never be prosecuted, or even mentioned in a Congressional hearing or Grand Jury. It needs to be addressed here, if for no other reason that to convince the reader that the Iran-Contra team, re-assembled for the attack on the World Trade Center, has fulfilled the dictate of the Neoconservative ‘court philosopher’ – Michael Ledeen: “In order to achieve the most noble accomplishments, the leader may have to 'enter into evil.' This is the chilling insight that has made Machiavelli so feared, admired and challenging... we are rotten.... It’s true that we can achieve greatness if, and only if, we are properly led” .[Michael Ledeen, from his book Universal Fascism] The historical record clearly suggests that the attempted assassination of Ronald Reagan by Robert Hinckley was part of a more intricate plot to control the government of the United States, leaving George Bush Sr. in charge. Interestingly, that transition from Reagan to Bush would begin the fulfillment of Barbara Bush’s desire recorded in the 1940’s, to be First lady. (see Kevin Phillips, American Dynasty: Aristocracy, Fortune and the Politics of Deceit in the House of Bush, Penguin, 2004, p.76) To understand the events leading up to George Bush Sr.’s first attempt to control the Presidency, one needs to put Reagan’s role in perspective. He was suffering from the early stages of Alzheimer’s, leaving much of the actual decision-making to his staff. “Ronald Reagan was 70 years old when he took office, the oldest man ever to be inaugurated as president. His mind wandered; long fits of slumber crept over his cognitive faculties. On some days he may have kept bankers' hours with his papers and briefing books and meetings in the Oval Office, but he needed a long nap most afternoons and became distraught if he could not have one. His custom was to delegate all administrative decisions to the cabinet members, to the executive departments and THE SEPTEMBER 11 COMMISSION REPORT Page 268 agencies. Policy questions were delegated to the White House staff, who prepared the options and then guided Reagan's decisions among the pre-defined options. This was the staff that composed not just Reagan’s speeches, but the script of his entire life: for normally every word that Reagan spoke in meetings and conferences, every line down to and including "Good morning, Senator," every word was typed on three by five file cards from which the Reagan would read.” [George Bush: The Unauthorized Biography , by Webster G. Tarpley & Anton Chaitkin, Chapter -XVII- The Attempted Coup D'Etat of March 30, 1991] In the months prior to the assassination attempt, Bush orchestrated a number of organizational changes that put him squarely in control of intelligence and foreign policy. “White House press secretary James Brady could say in early March, 1981: "Bush is functioning much like a co-president. George is involved in all the national security stuff because of his special background as CIA director. All the budget working groups he was there, the economic working groups, the Cabinet meetings. He is included in almost all the meetings." [Hinckley and Bush Families were close Friends, Connie Cook Smith, http://www.conniescomments.blogspot.com] During the several months prior to the assassination attempt, Vice President Bush manipulated the President into allowing him to take over from Al Haig, the key meetings used to make administrative decisions. Eight days before the attempt, Bush finalized his plan to control crisis management. “The struggle between Haig and Bush culminated towards the end of Reagan's first hundred days in office. Haig was chafing because the White House staff, meaning Baker, was denying him acess to the president…. Then, on Sunday, March 22, Haig's attention was called to an elaborate leak to reporter Martin Schram that had appeared that day in the Washington Post under the headline "White House Revamps Top Policy Roles; Bush to Head Crisis Management." Haig's attention was drawn to the following paragraphs: Partly in an effort to bring harmony to the Reagan high command, it has been decided that Vice President George Bush will be placed in charge of a new structure for national security crisis management, according to senior presidential assistants. This assignment will amount to an unprecedented role for a vice president in modern times. In the Carter administration, the crisis management structure was chaired by Zbigniew Brzezinski, the national security adviser.” [George Bush: The Unauthorized Biography, by Webster G. Tarpley & Anton Chaitkin, Chapter -XVII- The Attempted Coup D'Etat of March 30, 1991] The key player in placing George Bush Sr. in control of the “Special Situations Group” ultimately turned out to be James Baker III (Kevin Phillips, American Dynasty, Penguin Books, 2004, pp 207-208). (This centralized control over crisis management would be recreated in May and June of 2001 by George Bush Jr, who would appoint Vice President Dick Cheney as centrally in control of all NORAD defense, FEMA, and terrorist counterintelligence activities. [see Michael C Ruppert, Crossing the Rubicon, pp 337 and 574.] It might also be worth noting that Cheney received the Vice Presidential nomination because of George Bush Sr., and was made CEO of Halliburton due to Bush’s family connections with the Halliburton Board, connections going back to when Bush’s father Prescott was a Director of Dresser. [see Kevin Phillips, American Dynasty, Penguin Books, 2004, pp. 93 and 420] In every respect, Dick Cheney is a creation of George Bush Sr.) A key variable in this power play was Executive Order Number 12656 - which appointed the National Security Council as the principal body that should consider emergency powers in case of national emergency. Under the old regime, while a Vice President follows President in the line of succession, the Secretary of State (Al Haig) who is next in succession controls the National Security Council. Bush changed that formula, giving himself total control of the government- “in the event of a crisis.” Under Bush’s THE SEPTEMBER 11 COMMISSION REPORT Page 269 guidance, FEMA was structured to create three possible succession teams. Of the three teams set-up to possibly rule the US in case of a ‘transition crises,’ Dick Cheney and Donald Rumsfeld were responsible for two of them! George Bush, of course, would be in charge of the third. [see James Mann, Rise of the Vulcans- The History of Bush’s War Cabinet, Penguin, 2004, p142.] While running the government in the immediate aftermath of the assasination attempt, Bush had FEMA activated for a testing of new procedures. This “test” was to be administered by none other than Lt. Colonel Oliver North. “…Reagan signed Presidential Director Number 54 that allowed FEMA to engage in a secret national "readiness exercise" under the code name of REX 84. The exercise was to test FEMA's readiness to assume military authority in the event of a "State of Domestic National Emergency" concurrent with the launching of a direct United States military operation in Central America. The plan called for the deputation of U.S. military and National Guard units so that they could legally be used for domestic law enforcement. These units would be assigned to conduct sweeps and take into custody an estimated 400,000 undocumented Central American immigrants in the United States. The immigrants would be interned at 10 detention centers to be set up at military bases throughout the country REX 84 was so highly guarded that special metal security doors were placed on the fifth floor of the FEMA building in Washington, D.C. Even long-standing employees of the Civil Defense of the Federal Executive Department possessing the highest possible security clearances were not being allowed through the newly installed metal security doors. Only personnel wearing a special red Christian cross or crucifix lapel pin were allowed into the premises. Lt. Col. North was responsible for drawing up the emergency plan, which U.S. Attorney General William French Smith opposed vehemently. The plan called for the suspension of the Constitution, turning control of the government over to FEMA, appointment of military commanders to run state and local governments and the declaration of Martial Law. The Presidential Executive Orders to support such a plan were already in place. . [FEMA - The Secret Government, Harry V. Martin with research assistance from David Caul, Copyright: FreeAmerica and Harry V. Martin, 1995] 11.5 Attempted Assassination of Reagan The exercise for”testing” the emergency preparedness plan was ironically scheduled for April 1. Two days before it was to be set in motion, John Hinckley Jr. attempted to kill President Reagan. It would be a few more hours for Bush to be able to say he was in control, because Al Haig - immediately following the assassination attempt, went to calm the public by saying on National TV: “I am in control... until the Vice President returns.” The press however, was taken aback –in that this seemed un-Constitutional. “What they don't understand is all that Constitution stuff is pushed aside once they declare National Emergencies. Then they go into FEMA and they have whole other orders of succession that have to do more with the military and the Pentagon than with any of the civilian sector.” [John Judge November 2000 Interview] Most citizens assume that as per a law passed under the Presidential Succession Act of 1947, the House Speaker and President Pro Tem of the Senate, in that order, are placed in the statutory line of succession ahead of the Cabinet officers. This modifies the Presidential Succession Act of 1885, which provided that after the Vice President, the THE SEPTEMBER 11 COMMISSION REPORT Page 270 line of succession would begin with the Secretary of State and would continue through the Cabinet department. While the 25th Amendment, passed in 1967 addresses the replacement of the President and Vice-President, it does not clarify subsequent order. Opinion about the correct order is not unanimous. “Next are the hardy perennial (questions). First among these is whether the Speaker of the House and the President Pro Tem of the Senate are officers in the sense intended by article II of the Constitution. Are they therefore constitutionally eligible to succeed to the presidency? There has been a simmering controversy over this question for many years. A second question is more political or perhaps philosophical: should the officers in line to succeed the President and Vice President be elected Members of the House and Senate, as currently provided, or should we return to the Succession Act of 1886 and put appointed Cabinet officers at the top of the list?” [ 2004 PRESIDENTIAL SUCCESSION ACT, HEARING BEFORE THE SUBCOMMITTEE ON THE CONSTITUTION OF THE COMMITTEE ON THE JUDICIARY HOUSE OF REPRESENTATIVES, ONE HUNDRED EIGHTH CONGRESS,SECOND SESSION,OCTOBER 6, 2004; Testimony of Thomas H. Neale] Evidently, after 9/11, this interpretation of the law was so uncertain that Bush implemented the famous “shadow government” without advising those in the presidential line of succession “Key congressional leaders said yesterday the White House did not tell them that President Bush has moved a cadre of senior civilian managers to secret underground sites outside Washington to ensure that the federal government could survive a devastating terrorist attack on the nation's capital. There are two other branches of government that are central to the functioning of our democracy. I would hope the speaker and the minority leader would at least pose the question, 'What about us?' Rep. William Delahunt (D-Mass.), a member of the House Judiciary Committee Senate Majority Leader Thomas A. Daschle (D-S.D.) said he had not been informed about the role, location or even the existence of the shadow government that the administration began to deploy the morning of the Sept. 11 hijackings. An aide to House Minority Leader Richard A. Gephardt (D-Mo.) said he similarly was unaware of the administration's move. Among Congress's GOP leadership, aides to House Speaker J. Dennis Hastert (Ill.), second in line to succeed the president if he became incapacitated, and to Senate Minority Leader Trent Lott (Miss.) said they were not sure whether they knew. Aides to Sen. Robert C. Byrd (D-W. Va.) said he had not been told. As Senate president pro tempore, he is in line to become president after the House speaker.” [Congress Not Advised Of Shadow Government , Amy Goldstein and Juliet Eilperin, Washington Post, 3/2/2002] Only by understanding the tension between Bush and Haig in 1981, and the recent efforts by Bush to control decisions in the Whitehouse, does Haig’s historic statement take on its real context. Haig would press - in private – for an investigation into any possible conspiracy around the attempted assassination of Ronald Reagan. His request was overridden by George Bush, who now controlled the emergency security meeting. Being in the key position to control key meetings, Bush’s first actions were to cancel three activities: 1) any independent investigation into the attempted assassination, 2) a NORAD defense exercise which had mobilized the military, and 3) a FEMA exercise, which had the potential to take over the government. “Defense Secretary Caspar Weinberger's memoir of that afternoon reminds us of two highly relevant facts. The first is that a "NORAD [North American Air Defense Command] exercise with a simulated THE SEPTEMBER 11 COMMISSION REPORT Page 271 incoming missile attack had been planned for the next day." Weinberger agreed with General David Jones, the chairman of the Joint Chiefs of Staff, that this exercise should be cancelled. [fn 12] ] [George Bush: The Unauthorized Biography , by Webster G. Tarpley & Anton Chaitkin, Chapter - XVII- The Attempted Coup D'Etat of March 30, 1991] (Note: “Richard Bartholomew, a researcher in Texas, told me that he himself talked to Strategic Air Command bomber pilots who, like the pilots I talked to that were in the air the hour of the Kennedy assassination, told him that on March 31 they had no code books aboard.” [John Judge November 2000 Interview]) “Weinberger also recalls that the group in the Situation Room was informed by James Baker that "there had been a FEMA [Federal Emergency Management Administration] exercise scheduled for the next day on presidential succession, with the general title 'Nine Lives.' By an immediate consensus, it was agreed that exercise should also be cancelled." [George Bush: The Unauthorized Biography , by Webster G. Tarpley & Anton Chaitkin, Chapter -XVII- The Attempted Coup D'Etat of March 30, 1991] “As Weinberger recounts the same moments: "[Attorney General Bill French Smith] then reported that all FBI reports concurred with the information I had received; that the shooting was a completely isolated incident and that the assassin, John Hinckley, with a previous record in Nashville, seemed to be a 'Bremmer' type, a reference to the attempted assassin of George Wallace." [fn 16] Those who were not watching carefully here may have missed the fact that just a few minutes after George Bush had walked into the room, he had presided over the sweeping under the rug of the decisive question regarding Hinckley and his actions: was Hinckley a part of a conspiracy, domestic or international? Not more than five hours after the attempt to kill Reagan, on the basis of the most fragmentary early reports, before Hinckley had been properly questioned, and before a full investigation had been carried out, a group of cabinet officers chaired by George Bush had ruled out a priori any conspiracy.” [George Bush: The Unauthorized Biography, Webster G. Tarpley & Anton Chaitkin, Chapter -XVII- The Attempted Coup D'Etat of March 30, 1991] In the following months, while Reagan was recovering, Bush would be granted even more power over foreign policy and intelligence operations by a ‘secret memorandum’ from the President that was signed “for the President” by NSA Advsor William C Clarke. “Bush's position as chief of all covert action and de facto head of U.S. intelligence--in a sense, the acting President--was formalized in a secret memorandum. The memo explained that `` National Security Decision Directive 3, Crisis Management, establishes the Special Situation Group (SSG), chaired by the Vice President. The SSG is charged ... with formulating plans in anticipation of crises. '' It is most astonishing that, in all of the reports, articles and books about the Iran-Contra covert actions, the existence of Bush's SSG has received no significant attention. Yet its importance in the management of those covert actions is obvious and unmistakable, as soon as an investigative light is thrown upon it. The memo in question also announced the birth of another organization, the Standing Crisis Pre-Planning Group (CPPG), which was to work as an intelligence-gathering agency for Bush and his SSG. This new subordinate group, consisting of representatives of Vice President Bush, National Security Council (NSC) staff members, the CIA, the military and the State Department, was to `` meet periodically in the White House Situation Room.... '' They were to identify areas of potential crisis and `` [p]resent ... plans and policy options to the SSG '' under Chairman Bush. And they were to provide to Bush and his assistants, `` as crises develop, alternative plans, '' `` action/options '' and `` coordinated implementation plans '' to resolve the `` crises. '' Finally, the subordinate group was to give to Chairman Bush and his assistants `` recommended security, cover, and media plans that will enhance the likelihood of successful execution. '' It was announced that the CPPG would meet for the first time on May 20, 1982, and that agencies were to `` provide the name of their CPPG representative to Oliver North, NSC staff.... '' The memo was signed `` for the President '' by Reagan's national security adviser, William P. Clark. It was declassified during the congressional Iran-Contra hearings.” [George Bush: The Unauthorized Biography, Webster G. Tarpley & Anton Chaitkin , Chapter -XVIIIIran- Contra] THE SEPTEMBER 11 COMMISSION REPORT Page 272 As a result of the closed-door meeting in the aftermath of the attempted assassination of Reagan, there was no independent investigation, no grand jury, no congressional hearings. The public received whatever information the FBI fed them. (The value of this historical lesson was not lost on Bush, whose son attempted to stop every investigation into the attack on the World Trade Center, saying there was no need for an investigation, and exerted significant energy in attempting to prevent an investigation.) The world was told that Hinckley acted alone, in an attempt to win the actress Jodie Foster’s attention, as did the main character in the movie Taxi Driver. Hinckley was tried, and found innocent on a defense of insanity. It was the insanity defense that raised the vague and disturbing references in the press that he may have been some type of “Manchurian Candidate” assassin – unknowingly programmed to assassinate the President. The actual facts of the case suggest a set of circumstance far different than published for media consumption. Al Haig had very reasonable grounds to think that there may have been a conspiracy to assassinate Reagan. Recent events and events of that day suggested that the lone-gunman theory could not explain everything. First, (while unreported until much later), there was reason to believe that there had been a previous attempt to assassinate Reagan several weeks prior to March 30. “As reporters dug deeper into the alleged shooting, one asked a Secret Service contact if there had been any recent shooting incidents monitored by his agency. "The answer came back. On March 8, as a motorcade drove west on Canal Road, officers had heard a 'popping sound' from a 'steep, rocky cliff' on the Virginia side of the Potomac River. But it had been President Reagan's motorcade, not Bush's. And the noises never proved to be gunfire." [fn 9] Had there been an attempt to assassinate Reagan, or to intimidate him? In any case Senator Howard Baker, the GOP majority leader at that time, was overheard making jokes about the allegedly discredited Rumor at a weekend party, and this was duly noted in the Washinton Post of March 25.” [George Bush: The Unauthorized Biography , by Webster G. Tarpley & Anton Chaitkin, Chapter -XVII- The Attempted Coup D'Etat of March 30, 1991] The prior attempt aside, there were other unreported occurrences on March 30th that could lead Haig to believe that something was suspiciously awry. “When the President was shot… he was pushed into the car by a man named Jerry Parr(sp?) that was his Secret Service guard. Jerry Parr fell on top of him and, I just saw in the ‘Reader's Digest’ where Jerry Parr was telling his "valiant story." And the limousine tore off, didn't it? Now it was ‘five minutes later’ that the ambulance arrived and they put the Secret Service man, the Washington, D.C. policeman, and Brady in the ambulance and ‘it’ roared off. Using normal time-rate/distance, who should have arrived at George Washington University Hospital first? The President should have. Well, who did? You know it's a trick question. The ambulance arrived 15 minutes before the President. When asked, "What happened?" the Secret Service simply responded, "We got lost." The Secret Service does not get lost in Washington, D.C. They don't get lost in most places of the world. And so, now the investigation starts to get a little interesting. When they take Ronald Reagan in, they can see that he... matter of fact, his heart almost stopped. And he is convulsing; there's blood on his lips. They know he's hurt... seriously. But they can find no wounds. They X-ray him ‘3 times’ and can find nothing. Finally, a nurse notices a tiny entrance wound right at the seventh rib, underneath the armpit. And a doctor takes a probe, and ... very carefully, because they couldn't see it on X-ray, the doctor is able to extract what he said was a planchet, thinner than a dime, that was one-quarter inch from Ronald Reagan's aorta.” [Excerpts from a talk given by Lt. Col. "Bo" Gritz in Mesa, Arizona on 4/4/1992] “NBC correspondent Judy Woodruff said that at least one shot was fired from the hotel, above Reagan's limousine. She later elaborated, saying a Secret Service agent had fired that shot from the THE SEPTEMBER 11 COMMISSION REPORT Page 273 hotel overhang. Could Reagan's wound have been inflicted by friendly fire? Or, more ominously, did Woodruff glimpse a bona fide "second gunman" - a la JFK in Dealey Plaza? Either way, Woodruff's account might explain how a slug managed to strike Reaganwhen his limo's bulletproof door stood between him and Hinckley. Sizing up the Hinckley-Bush nexus, conspiracy researcher John Judge has theoretically dubbed this "the shot from the Bushy knoll." According to conspiratologist Barbara Honegger, White House correspondent Sarah McClendon made the somewhat more subjective comment that Reagan's Secret Service retinue wasn't in its "usual tight formation" around Reagan in front of the Hilton. Were the Gipper's bodyguards out to throw the game?” [Hinckley: Hit Man for the Government?] “…. the Secret Service helped to set-up Reagan too. Reagan was told not to wear his vest that day -- his protective vest…. They did not call the procedure with the limousine. He should have come out the door and gone directly into the limousine. That's how he arrived. He came, the Secret Service formed two rows on either side of the back door, they opened the back door and he goes in. When you hire a limousine, they don't go to the house down the street, they come to your door. When you're the president, they'll move it six inches to make sure that it's in the right place. It was in the right place when he arrived. He got out and went in through the phalanx of the two rows of agents. He's safe into the VIP entrance. He comes out the same exit and where's the car?' It is nowhere near the door. It's 40-50 feet down the pavement. So, he's got to walk out into the open. What's supposed to happen? The Secret Service is supposed to surround him like a diamond and protect him. One guy goes forward, McCarthy, to open the door for him. The rest don't surround him. They all file out like a line of ducks off to the right and they leave Reagan walking in the open with Brady and these other guys. Then, the shooting happens. The damage that was done there once the shooting started was quite extensive. Brady was hit which literally took a large chunk of his brain and knocked him on to the ground. A black cop was nicked in the neck, a big beefy cop, and he spun and hit the ground hard by the shot. McCarthy, 160 pounds, was lifted by the shot, that hit him in the groin at the back door of the car, and thrown through the air to the front bumper of the car. He himself says that was no 22. All of the early press reports said that Hinkley was firing a 38 and that is much more consistent with these kinds of reactions. A 22 will hurt you, enter you and do damage inside you, but it's not going to knock you over. A 38 is a much larger caliber of bullet. Hinkley purchased a 38 at a pawn shop on Elm Street in Dallas -- the same street where Kennedy was assassinated…. Then the official story changes after three or four hours and Hinkleysupposedly had a 22. I went through the ABC footage and you can actually see the replacement of the 22 and the pick-up of the 38 by a Secret Service agent.” [John Judge November 2000 Interview] “That motorcycle rentinue did not leave with Reagan's limousine when he did leave. He has no escort when he goes. That is not explainable either, especially if there has just been an assassination attempt - - why he would be put out there without escort. But he does, he goes without anybody.” “This cop comes over, off of his motorcycle, spreads his arms and kind of moves back and forth in front of -- at the edge of the crowd. He's not serving any purpose but he's there and after a moment the camera pans back and you can see at his feet, this 22, as if he's dropped it. One of his hands goes in towards the center of his coat and then comes out and right after that, as the camera is panning all around, it pans right between his feet, and you can see this 22 that becomes the official weapon. There is also a weapon near Brady's head that one of the Secret Service guys drops. That's how they explain the 38, saying that it was a confusion because it was really the Secret Service guy's gun. I believe, Hinkley was firing a 38. Hinkley damaged everybody but Reagan, also put holes in the car and the building across the street. But he only had six rounds and each one of those is explained and then a seventh round has to explain the wound in Reagan. Reagan's wound is so minimal that it doesn't match either a 22 or a 38. It is described as a little thin razor line when they finally get his clothes off. They think he's having a heart attack -- actually his lung had collapsed because of the thing penetrating him. Then finally a nurse sees a little line of blood underneath his left arm pit. She determines that something has gone in but it's a little razor cut. They know what a bullet hole looks there in the emergency room at G.W.U.. They get them all the time. THE SEPTEMBER 11 COMMISSION REPORT Page 274 They do poke around until they finally find this thing in the x-ray. They try three times to get it out and finally pull it out and it is a little disc, a flattened disc, that was described as `thin as a dime' and `razoredged.' This fits the profile of these aerodynamic discs that are used by the intelligence agencies in weapons that the Church Committee showed during the time that they did their testimony. They are fired with a CO2 (carbon dioxide) cartridge, so they are relatively silent. They just make a little puff. They have an accuracy up to a great length. They can be fired out of a regular gun or even out of these little tubes with the CO2 cartridge at the back. They also can be loaded with toxins. One of the uses they had for them was making them out of plastic and filling them with shellfish toxin which goes in and makes a razor split in the skin which wouldn't be noticed during an autopsy. The xray won't pull up the plastic and the shellfish toxin, once it gets into any part of the bloodstream, will cause a heart attack within 30 seconds. Very lethal -- several milligrams of the shellfish toxin is enough of a dose. Whether this thing had a poison load in it or not, who knows? But it didn't immediately kill him so if it did have such a load, it didn't work. It didn't shoot off. It bounced off of his rib. It would have cut into his aorta but bounced on his rib and missed the aorta by a quarter of an inch and went into the lung instead. But they did finally get it out. The lung was collapsed from it but they got him stabilized.” [John Judge November 2000 Interview] In addition to these irregular, undisclosed and downplayed events, the press immediately stumbled across what was referred to by a Bush spokesperson as a “bizarre coincidence” – a relationship between the Hinckley and the Bush families, which had known each other for years. The first allegation was that Hinckley’s father was a major campaign contributor to George Bush. For some reason, the relationship was “denied.” “Later in the day Bush spokesman Peter Teeley surfaced to deny any campaign donations from the Hinckley clan to the Bushcampaign. When asked why Sharon Bush and Neil Bush had made reference to large political contributions from the Hinckleys to the Bush campaign, Teeley responded, "I don't have the vaguest idea." "We've gone through our files," said Teeley, "and we have absolutely no information that he [John W. Hinckley Sr.] or anybody in the family were contributors, supporters, anything." [George Bush: The Unauthorized Biography, by Webster G. Tarpley & Anton Chaitkin, Chapter -XVII- The Attempted Coup D'Etat of March 30, 1991] The actual facts about the contributions and the relations between the families would turn out to be quite different, with the relationship between Bush and Hinckley to be quite substantial. “When Brady was shot, no question. Here we've got John Hinckley, Jr., Oh, by the way, is John Hinckley, Jr., just some kind of a "weirdo?" Isn't it strange that John Hinckley, Sr., is the owner of Vanderbilt Oil? And, of course, George Bush is the owner of Zapata Oil. Was it a coincidence, then, that John Hinckley, Sr., and George Bush are neighbors ‘for years’ in Houston, Texas, working together? Is it any coincidence that John Hinckley, Sr., when you go back through the FEC, the Federal Election Commission, his own record of giving maximum donations every year to Mr. Bush even when he started running for Congress…” [Excerpts from a talk given by Lt. Col. "Bo" Gritz in Mesa, Arizona on 4/4/1992] “When the Hinckley oil company, Vanderbilt Oil started to fail in the 1960s, Bush, Sr.'s, Zapata Oil financially bailed out Hinckley's company. Hinckley had been running an operation with six dead wells, but he began making several million dollars a year after the Bush bailout.” [Hinckley – Bush Family Friend - Nears Release, von A. Weist, 11/28/2003] The second allegation was that Hinckley’s brother and Bush’s brothers were not only friends, but had recently partied together and were scheduled to have dinner with each other that very day! (A parallel event in the 9/11 annals would be that George Bush Sr. THE SEPTEMBER 11 COMMISSION REPORT Page 275 was dining with the Bin Ladin family the day of the attack. This coincidence will take on even more meaning a little further into the report.) “The Rocky Mountain News article signed by Charles Roos carried Neil Bush's confirmation that if the assassination had not happened, Scott Hinckley would have been present at a dinner party at Neil Bush's home that very same night. According to Neil, Scott Hinckley had come to the home of Neil and Sharon Bush on January 23, 1981 to be present along with about 30 other guests at a surprise birthday party for Neil, who had turned 26 one day earlier. Scott Hinckley had come "through a close friend who brought him," according to this version, and this same close female friend was scheduled to come to dinner along with Scott Hinckley on that last night of March, 1981.” [George Bush: The Unauthorized Biography, by Webster G. Tarpley & Anton Chaitkin, Chapter -XVII- The Attempted Coup D'Etat of March 30, 1991] A third ‘coincidence’ was the possibility that Neil Bush actually had known John Hinckley, the would-be assassin. “In 1978, Neil Bush served as campaign manager for his brother, George W. Bush, the Vice President's eldest son, who made an unsuccessful bid for Congress. Neil lived in Lubbock, Texas, throughout much of 1978, where John Hinckley lived from 1974 through 1980.” [George Bush: The Unauthorized Biography, by Webster G. Tarpley & Anton Chaitkin, Chapter -XVII- The Attempted Coup D'Etat of March 30, 1991] A fourth coincidence, was that on the very day John Hinckley attempted to kill Reagan, three Department of Energy auditors were pressuring Hinckley’s brother Scott, with a $2 million penalty. This penalty would later disappear. “Neil Bush, a landman for Amoco Oil, told Denver reporters he had met Scott Hinckley at a surprise party at the Bush home January 23, 1981 [Nine weeks before Hinckley's brother John Jr. attempted to assassinate President Reagan-which would have elevated Bush Sr. to the presidency], and approximately three weeks after the U.S. Department of Energy had begun what was termed a "routine audit" of the books of the Vanderbilt Energy Corporation, the Hinckley oil company. In an incredible coincidence, on the morning of March 30 [the day of the Reagan assassination attempt by John Hinckley, Jr.], three representatives of the U.S. Department of Energy told Scott Hinckley, John Hinckley Jr.'s older brother and Vanderbilt's vice president of operations, that auditors had uncovered evidence of pricing violations on crude oil sold by the company from 1977 through 1980. The auditors announced that the federal government was considering a penalty of two million dollars. [This, on the same day that his brother John--the youngest son of Vice President Bush's close friend--attempted the assassination!] Scott Hinckley reportedly requested "several hours to come up with an explanation" of the serious overcharges. The meeting ended a little more than an hour before John Hinckly Jr. shot President Reagan.” With the subsequent revelation of these facts about the relationship between the Bush and Hinkley families, the question needs to be asked: Could the Hinckley family have been “behind” the Bush family quest for political power? Might they have sent their own son to do this deed as repayment of an obligation, and did Scott need to be pressured into silence? Also, what about these vague references as to whether John Hinckley could be some kind of Manchurian Candidate assassin, unknowingly programmed? To answer these questions, a little more about the Hinckley family needs to be understood. John’s father – Jack – in addition to being a successful oil-man, was one of two key individuals in a group known as US Ministries for World Vision, and very possibly a CIA agent in Guatemala in the period when Armitage and Secord were establishing their THE SEPTEMBER 11 COMMISSION REPORT Page 276 credentials as weapons dealers. (Armitage worked for Erich von Marbod at that time, who according to James Mann, in the Rise of the Vulcans, “was the man to see” “if you wanted to steer arms to a foreign government.”) "Jack" Hinckley, as the gunman's father was frequently called, during the 1970's became a close associate of Robert Ainsworth, the director of US Ministries for World Vision, Inc. Jack Hinckley's profile was that of a born again Christian. Jack Hinckley and Ainsworth traveled together to the Sahel region of Africa, Zimbabwe, and South Africa. Even before joining World Vision, Jack Hinckley had carried on "relief work" in Guatemala. "Jack and I became very close," Ainsworth said. "Jack was a successful businessman. On occasion he would ask us to pray for his son. It's not that Jack felt that John would do something bad, just that John had no direction, John had not found himself." World Vision is one of the notorious non-governmental organizations that function as a de facto arm of US intelligence under current arrangements. Robert Ainsworth's pedigree is impressive: he was a foreign area analyst for the US State Department; an advisor in Vietnam during the war there; and chaired an international committee involved in the negotiation of the Chemical and Bacteriological Warfare Treaty of 1973. The largest contributor to World Vision is the US State Department Agency for International Development (AID)…. Pax Christi, the Catholic human rights organization, has accused World Vision of functioning as a "Trojan horse for US foreign policy." The entire milieu is thus redolent of the US intelligence agencies. [George Bush: The Unauthorized Biography, by Webster G. Tarpley & Anton Chaitkin, Chapter -XVII- The Attempted Coup D'Etat of March 30, 1991] World Vision was a religious ministry with “missions” in South America. It had established relations with Bob Jones, founder of the People’s Temple, which established its infamy in Jonestown, Guyana on November 18, 1978. “With his new wealth, Jones was able to travel to California and establish the first People's Temple in Ukiah, California, in 1965. Guarded by dogs, electric fences and guard towers, he set up Happy Havens Rest Home.[98] Despite a lack of trained personnel, or proper licensing, Jones drew in many people at the camp. He had elderly, prisoners, people from psychiatric institutions, and 150 foster children, often transferred to care at Happy Havens by court orders.[99] He was contacted there by Christian missionaries from World Vision, an international evangelical order that had done espionage work for the CIA in Southeast Asia.[100] He met "influential" members of the community and was befriended by Walter Heady, the head of the local chapter of the John Birch Society.[101] He used the members of his "church" to organize local voting drives for Richard Nixon's election, and worked closely with the republican party.[102] He was even appointed chairman of the county grand jury.[103]” [The Black Hole of Guyana : The Untold Story of the Jonestown Massacre , by John Judge, 1985] The American public recalls the Jonestown Massacre as the greatest single mass-suicide event of the century. With the news of the mass deaths reported in Guyana, U.S. Green Berets landed at the Jones camp to ‘police’ the area. News started to circulate of “masssuicide.” The source of the "Kool-Aid Suicide" stories was the U.S. State Department, which presented the story immediately after the "suicides" were reported as though it was the only obvious truth. A U.S. Army spokesman pronounced with complete authority, "No autopsies are needed. The cause of death is not an issue here." As usual, the facts suggested a rather different story. In The Black Hole of Guyana: The Untold Story of the Jonestown Massacre, John Judge painstakingly documents that Jonestown was a CIA operation for converting dispossessed and lonely refugees into assassins. In an operation that was falling under Congressional investigation, the evidence had to be eliminated – and nearly all the inhabitants were murdered. A few that made it back to the US were THE SEPTEMBER 11 COMMISSION REPORT Page 277 murdered, one-by-one as they were found. However utterly unbelievable this appears, there are many independent, published first hand accounts describing this event. “To comprehend this well-financed, sinister operation, we must abandon the myth that this was a religious commune and study instead the history that led to its formation. Jonestown was an experiment, part of a 30-year program called MK-ULTRA, the CIA and military intelligence code name for mind control.[170] A close study of Senator Ervin's 1974 report, Individual Rights and the Government's Role in Behavior Modification, shows that these agencies had certain "target populations" in mind, for both individual and mass control. Blacks, women, prisoners, the elderly, the young, and inmates of psychiatric wards were selected as "potentially violent."[171] There were plans in California at the time for a Center for the Study and Reduction of Violence, expanding on the horrific work of Dr. José Delgado, Drs. Mark and Ervin, and Dr. Jolly West, experts in implantation, psychosurgery, and tranquilizers. The guinea pigs were to be drawn from the ranks of the "target populations," and taken to an isolated military missile base in California.[172] In that same period, Jones began to move his Temple members to Jonestown. The were the exact population selected for such tests.[173]” [The Black Hole of Guyana : The Untold Story of the Jonestown Massacre , by John Judge, 1985] Jonestown, after the massacre, was taken over by Jack Hinckley’s World Vision, another CIA operation! World Vision would also establish “camps” in the US: Florida, and Fort Chafey in Arkansas. (It would also open in Azerbaijan in 1994, with the Director of the operation being the wife of the US Ambassador.) “Another World Vision employee, Mark David Chapman, worked at their Haitian refugee camp in Ft. Chaffee, Arkansas. He was later to gain infamy as the assassin of John Lennon in New York City.[282] World Vision works with refugees worldwide. At the Honduran border, they are present in camps used by American CIA to recruit mercenaries against Nicaragua. They were at Sabra and Shatilla, Camps in Lebanon where fascist Phalange massacred the Palestinians.[283] Their representatives in the Cuban refugee camps on the east coast included members of the Bay of Pigs operation, CIA-financed mercenaries from Omega 7 and Alpha 66.[284] Are they being used as a worldwide cover for the recruitment and training of these killers? They are, as mentioned earlier, working to repopulate Jonestown with Laotians who served as mercenaries for our CIA.[285]” [The Black Hole of Guyana : The Untold Story of the Jonestown Massacre , by John Judge, 1985] “World Vision also took over the camp at Jonestown just after the massacre there. Mark David Chapman, (who killed John Lennon) was a member of World Vision. John Hinkley Jr. who tried to kill Ronald Reagan, was a member of World Vision.” [World Vision Christian ministry or CIA front? Posted By: EBW,Date: Saturday, 25 June 2005] “The chairman of the board for some period was John W. Hinkley Sr. The son worked at Fort Chafey at the Thai refugee camps. There were pictures of him after the Reagan shooting running in his World VisionT-shirt around the edge of the camp.” [John Judge November 2000 Interview] This portion of John Hinckley Jrs’ life was not mentioned in any official biography, or the FBI investigation documentation about Hinckley now available on the web. All of the sudden, the argument about Hinckley being a “Manchurian candidate” do not seem so far fetched. It is worth noting that Hinckley’s own notes, written both prior to the assassination attempt and while in his cell, make reference to a conspiracy. In both cases, the notes were suppressed. THE SEPTEMBER 11 COMMISSION REPORT Page 278 “Hinckley's parents' memoir refers to some notes penciled notes by Hinckley which were found during a search of his cell and which "could sound bad." These notes "described an imaginary conspiracy-- either with the political left or the political right [...] to assassinate the President." Hinckley's lawyers from Edward Bennett Williams's law firm said that the notes were too absurd to be taken seriously and they have been suppressed. [fn 21] In July 1985, the FBI was compelled to release some details of its investigation of Hinckley under the Freedom of Information Act. No explanation was offered of how it was determined that Hinckley had acted alone, and the names of all witnesses were censored. According to a wire service account, "the file made no mention of papers seized from Hinckley's prison cell at Butner, North Carolina, which reportedly made reference to a conspiracy. Those writings were ruled inadmissible by the trial judge and never made public." [fn 22] The FBI has refused to release 22 pages of documents concerning Hinckley's "associates and organizations," 22 pages about his personal finances, and 37 pages about his personality and character. The Williams and Connolly defense team argued that Hinckley was insane, controlled by his obsession with Jodie Foster. The jury accepted this version, and in July, 1982, Hinckley was found not guilty by reason of insanity.” [George Bush: The Unauthorized Biography , by Webster G. Tarpley & Anton Chaitkin, Chapter -XVII- The Attempted Coup D'Etat of March 30, 1991] The record shows that Hinkley was involved in a CIA assassination training operation run by his father, a close friend and business associate of George Bush, former CIA Director. Hinckley claimed there was a conspiracy, and those notes were suppressed, as was any other investigation. The record shows that the day after Ronald Reagan was shot, a small group of men, led by Vice President George Bush, declared that there was no conspiracy – that the culprit had been caught, and it was clear he had acted alone. As a result, there was no investigation, no grand jury, no Congressional hearings. (The value of this historical lesson was not lost on Bush Jr., who attempted to stop every investigation into the attack on the World Trade Center, saying there was no need for an investigation.) The actual facts of the case - both cases - suggest something far different. 11.6 Final Lessons The eerie parallels between the events of September 11 and the attempted Reagan assassination suggest that in both cases, the conspirators might have been using a ‘play book.’ 1. Use shooters that do not have a lot to lose: The Hinckley’s thought their son had not found himself, and was a disappointment. Osama Bin Ladin was thought to be on his deathbed. 2. Control the shooter: The CIA seems to prefer loners and unattached people for wet work because it reduces the complications of controlling any backlash. In this case, control is enhanced by using the shooter’s family. · In both cases, a member of the Bush family was with the family of the shooter as the crime came down. This may serve to remind the shooter that his family is vulnerable. · There may be a need for a quid pro quo. If the Bin Ladin family was giving up a son, maybe they felt Bush Sr. should do the same. When the attacks on Bush Jr. THE SEPTEMBER 11 COMMISSION REPORT Page 279 failed, maybe it was decided to let Osama Bin Ladin live. Maybe Bush met with Bin Ladin to save his son’s life. The Hinkley arrangement would suggest that the elder Bush is not above believing that a family may need to make great sacrifices. But as the record shows, assassinating a President is extremely difficult. 3. Remove security: Reagan was told to not wear a vest. His security detail left him exposed. On 9/11, the air defenses were down. The bomb-sniffing dogs at the World Trade Center had been removed early enough for someone to plant explosives. Air defenses failed miserably. 4. Have a back-up plan: As a shooter, Hinkley failed. The back-up shooter on the roof failed. The delay in getting him medical attention failed. The CO2 planchet failed, but ultimately all together they achieved the desired result. On 9/11, the planes failed to bring down the towers. One plane missed its target. The fires and local explosives did not bring down the tower. The explosions in the basement ultimately completed the job. 5. Control and if possible, prevent investigation by announcing you have the guilty: In both cases it was claimed immediately that the guilty parties were obvious and there was no need for an elaborate investigation. 6. Have a transition plan: In both situations, FEMA was engaged as a justification – if necessary – for keeping Congress out of the succession picture. All of these points, however, are speculation. THE SEPTEMBER 11 COMMISSION REPORT Page 280 12 Potential “Persons of Interest” This chapter sets out to identify a list of individuals who can be considered as “person of interest” in investigating the various crimes identified in this report. Those crimes include, but should not be limited to: · Conspiracy in the murder of Nick Berg, Eugene Armstrong and Jack Hensley. · Conspiracy in the attack of the World Trade Center and cover-up. This set of crimes includes hiring those who organized it, flew in the plane, as well as those who brought down the building with explosives. For this, the focus will be on the German/Swiss banking world, Russian/Israeli Mafiya, the re-assembled Iran- Contra/Azerbaijan gang, the President, Vice-President, Secretary of State, various officers in the CIA, FBI, Department of Justice, FEMA and NORAD. · Conspiracy to launder money and steal national treasuries. · Treason To focus on seeking out those responsible for a cover-up is to distract the world from the real crimes: the theft of the wealth of nations for personal use, and the murder of thousands of people for personal gain. 12.1 Murder of Nick Berg This report suggests Nick Berg was murdered by individuals meeting the following five criteria: · An extremely vicious person; · A member of the Israeli intelligence; · Near the Iraq prison Abu Ghraib; · Would have been aware of Nick Berg’s release from jail; · With links to the 9/11 conspirators; One individual that meets all of these criteria is Steven Stevanowicz (aka Stephanwicz, Staphanovic or Stephanowitz), an employee of Titan Corp. and a contract interrogator at Abu Ghraib. Stevanowicz was found to be directly responsible for the brutal interrogations at that prison. Titan Corp. was acting as a subcontractor to CACI in interrogation and translating. CACI, it turns out has significant links which meet two of the five criteria: links to Israeli intelligence and links to the 9/11 conspirators. THE SEPTEMBER 11 COMMISSION REPORT Page 281 It should come as no surprise that Israeli intelligence has played a key role in the Iraqi invasion and prisoner interrogation. “Israeli interrogators are working in tandem with the US-led occupation troops in detention facilities across Iraq, a senior US officer revealed Saturday, July 4. Brig Gen Janis Karpinski, the US officer at the heart of the Abu Gharib prison scandal, said she herself met an Israeli interrogator at a secret intelligence center in Baghdad [Israel Continues Interrogation Work in Iraq, Islamonline.net & News Agencies , 7/15/2004] “Seymour Hersh said that one of the Israeli aims was to gain access to detained members of the Iraqi secret intelligence unit, who reportedly specialize in Israeli affairs. Hersh further unveiled on June 22 that Israeli intelligence and military operatives were now quietly at work in northern Iraq, providing training for Kurdish commando units and running covert operations inside Kurdish areas of Iran and Syria. The report added that Mossad operatives work undercover in northern Iraq as businessmen and in some cases do not carry Israeli passports.” [Israel Continues Interrogation Work in Iraq, Islamonline.net & News Agencies, 7/15/2004] "One of Staphanovic's co-workers, Joe Ryan - who was not named in the Taguba report - now says that he underwent an "Israeli interrogation course" before going to Iraq.” [Israeli Mossad/Shin Bet Associated with Prison Torture, Robert Fisk, 5/26/2004] One of the key linkages in this Israeli involvement is CACI. CACI is linked to the 9/11 conspirators through Richard Armitage. Richard Armitage was Board member of CACI from 1999 to 2001, and a key participant in most of the activities shown to be relevant to the 9/11 attack: Iran-Contra, Azerbaijan covert operations, arms shipments to Afghanistan, the PNAC. Through the years, he has had a relationship with David Kimche of the Mossad. “So who is Richard Armitage? None other than a former board member of CACI--the private contractor that employed four interrogators at Abu Ghraib prison--interrogators who worked with the 205th Military Intelligence Brigade there.” [Richard Armitage and CACI: What's Behind the Attacks on Australia's Latham? David Palmer] Members of the Board of CACI have also been documented as having close relations with the Israeli defense organization. “Both Titan and CACI have directors with strong ties to the Israeli military establishment. The director of Titan with the largest stake in the company is Edward H. Bersoff, who received the Distinguished Leadership Award by the Washington Chapter of the American Jewish Committee in 1999. Bersoff has been an honored speaker at the Jewish Federation of Greater Washington, along with the likes of Sharon’s right-wing ally Binjamin Netanyahu. On January 14, Dr. J.P. (Jack) London, chairman, president, and CEO of CACI International, flew to Israel to receive the Albert Einstein Technology Award from the Jerusalem Fund. The award was presented by Israeli Defense Minister Shaul Mofaz and Uri Lupolianski, Jerusalem’s ultra-Orthodox Jewish Mayor at a ceremony in the occupied city on January 14, 2004. “Titan's linguist contract with the U.S. Army” was noted as a “primary driver” behind the companies increased revenues. The only language tool Titan offers on its website is for “Levantine Arabic,” i.e. the Arabic spoken in Palestine, Lebanon, and Syria. Last July, however, Titan Systems Corporation of Fairfax, Va., placed an ad for “native Arabic, Aramaic, Kurdish, Persian, Pashto, Turkish and Dari speakers.” Titan’s ad for interpreters required the native speakers be U.S. citizens and fluent in English. It is extremely unlikely that any native speaker of Arabic would be named “John Israel.” [Who is Behind the Abuse at Abu Ghraib? Christopher Bollyn – Rumor Mill News May 6, 2004] THE SEPTEMBER 11 COMMISSION REPORT Page 282 At least two of the CACI subcontractors at Abu Ghraib have been widely viewed as Israeli agents. “Although it is still largely undocumented if any of the contractor named in the report of General Antonio Taguba were associated with the Israeli military or intelligence services, it is noteworthy that one, John Israel, who was identified in the report as being employed by both CACI International of Arlington, Virginia, and Titan, Inc., of San Diego, may not have even been a U.S. citizen. The Taguba report states that Israel did not have a security clearance, a requirement for employment as an interrogator for CACI. According to CACI's web site, "a Top Secret Clearance (TS) that is current and US citizenship" are required for CACI interrogators working in Iraq. In addition, CACI requires that its interrogators "have at least two years experience as a military policeman or similar type of law enforcement/intelligence agency whereby the individual utilized interviewing techniques." Speculation that "John Israel" may be an intelligence cover name has fueled speculation whether this individual could have been one of a number of Israeli interrogators hired under a classified contract. Because U.S. citizenship and documentation thereof are requirements for a U.S. security clearance, Israeli citizens would not be permitted to hold a Top Secret clearance. However, dual U.S.-Israeli citizens could have satisfied Pentagon requirements that interrogators hold U.S. citizenship and a Top Secret clearance. Although the Taguba report refers twice to Israel as an employee of Titan, the company claims he is one of their sub-contractors. CACI stated that one of the men listed in the report "is not and never has been a CACI employee" without providing more detail.” [The Israeli Torture Template, By Wayne Madsen, www.counterpunch.org 5/10/2004] “A Lawsuit has been filed by the New York-based Center for Constitutional Rights (CCR) on behalf of nine Iraqis against two US contractors ….: Titan Corporation of San Diego and CACI International of Arlington, VA. Employees Stephen Stephanowicz and John Israel of CACI and Adel Nakkla of Titan, all of whom are believed to have ties with Israeli intelligence.” [Will Jewish-led legal group tell the full truth as it demands prosecution of torturers? Brendan Andrews ,San Diego 6/9/2004] Key to this issue is Stefan Stephanowicz. There are several points in his known history that substantiate suspicion of him. Through CACI, he meets all five of the criteria: The pictures of what was done to the prisoners under his direction, with the internet pictures being substantially more brutal than those published in the papers, is testimony to the utter brutality of this interrogator. He has demonstrated on multiple occasions, that he is capable of the brutality required for a beheading. · Several web sites refer to the Jewish heritage of his name, making him a candidate for potential recruitment as sayanim by the Mossad when he lived in the US. · In 1999, while a member of the US Naval Reserve, he moved to Australia to work as an IT recruiter. This would suggest he established special arrangements with the US Navy Reserve to allow this happen. He moved to Adelaide, Australia, which would subsequently be mentioned as a home to scandal involving Mossad agents trying to obtain Australian passports. · The man is 6 foot, five inches tall. If one views the photographs of the Nick Berg execution, one of the participants – the one in the white head dressing, and the “too short” pant legs – has been estimated to be 6’4”. One doesn’t find a lot of Arabic men fitting that height description. The photographic evidence does not rule him out. · He was at Abu Ghraib when Berg was released, and would have known of the release. THE SEPTEMBER 11 COMMISSION REPORT Page 283 If indeed it was Stephanowicz that murdered Nick Berg, the entire “team” of six interrogators identified in the Gonzalez report should be investigated. (Remember, there were five terrorists in the beheading video, with a sixth holding the camera.) It would also be fair to bring into the indictment whoever at CACI and Titan Corp. sent them to Israel for training. That is the trail of evidence that will lead to the individuals in the Mossad that ultimately owned the Zarqawi/Stephanowicz cell. Should an investigation of Titan be undertaken, there are least two reports which suggest suspicious activity related to their work in Iraq and the US. First, Titan translators in Iraq have an exceedingly high death rate (for translators), suggesting they are “targeted.” (13 of 29 seems statistically significant given these are not combat position.) “As of early April, San Diego's Titan Corp has lost at least 13 employees - including four Americans - since the defense company began providing interpreters to the US Army in Iraq, according to published reports. Nine of the 13 killed from July through December were Iraqis, although not all of the deaths were combat-related. [Corporate Mercenaries in Iraq: Part 1: Profit comes with a price, David Isenberg, 5/20/2004] CACI had 29 employees at Abu Ghraib alone, eight interrogators, 10 screeners, nine analysts and two report writers, according to Senate testimony on the abuse case. “[http://www.rotten.com/library/crime/corporate/caci_internatonal/] The question that needs to be asked here is: Is the Mossad eliminating its own recruits as the Abu Ghraib scandal grows, just as they needed to eliminate Nick Berg? 12.2 Deutsche Bank Executives This report contends that key owners and executives of the Deutsche Bank and related cartel members (especially UBS, Bank of New York) had motive, opportunity and capability to initiate the attack on the World Trade Center. Their motives were primarily financial: · $23 billion in annual potential equity banking revenues; · Hundreds of billions of illegal gold reserves, and profits from managing those. Those revenues alone could easily reach $20 to $30 billion a year. The relationships upon which this cartel is founded go back in history to World War II, when gold stolen from treasuries and personal fortunes was transferred from the Third Reich to a group of industrialist and financiers. This group built a financial empire founded on fraud and crime, refusing to return this wealth to its rightful heirs. With the not too distant history of German banking involvement with the Third Reich, it may be tempting for some to jump to the conclusion that these bankers are somehow connected to the rumored return of that regime. Nothing could be further from the truth. The history of German Banking – if not international banking – suggests that while a few bankers may succumb to the political winds of the time, they generally remain “adaptive” and learn to coexist with the current regime. Two recent studies support this conclusion: "They (German bank elite) built strong relationships over a period of ten, twenty and even thirty years. They often shared similar convictions on issues such as class, business, and the importance of U.S.- German economic ties. In many cases, they shared business partnerships and investments as well. This THE SEPTEMBER 11 COMMISSION REPORT Page 284 does not mean that they had a single point of view concerning Hitler, either before or after the Nazis climb to power in 1930-33. Contrary to the popular myths concerning the Dulles brothers, for example, Allen Dulles was a relatively early advocate of U.S. backing for the British in their showdown with Germany, while John Foster Dulles remained considerably more tolerant of Nazism. Others were prominent Jews who were destined to be dispossessed by the Nazis. Banker Eric Warburg was forced to sell off most of his German properties in the early 1930s, but he returned for the reconstruction after 1945. Some members of the elite did become creatures of Hitler, however, such as Dresdner Bank's Karl Lindemann, who was characterized as a "rabid Nazi" by one of the bank's senior executives. Despite their differences, these U.S.-German "reference groups" or "linkage groups," as they became known to sociologists, shared common convictions that were to them far more fundamental: the central importance of maintaining the viability of capitalism as a national and world economic system, and the key role of U.S. and German productive capacity and markets within that effort. Measured against these more basic values, the Nazis and their whole brutal apparatus were seen by much of the elite as transitory, at least during the 1920s and 1930s. From the standpoint of corporate ideology, this elite saw itself as a new generation of the so-called managerial revolution; they considered themselves to be "forward thinking" and unencumbered by the stuffy formalism of earlier times." [Christopher Simpson, The Splendid Blond Beast, Common Courage Press, 1995] "Right from the start, the NSDAP ideology was hostile to the financial sector. Financial capital, according to Nazi ideology, was more profit-earning than working capital, was disembedded from its national context and was in the service of Jewish interests. In his 1925 published pamphlet "Mein Kampf", Hitler (1925/1999: 213) wrote, "the hardest battle would have to be fought, not against hostile nations, but against international capital" which was "robbing the enterprises" (ibid: 314). Thus the strong continuity of the bank's entanglement with industrial corporations over the Nazi period and beyond was not a forgone conclusion. The relationship between different groups of industry and the NSDAP is the subject of numerous controversial debates… but there seems to be a consensus that "Hitler's assistants" were located more in the heavy-industry sector – the political commitment of Fritz Thyssen is a well-known example of this – than in the financial sector …..Nazi elite failed to make an extensive reform of the banking sector their top priority. The cartel-like banking system and the banks' ties with industrial corporations were not dissolved….the "Schutzstaffel" (SS) agitated against banks as rent seekers of the war and demanded the nationalization of the large banks. Again, the banks’ influence over industrial companies was a main point of criticism (James 1995: 390-395). Hitler refused such demands, arguing that National Socialists should not assume any responsibility towards banks……By and large, the company network remained stable in the years of the Nazi dictatorship." [Martin Höpner and Lothar Krempel, MPIfG Working Paper 03/9, The Politics of the German Company Network, Max Planck Institute for the Study of Societies, September 2003] The three largest German banks of Deutsche Bank, Dresdner and Commerzbank did indeed control most of industrial Germany, but that did not by default make their management Nazis. Sparing them the indignity of that accusation however, should not be construed as exoneration. These banks – especially the Deutsche Bank – seem to have a consistent reputation for being involved with organized crime, and they seem to deal with virtually any organized criminal element one can name. Moreover, it is fair to observe that more than one of these gentlemen has the potential to be linked to a German version of ‘Manifest Destiny’. Some of these gentlemen have lineages that are hundreds of years old, with a familial legacy of conquest and imperialism to live up to. Such men might easily subscribe to a German version of the New World Order. Accountability for corporate institutions can best be attributed to the Board of Directors. That being said, it would be inappropriate to claim that every – or even the majority of - Board member of Dresdner, Deutsche Bank and Allianz is responsible for the actions of a few rogue executives. The key issue is going to be: how few and how powerful are these THE SEPTEMBER 11 COMMISSION REPORT Page 285 rogue bankers? Research has suggested that the following candidates for this infamous distinction should include former Deutschebank Board members: · Michael Freiherr Truchseß von Wetzhausen - on the Board of the Deutschebank until June 2003. With a family name several hundred years old, his ancestor was a Grand Master of the Templars. His father was an SS Lieutenant at Dachau, killed by Americans troops from Brooklyn. If anyone was a candidate to represent the old school of the German Motherland – this individual has the best credentials. If revenge is considered a motive, he should become a suspect. · Dr. Diethart Breipohl. Former CFO of Allianz, this Board member of Allianz has probably served on more boards throughout Europe than any other board member from this group. This individual is clearly a ‘power.’ A partial list of his leverage is as follows: - prior to 12/1999 member of the executive committee of the alliance AG - prior to 12/1999 member of the supervisory board of the RWE AG - Member of the supervisory board of the alliance AG (2000) - Member of the supervisory board of the Rheinelektra AG (today: Lahmeyer AG) - Member of the supervisory board of the Beiersdorf Co. AG - Member of the supervisory board of the Continental AG - Member of the supervisory board of the Grundig AG - Member of the supervisory board of the metal company AG - Member of the supervisory board of the Bavarian Hypo and association bank - Mostly it is his involvement in Multigroup that puts his name on a list of suspects. Six Board Members – or former members - of the Deutsche Bank being investigated for approving tax evasion (also known as money laundering) activities should also be included as prime suspects. These gentlemen have all apparently demonstrated a willingness to allow illegal activity. "Investigators claim the bank helped clients transfer money anonymously to Switzerland and Luxembourg with the knowledge of these board members. Frankfurt's chief prosecutor, Job Tilmann, said they suspect Deutsche Bank employees not only "systematically" aided customers in such transfers, but also that Breuer and other executives were aware of the practice. "This is not about a few individual cases," Tilmann said. "The number of instances in question is so large that we're led to believe it has been part of a more widespread practice." [Deutsche Bank’s chairman faces probe into tax evasion charges,” Vanessa Fuhrmans, Financial Express, 6/18/1999] Rolf Breuer, Deutsche Bank AG Chairman;  Carl von Boehm-Bezing, Deutsche Bank Board Member;  Juergen Krumnow, Deutsche Bank Board Member;  Tessen von Heydebreck Deutsche Bank Board Member. A descendent of William the Conqueror;  Ulrich Weiss, former Deutsche Bank Board Member; and  Georg Krupp, former Deutsche BankBoard Member. THE SEPTEMBER 11 COMMISSION REPORT Page 286 These eight men would not constitute the entirety of the cartel, but it does represent a list of German financial executives with questionable activities of a money laundering nature in their background. On the North American continent, it is appropriate to designate at least two former high ranking Deutsche Bank Executives: · Mayo Shattuck: former Deutsche Bank Board Director and CEO of Deutsche Bank Alex Brown who resigned on 12 September 2001, Trustee of the Bronfman family fortune and financial advisor to Adnan Khashoggi. Mayo would move on to become CEO of an energy company and soon created a company whose primary business was trading energy derivatives and power –replacing Enron in a market vacuum after it’s collapse. · Tye W. Burt - the former Chairman of Deutsche Bank Canada and Deutsche Bank Alex Brown Securities Canada, and Managing Director and Head of Deutsche Bank’s Global Metals and Mining Group., and on the Advisory Board of Barrick Gold. Additionally, Marcus and Jacob Wallenburg need to be added to this list because of their involvement with the cartel and Donald Rumsfeld. Their family roots with this cartel were long disguised, but the release of post-war national archives in both Sweden and the US changed the world’s view. “…a darker chapter is being written now about the Wallenberg family and its extensive business empire, as Sweden confronts dismaying new evidence that the country's wartime collaboration was more extensive than is widely known, and that the Wallenberg family profited from secret dealings with the Nazis. For instance, documents from World War II contain evidence that Jacob and Marcus Wallenberg, Raoul's cousins, used their Enskilda Bank to help the Nazis dispose of assets seized from Dutch Jews who died in the Holocaust. According to extensive documentation, the Wallenberg bank also provided illicit cover so a German company could operate in the United States - with help from a future US secretary of state, John Foster Dulles. The documents indicate that the company, Bosch, paid its fee in gold, but that the Wallenbergs insisted that the gold be used to buy Swiss securities because they feared the gold had been stolen by the Nazis.” [Family long viewed as heroic profited from Nazi deals , Walter V. Robinson, Boston Globe Staff, 07/06/97 ] “There were many other Swedish corporations that enjoyed profitable relationships with the Nazis. However, the one most cherished by the Nazis was the Enskilda bank, owned by the Wallenbergs. With good relationships with a bank the Nazis could borrow funds and launder their stolen gold. Safehaven documents revealed that the US had been tracking the pro-Nazi activities of the Wallenbergs for several years. In February 1945, Morgenthau, in a letter to Secretary of State, Edward Stettinius, charged that Enskilda was making substantial loans to the Nazis without collateral and making covert investments for German capitalists in US industries. Note that Morgenthau's letter confirms Bormann's plan to allow Nazis to invest in the United States as a means of preserving their assets. He further charged that the bank was repeatedly connected with large black market operations. In the letter Morgenthau identified Jacob Wallenberg as strongly pro-Nazi and rebuts the claim that Marcus was pro-Ally. The Wallenbergs were playing both sides,…. Marcus Wallenberg came to the United States in 1940 and attempted to purchase on behalf of German interest an American held block of German securities…. Enskilda Bank has been repeatedly connected with large block market operations in foreign currencies, including the dollars reported to have been dumped by the Germans.” [Nazi Gold , Part 5:Operation Andrew & Sweden's Neutrality “According to Hewitt's report, it was Wallenberg's opinion that the only alternatives to Hitler were Himmler, backed primarily by the Waffen SS and the Gestapo, or the Wehrmacht secret opposition cells if they could survive Gestapo harassment and rally the main body of the army before Hitler THE SEPTEMBER 11 COMMISSION REPORT Page 287 became aware of what was going on and destroyed them.’ [Dispatch from Wartime Sweden: Reichsführer Himmler Pitches Washington, John H. Waller] The relationship between the Wallenbergs and Himmler’s industrial underworld efforts have carried into the present times, with the primary vehicles of the Wallenberg empire being ESB (the Wallenberg financial company), Investor AB (the primary holding company for Wallenberg wealth), and ABB Ltd – (the engineering company that built and sold components for nuclear armaments to North Korea.) It is from the Boards of these companies one finds the entwined relationships of the Wallenbergs with the German cartel, with Jacob Wallenberg currently having a position on the Board of Directors of the Deutschebank. Even more interesting, one finds the name of Donald Rumsfeld on two of these boards: Investor AB and ABB. (Of note: While on the Board of ABB, Rumsfeld approved the sale of equipment vital to North Korea’s nuclear capability. His recollection of this has failed, but other board members have recollected his participation.) All of these bankers had a vested interest in seeing the various investigations in World Trade Center disappear. While there were thousands of individuals who benefited from the destruction of that evidence, this group benefited the most, along with the criminals they were protecting. 12.3 Israeli “Fixers” The suspects that concocted and executed these crimes begin to emerge in the murky world of the Israeli Mossad. By historic example, the October Surprise meetings, (which were the beginning of the Iran-Contra affair, the sabotage of US rescue attempts of hostages, and the $40 million payment from George HW Bush to the Iranians to not release the hostages) were initiated by the Israelis. These Israelis (led by David Kimche) wanted to be able to continue to arm the Iranians and feed the war between Iran and Iraq. Profiteering on the side was also part of the agenda. “… in January 1986, Nimrodi, Schwimmer, and Kimche were replaced by the prime minister's counterterrorism expert, Amiram Nir. According to the Israeli newspaper Yedioth Aharonoth, Prime Minister Peres was uncomfortable with the idea of an Israeli, especially one of his friends, making commissions on the transactions. Perhaps more pointedly, Haaretz reported that some Israeli mediators had "meddled" with the bank account in Switzerland that was used to channel money from the Iranians to the Americans and eventually to the contras (New York Times, December 1, 1987).” [Contragate and Counterterrorism: An Overview, Gregory Shank, Crime and Social Justice, Vol. 31, No. 2,2003] It is the conclusion of this report that because of the extensive involvement of Israeli intelligence agents in so many aspects of the attack on the World Trade Center, and their key connections to both the German/Swiss banks and Iran-Contra/Azerbaijan group of ‘businessmen,’ that it was they who first proposed destroying the entire World Trade Center to solve the Bank Cartel’s problem. This solution – if blamed on Muslim terrorists – would fit their national agenda of enlisting American opinion against the Palestinians, the Hezbollah and the Iraqis. There are two primary “persons of interest.” David Kimche is a 30 year veteran of the Mossad and was involved not only in the very first October Surprise meeting, but through the entire Iran-Contra scandal as well. He has THE SEPTEMBER 11 COMMISSION REPORT Page 288 maintained a relationship with Saudi, Syrians, Iranians and his North American intelligence cohorts through Richard Secord. He is connected to Adnan Khashoggi as well. When Israelis were “recruited” for conflict in Azerbaijan, he was responsible for the recruiting. Over the years, he has developed deep relationships with the pro-Israeli movement in the US though his work with Jon Kimche. His involvement has been documented in various sections of this report. He is a major “hidden” conspirator in this crime. Today, in his leadership role of the Glocal Forum, David Kimche is in a perfect position to recruit and run sayanim in and out of third world contries on a regular basis. The other primary candidate of suspicion is Meir Dagan, the current head of the Israeli Mossad. Since Dagan’s ascent in 2002 to head of the Mossad, over 200 agents, including seven section heads, have left the agency. These ‘early retirements’ are generally attributed to a concern and disagreement over his priorities and methods. Dagan’s experience puts him in a central position for suspicion in all of the charges, ranging from directly or indirectly ordering the brutal execution of American and other hostages in Iraq, to the planning and execution of the attack on the World Trade Center. Meir Dagan, son of a Russian immigrant, started his military career in the late 1970’s, running the Sayeret Rimon. Sayeret Rimon was the first of its kind - a special forces unit which became the first “Mistaravim type unit.” Mistaravim, in Hebrew, means to ‘disguise as an Arab.’ During his eighteen months of running this unit, he deployed a host of innovative techniques for the Israeli Special Forces: · Hiring Palestinians as point men. He would use special persuasion to convince convicted and imprisoned Palestinian felons to act as fronts for his units; · capturing Palestinian freedom fighters, he would simply execute a number of them with a bullet to the head; · failing an ability to capture his targets, he would have them assassinated, quite often by car bombing; and then · Attributing his attacks and car bombing to other fictitious groups. After the first Invasion of Iraq by the US, Dagan was tasked with building the Mossad infrastructure inside of Iraq, using many of the same tactics he deployed while with the Sayeret Rimon. (This report contends that operation is still active, that Zarqawi was an agent of that group, and that it still foments civil unrest in Iraq through its traditional methods. The assault on an Iraqi jail by the British troops in Iraq to free two arrested terrorists is largely thought to be a rescue of Israeli agents before they were discovered.) He retired from the military after this assignment, but he designed and built the organization that has executed numerous competitors to the Mossad in Iraq. As the top commander of the Mossad at the time of the executions of Berg, Hensley and Armstrong – if the Mossad is responsible, then he is to be held accountable. In the late 1990s, Dagan became the Economic and Commerce Representative of Israel to Nigeria. Other than a simple notice of his holding this position, there is nothing in the press about his activities during this time. To understand the importance of his role as a chief architect of Israeli trade in Central Africa during this time, it is important to put this time and place in context. The last fifty years have been a time of great turmoil in Central THE SEPTEMBER 11 COMMISSION REPORT Page 289 Africa. Nigeria is considered to be a relatively stable and neutral country. To the west of Nigeria are Liberia and Sierre Leone. To the southeast of Nigeria are the Congo and Angola. All four of these countries were (and still are) subject to continuous internal strife, allowing the most powerful warlord in each country the right to exploit vast mineral deposits such as oil, lumber or “conflict diamonds.” Conflict diamonds are diamonds used by ‘illegal rebel forces’ to finance their rebellions. They are thought to be mined by individuals or small independent mining companies, taking wealth from land previously assayed by larger diamond firms as barren. These diamonds are then ‘confiscated’ by rebel warlords. The truth of the matter is that at the end of the Cold War, and collapse of the Soviet Union, about $12 billion in rough uncut diamonds from government reserves, originating from Russian mines, disappeared. These stones are most likely now being laundered by trading them to various warlords in exchange for cash, weapons and mineral concessions, primarily crude oil and wood. The legal sales contracts for these raw materials are made at ridiculously low prices, with cash coming across the table and under the table. As a result, there is very little “paper” profit in these trades to be used to develop the economies of those countries. Conveniently, the middlemen placing the stones in the market are also the same agents connecting the warlords with Israeli arms merchants. Technically, it’s illegal to sell “conflict diamonds” in the De Beers dominated market. They do however show up there from time-to-time. However, an alternative channel has opened up within the last decade: Lev Leviev. Lev Leviev is a secondary candidate. Because of his involvement in blood diamonds, Angola, arms deals and a supply chain comparable to Barrick, it is speculated his accounts are involved in this tragedy. Leviev belongs to a group of rogue Israeli intelligence and military operatives who are attached to 9/11 through a false flag operation. He was born in Soviet Uzbekistan, and emigrated to Israel with his father in 1971. After a short career in the diamond industry, being one of the ‘select few 150’ authorized to buy directly from De Beers, he set out to create an alternative diamond supply chain. This personal vision of Leviev’s was conceived – coincidentally - at the end of the Cold War, about the same time the Russian criminals were looking for a way to launder $12 billion in diamonds heisted from the Russian treasury, over the next ten to twenty years. Leviev is considered to be the primary means by which the Russian diamond stockpile is being liquidated. (“Israel Tycoon Lev Leviev”, Paul Westman, 9/11/2003.) Leviev also has been reported (unconfirmed) to own a very significant share of a shipping company that illegally broke its lease with the World Trade Center and moved out seven days before the attack on September 11, 2001. [www.freerepublic.com/focus/news] That company would be Zim-American Israel Navigation, which is largely owned by the Israel Corporation (i.e., the government of Israel. Prior to that Zim was owned by Shaul Eisenburg, and the Eisenburg Group. Eisenburg was widely reported in the mainstream media as a Mossad agent, and would later be the private sector employer for David Kimche). The second largest investor in the Israel Corp. is Leumi Bank (about 20%). Leumi Bank has about four major investments, one of which is in Lev Leviev’s major companies. Less than a year after the attack, one of their ships would be impounded for attempting to ship Israeli manufactured weapons to Iran. It has not been confirmed that Lev owns a significant portion of Zim, but he is THE SEPTEMBER 11 COMMISSION REPORT Page 290 surely well connected to it. Lev Leviev is an extremely lucky man. He is also extremely generous in his charitable contributions, and as a result, extremely well connected across the globe. Diamond laundering would have to be a bit more difficult than laundering gold, because there are not a lot of places that can be described as sources of diamonds. The ‘deal’ would probably go like this: the stones stolen from Russia are laundered into the market in exchange for contracts for legal raw materials (oil and wood). They surface on the market as blood diamonds or conflict diamonds, supposedly mined in alluvial fields and small mines throughout Africa – even though prior investigation by De Beers had found these locations barren. Leviev’s supply chain is able to re-absorb the uncut stones into any of Leviev’s twelve cutting factories, and sell them on the open market. This supply chain completely bypasses the De Beers mechanisms and controls put in place which would identify the sources of these illegal “conflict diamonds.” According to a UN Security Report, this is the Israeli “fix:” "In all three cases (the Democratic Republic of the Congo, Angola and Sierre Leone), the pattern is the same. Conflict diamonds are exchanged for money, weapons and military training. These diamonds are then transported to Tel Aviv by former Israeli Air Force Pilots….In Israel, these diamonds are then cut and sold at the Ramat Gan Diamond Centre…."[Liberian Orbit, 10/1/2001] Feeding this Central African blood frenzy are numerous private military companies (PMC’s- agents formerly referred to as mercenaries) and arms merchants. A majority of these arms merchants and PMC’s involved in selling weapons, aircraft and military training to both sides of third world civil wars and warlords are Russian/Israeli. On this list are: Victor Bout (Russian/Tajikistan born, started business in Afghanistan, became an Israeli citizen), who had extensive dealings selling armaments and weapons to the Taliban. He is reported to have partnered with Farhad Azima on at least one Russian air deal. He is now running weapons into Iraq on behalf of the US government because of the dangers associated with flying in. Nevertheless, there are outstanding warrants for his arrest in multiple countries. · Israeli Arcadi Gaydamak, whose key partner at one time was Alimjar Tokhtakhounov – a leading member of the Russian mafia. His dealings with Angola are detailed in Section 4.8. He has done business with Nazarbayev. · former Mossad agents Danny Yatom and Avi Dagan, who created the PMC Strategic Consulting Group; · Moshe Levy, owner of the Lordan-Levdan, a PMC working in the Congo; · Zeev Zachrin, former Brigadier general in Israel; · Dan Gertler, owner of the Israeli firm International Diamond Industries, who has been connected with diamond purchases in exchange for weapons and training in Liberia, Sierre Leone and the Congo, working with Yair Klein THE SEPTEMBER 11 COMMISSION REPORT Page 291 · former Israeli Col. Yair Klein (imprisoned in Sierre Leone) who has been widely reported to have provided weapons and training to Sierra Leone, Liberia, the Colombian drug cartels and Al Qaeda ; and · Simon Yelnik, Israeli arms dealer and former director of security for Zaire’s dictator Mobutu Sese Seko; · Ori Zoller, Israeli arms dealer, citizen and representative of Israeli Military Industries, as well as former member of the Israeli Special Forces and intelligence. These are just some of the people who have profited from the theft of Russian gold, diamonds and weaponry. Their names, and their company names, should appear on a wide range of accounts that cross the trail of this massive theft of national treasuries. A large part of what they do is technically legal, but history demonstrates over and over that these deals are accompanied by bribes, hidden profits and tax avoidance – and usually murder. At the same time these types of trades were occurring, supposed Al Qaeda agents were accused of trading weapons for diamonds to rebel groups in Central Africa. The story is that Al Qaeda was attempting to generate cash by selling arms received from the Americans. Of the six alleged Al Qaeda members known to have been involved in these trades, one of them - Pakistani Asfia Siddiqui, and the only prominent female figure in Al Qaeda in this investigation – was considered by US intelligence to be a “fixer” for the Al Qaeda operatives in the U.S. [“Al Qaeda bought diamonds before 9/11”, AP, 6/28/2004]. She was part of an operation that bought weapons from Bulgarian arms distributor: Nataco Holding PLC, and moved them into Liberia. Part of that shipment included 10 million rounds of ammunition from - guess who! Also linked to this purported Al Qaeda connection is Aziz Nassour, a Lebanese organized crime figure reported to have sold diamonds to Al Qaeda. His associate for this deal - named Samih Ossaily - is his cousin, another Lebanese underworld figure. Their deal, supposedly on behalf of Al Qaeda, was to bring arms to Liberia using a Moscow based air cargo company named Aviatrend. However, both Aziz and Ossaily have a prior track record of dealing of behalf of the Mossad, working with Ori Zoller and Simon Yelnik. On prior deals, Nassour’s buyers have been arrested shortly after their dealing with Nassour, while he remains free. These buyers were reported to be Hezbollah and AMAL representatives, traditional enemies of Israel. It was concluded that Nassour was a Mossad agent. Was Asfia Siddiqui really an Al Qaeda member? In the US, what the world knows of Asfia was that she was originally from Pakistan, an active – yet seemingly peaceful - advocate of the Muslim religion, an MIT neurophysiologist, lived in Boston, was married and had three children, and was abandoned by her husband. Her lawyer and family claim they have proof that she was in the US when she is reported to have been in Central Africa. Her parents and lawyer claim she is a victim of identity theft, as were twelve of the individuals accused of being 9-11 hijackers. Unfortunately, she and her children have disappeared. The questions that need to be asked to make sense of this scenario include: THE SEPTEMBER 11 COMMISSION REPORT Page 292 Was the real Asfia’s identity stolen by the Mossad, as were the identities of many of the 9-11 hijackers? · Were Nassour and Ossailly tools of the Mossad, being used by the Mossad to infiltrate the Lebanese Hezbollah? · Was the entire diamond for weapons operation an attempt by the Mossad to establish credibility for their undercover agents, which would enable them to infiltrate the Lebanese underworld and their many links to Hezbollah? · Was Asfia’s identity stolen by a Mossad agent to manage an ‘Al Qaeda/Mossad’ cell in Boston, from which two planes in the WTC attack originated? · Is it coincidence that Al Qaeda members are reported to ‘appear’ in Central Africa at the same time that Meir Dagan, the master of “Mistaravim” appears in Nigeria? The preponderance of information seems to suggest that the Central African “Al Qaeda” link is a Mossad, false flag operation. As noted in a recent report: "Strategically, Al Qaida diamond trade would be impossible without Israeli intelligence complicity….For the Sharon government, the de facto financial support of Al Qaida terror around the world, as well as Hezbollah, serves Sharon’s long-term strategy of detonating a clash of civilizations between the West and all Islam." [The Politics of Three, Paul W Rasche] Three additional arguments support this view: 1) Conservative Muslims do not take orders from women, but it is common in the Israeli armed forces; 2) Israelis are strongly motivated to “sell” to both sides of a civil war, allowing them insight into Muslim rebellions in Central Africa; and 3) the US government states that it could never prove that the actual Al Qaeda profited from conflict diamonds, and quickly dropped the investigation. (Note: this would be a fifth US investigation mentioned in this report which was stopped when it bumps into Israeli ‘players.’) This operation included the same assortment of the dark side of the Mossad: Russian Mafiya figures, Israeli secret service, and East European weapons manufacturers and distributors. This time however, there are phone records that link these false Al Qaeda elements in Africa to managing supposed Al Qaeda terrorists in Boston – a source of the attack on the World Trade Center. 12.4 “Fixers” in Florida No review of the participants in this tragedy can be complete without a commentary on the activities in southern Florida which played a significant role in the attack on the World Trade Center. At least fourteen of the hijackers were reported to have ‘studied’ in one or more of the following flight schools in southern Florida: School Management/Owner Nationality of Manager School Location Change of Ownership Huffman Flight School Rudy Dekker Netherlands Venice Airport 1999 Florida Flight Training Center Arne Kruithof Netherlands Venice Airport 1999 THE SEPTEMBER 11 COMMISSION REPORT Page 293 Pelican Flight Training Center (Professional Aviation) Pascal Schreier and Sandra Hamouda Germany French-Tunisian Charlotte County Airport, Punta Gorda Feb 2001 What these four schools (Schreier was involved in two schools, the first of which went bankrupt within two months of Atta’s arrival) had in common was:  Recent change in ownership;  New ownership/management by nationals from Northern Europe;  High percentage of Arabic nationality students;  All three owner/managers had a personal relationship with Mohammed Atta;  All spoke German; and  All three were acquaintances. "It appears that Schreier, Hilliard and Dekkers were also in business together. Later, we learned that the new owners of Huffman Aviation were from the largest flight school in the Netherlands, which used to train up in Lakeland, Florida. It was near Rotterdam, the city from which Arne Kruithof hailed. Pascal Schreier was also apparently involved with Wally and Rudi’s failed aviation ventures. The true name of their flop airline, which flew as Florida Air, was Sunrise Airlines. And Pascal Schreier owned a company called Florida Sunrise with an address at the Venice Airport. It was too close for coincidence." [Welcome to Terrorland: Mohammed Atta and the 9-11 Cover-Up in Florida, Daniel Hopsicker, 2004] An analysis of the schools and people who owned and managed them suggests the whole process of preparing the Arabic hijackers was controlled at two levels: one which would create and feed the pipeline of terrorists into the US, and another that ensured that the Arab recruits would execute the given task of attacking the World Trade Center. 12.5 Huffman Flight School The Huffman Flight School garners the most media attention, for at least four reasons. First, it was the primary training school for Mohammed Atta and four of his reported ‘cell member’ colleagues from Hamburg. Second, it is also known that recruiting for the school was actively conducted by Yeslam Bin Laden, brother of Osama Bin Laden. Third, the school was responsible for training of the bin Laden family pilots for SICO, it’s Swiss investment arm, run by two former BCCI agents. Fourth, the school has an intriguing story behind its ownership. Actual financial ownership of the school has not been thoroughly documented, but the consensus appears to be that it was under the ownership of Oryx Investments, an investment holding company formed in Dubai by Adnan Khashoggi, Sheik Kamal Adham, director of Saudi intelligence (1963-79), Prince Nawaf bin Abdul Aziz (a major investor in Barrick, codenamed “Tumbleweed” by his CIA contacts) and Wallace J. Hilliard. · Wally Hilliard is a semi-retired insurance entrepreneur/multi-millionaire, and many observers – including the FBI – view him as an innocent victim in his connections to the terrorists. Unfortunately, while Wally Hilliard continues to claim he was duped, many of his business partners have well documented links to the intelligence and criminal underworlds. He also appears to have political friends that might ensure his protection from any prosecution. Wally made his first fortune by selling an insurance THE SEPTEMBER 11 COMMISSION REPORT Page 294 company - Employers Health -that he had co-founded in Green Bay. That company was sought for purchase by the Fireman’s Fund Insurance, who’s Chairman was Myron Du Bain. Myron, it seems, was a close associate of John McCone (former CIA Director), and they held simultaneous seats on the boards of several major financial institutions, including the United California Bank. It is fair to speculate that Myron is responsible for introducing Wally to the fast paced world of weapons merchants and drug smugglers. Wally is reported in the Florida press to have been the owner of a Lear jet that was seized in Florida with 45 pounds of heroin on it, but his involvement in that crime was cleared by the DEA and FBI. He is also reported to be an avid flyer, and to have purchased between 30 and 40 jets in Florida. Evidently, these were required for creating an airline that would service the Caribbean, and his newly emerging business interests in Cuba. Significantly, he and his investment partner in Oryx, Adnan Khashoggi, have spent several years attempting to establish businesses in Cuba, and open a casino on a small island in the Caribbean. It is worth noting that on a number of these planes, he was a business partner with Mark Shubin. Shubin’s father was a KGB Colonel who was imprisoned in Russia after being caught spying for the US. Mark’s father and family were allowed to leave Russia as part of the Gary Powers (U2 Spy Plane incident) spy-for-spy trade. Mark Shubin later went on to work for the CIA as a pilot. [Welcome to Terrorland: Mohammed Atta and the 9-11 Cover-Up in Florida, Daniel Hopsicker, 2004, pp 262-264] Hilliard’s involvement in airline building, with his airplanes being used by terrorists and drug smugglers, has put him in relationships with powerful people. His business associate in many of these planes - Mark Shubin– was also involved with Ken Good in several businesses. "(Ken) Good had been one of Neil Bush’s cronies in the Silverado Savings and Loan debacle. Kenneth Good was a big part of the Silverado Savings and Loan collapse. He was in business with Neil Bush. In fact, Ken Good had been so clearly a Bush family retainer that it strained credulity to think that Shubin—and Wally Hilliard—now were not similarly connected. In 1983, Neil Bush, President George H.W. Bush’s son, and our current president’s brother, became partners in an oil venture with Ken Good and William Walters, a Denver developer. Two years later, Bush joined the board of Silverado, a Denver S&L to which Walters and Good already owed more than $100 million that was never to see the light of day again. Neil Bush received a $100,000 ‘gift’ from Good, as well as other major financial assistance. Yet he was pressing Silverado’s management— without mentioning these favors—to let Good off the hook on his debts. There was no conflict of interest. It was all just a coincidence." [Welcome to Terrorland: Mohammed Atta and the 9-11 Cover-Up in Florida, Daniel Hopsicker, 2004, pp 264-265] Wally Hilliard, besides having a reach into the Bush family through Shubin (and vice versa), was also fortunate to have his emerging airlines endorsed by Florida Governor Jeb Bush and Florida Secretary of State, Katherine Harris, who established her national notoriety as the person who presided over the Florida vote count that resulted in the Presidency of George Bush. Mr. Hilliard: respected, connected, protected and suspected. He may be innocent, but his reported associations link him to the worlds of gambling, drugs, smuggling and financial fraud. One final note of interest: Hilliard is a significant investor in a small California defense/electronics company (Spatialight, Inc.) with Farhad Azima, another of the Iran-Contra/Azerbaijan group. THE SEPTEMBER 11 COMMISSION REPORT Page 295  Adnan Khashoggi - is first and foremost one of the world’s elite arms merchants. Referred to as a “notable member of this elite group” he was described in the Small Arms Survey of 2004 with the following words: "Some brokers with powerful political clout, like Khashoggi, are virtually ‘untouchable’ insofar as their relationships and dealings involving government officials at the highest echelons go. Any persecution of these brokers, or denunciation of their activities as illicit, could result in the incrimination of states, or the exposure of embarrassing covert activities by the governments themselves." [Small Arms Survey, Graduate Institute of International Studies in Geneva, Switzerland, 2004] Khashoggi has his fingerprints on so many aspects of 9/11 that he may well be “the” key conspirator. Gaining notoriety by being at the heart of the Iran-Contra ‘guns for drugs scandal’ during the Reagan administration, Khashoggi has since leveraged his notoriety to the point where he is a familiar face with film and rock stars, presidents, sultans, sheiks, kings and queens, investment bankers and of course, war lords. While most famous for his connections with the Arab banking community, he is also well established with the Deutsche Bank, most recently continuing his notoriety in the U.S. press by being sued, with Deutsche Bank Securities of Canada , for fraudulent manipulation of security prices. In the case of MJK Clearing vs Deutsche Bank Securities, Adnan Khashoggi et al., filed in December 2002, the facts presented suggest that in addition to misrepresentation by the defendants, an ‘unanticipated drop in stock prices’ on September 11, 2001 enhanced their ability to increase the payout of the purported fraud. (Business Week, May 2003.) As part of the ever increasingly tangled web of relationships, Khashoggi also had ties not only to the Deutsche Bank, but the Bronfman family as well (additional key investors in Barrick) by way of another Deutsche Bank executive: Mayo Shattuck. "Khashoggi, a trusted adviser to the Saudi royal family, is one of the "high net worth individuals" whose past investments have been handled by Mayo Shattuck, formerly head of Alex. Brown (mentioned earlier). ". In 1997, Mayo Shattuck was made Trustee of the Bronfman (mentioned earlier) family fortune. He resigned as CEO of Deutsche Banc Alex. Brown on 12 September 2001, the day following the tragic events in New York City and Washington, DC--the day that has come to be known as "9-11" [David G. Guyatt, Nexus Magazine, Volume 10, Number 6, October- November 2003] His ties to the Bronfmans went well beyond Shattuck, as Khashoggi and Bronfman would become investment partners in Barrick, through Trizec Hahn (landlord to the headquarters of Halliburton and Enron, in the same building). Khashoggi was also identified as an early participant in the October Surprise meetings and subsequent Iran-Contra deals. He would later create Oryx, which funded Hoffman Aviation –the training school where many of the hijackers validated their “education” visas. After the invasion of Iraq, Adnan Khashoggi (Genesis Aviation) became a business partner with retired General William Lyon (on the Board of Kellstrom Industries, Inc., an Israeli owned company) in a venture called Wings of Democracy, an attempt to penetrate the commercial Iraq air business. Lyon is the founder of several university diploma-mill operations in California (American Commonwealth University, aka William Lyon University). These operations are directly associated THE SEPTEMBER 11 COMMISSION REPORT Page 296 with the entry to the U.S. by two of the 9/11 hijackers in the early 1990s. Lyon is a major Republican fund raiser in Orange County, associate of Karl Rove, major financial backer of the Swift Boat Veterans, and keynote speaker at the Republican national convention. Khashoggi is also of interest due to his relationship with Yaslem Bin Laden, a known business partner of his on a limited number of investments. In this case, Yaslem admits to have recruited young Arabs from across the world for Huffman Aviation, a school owned by his former and ongoing business partner, Adnan Khashoggi. Similary, Khashoggi has banks in Azerbaijan, where he easily could have coordinated the recruitment of hijackers with the assistance of his other business associates Richard Secord and David Kimche (Mossad). · Sheik Kamal Adham The last and least mentioned investor in Oryx was Sheik Kamal Adham, director of Saudi intelligence (1963-79), brother-in-law of King Faisal and the CIA's key liaison in the Arab world, a relationship established with George HW Bush when he was Director of the CIA. "In the 1980s, the Sheik Kamal Adham and Abdul Khalil (Adham's successor as Saudi intelligence director), became officers of BCCI, and were implicated in a hostile bid for FIB, and became embroiled in the BCCI bank scandal. In a related venture, Majority shares in Capcom, a BCCI subsidiary, were held by Adham and Khalil. Capcom activities included money laundering and drug trafficking. Adham was eventually prosecuted for fraud in the BCCI case and paid a $100 million fine." [Saudi Entrepeneur Adnan Khashoggi Linked to 9/11 Terrorists, Alex Constantine] Also of interest is the report that two of the 19 reported hijackers were actually from Saudi Intelligence: "Two of the hijackers—part of the team that flew a plane into the Pentagon—had very visible connections to Saudi intelligence and the CIA. Nawaf al-Hazmi and Khalid al-Mihdhar were well known to the CIA and FBI. The claim that an FBI informant in San Diego who knew the men and assisted them but never mentioned any of this to his FBI handlers has another, darker explanation. A former CIA officer who worked in Saudi Arabia described what he says happened: "We had been unable to penetrate Al Qaeda. The Saudi's claimed that they had done it successfully. Both al-Hazimi and al-Mihdhar were Saudi agents. We thought they had been screened. It turned out the man responsible for recruiting them had been loyal to Osama bin Laden. The truth is bin Laden himself was a Saudi agent at one time. He successfully penetrated Saudi intelligence and created his own operation inside. The CIA relied on the Saudis vetting their own agents. It was a huge mistake. The reason the FBI was not given any information about either man is because they were Saudi assets operating with CIA knowledge in the United States." [The Real Intelligence Cover- Up: America's Unholy Alliance, Joe Trento's Column, 8/6/2003 ] It is possible that like the Israelis, the Saudis’ with interest in global gold movements decided to place two of their own team with the hijackers to ensure success of the mission. · Prince Nawaf bin Abdul Aziz was an initial investor in Barrick, and had remained primarily a investor through the 1980s and 1990s. However, two weeks before September 11, 2001, he is appointed as the new head of Saudi Intelligence. “August 31, 2001: Turki al-Faisal, head of Saudi Arabia's intelligence service for 24 years, is replaced. No explanation is given. He is replaced by Nawaf bin Abdul Aziz, his nephew and the THE SEPTEMBER 11 COMMISSION REPORT Page 297 king's brother, who has "no background in intelligence whatsoever." [AFP, 8/31/01, Seattle Times, 10/29/01, Wall Street Journal, 10/22/01] Needless to say, if one had to find the type of criminals necessary to provide the Arabic hijackers which would create the appearance of an Arabic terrorist operation, these latter three gentlemen were and are the right men to bring to the task. Finding willing terrorists, however, was probably the easier part of this operation. After all, there are reported to be thousands of these ‘terrorists’ just looking for the opportunity to strike at America. The more difficult part of this operation would be to manage and steer these terrorists, which would be the task of Mohammed Atta and his friends from northern Europe. Here is where the proclivity for being two-sided was required of a perennial middle-man. Adnan Khashoggi was that middle-man with a reputation of dealing with anyone and everyone, and being able to misrepresent the total picture. Khashoggi’s relationship with Richard Perle is well documented in the press. Adnan would have no difficulty on one hand, encouraging his friend and partner Yeslam Bin Laden, to find recruits for this mission. On the other hand, he was probably required to work into the management team of this attack three probable sayanim: Pascal Schreier, Rudy Dekkers and Arne Kruithof, and one deep cover Mossad agent - Mohammed Atta– who would have been provided to him by the Mossad. This report, with the evidence provided, will conclude that Mohammed Atta was actually a deep Mossad agent rather than an Al Qaeda operative. The circumstances and backgrounds of these flight school operators suggest that while there are no documented reports to that these men were agents of the Mossad, their similar profiles make them candidates for consideration: They show up in Florida, all at about the same time and vicinity, and at the same time that Nick Berg was settling in to Norman, Oklahoma;  They all know each other;  They shared the same customer base- primarily Tunisian, Moroccan and Syrian flight students;  They were young, single, and athletic, and two have names well documented in Europe as Jewish (Arne Kruithof appears to be an exception to the attributes of being single and of Jewish heritage.);  Dekkers, while thought to be Dutch, confided to an acquaintance in Florida that he was German, not Dutch. It seems odd that a man who runs an air flight training school knew little about flying – especially with the name “Dekkers.” Dekkers is a relatively famous name in European flight circles, with a number of individuals with that last name having gained respect as an “expert authority” in the field. It may be fair to surmise that Dekkers was a “created” identity, and he was given that name to lend credibility to his cover.  One needs to ask: If someone was setting up a pipeline to train Arabic hijackers, why not set-up Arabic individuals as owner-managers? Why risk the potential THE SEPTEMBER 11 COMMISSION REPORT Page 298 exposure? Khashoggi had set up numerous organizations and operations with Arabic management across the globe. Why was this different? A final note on the Huffman School confirms the significance of this entity as a clue in the mystery of 9/11, even though not referenced by the official government report. “Hopsicker has confirmed that within hours of the attacks, Florida Governor Jeb Bush had a military C 130 Hercules transport fly in to the Venice airport where a hastily loaded rental truck, filled with the records of Huffman Aviation …was driven into the plane. The C130 immediately took off for parts unknown.” [Michael C Ruppert, Crossing the Rubicon, P. 350] 12. 6 Mohammed Atta With Mohammed Atta, there are a number of circumstantial pieces of information which might lead one to believe Atta is not the person he is generally made out to be. More important, one might be persuaded by the evidence that he could be a deep cover Mossad agent.  He was on very friendly, personal terms with the operating management of these training schools – including drugs, loose women and nightlife. The behaviors attributed to him during his stay in Florida are quite inconsistent with the description of him by his friends in Germany. "I think freedom and the possibility to tell your opinion openly was of great interest for him or it was of big interest for him but all these good of the western world like you told me cars, girls, motor cycles, or things like that, he was not interested in…. he didn't show any fanaticism against America…." [Liz Jackson interviews Volker Hauth, 10/18/2001] “Sure enough. We found an Associated Press story on Sept 26, 2001 headlined “SunCruz Casinos turns over documents in terrorist probe.” “SunCruz Casinos has turned over photographs and other documents to FBI investigators after employees said they recognized some of the men suspected in the terrorist attacks as customers.… Names on the passenger list from a Sept. 5 cruise matched those of some of the hijackers... Two or three men linked to the Sept. 11 hijackings may have been customers on a ship that sailed from Madeira Beach on Florida's gulf coast.” Less than a week before the 9.11 attack, Atta and several other hijackers were aboard one of Abramoff’s casino boats. “ Atta seems to have a history of two personalities. Atta does not fit the profile of a suicide bomber: he is college educated, from a well-todo family in Egypt, apparently quite wealthy (according to witnesses in Florida); and not a religious fanatic, – as demonstrated by his behaviors in Florida. His friends knew him as a political activist, but not a religious fanatic.  In Europe, his modus operandi that is documented by the German Intelligence was a strong anti-Semitic stance. With this factor, one might assume he was sent to Germany to work his way into neo-Nazi, anti-Semitic groups – until his assignment changed;  It seems strange to mention there is no evidence that Atta actually died in the attack on the World Trade Center, but the world does not know for sure that Atta died in that attack. There is, of course his bag, left at an airport, and someone using a ticket with his name. There is however, no radio voice recording or THE SEPTEMBER 11 COMMISSION REPORT Page 299 security video recording from the plane or Boston, or visual confirmation of the man boarding or on board. His father said the security video picture of “Mohammed Atta” at the Portland airport was not his son. This issue of identity theft has plagued identification of many of the supposed 9/11 suspects. What the world may have been presented is conveniently planted information which suggests Mohammed Atta died.  The bag that has been produced as key evidence is troubling. Atta is the only individual on the flight whose bag did not make the plane. He supposedly checked two bags in Portland, so it seems fortuitously and coincidentally odd that one bag was left behind. Two simultaneous coincidences seriously challenge credibility.  There is the curious aspect of his last will and testament found in the bag conveniently left behind. Foreign press describe the document as "a cross between a chilling spiritual exhortation aimed at the hijackers and an operational mission checklist." Much has been written about the will, but not in the following context. Atta supposedly wrote it in 1996 and carried it with him for five years. The world is expected to believe that after all this concern and care for his last will and testament, he deliberately took the will with him, knowing it would be destroyed, but it accidently was saved for posterity by poor baggage handling that affected only this bag on this flight. This is a significant contradiction in behavior that is best explained by a theory that the bag, and will, was planted as evidence, by undiscovered co-conspirators. There might be an official counter to this theory that the bag was a plant, by recognizing that “second copy was found in a car parked outside Boston airport, allegedly rented by Atta.” This however, raises equally disturbing questions which remain unanswered. 1. If Atta flew into Boston on the morning of September 11 as alleged, why did he leave a rental car in the parking lot at the Boston airport – overnight - where it could be discovered in advance, thus jeopardizing the entire operation. Should both pieces of “evidence” (bag and car) be viewed as plants, left by people who wanted the world to believe this was an Arabic, terrorist attack? 2. The FBI- on the basis of security videos - is convinced that on September 4, a white Mitsubishi sedan with Atta was seen “casing” the airport parking lot several times within the space of a few days. On September 10, that car is left at the airport by Atta, who then drives north to Portland, Maine, with another hijacker, and flies back to the airport where he left the car. These would seem to be the activities of an individual planning a get-away, more than anything else. How does one explain the presence of this vehicle: plant or getaway car? · The discovered bag also presents a troubling question. The bag supposedly did not get loaded on the plane because it did not arrive within the necessary ten minutes of departure, while the other one did. This means the flight from Portland on which Atta is reported to have arrived, might have landed exceptionally close to departure time of the connecting flight. Is the world THE SEPTEMBER 11 COMMISSION REPORT Page 300 expected to believe that after years of planning this attack, the attack leader was willing to risk the mission by planning on a connecting flight being ‘on-time’? (Especially when he was within driving distance of the airport.) This however, was probably not the case, which actually makes the bag story more suspicious. American Airlines Flight 11 left at 7:59 AM, but the FBI maintain Atta was on the phone, in the Boston airport at 6:45 – meaning the bag had well over an hour and fifteen minutes to be transferred. This would throw weight to the argument the bag was a plant, put into play by someone who understood the bag handling process and had access to those portions of the airport. Remember that employees of the Israeli owned firm of Huntleigh USA, managed by former Israeli security forces, had access throughout the airport.  Atta’s father, in an interview shortly after the attack, made what seemed to be astounding claims at the time. "…(he) claimed that his son had called him two days after the attack, and described it as "a normal conversation." …. Asked what country Muhammad had called from, he said, "The name of the country isn't written on the phone." Asked where Muhammad was now, he said, "Ask Mossad." [Muhammad Atta Sr is in the center of the media storm, Ashraf Khalil] This claim needs to be added to the separate contention by his father that the person captured in the video boarding the Portland flight was not his son. At this point in time, these claims seem to be more consistent with the facts than those presented by the FBI. One of the people who knew Atta best – his father - claims he was working for the Mossad.  Consistent with these claims that Atta might have been a Mossad agent, there is now second theory about Atta developing in the official German circles- that Atta worked with Western Intelligence agencies: "Suspicion is growing in Hamburg, Germany that Atta maintained ties with Western intelligence agencies while in Technical School, says one former German intelligence official, pointing to Atta's participation in an elite program sponsored by the German equivalent of the Agency for International Development, an arm of the government which often harbors intelligence operatives in the U.S." [Mohamed Atta Connected To Saudi Royal Family? Daniel Hopsicker , 3/11/2002] "The only information we have connecting the three Hamburg suspects is the FBI's assertion that there is a connection," said a high-ranking (German) police source involved in the investigation…. "We have come across absolutely no evidence of our own."[Los Angeles Times, Carol J. Williams, 10/23/2001 Staff Writer]  One might argue that because Atta was the most seasoned “pilot” of the group, his presence on one of the flights leaving Boston was absolutely imperative. This is probably not true. A recent disclosure based on a slow-motion analysis of the plane flying into the South Tower (Building 2) shows that in the last seconds, the plane actually levels out and veers sharply rather than continue its descent, as if it was targeting floor 78. While the analysis concludes it was targeting floor 78, please note that an airliner of that magnitude is several stories in itself, and actually struck several floors simultaneously. According to the residence charts, THE SEPTEMBER 11 COMMISSION REPORT Page 301 there were no occupants on floors 77 and 76. These were utility floors that contained a 5,000 gallon water tank for the fire sprinkler system. This link between a plane targeting the a floor with the sprinkler system, and the earlier revelation (pages 48-49) that Sakher 'Rocky' Hammad, with forged identity documents, had been working on the Tower’s sprinkler system along with four other individuals, 6 days before the attack, provide support for another theory as to how a group of such inexperienced pilots could target these buildings with such precision. Access by sprinkler repairmen might have enabled the conspirators to plant a small transmitter which would bring the plane right to the tower. The system of choice for this would have been the CTS (Command Transmitter System) and FTS (Flight Termination System) produced by the System Planning Corporation. This system remotely controls test missiles and drones intended for destruction, and is adaptable to planes, boats and motor vehicles. Some of its key selling points for the testing of missiles, include: - “Primary operators can be located up to several hundreds of miles away from the site of …termination - “Each remote (termination) site can be individually controlled, or all (10) remote sites can be operated from a centralized location” - “The FTS is capable of 20 different zones, allowing simultaneous missions from one CTS" [System Planning Corporation] As part of another string of remarkable coincidences, a key Vice Presidential Executive of System Planning Corporation is Rabbi Dov Zakheim. "Who is Rabbi Dov S. Zakheim? Well, first of all he is a Jewish Rabbi, but not just any Jewish Rabbi. For the past three years he has worked as Chief Financial Officer of the United States Dept. of Defense at the Pentagon. Prior to that from 1985 until March 1987, Rabbi . Zakheim was Deputy Under Secretary of Defense for Planning and Resources. In that capacity, he played an active role in the Department's system acquisition and strategic planning processes and he guided Department of Defense policy in a number of international economic for a. …Rabbi Zakheim also co-authored the Project for the New American Century's infamous tract, "Rebuilding America's Defenses," in which the Bush Administration's entire design for renewed global conquest was laid down a full year prior to 9-11. Rabbi Zakheim was also Corporate Vice President of System Planning Corporation. "[Ronald Brownstein, Times Staff Writer, 6/13/ 2004] If the Mossad needed a remote control device for this mission, it had a ready made advocate in Rabbi Zacheim, who co-authored the need for a new “Pearl Harbor” to justify invasions of Iraq, Syria and Iran. If the Mossad needed someone to install the system in the Towers, it had Sergei Dimtry Davidenko – that mathematician that hired the Israelis to fix the water system in the Tower 6 days before the attack. Starting in July, 1992, Atta moved from his parent’s home in Cairo to continue his education and start a new life with a German – reportedly Christian - family in Hamburg. After a year, he reportedly began to develop strong ant-Semitic feelings, and was asked to leave this home. This short period of his life is a mystery. The world has been advised of Atta’s parent’s name, the name of his neighbor in Cairo, as well as the names of his landlords, friends and colleagues in Germany and Florida. THE SEPTEMBER 11 COMMISSION REPORT Page 302 All of these people have been interviewed and identified for the public. However, the identity of this family that started him on his new life in Hamburg has been kept secret; a favor not bestowed on any of his other acquaintances. These people spent more time with him than any one else, but their identities are shielded. What inconvenient fact about this family remains to be discovered? · A fact curiously missing from the 9/11 Commission report, but identified by his girlfriend in Florida is that he spoke Hebrew. · Also curiously missing from the 9/11 Commission Report, but reported by Hopsicker, Atta was enrolled as a student at the International Officer’s School of Maxwell Airforce Base, and witnesses recall him having been introduced around at an officers' club party. “On Maxwell Air Force Base (General Charles G. Boyd, BENS): On September 17th, 2001 the Air Force confirmed, that Mohammed Atta trained at a US Air Base. "...Air Force spokesman Col. Ken McClellan said a man named Mohamed Atta -- which the FBI has identified as one of the five hijackers of American Airlines Flight 11 -- had once attended the International Officer's School at Maxwell/Gunter Air Force Base in Montgomery, Ala. NOTE: McClellan later denied his own report and claimed, it was another Atta, who worked there." http://www.pressconnects.com/archive/attack/stories/091701N1.html · There seems to be a case being made that the Hamburg cell of which Atta was a member was not created by Al Qaeda, but was created by someone who then “volunteered” the cells services to Al Qaeda. This suggests a “planted” operation rather than a ‘home-grown’ operation. “As reported by Finn in his June 12 2002 Washington Post article: "After the Sept. 11 attacks, Zammar was questioned and released by German police who kept him under surveillance. German officials said they did not have enough evidence to charge Zammar, and he left Germany freely on Oct. 27, ostensibly to obtain a divorce from a Moroccan woman . . . German officials said they have confirmed that Zammar reached Morocco, but he subsequently disappeared."Thus, Zammar was no longer a German problem. As reported by Finn, "Zammar's partner and six children", who were still in Hamburg, "filed an official missing persons report with German authorities." Finn also offers another reason why Zammar was -- and should be regarded as -- one of the more key operatives in the September 11 plot: " At some point, probably in 1998 or early 1999, the Hamburg group decided to `offer themselves' to al Qaeda, [a] U.S. counterterrorism official said, describing Zammar as a central player in that process." [Securing The Plot -- The Lead-Up To 9/11] · Atta’s interests seemed to coincide with those of traditional espionage. An email list of his was reported to the FBI by one of the recipients. Upon investigation, it was reported by a recipient of one of his emails, that Atta had a number of email addresses of defense contractors: "…the email addresses of several of the names on Atta's 'terrorist e-list' appear to have been, or still are, employees of US defense contractors. One name on Atta's email list, for example, apparently worked at a Canadian company called Virtual Prototypes." [The Online Journal, Mohamed Atta Kept Terrorist E-List , Daniel Hopsicker, 4/24/2002] Virtual Prototypes Inc., would later change its name to eNGENUITY Technologies. It seems as though the type of work done at eNGENUITY was of more interest to the Israeli government, than it might be of use to a group such as Al Qaeda, which has no known space systems. THE SEPTEMBER 11 COMMISSION REPORT Page 303 "Montreal, Canada - August 4, 2004 - eNGENUITY Technologies [TSX: EGY], a leading provider of solutions for the development of high-end visualization and simulation applications, today announced that the System Missile and Space Group of the Israel Aircraft Industries (IAI) MLM division has purchased multiple licenses of eNGENUITY’s STAGE Scenario toolkit to build training scenarios for IAI’s Air Operations C4I Suite (AOCS), an advanced air space monitoring system.” · It is worth noting that Atta is on record as having a business partner in Florida named Hassan Erroudani, “Government records in Florida reveal that Mohamed Atta was the President of a company in Orlando with a business partner whose web of dummy shell companies appear characteristic of the type used in terrorist financing and illicit money laundering, … One day after the 9/11 Commission Report says the terrorist ringleader finished making withdrawals in Virginia Beach, VA. totaling $18,000 from a SunTrust Bank account, on April 5th, 2001 Hassan Erroudani, an Orlando man with close ties to the Moroccan Embassy in Washington D.C., filed incorporation papers with the state of Florida listing the President of KARAM LLC as “Mohamed Atta.” [Daniel Hopsicker , Mohamed Atta, Florida Entrepreneur: Terrorist Ringleader was President of Orlando, Mad Cow Morning News, June 12 2007] Where this becomes interesting is that Erroudani is publicly linked with support from the Allied Media Group, whose customers on their website include: USAF US Army FBI US Treasury Department of Justice Department of State CACI Young & Rubicam BURSON MARSTELLER Allied Media works to recruit ‘translators’ and other third world contractors for the above agencies, which is a role played by Osama Bin Ladin going back to 1979. · A closing observation would be that Atta’s long term associate during his stay in Florida claimed to be a CIA agent while operating ‘flight training schools.’ There is a lot of evidence to support that claim. “… the FBI launched a manhunt scouring the South Pacific for Wolfgang Bohringer, a German pilot fingered as one of Atta's closest associates in “Welcome to TERRORLAND,” after he resurfaced in the middle of the South Pacific recently to launch a highly-dubious enterprise on a tiny island over 1000 miles from a city of any size, where he planned to open a flight school which would only teach pilots how to fly DC3’s. Bohringer was hanging out with Mohamed Atta all over Southwest Florida in the year before 9/11 while serving as the personal pilot of fugitive financier, Victor Kozeny, the so-called “Pirate of Prague.” Kozeny ran afoul of U.S. officials after attempting to bribe his way to ownership of the state oil company in Azerbaijan. His endeavor was assisted by shady American financing, including money from AIG Insurance, whose subsidiary Coral Reinsurance, according to the Arkansas Project, was implicated during the 1980's in cocaine trafficking through Mena, Arkansas.” [Russian Mobster Tied to 9/11 In Assassination Plot in Ukraine, Daniel Hopsicker, MadCow Morning News, November 29, 2006] THE SEPTEMBER 11 COMMISSION REPORT Page 304 “Reporter Barbara Dreaver of New Zealand network TVNZ broke the story of the terror alert yesterday: "The isolated Kiribati islands are grappling with being catapulted into the world of terrorism. The man causing the alarm is Wolfgang Bohringer, who sailed into Kiribati's Fanning Island a year ago.”"It's absolutely gut wrenching frightening," says Fanning Island resident Chuck Corbett. Corbett had gotten in touch with us two months ago after reading several stories about Bohringer in the MadCowMorningNews. He is an easy-going but inquisitive American. What they learned, a Kiribati government authority told New Zealand reporter Dreaver, was that “there was maybe a little more to the proposal (to redo a landing strip and provide air service to the island) than there appeared to be.” “Then there was the cash. Lots of it,” according to New Zealand TV. "I would offer to go shopping for him," says Corbett. "He would always give me a $100 bill. Once it was seven $100 bills and they were always crisp and neat." For Corbett, who spent months with Bohringer, things did not add up. "One particular night he laid out seven passports on the table,” Corbett said. “I recall one from Ireland, from the Bahamas, one from Grenada, India, the US, Germany and one or two others. The Kiribati government is calling for the US, New Zealand and Australia to help them with security, reported New Zealand’s Barbara Dreaver. New Zealand’s ONE News spoke to an FBI Agent who confirmed that the FBI is continuing its search for the mysterious Wolfgang Bohringer, and his cash-laden yacht. They want answers to why Bohringer would set up a flight school using DC3’s on an island bordering US waters, and “are very keen to find out where he is.'” [FBI Terror Alert in South Pacific for Wolfgang Bohringer/Terror Alert suspect fingered by Mohamed Atta's American girlfriend, Daniel Hopsicker, MadCowMorningNews ,, November 16, 2006, http://www.madcowprod.com/11162006.html] When Bohringer was located, he was immediately released upon arrest. “The JTTF swiftly descended on Wolfgang Bohringer, outside Fanning Island, in the South Pacific, about 1000 miles south of Hawaii, on the 17th of November. Sources reported that the arresting officers said, “The first thing out of his mouth made him go from a ‘5’ to an ‘8’” (on a scale of importance). Allegedly, Bohringer had claimed, “You can’t arrest me, I’m working for the CIA.” It looks like Bohringer was right. The day after the arrest, The Megaphone’s JTTF sources did an about-face. With a mix of threats and attempts at persuasion, they claimed that an error had been made: Bohringer had not been arrested. It was someone else. They couldn’t say who. That identity was secret.” [Mohamed Atta's Best Friend Caught in South Pacific: “You can’t arrest me, I’m working for the CIA,” Sander Hicks, New York Megaphone, December 19, 2006, http://www.911truth.org/article.php?story=20061219213258655] The Atta-Bohringer connection provides an interesting linkage back to George HW Bush’s secret war against the Soviet Union in 1991. Bohringer’s extensive relationship to Viktor Kozeny is actually one of several connections to US Intelligence, the first being his claim to his arresting officers that he was a CIA operative, apparently a substantiated claim in that Bohringer was released within hours after his arrest. The other linkages are through his nominal employer, Viktor Kozeny, who appears as a front man for Western Intelligence in the early 1990s no more or less than Leo Wanta. · Kozeny received funding for his Azerbaijan bribery and money laundering efforts to purchase SOCAR, the Azerbaijan State Oil Company, from AIG. AIG has been, since WWII, a major CIA intelligence operation. History records that the OSS learned that in the 1940’s that the Nazis owned 45% of the world’s insurance companies, and used the background files from these companies to plan their espionage and bombing raids. With this lesson, when William ‘Wild Bill’ Dovovan created the CIA, part of his legacy was an extensive partnership with AIG. [see "The Secret (Insurance) Agent Men," Mark Fritz. The Los Angeles Times 2000 September 22, 200] THE SEPTEMBER 11 COMMISSION REPORT Page 305 · Kozeny’s contact at AIG was Frank Gardiner Wisner [see Capturing the Pirate of Prague, Rob Urban and David Glovin, International Eurasian Institute for Economic and Political Research, Bloomberg Markets, February 23, 2006] Frank G Wisner was head of Office of Strategic Services operations in southeastern Europe at the end of World War II, and the head of the Directorate of Plans of the Central Intelligence Agency during the 1950s.] http://en.wikipedia.org/wiki/Frank_Wisner] · One of Kozeny’s key promoters was Senator George Mitchell. Mitchell had served in the U.S. Army Counter-Intelligence Corps from 1954 until 1956, and later served on the Iran-Contra Senate Hearings and while challenging some of Oliver North’s assumptions about patriotism, inevitably supported the conclusions of the committee. · When Kozeny and his investment ‘partners’ were brought to US court for money laundering and bribery, Judge Shira A. Scheindlin dismissed most of the charges. [see Federal Prosecutors Hope To Revive Oil Bribery Case, Free Internet Press, 2007-08-23]. Scheindlin is the same judge that dismissed charges against Osama Awadallah, who was an associate of the two San Diego based September 11 terrorists. Her ruling prevented the FBI from collecting information on the two terrorists. · Kozeny was initially funded by loans from Alpha Bank, which is represented in the US by ex-Bush administrators Lanny Griffith and Ed Rogers of Barbour, Griffith and Rogers [Seller of Privatization Securities Is Indicted in the U.S., Gretchen Morgenson, New York Times, October 3, 2003]. Kozeny used his scam proceeds to repay Alpha Bank. It is of related note that Alpha Bank funds a fellowship for Carl Duisberg Gesellschaft, which also funded Mohammed Atta’s entrance to Germany. [For The Record#573, Alfa Males—One Helluva Conspiracy Theory, Part II, Recorded on 10/15/2006.] 12.7 Atta’s Connections to Pakistani, Syrian and German Intelligence There is a significant amount of undisputed public data that clearly indicates Mohammed Atta was receiving support from the Syrian and Pakistani Intelligence organizations. Virtually every analysis of the attack on the WTC ignores this data because it does not fit theories that Al Qaeda or the Bush Oil interests were responsible. This information might suggest that Syria or Pakistan, rather than Khashoggi and the rogue Russian/Israelis controlled the operation. However, when probed for an explanation for this cooperation between the Pakistani and Syrian Intelligence groups, the only explanation that seems to be plausible points back to Khashoggi and George Bush Sr.. This is a generally ignored data point that suggests the attack on the WTC was not an Al Qaeda operation. Shortly after the attack, the Indian press released a report that the Director of the ISI (Pakistani) Intelligence (director-general Lt-Gen Mahmud Ahmad) THE SEPTEMBER 11 COMMISSION REPORT Page 306 had been responsible for wiring $100,000 to an account belonging Mohammed Atta in the weeks before September 11. “According to accounts in both The Times of India and India Today, former ISI chief Lt. Gen. Mahmud Ahmad instructed Sheikh to send the $100,000 to Atta. "A direct link between the ISI and the WTC attack could have enormous repercussions," the Times article said. "The U.S. cannot but suspect whether there were other senior Pakistani Army commanders who were in the know of things." “It added: "Evidence of a larger conspiracy could shake U.S. confidence in Pakistan's ability to participate in the anti-terrorism coalition." The Times says Ahmad lost his job only after India shared with the FBI evidence showing a link between the general and Sheikh's wiring of funds to Atta.” [Did ally Pakistan play role in 9-11? Indian intelligence finds more linksto terrorist attacks in U.S., Delhi By Paul Sperry© 2002 WorldNetDaily.com] It appears as though the Indians were using this opportunity to eliminate an enemy of the state of India (Mahmoud Ahmad), and were quite successful in doing so. By publicly releasing the information to the press (an action usually avoided as a professional courtesy) the U.S. was forced to act. The charges were never refuted. Mahmoud Ahmad was forced to retire, with no subsequent investigation, no lock-up and interrogation at Guantanamo by US Intelligence, no confiscation of bank accounts. In fact, he was treated quite similarly as the Israeli agents detained in the U.S. When trying to understand the absence of any punitive action by U.S. authorities for his role in funding the attack, one must consider his connections. Mahmud Ahmad was in the U.S., having breakfast with Senators Graham and Kyl, and Congressman Porter Goss (who would later be rewarded with being made Director of the CIA), when the attack on the World Trade Center happened. “…the Chairman of the U.S. Senate Select Committee on Intelligence, the Chairman of the Senate Judiciary Subcommittee on Terrorism, Technology and Homeland Security, and the Chairman of the House Intelligence Committee doing on the morning of 9/11 before that first plane hit? Senator Bob Graham, Senator Jon Kyl and Congressman Porter Goss were having breakfast with Mahmud Ahmad, then Pakistani Chief of Intelligence - the same man who ordered $100,000 to be wired into hijacker Mohammed Atta’s bank account [Slick Trick, By Ellen W. Horowitz, Israel Hasbara Committee] “General Ahmad had already been reported as having breakfast in the nation's capital with Senator Bob Graham and Representative Porter Goss on the morning of September 11 (both Graham and Goss would go on to co-chair the joint Senate-House 9/11 inquiry). In fact, as early as September 9—two days before 9/11, for those who didn't notice—Karachi News had weighed in with the following observation: "ISI Chief Lt-Gen [Mahmud Ahmad's] week-long presence in Washington has triggered speculation about the agenda of his mysterious meetings at the Pentagon and National Security Council . . . What added interest to his visit is the history of such visits. Last time Ziauddin Butt, [General Ahmad's] predecessor, was here during Nawaz Sharif's government, the domestic politics turned topsy-turvy within days. That this is not the first visit by [General Ahmad] in the last three months shows the urgency of the ongoing parleys." [Truth, lies, and the legend of 9/11 Part 1 of 10 parts: There's something about Omar, By Chaim Kupferberg, OnLine Journal] “… the afternoon of 9-11, as well as on September 12 and 13, Ahmad met with Richard Armitage” “... Most controversially, Goss was having a breakfast meeting in Washington with the then ISI chief Mahmoud Ahmad at the exact instant the 9/11 hijackers flew their planes into the World Trade Center. Ahmad was a Taliban supporter who was subsequently removed from his job when he continued to bat for the outlaw regime post 9/11. THE SEPTEMBER 11 COMMISSION REPORT Page 307 Some reports have suggested that Ahmad and the ISI had links to -- or foreknowledge about -- 9/11. A money transfer from Karachi to the hijackers in Florida has never been fully explored or explained. Ahmad was never called to account for this or his support to the Taliban post 9/11 even as General Musharraf moved him into the shadows. Goss himself visited Pakistan just a few days before 9/11 for talks with the then pariah military establishment of Gen. Musharraf. By Goss's own account, the visit was more Kashmir-centered.” [Times of India -AUGUST 10, 2004, GlobalFree Press http://inn.globalfreepress.com/modules/news/article.php?storyid=485] Why this individual, with clear and undeniable financial links to the attack on the WTC and a long record of U.S. support is not mentioned in the official Commission Report on 9/11, remains a significant mystery. It is however, of important note that Porter Goss – former CIA agent, and now Director of the CIA, and identified by a former-Iran-Contra conspirator as someone with responsibility for the cover-up of the Iran-Contra drug deals and subsequent media damage, was working with a documented source of hijacker funding before and after the attack on the World Trade Center. Additionally, Mahmoud Ahmad met with Richard Armitage, another Iran-Contra conspirator, whose field work with the Mujahedin spanned fifteen years or so. Once again, the link between the Iran- Contra criminals and 9-11 terrorists is demonstrated. The explanation offered for the meetings between Mahmoud and Porter, Goss and Armitage (as offered by Porter and Goss) is that Mahmoud Ahmad was in Washington to ‘turn over’ Osama Bin Ladin, who was expected to die shortly. Bin Ladin, dying, was a convenient ‘patsy.’ The FBI could have arrested him in July of 2001, but evidently had contravening orders. The CIA knew Osama was at a military hospital in Pakistan, just as they had known earlier he was in a hospital in Dubai. Rather than negotiate with Ahmad, they could have arrested Bin Ladin. He was on the FBI most wanted list. “According to the Reuters report: "At the time, bin Laden had a multi-million dollar price on his head for his suspected role in the 1998 bombings of two U.S. embassies in East Africa". So why did the hospital staff, who knew that Osama was at the American Hospital in Dubai, not claim the reward? The Figaro report points to complicity between the CIA and Osama rather than "negotiation". (see excerpt below). Consistent with several other reports, it also points to the antagonism between the FBI and the CIA. If the CIA had wanted to arrest Osama bin Laden prior to September 11, they could have done it then in Dubai (July 2001). But they would not have had a the war on terrorism pretext for waging a major military operation in the Middle East and Central Asia.” [Where was Osama bin Laden on 9/11? Bush Administration knew the Whereabouts of Osama, by Michel Chossudovsky ] “Barry Petersen, CBS Correspondent (voice-over): Everyone remembers what happened on September 11. Here`s the story of what may have happened the night before. It is a tale as twisted as the hunt for Osama bin Laden. CBS News has been told that the night before the September 11 terrorist attack, Osama bin Laden was in Pakistan. He was getting medical treatment with the support of the very military that days later pledged its backing for the U.S. war on terror in Afghanistan. Pakistan intelligence sources tell CBS News that bin Laden was spirited into this military hospital in Rawalpindi for kidney dialysis treatment. On that night, says this medical worker who wanted her identity protected, they moved out all the regular staff in the urology department and sent in a secret team to replace them. She says it was treatment for a very special person…. "The military had him surrounded," says this hospital employee who also wanted his identity masked, "and I saw the mysterious patient helped out of a car. Since that time," he says, "I have seen many pictures of the man. He is the man we know as Osama bin Laden. I also heard two army officers talking to each other. They were saying that Osama bin Laden had to be watched carefully and looked THE SEPTEMBER 11 COMMISSION REPORT Page 308 after." Those who know bin Laden say he suffers from numerous ailments, back and stomach problems. Ahmed Rashid, who has written extensively on the Taliban says the military was often there to help before 9/11. Inpatient dialysis treatment tends to be longer than 24 hours in most American hospitals, which suggests that Osama would have been discharged from the Hospital on or "after" September 11. If the CBS report is accurate and Osama had indeed been admitted to the Pakistani military hospital on September 10, courtesy of America's ally, he was in all likelihood still in hospital in Rawalpindi on the 11th of September, when the attacks occurred. In all probability, his whereabouts were known to US officials on the morning of September 12, when Secretary of State Colin Powell initiated negotiations with Pakistan, with a view to arresting and extraditing bin Laden. These negotiations, led by General Mahmoud Ahmad, head of Pakistan's military intelligence, on behalf of the government of President Pervez Musharraf, took place on the 12th and 13th of September in Deputy Secretary of State Richard Armitage's office.” [M. Chossudovsky, Cover-up or Complicity of the Bush Administration? --The Role of Pakistan's Military Intelligence (ISI) in the September 11 Attacks, 2 November 2001, http://www.globalresearch.ca/articles/CHO111A.html] “….he did not agree on the issue of surrendering Osama bin Laden. The maximum that he agreed to was to form a court, an Islamic religious scholar's court, to try him.” [A General Turn Around, By Zahid Hussain, Newsline, 2/2003] “Looking more closely at Saeed Sheikh (who studied for some time at the Fabian Socialists' London School of Economics), on February 5, 2002 Sheikh voluntarily surrendered to Pakistani authorities who wanted to take him into custody for the kidnapping and killing of Daniel Pearl. Sheikh reportedly was taken to Rawalpindi (where Gen. Ahmad is now living in seclusion), where Ahmad ally Gen. Mohammed Aziz Khan has lived. Khan has been with the ISI and is now head of Pakistan leader Gen. Musharraf's Joint Chiefs of Staff. Gen. Khan also hosted parties where Sheikh was frequently in attendance before October 8, 2000. The reason Sheikh was taken to Rawalpindi reportedly was so that Gen. Khan could convince Sheikh not to reveal the ISI-bin Laden connection. Gen. Khan had helped Osamabin Laden get dialysis treatment and helped the Taliban and Al Qaeda relocate in safe sanctuaries in Pakistan after the U.S. attacked the Taliban. Have you ever wondered why Sheikh was not charged for his alleged involvement in the attacks of 9- 11, and why the U.S. did not request his extradition for the murder of Daniel Pearl who was investigating the ISI-Al Qaeda connection? Could it be because Sheikh would have exposed the link between Gen. Musharraf, the ISI and bin Laden? On November 27, 2004 Gen. Musharraf's military spokesman, Major-General Shaukat Sultan, announced that they were pulling Pakistani forces who had been searching for Osama bin Laden and other members of Al Qaeda away from checkpoints and some other positions along the border with Afghanistan, and they would no longer be searching specifically for them there.” [Copyright © 2004 Cutting Edge Ministries] As for Atta’s connections to Syrian Intelligence, it is reported that Atta worked for a company in Germany that was a Syrian intelligence front: “…CIA-Syria cooperation was far more extensive, former and serving U.S. intelligence officials said. According to these sources, Syria and the CIA have a joint exploitation center based in Aleppo, plus Syria turned over to the agency all its intelligence networks in Germany as well as all of Syria's cover companies there. As a result, the agency learned that Sept. 11, 2001, hijacker Mohammed Atta once worked in Germany for a Syrian cover company, these sources said. …a former senior CIA official said.[ U.S. Syria raid killed 80, Richard Sale, UPI Intelligence Correspondent, July 21, 2003] “Tatex Trading has employed, at various times in the past 15 years, two Syrian-born German citizens… who are high on the list of Sept. 11 suspects….Investigators also say Atta himself worked for a time at Tatex…The origins of Tatex Trading itself have become of interest to investigators… Tatex investor is Mohamad Majed Said, a former head of Syria's General Intelligence Directorate…” [ The Chicago Tribune November 3, 2002] THE SEPTEMBER 11 COMMISSION REPORT Page 309 There are relatively reliable sources suggesting Atta received funding from the Syrian intelligence organization. (It is of worth to note that Syria supported the US with troops during the first Gulf War.) Finally, this report should mention that Atta may have also been funded, while in Europe, by a joint U.S.-German intelligence operation. In coming to Germany, Atta was funded with a scholarship and employed as a tutor by the Carl Duisberg Gesellschaft. “The organization that apparently sponsored Atta’s travels was the Carl Duisberg Gesellschaft (its American component is the Carl Duisberg Society)—named for one of the principal figures in the founding of I.G. Farben. “News that Mohamed Atta had been on the payroll of an elite international program known as the ‘Congress-Bundestag Program first surfaced a month after the 9/11 attack in a brief seven-line report by German newspaper Frankfurter Algemeine Zeitung on 10/18/2001 under the headline ‘Atta was Tutor for Scholarship Holders… Atta had therefore been on the payroll of a joint U.S.-German government program was concealed by the newspaper through the simple expedient of neglecting to mention that the ‘Carl Duisberg Gesellschaft’ was merely a private entity set up to administer an official U.S. and German government initiative,” (For the Record, #408) Subsequent Internet reports linked the Carl Duisberg Society to administration by the U.S. Information Agency, but this had not been verified by any government documentation. Most of the funding for the U.S. program seems to come from Robert Bosh Stiftung GmbH, on whose board sits Dr. jur. Ulrich Cartellieri (Deutschebank) and Dr. jur. Peter Adolff (Allianz). Alpha Bank, represented in the US by ex-Bush administrators Lanny Griffith and Ed Rogers, also funds a fellowship for Carl Duisberg Gesellschaft. [For The Record#573, Alfa Males—One Helluva Conspiracy Theory, Part II, Recorded on 10/15/2006.] The more interesting aspect of Carl Duisberg Gesellschaft is that it’s Managing Director is Bernd Schleich, the same individual who is Managing Director of InWEnt (Internationale Weiterbildung und Entwicklung. If one investigates the activites and research of InWEnt, it appears to be a commercial intelligence operation that does studies on such matters as money-laundering, weapons trades, drug smuggling, anthrax control in such places as South America, Central Asia and Africa. Atta’s involvement with Carl Duisberg Gesellschaft may be co-incidental but in light of the revelations about Syrian and Pakistani intelligence connections, Atta’s links to German and US intelligence are probably real, and not coincidental. There seems to be little dispute that Mohammed Atta was connected to both the Pakistani Intelligence and the Syrian Intelligence, and received funding from both. In both cases, when this was reported to US investigators, the investigation on those sources of funding came to a grinding halt under the argument of ‘national security.’ The government leaders of Pakistan and Syria, in the pre- and post-9/11 world, have demonstrated themselves to be supportive of US counter-terrorist efforts, and their intelligence organizations have provided some, but probably less than total disclosure. However, the rank-and-file of the intelligence and military organizations in both Syria and Pakistan demonstrate loyalties to Muslim groups that have established themselves as de facto governments in Lebanon and Afghanistan, and are far more religiously conservative than are their top government leaders. Is it possible that both Syria and Pakistan intelligence organizations were taking direction from a higher authority, working with rogue Mossad direction, while their rank-and-file were committed to more nationalistic, Islamic values? THE SEPTEMBER 11 COMMISSION REPORT Page 310 That type of scenario is not so far removed from a similar situation in the US intelligence organizations, where a conflict exists between “professional” agents and the more “political” agents – the latter whose careers ride with political fortunes rather than tenure, merit and service. There does not appear to be any direct evidence, but pertinent history does demonstrate the ability of the Mossad, Syrian and Pakistani intelligence to work together for financial gain. The case is point is the October Surprise incident, and the subsequent Iran-Contra scandal. In those operations, Gaith Pharon, former Head of Saudi Intelligence, worked with a core team of Iranians and Israelis to support George Bush Sr.’s deception of the American public. (See Section 9: Iran-Contra and the October Surprise) Twenty years later, reports indicate that Gaith Pharon plays a dominant role in the direction of Afghan Mujahedeen through his operations in Pakistan, and has considerable influence in Syria and Saudi Arabia. “BCCI also served as a conduit for the Iran-Contra operation, largely through Gaith Pharon, former head of Saudi Intelligence, who operated out of Islamabad, Pakistan. The Saudis played a major role in funding the Mujahadeen and [via the request of Secord and McFarlane] the Contras”. [Iran-Contra Connections to the Oklahoma Bombing , gathered by Alex Constantine© 2000 Alex Constantine. All rights reserved] “Gaith Pharon … A main figure in the BCCI scandal even though he played a minor role compared to Khaled bin Mahfouz and others. Lives between Saudi Arabia and Syria. Escapes Interpol by taking his yacht to international waters. Syrian intelligence warns him ahead of time. His father was a close advisor to King Faisal and builder of Saudi politics.” [http://www.geocities.com/saudhouse_p/industry.htm] “According to the September 17, 2001 issue of the German weekly Die Zeit, Mohamed Atta, visited Syria several times between 1994 and 1999. Syrian territory was used to prepare the different attacks held against the Pentagon and New York City. Yes! when Mr Chareh Spoke about complicity he was thinking on Syria complicity in the 11th September attacks.” [Syria – Al Qaida Connection, Dr. J. R. Albani, http://www.free-lebanon.com/LFPNews/2003/May/connection/connection.html] Gaith has always been close to Adnan Khashoggi. If Khashoggi was – at a high level – directing this effort, he could easily have engaged Syrian and Pakistani Intelligence through Gaith Pharon. With their long history of working with the Bush family, engaging the Bush family to cover-up for them would not have been a problem. Engaging the Israelis for the operation would have been just as easy. Virtually all the biographical information about Atta presented by the German and US government, which documents his career as a terrorist may be perfectly accurate. Under consideration of the circumstances, however, one is forced to question whether Atta was actually an Al Qaeda agent or Israeli agent acting in a manner so as to gain the trust of the Arabic groups he was infiltrating. If Atta was a Mossad agent, as his father claimed, many of the anomalies are explained: · the comments by his father; · the possible disappearance out a back door at the Boston airport; · the interest in space technology later acquired by Israel; · his ability to speak Hebrew; THE SEPTEMBER 11 COMMISSION REPORT Page 311 · his involvement with German intelligence and US military organizations; · the cover-up of his German host family; and · his dual personality attested to by his friends on two continents. The primary investigator of all these activities and relationships has been Daniel Hopsicker, who has been reporting new details on these businesses and their owners for almost three years. Most of his focus has been on demonstrating the extensive involvement of the FBI and CIA in regional drug activities, and the total inadequacy of the 9-11 Commission report on the activities of various “persons of interest” in southern Florida. After all this time, Hopsicker still wonders how to explain all the German, Russian and ex-KGB names and faces he uncovered while investigating this story, most of which remains unreported by him for want of a reason. If one looks for an alternative explanation that suggests heavy Mossad involvement in the Florida flight schools, the link to the ex-KGB and Russian element falls is easily understood. 12.8 The Iran-Contra Re-Union Throughout this report, there have been names of individuals previously associated with treason, bank fraud, money-laundering, gun-running which all seem to find a common background in the events referred to as Iran-Contra, the October Surprise, the BCCI bank scandal, the Lincoln Savings and Loan scandal. This group appears to have moved it’s base of operations to Azerbaijan, a small country whose dictator is widely recognized to be a criminal in his own right. This group includes: · Adnan Khashoggi, whose Azerbaijan banks "played a big part in the formation of terrorist camps and in the opening of laboratories for developing chemical and bacteriological weapons in Nagornyy Karabakh;’ major mover of illegal gold; major investor and founder in Barrick; major investor in Oryx – financial backer of Huffman Aviation; business partner with General William Lyon – founder of diploma mills which provided access for two hijackers. · Richard Secord, a former U.S. Air Force major general who been helping to recruit and train the Azerbaijani army as well as regional secret services in conjunction with David Kimche; · Richard Armitage, managed illegal gold funds for George HW Bush during Iran- Contra period; acting as a consultant to Halliburton and Unocal at the time, and President of the US-Azerbaijani Chamber of Commerce; demonstrated history of visits to Pakistan and the rest of Central Asia; · Farhad Azima, arms merchant with Iranian background, member of US-Azerbaijani Chamber of Commerce, assisted Richard Secord in recruiting and training mujahadin mercenaries, owned the Azerbaijani Airlines, and has a twenty year old relationship with the Bush family enterprise; significant co-investor with Wally Hilliard of Huffman Aviation in Spatialight. Inc. THE SEPTEMBER 11 COMMISSION REPORT Page 312 · Khalid bin Mahfouz, owner, with the bin Laden family and members of the Saudi royal family of the Saudi companies Delta Oil and Nimir Oil. Both are partners with Unocal in Azerbaijan; partner in multiple Bush family enterprises; participant in Barrick and Trizec Hahn; · Brent Scowcroft, Director in the Azerbaijan International Operating Company; participant in congressional hearings that let Iran-Contra participants off-the-hook. · Dick Cheney, as CEO of Halliburton, lobbyist for the Azerbaijan International Operating Company on US-Azerbaijani Chamber of Commerce; participant in Congressional hearings that let Iran-Contra participants off-the-hook. · David Kimche, Israeli Mossad agent who brought Israeli agents into Azerbaijan at the request of Secord, and worked Secord and the regional secret service organizations; participant in the October Surprise and Iran-Contra scandal; This report hypothesizes that this group conspired to provision and execute a plan to destroy the World Trade Center on behalf of the German/Swiss banking cartel. The idea for the attack most likely came from the Israelis, as did the original thinking for the October Surprise and Iran-Contra. The proposal probably came from Kimche, through Bronfman to the cartel, as the quid pro quo required to successfully negotiate a solution to the U.S. gold related investigations plaguing the Swiss banks in 1998. In exchange for a lucrative payout on the gold issue, Bronfman promised the banks protection against further investigations by various US agencies housed in the World Trade Center, which were drilling deep into accounts that might expose larger bank vulnerabilities. Bronfman’s connections with the Clinton administration brought “Buzzy’ Krongard into the CIA in 1998 to coordinate the cover. However, this would not be enough. Khashoggi was a person all parties could work with, and had demonstrated his ability to arrange financing for covert activities which could be well hidden. Khashoggi, with Bronfman, was able to arrange for additional U.S. support by engaging his former Iran-Contra colleagues. Once Khashoggi had coordinated the involvement of the Iran-Contra- Azerbaijan team, Secord probably arranged recruitment and Armitage probably managed diplomatic cover (e.g., Pakistani involvement, German involvement, Syrian involvement…) Kimche probably managed ‘insurance,’ making sure the back-up plans for destruction of the buildings held up and the designated hijackers did what they were recruited to do. As a quid pro quo for the use of Osama Bin Ladin as a fall guy, Bush Sr. probably had to allow the Saudis to attempt to kill his son. When they failed, he was required to allow Osama Bin Ladin to live. At the end of the day, this attack was going to happen whether the Bush enterprise wanted it or not, whether Bush was president or not. Bush knew that, and capitalized on it rather than prevent it. Bush knew that if the actual planners were identified by US investigators, they would take him down with them. Thus, he put in motion an elaborate cover-up which involved a “controlled” patsy – Osama Bin Laden. Once the primary plan was in motion, other plans were set in motion to capitalize on the event. The Bush administration had its plans- essentially to move its Central Asian oil agenda further, faster. The Israelis had their plans, which was to use the event to further its own security interest in the Middle East. Khashoggi made a few million on his MJK THE SEPTEMBER 11 COMMISSION REPORT Page 313 scandal. The Bush enterprise was able to legalize investments and aid in Azerbaijan, thus enabling them to continue their standard pump and dump practice of oil stocks. Equally important, it allowed the Bush enterprise to push billions of US taxpayer dollars from Aid for International Development, the Overseas Private Investment Corp. and the Export Import Bank through the Riggs Bank, where they were taking their percentage whether the investments paid off or not. It seems as though the Bush family had been setting up its own international banking pipeline to compete with the Deutschebank. This would prove to be the Riggs Bank, with its small set of global offices providing banking services to nearly every foreign embassy in the US. “CAMBRIDGE, MA – January 1, 2005 – On December 31st, the Wall Street Journal's Glenn Simpson reported that Riggs Bank, currently under federal investigation for failure to comply with anti-money laundering laws, has longstanding ties to the CIA. Riggs is being investigated for failing to report suspicious transactions involving the accounts of Saudi Ambassador Prince Bandar, former Chilean dictator Augusto Pinochet, and Teodoro Obiang, the current President of Equatorial Guinea. The relationship was significant enough that top Riggs executives received U.S. government security clearances; Simpson also noted that both Pinochet and Prince Bandar have worked with the CIA in the past. However, the nature of the bank's relationship with the CIA is largely unknown.” [The Public Accountability Initiative] “On July 21st, following the revelation that Riggs had also aided dictator Augusto Pinochet in hiding money looted from the Chilean national treasury, Bush stated, "It's important for the facts to be en la mesa, as we say, on the table...Riggs Bank is being fully investigated, and they'll be investigated in a very open way." Press reports have also noted that George W. Bush's uncle, Jonathan Bush, heads a subsidiary of the bank. However, other significant ties between the Bush administration, federal banking regulators, and Riggs officials have never been publicly disclosed Riggs & Co. Vice Chairman and Director J. Carter Beese is a close associate of George W. Bush and the Bush family. He was a Bush Pioneer in 2000 and a leading donor to the Bush Florida recount effort. He holds a presidential appointment and has served as a confidential advisor to George W. Bush on the nomination of high-level regulators at the Securities and Exchange Commission. In 1992, following more than a decade of service to the Bush family's political endeavors, George H. W. Bush appointed Beese to the post of SEC Commissioner. Beese also helped to found the Carlyle Group, a conglomerate with historical ties to the bin Laden family and George H. W. Bush. While serving as an executive at Alex. Brown, Beese was mentored closely by A. B. Krongard, appointed by George W. Bush as Executive Director of the CIA, the third highest-ranking position at the Agency.” [New Evidence in the Riggs Case: The Bush Administration's Links to the "Bank of Presidents"A Public Accountability Initiative Report, 10/15/2004] “Beginning in administration of George H.W. Bush, Riggs forged an unorthodox financial relationship with the Department of Treasury. As a major contractor, Riggs provides data processing, account management and software development services for the Federal government. Through a partnership with the Treasury Department's Financial Management Service, Riggs manages the Federal government's financial flow and reconciles its accounts. The bank has collected an estimated $3 million per year in fees from the Federal government for the service and beat out many larger banks to win the account.” [New Evidence in the Riggs Case: The Bush Administration's Links to the "Bank of Presidents" A Public Accountability Initiative Report, 10/15/2004] “Under the Bush Administration, Riggs has also been a major recipient of Federal assistance through the Eximbank. Over the past four years, Riggs has received Federal-backed financing for export transactions to nations such as Bulgaria, Venezuela, Nigeria and Brazil.39.”[New Evidence in the THE SEPTEMBER 11 COMMISSION REPORT Page 314 Riggs Case: The Bush Administration's Links to the "Bank of Presidents" A Public Accountability Initiative Report, 10/15/2004] The Bush family enterprises have never been about the oil – it’s always been about the money, and as their old family friend Richard Secord has noted: “Nobody makes money unless there’s a boogeyman.” THE SEPTEMBER 11 COMMISSION REPORT Page 315 13 Cover-up: Credibility of the American Press and Government For most Americans, the findings of this report raise the question of credibility. Whom should one believe: the government? the American press? the sources in this report? When it comes to trusting the government sources regarding the matters covered in this report, the only published opinion survey on the substance of this report found that nearly half of the American public does not find the official government story credible! From Zogby International, the official polling agency for Reuters in the US, one learns “… half (49.3%) of New York City residents and 41% of New York citizens overall say that some of our leaders "knew in advance that attacks were planned on or around September 11, 2001, and that they consciously failed to act," according to the poll conducted by Zogby International. The poll of New York residents was conducted from Tuesday August 24 through Thursday August 26, 2004. Overall results have a margin of sampling error of +/-3.5. The poll is the first of its kind conducted in America that surveys attitudes regarding US government complicity in the 9/11 tragedy. Despite the acute legal and political implications of this accusation, nearly 30% of registered Republicans and over 38% of those who described themselves as "very conservative" supported the claim.” [ Half of New Yorkers Believe US Leaders Had Foreknowledge of Impending 9-11 Attacks and “Consciously Failed” To Act; 66% Call For New Probe of Unanswered Questions by Congress or New York’s Attorney General, New Zogby International Poll Reveals http://www.zogby.com ,Released: August 30, 2004] Similarly, Time Magazine reported in December 2005 that 48% of Americans believe President Bush deliberately misled the American public to build his case for invading Iraq. [The New Rules of Engagement, Michael Ware, Time, December 12, 2005, p.38] With this type of public support (or lack there-of), challenging the credibility of the US Government official story should not be interpreted as an unpatriotic act, although it will be. The credibility of this report, challenging the credibility of the official US government position, does generate some concern. It might be very easy to dismiss the findings in this report by arguing that the independent, free press has not reported on these findings, therefore they must not be true. Actually, the free press has done its job, but it appears that when it comes to matters of organized crime, the free press has been reduced to a handful of courageous individuals who have suffered much to bring Americans the truth. Without them, this report could not exist. This report attempts to recognize those reporters by using their words directly, rather than burying the recognition in a footnote. To assist the reader is assessing the issue of credibility and reliability of an independent, free press, this section presents three arguments and supportive evidence which demonstrates that the level of control of ‘the media’ by an ‘organized crime’ syndicate is both insidious and pervasive: 1. Through control of various positions in the government and through close relations with owners of the press, the Bush political and family network is able to bury news it believes will expose their crimes; THE SEPTEMBER 11 COMMISSION REPORT Page 316 2. Any individual who challenges the Bush syndicate as a witness, reporter, or whistleblower, or resists pressure to publish the news as preferred by the Bush network, is definitely risking their career, their life and the lives of their family. This is particularly true in the case of news reporters. As a result, the Bush political and family network suppresses the news through “terrorism” ranging from intimidation to murder, to mass murder. At least nine investigative reporters have been murdered while following up on the Bush syndicate. 3. In addition to suppressing the news through fear and influence, there is a large propaganda effort which is used to feed the media “controlled’ news. Using these tactics, the Bush network provided cover-up for those responsible for 9/11. The phrase “Bush network” or “Bush syndicate” can only be understood in historic context. In July of 1980, CIA agents began discussions with the Iranians and Israelis which would ultimately evolve into what was known as the Iran-Contra Scandal. The Senior member of that group was Vice Presidential candidate George Bush, former Director of the CIA and the primary decision-maker of that clandestine group. That same group of individuals would grow to include many others involved in the cover-up of those meetings, and subsequent arms-for-drugs deals. Because of Bush’s senior position with that group, which ultimately allowed him to become President, this group is referred to by this report as a “Bush syndicate.” Bush would later use his Presidential powers to protect this group from prosecution, and pardon those he could not protect. The “Bush network” is a reference to a group of business and political associates who trade money and favors, leaving the ‘wet work’ to the “syndicate.” Many of those same individuals in both groups would work for his son, George Bush Jr., ten years later. The Bush “family” includes the syndicate, the network, and the actual family members. It includes a wide range of international money-movers and fraudsters who have been involved in moneylaundering, bank fraud, tax evasion and other assorted criminal activities. The Bush family justifies these crimes in the name of “patriotism.” Just as Al Capone viewed himself as a “public benefactor” and sought to keep America “whole, safe, and unspoiled” from the foreign menace – the Bush family has somehow distorted its criminal history as patriotic endeavor. This will not surprise those who follow the workings of Bush’s henchmen: “His Defence Secretary, Donald Rumsfeld, likes to quote Al Capone: "You will get more with a kind word and a gun than you will with a kind word alone." 13.1 Control of the Media There are some stories that are so “big,” one wonders how the American press can ignore them while the rest of world is receiving reports. One such story, for illustrative purposes is the following: “Today, on Democracy Now!, the U.S. broadcast premiere of a documentary film called “Afghan Massacre: The Convoy of Death.” The film provides eyewitness testimony that U.S. troops were complicit in the massacre of thousands of Taliban prisoners during the Afghan War. It tells the story of thousands of prisoners who surrendered to the US military’s Afghan allies after the siege of Kunduz. THE SEPTEMBER 11 COMMISSION REPORT Page 317 According to eyewitnesses, some three thousand of the prisoners were forced into sealed containers and loaded onto trucks for transport to Sheberghan prison. Eyewitnesses say when the prisoners began shouting for air, U.S.-allied Afghan soldiers fired directly into the truck, killing many of them. The rest suffered through an appalling road trip lasting up to four days, so thirsty they clawed at the skin of their fellow prisoners as they licked perspiration and even drank blood from open wounds. Witnesses say that when the trucks arrived and soldiers opened the containers, most of the people inside were dead. They also say US Special Forces re-directed the containers carrying the living and dead into the desert and stood by as survivors were shot and buried. Now, up to three thousand bodies lie buried in a mass grave. The film has sent shockwaves around the world. It has been broadcast on national television in Britain, Germany, Italy and Australia. It has been screened by the European parliament. It has outraged human rights groups and international human rights lawyers. They are calling for investigation into whether U.S. Special Forces are guilty of war crimes. But most Americans have never heard of the film. That’s because not one corporate media outlet in the U.S. will touch it. It has never before been broadcast in this country.” [Convoy of Death. Why have US television stations refused to broadcast this documentary? News You Won’t Find on CNN, http://www.informationclearinghouse.info/article3267.htm] Never the less, these stories are never quite picked up by the US major media. Nor are the stories about murdered reporters and investigators who chase the Iran-Contra criminals. Nor are the hundreds of odd coincidences that overwhelm the 9-11 Commission Report, but are totally ignored in the mainstream media. One begins to ask, where is the coverage of these stories? This chapter attempts to explain why that coverage is lacking. The story begins when Bush Sr. ran the CIA as its Director, and later as unofficial acting President under Reagan, and then as President himself. These tours allowed George Bush Sr. almost 25 years of opportunity to put in place a major propaganda machine which has allowed him and his son to control, create, falsify, distort and bury the news. This gave him 25 years to perfect a strategy initiated by Averill Harriman who owned Time Magazine, or CIA Director William Casey being the controlling stockholder in ABC. Hence, this report needs to document a two front strategy by the Bush family to manage the news: cover-up and propaganda. 13.2 Systemic Fear After investigating these crimes across thousands of news stories and websites, it becomes clear that there is a pattern of intimidation which silences those who would attempt to expose the Bush family, and there are dozens of examples of this. There are six levels of escalation in this systematic use of fear: · Level 1: When individuals report information that conflicts with the “officially sanctioned” story or even portrays a negative image of the Bush administration, its policies or personalities, these individuals are instructed and coached to drop the matter or ignore it. Sometimes, Level One may result in warnings be issued before a possible witness contemplates coming forward, as in the air traffic controllers on 9/11. “One air traffic controller from another Northeast sector revealed to a 9-11 widow that FBI threats were made of both a personal and career nature: "You are ordered never to speak about what you saw on your screen during the attacks; and if you do, things will not go well for you THE SEPTEMBER 11 COMMISSION REPORT Page 318 and your family." [Missile & remote control systems added to small jets before 9-11; same parts found at Pentagon, Tom Flocco, TomFlocco.com, 5/26/2005] · Level 2: If they are conscientious, and press the matter with their supervisors they are warned there will be repercussions for officially pursuing the matter, such as career limitations. (Examples: Dan Rather, James Norman, formerly Senior Editor of Forbes Magazine and now with Media Bypass Magazine, New York Firefighters, LA Police Department, district immigration adjudications officer Mary Schneider, Karon von Gerhke-Thompson, witness in the Riggs- Valmet money laundering scandal). The following example is of interest because it not only shows how the government distorts information, but then turns on those who expose the distortion! “The scandal: The Department of Justice completely botched the nation's first post-9/11 terrorism trial, as seen when the convictions of three Detroit men allegedly linked to al-Qaida were overturned in September 2004. Former Attorney General John Ashcroft had claimed their June 2003 sentencing sent "a clear message" that the government would "detect, disrupt and dismantle the activities of terrorist cells." The problem: The DOJ's lead prosecutor in the case, Richard Convertino, withheld key information from the defense and distorted supposed pieces of evidence - like a Las Vegas vacation video purported to be a surveillance tape. But that's not the half of it. Convertino says he was unfairly scapegoated because he testified before the Senate, against DOJ wishes, about terrorist financing. Justice's reconsideration of the case began soon thereafter. Convertino has since sued the DOJ, which has also placed him under investigation.” [The Scandal Sheet , Peter Dizikes, Salon.com, January 18, 2005 ] · Level 3: If they continue to press the matter they are ‘set-up’ for criminal or procedural infractions, investigated, and then lose their security clearances, are suspended, or fired. They are then often slandered by others in the media. (Examples: Mike German, Sibel Edmonds, General Kevin Byrnes, LT Colonel Anthony Shaffer, LA Police Department for the Contra investigations, Richard Brenneke, Gary Webb.) · Level 4: If the matter is serious enough to cause broad exposure, the Attorney General’s office issues a restraining court order on them to cease and desist in the interest of National Security (no further explanation by the government is required) and threatened with jail if they talk about it further. (examples: Sibel Edmonds, John O’Neill, U.S. Navy Captain Gunther Russbacher, 3 un-named FBI agents currently under gag order in their suit against the US Government) · Level 5: The person persists and is sent to jail to be silenced. (examples: Fritz Walser, U.S. Navy Captain Gunther Russbacher, Richard Brenneke, Michael Riconosciuto, Derk Vreeland, Kenneth Ford Jr., Lee Wanta) · Level 6: This level can be jumped to at any point in time, and is reserved for serious and extremely damaging threats. At this level, people experience beatings, suicide (window jumps and a bullet in the head are popular), airplane crashes and other forms of fatal occurrences such as going out in a boat by yourself and drowning. There are at least nineteen clearly documented examples of such terror. THE SEPTEMBER 11 COMMISSION REPORT Page 319 An internet search on any or all of these nineteen individuals will more than substantiate this claim. All of these individuals were witnesses, prosecutors, investigators or reporters on crimes related to the Iran-Contra/September 11 group of criminals. Examples: 1. Emilia DiSanto, chief Congressional investigator looking into the Abramoff scandal 2. Jonathan Moyle, reporter 3. Darlene Novinger, FBI 4. Brad Doucette, 20 year veteran FBI 5. John Millis, Executive Director of the House Permanent Select Committee on Intelligence, his report has not been released 6. Nasser Beydoun, a witness at the Cardoen trial, was murdered in Brazil in June 1995. 7. Katherine Smith, witness in 9/11 8. Darrell MacIntyre, US Attorney’s office 9. Jim Hatfield, reporter/author 10. Mark Lombardi, researcher/reporter 11. Daniel Casolaro, reporter covering the Iran-Contra link to South American drugs - the manuscript of the book Casalaro was working on has never been found. 12. Steve Kangas, reporter/author 13. Gary Webb, reporter/author 14. Brian Downing Quig – investigative journalist 15. Lawrence Ng, reporter 16. Colonel Russell Hermann, CIA bank account and Brady Bond administrator 17. Lori Kaye Klausutis, former congressional staff aide 18. Col. Ted Westhusing, Military Investigator in Iraq 19. Marc Bastien, co-operative with OSI Agent Derk Vreeland The classic Level 6 ‘hit’ is the serial murder of ten people to cover at least two murders. The Washington Beltway Sniper murders of Linda Franklin and James D. Martin (of the National Oceanic and Atmospheric Administration’s National Meteorological Center, Camp Springs, Maryland) should clearly be reviewed further: Franklin, for possible connections to the Riggs Bank/Pinochet money laundering scandal, and Martin, for whatever satellite research he was working on. This ‘hit’ was not the random serial murder it was perceived as. John Muhammad, the Beltway Sniper, was trained as a sniper by U.S. Army Sergeant Ali Mohammed, who in turn was a former Egyptian Army officer. Ali Mohammed left the US Army Special Forces in 1989 after a three-year enlistment and was arrested by U.S. authorities after the U.S. embassy bombings in East Africa, supposedly as an Al Qaeda operative. Franklin was FBI analyst responsible for electronic monitoring of bank transfers working for Bureau of Alcohol, Tobacco and Firearms, just before the Riggs Bank/Pinochet money laundering scandal broke, a scandal in which Pinochet was illegally trafficking weapons with Carlos Cardoen to Iran i.e., part of the Iran-Contra connection. Cardoen was also a business partner of Porter Goss, who met with Mahmoud THE SEPTEMBER 11 COMMISSION REPORT Page 320 Ahmad before and after the 9/11 attack. Mahmoud provided Atta with $100,000 shortly before the attack on the World Trade Center. The Riggs Bank has been found by government auditors on several occasions to be negligent of money laundering, but with Jonathon Bush (George Bush’s uncle) on the Board of Directors, it has escaped any real penalties. In looking at the other victims of the Beltway Sniper, it was of note that James Martin worked for a known NSA/CIA cover operation. Internet investigation of his occupation produces a real dark hole, which for a well-publicized murder victim suggests purposeful cover-up.) Another amazing example of the ability of this group to execute multiple hits, is found in the story of five potential witnesses of the attack on 9/11. As evidence mounts that the plane that hit the Pentagon was an A-3 specially outfitted at a non-military airfield, the search for witnesses turned up this amazing coincidence: "Only the Raytheon executives and the Air Force would have known which team installed a particular system on the A-3 and who was involved in the operation," said Schwarz. Coincidentally, five key Raytheon executives died on 9-11: Stanley Hall--Director of Electronic warfare program management (American 77), Peter Gay--VP of Electronic Systems on special assignment at the El Segundo, CA division office where the Global Hawk UAV remote control system is made (American 11), Kenneth Waldie--Senior Quality Control Engineer for Electronic Systems (American 11), David Kovalcin-- Senior Mechanical Engineer for Electronic Systems (American 11), and Herbert Homer--Corporate Executive working with the Department of Defense (United 175). Curiously, the five Raytheon executives chose three of the four doomed jets and all happened to fly on September 11. [Missile & remote control systems added to small jets before 9-11; same parts found at Pentagon, Tom Flocco, TomFlocco.com, 5/26/2005] In reflecting on these deaths, the high rate of “reporters” on the list supports the argument that the American media is being controlled through fear. Statistics suggests that having nine people on this list who were all involved with investigating the same set of Iran- Contra criminals, is virtually impossible: “Examining the male U.S suicide rate for recent years (http://www.suicidology.org/stats2001) we can extrapolate a conservative estimate of 17 male suicides per 100,000 people, or 0.017%. The odds of 3 specific (all male?) biographers committing suicide would be the cube of 17/100000, or 4.913 x 10^- 12...about 5 chances in one trillion. (That's over 300,000 times LESS likely than drawing a Royal Flush in 5 card stud poker with no wild cards.)” [http://www.bcrevolution.ca] If at three suicides the odds are impossible, how then can one ignore ten “suicides.” The murder does not stop with this list of nineteen though! It is not just reporters being eliminated, but other potential loose lipped participants, prosecutors and witnesses as well, with a list of murder victims potentially as high as 400 or more: “Navy Lt. Commander Alexander Martin was, in effect, the chief accountant for the Reagan/Bush drug operations run by Marine Lt. Col. Oliver North, through an obscure arm of the White House National Security Council called the National Programs Office. In a radio interview with talk show host Tom Valentine last July, Martin spoke not only of drugs and money, but death. "Out of roughly 5,000 of us who were originally involved in Iran-Contra, approximately 400, since 1986, have committed suicide, died accidentally or died of natural causes. In over half those deaths, official death certificates were never issued. In 187 circumstances, the bodies were cremated before the families were notified. THE SEPTEMBER 11 COMMISSION REPORT Page 321 "Martin then said he was lying low.” [The Still Before the Storm, James Norman, Media Bypass magazine, December 1995] “The Manhattan D.A. who closed the American branch (of the BCCI) announced that 16 witnesses had died in the course of investigating the bank's entanglements in covert operations of the CIA, arms smuggling to Iraq, money laundering and child prostitution.” [The False Memory Hoax, Alex Constantine, Copyright © January, 1996] “There's a lot about BCCI that outsiders will never know. Once the investigations started, there were seven fires in the fireproof London warehouses where BCCI stored records. In one of them, four firemen were killed.” [BCCI: The Case that Kerry Cracked, Lucy Komisar] “From October 30th to Christmas eve there were four attempts to kill, me and our friend William Smith, who everyone thinks is a high ranking Naval Intelligence officer. During that same time over fifty CIA operatives, their wives and families were killed in an attempt by the Robert Gates faction of the CIA to cover its tracks before Clinton's team came to power. After the last attempt on my life, my husband's SEAL team arranged safe passage for me to Vienna, Austria, where I stayed until Robert Gates was removed as Director of the CIA.” [Correspondence from Rayelan Allan Russbacher, February 1993, http://crashrecovery.org/wackenhut/wackenhut3.pdf] “The witnesses were quite fearful about several recent "suicides, car wrecks--mysterious deaths-- directly related to the aviation experts" working on the systems that were installed on the A-3’s at Fort Collins-Loveland--having breached the government-blocked information flow at great personal risk, according to Schwarz--but providing more evidence for a New York 9/11 investigation.” [Missile & remote control systems added to small jets before 9-11; same parts found at Pentagon, Tom Flocco, TomFlocco.com, 5/26/2005] As a result of these tactics, and others to be described later in this section, the conclusion is well made by the BBC reporter, Greg Palast (a former US reporter who moved to the UK to maintain his professional integrity and ability to report.) “On my BBC television show, Newsnight, an American journalist confessed that, since the 9/11 attacks, US reporters are simply too afraid to ask the uncomfortable questions that could kill careers: "It's an obscene comparison, but there was a time in South Africa when people would put flaming tires around people's necks if they dissented. In some ways, the fear is that you will be necklaced here, you will have a flaming tire of lack of patriotism put around your neck," Dan Rather said. Without his makeup, Rather looked drawn, old and defeated in confessing that he too had given in. "It's that fear that keeps journalists from asking the toughest of the tough questions and to continue to bore in on the tough questions so often." [Greg Palast Interview by Bruce David, Hustler, On-line] The same terror tactics are now being applied to foreign journalists as well: “US was for the first time listed among the top 10 (ranking 6th in the world's leading jailers of journalists), the Committee to Protect Journalists has said…. US detention centers in Iraq were holding four journalists, while the US Naval Base at Guantanamo held one.” [US among top 10 nations jailing scribes, Dharam Shourie,Rediff, December 14, 2005] “American troops in Baghdad yesterday blasted their way into the home of an Iraqi journalist working for the Guardian and Channel 4, firing bullets into the bedroom where he was sleeping with his wife and children. Ali Fadhil, who two months ago won the Foreign Press Association young journalist of the year award, was hooded and taken for questioning. He was released hours later. Dr Fadhil is working with Guardian Films on an investigation for Channel 4’s Dispatches programme into claims that tens of millions of dollars worth of Iraqi funds held by the Americans and British have been misused or misappropriated. The troops told Dr Fadhil that they were looking for an Iraqi insurgent THE SEPTEMBER 11 COMMISSION REPORT Page 322 and seized video tapes he had shot for the programme. These have not yet been returned.” [U.S. troops seize (UK) Channel 4/Guardian journalist, by Brian Boyko, The Guardian, January 9, 2006] “The British government has threatened newspapers with prosecution [Guardian Unlimited] under the Official Secrets Act if it releases the memo where Bush claimed to want to bomb Al Jazeera headquarters in Doha, Qatar. The Daily Kos reports that the two Brits who leaked the memo to newspapers are already being prosecuted under the Official Secrets Act.” [Bombing Al Jazeera Story Update, http://brianboyko.com/category/iraq-war/] These tactics have silenced the ‘witnesses’ who would challenge the Bush organization over the past 25 years. Never the less, investigations are sometimes spurred by organizations, groups and individuals not under the influence of the US government. For instance: - the Kazakhstan-Mobil Oil bribery case was initiated in British courts; - the Russian money-laundering scandal was opened first by the Russians, closed by the US Attorney General without a scandal, and then re-opened by the Swiss who discovered the problem to be far more massive than US investigators reported; - the French legal system is in the process of bringing Richard Cheney and Halliburton to task for the Nigerian oil scandals. (The US investigation of Cheney for violation of the US Foreign Corrupt Practices Act was mentioned in one US story by the Boston Globe;) - the Marcos gold/Swiss bank scandal would have died had it not been for a Swiss janitor; - the Iran-Contra scandal was actually pushed into the media by the Israelis, who felt betrayed by George Bush Sr; - the Valerie Plame (forged Iraq WMD evidence) scandal was initiated by a “blogger.” To deal with these emergent scandals, the Bush organization has, over the years developed an effective system for “killing” bad news, as well as its bearers, and managing the flow of negative information that manages to surface to the public attention through minor news channels. This system includes several means to control the information made available to the American citizenry: 1. Control of the legal and investigative systems (FBI, DEA, CIA, Congressional Hearings, Independent Commissions), 2. Control of the major media through the three “F’s: fool’em, feed’em and force’m.” Here is the real terrorist threat. People who make a living reporting the news and investigating crime are pretty much aware of what happens when a member of their profession pursues investigation of these crimes: they know of these deaths and career terminations, and live their lives in fear of those consequences. To avoid those consequences, nearly all reporters and investigators generally stop at Level 1 or Level 2, and the investigation is dropped. The group behavioral phenomenon is that of the fable of “the emperor has no clothes!” The crowd of reporters remains quiet as a group, except THE SEPTEMBER 11 COMMISSION REPORT Page 323 for a little boy who shouts out the truth. In the fable, the boy is rewarded by the king, but in today’s reality, he gets a 38 magnum bullet in the head for his honesty. 13.3 Fool’em: Control of the legal and investigative systems. Through political appointments to key positions in the Department of Justice, FBI, CIA, and Customs as well as other ‘secretive’ intelligence agencies, decisions to pursue or not pursue investigations are controlled. There are at least eighteen “intelligence agencies” in the US Government. Most of them and other “investigative” groups such as the FBI, DEA etc. came to fear the CIA in the period after George Bush Sr.’s control. All investigations deferred to the CIA and “national security.” Now, after twenty-five years, the Bush family controls them all through the Department of Homeland Security. In the future, the legacy of Herbert Hoover as a blackmailer and political bully will pale in comparison to the legacy of the Bush dynasty. Here are thirteen examples, documented here or elsewhere in this report, which demonstrate the ability and willingness of the administration to interfere with and control investigations with which the Bush administrations have been identified: - As demonstrated with the Convar investigation of illegal electronic trades in the World Trade Center. This information, which clearly identified some of the criminals, was never acted on or published by the FBI. “Henschel said the companies in the United States were working together with the FBI… to piece together what happened on September 11 and that he was confident the destination of the dubious transactions would one day be tracked down. ``We have been quite surprised that so many of the hard drives were in good enough shape to retrieve the data,'' he said.``The contamination rate is high. The fine dust that was everywhere in the area got pressed under high pressure into the drives. But we've still been able to retrieve 100 percent of the data on most of the drives we've received. ``We're helping them find out what happened to the computers on September 11 as quickly as possible. I'm sure that one day they will know what happened to the money…” [ German Firm Probes Final World Trade Center Deals. Erik Kirschbaum, Reuters, 12/16/2001] - As demonstrated in the James Griffen/Mobil Oil bribery incident, the Attorney General’s office under John Ashcroft was able to keep Nazarbayev’s and George Bush Sr.’s names out of the trial proceedings. - As demonstrated in the Bank of New York money laundering scandal, the US Attorney General’s office was able to resolve the case of multi-billion dollar money laundering with a two-week jail sentence for a bank clerk. The Swiss investigators re-opened the case, after it was discovered the transactions were significantly underestimated by U.S. investigators. “A source familiar with the grand jury investigations… said Ashcroft has quietly moved… to exert control over the New York grand jury from Washington and to exercise “unusual” influence over the Washington investigations. FTW has also received multiple reports that several highranking career prosecutors in both New York and Washington have raised serious objections to Ashcroft’s actions and his failure to publicly recluse himself in these cases. [The Elephant in the Living Room – Part I, Michael C. Ruppert © Copyright 2002, From The Wilderness Publications, 3/ 26/2002] THE SEPTEMBER 11 COMMISSION REPORT Page 324 - As demonstrated by the FBI prematurely dropping the investigation of the forged Niger documents which provided Bush’s “proof” of Iraq’s nuclear arsenal. - As demonstrated by the investigations into the Marcos gold, where individuals responsible for letting the world know the gold actually still existed, contrary to the claims of the Swiss banks, were imprisoned until they recanted: “Upon Cosandey's orders, Jacobi and his informers Fritz Walser and Tony Silano were arrested and charged with economic espionage on July 10, 1991 in Munich, Germany. Walser was an informer who knew a banker who had penetrated the banks' computer systems, Chavez said. Walser's contacts also reportedly confirmed the existence of 1,241 tons of Marcos gold deposits at UBS under account number 7257. It was the same account passed on to the government by Adoracion Edralin Lopez, a Marcos relative, Chavez said. He said the discovered Marcos accounts were later transferred in the name of the late dictator's Swiss lawyer Bruno de Preux and his son, Cyril. Switzerland sought Jacobi's extradition from Germany but lost in a German court, which decided that the charge against him was "politically motivated." (Fritz) Walser would later claim everything he revealed had been a hoax, in exchange for his freedom. His revised statement was later used by Swiss authorities to claim that the $13.4-billion Credit Suisse account under "I. Arenetta" and the 7257 accounts were a hoax.” [Recovering the Marcos Wealth Show Us the Money, By Marites N. Sison ] - As demonstrated in control that allows individuals to be “protected” from investigative queries, as are Adnan Khashoggi, Richard Armitage and Farhad Azima: “Former presidential candidate H. Ross Perot, who was appointed presidential investigator for POW/MIA affairs, came upon the same information, and was warned by former Defense Secretary Frank Carlucci to stop pursuing the connections to Armitage. As he sadly explained to a group of POW/MIA families in 1987: "I have been instructed to cease and desist."[1125] [Iran-Contra Connections to the Oklahoma Bombing, gathered by Alex Constantine© 2000 Alex Constantine. All rights reserved] “Saudi financier Adnan Khashoggi is charged by the State of New York in aiding and abetting former Filipino first lady Imelda Marcos in hiding billions from her country after she and husband Ferdinand Marcos were forced to flee the island nation. The charges are brought by New York Attorney General Rudolph Giuliani, who apparently has a personal score to settle with Khashoggi after Khashoggi defeated Giuliani's client John Tumpane in a business lawsuit. After a long and heated court battle, during which time Khashoggi was forced to stay in New York City under house arrest, the jury acquits Khashoggi of all charges. According to a former Army intelligence officer, Giuliani gets the indictments filed after months of effort by threatening George Bush that if he doesn't stop blocking the indictment, that he will call a press conference and complain that the White House is interfering with the criminal justice system merely to protect Bush's friend Khashoggi. (Larry Kolb).” [http://www.iraqtimeline.com/1990.html] “According to statements from a former Justice Department prosecutor to the Houston Post at that time, he was ordered to "back off" on his investigation into Indian Springs Bank shareholder Azima because "Azima had CIA connections and a 'get-out-of-jail-free card.'" [The Inside Story of John Lear, Bill Cooper and "The Greatest Cover-Up in Human History," An Affidavit by Lars C. Hansson, July 18, 1991] - As demonstrated in the control of post 9/11 terrorist investigations by FBI agents: THE SEPTEMBER 11 COMMISSION REPORT Page 325 “WASHINGTON, Dec. 3 - Officials at the Federal Bureau of Investigation mishandled a Florida terror investigation, falsified documents in the case in an effort to cover repeated missteps and retaliated against an agent who first complained about the problems, Justice Department investigators have concluded….The agent who first alerted the F.B.I. to problems in the case, a veteran undercover operative named Mike German, was "retaliated against" by his boss, who was angered by the agent's complaints and stopped using him for prestigious assignments in training new undercover agents, the draft report concluded. Mr. German's case first became public last year, as he emerged as the latest in a string of whistle-blowers at the bureau who said they had been punished and effectively silenced for voicing concerns about the handling of terror investigations and other matters since Sept. 11, 2001. Mr. German's case dates to 2002, when the F.B.I. division in Tampa opened a terror investigation into a lead that laundered proceeds, possibly connected to a drug outfit, might be used to finance terrorists overseas. …...the inspector general found that the F.B.I. had "mishandled and mismanaged" the investigation, partly through the failure to document important developments for months at a time. The report also found that supervisors were aware of problems in the case but did not take prompt action to correct them.” [Report Finds Cover-Up in an F.B.I. Terror Case, Eric Lichtblau, New York Times, December 4, 2005] - As demonstrated in the unwillingness to prosecute BCCI: “The influential Chairman of the Banking Commission in the U.S. House of Representatives, Henry Gonzales, chided the Bush and Reagan administrations for refusing to prosecute the BCCI. In addition the Dept. of Justice repeatedly declined to co-operate in the Congressional investigations into the BCCI scandal and the closely linked scandal of the "Banco Nazional del Lavoro" (BNL). This bank had made billions of dollars from loans that Bush had granted the Iraqi government shortly before the Gulf War. Gonzales had said that the Bush administration had had a Department of Justice which he thought "the most corrupt, most unbelievably corrupt Department of justice that I have ever experienced during my 32 years in Congress". [George Soros and the Rothschilds Connection, Jan Von Helsing ("Secret Societies and their Power in the 20th Century")] - As demonstrated in Bush’s determination to regularly eliminate special investigators from investigations of his political colleagues – eliminating special investigators on the same case twice! “WASHINGTON — A US grand jury in Guam opened an investigation of controversial lobbyist Jack Abramoff more than two years ago, but President Bush removed the supervising federal prosecutor, and the probe ended soon after.” [ LA Times, Aug 8, 2005] “The investigation into Jack Abramoff, the disgraced Republican lobbyist, took a provocative new turn Thursday when the Justice Department said the chief prosecutor in the inquiry would step down next week because he had been nominated to a federal judgeship by President Bush.” [SF Chronicle, Jan 27, 2006] - As demonstrated by George Bush Sr’s. willingness to blatantly interfere with a criminal investigation: “May-June 1989 - Trial of executives of Sunrise Savings and Loan in Florida which collapsed in 1985 with bailout costs to the American taxpayer of $680 MILLION dollars. The Miami Herald, a Knight-Ridder newspaper covered every day of the trial. Yet when one witness testified that thenvice President George Bush had interferred in the investigation of Sunrise in 1984, a year before it collapsed, the Miami Herald somehow missed this story. The Bush-appointed Federal attorney in Miami never investigated this testimony, nor did he make an attempt to indict the man for THE SEPTEMBER 11 COMMISSION REPORT Page 326 perjury, whose testimony, by the way, was corroborated by another ex-Sunrise employee.” [http://www.pd.com/~franklin/MN1.html] - As demonstrated in the control of Congressional hearings that simply refuses to listen to qualified whistleblowers: The following is a press release issued by the National Security Whistleblowers Coalition regarding the silence of the top congressional representatives on intelligence committees about ex- NSA officer Russ Tice's unheard charges: On December 22, 2005, the National Security Whistleblowers Coalition (NSWBC) made public the request by a former NSA intelligence analyst and action officer to report to Congress probable unlawful and unconstitutional acts conducted while he was an intelligence officer with the National Security Agency (NSA) and with the Defense Intelligence Agency (DIA). NSWBC urged the congress to hold hearings and let Mr. Tice testify. Today, more than four months after Mr. Tice’s letters were sent to the chairs of the Senate and House Intelligence Committees and publicized in the media, he has yet to receive a response and be given an opportunity to lawfully disclose his first-hand account of criminal acts conducted by the National Security Agency. [Congressional Chairmen on intelligence won't hear out NSA whistleblower, RAW STORY, April 26, 2006 ] - As demonstrated by planting false information in the press in the original exposure of the Iran/Contra operation: “WASHINGTON-- Nicaraguan rebels falsely assumed responsibility for an arms-laden plane downed over Nicaragua in 1986 in an effort to shield then-Vice President George Bush from the controversy that soon blossomed into the Iran-Contra scandal, a senior Contra official said in early May 1989. According to the Contra official, who requested anonymity but has direct knowledge of the events, a Contra spokesman, Bosco Matamoros [official FDN representative in Washington, D.C.], was ordered by [FDN Political Director] Adolfo Calero to claim ownership of the downed aircraft, even though the plane belonged to Oliver North's secret Contra supply network.... Calero called (Matamoros) and said, `` Take responsibility for the Hasenfus plane because we need to take the heat off the vice president, '' the Contra source said.... The senior Contra official said that shortly after Calero talked to Matamoros, Matamoros called a reporter for the New York Times and `` leaked '' the bogus claim of responsibility. The Times ran a story about the claim on its front page.” [Official: Contras Lied to Protect VP Bush, Alfonso Chardy, Knight-Ridder Newspapers] - As demonstrated by putting the same individual in charge of major investigations of crimes linked to the Bush group. In this case, Robert S. Mueller (U.S. Attorney and FBI Director) has been the chief investigator and prosecutor over the BCCI scandal, the Iran-Contra criminal investigation, the Noriega-CIA drug connections, and finally, the 9/11 investigation. His protégé, Leslie Caldwell, was responsible for the Arthur Anderson investigation, and later the Enron investigation. “In the 1980s, Mueller was third in command in the FBI under George Terwilliger. Mueller apparently put in a lot of overtime working to keep the Iran-Contra scheme under wraps, and then, once things got sticky for Reagan, helped the Dept. of Justice's Domestic Criminal Section Chief Dave Margolis and International Criminal Section Chief Mark Richards limit liability for Reagan, and then Bush, Sr. According to political watchdog Al Martin, Mueller personally handled damage containment for Bush Sr. during Bush's potentially scandalous dealings with Jordanian coffee merchant Mansour Barbouti. Barbouti was involved in the illegal exportation of chemicals used in chemical weapons to both Iraq and Iran.” [Scapegoat! How Bush Nearly Ruined the FBI, Cheryl Seal, Democrats.com] THE SEPTEMBER 11 COMMISSION REPORT Page 327 “In the case of Noriega and Gotti, they were silenced through the capable tools of the American justice system. And overseeing the prosecutions - Noriega, Gotti, and BCCI - happened to be a man who would, years later, be entrusted with overseeing the investigation into the causes of 9/11 - Robert Mueller III. ”[Backdrop - Detecting The Puppet Masters, Part 6 of Truth, Lies, and The Legend of 9/11: Truth Lies Legend] Other items warranting mention are: · four probable violations of SEC regulations by George Bush Jr. while with Harken which have been overlooked, · closing down of criminal investigations into Jeb Bush’s partners Camilo Padreda and Miguel Recarey, · Bush Sr’s., destruction of SEC records of Zapata Oil, · Interference with bank regulators during the Riggs money-laundering investigation, where Jonathon Bush is a director. The Bush family has three generations of experience in circumventing investigation into their financial conduct. They have appointed six of the Supreme Court Justices, and given major federal appointments to two of the Justice’s children, after having been given the Presidential office by Supreme Court dictate. 13.4 Feed’em: Control, Fabricate and Falsify Evidence The American press corps has recently been stripped of its ability to conduct any serious investigative reporting, an observation reported only in the foreign press (BBC and Guardian.) What is being experienced is not only a failure of the press to step up to professional standards of investigative reporting, but an additional willingness to let investigative government agencies conduct less than thorough investigations, and be satisfied to reports the “results” of aborted government investigations. “… political courage is especially rare. Reporters in Washington are kept in line by the standard threat: annoy us, and your stories dry up. In normal times this matters less, because there may be enough dissidents to produce alternative information. But the Bush White House's sophisticated news management has given them control. One official who has worked in administrations of both colours explained: "The Republicans regard themselves as patrician gatekeepers of the news. They say 'If you're really good, we'll give you information and if you're really, really good, we'll give you more information.' The Democrats thought; 'My God, there are all those reporters out there! We better talk to them!'"[Bushwhacked, Matthew Engel, Guardian, January 13, 2003] In addition to the examples listed above, here are several more examples of where the American press seemed all-to-willing to accept less than factual reporting by US Government agencies. - As demonstrated by professional testimony regarding the Osama Bin Ladin videotapes, these tapes do not say what the government translators reported; - The ‘weapons of mass destruction evidence” which was used to justify an invasion of Iraq: “WASHINGTON — The FBI has reopened an inquiry into one of the most intriguing aspects of the pre-Iraq war intelligence fiasco: how the Bush administration came to rely on forged documents linking Iraq to nuclear weapons materials as part of its justification for the invasion. The documents inspired intense U.S. interest in the buildup to the war — and they THE SEPTEMBER 11 COMMISSION REPORT Page 328 led the CIA to send a former ambassador to the African nation of Niger to investigate whether Iraq had sought the materials there. The ambassador, Joseph C. Wilson IV, found little evidence to support such a claim, and the documents were later deemed to have been forged. But President Bush referred to the claim in his 2003 State of the Union address in making the case for the invasion. Bush's speech, Wilson's trip and the role Wilson's wife played in sending him have created a political storm that still envelops the White House. The documents in question included letters on Niger government letterhead and purported contracts showing sales of uranium to Iraq. They were provided in 2002 to an Italian magazine, which turned them over to the U.S. Embassy in Rome. The FBI's decision to reopen the investigation reverses the agency's announcement last month that it had finished a two-year inquiry and concluded that the forgeries were part of a moneymaking scheme — and not an effort to manipulate U.S. foreign policy. Those findings concerned some members of the Senate Intelligence Committee after published reports that the FBI had not interviewed a former Italian spy named Rocco Martino, who was identified as the original source of the documents. The committee had requested the initial investigation.” [FBI Is Taking Another Look at Forged Prewar Intelligence, Peter Wallsten, Tom Hamburger and Josh Meyer, Los Angeles Times, December 3, 2005] - The Bush administration’s actions to prevent the facts around 9/11 from being exposed have been documented in other parts of this report. This behavior however, is not isolated, and reflects a broader pattern of lies and deception. Other examples of falsification of evidence can include the following three stories: “U.S. congressional leaders who have been touting Iraq's new "free press" as a sign of progress in the troubled country are upset at the Pentagon's admission last week that it has been paying for "good news" stories written by the military and placed in Iraqi media by a Washington-based public relations firm. In a briefing for the powerful chairman of the Senate Armed Services Committee, Republican John Warner of Virginia, the military acknowledged that news articles written by U.S. troops had been placed as paid advertisements in the Iraqi news media, and not always properly identified. Warner told reporters after receiving a briefing from officials at the Pentagon that senior commanders in Iraq were trying to get to the bottom of a program that apparently also paid monthly stipends to friendly Iraqi journalists.” [The Bad News Is That the Good News Is Fake, William Fisher, Inter Press Service News Agency December 6, 2005] “When a CIA briefer did not provide him with the answers he desired, Cheney reportedly demanded that she be replaced. Congressman Silvestre Reyes, a Texas Democrat and member of the House Intelligence Committee, said in July 2003 that he knew of at least three intelligence analysts who felt pressured to warp their findings.” [The Rise and Rise of Richard B. Cheney, John Nichols, The New Press, 2004, p212.] “Cheney got on well with the king (Fahd) and his minions, who would not learn until sometime later that the defense secretary and his aides had deceived them – displaying doctored satellite photos to suggest that an Iraqi invasion force had moved to the border in preparation for an invasion of Saudi Arabia.” [The Rise and Rise of Richard B. Cheney, John Nichols, The New Press, 2004, p114.] For those who might need evidence that this ‘fabrication’ also happens in the US as well as outside of it’s borders, this report suggests an Internet search on the Jeff Gannon (aka Guckert) affair, of a Whitehouse “plant” in the Press Corps, or the discovery that the Bush administration paid consultants to write favorable news coverage. The falsification of news is actually quite easy though. The ‘inside’ view of the news media is that in nearly all cases, the media does little “investigative” analysis any more THE SEPTEMBER 11 COMMISSION REPORT Page 329 “….in fact as (Dan) Rather explained it to me: the networks are really dependent upon press releases from the State Department about going to press conferences, and they need that, what’s called target footage - pictures from the smart bombs that go tick-tick-tick, boom! And all those cool pictures are what keeps stations like CNN alive, and their advertising alive. So, what you have to do is, we have to understand that we’re talking about a press corps which has stopped reporting, and what they’re doing is just repeating; they take a press release, they rewrite it, they stand up in front of the camera and they say… “This is Jo Schmo in front of the White House, and the president just said …” That’s not reporting, that’s not getting the story.” [Greg Palast Interview, Bruce David, Hustler, On-line] Another example of this fabrication and control is the 9-11 Truth Movement, which masquerades as data collection point for “conspiracy” information. This organization is actually funded by a business partner of Adnan Khashoggi. Any conclusions drawn on the purpose of that arrangement are left to the reader. “Khashoggi’s henchman Ramy El-Batrawi, currently under indictment with Big K for looting over $120 million from a bankrupt company called GenesisIntermedia, the company that owns the marketing rights to the creative output of Mars & Venus snake oil salesman John Gray. Gray is also the man who funded the disinformation campaign calling itself the 9.11 Truth movement.” [FAA Stonewalls Release of DC9 ‘Cocaine One’ Records: Homeland Security Inc Scandal Off And Running , Daniel Hopsicker, Mad Cow Morning News, June 22 2006] If the “press” no longer presents the fair and balanced reporting the American populace assumes it to provide, an understanding of how that condition came to be is warranted. The following section provides that understanding. 13.5 Media Control - the Facts When people think of “controlling the media” they envision an Orwellian nightmare, where a faceless bureaucracy has taken control of all the media. This section contends that ‘media control’ is defined as the significant influence of five or six key individuals who can intervene not only around key events, but can create an atmosphere of fear that intimidates the reporters into compliance and biased reporting in the major media outlets. Using this definition, the report will provide information which demonstrates that a few key individuals in the US have that ability, have exerted their influence on news organizations, and have controlled the news in favor of the Bush family. This, combined with the physical intimidation of independent reporters by a group of murderous thugs which supports the Bush family, suggests that “media control” is far more pervasive than generally perceived. It is that influence that has prevented critical public analysis of the events of 9/11 by the media, and prevented analyses such as this report from being publicly discussed in the mainstream media. First, it is important to understand that the US media is not an industry of multiple independent news outlets from which the truth will spring. The public record clearly demonstrates substantial consolidation of the media under five corporations. THE SEPTEMBER 11 COMMISSION REPORT Page 330 “In 2004, Bagdikian's revised and expanded book, The New Media Monopoly, shows that only 5 huge corporations -- Time Warner, Disney, Murdoch's News Corporation, Bertelsmann of Germany, and Viacom (formerly CBS) -- now control most of the media industry in the U.S. General Electric's NBC is a close sixth.” The amount of stock required to control such an organization is relatively small, much smaller than normally thought required to “control” a corporation: “Billionaire Prince al-Waleed bin Talal, the world's fifth richest man (as listed by Forbes magazine), now owns 5.46% of the voting shares of NewsCorp, Rupert Murdoch's media empire that includes Fox News Channel. The business media—including the Wall Street Journal, Bloomberg, and the rest— portray this as an act of the Prince's friendship with Murdoch, and an effort to help the media mogul fight off a hostile takeover attempt by John Malone's Liberty Media, which has acquired 18%. That is second only to Murdoch's 30% share. Fidelity Management and Research comes in third at 5.8%. To the casual observer, 5.46% may be small change. Not so. There is potential clout in that 5.46%, especially since it is ostensibly meant to bail Murdoch out of a jam. Moreover, in most of my years at CBS, there was never any doubt that the "big boss" was the legendary William S. Paley. And his stake in what was then the nation's largest media company (the "Tiffany network") was a mere 8%. The rest included banks, insurance companies and others whose interests were not "hands on" and would not challenge Paley's supremacy.” The analysis suggests a very credible position that five individuals with significant stock could significantly control America’s major media outlets. If the loyalty of five such individuals was somehow ‘procured’ – it might produce significant control and significant manipulation of the media. Further evidence suggests that is exactly what has happened. In fact, theories of their “collusion” parallel those theories of the Bilderberg group: “A quiet gathering of the media's top elites to discuss mergers, with a keynote address by the head of the CIA, escaped mention in the mainstream press. Each year, at the posh ranch of investment banker THE SEPTEMBER 11 COMMISSION REPORT Page 331 Herbert Allen Jr., the world's media elites meet to discuss strategy, possible mergers and editorial policy. It can only be called a media version of Bilderberg as government, corporate and media officials are meeting in secret, behind the usual wall of security. "Of all the people in the Bush Administration, perhaps no one was of more interest to the public last week than CIA Director George J. Tenet," Rick Ellis wrote (http://www.allyourtv.com, July 16, 2003. "As the center of a whirlwind of controversy over claims that the agency had made mistakenly allowed President Bush to assert Iraq had attempted to buy uranium from Niger, Tenet was being sought by everyone from Dateline to Senate Intelligence Subcommittee. He was talking last week, but it wasn't to the public. He was in Sun Valley, Idaho, giving a private intelligence briefing to participants of the private (Allen & Company, Inc.) Media conference. "The annual gathering includes nearly every major player of the world's media, technology and entertainment industries, and it's a reminder of just how insular, isolated and powerful the world's media owners are from the billions who consume their products. Organized by investment banker Herbert Allen, the get-together is a summer camp for Citizen Kane's, a place where the rich and powerful are able to meet over picnic lunches and fishing streams as they help determine what you'll be watching for the next few years," Ellis wrote. [SourceWatch: a project of the Center for Media & Democracy, http://www. sourcewatch.org/index.php?title=Herbert_Allen] (Author’s note: It was the 2002 media meeting at Herbert Allen’s ranch at which the Russian Khodorkovsky, key owner of Menatep Bank, met with Lord JacobRothschild. Shortly after that meeting, Khodorkovsky handed over to Rothschild his proxy rights to a 26% controlling interest in Yukos in an attempt to secure his holdings from reclamation by the Russian government, who contends that he illegally acquired control of the largest oil company in Russia. It is reported that shortly after this meeting Khodorkovsky met with Vice President Dick Cheney for private talks. Section 8 of this report describes how these players are linked to the destruction of the World Trade Center and the Bush family.) The breadth of control of these five organizations is demonstrated in Table 8. In dealing with these five groups - one at a time - one needs to understand the payoff promised to the industry CEOs by George Bush (and delivered afterwards) prior to his election. “Shortly after George W. Bush declared his candidacy for president in June of 1999, General Electric Chairman and Chief Executive Officer Jack Welch was contacted by Bush political advisor Karl Rove. Welch later informed associates that Rove told him a Bush administration would initiate comprehensive deregulation of the broadcast industry. Rove guaranteed that deregulation would be implemented in a way that would create phenomenal profits for conglomerates with significant media holdings, like GE. Rove forcefully argued that General Electric and the other media giants had a compelling financial interest to see Bush become president.” [Democracy, General Electric Style, David Podvin and Carolyn Kay, October 23, 2001] The impact of this campaign promise was clearly felt on the election, and subsequent new reporting. The major networks, led by their respective CEOs and Chairmen, led Americans to the conclusion the George Bush should be their President. What Americans experienced in the media, as a result of promise of corporate deregulation, were stories heavily favoring Bush, illegal calling of the election on TV to influence a vote, and a cover-up of the independent Florida voting audit result which was intended to prove that Bush had won legitimately. “A study produced by the Project for Excellence in Journalism and the Princeton Survey Research Associates examined 1,149 stories from 17 news publications, programs and websites. The research revealed that there were almost twice as many positive stories about Bush as there were about Gore. Even more important than this blatant pro-Bush bias, the study found that the coverage de-emphasized the philosophical differences between the candidates. This was critical, because public opinion polls showed that the voters agreed with Gore on the issues. By robbing Gore of his greatest advantage, the THE SEPTEMBER 11 COMMISSION REPORT Page 332 media organizations were Bush’s greatest allies.” [Democracy, General Electric Style, David Podvin and Carolyn Kay, October 23, 2001] The piece of information that makes the Project for Excellence study so intriguing is that Bush was being identified in more positive stories than Gore, even when the press corp in general is consistently more liberal than conservative. "I suspected that many media outlets would tilt to the left because surveys have shown that reporters tend to vote more Democrat than Republican," said Tim Groseclose, a UCLA political scientist and the study's lead author. "But I was surprised at just how pronounced the distinctions are." "Overall, the major media outlets are quite moderate compared to members of Congress, but even so, there is a quantifiable and significant bias in that nearly all of them lean to the left," said co-author Jeffrey Milyo, University of Missouri economist and public policy scholar. …Of the 20 major media outlets studied, 18 scored left of center, with CBS' "Evening News," The New York Times and the Los Angeles Times ranking second, third and fourth most liberal behind the news pages of The Wall Street Journal. Only Fox News' "Special Report With Brit Hume" and The Washington Times scored right of the average U.S. voter. [Media Bias Is Real, Finds UCLA Political Scientist, Meg Sullivan, December 14, 2005] The only valid explanation of a liberal press favoring Bush is ‘pressure’ from management, a conclusion that other research appears to validate. That same inexplicable behavior was experienced again shortly after the election, when eight major newspapers abandoned their pledge to the American public: “On January 9, 2001, eight media organizations announced their intention to form the Consortium that would examine and classify the votes in the Florida presidential election. The eight news organizations were The New York Times, The Washington Post, Dow Jones and Company (The Wall Street Journal), the Associated Press, The Tribune Company (The Los Angeles Times and The Chicago Tribune, among others), The Palm Beach Post, The St. Petersburg Times, and CNN (which later dropped out). The Consortium sought to gain credibility for the integrity of its recount by hiring the not-for-profit National Opinion Research Center to perform the actual ballot handling tasks and to compile the relevant information. NORC was assigned to provide the raw data to each of the members of the Consortium. It would then be up to the individual media outlets to decide how they would interpret and report the data to the American people. ….As for what will happen next, the executive said, “Once the dominant pro-Gore trend became apparent, the Consortium was never going to release the results; the pressure from the big money boys was too great. Terrorism just provided a better excuse for withholding the information than the ‘technical difficulties’ stalling tactic that was otherwise going to be used. The Consortium is determined to make sure that the original results of their recount will never see the light of day.” [The Media Cover-Up of the Gore Victory Part One: Reliable Source Reveals the Cover-Up, David Podvin, Carolyn Kay] The media en masse again would support Bush when the first a major piece of news critical of Bush was made available, and the major media companies pretended the news did not exist. “L.A. Weekly has learned that CBS, NBC and ABC all refused Fahrenheit 9/11 DVD advertising during any of the networks’ news programming. Executives at Sony Pictures, the distributor of the movie for the home-entertainment market, were stunned.” [When Might Turns Right - Golly GE, Why Big Media is Pro-Bush, Nikki Finke, LA Weekly, October 1 - 7, 2004] THE SEPTEMBER 11 COMMISSION REPORT Page 333 President Bush’s courtship of the media did not stop with pre-election promises. Subsequent actions directly provided billions of dollars of benefits at the expense of the taxpayers: “Six days after the attacks on the World Trade Center and the Pentagon, Bush FCC appointee Michael Powell (son of Colin Powell) announced a ruling that affected corporations having licenses to operate 130 UHF TV stations broadcasting on certain frequencies. The FCC gave the media companies approval to sell those taxpayer-owned licenses and keep the tens of billions of dollars that will be generated by the sales.” [Democracy, General Electric Style, David Podvin and Carolyn Kay, October 23, 2001] One-at-a-time, the dynamics of influence and fear were experienced in the American media: NBC With General Electric being almost as large of a news organization as the next four largest combined, the role of its CEO Jack Welch is extremely insightful. “The crucial step that Welch took was to make it well known throughout NBC News that the standard for the promotion of journalists would be the same as it was for every other employee in the corporation: outstanding contribution to the financial well being of General Electric. The journalists who had their paychecks signed by Welch knew that favorable coverage of George W. Bush would be considered an outstanding contribution to the financial well being of General Electric….Welch’s successful behind-the-scenes campaign to influence media coverage in a way that would get Bush into the White House has not been visible to the public, with one exception. On election night, according to an eyewitness, Welch was so angry that his own NBC News team would not call the race for Bush that he personally went to the studio from which Tom Brokaw was anchoring the coverage. Welch quietly watched the broadcast for a few minutes. Two people who were present claim that, when Brokaw and Tim Russert did not take the hint that their boss had come into the newsroom because he wanted something from them, he explicitly announced that he wanted them to call the election for Bush. They did. As a result, Bush entered the Florida recount phase with the tremendous advantage of having already been declared the winner.” [Democracy, General Electric Style, David Podvin and Carolyn Kay, October 23, 2001] From additonal sources: “During a March 12 interview with C-SPAN president and chief executive officer Brian Lamb, MSNBC host Keith Olbermann said: "There are people I know in the hierarchy of NBC, the company, and GE [General Electric Co., NBC's parent corporation], the company, who do not like to see the current presidential administration criticized at all. ... There are people who I work for who would prefer, who would sleep much easier at night if this never happened." [Olbermann: There are execs at NBC "who do not like to see the current presidential administration criticized at all, Mar 13, 2006, http://mediamatters.org/items/200603130006] “CNN correspondent Jessica Yellin said Thursday she was referring to her time spent at MSNBC when she said she felt pressure not to report stories critical of the Bush administration during the time leading up to the Iraq war…. During her CNN appearance, Yellin said the press corps was under enormous pressure from corporate executives to make sure the war was presented "in a way that was consistent with the patriotic fever in the nation and the president's high approval ratings….The charges against MSNBC aren't new, however. A prime-time show with Phil Donahue received consistent pressure to present panels tilted in favor of the war, said Jeff Cohen, that program's former senior producer. Donahue's show was on for less than a year before being cancelled less than a month before THE SEPTEMBER 11 COMMISSION REPORT Page 334 the war began" [CNN reporter talks of pressure to be patriotic, David Bauder, Associated Press, May 29, 2008] CBS “Millions of Americans supported Bush because they believed he would promote family values; Karmazin threw the support of CBS News behind Bush on the basis that family values were a campaign mirage, and that Bush had no intention of implementing them into public policy. While Bush has been president, Stern has continued to shout the same vulgarities and peddle the same sleaze over the air, but the intense pressure that was applied by the FCC during the Democratic era has not continued during the “family values” administration.” [Democracy, General Electric Style, David Podvin and Carolyn Kay, October 23, 2001] A classic example of CBS killing a story that reflected poorly on the Bush administration comes from Greg Palast: “….five months before the election, Katherine Harris, acting under orders from Jeb Bush, knocked 57,000 voters off the rolls. They were suspected of being evildoers and felons and, therefore, not allowed to vote in Florida. Here's the news: Of the 57,000 people, 97% were innocent of crimes, but they were guilty of being black. Half of them were African-American or Hispanic-in other words, Democratic voters. Was the state guessing who the people of color were? In Florida, it's like South Africa; they list your race right on your registration. There was no guessing. These people not only lost their vote, but lost their president. BBC figures Gore lost 22,000 votes this way, but you didn't read that in the U.S. press. You didn't read in the U.S. press that they say they're going to allow the voters back on in 2003. That means that they were screwed for the election of 2002 as well. I ran the story of the theft of the election on the BBC. Then a hotshot with CBS News calls me and says, "Oh, that's a great story, can we have a piece of it? We want something new." I said, "Yeah, I got something for you: Jeb Bush's office, the governor of Florida, is involved in knocking off the voters too, not just Katherine Harris, and there's a letter dated September 18, 2000, which directs county-election officials to deliberately violate the law and not register a bunch of people who are Democrats. These are people who committed crimes in other states. Jeb can't legally stop them from voting, but he did anyway. And he knows that these people are Democrats, because there's something about going to jail that turns people [into] Democrats, about 93% [of ex-cons vote Democrat.] (Interviewer): So, people who were either black or who had previously gone to jail were just automatically eliminated? PALAST: Right. Jeb sent out the letter anyway, September 18, 2000, despite two court orders saying he couldn't do that. I had an insider in his office, some poor woman, shaking, saying, "I gotta read you this letter." She knew about the court orders. Okay, so I said, to CBS, "That's a story." CBS News didn't run the story-one night, two nights. I said, "What happened?" They said, "It didn't stand up." I said, "How do you know the story didn't stand up?" "Well, we called Jeb Bush's office, and they said, 'We didn't do it.'…: In fact, just so you know, the NAACP took my information, sued Katherine Harris and the State of Florida; and they won. And you haven’t seen that reported in the American press: they won. Turns out, by the way, it wasn’t 57,000 people; 94,000 people were targeted to have their names illegally removed. And the State of Florida said, “You got us.” Katherine Harris has faced up to it, even though you don’t see it in the papers.” [Greg Palast Interview by Bruce David, Hustler, On-line] Time Warner and CNN In 1994, Edgar Bronfman Jr.'s Seagram company acquired a 14.5% stake in Time Warner, and has been a controlling player ever since. The role of Edgar Bronfman in the larger illicit laundering scandal has been amply detailed throughout this report. Here is the same individual being one of the key media influencers in the US. Here is at least one example of their deliberate squelching of the news to support a cover-up. THE SEPTEMBER 11 COMMISSION REPORT Page 335 “Further investigation and probing of several other CNN sources closely connected with the production of the Asner segment on Showbiz Tonight reported that high-level members of CNN management advised the producers of the show to "kill it. " This statement was clearly made to stifle any further coverage of 9/11…”.[CNN Fears 9/11 Truth - Cancels Ed Asner's Appearance, Infowars.com, March 28, 2006] Disney and ABC Disney and ABC appears to be another example, very similar to NBC and CBS, where the corporate profit motive determined the content of the “message” to the American public. “The attitude at ABC was an extension of the personality of Disney Chairman Michael Eisner. Eisner does not like those who make waves, as the host of Politically Incorrect recently learned. After Bill Maher said that it was cowardly of America to fight battles by launching missiles from a safe distance, Eisner went out of his way to very publicly slap Maher down. This episode provided outsiders with a rare glimpse inside the corporate culture of … do not rock the boat or you’re in trouble. “Eisner will always stand up for principle, no matter what the cost,” says a former Disney executive, “as long as that principle involves increasing his personal compensation.” As a result, the candidate who held out the prospect of fabulous wealth for the broadcast industry got favorable coverage from ABC News. In fact, Bush received better coverage than Gore from the entire mainstream media.” [Democracy, General Electric Style, David Podvin and Carolyn Kay, October 23, 2001] It was Disney under Eisner that attempted to bury a film by Michael Moore that was critical of the Bush family, suggesting collusion with the Saudi Royal family. “Mr. Moore’s agent, Ari Emanuel, said that Michael D. Eisner, Disney’s chief executive, asked him last spring to pull out of the deal with Miramax. Mr. Emanuel said Mr. Eisner expressed concern that it would endanger tax breaks Disney receives for its theme park, hotels and other ventures in Florida, where Mr. Bush’s brother, Jeb, is governor. “Michael Eisner asked me not to sell this movie to Harvey Weinstein; that doesn’t mean I listened to him,” Mr. Emanuel said. “He definitely indicated there were tax incentives he was getting for the Disney corporation and that’s why he didn’t want me to sell it to Miramax. He didn’t want a Disney company involved.” But that was then and this is now. Disney has turned most of ABC’s extensive radio network and owned-and-operated stations into a 24/7 orgy of right-wing talk. Disney’s chief lobbyist, Preston Padden, is not only one of Washington, D.C.’s most infamous Republican lobbyists, but he used to work for Rupert Murdoch. And Padden was set to use all of his considerable influence in Congress and the White House on Disney’s behalf if that big bad Goliath, Comcast, really tried to gobble up the Mouse House. As a result, no one thought it just coincidental when W pleaded just days after 9/11 for Americans “to return to the kind of lives we were leading before [that], especially air travel. Get on board. Do your business around the country. Fly and enjoy America’s great destination spots. Go down to Disney World in Florida; take your families and enjoy life the way we want it to be enjoyed.” It was as close to a White House commercial for Disney as any corporation could dare hope. Then Bush followed that up weeks later with a PR visit to Orlando, Florida, where the Magic Kingdom had suffered a 25 percent drop in ticket sales, where a national photo showed the theme park’s deserted entrance. And since then, in addition to the usual tax breaks from W’s brother, Jeb, Disney World has benefited from special security measures, including extra protection and a federally declared “no flyover zone.” [When Might Turns Right - Golly GE, Why Big Media is Pro-Bush , Nikki Finke, LA Weekly, October 1 - 7, 2004] Behind all this, and what is rarely disclosed, is that in 1985, the largest shareholder in the owner of ABC, at the time being Capital Cities, was CIA Director Wiliam Casey. This THE SEPTEMBER 11 COMMISSION REPORT Page 336 effectively put the CIA in control of ABC news. [see Gold Warriors: America’s Secret Recovery of Yamashita’s Gold, Sterling and Peggy Seagrave, Verso, 2005, p.188 ] News Corporation and FOX The role of Murdoch’s FOX news as a mouthpiece for the Bush family is legendary. If nothing else, having George Bush’s cousin as the Senior News Editor at FOX should be an insightful tip. “As Slate reports, Murdoch "put George W. Bush cousin John Ellis in charge of [Fox's] Election Night vote-counting operation: Ellis made Fox the first network to declare Bush the victor" even as the New Yorker reported that Ellis spent the evening discussing the election with George W. and Jeb Bush. After the election, Fox bragged that it attracted 6.8 million viewers on Election Night, meaning Ellis was in a key position to tilt the election for President Bush.” [Slate, 11/22/00; New Yorker, 11/20/00] Similarly, having former Republican Party advisor Roger Ailes as a Fox News Director is another insight to the FOX predisposition. [Michael C Ruppert, Crossing the Rubicon, p. 263.] “Ailes, 48, is the legendary dark prince of political advertising, the Republican consultant who helped engineer Richard Nixon's resurrection in 1968 and who scripted Ronald Reagan's second-debate comeback against Walter Mondale in 1984. This time Ailes has been the unseen hand behind Bush's best moments: the "Pierre" put-down of former Delaware Governor Pete du Pont in a debate last October, the hard-hitting anti-Dole advertising in February's New Hampshire primary, and the on-air pummeling of CBS's Dan Rather last January…. Ailes' involvement has been crucial to Bush's candidacy. When Bush arrived in New Hampshire reeling from a third-place finish in the Iowa caucuses, Ailes labored all night over the television ad that quashed Robert Dole's insurgent campaign. Known as the "Senator Straddle" commercial, the blunt spot asserted that Dole had waffled on tax hikes, oil-import fees and arms control.” [The Man Behind the Message: If anyone can build a better candidate, it is Roger Ailes, Richard Stengel, Time Magazine, August 22, 1988] But there is more. “Murdoch's media empire still has close ties with the Bush family. The relationship was recently put under the spotlight when it was revealed that Fox News Channel chairman Roger Ailes, a former Republican party strategist, secretly acted as an advisor to the president in the days after the September 11 terrorist strikes.” [US media dig deep for politicians, Annie Lawson, Guardian, April 7, 2003] “Discussions with former Fox News employees on several levels claim they were ordered to carry propaganda, discredit and skew news against Democrats, meld news and commentary and negatively caricature Mr Bush's presidential opponent, John Kerry, all under the network's slogans of ‘Fair and Balanced’, and ‘We Report, You Decide’.”[The Advertiser, Stan James, October 16, 2004] “When he decided to create his own U.S. radio and television network, Fox, he was confronted by an American law no broadcaster had ever circumvented, though many had tried. The law requires that no foreign entity may own more than 24.9 percent of a U.S. radio or television station. Murdoch changed his citizenship from Australian to United States, but that gesture was not enough. He still failed to comply with the broadcast law that requires the broadcaster's parent corporation to be based within the United States. Murdoch refused to move the company because he had special tax advantages in Australia. Instead, he used his new American power base of four newspapers and two magazines as THE SEPTEMBER 11 COMMISSION REPORT Page 337 levers for his legendary political behind-the-scenes navigating to obtain special favors. It was a shock to other foreign firms, which had attempted but never succeeded in entering U.S. broadcasting, when Murdoch was granted the first waiver of that United States-only ownership law that had ever been granted. It still has never been granted to anyone else.” “While the media can’t avoid talking about the Abramoff Scandal, they can—and do—blow smoke and spread confusion and misinformation. A most popular example is the false claim that Democrats as well Republicans took money from Abramoff. In fact, Abramoff gave more than $127,000 to Republican candidates and committees between 2001 and 2004, and nothing to Democrats. Indeed, TV pundits themselves have closer ties to Abamoff. In March, 2003, Hollywood Reporter online reported that “Fox News Channel’s Tony Snow is master of ceremonies, and Fox’s Brit Hume and MSNBC’s Chris Matthews are aboard” for an event whose “purpose is to raise about $300,000 for the Capital Athletic Foundation.” The Capital Athletic Foundation is one of Abramoff’s various slush fund fronts. Ostensibly devoted to “needy and deserving” sportsmanship programs, the Washington Post discovered that though it collected nearly $6 million in its first four years of operation, “less than one percent of its revenue has been spent on sports-related programs for youths.” The fundraiser was cancelled because of the invasion of Iraq. But the Beltway newsmen’s involvement raises serious questions about their objectivity and distance from the subject of scandal. No one is saying they are dirty. But neither can they be considered objective in reporting about a widespread scandal that they themselves have gotten entangled in, however innocently. And yet, they are among the leading voices telling America how to think about it.” [Abramoff Scandal Threatens GOP But Media Runs Interference, Paul Rosenberg, Senior Editor, Harbor Independent News, January 2006] Clear Channel “Global radio giant Clear Channel recently reignited concerns about companies that control mainstream media and snuggle up to political parties, following its controversial sponsorship of prowar rallies in the US. The media group, which controls 1,225 radio stations across the US and is the world's largest radio empire, also attracted scathing criticism for dropping the Dixie Chicks from its network playlist after its lead singer publicly declared her opposition to the war. The company's founder, Lowry Mays, ensured the majority of the $503,910 donations made in 2001- 02 landed in the Republican party's coffers. But his company's links with the Bush family run deeper. Media watchdog takebackthemedia.com this week published the elaborate web of connections that further align Clear Channel with the Bush family. Mays, who took advantage of radio deregulation and transformed Clear Channel into a global multimedia player, is associated with the president through the University of Texas Investment Management Company (UTIMCO). Mays sits on the governing board, alongside Clear Channel vice-chairman Thomas Hicks, whose family is believed to have contributed over $500,000 to Bush campaigns over the years. Hicks, a long-time friend and supporter of President Bush, heads the UTIMCO board but his position was recently embroiled in controversy when it emerged he awarded UTIMCO-funded contracts to firms politically associated with the Bush dynasty. Hicks also bought the Texas Rangers baseball team from Bush for $250 million in 1998, three times the amount that Bush and his partners had originally paid.” [US media dig deep for politicians, Annie Lawson, Guardian, April 7, 2003] Bertelsmann The fifth largest Media Empire belongs to the Mohn family of Germany, which appears to maintain relative silence in American politics. However, a deep probe into the ownership suggests the significant but subtle influence of the Bush syndicate partners. THE SEPTEMBER 11 COMMISSION REPORT Page 338 “If one drives southwest from Hanover, Germany, and is careful to remain on Berliner Strasse for about 125 kilometers, one will come to Gutersloh, a pleasant town of sculptured tulip gardens, highspired churches, and tree-lined streams and lakes. It is a town of thirty-six thousand that lists as an honorary citizen, among others, Reinhard Mohn. This is the ancestral home of the Mohn family, who happen to own the privately owned firm of Bertelsmann A.G., the fifth largest media corporation in the United States and, among other things, the largest printer of English-language books in the world. …Like the other members of the Big Five that dominate the American media world, Bertelsmann's list of media companies is lengthy. It requires nine typed pages. Thirty percent of its holdings are in the United States, bringing from this source alone $63 billion annually. Most of Bertelsmanns eighty-two book subsidiaries were once freestanding, independent publishing houses, some of them household words not so many years ago Alfred Knopf, Pantheon, Random House, Ballantine, Bantam, Crown, Doubleday, and Modem Library. Its magazine groups include familiar names like Family Circle and Parents (joint ventures). The twenty different record labels issued by Bertelsmann include RCA, RCA Victor, and Windham Hill. Like others in the Big Five, Bertelsmann has shared enterprises with its "competitors," including a 50-50 ownership with Disney of a German TV operation, Super RTL. With all its power, Bertelsmann is haunted by a ghost....With the advent of Hitler and Nazism in the 1930s and the aftermath horrors of the Holocaust in World War 11, questions were asked how the company had emerged from the war ready to resume its growth around the world. To queries like "What did you do under Hitler?" the Bertelsmann official answer was, in effect, "We suffered for our anti-Nazism." Postwar records seemed to confirm this because in 1944 there was a temporary closure of the Bertelsmann plant in Gutersloh. But as postwar German archives became available, Gennan sociologist Hersch Fischler discovered that, during the war, Bertelsmann had, in fact, been the largest publisher under Hitler. Among its 19 million books, it had large contracts from the Nazi Propaganda Ministry, including anti-Semitic tracts supporting Hitler's insistence that Germans needed to take over central and western Europe. One book echoed Hitler's propaganda claim. Bertelsmann's anti-Semitic tracts were standard literature for Hitler's Brown Shirts.” [The New Media Monopoly, Ben Bagdikian, Beacon Press, 2004] While the Bertelsmann Media giant is owned mostly by the quiet Mohn family of Germany, they have cast their lot with a familiar global financial powerhouse: Group Bruxells Lambert, largely controlled by Andre Desmarais. The reader will recall that Desmarais was identified as a board member of Barrick Gold, along with George Bush Sr., Adnan Khashoggi, the Bronfmann family and a host of German/Swiss bank cartel members. Desmarais had himself placed on the Board of BertelsmannAG, suggesting another media company controlled by one of the extended Bush syndicate. “In February 2001, Groupe Bruxelles Lambert, one of Belgium’s top 10 companies and 25 percent owned by Power Corp., acquired control of BertelsmannAG. Andre Desmarais, President and Chief Executive Officer of Power Corp., was named to the BAG board. As it turns out, the publishing company controlled by Canada’s powerful Desmarais family has a less than honourary history. Indeed, during the days of the Third Reich, BertelsmannAG was the biggest publisher of Nazi texts, with production more prolific than the National Socialist Party’s own printing business. The Nazi chapter of BertelsmannAG began in 1933, but was only documented and disclosed by a historian Saul Friedlander in 1999. Bertelsmann published the nefarious, The Christmas Book for Hitler Youth. The publishing empire which employs some 80,000 workers in 51 countries, posted an overall cash flow of $18.3-billion in 2002. Originally run by the Heinrich Mohn family, the company donated money to the SS and to various ecology Save-the-Earth factions of the Nazi movement.” [Canada's global connections, Judi McLeod, Canadafreepress.com, December, 15, 2004.] THE SEPTEMBER 11 COMMISSION REPORT Page 339 Additionally, another Barrick Board member – Otto Pohl – is also a director of Bertelsmann. 13.6 Final Steps in Ending a Free Press The Bush syndicate has figured out how to control the traditional press. The internet, however, remains free. This report is an example of how the Internet allows information to be shared that has been buried by a controlled press. Freedom, however, threatens this syndicate. Hence, in 2005, Representatives of the Bush syndicate went to court to try to limit political expression on the internet. “The Federal Election Commission (FEC) is currently under court order to consider extending regulation and restriction of political speech outlined by the Bipartisan Campaign Reform Act of 2002 (BCRA, also known as McCain-Feingold). The court order was the result of a lawsuit filed by advocates of regulated speech, including the architects of BCRA, Sens. John McCain and Russ Feingold. Users of the Internet, such as online publications and blogs, so far have enjoyed a broad exemption from the speech restrictions favored by reformers. But the court-ordered rule-making by the FEC could change that….. FEC Commissioner Brad Smith: I think because anything they can't control scares them. And I think that as they are zealots, they are perpetually afraid somebody, somewhere is going to spend some money to influence politics and they think that that is a bad thing. They don't say that, of course. They say they are still very concerned about First Amendment rights and citizens participating in politics and so on. But if you are really looking at what their record is, if you look at what they do, if you look at what they testify before the commission about, what they are afraid of is that people would be participating in politics and in ways that they cannot control. So while there is no demonstrative threat yet, it's just a possibility that this could be a threat that has led them to swing into action.” [An End To 'Everybody's Press? Nick Schulz, www.techcentralstation.com, June 13, 2005] Summary The current methods ofterror, propaganda and media control all suggest that the country is being controlled by something other than the democratic process. If one adds to that a massive amount of research that indicates last two presidential elections were tampered with in the polls of numerous states, the path the U.S. is being steered to take is a dark one indeed. The next section of this report suggests that the Bush administration and the Neoconservative movement it uses as its front are really more like a totalitarian movement, than a party in the democratic process. THE SEPTEMBER 11 COMMISSION REPORT Page 340 Who Owns the Media Parent General Electric $100.5 billion Time Warner $26.8 billion The Walt Disney Co. $23 billion Viacom $18.9 billion News Corporation $13 billion Networks NBC includes programming, news and more than 13 TV and radio stations TURNER BROADCASTING includes sports teams, programming, production, retail, book publishing and multimedia WB Television Network ABC includes ABC Radio, ABC Video and ABC Network News CBS includes stations, CBS Radio, CBS Telenoticias and CBS Network News UPN includes programming and TV stations (50%) FOX includes programming and stations Cable Interests Owns 25-50% of the following:A & E (with Disney and Hearst) American Movie Classics (25%) Biography Channel (with Disney and Hearst) Bravo (50%) Bravo International CNBC Court TV (with Time Warner) Fox Sports Net History Channel (with Disney and Hearst) Independent Film Channel MSG Network MSNBC (50%) National Geographic Worldwide News Sport Prime Prism (with Rainbow, a subsidiary of Cablevision, and Liberty Media, a subsidiary of TCI) Romance Classics Sports Channel HBO (75%) Cinemax HBO Direct Broadcast Court TV (33% with GE) TBS Superstation Turner Classic Movies TNT Cartoon Network Comedy Central (37.5% with Viacom) Sega Channel OVATION (50%) Women's Information Television (WIN) (partial) TVKO (75%) 4 regional all-news channels CNN CNN/SI (with Sports Illustrated) CNNfn (financial network) CNNRadio Headline News Sportsouth CNN International CNN Airport Network Disney Channel Disney Television (58 hours/week syndicated programming) Toon Disney Touchstone Television A&E (37.5% with Hearst and GE) Lifetime Network (50%) ESPN (80% with Hearst) ESPN2 (80% with Hearst) ESPN Classic (80% with Hearst) ESPN West (80% with Hearst) ESPNews (80% with Hearst) Buena Vista Television Biography Channel (with GE and Hearst) History Channel (37.5% with Hearst and GE) Classic Sports Network E! (35%) Nickelodeon MTV M2: Music Television VH1 Showtime Nick at Nite's TVLand Paramount Networks Comedy Central (50% with Time Warner) TNN: The Nashville Network Movie Channel FLIX All News Channel (50%) Sundance Channel (45%) Midwest Sports Channel CBS Telenoticias (30%) Home Team Sports (66% with News Corporation) Fox Family Channel (50%) Fox News Channel fx (50% with TCI's Liberty Media) fxM (50% with TCI's Liberty Media) Fox Sports Net (25% with TCI, GE and Cablevision) The National Geographic Channel (50%) FIT TV Partnership Regional networks, including TV Guide Channel and Fox Sports New York Other Major Players: AT&T (TCI) - Recently acquired by AT&T, TCI's hold on cable, internet and local phone services contributed to $7.6 billion in 1997 revenues. TCI is the second-largest US cable television system provider, and it has 10% ownership of Time-Warner/Turner. The company owns all or part of USA Network, Sci-Fi Network, E!, Court TV, Starz! and Starz! 2, Black Entertainment Television, BET on Jazz, BET Movies/Starz! 3, CNN, TNT, Headline News, Prime Sports Channel, The Learning Channel, Discovery Channel, QVC, Q2, Fox Sports Net, The Travel Channel, Prevue Channel, Animal Planet, The Box, Telemundo, International Channel, Encore, MSG Network, Action Pay-per-view, and the Home Shopping Network. Sony - Sony's main media interests, earning $9 billion in 1997 sales, are in film and television production, movie theaters and music. Universal (Seagram) - In addition to Universal Studios, with its production facilities and theme parks, the company owns the USA and Sci-Fi cable networks. Source: Who Controls the Media? Professor John Lye - Last Updated (Friday, 08 October 2004), also National Organization of Women THE SEPTEMBER 11 COMMISSION REPORT Page 341 14 Policy and Philosophy: Democracy and Patriotism as Coverups for Terror and Greed The political movement founded by George H.W. Bush has a history of being tainted by allegations of criminal misconduct, most of which has never been proven in a court of law. Voters are often reminded that the allegations around Iran-Contra, cocaine dealings, savings and loan frauds, bank fraud and money laundering, and violations of the U.S. Foreign Corrupt Practices Act have never been proven in court of law. Voters are never reminded that investigations into these crimes have been stopped or corrupted; witnesses have been bribed, intimidated and murdered, and evidence has been suppressed under the guise of ‘national security.’ If the record was one such that there had been only one whispered allegation or possibly two – there might be a reasonable position in giving the accused the benefit of the doubt, which the U.S. legal system does. However, over the past twenty years, those individuals intimately linked to the Bush family success have been accused over-and-over again of felony crimes, only to escape prosecution and punishment because of the Bush apparatus political influence. Their public accusers have been slandered, ruined, imprisoned and murdered. The news of these crimes is selectively ignored under the guidance of a few media oligarchs who are indebted to - and in fear of - the Bush machine. In so many ways, the alleged crimes and behavior patterns of the Bush family are such as to suggest they trumpet the coming of a new totalitarian order – the “new world order” first mentioned in a speech to Congress by George H.W. Bush on September 11, 1991. The movement, however, began much earlier, in 1975, when Bush came to power as CIA Director under President Gerald Ford. It was at that time that his future war cabinet “eviscerated” Kissinger’s policies of détente and balance of power, and by eliminating Kissinger, sought to take the United States down a path of global domination by eliminating the policy of “balance” of power. “The report, delivered at the end of 1976, presented an analysis of Soviet motivations profoundly different from the one U.S. intelligence had been offering. The team (appointed by Bush, including Wolfowitz) concluded it was possible to interpret the available intelligence data as showing that the Soviet Union was striving for military superiority over the United States and that it viewed détente as a means of achieving that goal. “All evidence points to an undeviating Soviet Commitment to what is euphemistically called the “worldwide triumph of socialism,’ but in fact connotes global Soviet hegemony” the report said. It criticized the CIA for relying too much on satellites and other technology and for failing to give enough weight to what the Soviet leaders were saying.” …The evisceration of Henry Kissinger and détente represented a turning point for America’s relations with the world….Rumsfeld, Cheney and Wolfowitz all played key roles in these changes…”.[Rise of the Vulcans- The History of Bush’s War Cabinet, James Mann, Penguin, 2004, p74.] The new policy which strives for world hegemony was founded in the thinking of the Bush advisors who would later proclaim themselves the “Vulcans” in the late 1980s (after the Roman god of fire and volcanoes, maker of iron, arms and armor), and later became leaders of the Neoconservative movement of the late 1990s. Their policy of world domination, initially expressed in 1976, is reported by numerous resources, to be THE SEPTEMBER 11 COMMISSION REPORT Page 342 encompassed in such phrases as “global hegemony,” “permanent superiority,” and “perpetual war.” “Already in 1992, toward the end of the first Bush White House, then Undersecretary of Defense Wolfowitz and Secretary of Defense Cheney came up with a bold new plan to rethink U.S. military policy, which was circulated in the top-secret Defense Policy Guidance report. So disturbing was this report that a Pentagon official, who believed this strategy debate should be carried out in the public domain, leaked it. Indeed, it was described by some as nothing less than a plan for the U.S. to “rule the world,” without acting through the U.N. and by using pre-emptive attacks on potential threats (Armstrong Armstrong, David 2002 “Dick Cheney’s Song of America: Drafting a Plan for Global Dominance.” Harper’s (October): 76-83; Johnson, Chalmers 2004 The Sorrows of Empire: Militarism, Secrecy and the End of the Republic. New York: Henry Holt and Company. 20-25). … Although this plan was quickly rejected after its leak, it resurfaced in a new form in 1997, with the founding of the Project for a New American Century by Irving Kristol’s son, William. As William Kristol and Robert Kagan had already argued in Foreign Affairs in 1996, America now has an opportunity to exercise a “benevolent hegemony” over the world while promoting democracy and free markets – an opportunity it would be foolish to let slip away.” (“Toward a Neo-Reaganite Foreign Policy.” William Kristol and Robert Kagan ,Foreign Affairs July/August 1996) http://www.foreignaffairs.org/19960701faessay4210/william-kristol-robert- kagan/toward-a-neoreaganite- foreign-policy.html). [America, Left Behind: Bush, the Neoconservatives, and Evangelical Christian Fiction, Hugh B. Urban, Journal of Religion & Society, Volume 8 (2006), ISSN 1522-5658 ] “Inside the Pentagon, Wolfowitz had delegated the job of coming up with the new Defense Planning Guidance to (Scooter) Libby, his protégé and top assistant …. Libby in turn, assigned the task of writing the new strategy to (Zalmay) Khalilzad…. Khalilzad’s draft suggested that the competition with Japan and Germany should be confined to economics; the United States should make sure it had no military rivals…. Libby wanted to shift the emphasis subtly. The point shouldn’t be to block rival powers, but rather for the United States to become so militarily strong, so overwhelmingly that no country would dream of ever becoming a rival. America should build up its military lead to such an extent that other countries would be dissuaded from even starting to compete with the United States. The costs would be too high….Thus the United States would be the world’s lone superpower not just today or ten years from now but permanently….This Pentagon strategy for permanent American military superiority was issued under Cheney’s name, and Cheney played the key role in making the document public.” [Rise of the Vulcans - The History of Bush’s War Cabinet, James Mann, Penguin, 2004, pp209-213.] “Against the looming threat of peace and prosperity, Dick Cheney assured that in the words of Gore Vidal, the decades to come would be defined by “perpetual war.” Cheney was as fervently anti- Communist as the next right-winger, but when the Communist-led governments ceased to pose even the slightest challenge to the United States or its allies, the secretary of defense jettisoned the rationale for the cold war while maintaining the form and substance of the struggle.” [The Rise and Rise of Richard B. Cheney, John Nichols, The New Press, 2004, p104.] The Neoconservative movement however was more than an expression of government policy. It became - it evolved into - an ideology of faith, as shown by its advocates. “As Halper and Clarke suggest, [The Faith Factor, Stefan Halper and Jonathan Clarke, Time, June 21, 2004, p.30] the Neoconservative persuasion can perhaps best be characterized by three features: first, “a belief deriving from religious conviction that the human condition is defined as a choice between good and evil and that the true measure of political character is found in the willingness by the former to confront the latter;” second, “an assertion that the fundamental determinant of the relationship between states rests on military power and the willingness to use it….” [America, Left Behind: Bush, the Neoconservatives, and Evangelical Christian Fiction, Hugh B. Urban, Journal of Religion & Society, Volume 8 (2006), ISSN 1522-5658 ] THE SEPTEMBER 11 COMMISSION REPORT Page 343 “As Kristol argues, strong religious faith and a belief in the transcendent basis of moral law is crucial to the health of the country and the strength of the economy: “The three pillars of modern conservatism are religion, nationalism, and economic growth. Of these, religion is easily the most important, because it is the only power that . . . can shape people’s characters and regulate their motivation”. The loss of a strong moral and religious compass, in turn, has led to the intense crisis that modern liberal America faces, which he described as a “steady decline in our democratic values, sinking to new levels of vulgarity.” [America, Left Behind : Bush, the Neoconservatives, and Evangelical Christian Fiction, Hugh B. Urban, Journal of Religion & Society, Volume 8 (2006), ISSN 1522-5658 ] The Neoconservative movement as expressed by its apostles, promised the fulfillment of a “Utopian” vision with apocalyptic connotations – the ultimate, Utopian destiny of human kind. “…the Neoconservative “persuasion” has attracted a wide range of powerful figures, from Bush cabinet members like Paul Wolfowitz, Donald Rumsfeld, and Dick Cheney, to intellectuals like Franci Fukuyama. Indeed, one of the most important texts for Neoconservative ideology is Fukuyama’s widely-read work, The End of History and the Last Man, which posits that American government and free market capitalism represent the final stage of human development with few flaws (cf. Burbach and Tarbell: 83).” [America, Left Behind: Bush, the Neoconservatives, and Evangelical Christian Fiction, Hugh B. Urban, Journal of Religion & Society, Volume 8 (2006), ISSN 1522-5658 ] Clearly, the Neoconservative movement was and is more than expression of guidance for American foreign policy. William Kristol and Michael Ledeen, as the Nietschean Zarathustras of the Neoconservative movement, both advocate a disdain for all that has preceded them with the proclamation that “history begins today” and that the future of humanity is best determined by the global hegemony of their interpretation of “good versus evil” based on their Judaeo-Christian Old Testament culture. Their interpretation of what that culture demands is one that rationalizes a conscious choice and the practice of evil, hatred, suffering, and arrogance in pursuit of their “Utopian vision.” The philosophical rationalization of evil and hatred has resulted in a US foreign policy which blatantly deploys unjustified war, murder, rape, torture, theft, fraud, lying, forgery and bribery under the immunity of patriotism and national security and under the façade of promoting democracy. The Vulcan/Neoconservative ideology of world hegemony can be interpreted as ‘patriotic’ or impassioned love of country – but it is also a reflection of a deeper, unnerving psyche. That psyche is best described by Hannah Arendt, whose classic study of German and Russian totalitarianism provides insight to the many similarities between the Neoconservative movement and those movements that gave birth to the totalitarian phenomenon. “The struggle for total domination of the total population of the earth… is inherent in the totalitarian regimes themselves…Totalitarianism in power uses the state administration for its long-range goal of world conquest and for the direction of the branches of the movement; it establishes the secret police as the executors and guardians of its domestic experiment in constantly transforming reality into fiction; and it finally erects concentration camps as special laboratories to carry through its experiment in total domination.” [The Origins of Totalitarianism, Hannah Arendt, Harvest Book, 1968, pp. 392] THE SEPTEMBER 11 COMMISSION REPORT Page 344 “To be sure, totalitarian dictators do not consciously embark upon the road to insanity….they consider the country where they happened to seize power only the temporary headquarters of the international movement on the road to conquest, that they reckon victories and defeats in terms of centuries or millennia , and that global interests always overrule the local interests of their own territory.” [The Origins of Totalitarianism, Hannah Arendt, Harvest Book, 1968, p411.] The Weltanschauung and ideology of the Neoconservative movement is not inherently totalitarian, and a desire for global domination does not automatically qualify the movement as Totalitarian. Unfortunately, it is but one of many characteristics that the Neoconservative movement has in common with the horrors of the mid-Twentieth Century dictators now known as Totalitarian. If one highlights the characteristics of ‘Totalitarian” regimes, the parallels between those abominations and the neoconservative movement become clear. Here are nine more similarities between Bush’ Neoconservative cabal, and the totalitarian regimes of Germany and the Soviet Union. 1. The movement considers itself above the law. “…the fundamental difference between the totalitarian and all other concepts of law comes to light. Totalitarian policy does not replace one set of laws with another, does not establish its own consensus iuris, does not create by one revolution, a new form of legality. Its defiance of all, even its own positive laws implies that it believes it can do without any consensus iuris whatever, and still not resign itself to the tyrannical state of lawlessness, arbitrariness and fear.” [The Origins of Totalitarianism, Hannah Arendt, Harvest Book, 1968, p462.] Time and again, in protecting his business partners from criminal investigation and pardoning them from crimes against the state, Bush has maintained that patriotism is more important than the law, and that he as President, was above it. ‘President Bush December 24 granted pardons to former Defense Secretary Caspar Weinberger and five other individuals for their conduct related to the Iran-Contra affair. Bush said Weinberger -- who had been scheduled to go on trial in Washington January 5 on charges related to Iran-Contra -- was a "true American patriot," who had served with "distinction" in a series of public positions since the late 1960s. "I am pardoning him not just out of compassion or to spare a 75-year-old patriot the torment of lengthy and costly legal proceedings, but to make it possible for him to receive the honor he deserves for his extraordinary service to our country," Bush said in a proclamation granting executive clemency. The president also pardoned five other persons who already had pleaded guilty or had been indicted or convicted in connection with the Iran-Contra arms-for-hostages investigation. They were Elliott Abrams, a former assistant secretary of state for Inter-American affairs; former National Security Adviser Robert McFarlane; and Duane Clarridge, Alan Fiers, and Clair George, all former employees of the Central Intelligence Agency. Explaining those pardons, Bush said the "common denominator of their motivation -- whether their actions were right or wrong -- was patriotism." [Bush Pardons Weinberger, Five Others Ties to Iran- Contra, Dian McDonald; USIA White House Correspondent Washington, December 24, 1992] Similarly, his son George W. Bush, has taken this interpretation of the law to a new level, creating for himself interpretations of the law that allow him to suspend any law, in secret, at his discretion. ‘When the New York Times revealed that George W. Bush had ordered the National Security Agency to wiretap the foreign calls of American citizens without seeking court permission, as is indisputably THE SEPTEMBER 11 COMMISSION REPORT Page 345 required by the Foreign Intelligence Surveillance Act (FISA), passed by Congress in 1978, he faced a decision. Would he deny the practice, or would he admit it? He admitted it. But instead of expressing regret, he took full ownership of the deed, stating that his order had been entirely justified, that he had in fact renewed it thirty times, that he would continue to renew it and--going even more boldly on the offensive--that those who had made his law-breaking known had committed a "shameful act." As justification, he offered two arguments, one derisory, the other deeply alarming. The derisory one was that Congress, by authorizing him to use force after September 11, had authorized him to suspend FISA, although that law is unmentioned in the resolution. Thus has Bush informed the members of a supposedly co-equal branch of government of what, unbeknownst to themselves, they were thinking when they cast their vote. The alarming argument is that as Commander in Chief he possesses "inherent" authority to suspend laws in wartime. But if he can suspend FISA at his whim and in secret, then what law can he not suspend? What need is there, for example, to pass or not pass the Patriot Act if any or all of its provisions can be secretly exceeded by the President? Bush's choice marks a watershed in the evolution of his Administration…. The Administration of George W. Bush is not a dictatorship, but it does manifest the characteristics of one in embryonic form. Until recently, these were developing and growing in the twilight world of secrecy. Even within the executive branch itself, Bush seemed to govern outside the normally constituted channels of the Cabinet and to rely on what Secretary of State Colin Powell's chief of staff has called a "cabal." Former Treasury Secretary Paul O'Neill reported the same thing. Cabinet meetings were for show. Real decisions were made elsewhere, out of sight. Another White House official, John DiIulio, has commented that there was "a complete lack of a policy apparatus" in the White House. "What you've got is everything, and I mean everything, being run by the political arm." As in many Communist states, a highly centralized party, in this case the Republican Party, was beginning to forge a parallel apparatus at the heart of government, a semi-hidden state-within-a-state, by which the real decisions were made.’ [The Hidden State Steps Forward, Jonathan Schell, The Nation, December 22, 2005] “… in the United States, this president (George HW Bush ) and Congress seem hell bent on defying the popular will. The American people, in poll after poll and survey after survey, are revealed to be opposed to the direction of the war in Iraq, illegal immigration, amnesty, a guest-worker program, the outsourcing of jobs and certainly the outsourcing of our security. It has become increasingly clear over the last several years that the least represented constituency in either Congress or the White House is the middle class, working men and women who are the foundation of our country.” [Dobbs: President, Congress Defying People's Will, Lou Dobbs, CNN, March 31, 2006] “I do not need to explain why I say things. That’s the interesting thing about being president. Maybe somebody needs to explain to me why they say something, but I don’t feel like I owe anybody an explanation.” George Bush Jr. [Michael C Ruppert, Crossing the Rubicon, p. 480.] 2. The movement is founded on terror. ‘Terror becomes total when it becomes independent of all opposition; it rules supreme when nobody any longer stands in its way. If lawfulness is the essence of non-tyrannical government and lawlessness is the essence of tyranny, then terror is the essence of totalitarian domination.’ [The Origins of Totalitarianism, Hannah Arendt, Harvest Book, 1968, p.464.] The Neoconservative movement, under the Bush family, has engaged in total terror, including murder, conspiracy with organized crime, drug-running, torture, secret camps. ‘He has presided over a system of torture and sought to legitimize it by specious definitions of the word. He has asserted a wholesale right to lock up American citizens and others indefinitely without any legal showing or the right to see a lawyer or anyone else. He has kidnapped people in foreign countries and sent them to other countries, where they were tortured. In rationalizing these and other acts, his officials have laid claim to the unlimited, uncheckable and unreviewable powers he has THE SEPTEMBER 11 COMMISSION REPORT Page 346 asserted in the wiretapping case. He has tried to drop a thick shroud of secrecy over these and other actions.’ [The Hidden State Steps Forward, Jonathan Schell, The Nation, December 22, 2005] 3. The success of the movement is founded on apathy in the voting populace. ‘Totalitarian movements are possible wherever there are masses who for one reason or another have acquired the appetitive for political organization. Masses are not held together by a consciousness of common interest and they lack that specific class articulateness which is expressed in determined, limited, and obtainable goals. The term masses applies only where we deal with people who either because of their sheer numbers, or indifference, or a combination of both, cannot be integrated into any organization based on common interest, into political parties or municipal governments or professional organizations or trade unions. Potentially, they exist in every country and form the majority of those large numbers of neutral, politically indifferent people who never join a party and hardly ever go to the polls.’ [The Origins of Totalitarianism, Hannah Arendt, Harvest Book, 1968] 4. The movement is funded not so much by the willing populace, but rather by stealing the resources of subjugated territories “Like a foreign conqueror, the totalitarian dictator regards the natural and industrial riches of each country, including his own, as a source of loot and a means of preparing the next step of aggressive expansion. Since this economy of systematic spoliation is carried out for the sake of the movement and not of the nation, no people and no territory, as the potential beneficiary, can possible set a saturation point to the process. The totalitarian dictator is like a foreign conqueror who comes from nowhere, and his looting is likely to benefit nobody.” [The Origins of Totalitarianism, Hannah Arendt, Harvest Book, 1968, p. 417] The Bush movement has been propelled into history by “dark ops” across the globe, funded by the initial theft of the World War II Asian treasuries recovered by Ferdinand Marcos, and subsidized by criminal profits from weapons for drugs for cash. The involvement of the Bush apparatus in facilitating this trade between crime organizations, terrorist organizations and mainstream political parties is seen in Vietnam, Afghanistan, Chechnya, Albania, Columbia, Nicaragua, to mention the obvious examples. Using these funds, they have destabilized these same areas for the sake of controlling oil, while their Russian/Israeli Mafiya partners reap the gold and diamond mineral wealth. 5. The movement began with a benign front. “The world…usually gets its first glimpse of a totalitarian movement through its front organizations. The sympathizers, who are to all appearance still innocuous fellow-citizens in a non-totalitarian society, can hardly be called single minded fanatics; through them, the movements make their fantastic lies more generally acceptable, can spread their propaganda in milder, more respectable forms….” [The Origins of Totalitarianism, Hannah Arendt, Harvest Book, 1968] (367) For Americans, the first glimpses of this new movement came from the “Project for a New American Century” and “American Enterprise Institute.” These are the public fronts. The non-public, secretive fronts are not so obvious, and are described under Arendt’s totalitarian characteristic – new levels of secrecy. 6. The movement defines new levels of militancy and secrecy. THE SEPTEMBER 11 COMMISSION REPORT Page 347 “Another advantage of the totalitarian pattern is that it can be repeated indefinitely and keeps the organization in a state of fluidity which permits it constantly to insert new layers, and define new degrees of militancy.” [The Origins of Totalitarianism, Hannah Arendt, Harvest Book, 1968] 368 “Real power begins where secrecy begins.” [The Origins of Totalitarianism, Hannah Arendt, Harvest Book, 1968] 403 For Arendt, militancy and secrecy were state or party sponsored. In this report, the evidence has shown the emergence and use of private military armies by the Bush administration and business partners in pursuit of their goals, as aligned through their party allegiances. Such organizations have names which hide the fact that their sole business is selling war and murder, packaged as “security.” · Diligence · FarWest · CACI · Strategic Consulting Group · Titan Inc. · Stratesec There is however another layer of militancy, where organizations are fronts for illegal intelligence operations, free of Congressional or Parliamentary oversight. These are organizations where public leaders can deploy stolen public treasuries for the purposes of advancing their personal business interests. They come under such innocent names as · International Republican Institute (not affiliated with the Republican Party) · World Vision · Wings of Democracy · US-Azerbaijani Chamber of Commerce · Office of Special Plans · Internationale Weiterbildung und Entwicklung · Azerbaijan International Operating Company · American Commonwealth University These organization and corporations are only a few of the “fronts” deployed by this movement’s members. 7. It is a movement that masks its realities with lies. “A mixture of gullibility and cynicism is prevalent in all ranks of totalitarian movements, and the higher the rank, the more cynicism weighs down gullibility. The essential conviction shared by all ranks, from fellow-traveler to leader, is that politics is a game of cheating and that the first commandment of the movement: “The Fuehrer is always right,” is as necessary for the purpose of world politics, i.e.., world-wide cheating, as the rules of military discipline are for the purpose of war …. The result of this system is that the gullibility of sympathizers makes lies credible to the outside world, while at the same time the graduated cynicism of membership and elite formation eliminates the danger that the leader will ever be forced by the weight of his own propaganda to make good his own THE SEPTEMBER 11 COMMISSION REPORT Page 348 statements and feigned respectability. It has been one of the chief handicaps of the outside world in dealing with totalitarian systems that it ignored this system and therefore trusted that on one hand, the very enormity of totalitarian lies would be their undoing and that, on the other, it would be possible to take the Leader at his word and force him, regardless of his original intentions, to make it good. The totalitarian system, unfortunately, is foolproof against such normal consequences; its ingeniousness rests precisely on the elimination of the reality which either unmasks the liar or forces him to live up to his pretense.” [The Origins of Totalitarianism, Hannah Arendt, Harvest Book, 1968, p.384.] In their proclaimed battle of good versus evil, Neoconservatives claim – as did Hitler and Stalin –that they stand for democracy and patriotism, and all the goodness those conditions bring. What they leave behind in the Philippines, Albania, Chechnya, Kazakhstan, Uzbekistan, Angola, Nicaragua, Afghanistan, Iraq and other places is a new tyranny, the only difference is that the new tyrannies pay tribute to the “new world order:” the friends and corporations aligned with the Neoconservative movement and Bush family. What they leave behind in the U.S. is equally tragic. Their ‘patriotic’ contribution to the nation is found in the subtle theft of untold hundreds of billions of taxpayer dollars via · Treasury backed loans from The World Bank, the IMF, and the Inter-American Development Bank, which end up in Swiss an other off-shore accounts; · A fee on all cash transactions of the U.S. Treasury. In their outsourcing of the various federal functions, every dollar going into and out of the Treasury would flow through the Riggs Bank, in Washington D.C., of which Jonathon Bush is a Director, and former Vice Chairman and Director J. Carter Beese became a founder of the Carlyle Group and an SEC Commissioner. When attention was focused on the Bank for its unwillingness to clamp down on illegal moneylaundering, the bank changed its name. · Secret, uncompetitive bid contracts for hundreds of billions of dollars that produce no substantial value, and where even the results of government audits which report fraud are disregarded. 8. It is a movement that finds alliances with organized crime, brutal warlords, and drugrunners. “…there is no doubt that the elite and the mob notwithstanding, there is no doubt that the elite was pleased whenever the underworld frightened respectable society into accepting it on an equal footing. The members of the elite did not object at all to paying a price, the destruction of civilization, for the fun of seeing how those who had been excluded unjustly in the past forced their way in. They were not particularly outraged at the monstrous forgeries in historiography of which all totalitarian regimes are guilty and which announce themselves clearly enough in totalitarian propaganda.” [The Origins of Totalitarianism, Hannah Arendt, Harvest Book, 1968, p 332.] Is there a better example of this than the Board of Diligence, with all its connection to the Neoconservative movement, dealing on a regular basis with a front for the Chechen Mafiya and other mercenaries, whose targets are children and sleeping families? 9. It is a movement that openly admits that intolerance, evil and hatred are acceptable behaviors. THE SEPTEMBER 11 COMMISSION REPORT Page 349 “Leo Strauss is one of the icons of the modern conservative movement. His influence today is particularly strong among conservatives working on issues of public policy, including foreign affairs. His intellectual heirs include William Kristol…William Bennet, Fukyama and Harvey Mansfield, as well as quite a few officials in the Pentagon and National Security community….One core idea in Strauss’s work was a denunciation of the spirit of moral tolerance….[Rise of the Vulcans- The History of Bush’s War Cabinet, James Mann, Penguin, 2004, p26.] “The defense of the country is one of those extreme situation in which a leader is justified in committing evil.” [Machiavelli on Modern Leadership, Michael Ledeen, 2000, pp 117] “…in order to achieve the most noble accomplishments, the leader may have to ‘enter into evil.’ ” [Machiavelli on Modern Leadership, Michael Ledeen, 2000, pp 90] There should be no ambiguity as to what the Neoconservative/Bush movement represents. 10. It is an organization that openly justifies the murder of innocent civilians to promote their personal definitions of public policy According to a classified document prepared for Rumsfeld by his Defense Science Board, the new organization — the "Proactive, Preemptive Operations Group (P2OG)" — will carry out secret missions designed to "stimulate reactions" among terrorist groups, provoking them into committing violent acts which would then expose them to "counterattack" by U.S. forces. In other words — and let's say this plainly, clearly and soberly, so that no one can mistake the intention of Rumsfeld's plan — the United States government is planning to use "cover and deception" and secret military operations to provoke murderous terrorist attacks on innocent people. Let's say it again: Donald Rumsfeld, Dick Cheney, George W. Bush and the other members of the unelected regime in Washington plan to deliberately foment the murder of innocent people — your family, your friends, your lovers, you — in order to further their geopolitical ambitions. [Into the Dark: The Pentagon Plan to Provoke Terrorist Attacks, Chris Floyd, CounterPunch, November 1, 2002] These were the people that had no difficulty in ordering the deaths of thousands of innocents on September 11, 2001. THE SEPTEMBER 11 COMMISSION REPORT Page 350 15 Epilogue The murder of Nick Berg by Mossad agents posing as Muslim terrorists was meant to accomplish three goals: · Eliminate any potential smoking gun which could implicate rogue Mossad agents and their employers in the bombing of the World Trade Center; · Send a message to the US intelligence world, that “trespassing” on their turf was still punishable by death. Just as the Israelis deliberately murdered 34 U.S. sailors on the USS Liberty in 1967 for conducting surveillance on Israel, so did they murder Nick Berg, Eugene Armstrong and Jack Hensley; and · Continue the pretense that Muslim terrorists are a threat to American citizens, so as to encourage the American public to support the Israeli ambition in the Middle East and support US assaults on Iraq and Iran. In trying to understand why the primary intelligence agency of a supposed U.S. ally would help destroy the World Trade Center, and try to assassinate President Bush, darker secrets were uncovered. It appears that contrary to what the U.S. Government (under the guidance of George W. Bush) has convinced the public, Muslim terrorists did attack the World Trade Center, but not for the purpose of jihad. These Muslim terrorists most likely were contract operatives working under the guidance of the Mossad and rogue U.S. intelligence operatives. Their objective was to bring to an end numerous U.S. investigations into secret Swiss bank accounts and Deutschebank transactions which would have exposed numerous criminal activities by the Russian Mafiya and the George HW Bush Sr. intelligence operations going back as far as 1991. Those investigations would have exposed: · illegal theft of national treasuries of Russia and the Philippines; · the use of heroin sales proceeds to fund covert intelligence operations in Central Asia (mostly in Azerbaijan, Chechnya, Georgia, Afghanistan, Kosovo, etc.); · illegal bribes to various Central Asian oligarchs from major corporate financial contributors to the Bush campaigns, as well as directly from George Bush Sr.; and · illegal gold and money laundering operations; and · Fraudulent Brady Bonds issued to Russian criminal oligarchs. These are the types of illegal activities that Sibel Edmonds identified as having been covered-up by a “National Security” block and Attorney General gag order imposed on her, and the activities independently confirmed by research of intelligence leaked to the public domain. Like the Iran Contra scandal of the 1980’s, George Bush Sr. used a wide array of illegal activities to fund intelligence operations for a foreign policy he deemed THE SEPTEMBER 11 COMMISSION REPORT Page 351 appropriate, and decided to pursue without Congressional confirmation, and in violation of the law. That foreign policy translated into illegal activities to take over the Central Asian and Russian oil and gas fields of the former Soviet Union through use of privately funded armies and financial fraud – just as he had illegally funded covert activities to promote foreign policy in Iran and Nicaragua. Illegal activities also included his payoffs to Russian oligarchs with 10 year Brady Bonds to ensure the collapse of the former Soviet Union. However much one may agree with those ‘foreign policy’ objectives, the activities undertaken at Bush’s order were illegal, and ultimately needed to be covered-up by the destruction of the World Trade Center, and the senseless murder of thousands of innocents. All of these illegal activities were threatened with exposure by various investigations in to Swiss accounts by U.S. federal agencies, and possibly the New York State Tax department. The accounts that were attracting the most investigative evidence were the Khashoggi accounts, which were used to hide proceeds from the transfer of the Philippine treasury stolen by Ferdinand Marcos, with the assistance of George Bush Sr. Khashoggi’s accounts were linked, through his Azerbaijani banks, to illegal funding of mercenaries in Central Asia, and probably the Afghan heroin trade, as well his connections to arranging terrorist events for the Russians. However, the Russian accounts were rapidly drawing attention as well. There were other investigations that threatened to expose a network of illegal funding, as well as illegal profiteering. These included investigations into 1. The Deutschebank and Barrick gold trades investigated by the FBI in conjunction with the GATA lawsuit (This investigation would have exposed the gold laundering operations used by the German bank cartel to launder Russian Mafiya and Philippine gold); 2. The Swiss accounts of Kazakhstan President Nazarbayev, which led to the Giffen- Williams-Mobil Oil money laundering scandal (There is evidence that the Russian Mafiya associates of Nazarbayev threatened to bring an end to the investigation); 3. The Swiss accounts of various Russian oligarchs related to the Bank of New York/Riggs-valmet /Russian Mafiya money laundering scandal and the illegal Brady Bonds of September 12, 1991; 4. The Export-Import Loans to Halliburton that probably funded illegal activities in Angola, Georgia, and Kazakhstan; and 5. The Swiss accounts which held World War II holocaust gold, which would have been audited as a result of the GATA investigation. A potentially bigger time-bomb than any of these investigations would be the exposure of the September 11, 1991 Brady Bonds. Although a decision to destroy the World Trade Center was made in late 1998, the execution of the attack had to be delayed until September 11, 2001 because the cover-up of the ten year Brady Bond fraud could only be done in conjunction with these bonds being re-financed on maturity. By declaring a national emergency with the attack on the World Trade Center, Alan Greenspan - one of THE SEPTEMBER 11 COMMISSION REPORT Page 352 the co-initiators of the bonds with George Bush Sr. and Oliver North – allowed for the refinancing of the fraudulent bonds during the activities that followed September 11. To ensure the destruction of the FBI and other investigative agency offices in the various buildings of the World Trade Center, these rogue Mossad agents planted explosives throughout Buildings 1, 2, 4, 6 and 7, during the blackout weekend prior to the attack. This cover-up also required manipulating Muslim fanatics into creating a diversion which would cover-up the explosions. To accomplish this, the rogue, Russian based Mossad used the traditional Mossad to create and manipulate a false flag operation. Nick Berg was part of this operation. The FBI was hot on his trail, and he needed to be silenced. With the involvement of Israelis, Russian Mafiya and German and Swiss bank executives, it was easy for the intelligence agencies of these countries to discover the plot, and send warnings to the US government. Top leaders in the Bush administration were already aware. Prior knowledge of this attack was leveraged by a group of bureaucrats and military professionals, and possibly the President himself (but more likely his father, the former President), who had pre-inauguration plans to launch attacks on Afghanistan and Iraq, using the attack as a “Pearl Harbor” justification. Their plan was to use the incident to further their personal agendas in American foreign policy: the enrichment of US oil interests, and the security of Israel through the destruction of its enemies in Palestine, Iraq, Iran, and Syria. In this hypothetical explanation of events, there may be error in some of the conclusions. There is however, no error in the pattern of evidence that shows, over and over again, that the two main groups involved in the destruction of the World Trade Center were the Mossad and the Bush intelligence apparatus, with assistance from the Syrian, Saudi and Pakistani intelligence operations, as well as a commercial German intelligence operation. These groups, using Deutschebank and Swiss bankers as co-conspirators, have been funding illegal, covert activities for years and using these same Muslim fanatics as their contract agents throughout Central Asia, Asia, and Africa. The criminals responsible for these crimes are probably quite easy to find (with the right resources), and easy to convict – if on no other grounds than tax evasion or violation of the Foreign Corrupt Practices Act. (It is another co-incidence that the plane that hit the South Tower of the World Trade Center hit the office of the New York State Tax investigators.) However, it is immensely inexpedient to find the real criminals. Finding the actual criminals would mean the invasions of Afghanistan and Iraq were unwarranted. If the true criminals were brought to justice, it could easily bring down the administration of President Bush, and begin an unraveling of the controls being implemented by invasions of Afghanistan and Iraq. To do so might seriously undermine the credibility of the U.S. administration, and most likely put its officials at risk in international courts. It would disrupt the massive money laundering capabilities of the Deutschebank and probably some U.S. banks (which unfortunately, would only force THE SEPTEMBER 11 COMMISSION REPORT Page 353 criminals to another channel.) It might even provide cause for the ousting of the hawkish Israeli government, and breathe new life into the Palestinian Peace process. On the other hand, it might bring to an end thirty five years of global conflict instigated by the Bush family sense of “patriotism and duty.” It would be unrealistic to expect any branch of the U.S. Government to seriously pursue this investigation. The systemic terror that is inflicted on government agents that want to become whistleblowers has been reported on extensively, with at least twenty murders attributed to the crime family associated with the attack on the World Trade Center and Pentagon. It has also become convenient for corporate owners of the media conglomerates to not hold the administration accountable. There is no serious investigative analysis of events and activities that challenge these criminals and at least one key investigation by FOX was prevented from airing. It has been all too easy forget questions such as “who benefited from the trades the day the World Trade Center was attacked?” The press has been first been intimidated into silence by the accusation of being anti-patriotic. If that type of intimidation does not silence critics, there are more aggressive types of intimidation. “Bad luck and accidents” seem to plague members of the press that displease the government: lost assignments, lost jobs, even lost lives. (For instance, one of the very few victims of the post 9-11 anthrax attack was the editor of a newspaper who only two months before had published what some considered embarrassing pictures of the Bush daughters. No periodical has touched the story since.) Those few who find the courage to speak up are legally gagged with court orders on the pretext of National Security. It is no wonder that the mainstream media does not explore the implications of these peripheral news items. There have been too many unanswered questions surrounding the events addressed in this report, and there have been too many questions that have not been asked. There has been a tendency for writers to ignore facts that did not fit neatly into their explanation. When a person starts looking at the pieces of information, especially those generally ignored because they are “peripheral, inconsequential, coincidental, and just plain inconvenient,” the answers become clear. The answers do not lead to terrorists and oil conspiracies – it’s about the money. All of the September 11th crimes were justified, in some twisted manner, as being the “right thing to do” for stock-holders, country, family, citizens or self. Deep down, however, it is all too apparent that it was always just about the money. Is this report proof? No. Is it possible that it happened like this? Yes. Did it happen this way? To answer this last question, it can be said that this explanation offers a more complete, inclusive interpretation of the events than explanations offered by the Bush administration, the 9/11 Commission or multiple conspiracy theorists. As citizens, Americans must ask themselves – because the rest of the world has already concluded this – is America under President Bush guilty of some of the same practices as numerous third world and European dictators? Are Americans guilty of attempting to destroy a culture because they disagree with their values and covet what the Muslims own? Will Americans tell lies to the world and hide the murder and torture of thousands? Will Americans illegally imprison citizens because it serves government needs, rather than because of something they have done? Will Americans sanction ‘death squads?’ THE SEPTEMBER 11 COMMISSION REPORT Page 354 Will Americans intimidate with threats those who seek to report the truth? Are Americans turning a blind eye to these activities as did the world during the 1930s and 1940s? Will Americans allow their country to be controlled by the real terrorists? This report does not answer those questions, but it does document and explain the reasons why Americans are in the predicament of answering them. Every American must answer the questions for himself or herself. How one lives with this answer is a personal choice, a personal responsibility, and the legacy left to their children. From the Hagakure: To tell others that It is a rumor Will not do. When your own heart asks, How will you respond? Gosen waka shu THE SEPTEMBER 11 COMMISSION REPORT Page 355 Appendix A: Banking Links with US Intelligence When investigating this series of events that ties together terrorists, spies and bankers, there is a need to define the context of these relationships. There is a more than cozy relationship that exists between the intelligence community and the banking industry. One only needs to look at the background of a number of US intelligence executives to identify this very compelling pattern of career advancement. That pattern suggests that after intelligence executives serve their time managing millions or billions of dollars of funds for which he cannot be held accountable (in the US, the annual intelligence budget is over $40 Billion) – they are rewarded by being promoted to the lofty air of financial executive. In exchange for that reward, they bring a range of ‘relationships’ to the bank which historically have proven financially lucrative. (One might safely assume they are not being hired for their acumen and experience as financial geniuses.) In a more than unique turnabout, the Deutsche Bank eversed the process and placed a banking executive (A.B. Krongard) as an Executive Director of the CIA! (This was Mr. Tenet’s gift to the Mossad.) This is the world this article must explore – the marriage of intelligence organizations, banks, and illegal money. The world where banks make money off the ‘dark side’ of the economy: money laundering, bankrolling wars and revolutions, hiding the import and export of weapons and munitions, managing large, ill-gotten slush funds etc. The fact that the US banking industry has bought into this model is obvious. Examples include: Table 2 Examples of Intelligence – Banking Linkage Name CIA Connection Financial Connection Bill Casey CIA Director Chairman of the Securities and Exchange Commission David Doherty General Counsel of the Central Intelligence Agency. Vice President of the New York Stock Exchange George Herbert Walker Bush CIA Director consultant to the Carlyle Group, joint investments with the bin Laden family, executive committee chair of First International Bancshares (FIB) A.B. "Buzzy" Krongard Executive Director of the Central Intelligence Agency Chairman of the investment bank A.B. Brown and former Vice Chairman of Banker's Trust. John A McCone CIA Director Director of United California Bank, Western Bankcorporation; Pacific Mutual Life Insurance John Deutch CIA Director the board at Citigroup Nora Slatkin CIA Executive Director sits on Citibank's board THE SEPTEMBER 11 COMMISSION REPORT Page 356 Robert "Bud" McFarlane CIA Director Board of Directors of American Equity Investors (AEI) William Colby CIA Director General Counsel of the Nugan Hand Bank, unlisted counsel to Household Bank Mitch Rogovin CIA Legal Counsel Board of Directors of American Equity Investors (AEI) George Clairmont and Howard Hebert CIA officials Board of Directors of American Equity Investors (AEI) Bobby Inman CIA Director and ONI Board of Directors, Federal Reserve, Dallas Maurice "Hank" Greenburg floated as a possible CIA Director in 1995 CEO of AIG insurance, manager of the third largest capital investment pool in the world This model also applies to the non US intelligence agencies. The European model, however is a bit different. Because of the sophisticated nature of interlocking corporate directorships in Europe, European intelligence agents are retired into industry, IT consulting and business consulting career slots rather than banking. On both sides of the ocean, banking has a ‘dark side’ which engages ex-intelligence agents who forge a link that converts illegal funds into respectability. On the US side, the offshoot of these practices are such scandals as the Iran Contra scandal and the Nugan-Hand banking scandal. On the European side, one finds such scandals as the BCCI-Vatican Bank scandal, the theft of Czech gold reserves, the disappearance of Soviet gold reserves and the laundering of Marcos gold from the Philippines. The thread that runs through these scandals is gold and money laundering– which brings this article to a major connection to the destruction of the World Trade Center, and a second compelling link to the German banking industry. THE SEPTEMBER 11 COMMISSION REPORT Page 357 Appendix B: Stratesec Stratesec Incorporated, formerly Securacom, Incorporated, has been subjected to a great deal of attention because of its contract to provide security and access control services to the World Trade Center. The attention is provided only by ‘conspiracy theorists’ primarily because of one of it’s Board Of Directors members is Marvin Bush, brother of President George Bush and son of George Bush Sr. The official 9/11 Commission totally ignored this security operation, but any investigation which hypothesizes that explosives were placed in the building cannot ignore it. In reviewing the information available, the company appears to be nothing more than an intelligence agency ‘front’ which operates as a courier for special visitors and other items requiring undisclosed transit. To accomplish this, they operate as a maintenance organization for security access control at major airports, financial centers and federal government groups which have investigative/intelligence capabilities. They are permitted secured, unquestioned access through airports and other buildings using this cover. Their only significant asset is a plane. The conclusion that it is an intelligence agency front company is suggested by the following clues: 1. The primary owner of the company is Wirt D. Walker, III, who also is chief owner and CEO of Aviation General. “The Group's principal activities are carried out through two subsidiaries: Commander Aircraft Company and Strategic Jet Services, Incorporated. Commander Aircraft Company manufactures, markets and provides support services for its line of single engine and high performance commander aircraft. It also provides consulting, brokerage and refurbishment services for all types of pistonpowered aircraft through its Aviation Services division. Strategic Jet Services provides consulting, brokerage, sales and refurbishment services for jet aircraft. The Group markets its aircraft through factory direct sales and marketing organization.” What is of note of these subsidiaries is that Commander Aircraft manufactures and provides training aircraft and flight simulators to flight training schools. Two schools that did business with Wirt’s company are a flight school in Florida investigated for training a 9/11 hijacker, and another in Egypt – where Mohammed Atta initially received his flight training, before he went to Germany. “Aviation General, formerly Commander Aircraft, brokered the sale of airplanes to the National Civil Aviation Training Organization (NCATO), located in Giza, Egypt, the hometown of lead hijacker Mohammed Atta. NCATO is the only civilian pilot training school in Egypt. NCATO has a training agreement with Embry-Riddle University in Daytona Beach, Florida, the flight school that was investigated by the FBI for possibly training at least one of the 9/11 hijackers.” [[MARVIN BUSH EMPLOYEE'S MYSTERIOUS DEATH – Connections to 9/11?, Wayne Madsen] 2. When one begins to investigate Strategic Jet Services, one finds a company that refurbished and sells used military aircraft, and had a President with a resume any intelligence operator could envy: THE SEPTEMBER 11 COMMISSION REPORT Page 358 “Dan Cretsinger is a graduate of the College of the Air Force and the Federal Aviation Academy in Oklahoma. He has over 25 years experience in the aviation industry. Mr. Cretsinger has held supervisory / management positions with the Federal Aviation Administration, the United States Air Force, Beechcraft, Cessna, Sandar Corporation and was President of Strategic Jet Services….Mr. Cretsinger was lead negotiator for Aerolineas Argentina Airlines during their $465 million merger with Iberia Airlines of Spain. His expertise ranges from airline fleet analysis and acquisition to route planning and structuring for domestic and international airlines. A few of his clients include TelMex - Mexico City, Doyle Wilson Homes-Austin, TX, The Eisenberg Group-Tel Aviv,[author’s note: In the 1980s the Eisenberg Group acquired control of the Israel Corp. Subsequently many of the original investors withdrew, leaving the chairmanship to Eisenberg. By 1998 The Israel Corp. had investments in more than 100 businesses, including the Israeli shipping company that moved out of the WTC several weeks before the attack. The Eisenburg Group was also involved as a partner with Nordex in its dealings with Nazarbayev.] Dent Wizards-Sarasota, FL, Hallmark Cards-Quincy, IL, Tarom Airlines-Romania, Trans World Airlines, Aerolineas Argentinas, Aero Peru, and Aeroflot Airlines- Moscow. Mr. Cretsinger, who is a member of Who's Who Worldwide, was awarded the "1994/95 Who's Who Registry of Business Leaders". Additionally, Mr. Cretsinger is a rated commercial jet pilot with over 5,000 flight hours. He is a single and multi-engine flight instructor with Instrument and Jet type ratings and a Certified Aircraft Appraiser in good standing with the National Organization of Certified Aircraft Appraisers. Currently, Mr. Cretsinger specializes in certified Aircraft Appraisals from Piper Cubs to Boeing Executive Jets. “ [National Organization of Certified Aircraft Appraisers] 3. The company Aviation General, was apparently acquired from James Bath. “Marvin Bush and Wirt Walker appear to have taken over the Saudi real estate investment and aircraft brokerage business once run out of Texas by Houston-based James Bath in association with Salem bin Laden, the late brother of Osama bin Laden, and Khalid bin Mahfouz.” James Bath, who served in the National Guard with George Bush Jr., and was described as having a similar ‘excused’ absence from service attendance as George, is thought to have worked (with George Bush Jr.) as a CIA pilot during the period of absence, under the Direction of then Director of the CIA, George Bush Sr. George Jr., is known to have flown aircraft at one point for a private Alaskan air freight company that was later reputed to run arms to African nations. 4. Another Board Member of Stratesec is retired Lt. General James Alan Abrahamson, who is in regular business contact with former CIA director James Woolsey “Lieutenant General James Alan Abrahamson, chairman of StratCom International, Inc. and former director of the Star Wars programme initiated during the Reagan administration, … is in partnership (http://www.benadorassociates.com/ijaz.php) with Mansoor Ijaz, the "founder and chairman of Crescent Investment Management LLC, a New York investment partnership between Ijaz, Lt. Gen. James Alan Abrahamson (USAF Ret), former director of President Ronald Reagan's Strategic Defense Initiative, and Turkey's Global Group. Former CIA Director, R. James Woolsey, Jr. serves as vice chairman of Crescent's Board of Governors...." [From SourceWatch] There are too many links to intelligence operations for this to not be an intelligence front company. If that is true, the key question is: was Stratesec involved in the attack on the World Trade Center by providing access to the building to those who may have planted explosives. The evidence is very sketchy, but there is one key event that cannot go without mention. Shortly after the attack on the World Trade Center, a Swiss pilot (Luigi THE SEPTEMBER 11 COMMISSION REPORT Page 359 Fasulo) crashed a Rockwell Commander plane (built by Aviation General), into the Pirelli building in the financial district of Milan, Italy. Interestingly, two floors above where the plain crashed into the building, the 27th floor crashed down onto the 26th, in a manner similar to the way the 23rd floor of the North Tower in the WTC came down. There is nothing in any news report suggesting that the crash caused structural damage, and there were no interviews allowed with the building inhabitants. Also, as in the WTC attack, there has been virtually no public discussion of what the ‘target’ was, other than it being the Regional Lombardy center, which regulated the economic and financial affairs of the wealthiest state in Italy. There is the extremely interesting side note that suggests the owner of the aircraft (and supposedly it’s pilot, although the head was never found) was a distributor for Aviation General, who then moved into the finance industry, as do many CIA operatives. (See Appendix A). Equally important, the owner of the aircraft was involved in the global air freight business, which would create another coincidence linking the Milan tower attack to Stratesec. “The paper identified the pilot as Luigi Fasulo, who made a fortune in the airplane business then lost it all after becoming a self-styled investor…..La Repubblica said Fasulo had made his money with planes, owning a small company that rented out and sold aircraft. His fortunes failed when he switched focus and become a self-styled banker and financier, the paper said without giving sources.” [Agence-France Press, Original link: http://sg.news.yahoo.com/020419/1/2o9ix.html] “One of Fasulo's companies — Playmatic SA — was listed in the 2002 Swiss company directory as being bankrupt. A sign attached to Fasulo's mailbox in the lobby of the modest apartment building in Lugano where he lived indicated another company, Eurotex Corp. Panama. There was also an address for a third firm, Avioservizi SA of Chiasso, which also was listed in the 2002 directory.” [USAToday, Friends of Milan crash pilot deny son's suicide claim, 04/20/2002] Avioservizi is an Italian air freight and forwarder with connections to: Israele Ashdod, Haifa Cipro Limassol, Famagusta Giordania Aqaba Tunisia Radès Mauritius Port Louis Madagascar Tamatave India Chennai, Mumbay Cina Shanghai Hong Kong Hong Kong Thailandia Bangkok USA (New York, Los Angeles) Also, one finds the ever present connection to Russian. “EuroTex - THE EUROPEAN CENTRE FOR KNOWLEDGE AND TECHNOLOGY TRANSFER is an international non-profit making association, established in 1999 under the Belgian law, and devoted to the transfer of knowledge, innovation and technology between countries of the Western, Central and Eastern Europe, and the Commonwealth THE SEPTEMBER 11 COMMISSION REPORT Page 360 of Independent States, to the mutual benefit of all countries involved: The Commonwealth of Independent States (CIS) consists of Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgystan, Moldova, Russian Federation, Tajikistan, Turkmenistan, Ukraine and Uzbekistan. The name EuroTex stands for the word European and for the Russian word Òåõíîëîãèÿ (Technology)”. Fasulo was reputedly killed by the Russian mafia, with his death made to look like a suicide. The Italian government did its best to portray the attack as an accident, when most facts clearly indicate it was not. This report will not explore those facts, other than to suggest that Fasulo was not an innocent Swiss businessman who accidentally crashed into the financial regulation center of Lombardy. Most likely, Fasulo was an American intelligence agent who needed to destroy some investigation in the Pirelli building. He was connected to Aviation General in a business manner, and dealt with global freight movements out of the Italian financial district. Both occupations lend credence to his being an agent as well. THE SEPTEMBER 11 COMMISSION REPORT Page 361 Appendix C: World’s Greatest Treasure Hunt There are two major lost treasures in the world today: the Golden Lily treasure and the lost Soviet Treasury. The recently announced and forthcoming Khordokorvsky moneylaundering trial is the tip of the iceberg of the hunt for the Soviet Treasury, and a lot of people are being murdered in the quiet hope that this investigation and trial passes without any public revelation as to where that treasure resides. Originally having an estimated value between $200 billion and $500 billion in 1991, this treasure would be worth well over a trillion dollars today.[1] The core of this trial will be an investigation into the financial dealings of Khordokorvsky and his dealings going as far back as 1989, when he - sponsored by Aleksey Kondaurov and Phillip Bobkov of the KGB[2] – began his alleged theft of the Soviet Treasury with the help of a small financial consulting firm known as Riggs-Valmet[3], who helped craft his financial strategy and tactics (as well as those of oligarch Roman Abramovich.) Thus began an operation that became and remains one of the most closely guarded secrets of both the KGB/FSB and the CIA, with neither willing to admit involvement or “knowledge.” To maintain that secret, those with knowledge of the whereabouts of the funds or the nature of the transactions have committed suicide, or have been poisoned, or shot, died in a helicopter crash, or simply threatened into silence. Even more intriguing, this money laundering may well be at the core of one of the world’s most infamous cover-ups. The trial is viewed quite differently by the various stakeholders. From the official US point of view, the trial represents an authoritarian leader’s attempt to turn back the clock and eliminate the democratic reforms realized in Russia since the collapse of the Soviet Union in September 1991. From the Russian citizen’s point of view, the trial is an attempt to find justice for deliberate actions that were directly responsible for causing the deaths, wiping out life savings, jobs, pensions and destroying the lives of millions of Russians.[4] From the official Russian point of view, it is an attempt to bring back under control of the Russian bureaucracy, billions of dollars of industrial assets that were stolen by Western investors. There is a fourth group of stakeholders – the men behind these crimes. They consist of a group of financiers and government agents who are responsible for inestimable pain and suffering in Russia, and destroyed the only real chance that Russia and the US ever had to create a lasting peace. For this group of stakeholders, murder is their safeguard. At least six individuals who represented a threat to expose information about the thefts have met violent or suspicious deaths: Alexander Litvenenko was poisoned in the ultimate media murder, with a dose of radioactive poison worth $24 to 35 million dollars. Litvenenko, whose original assignment with the FSB was to investigate corruption, was in regular contact with the oligarchs that had been party to those transactions now being questioned, and had passed documents to Leonid Nevzlin just shortly before he was murdered. [5] THE SEPTEMBER 11 COMMISSION REPORT Page 362 Andrei Kozlov, First Deputy Head of Russia’s Central Bank was shot, along with his family when he got too close to the answers. “…in 1991-92, 400 billion rubles were embezzled from the Russian Central Bank…. when the Central Bank became object of an unprecedented criminal attack known as the fake advice notes fraud…. MP Nikolai Leonov, speaking on TV, directly stated that Kozlov’s death was directly connected with fake advice notes, Head of the Russian Audit Chamber Sergey Stepashin said the same. I think they are right. Andrei Kozlov was really occupied with investigation of causes of those events” [6] Stephen Curtis was one of the original Valmet-Riggs consultants, and after Khorodkovsk’s arrest, had gone to the authorities and was prepared to testify. Shortly thereafter, he died, in what an inquest determined to be an accident. Mr. Curtis had received threatening telephone calls and was under surveillance for two years before his helicopter crashed during a routine flight from Bournemouth International Airport in Dorset in March 2004. Shortly before the crash, Mr. Curtis told family members that if something happened to him, it wouldn’t be an accident. [7] Nikolai Kruchina Central Committee treasurer, one of the “reported” two individuals who knew where the stolen treasury went to, committed suicide by jumping out a window after the first August 1991 coup. Andrei Sevenyuk had been going public with his involvement with Roman Abramovich, who gained control of the Siberian oil giant Sibneft, and was a beneficiary holder of Abramovich’s shares. He died in a helicopter crash in September of 2004. His death and involvement is of interest because of his key role with Abramovich, who is not only linked to Riggs-Valmet, but also received funding from the Kredo (aka Credo) Bank, identified by Leo Wanta as a participant in his Bush sanctioned activities to destabilize the Russian currency.[8] Yuri Golubev, a founder of Yukos, an acting President of Group Menatep and a very close advisor of Khodorkovsky was found dead in January, 2007, with no explanation. By themselves, these incidents and the trial and investigation they are related to would have little interest for the average US citizen. The plot however becomes more intriguing when one learns that after all these years of investigation, little is yet known about where the 400 billion roubles went, and that given the ‘official’ conversion rate of 1.8 roubles/dollar at which most of these roubles disappeared, the US dollar equivalent was $222 Billion. [9] The $222 Billion was lifted from the Soviet Treasury by way of fraudulent “advice notes.” This trick is well explained by Novoye Vremya in Newtimes.RU, September 2006 (which was closed within a couple months of publishing this article). The essence of the fraud was to place fraudulent notes in a remote, regional bank and then withdraw the funds immediately from the Moscow Central Bank. When the Central Bank went to collect on the notes, the fraudulent notes, and any electronic traces of them had been erased. Hence, in order to perpetrate the fraud, the criminals initially involved in this theft required $220 Billion in fake notes to place with the regional banks. This number will THE SEPTEMBER 11 COMMISSION REPORT Page 363 register quickly with those who have followed the $240 Billion Durham/ Brady Bond allegations from exactly the same timeframe. According to the allegations of Mrs. V.K. Durham, (who claims her husband - Russell Hermann - was a financial manager for the CIA,) then-President George W. Bush fraudulently created $240 Billion of bonds using a trust created by her husband in her name. The bonds authorized by Bush were never found. However, according to information leaked from the US Office of Naval Investigations (ONI), and Mrs. Durham – these ten year, fraudulent bonds ended up mostly in the offices of Cantor Fitzgerald where they matured on or about September 11, 2001. [10] It is only a coincidence, of course, that the offices of the ONI in the Pentagon and Cantor Fitzgerald in the World Trade Center took direct hits from the hijacked airliners on the day those bonds would have matured. It is also only coincidental that the offices of the US Federal agencies that were involved in investigating the related Russian moneylaundering scandal (US Customs, FBI, SEC, IMF, Export-Import Bank) were also destroyed, and that immediately thereafter, President HW Bush terminated the investigation of the Bank of New York’s involvement in the scandal. Unfortunately, the coincidences do not stop there. · Building 6 of the World Trade Center (hardly remembered by anyone), which was home to the US inter-agency task force on money-laundering, according to video footage, was cratered by an explosion from the inside before the two Towers aside it collapsed onto it. Only a mushroom like cloud appears in the news video but subsequent photos show a huge crater in the center of the building prior to being buried by the collapsing towers. · Mr. Delmart “Mike” Vreeland, who warned prison officials of the September 11 attack from inside a Canadian prison, was an ONI agent. His supervisor was killed in the attack on the Pentagon. · There were several reports of thousands of fraudulent transactions being ‘pushed through computers’ during the attack. While bloggers gravitate to comments about the infamous “put options,” the stock market had not opened yet, and did not open that day. The fraudulent trades on September 11 had to be in bonds, which started trading at 7:00am that day. · The activities of the Federal Reserve’s Government Securities Clearing Corporation in the weeks that followed the attacked suspended all controls on bond settlements for fifteen days in such a manner as to allow blind trades and collateral substitutions. If fraudulent bonds needed to be ‘removed’ from the system, those fifteen days were the only time is US history it could have been accomplished. · The Federal Reserve temporarily pumped $300 billion of excess liquidity into the bond market in the weeks after the attack. The tactical banking safeguards introduced the day of the attack should have eliminated the need for the excess monetary supply. Well over $240 Billion in bonds were withdrawn by the Federal Reserve in the aftermath of September 11. The Russian treasure hunt threatens to expose more than just the dark cold war secret that the US was responsible for over an estimated 3 million deaths by facilitating the theft of THE SEPTEMBER 11 COMMISSION REPORT Page 364 the Soviet Treasury, and possibly involved in the murder of another three thousand by attempting to cover up the source of the fraudulent bonds. The investigation of the theft of the Soviet Treasury would open lines of inquiry into the roles of the two western banks extensively involved: the Bank of New York (founded by the Dulles Brothers) and Riggs-Valmet (a well established CIA cover for financial operations, with an extensive role for Jonathon Bush, brother of George W. Bush.) The investigation could conceivably attempt to discover how 3000 tonnes of Russian gold were laundered.[11] There are persistent rumors that this gold played a role in the Russian bank note scam.[12] More than likely this would lead to another investigation buried in the rubble of September 11. This FBI investigation (related to a lawsuit claiming the US banks were illegally selling US gold stock to fix the price of gold) was stored in the hardened FBI storage facility on the 23rd floor of the North Tower. There are a surprising number of personal accounts (available on the internet) of what happened that day on the 23rd floor, all of which indirectly support Dick Eastman’s original claim that the facility was deliberately targeted by explosives to destroy the evidence in it. After 9/11, the FBI investigation into gold price-fixing allegations was dropped so that agents could be focused on pursuing terrorists. The original lawsuit by Reginald H. Howe in 2000 was not allowed to proceed by the court. A subsequent lawsuit by Donald W Doyle (CEO of Blanchard & Company) [13] (amended to address the courts instructions to Howe), focused on a company call Barrick Gold, and accused it of working with banks to ‘fix’ gold prices. This lawsuit was settled out of court in 2006 and the agreement sealed. Three efforts (a reported FBI investigation and two law suits) to make public the role of Barrick in the gold trades of the 1990s have been squelched or sealed. A new investigation by the Russians may shed new light on the subject. What is left behind is another troubling set of coincidences. The group that played key roles in the creation and direction of Barrick has a number of inter-locking relationships with individuals associated with the theft of the Soviet Treasury. Moreover, this same group has a publicly reported track record of money-laundering connections. Adnan Khashoggi, an original co founder of Barrick, has been linked by the French intelligence, the press and the Heritage Foundation to a Swiss ‘security’ company comprised of ex-KGB and Russian military. This company – Far West – was co founded by Col. Anton Surikov (aka Suirokov), an associate of Alexei Kondaurov, who continues to fund Surikov through IPROG. Kondaurov was one of Khordokorvsky’s original KGB sponsors, and played executive roles in Menatep and Yukos. Shiek Kamal Adham, another original co founder of Barrick who - like Khashoggi - is linked to various money-laundering scandals: the BCCI scandal, the Vatican Bank scandal, and the Iran-Contra scandal. Shiek Adham and Khashoggi are reported by Daniel Hopsicker to have been co-investors in Oryx Investments with Wally Hilliard. Oryx reportedly financed the aviation company that ‘trained’ the September 11 hijackers. Shiek Adham retained Ed Rogers (former George W. Bush assistant, vice Chairman of Diligence, and of the Washington lobbying firm of Barbour Griffith and Rogers) as his personal lobbyist. Diligence also is reported to be a customer of Far West. THE SEPTEMBER 11 COMMISSION REPORT Page 365 George W Bush, temporarily on the ‘Advisory” board of Barrick, gave Barrick credibility in the international market by providing Barrick with an estimated $10 Billion of gold reserves. At the same time that Bush pardoned the convicted Iran-Contra conspirators, he authorized a procedural change in Federal law which allowed Barrick (a company started with funding from Khashoggi and Shiek Kamal Adham) to claim $10 billion in un-mined reserves in Nevada, for the meager cost of $10,000. It is speculated this process needed to be expedited because it was anticipated the Clinton administration would not approve transaction without sizeable royalty requirements. Not often reported, Barrick claims it paid $63 million for the company that owned those rights, although the details of that investment are not known. Even at that rate, $63 million for $10 billion in assets seems like a suspicious arrangement. Lord Robert Powell, who sits on the Boards of Diligence and Barrick, and represents the Rothschild interests. Rothschild came up as the surprising trustee of Khordokorvsky’s shares in Yukos when Khordokorvsky was sent to jail, and was originally identified as an interested party in financing Khordokorvsky in 1989. [14]The strange connection between the four board members of Barrick, the management of Diligence and the crime group that operates under the corporate umbrella of Far West is disturbing in that Far West is accused by several researchers as being involved in the “Russian 9/11” and at the same time, they work closely with investors who benefited ‘significantly’ from the destruction of the World Trade Center. Edgar Bronfmann and the Bronfmann family (at one time major holders of Barrick stock) have an interesting legacy of investing in money laundering operations. "In Chicago, is a branch of a huge Canadian octopus, the Bank of Montreal, owned by the … Bronfman family. … Their branch in Chicago, Harris Bank, has for some time been THE heavy weight in foreign currency trading, handling and exchanging most every type of money instrument. Several years ago Harris Bank merged with a known reputed money laundry, Household Bank, with units of Household International, headquartered in the Chicago-area. Household is the successor and alter ego to Nugan Han Bank that operated in California, Australia, Manila, Saudi, London, and a few other places. The General Counsel of Nugan Hand was William Colby, former Director of Central Intelligence. Former Generals and Admirals, close to CIA, operated Nugan Hand's worldwide offices.” [15] Barrick, as a corporation has a “partnership” with Nelson Gold, noted in the Barrick annual report. Nelson Gold is a subsidiary of Nelson Resources – run by the son-in-law of Nursultan Nazarbayev, President of Kazakhstan. George HW Bush kept Nazarbayev’s name out of another money-laundering investigation – the investigation of James Griffen. Griffen was sent to Kazakhstan by the George W Bush Whitehouse, and Griffen’s lawyers contend his actions were protected because he acted as an agent of the US government . The files for that investigation were also coincidently stored on the 23rd floor of the North Tower of the World Trade Center. A Russian investigation into the whereabouts of the stolen Soviet Treasury could certainly move beyond the fraudulent advice notes and the Soviet gold and could open a can of worms in addition to the Bank of New York scandal, the well concealed Riggs- Valmet operation and the Barrick operation. Other potential embarrassments include THE SEPTEMBER 11 COMMISSION REPORT Page 366 Menatep’s partnerships with Global Asset Management, the Blackstone Group, the Carlyle Group and AIG Capital Partners, which are reported to be financial allies of the Bush family interests. [16] Two additional embarrassments for the Bush legacy would be the media exposure of the Leo Wanta ‘rouble destabilization’ program, news of which has been pretty well contained to the blogger community. While Wanta himself has said little, the released documents reference several Central Asian banks used by him for his officially sanctioned ‘ruble destabilization program.’ One path for the Russian investigation to pursue Wanta is the Altalanos Ertekforgalmi Bank (AEB) in Budapest, Hungary. AEB had an evolving role in the financial rape of the Soviet Union starting in 1990, when 50% of AEB was bought by the CEDC (Central European Development Corporation.) The CEDC is actually operated out of Singer Island, Florida, and was created in 1989 apparently for the sole purpose of procuring the AEB, as it apparently has not done a lot else of public record. CEDC was managed by former US Ambassador to Hungary, R. Mark Palmer. (In addition to being a Bush appointee, R. Mark Palmer, it turns out appears to have been a collaborator with George Soros in his efforts to unhinge Eastern European currencies, working through the N.M. Rothschild Continuation Trust.) AEB initially server as a tool for the Wanta rouble destabilization program, and is identified in his public records. As it would turn out, AEB was a bank asset which, while half owned by U.S. investors, was apparently controlled by the Yeltsin family. The bank was later was absorbed by Gazprom, which in turn was controlled by Khodorkovsky and Viktor S. Chernomyrdin, long-time aide to Boris Yeltsin. In 1996, the U.S. investors would hand over their 50% of the bank to Gazprom for an undisclosed sum. The bank would then become a money laundering conduit for Yeltsin family, just as Valmet SA was transferred to the Yeltsin family from Riggs bank ownership. In both cases (Valmet and AEB) the U.S. partners ‘took the money and ran.’ Similarly, another bank which was a recipient of Wanta controlled funding intended to destabilize the rouble was Westdeutsche Landesbank. The bank is reported to have loaned moneys to the Khodorkovsky group, and found itself with difficulty trying to collect that loan. Investigation into these transactions were linked to the Bank of New York scandal, derailed by George HW Bush. [17] A public investigation into the money-laundering that surrounded the theft of the Soviet Treasury has been studiously avoided in the West. Yeltsin’s control of Russia prevented any serious investigation by the Russians, but Putin’s takeover changed all that. Putin is going after Yeltsin’s cronies and their Western backers. At this point, it can be argued that the deaths referenced in this article should be attributed to the West rather than Putin. Putin is trying to regain the lost treasury, and he would seem to need the information these men had more so than not. It would appear that the West has much to lose if the ultimate destination of the stolen treasury is found, and anything that obfuscates the money trail works to the advantage of the Western investors. If that same group of investors has somehow played a role in the destruction of the World Trade Center to cover up US investigations related to the theft of the Soviet Treasury, one suspects additional murders would be no moral barrier. THE SEPTEMBER 11 COMMISSION REPORT Page 367 Notes 1. “Eight metric tons of platinum, 60 metric tons of gold, hoards of diamonds and an estimated $15 billion to $50 billion in cash were, according to reformist lawmakers probing KGB crimes, only a small part of state property stolen under secret Communist Party Central Committee decrees and transferred to unknown hands by the KGB's espionage branch between 1989 and 1991…Less than $2.5 billion of the $300 to $500 billion Dollar siphoned out of Russia from 1991 to 1997 has returned to be invested in Russia.” Statement of Richard L Palmer, President of Cachet International, Inc. on the Infiltration of the Western Financial System By Elements of Russian Organized Crime Before the House Committee on Banking and Financial Services on September 21, 1999 http://financialservices.house.gov/banking/92199pal.htm 2. Catherine Belton, Khodorkovsky's High Stakes Gamble, The Moscow Times, May 16, 2005. 3. For those readers unfamiliar with the history of Riggs-Valmet “Christian Michel, a founder of Valmet, a Geneva-based global trust business, which agreed in early 1989 to advise Khodorkovsky's group of young businessmen. Valmet later held the key to the Group Menatep fortune, holding shares via nominee ownership schemes and organizing the transfer of vast sums of money via its network.” Catherine Belton, Khodorkovsky's High Stakes Gamble, The Moscow Times, May 16, 2005. Abramovich’s connection to Riggs-Valmet is found in: Yeltsin 'Family' Tycoon Linked to Cash Scandal , James Bone, David Lister, Fiona Flick, The Times (UK), September 7, 1999. 4. “Healthcare financing and payment of pensions drastically decreased, a crisis happened to the financial system; all savings of the population “burned” in inflation. Life span decreased. Thus, if we sum up, the theft of the Central Bank in its economic consequences was comparable to a nuclear aggression against our country.” From: “President of information protection company: “The West is not very highly concerned with the threat of cyber terrorism,” Anatoly Klepov, www.regnum.ru/english/749825.html, December 14, 2006. “Some 70 percent of Russians now live below or just above the poverty level, and capital investment (the source of future prosperity) is only 10 percent of what it was a decade ago. In addition, basic social statistics reveal a "catastrophe of historic proportions," as Nicholas Eberstadt documented in the Heritage Foundation's Policy Review, a venue that's not likely to wax nostalgic for the USSR. Eberstadt, extrapolating from World Health Organization estimates, argues that more than 3 million "excess deaths"--people who died who wouldn't have, according to old demographic patterns--occurred between 1992 and 1998. With deaths exceeding births, the population is shrinking annually, something rarely seen unless there is war or famine.” (Robbing Russia , THE SEPTEMBER 11 COMMISSION REPORT Page 368 http://www.thenation.com/doc/19991004/editors2, September 16, 1999 (October 4, 1999 issue) 5. “Murdered Russian ex-spy Alexander Litvinenko passed documents to former Yukos CEO in Israel months before his death – report,” November 25, 2006, 9:10 AM (GMT+02:00) 6. “The West is not very highly concerned with the threat of cyber terrorism,” REGNUM News Agency, December 15, 2006, http://www.regnum.ru/english/749825.html 7. “Focusing on Mikhail Khodorkovsky and the Leadership of Group MENATEP”, October 27, 2005, http://www.supportmbk.com/update/11-03-2005_briefing.cfm 8. “Abramovich Kicks a Ghost, Ft Puts Foot in Mouth, John Helmer,” The Russia Journal, March 22, 2006 9. A lot of analysts like to use unofficial market rates of approximately 50 to 100 roubles per dollar, but prior to the collapse, official transactions happened at the official rate of 1.8. “new rouble exchange rate (90 roubles, in place of the existing 1.8 roubles)” “The Banking System: Teething Troubles,” Novoye Vremya, Newtimes.RU, September 2006, http://www.newtimes.ru/eng/detail.asp?art_id=691. A second source for the 1.8 rubles per dollar rate: “Scientific - industrial union of Volsky in his concern " Simako" used a special arrangement in the party. They received large financial grants, converted roubles into foreign currency at the rate of 1,8 roubles per dollar. ["New Russian" capitalists and the gold of the Communistic Party of the USSR, 2001, #19 Discreditable materials, http://www.russiamonitor.org/en/main.asp?menu_id=1_a_786_19] 10. Cash payoffs, bonds and murder linked to White House 9/11 finance, Tom Flocco, tomflocco.com; also see “Part 4: More reasons to not investigate 9-11”, Karl W. B. Schwarz 11. The key point is that in 2006, there appears to be no clear understanding of where the treasury went. “There is no comprehensive understanding on the country today on what happened in Russia then….The reality is, in 1991-92 a cyber war broke up in Russia. Management of national strategic financial resources was partially taken under control by criminal subjects, but we are still unable to define it clearly, whether it was crime or, maybe, some external forces stood behind them and tried to destabilize the situation in Russia. For some time, they had managed to take under control vast financial flows of Russia’s National Bank.” President of information protection company: “The West is not very highly concerned with the threat of cyber terrorism,” Anatoly Klepov, www.regnum.ru/english/749825.html, December 14, 2006 12. Russian gold as part of bank note scam. "In one operation valued at $4 billion, over 300 tons were secretly shipped to Switzerland, some of it subsequently arriving in London. Unlike Britain, the Swiss authorities do not keep records of gold imports which makes it a favourite centre for disguising the point of origin - a very effective method of laundering suspicious transactions. The bullion, some sources now believe, was used as collateral in a secondary scam that set-out to vacuum-up all the available Rouble bank-notes in existence at the time and sell them at knock down prices to organised crime syndicates from around the world." Gangster’s Paradise, David Guyatt, 1997; "Valued at $35 billion, Russia's gold THE SEPTEMBER 11 COMMISSION REPORT Page 369 reserves were estimated to be 100 million troy ounces - just under 3000 tonnes. Then in September 1991, a palpitating Grigory Yavlinski, the economic supremo, revealed to delegates at the Group-of-Seven industrial countries meeting in Bangkok, that a mere 240 tons were all that was left. Two months later, in November, even that had disappeared. "Not a gram of gold remains; the vaults are empty," said Victor Geraschenko, chief of Gosbank, the Russian Central Bank." Gangster’s Paradise, David Guyatt, 1997 13. "GATA consultant Reginald H. Howe brought a similar federal lawsuit in Boston in 2000. It was dismissed on jurisdictional grounds in 2002. Since then GATA has documented and publicized evidence of manipulation of the gold market by Barrick, Morgan Chase, other bullion banks, and the U.S. government." Class- Action Suit Seeks Damages For Gold Investors from Barrick and J.P. Morgan Chase, Business Wire, 11/27/2004 14. Arrested oil tycoon passed shares to banker, Washington Times, November 03, 2003, http://washingtontimes.com/world/20031102-111400-3720r.htm 15. "Clinton's Money Laundry, Sherman H. Skolnick, June 13, 1999 16. “According to PBS in 2003, Khodorkovskii's firm Menatep shared business interests with the western investment firms Global Asset Management, the Blackstone Group, the Carlyle Group and AIG Capital Partners.”[The Global Drug Meta-Group: Drugs, Managed Violence, and the Russian 9/11, Peter Dale Scott (18,734 words) 10/29/05 17. Corporate Governance Goes Global: Riding the Rising Tide, Rob Wright, IFC Corporate Relations Unit, Impact, Summer 1999; The World's Billionaires: The Oligarch Who Came in from the Cold, Paul Klebnikov, Forbes, March 18, 2002; Bank of New York probe exposes ties between Western financiers and Russian Mafia, James Brookfield, 27 August 1999, wsws.org THE SEPTEMBER 11 COMMISSION REPORT Page 370 Appendix D: The Federal Reserve and the Three Card Monte On of the most common scams on the streets of America is a set up of three card Monte. The intricacies of the scam are legion, but essentially, the dealer’s sleight of hand which fools the ‘mark’ is covered by a rapid rotation of the three cards. It was the rapid rotation of the securities settlement fails in the aftermath of September 11th that appears to have allowed the Bank of New York and the Federal Reserve to engage in a securities refinancing that scammed the American taxpayer by $240 billion. A review of the explanations for actions of the Federal Reserve after September 11 exposes an amazingly complex web of analysis and speculation. These reports published by the Federal Reserve argue that the Federal Reserve’s actions increasing the monetary supply by over $300 billion were justified to overcome operational difficulties in the financial sector. While impressive as the reports are, what is noted by the casual reader is that all of the Federal Reserve analysis is speculative and suggestive, using phraseology such as “may have,” “likely,” “presumably,” or “should have.” There are few - if any - definitive statements about root cause and the appropriateness of the response. The general perspective of the industry is captured in such comments as: “The destructive force of the attacks themselves caused severe disruptions to the U.S. banking system, particularly in banks’ abilities to send payments. The physical disruptions caused by the attacks included outages of telephone switching equipment in Lower Manhattan’s financial district, impaired records processing and communications systems at individual banks, the evacuation of buildings that were the sites for the payments operations of large banks, and the suspended delivery of checks by air couriers.” [Liquidity Effects of the Events of September 11, 2001, James J. McAndrews and Simon M. Potter, FRBNY Economic Policy Review / November 2002, p. 59] “Following September 11, open market operations were aimed at satisfying the financing needs of the severely disrupted government securities dealer community, leaving to the discount window the task of elastically providing balances to satisfy demand at the target rate. The huge additions of funds following September 11 were therefore a by-product of operating procedures designed to target the overnight funds rate.[3]” [Payment System Disruptions and the Federal Reserve Following September 11, 2001, Jeffrey M. Lacker, Federal Reserve Bank of Richmond, Richmond, Virginia, 23219, USA, November 17, 2003 printed in Journal of Monetary Economics, Volume 51, Issue 5, July 2004, Pages 935-965] “Fails rose initially because of the destruction of trade records and communication facilities. They remained high because the method typically used to avert or remedy a fail—borrowing a security through a special collateral repurchase agreement—proved as costly as failing to deliver the security.” [When the Back Office Moved to the Front Burner: Settlement Fails in the Treasury Market after 9/11, Michael J. Fleming and Kenneth D. Garbade, FRBNY Economic Policy Review / November 2002, p 35.] Reading statements like this are suggestive that there were massive, wide spread disruptions in the system. These were the conditions that “led policymakers to depart so significantly from previous debt management practices.” [When the Back Office Moved to the Front Burner: Settlement Fails in the Treasury Market after 9/11, Michael J. THE SEPTEMBER 11 COMMISSION REPORT Page 371 Fleming and Kenneth D. Garbade, FRBNY Economic Policy Review / November 2002, p1.] While the facts presented by the Federal Reserve analyst’s reports are true, as presented they tend to distort what really happened in the aftermath of the attack. In truth, while the analysts reported disruptions at over 800 banks, a deeper look at the reports indicated that only “a few’ were seriously disrupted. The order of magnitude of disruption at any bank has never quantified, with the exception of one. Even that statement however, detracts from the data which suggest that the disruptions were essentially concentrated in one bank – the Bank of New York. (The same Bank of New York was being investigated for money laundering charges in relation to the economic pillaging by Russian by criminal oligarchs who benefited from the illegal securities purportedly being laundered in the aftermath of September 11th.) This is because while the Fed was reporting outstanding account balances over $100 billion per day (while not identifying the banks involved), the Wall Street Journal reported: “At one point during the week after September 11, BoNY publicly reported to be overdue on $100 billion in payments. (Beckett, Paul, and Jathon Sapsford, Rebuilding Wall Street: How Wall Street's Nervous System Caused Pain, Wall Street Journal, September 21,2001)” reported in [Payment System Disruptions and the Federal Reserve Following September 11, 2001, Jeffrey M. Lacker, Federal Reserve Bank of Richmond, Richmond, Virginia, 23219, USA, November 17, 2003 p.6.] The Deutschebank which sat inside the World Trade Center reported no such account balance increase, and JP Morgan, the other of only two clearing banks which uses the same traders and communications hub, reported no such increase in its account balance. Understanding what was happening at the BoNY becomes critical to understanding the securities settlement issues: “GSCC and several dealers could not verify what came into and what left their custodial accounts at BoNY, they could not advise BoNY of securities they expected to receive, and they could not give BoNY instructions for delivering securities. Additionally, GSCC was unable to verify the movement of funds into and out of its account at BoNY (GSCC Important Notice GSCC068.01).” [When the Back Office Moved to the Front Burner: Settlement Fails in the Treasury Market after 9/11, Michael J. Fleming and Kenneth D. Garbade, FRBNY Economic Policy Review / November 2002, p 46.] In a world of coincidence The Bank of New York (which had over 8000 employees in its downtown location), lost three employees that day. One of those three employees was a man who was in the best position to explain how the attacks would have impacted BoNY. His name was Michael Diaz-Piedra III, a former West Point graduate and son of a Cuban exile. Michael was the Vice-President of Disaster Recovery Planning for the Bank of New York. In the aftermath of September 11, he was reported as being an employee of Bank of America, or holding another position at the BoNY. THE SEPTEMBER 11 COMMISSION REPORT Page 372 Finally, with respect to the Bank of New York operations and the level of disruption experienced on September 11th, an important element needs to be highlighted. Disruptions to the financial system were attributed to the loss of the communications hub in downtown Manhattan. The hub was decimated when the WTC collapsed onto it. However, the BoNY Funding Transfer operations, which reportedly could not communicate with the Fed, were located in Utica, New York, and had none of its communication abilities impaired. Moreover, the four BoNY back-up datacenters were all located within 46 miles of Manhattan, and could and did deliver data on tape regularly to the Fed via courier. In a reported setting of half truths and speculation made to appear as facts, review of the reports of the financial aftermath of September 11th suggest: · The disruptions to the U.S. financial system were not as widespread as the reports from the Federal Reserve would have the public believe, but that the public had to be made to perceive a widespread need for declaring a national financial THE SEPTEMBER 11 COMMISSION REPORT Page 373 emergency, suspending key provisions of the Federal Reserve Act and driving the ‘ten-year special rate’ to almost zero. · Certain key unknown figures in the Federal Reserve may have ‘conspired’ with key unknown figures at the Bank of New York to create a situation where $240 billion in illegal securities created in 1991 as part of an official covert operation to overthrow the Soviet Union, could be cleared without publicly acknowledging their existence. · These securities, originally managed by Cantor Fitzgerald, were cleared and settled in the aftermath of September 11th through the BoNY. The $100 billion account balance bubble reported by the Wall Street Journal as being experienced in the BoNY was tip of a three day operation, when these securities were moved from off-balance-sheet to the balance sheet. (The off-balance-sheet process is described by banking advisor to the US Presidents Earl Cocke, who admitted under sworn testimony to managing Project Hammer funds – the suspected source of these illegal securities.) · By reducing the ‘ten-year special rate’ to almost zero, the Fed structurally increased the number of refinancing (Repo) settlement fails. Under the umbrella of this artificially created statistical bump of fails, the high level of fails due to the laundering of the $240 billion was able to be processed unnoticed. · The cover for this bubble is found in the footnotes to the BoNY annual and quarterly reports, which report that the BoNY took over $330 billion of commercial securities business from U.S. Trust between June and October of 2001, although the assets under control of U.S. Trust in 2000 were reported by two sources as $80 or $86 billion. [Charles Schwab Shells Out for U.S. Trust, Nick Paumgarten, The New York Observer, January 23, 2000; Schwab to Pay $2.73 Billion For U.S. Trust, New York Times, Patrick McGeehan, January 14, 2000] Federal Reserve Management of the Aftermath of September 11 There were two key disruptions reported in the financial markets: 1) Excessive account balances in a few banks reportedly contributing to an increase in the account balance in a wide array of banks which required a massive infusion of credit to stabilize the Federal Reserve system. These accumulations started appearing on September 12th and ran through the 18th,. They resulted in the addition of $300 billion to the US monetary supply, which initiated the on-set of the sub-prime market. 2) A reported excessive number of fails in securities settling requiring the lifting of controls on settlements. There were two reasons reported for these fails: · Missing trade data due to loss of communications and data; · Refinancing (Repo) settlements had lost any financial incentive to avoid fails because the special rate for 10 year notes was dropped to almost zero. The first wave of fails is attributed to the BoNY situation. “In the absence of complete information on deliveries into and out of its account at BoNY on September 11, and as a result of its assumption of settlement fails on the starting legs of blindTHE SEPTEMBER 11 COMMISSION REPORT Page 374 brokered RPs, GSCC recorded (after the close of business on September 11) $266 billion in transactions that apparently failed to settle.… Continuing connectivity problems prevented GSCC from giving BoNY delivery instructions after the close of business on September 11 and prevented it from acquiring information on activity in its account at BoNY during the day on September 12. Consequently, GSCC recorded $440 billion in settlement fails as of the close of business on September 12.” [When the Back Office Moved to the Front Burner: Settlement Fails in the Treasury Market after 9/11, Michael J. Fleming and Kenneth D. Garbade, FRBNY Economic Policy Review / November 2002, p 46.] Excessive Balances Increasing the Supply of Money On over-riding consideration in the Fed’s management of the aftermath of September 11th was the concentration in account balances at the Federal Reserve. “It is clear that the concentration in account balances at the Federal Reserve—rising more than fourteen-fold from its normal levels on the days following the terrorist attacks—was a most unusual event…. If a large proportion of the balances in the banking system concentrate in one bank’s account, then other banks will face, all else being equal, higher costs of making payments, or alternatively may face liquidity constraints on their borrowing, which could preclude their submission of further payments.” [Liquidity Effects of the Events of September 11, 2001, James J. McAndrews and Simon M. Potter, Federal Reserve Bank of New York Economic Policy Review, November 2002, p65. ] It may seem a small detail, but note the qualifying statement: “all else being equal.” An alternative explanation could be to move off-balance sheet liabilities to the balance sheet and claim the offsetting claims are in the ruble of the World Trade Center. Chart taken from [Liquidity Effects of the Events of September 11, 2001, James J. McAndrews and Simon M. Potter, Federal Reserve Bank of New York Economic Policy Review, November 2002, p.64.] THE SEPTEMBER 11 COMMISSION REPORT Page 375 A key consideration is the pre-9/11 daily average for this balance: “For commercial banks, these balances consist of either required reserve balances, excess reserve balances, or service-related balances.3 These balances and service-related balances for August 2001 averaged $14.65 billion per day.4 (Liquidity Effects of the Events of September 11, 2001, James J. McAndrews and Simon M. Potter, Federal Reserve Bank of New York Economic Policy Review, November 2002, p.60.) This makes the actual surges due to the attack show a net impact of $352 billion on the account balance over the remainder of the week . Federal Reserve Balance adjusted for normal daily average to reflect true impact of attack. Reported Balance (Billions) Adjusted Balance Due to Attack (Billions of Dollars) September 12 44 29 September 13 104 89 September 14 121 106 September 15 111 96 September 16 46 31 What appears to be the case is that the Federal Reserve imbalances reported on three consecutive days in the aftermath were largely concentrated at the Bank of New York, which is reported to represent over 90% of the imbalance, suggesting the Bank had been the recipient of massive fund transfers, and unable to send out transfers. “At one point during the week after September 11, BoNY publicly reported to be overdue on $100 billion in payments. (Beckett, Paul, and Jathon Sapsford, Rebuilding Wall Street: How Wall Street's Nervous System Caused Pain,Wall Street Journal, September 21,2001)” reported in [Payment System Disruptions and the Federal Reserve Following September 11, 2001, Jeffrey M. Lacker, Federal Reserve Bank of Richmond, Richmond, Virginia, 23219, USA, November 17, 2003 p.6.] This supposedly was due to major communication and system failures. “The crucial government bond processing, for example, had a system in which a second computer was receiving and processing all the data going into the main computer, making it ready to pick up at a moment's notice…. As it turned out, though, even the expensive backup system was unable to get the government bond business up and running smoothly. That is largely because of problems maintaining the communications links that receive information on trades from its customers and report their positions back to them. ''In many cases our backup sites were dealing with our customers' backup sites,'' Mr. Renyi said. And though the bank had established communications lines in advance connecting these various backup centers, they often were of low capacity and typically had not been fully tested and debugged. Even a week after the attack, the Bank of New York was having trouble with some crucial communications links, like its connection to the Government Securities Clearing Corporation, a central part of the government bond market. On several days that week, the bank had to drive computer tapes with its trades to G.S.C.C. offices.” [Wall St. Lifeline Shakes Off Dust, and Critics; Disruptions Put Bank of New York to the Test , Saul Hansell with Riva D. Atlas, New York Times, October 6, 2001] “On September 11, we were able to continue processing, as our funds transfer business unit is in Utica, New York, until the telecommunications lines went down later in the day in lower Manhattan. After THE SEPTEMBER 11 COMMISSION REPORT Page 376 that, excess liquidity quickly built up because we were unable to process all securities and cash transactions in a normal manner. The increase in the balance sheet went away very quickly, however, as we returned to normal processing by Friday and handled the backlog over the weekend.” [ Emerging Stronger from 9/11/01: An Interview with Todd Gibbons, RMA (Risk Management Association) Journal, The, Dec, 2001] In fact, none of the BoNY’s systems failed or went non-operational. “Bank executives argue that some of the criticism has taken on some aspects of urban legend, especially the notion that the bank was in disarray because the main backup for its computer center in Lower Manhattan was at another location in Lower Manhattan. The bank says that all of its several computer centers in Manhattan were always set to revert to centers outside the city in case of emergency, and they did on Sept. 11.” [Wall St. Lifeline Shakes Off Dust, and Critics; Disruptions Put Bank of New York to the Test , Saul Hansell with Riva D. Atlas, New York Times, October 6, 2001] Even more to the point, the Bank’s Fund Transfer operations are located in Utica New York, and its communication systems remained untouched. Where the inconsistent reporting gets interesting is that Todd Gibbons of the BoNY reported an “increase” in the volume of securities on September 11. “The contingency site muse be able not only to accommodate normal business loads, it must be able to accommodate extreme business surges, such as we saw in the first day in the equities market. Our contingency plans had included the ability to handle a great amount of excess capacity; and we were able to handle the increase in volumes….” [ Emerging Stronger from 9/11/01: An Interview with Todd Gibbons, RMA (Risk Management Association) Journal, The, Dec, 2001] However, the overall volumes for the day were 25% less than normal and one third of the volume or $400 billion came in after normal business hours in very few transactions. As seen in the chart below, overall transactions for the day were seemingly down even more significantly than volume, but the transactions that came in after closing were extremely large, averaging in size in packages of $35million or more. This would be consistent with a hypothesis that $240 billion of securities were being pushed surreptitiously into the money supply. Additionally, the conflicting information from the BoNY and Fed suggest the activity in the bank was different that that being reported to the public. “August 2001, the value of Fedwire funds transfers averaged more than $1.6 trillion per day, while banks held about $15 billion on account.11 ….The value of funds sent on September 11 was $1.2 trillion, about three-fourths of the average for the benchmark period. However, unlike volume, the value of funds sent had returned to normal levels on the twelfth and was then at elevated levels for the next seven business days.” [Liquidity Effects of the Events of September 11, 2001, James J. McAndrews and Simon M. Potter, Federal Reserve Bank of New York Economic Policy Review, November 2002, p.61] THE SEPTEMBER 11 COMMISSION REPORT Page 377 [Liquidity Effects of the Events of September 11, 2001, James J. McAndrews and Simon M. Potter, Federal Reserve Bank of New York Economic Policy Review, November 2002, p65. ] The Federal Reserve, without providing the detail required to substantiate it’s claims, would have the public believe that there were widespread liquidity issues, when in fact the issues were very concentrated primarily, if not singularly, in the BoNY, which has been the subject of an ongoing major money-laundering investigation for many years. These account balance issues resulted in the defacto expansion of the monetary supply, details of which are no longer reported by the Federal Reserve. The reported cause of this market malfunction is seemingly suspect. By comparison, the Deutschebank which sat inside the World Trade Center reported no such account balance increase, and JP Morgan, the other of two clearing banks which uses the same traders and communications hub reported no such increase in account balance. Additionally, while problems were being documented between the BoNY and GCSS, no other institution had those problems. “…it is worth noting that settlements occurred at the major large-value private sector settlement systems (the Depository Trust & Clearing Corporation and the Clearing House Inter-bank Payments System [CHIPS]) on the eleventh and subsequent days.” [Liquidity Effects of the Events of September 11, 2001, James J. McAndrews and Simon M. Potter, Federal Reserve Bank of New York Economic Policy Review, November 2002, p64. ] There is every reason to believe activities in the BoNY in the aftermath of September 11th are worthy of suspicion. The Fails THE SEPTEMBER 11 COMMISSION REPORT Page 378 In the aftermath of September 11th, the analysts at the Fed attributed the security settlement failures to two causes: · the initial inability to match up trades with correspondent data, and · the use of ‘strategic’ fails by brokers in the aftermath, when the special rate on securities was so low that there was no incentive to avoid the refinancing fail. This reduction in the special rate was attributed to operations to increase liquidity in response to excess balance issue discussed in the section above. One key Federal Reserve researcher summarized it accordingly: “Fails rose initially because of the destruction of trade records and communication facilities. They remained high because the method typically used to avert or remedy a fail—borrowing a security through a special collateral repurchase agreement—proved as costly as failing to deliver the security. The U.S. Treasury responded to the fails problem by reopening the on-the-run ten-year note. The increased supply made borrowing the note more attractive than failing.” [When the Back Office Moved to the Front Burner: Settlement Fails in the Treasury Market after 9/11, Michael J. Fleming and Kenneth D. Garbade, FRBNY Economic Policy Review / November 2002, p 35.] The standard remedy for a fail—borrowing a security through a special collateral repurchase agreement— fell apart when the Fed dropped the special rate to nearly zero. “The Desk “had to accept the vast majority of propositions – even those offered at rates well below the new 3 percent target level – in order to arrange RPs of sufficient size.” (Markets Group of the Federal Reserve Bank of New York 2002, p. 24) On Wednesday, the Desk accepted all propositions submitted, the lowest of which was ¾ percent: see Table 2. The effective federal funds rate sank to 1¼ percent on Tuesday and below that on Wednesday” [Payment System Disruptions and the Federal Reserve Following September 11, 2001, Jeffrey M. Lacker, Federal Reserve Bank of Richmond, Richmond, Virginia, 23219, USA, November 17, 2003 p.18.] “The incentive of a seller to borrow securities to avoid or cure a fail declines with the specials rate for the security. When the specials rate is near zero, a seller has little to gain lending money (at nearly no interest) to borrow the needed securities.13 This suggests that market participants may have little incentive to break daisy chains and round robins when the specials rate for a security is near zero. This aspect of the market is important to understanding the fails problem after September 11…. the specials rate for a security will be driven to its lower limit more frequently when the fed funds rate, and hence the general collateral rate, is lower. This follows because the gross compensation earned by a lender of securities at any given specials rate is the difference between the general collateral rate and the specials rate.” [When the Back Office Moved to the Front Burner: Settlement Fails in the Treasury Market after 9/11, Michael J. Fleming and Kenneth D. Garbade, FRBNY Economic Policy Review / November 2002, p 44-45.] As shown in the following chart, the specials rate dropped by 200 -300 basis points, creating a disincentive to resolve short term, repo fails and creating a statistical flurry of fails. THE SEPTEMBER 11 COMMISSION REPORT Page 379 [When the Back Office Moved to the Front Burner: Settlement Fails in the Treasury Market after 9/11, Michael J. Fleming and Kenneth D. Garbade, FRBNY Economic Policy Review / November 2002, p 41.] The response of the Fed in bringing a new issue to the market at this time seems to have inadvertently (an assumption which should be challenged) been the source of continued lower “special rates” on the ten year note, and exacerbated the fail problem through the end of the year. In the extended condition of a high level of settlement fails, it would require little effort to ‘statistically hide’ the settlement of the remaining $240 billion that may not have been cleared in the immediate aftermath. The three week lull of fails in October could easily represent the 30 day short term refinancing of the debt. As the debt came back to the market for permanent refinancing, a shortage of investors would result in more fails. THE SEPTEMBER 11 COMMISSION REPORT Page 380 [When the Back Office Moved to the Front Burner: Settlement Fails in the Treasury Market after 9/11, Michael J. Fleming and Kenneth D. Garbade, FRBNY Economic Policy Review / November 2002, p 43.] The critical perspective here is that in making the original paper on $240 Billion in illegitimate notes disappear in the rubble of the World Trade Center, it would be implausible to refinance them in a few days without the financial world taking note. Notes could conceivably be refinanced for 30 days in the repo market Summary There is a contention that at the core of the September 11th attack, someone was planning to cover the 1991 issuance of $240 billion in illegal securities used to finance the collapse the Soviet Union. The facts surrounding the financial aftermath of September 11 suggest this is not only possible, but that reports describing the aftermath have deliberately been misleading. · The US dollar money supply was significantly increased in the aftermath of 9/11; · The bank at the core of the illegal money laundering by ex-Soviet criminals was the source of the increased money supply (BoNY); · The generally disseminated rationale for BoNY’s operational problems seems to have affected no other bank in a similar manner or magnitude and is inconsistent with reports on the BoNY operations in the aftermath; THE SEPTEMBER 11 COMMISSION REPORT

Tarpley
BARACK
H.
OBAMA
THE
UNAUTHORIZED
BIOGRAPHY
Webster Griffin Tarpley
2008
BARACK H. OBAMA: THE UNAUTHORIZED BIOGRAPHY
Copyright © Webster Griffin Tarpley, 2008
All Rights Reserved
Published by Progressive Press
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www.ProgressivePress.com
Length: 264,000 words.
Typeset left-justified in 11 pt. Times New Roman, for optimum value and ease of reading.
Classification: Nonfiction, Politics, Biography
ISBN: 0-930852-91-5. EAN: 978-0-930852-91-7
DIGITAL
ADVANCE
REVIEW
EDITION
September 2008
Cataloging-in-Publication Data
Tarpley, Webster Griffin
Barack H. Obama: the unauthorized biography / Webster Griffin Tarpley
ISBN-13: 978-0-930852-91-7 (Digital), 978-0-930852-81-8 (Offset edition)
1. Obama, Barack. 2. Presidential candidates – United States.
TABLE OF CONTENTS
INTRODUCTION: OBAMA FROM THE FORD FOUNDATION TO THE TRILATERAL
COMMISSION..............................................................................................................................4
CHAPTER I: OBAMA’S ROOTS IN POLYGAMY AND THE FORD FOUNDATION..............12
CHAPTER II: COLUMBIA UNIVERSITY AND RECRUITMENT BY ZBIGNIEW
BRZEZINSKI ..............................................................................................................................37
CHAPTER III: FOUNDATION-FUNDED RACISM IN CHICAGO: JEREMIAH WRIGHT AND
MICHELLE .................................................................................................................................91
CHAPTER IV: APPRENTICESHIP WITH FOUNDATION-FUNDED TERRORISTS: AYERS
AND DOHRN............................................................................................................................134
CHAPTER V: OBAMA’S HEART OF DARKNESS: REZKO, AUCHI, ALSAMMARAE, AND
CHICAGO GRAFT....................................................................................................................182
CHAPTER VI: GRABBING A SENATE SEAT WITH A LITTLE HELP FROM HIS
TRILATERAL FRIENDS..........................................................................................................215
CHAPTER VII: THE HOPE POPE AND HIS TRILATERAL MONEY MACHINE..................265
CHAPTER VIII: “OUR SOULS ARE BROKEN” – “FEEL, DON’T THINK! BE VISCERAL!” –
MICHELLE OBAMA, POSTMODERN FASCIST IDEOLOGUE.............................................287
CHAPTER IX: OBAMA’S TRIUMPH OF THE WILL: THE 2008 PRIMARIES .....................309
CHAPTER X: OBAMA: A LOOMING WORLD TRAGEDY ...................................................369
CHAPTER XI: OBAMA AS SOCIAL FASCIST.......................................................................393
APPENDICES ...........................................................................................................................415
NOTES ......................................................................................................................................426
INTRODUCTION: OBAMA FROM THE FORD
FOUNDATION TO THE TRILATERAL COMMISSION
You know, I’ve come to the conclusion that poverty is closer to the root of the problem than
color. – Robert F. Kennedy, 1968
This book marks my first foray into the field of presidential candidate biography since the
publication of my George Bush: The Unauthorized Biography (1992). I have been impelled to
return to the business of presidential candidate biography by a profound sense of alarm and national
emergency, because of the threat to the American people and to the future survival of the world
posed by the Trilateral Commission puppet and Manchurian candidate, Barack Hussein Obama.
During the early months of 2008, I issued a series of articles which analyzed the dynamics of
Obama’s postmodern coup d’état from the standpoint of comparing the Illinois Messiah’s lemming
legions and Kool-Aid cult fanatic following with the incipient and inchoate fascist movement which
coalesced around the young Benito Mussolini between 1919 and 1922, in a period of crisis similar
to the one we are traversing today. These articles were supplemented by a theoretical introduction
restating the basic characteristics of a fascist mass movement, and also by an extended comparison
between Obama’s campaign platform and the record in office of Jimmy Carter, who is the most
recent example of a puppet president controlled by the Trilateral-Rockefeller banking elite. I also
benefited from valuable contributions from my friends Bruce Marshall and Jonathan Mowat.
The resulting book was entitled Obama the Postmodern Coup: the Making of a Manchurian
Candidate, and was offered to the public for the first time on Monday, April 7, 2008, thanks to the
superlative efforts of the eminent publisher John Leonard of Progressive Press in California. Our
original intention had been to include a biography of the mystery candidate Barack Hussein Obama,
but in the end we decided that it was better to issue a first volume well in advance of the April 22
Pennsylvania primary. Now, a few months later, we are delivering a second installment in the
continuing process of exposing and unmasking the enigmatic Messiah Obama. We ask for the
reader’s indulgence for the fact that this book had to be assembled in haste, but we are confident
that it contains the concepts necessary to understanding the threat posed by Obama, from the
standpoint of elementary class consciousness.
THE ONLY STUDY BASED ON AN EXPLICIT CLASS ANALYSIS
OF ELITISTS VS. WORKING PEOPLE
The 2008 campaign has been remarkable for having had the great merit of focusing attention on
the issue of class, elitism, and oligarchy, with Obama furnishing the obvious villain on the elitist
side. This book is a product of the anti-oligarchical or American school of historical writing. The
analysis is conducted from the standpoint of the New Deal tradition. Class consciousness as used
here means first of all the method exemplified by Plato in his Republic, above all awareness of the
abuses of the one (tyranny), the few (oligarchy), and the many (mob rule or ochlocracy). Our world
is generally a world of oligarchy, which is now threatening to pass through an interlude of mob rule
and then into tyranny. This book is also based on the class analysis of Machiavelli’s Discourses,
which is infinitely superior to that of Marx. In Machiavelli’s terms, the Obama campaign is a
project of the nobility (gentiluomini) and the urban bankers (ottimati or patrizi, in Britain as well as
the US) to mobilize the city mob, especially excitable youth (plebe) against the middle class
(popolo), under extreme crisis conditions. This book is also founded on the experience of the
Introduction: Obama from the Ford Foundation to the Trilateral Commission 5
Franklin D. Roosevelt New Deal as the most recent successful historical model in how to organize
the American people to deal with a world economic depression.
A critical unauthorized biography of Senator Barack Hussein Obama is all the more urgent today
because nothing competent in this line has been forthcoming so far. Back in 1991, when I began
writing the unauthorized biography of George Bush the elder, I found that the biographical literature
about the candidate was rather limited. There was a campaign biography from 1980, a campaign
biography from 1988, and some biographical essays for 1992. These had all been generated from
Bush family documents and printouts. There were also a limited number of critical studies, which
were either very brief, incomplete, or useless for other reasons. Another biography of Bush the
Elder which appeared after the election turned out to be just another cover-up. But all in all, the
biographical literature was relatively limited, and there were no real autobiographies, memoirs or
books written by the candidate.
With Obama, the picture is radically different. Obama is a word-monger. The candidate himself
claims to be the author of not one but two books, although it is clear that he has had much help from
the ghost-writing staff of the Trilateral-Bilderberg combine. The first is a long autobiographical
memoir entitled Dreams from My Father, which Obama sent into the world back in 1995. This
book documents Obama’s obsession with the polygamous Kenyan father who showed no interest in
him, with race and racism, and above all with himself. It is a document which already suggests that
the author is not just a racist, but also a deeply troubled existentialist megalomaniac, since it is
surely a rare man who writes his own autobiography before he has reached the age of 35, when he
still has accomplished absolutely nothing. This is the book which we define as Obama’s
postmodern Mein Kampf. Obama is also the author of a more conventional catalog of campaignoriented
political positions The Audacity of Hope, with its title drawn from one of the ranting
sermons of Obama’s racist guru and hatemeister, the Reverend Jeremiah Wright.
1995: DREAMS FROM MY FATHER – OBAMA’S POSTMODERN MEIN KAMPF
The first time I heard Obama speak, the first words that passed through my mind were, “slippery
as an eel.” This is the main problem with the things that Obama himself has written, as well as with
his campaign in general. Both books written by Obama make it their primary business to deceive
the reader, for obvious purposes of political gain. Dreams is designed to mislead about the
candidate himself, while The Audacity of Hope seeks to muddy the waters concerning his political
ideas and policies. Far too often the audacity of hope that we are promised turns out to be nothing
more than the mendacity of dope, on the part of a candidate whose mental impairment owing to
narcotics abuse during his college years is certainly comparable to that of the notorious George W.
Bush — as we can see in Obama’s striking inability to speak coherently in the absence of the glass
plates of a Teleprompter sitting in front of his nose.
The Audacity of Hope has been described by the reactionary Ann Coulter as Obama’s dime-store
Mein Kampf. This is accurate in at least one way, since both books deal with the quest for racial
identity and the need to overcome the various barriers to the assertion of that identity. Well before
Miss Coulter had come on the scene, I had published an article on the Internet referring to Obama’s
postmodern Mein Kampf, which represents a more exact description of Obama’s actual ideology
and world outlook, which is that of an existentialist reader of the Third World pro-terrorist
ideologue, Frantz Fanon. Obama’s book is also an attempt to capitalize on the popularity of Alex
Haley’s Roots. Obama’s memoir may thus be described as Roots lite, but with the identity trip being
carried out by a Fanon-style existentialist.
6 Barack H. Obama: The Unauthorized Biography
THE MENDACITY OF DOPE
But the books by Obama himself are only the beginning of the cloud of obfuscation and deception
which envelops the Perfect Master. There are easily two dozen biographical studies of the Illinois
Senator, and they are almost without exception characterized by fawning adulation, adolescent hero
worship, and messianic hagiography. They add up to so many versions of the Life and Miracles of
St. Barack the Good. I have found it easy to dispense with the vast majority of these meretricious
and venal little books. One or two exceptions do stand out: there is, for example, Shelby Steele, a
kind of black neocon, who makes many intelligent observations about Obama’s character.
Then there are the hard-line neocon critics of Obama. Some of them have managed to perform
an important public service by forcing the odious figures of the gangster Tony Rezko, the Reverend
Jeremiah Wright, the terrorist William Ayers, and the terrorist Bernardine Dohrn — all of whom
belong to Obama’s immediate social circle — into the public eye in the face of hysterical opposition
by NBC, MSNBC, The New York Times, the Washington Post, and the other assorted media whores
for Obama. But, for any task of analysis more complicated than the straight exposing and outing of
Obama’s rogues’ gallery of personal friends and associates, the neocon methods break down and
often lapse into absurdity. The biggest absurdities are that Obama is really a Moslem, or else that
Obama is really a Marxist AND Communist.
We state emphatically here at the outset: Obama is a creature and puppet of finance capital and
of the Wall Street bankers and investment bankers, as represented by the Trilateral Commission,
Bilderberger Group, Council on Foreign Relations, Skull and Bones Society, Ford Foundation, and
Chicago School of Friedmanite economics. The family business which Obama inherited from his
mother (a Ford Foundation anthropologist and counterinsurgency operative who also worked for the
World Bank and the US Agency for International Development) was to work for foundations. And
this is what Obama has done in his life, working at various times for or with the Gamaliel
Foundation, the Woods Fund, the Joyce Foundation, the Annenberg Foundation, and other
foundations and entities which notoriously look to the Ford Foundation for guidance and leadership.
Obama is best described as a foundation-bred counterinsurgent, that is to say an operative in the
service of the US financier ruling class whose task it is to wreck and abort any positive outcomes
that might be forthcoming from the political ferment which is shaking the globe, and above all from
the deep political upsurge which is clearly at hand in this country.
Obama claims to be a uniter, but the simplest empirical survey will show that he is the most
explosive divider seen in this country in decades, since he has succeeded in splitting both the
Democratic Party and the US population in general according to the classic fault lines of white
against black, black against Hispanic, black against Asian, black against Jewish, men against
women, old against young, rich against poor. Having seen Obama accomplish all of this in less
than a year and a half on the campaign trail, we can confidently predict that an Obama presidency
would in all probability put the United States well on its way to civil war. Giving Obama and his
financier controllers the White House would represent an act of national suicide for this country,
with the most catastrophic implications for the world as a whole. This analysis is corroborated by
the fact that Obama, alone among all the protagonists of the 2008 presidential contest, possesses
either a postmodern fascist mass movement, or a very plausible facsimile thereof. These are the
lemming legions who are not supporting a program of measures that the government might take, but
who are hysterically loyal to and obsessed with Obama as a fantasy figure and charismatic savior –
in other words, as an emerging fascist leader. As those who lived through Italy in 1922 and
Germany in 1933 remind us in the writings they have left behind, there is simply no comparison
between a normal, corrupt, bourgeois parliamentary regime and a fascist seizure of power. These
Introduction: Obama from the Ford Foundation to the Trilateral Commission 7
are qualitatively distinct, and set Obama apart from all of his competitors in a way that we can only
ignore at our own very great peril.
The only way to conduct a satisfactory analysis of the Obama agitation is to use a class
standpoint, rather than a racial criterion or an outlook based on gender. Obama is an operative for
the finance oligarchs. The Democratic Party bureaucracy is supporting Obama and opposing
Senator Clinton because this is the decree of Wall Street, the Trilateral Commission, the
Bilderberger group, the Ford Foundation, Skull and Bones, the Chicago School, the Council on
Foreign Relations, and other ruling class institutions. The Democratic Party bosses like Howard
Dean and Donna Brazile are not supporting Obama because they care about what happens to black
voters. The Democratic Party has proved repeatedly that it cares nothing whatever about the fate of
black voters. At the same time, it is very naïve to assume that the explanation for the slander
campaign of the controlled corporate media against Hillary Clinton is that the media whores for
Obama are motivated by misogyny and hatred of women. That may be a factor in individual cases,
but the main reason the controlled media are vilifying Senator Clinton is that they have been
ordered by their Wall Street paymasters to do so. The main issues in this contest are class issues,
and not racial or gender issues. Blue-collar working-class voters are not generally opposed to
Obama because of race, but rather because they can sense in his elitism and condescension that he is
a candidate loyal solely to the dictates of the financiers.
The phalanx of right-wing radio commentators who call themselves conservatives is attempting
to portray Obama as an ultraliberal, “the most liberal senator in the Democratic Party,” according to
a study produced by National Journal. This is a very weak, tired, unconvincing way to deal with
Obama, and it is ultimately a loser. This is not very scary, and to do justice to the horrifying reality
of the Obama threat, it ought to be very scary indeed. To say that Obama is a liberal, as Rush
Limbaugh incessantly does, is to say that he is just more of the same, from the same tired old
playbook of Walter Mondale and Michael Dukakis. If Obama is just the latest liberal and there is
nothing new under the sun, then ho-hum. This approach fatally underestimates how radically
different and how extremely dangerous Obama really is. Sean Hannity does a little better with his
mantra of “Stop the radical.” But it soon turns out that this means radical liberal, which is also not
going to launch a thousand ships against Obama.
The first instinct of most right-wingers is to look at Obama’s middle name of Hussein, and
perhaps at his Moslem father and step-father and at his time in school in Indonesia, and announce
that Obama is a Moslem. But this will hardly do. Obama’s father and step- father were united not by
the Koran, but rather by their shared devotion to Johnny Walker, which increased as they got older.
And if Obama himself were a secularized Moslem, so what? Voters have a right to know Obama’s
religious history in full detail, but there is no religious test for office. But Obama is something very
sinister indeed. Obama himself is either an atheist, or much more likely a Satanist of the apostate
Jeremiah Wright-James Cone-black liberation theology school, a Christian heresy which places
racist hatred instead of charity at the center of its edifice of faith. Wright is ultimately the high priest
of a death cult. Obama is, more precisely, an existentialist fascist made of equal parts 1969
Weatherman race war theory and Frantz Fanon’s cult of violent Third World rebellion. This is what
low-income blue collar voters in West Virginia have understood far better than all the effete snobs
who profess postmodernism at Harvard.
The other approach is to paint Obama as a Marxist and communist, in the Cold War McCarthyite
tradition. Here is an article by Dana Milbank, a decadent member of Skull and Bones who frequents
the Keith Olberman Grand Guignol propaganda show on MSNBC-Obamavision, also known as the
Brzezinski network. Milbank is a cynical cataloguer of the politically grotesque. The following is
8 Barack H. Obama: The Unauthorized Biography
Milbank’s satire of a group of aging and rabid neocons who gathered recently in a Washington café
to review the evidence that Obama was a communist, a Marxist, and a subversive. This group,
assembled by America’s Survival Inc., met in the basement of Ebenezer Coffee House at Second
and F streets NE. Milbank writes:
Here are some things we can look forward to learning about Barack Obama: that he was
mentored in high school by a member of the Soviet-controlled Communist Party; that he
launched his Illinois state Senate campaign in the home of a terrorist and a killer; that while
serving as a state senator, he was a member of a socialist front group; that his affiliations are so
dodgy that he would have trouble getting a government security clearance; that there is reason
to doubt his “loyalty to the United States.” “We believe that any public figure with links to
foreign and hostile interests should be asked to explain those associations,” the organizer, Cliff
Kincaid, told about two dozen conservatives and a few reporters. “In the case of Obama, a
relatively new figure on the national scene, we submit the facts suggest that he would have
serious difficulty getting a security clearance in the United States government. An FBI
background check was once used to examine one’s character, loyalty to the United States, and
associations.” “He’s a member of an organization [that is] openly a front for two socialist
groups,” reported another participant, Trevor Loudon. “Obama was raised and educated in a
very Marxist-rich environment, which often would limit his worldview,” reported a third, Max
Friedman. But the star of the show was the ancient Herbert Romerstein, who once plied his
trade for the Un-American Activities committee. “We decided to start going back and seeing
what things influenced him even before he was born,” Romerstein announced without a trace of
irony, before tying Obama to the Communist Party of the 1930s in Hawaii and Soviet spies on
the island. “This is the atmosphere that young Barack Obama grew up in.” The smoking gun?
Obama’s “mentor” during his teens, according to Kincaid, was “a key member of a Sovietcontrolled
network that was sponsored by Moscow and active in Hawaii.” “The Weather
Underground terrorists,” Romerstein added, “were instrumental in getting him into office in the
first place.” “It’s clear that the communists and the socialists are backing him,” Kincaid
confirmed. It was beginning to sound like a UFO convention. But the panelists took it seriously,
firing questions back at the audience. “Was Barack Obama working for Bill Ayers?” Kincaid
wondered aloud. Romerstein demanded: “How come for 20 years he sat in the pews and
listened to a raving anti-American racist? How did he bring his two young children to this
church to hear Wright rave on?” The evidence was compelling enough for participant Friedman.
For him, the Rosetta Stone was Obama’s chief strategist, David Axelrod, who Friedman alleged
was the protégé of a man with “a Communist Party-front record” in Chicago. “The more I look
at this, I’m seeing there are a lot of red-diaper babies around here,” he deduced. “By putting
these pieces of the puzzle together, I’m beginning to see something much bigger.” (Dana
Milbank, “Obama as You’ve Never Known Him!” Washington Post, May 23, 2008.)
This treatment shows how easy it is for a lightweight elitist scribbler like Milbank to satirize
these neocon critics of Milbank’s Perfect Master. Even a superficial flack like Milbank has no
trouble making these poor neocons look like relics from the hated and notorious House Un-
American Activities Committee who are daring to pollute the sublime dream of today’s golden
youth.
Obama has only the vaguest echoes of his mother’s vague devotion to old Karl Marx (the British
agent whose case officer was David Urquhart of the British Foreign Office). Obama is most
emphatically a product of the foundations and their cult of social manipulation and political
subversion, but always in the service of a social order centered on Wall Street. Obama is himself an
Introduction: Obama from the Ford Foundation to the Trilateral Commission 9
operative of finance capital at the highest level. If his hardware comes from the Ford Foundation
where his mother was employed, Obama’s software comes from the Trilateral Commission, the
Bilderberger group, the Council on Foreign Relations, the RAND Corporation, Skull and Bones, the
Chicago school of economics – in other words, the highest levels of the Anglo-American financier
oligarchy. If Mussolini started off as an agent of the British and French embassies and of certain
Venetian financiers, and Hitler began his career as an agent for German military intelligence,
Obama’s pedigree is the complex of institutions we have just stated. Obama is connected to Wall
Street by a million adamantine threads. Obama’s main controller, guru, adviser, and handler is none
other than Zbigniew Brzezinski, the man who ran the catastrophic Trilateral administration of
Jimmy Carter thirty years ago. Such is the reality of Obama as he emerges from these pages.
HISTORICAL BACKGROUND IS INDISPENSABLE
In order to understand Obama and the congeries of foundation-funded racist and terrorist
provocateurs and international gangsters who represent his immediate social circle, some significant
historical background is indispensable. Obama’s mother worked for the Ford Foundation, and
Obama has worked for foundations like the Gamaliel, the Joyce, the Woods, and the Annenberg
Chicago Challenge all his life. But what do foundations do? Emphatically, they do not practice good
works of charity; they deal in cynical social and political manipulation in the service of the ruling
class. So it is necessary to explain the strategic doctrine which has governed the activities of the US
foundation community since the 1960s, especially in the framework of Reagan’s Executive Order
12333, which privatized the US intelligence community into front companies, law firms, and
especially foundations.
The public now knows that Obama attended Jeremiah Wright’s church, where the incendiary
doctrine of black liberation theology, a school atypical of the black church, is proclaimed. But
where do Wright and his sidekicks Otis Moss III and Dwight Hopkins come from? Are they an
authentic and spontaneous expression of the black church, or are they controlled assets deployed in
a cynical divide-and-conquer strategy by foundations and divinity schools that represent the most
parasitical interests in Wall Street? The historical approach is the only way to clarify these issues.
Obama claims to be an apostle of bipartisan cooperation and the transcendence of legislative
wrangling and haggling. His background in this regard is real, but it is not what the public thinks.
Obama is a product of the infamous Illinois bipartisan Combine, a joint venture by the Illinois
Republican and Democratic Parties to savagely loot the people of that state. Obama’s godfathers
include not just corrupt machine pols like Mayor Daley and Governor Blagojevich, but also the
Levantine gangsters and underworld figures Rezko, Auchi, and Alsammarae, all part of what the
FBI has been probing under the heading of Operation Board Games. Obama’s bosom buddy Rezko
is now a convicted felon, having been found guilty on June 5, 2008 on 16 of 24 counts in Chicago
federal court, including for scheming to get kickbacks out of money-management firms wanting
state business, and a contractor who wanted to build a hospital in northern Illinois. Auchi and
Alsammarae are also convicted felons. Obama’s long history in graft and corruption make him the
most corrupt and dirtiest presidential candidate in many decades.
Americans have now been told that the 1960s Weatherman terrorist bombers and provocateurs
(and foundation operatives) Bill Ayers and Bernardine Dohrn have sponsored Obama’s career as a
foundation asset and later as a holder of elective office. But what were the Weathermen? And, were
Ayers and Dohrn honest revolutionaries who chose terrorism, or were they intelligence community
operatives sent in to destroy the student movement and peace movement by taking over Students for
10 Barack H. Obama: The Unauthorized Biography
a Democratic Society (SDS) in the wake of the New York City teachers’ strike, and then scuttling
SDS from within, in a matter of months? Only historical background can clarify the question of how
Obama’s penchant for associating with known criminals makes him the most radical subversive
ever to get this close to the presidency.
The public is being urged to regard Obama as a politician of phenomenal organizational ability
because of his ability to game the absurd rules of the Democratic Party. But what if Obama had
been a protected asset of Zbigniew Brzezinski and the Trilateral Commission since about 1981-
1983, and a man whose entire career has been fostered and promoted by the Trilateral-Bilderberger
Wall Street group? What if Obama’s campaign ran on Rockefeller-Soros Trilateral cash, with the
backing of the matchless Trilateral network of media whores and agents of influence? Here again,
adequate historical background is necessary.
The last time that the Trilateral Commission fielded a relatively unknown puppet with the goal
of seizing power through an insurgency based on surprise, the result was the catastrophic presidency
of Jimmy Carter, who turned foreign affairs over to Brzezinski, while placing economic policy in
the hands of Trilateral agent Paul Adolph Volcker, who destroyed what was left of the US industrial
economy. Today Obama is attempting to profile himself as something of an economic populist.
Only an appeal to history can show how today’s Trilateral puppet Obama will go beyond
yesterday’s Trilateral puppet Carter, this time imposing austerity in the name of third world
solidarity, sacrifice in the name of global warming, and perhaps even reparations for racism. As
with Carter, the beneficiaries will be the Rockefeller-Soros Wall Street interests.
Obama promises hope and change, but his campaign bears uncanny similarities to the early days
of Italian fascism in 1919-1922. Only historical background can show the many parallels between
Obama and the young Mussolini.
This book is not an invitation to contemplation. It is a call to mobilize. At this writing, we are at
the half-way point in a postmodern fascist coup in the United States. There is still time to prevent
this coup from succeeding.
In January 1933, just before Hitler seized power, people in Germany were as careworn and
overwhelmed and overstressed as many Americans feel today. A combination of bankers and
corporate chiefs had decided they needed more than a dictator; they needed a dictator with his own
private army of street fighters, the storm troopers. The Social Democrats (the SPD) were a huge
mass party backed up by trade unions, sports clubs, women’s groups, and their own self-defense
corps, but they dithered and dawdled and talked about a general strike, and never did anything. The
communists (the KPD) were also a large mass party, with a big organization of unemployed
workers, and their own self-defense corps of armed veterans. But the communists were convinced
that they had been living under fascism for a long time, and that the Social Democrats were really
social fascists and therefore even worse than Hitler. So nobody called a general strike to stop Hitler
when this would have been possible. Many of the SPD and KPD leaders who refused to mobilize
against the National Socialist seizure of power soon had to flee the country when their parties were
outlawed and their members expelled from the parliament by the Nazis. Many of those who stayed
behind were either assassinated in the streets, or died in concentration camps. Perhaps we can learn
something from this chilling example of the importance of mobilizing while mobilization is still
possible.
If this book attracts some readers, the Obama campaign will inevitably attempt to vilify me as a
racist. I therefore state formally that I am not a racist, but just the opposite. I am convinced that race
is a mystification with no scientific basis whatsoever. Politics and government based on race are
Introduction: Obama from the Ford Foundation to the Trilateral Commission 11
sure to fail. My own standpoint is the universality of the human personality, with all persons being
ontologically equal. I lived the first years of my life in Great Barrington, Massachusetts, a town
which, thanks in part to a large population of abolitionists living there, had largely achieved racial
integration in the decades following the Civil War. I lived on the same street where W.E.B. DuBois
had grown up by the Housatonic River and close to the integrated school he attended c.1870.1 I later
lived in Flushing, New York, a part of north Queens which had been the site of the first formal
demand for religious tolerance in North America – the Flushing Remonstrance of 1657. In the
1950s, this community was thoroughly integrated down to my Cub Scout troop, where the den
mother was Mrs. Andrew Jenkins, a black lady and the mother of one of my friends. Flushing was
so tolerant that, around the time of the New York World’s Fair of 1964, it began to attract residents
from the Far East, and now hosts a large Chinese community. So I reject any charge of racism. At
the same time, I reject the absurd taboos which the bankrupt ideologues of foundation-style
multiculturalism and political correctness are seeking to impose, since these are forms of insidious
class prejudice against the working people of all races in this country. In many ways, this book
continues the critique of foundation-based multiculturalism from a New Deal standpoint which was
offered by the late Arthur M. Schlesinger in his The Disuniting of America: Reflections on a
Multicultural Society. Those who actually read this book will be able to evaluate my argument that
racism in the United States today is very largely the product of a deliberate and cynical divide-andconquer
policy carried forward above all by the foundations and by the oligarchs and elitists who
control them – that is to say, by precisely those groups who have created Obama. We need a return
to the New Deal and a Marshall Plan for the cities, not another fruitless discussion about race of the
kind proposed by Obama. To finish off racism, we will need full employment, something which has
hardly been seen in this country since 1945. Full employment is also the key to solving most of the
problems associated with the flows of immigrants from Latin America and Asia, since a return to
economic progress will immediately create a labor shortage that will put these issues in the proper
perspective. To obtain an economic recovery for the benefit of all the people from the present Bush
world economic depression, we will need updated versions of New Deal programs, and on the way
to getting them we will need to break the power of the foundations, who will attempt to maintain the
fragmentation and subjection of the US population by every means at their disposal. This book, it is
hoped, will represent a step towards exposing the destructive elitist manipulation of society by the
foundations and the sinister intentions of the leading foundation operative on the scene today,
Obama.
CHAPTER I: OBAMA’S ROOTS IN POLYGAMY AND THE
FORD FOUNDATION
How can I refuse the best education? – Barack Hussein Obama Senior
For many Americans, Barack Hussein Obama is a riddle wrapped in a mystery inside an enigma.
Never in recent American history has a candidate so little known approached the presidency. The
only recent comparison is offered by Jimmy Carter, and Carter — who had served as governor of
Georgia for four years — was an open book in comparison to Obama. After Carter had entered the
White House, voters were shocked to realize that they had elected a mystery man — they had
bought a pig in a poke. George W. Bush was another little-known candidate: he too talked about
being a uniter and not a divider, promised a foreign policy based on humility, and pledged to govern
in the spirit of compassionate conservatism. Here too, the reality turned out to be much different.
Back in 1991, I realized that even though George H. W. Bush had been occupying the White
House for a number of years, there was no critical and unauthorized biography of him. I therefore
set out to write such a critical biography, which still stands today as the only non-apologetic study
of his life. My present task is to offer readers a chance to get to know Obama before they make the
irrevocable decision to grant him state power in the midst of one of the most severe crises this
country has ever known.
As we have suggested elsewhere in this book, one way to parse the speeches and promises of
presidential candidates is to examine their advisers, handlers, and controllers, since many of these
will make their way into the cabinet and into the White House palace guard. Another important
method is to examine the candidate’s financial backers, and we will do so. A third approach is to
bear in mind the famous dictum that biography is destiny — meaning that the life experience of any
individual is bound to exert a profound influence on the way that person will tend to use the powers
of a public office. It is mainly this third approach which we will implement in this section, seeking
to assemble what is known about the life of Obama with a view to extracting clues about what kind
of a president he might be.
The guiding principle of the present treatment is that when a politician is seeking to get his hands
anywhere near the famous button which can be used to launch worldwide thermonuclear war, when
that politician is in effect demanding life-and-death power over American voters and their families,
then there are no limits to the public’s right to know anything and everything about all facets of that
politician’s life, without exclusions of any sort. For a presidential candidate, there is and can be no
private sphere. Everything is fair game. Researchers are not only allowed to delve into the
candidate’s background in every conceivable way — they are imperatively obligated to do so.
BARRY WHO?
Obama presents unprecedented difficulties for the presidential biographer. His clever handlers,
controllers, and managers seem to have understood very well that a candidate with a resume, a
voting record, and a history of past performance can very easily find that these things become
liabilities when they are scrutinized by the opposition research of political adversaries, or simply by
journalists in general. Any record at all is apt to become grist for the opponent’s attack machine.
Obama appears to have been advised by Senator Daschle that it is better not to stay in the Senate
very long before running for president, since every vote that a Senator makes can represent a policy
I. Obama’s Roots in Polygamy and the Ford Foundation 13
commitment which is going to offend some group or stratum in the voting public. Ironically, it
turns out that in politics, the best resume is often no resume at all. Obama represents this approach
in an extreme form. Maureen Dowd of the New York Times, who with her usual cynicism has
rushed to join media swoon for the Illinois Senator, has called Obama “the 46-year-old virgin.” The
columnist Spengler of the Asia Times observes that “We know less about Senator Obama than about
any prospective president in American history. His uplifting rhetoric is empty, as Hillary Clinton
helplessly protests. His career bears no trace of his own character, not an article for the Harvard
Law Review he edited, or a single piece of legislation. He appears to be an empty vessel filled with
the wishful thinking of those around him.” (Spengler, Asia Times, Feb. 26, 2008) Obama’s halfsister,
Maya Soetoro-Ng, a schoolteacher from Hawaii, says cryptically, “He’s a very cool
customer.” The candidate himself admits: “I am an imperfect vessel for your hopes and dreams.”
(Todd Purdum, Vanity Fair, March 2008)
Indeed, Obama would appear to stand for nothing, with no principles, no commitments, no
loyalties, and no real program. In spite of this, Obama did not spring fully armed from the head of
Zbigniew Brzezinski, nor did he rise from the foam of the ocean. He does have a past, and it is to
this past and its lessons that we now turn.
So little is known about the life of Obama that wild rumors have proliferated about who he really
is. Is he a devout Moslem? Is he an Iranian agent? Is he a Marxist crypto-revolutionary? The
conclusion of the present study is that he is none of these. Obama is certainly an ambitious and
ruthless demagogue who can be counted on to be wholly unscrupulous in his pursuit and exercise of
power. He is the creature of those intelligence circles which we may describe as the foundationfunded
Left CIA. Obama is the wholly-controlled puppet of these circles. He has been chosen for
his current task first of all because of his uncanny anthropologist’s ability to size up and profile his
interlocutors for the purpose of duping them all and manipulating them the more efficiently. He
brings to his political campaign the detachment of an anthropologist doing field work: he treats
American voters as mere ethnographic material, mere grist for his power machine. Obama is at
heart a cosmopolitan, meaning that he would seek to float above the various constituent groups of
the US population in the same way that the supernational and cosmopolitan Prince Metternich
sought to float above the subject nationalities of the Austrian Empire until he was forced to flee to
London in 1848. Obama’s connection to the American people is as tenuous as that of such figures
as the German Nesselrode, the Greek Kapodistrias, and the Sardinian Pozzo di Borgo, when they all
found themselves working for the Foreign Ministry of the supernational Russian Empire. Obama is
also reminiscent of those Coptic Christians like the Boutros-Ghali family whom the British
habitually chose as top-level civil servants during their protectorate over Egypt. Imperial regimes
have often chosen to govern large populations through ethnic minorities, and an Obama
administration would give the United States a taste of this kind of rule for the first time.
THE MAKING OF A MANCHURIAN CANDIDATE
Underneath Obama’s cool and aristocratic detachment, however, there lurks a deep resentment
against the broad strata of the American people. It is not a hatred of Wall Street bankers, of CIA
assassins, of war criminals, nor of mercenaries who kill people in countries far away. It must
unavoidably be described as a hatred of the American people themselves, and it is therefore a
sentiment which any responsible person must strongly condemn. Despite his evasive denials,
Obama has a real elective cultural affinity for the “God damn America” outlook expressed by his
pastor, the Reverend Jeremiah Wright. Based on the research embodied in this study, we can
confidently predict that a future Obama administration would impose austerity, sacrifice, and
14 Barack H. Obama: The Unauthorized Biography
foreign wars on the American people with a wanton cruelty which has not been seen so far, not even
under Bush the younger. It is because of their accumulated anti-American animus that Obama and
his wife have been selected by the circles of the Trilateral Commission for their current attempts to
carry out a postmodern coup d’état, leading in turn to what we must designate as postmodern
fascism.
Obama is a disciple neither of Mohammed nor of Marx. He comes rather from the school of
Frantz Fanon and Jean-Jacques Rousseau. His relation to Rousseau is especially close: both the
Rousseau of the noble savage who is the patron saint of modern anthropology, and the Rousseau of
the collective will, who is the guiding spirit of modern totalitarian liberalism.
Obama’s world is the left wing of the US intelligence community as it emerged in the wake of
President Reagan’s Executive Order 12333 of 1982. It is a world composed of the Ford Foundation
and other foundations specialized in social engineering, social manipulation, social control, and
political counterinsurgency against possible challenges to the system of oligarchical financier
domination of national affairs. It is a world populated by former Weatherman terrorists, black
cultural nationalists, radical Palestinians on the CIA payroll, and left liberal ideologues financed by
the foundations or even by the defense budget. It is the world of the National Endowment for
Democracy, the Soros Foundation, and the veterans of the Jimmy Carter Administration.
BIRTH AND FAMILY
Many sources allege that Barack Hussein Obama was born on Aug. 4, 1961, in Honolulu,
Hawaii. But even this most basic fact of Obama’s existence is highly controversial, and as this book
goes to press, is a contested issue in the courageous law suit of Philadelphia lawyer Philip J. Berg,
who asserts that Obama is not a natural-born citizen of the United States, and accordingly cannot be
considered qualified for the presidency.2 His father, Barack Obama, Senior was a member of the
Luo tribe or people from Nyanza Province, Kenya, in East Africa. His mother was Stanley [sic] Ann
Dunham, an American woman who would later became an anthropologist and a consultant for the
World Bank. Obama’s parents met when they were both students at the East-West Center of the
University of Hawaii at Manoa. When Barack Obama was only two years old, his father abandoned
his wife and young son in Hawaii and went to Harvard University, where he obtained a doctorate in
economics, and later returned to Kenya to become a government official. Barack Obama would see
his father only once more in his life.
Barack Obama is listed as the author of two books: Dreams from My Father: a Story of Race
and Inheritance (1995), and The Audacity of Hope (2006). From the first of these works, a number
of themes emerge. First of all, Obama is obsessed with himself. His books do not really represent
programs or promises concerning things that he wants to do for the American public, or to improve
the state of the world. They are concerned above all with his own mental states, yearnings, desires,
and confusions. Secondly, Obama is obsessed with the trauma of having been abandoned by his
father at the age of two, and with the vicissitudes of having grown up as a fatherless boy with all the
problematic syndromes this may imply. He was also later abandoned by his mother. Thirdly,
Obama is obsessed with his African roots; he may at times portray himself as being multicultural,
but his real center of gravity is his Afrocentrism. He is thus a radical subjectivist, and a
postmodernist. His thoroughgoing postmodernism means that he espouses a method of thought
which no American president has thus far represented. These are important things to bear in mind
I. Obama’s Roots in Polygamy and the Ford Foundation 15
as we proceed. Since Obama accords so much importance to his own African background, it is
legitimate to follow him back to his grandfather.
GRANDFATHER OBAMA FROM KENYA:
UNCLE TOM OF BRITISH COLONIALISM
Obama’s grandfather was named Hussein Onyango Obama, who was born about 1895 in Kandu
province, Kenya, and died in 1979. He practiced traditional polygamy and had at least three wives:
Helima, who was childless; Akumu, who was the mother of Sarah Obama and Barack Hussein
Obama, Sr.; and Auma Obama. He also claimed to have married a woman in Burma when he lived
there as the servant of a British officer during World War II. Grandfather Obama belonged to the
Luo tribe. For those who may be scandalized by the idea that the candidate belongs to a tribe, we
can establish this fact by referring to Obama’s own writings. In Dreams from My Father, Obama
travels to Kenya. Here he meets a vendor, an old woman, who tries to make him pay the tourist
price for a necklace. One of Obama’s relatives intervenes to help him avoid paying the inflated
price reserved for foreigners. The dialogue goes like this: ‘“She says that you look like an American
to her.” “Tell her I’m Luo,” I said, beating my chest!”’ (Dreams 310) So Obama, based on his own
memoir, has a strong sense of tribal identity.
The Luo or Lwo people are a Nilotic group from the eastern Sudan whose language (sometimes
called Dholuo) belongs to the Nilo-Saharan language family. The Luo are one of the most numerous
ethnic groups of East Africa, and specialize in agriculture, livestock raising, and fishing. Their
demographic center of gravity is the northeastern shore of Lake Victoria. They currently inhabit
areas of five nations, including the southern Sudan, northern Uganda, eastern Congo, western
Kenya, and part of Tanzania. The Luos are tall and thin Nilotic peoples of haughty and aristocratic
bearing, like the Tutsis. Folklore attributes to the taller Nilotics like Tutsis and Luos the desire to
dominate the shorter Hutu and Kikuyu peoples. Michelle Obama, in the initial transcripts of her
infamous “whitey” tape of July 2004, reportedly takes a strong position in favor of the Tutsi, which
is the very essence of the overall line of Anglo-American imperialism in this part of Africa, which
has always been to support the Tutsi against the Hutu. Some famous Luos include the Kenyan
politician Tom Mboya (assassinated by a Kikuyu in 1959), former Uganda president Milton Obote,
and the infamous butcher Joseph Kony, the head of the Lord’s Resistance Army, a new dark ages
terrorist rebel group which operates in Uganda. The traditional ideological profile of the Luo is that
they are clever but sometimes lethargic, and addicted to show-boating. The Luo are currently
receiving US-UK imperialist support against the majority Kikuyu people in the tribal-ethnic power
struggle unleashed inside Kenya. The Luo represent one of the micro-nationalities which Zbigniew
Brzezinski intends to liberate in the course of his “dignity” campaign against the nation-state. The
advantages for the imperialists of backing the Luo are obvious: if an independent Kurdish state
would carve Iraq, Iran, Syria, and Turkey, a Luo state would carve Sudan, Uganda, Congo, Kenya,
and Tanzania.
OBAMA’S LUO TRIBE: SMART, LAZY, SHOWBOATERS
What kind of people are these Luo? Modern Americans have an idea of the ideology or
mentality of the French, Germans, Italians, Russians, Chinese, and so forth, but what are Luos like?
A standard work on Luo mentality is A.B.C. Ocholla-Ayayo’s Traditional Ideology and Ethics
Among the Southern Luo (Uppsala: Scandinavian Institute of African Studies, 1976). Ochollo-
Ayayo is a Luo writing a profile of the mentality and culture of his own people. Since Obama has
16 Barack H. Obama: The Unauthorized Biography
spoken about his grandmother as a “typical white person,” we may perhaps be allowed here to use
this same method of sampling to make some generalizations about the Luo. Let us use the first Luo
we meet, in this case Ochollo-Ayayo himself, as a typical Luo person, and factor in the analysis he
provides as well as critical reactions to his work, some of them also from Luos. In this way we may
get at least a few insights into Luo ideology and mentality.
The overall profile of the Luo is that they are clever, lazy, and love showboating. Ochollo-Ayayo
goes further, writing about “virtue boasting,” which comes complete with virtue songs and virtue
names or praise names. The Luo cultivate witchcraft and sorcery, although they have increasingly
turned in recent decades to independent churches. The Luo have been studied for the practice of
geophagy (dirt eating) among children.
In a review of Hans-Egil Hauge’s Luo Religion and Folklore (Oslo: Universitetsforlaget, 1974),
Ocholla-Ayayo lectures Hauge about using the wrong terminology in a discussion of polygamy
among the Luo: “Rather than saying that the Luo are polygamous, it would have been more
accurate to say that they practice polygyny [meaning, they have multiple wives at the same time].
The word ‘polygamy’ is ambiguous. It is also inaccurate that ‘by counting the number of huts one
can tell from a distance how many wives a man has,’” since some huts do not correspond to wives,
but may be used for other purposes, such as sleeping quarters for children. Ocholla-Ayayo, who
taught at Khartoum in the Sudan, is so pedantic that he berates Hauge, who published his book in
1974, for not citing a book that Ocholla-Ayayo published two years later, in 1976.
Much of this review is devoted to a discussion of the evil spirits (jachien), and especially the
jajuok otieno, the night-runner or evil spirit who comes to steal cattle. This is an issue treated in
Obama’s Dreams. E.E. Evans-Pritchard, the famous British intelligence figure and professor of
sociology at Oxford, did field work among the Luo in 1936, and produced articles like “Marriage
Customs of the Luo of Kenya” and “Ghostly Vengeance of the Kenya Luo,” Man 133 (1950). Evil
spirits are often those of grandparents who afflict grandchildren because these latter have failed to
carry out their filial duties. The night-runners become a large issue in Obama’s memoir (Dreams
435 and passim). Ocholla-Ayayo’s work is a “brittle inventory” of Luo norms, discussing questions
like pastoralism, the role of cattle and their value, kinship, polygamy/polygyny, and the premises of
Luo reasoning.
Ocholla-Ayayo’s critics tell us more than he does. These reviewers are themselves
anthropologists who deal in academic jargon, but they cannot suppress bursts of annoyance and
resentment at the author because of his pedantic, pompous, lecturing and hectoring method. One
reviewer writes that while the data presented by Ocholla-Ayayo are worthwhile, “the mannered and
often incoherent fashion in which they are presented is likely to alienate even the most welldisposed
of readers.” (Elizabeth Hopkins, ASA Review of Books 5 [1979], 216) This same reviewer
finds this Luo writer’s “belabored pronouncements” to be “verging at times on the tautological.”
There is also a tedious parade of erudition which the reviewer finds insufferable: “One must also
lament Ocholla-Ayayo’s determination to validate the monograph to the scholarly community. The
consequence is an accretion of self-conscious citations in which a hagiography as diverse as
Galatians, David Hume, and Adam Smith is invoked, as well as a multitude of modern
philosophers, economists, sociologists, anthropologists, and jurists. Frequent and gratuitous
references to university mentors also prove regrettably intrusive and distracting.” This reviewer
concludes that the “fragmented, a temporal presentation of the material and the author’s failure to
explore the behavioral as well as the normative dimensions of traditional Luo ideology seriously
undermine its value for the general reader.” The lack of historical analysis is a key defect.
I. Obama’s Roots in Polygamy and the Ford Foundation 17
Obama’s grandfather is described as a strange, hard, autocratic and cruel man. (Dreams from My
Father 397, 406) “It is said of him that he had ants up his anus, because he could not sit still…. he
was very serious always. He was always curious about other people’s business, which is how he
learned to be a herbalist.” (Dreams 397) He was very fastidious and compulsively clean.
Grandfather Obama lived at the time that the British colonialists first arrived in Kenya. Grandfather
Obama was one of the first to imitate the practices of the British: at one point he went away for
some months, and came back wearing European trousers, shirts, and shoes. Kandu province is
located in the interior of Kenya, closer to Lake Victoria than to the Indian Ocean. When the British
arrived in Kandu they began setting up a colonial administration with a district commissioner. The
Kenyans “called this man Bwana Ogalo, which meant “the Oppressor” … he surrounded himself
with Luos who wore clothes like the white man to serve as his agents and tax collectors.” (Dreams
399) One of those who went to work for the British during this time was grandfather Obama, who
“had learned to read and write, and understood the white man system of paper records and land
titles. This made him useful to the white man, and during the war [World War I] he was put in
charge of road crews. Eventually he was sent to Tanganyika, where he stayed for several years.”
(Dreams 400) When grandfather Obama returned to Kandu, he staked his claim to a plot of land,
but he soon departed for Nairobi, where he again went to work for the British.
Obama’s grandfather worked in Nairobi as a butler and cook for the British. He “was popular
with employers and worked in the estates of some of the most important white men, even Lord
Delamere.” (Dreams 401) Hugh Cholmondeley, 3rd Baron Delamere, was the undisputed political
boss of the British colony of Kenya from about 1900 until his death in 1931; he was known as the
Kenyan equivalent of Cecil Rhodes in South Africa, meaning that he was the dominant political
personality of the colony. He had huge estates in the Rift valley. According to Wikipedia, “It is
believed that on one of these Somaliland hunting trips, Delamere coined the term “white hunter” –
the term which came to describe the professional safari hunter in colonial East Africa.” The relation
with Lord Delamere is the first sign of anything extraordinary in the entire Obama clan. If Obama
seizes the presidency, it will be due in some measure to the fact that his grandfather chose to go to
work for the leading British imperialist politician in that part of the world.
Using his earnings, grandfather Obama was able to buy land and cattle in Kandu. He was very
strict about his property, and emerges as an obsessive-compulsive personality. He was also choleric
and violent, and was known for harshly beating his wives and any men who offended him. He was
often involved in shouting matches with his British employers, and once beat one of them with a
cane; he was fortunate to get off with a fine and a warning. He was so violent to his wife Akumu
that she tried repeatedly to get away from him, and finally deserted him for good, leaving behind the
young child who would become Barack Obama’s father.
A BATMAN IN THE BRITISH ARMY
During World War II, grandfather Obama accompanied the British Army captain who was his
employer as cook and servant. He was attached to a British regiment and was stationed in Burma,
Ceylon, Arabia, and Europe. When he returned to Kandu, he was economically well-off. When he
was almost 50, he decided to move to Alego, the family’s ancestral home. At that time Alego was
bush country, but grandfather Obama’s ability as a farmer allowed him to build up a successful
farming business. Grandfather Obama seems all in all to have had a Hobbesian temperament; he is
quoted as saying: “The African is thick. For him to do anything, he needs to be beaten.” (Dreams
407) Grandfather Obama appears to have started his life as a follower of traditional animist or
totemic religion. What Grandfather Obama “respected was strength — discipline…this is also why
18 Barack H. Obama: The Unauthorized Biography
he rejected the Christian religion…For a brief time, he converted [to Christianity], and even
changed his name to Johnson. But he could not understand such ideas as mercy towards your
enemies, or that this man Jesus could wash away a man’s sins. To [him] this was foolish sentiment,
something to comfort women. And so he converted to Islam — he thought its practices conform
more closely to his beliefs,” Barack is told by his grandmother. (Dreams 407) According to some
accounts, he had been exposed to Islam during some time spent in Zanzibar. It was upon converting
to Islam that Grandfather Obama took the name Hussein, which lives on as the middle name of his
grandson, the current presidential candidate. Much of what we learn about Grandfather Obama
comes from Sarah, his third wife; this is the person Obama calls his grandmother. She is not,
however, a blood relative. Sarah Obama describes herself as a devout lifelong Muslim: “I am a
strong believer of the Islamic faith,” she has told interviewers.
Until his first visit to Kenya in the 1990s, candidate Obama had known very little about his
grandfather. The one thing he did know was that his grandfather had opposed his father’s decision
to marry the white woman Stanley Ann Dunham in Hawaii around 1960. Around this one incident,
the future candidate Obama has built an image of his grandfather as a proud Afrocentric race
patriot. Barack Hussein Obama, as the thorough postmodernist that he is, attempts in his writings to
derive his sense of personal identity not so much from his own achievements as an individual as
from his family and ethnic group. In Dreams from My Father, he tells of his bitter disappointment
with the reality of his grandfather’s life: “I knew that, as I had been listening to the story of our
grandfather’s youth, I, too, had felt betrayed. My image of Onyango, faint as it was, had always
been of an autocratic man — a cruel man, perhaps. But I had also imagined him an independent
man, a man of his people, opposed to white rule. There was no real basis for this image, I now
realized — only the letter he had written to Gramps saying that he didn’t want his son marrying
white. That, and his Muslim faith, which in my mind had become linked with the Nation of Islam
back in the states. What Granny had told us scrambled that image completely, causing ugly words
to flash across my mind. Uncle Tom. Collaborator. House n****r.” (Dreams 406)
FATHER: BARACK HUSSEIN OBAMA SENIOR, “DRUNKEN LECHER”
Of all of Grandfather Obama’s wives, it was Akumu who asserted herself the most, constantly
contradicting her husband and arguing with him. Because of this, Akumu was frequently beaten,
and made several attempts to run away. She disappeared for the last time when Barack Obama
Senior was nine years old. She went back to her family, found a new husband, and went away with
him to what was then called Tanganyika. Obama Senior was therefore raised by Sarah, another of
Grandfather Obama’s wives.
Several weeks after Akumu had fled from her harsh life with Grandfather Obama, Obama Senior
and his elder sister attempted to rejoin their mother. For almost two weeks they trudged along the
primitive roads of rural Kenya, sleeping in the fields and begging for food. They were both starving
when a passerby took them in and sent for Grandfather Obama. This was their last attempt to find
their mother, Akumu. Obama Senior was profoundly traumatized by losing his mother at the age of
nine; he “could not forgive his abandonment, and acted as if Akumu didn’t exist. He told everyone
that I [Grandmother Sarah] was his mother, and although he would send Akumu money when he
became a man, to the end of his life he would always act coldly towards her.... Barack [Senior] was
wild and stubborn like Akumu.” (Dreams 413)
Barack Obama Senior is described as highly intelligent and quick to learn, but also very
mischievous. After Senior’s first day at the Mission school in the village, he told grandfather
I. Obama’s Roots in Polygamy and the Ford Foundation 19
Obama that he did not want to attend school because he already knew everything that was being
taught, and the teacher was a woman. Grandfather Obama shared this contempt for women, so
Senior was sent to a school 6 miles away where the teacher was a man. Only after this male teacher
beat him repeatedly did Senior learn to accept a woman teacher. Senior was often a truant, not
attending school for weeks on end, but mastering the entire subject matter just before the final
exams and coming in first in the class.
During World War II, many Kenyans were inducted into the British Army. When they returned
home, they began to support the cause of independence from colonial rule. Grandfather Obama
agreed with the demand for independence, but he refused to become associated with the
independence movements. He argued that Africans could never defeat British troops. “How can
the African defeat the white man,” he told Senior, “when he cannot even make his own bicycle? ...
That is why the black man will always lose.” (Dreams 417) Despite his refusal to join the
independence movement, Grandfather Obama was arrested by the British and held in a
concentration camp for more than six months because one of his personal enemies, an employee of
the British district commissioner, had settled a score by placing his name on the list of dangerous
subversives. When he finally returned home, his health was broken.
OBAMA SENIOR EXPELLED FROM PREP SCHOOL FOR HANKY-PANKY
Obama Senior had taken the entrance examination for the Maseno Mission School, an elite
college preparatory institution which very few Africans were allowed to attend. He was admitted to
this school and seemed to have a great future ahead of him, but he soon encountered disciplinary
problems. He insisted on violating the rules by bringing girls into his dormitory. He and his friends
stole chickens and yams from nearby farms because the dormitory food was not to their liking. At
first the teachers were indulgent because Senior was such a good student, but he was caught one too
many times and was expelled. When he returned home he was severely beaten by Grandfather
Obama, who forced him to go to Mombasa and take a job in the office of an Arab merchant. He
quarreled with the Arab and had to take a job that paid much less. He worked for a time as a
goatherd. This is the origin of BHO’s claim to be a son of a goatherd. Eventually Senior moved to
Nairobi and found work as a clerk for the British railway authority. He attended a pro-independence
meeting, and was arrested and jailed for a few days by the British. During this time Senior married
his first wife, Kezia, and soon had two children, Roy and Auma. At this time he was employed as
an office boy by an Arab merchant named Suleiman.
Up to now we have been forced to rely on candidate Obama’s own account of these events.
From this point on, we can begin to supplement this with other sources. A more detailed view of
Senior and Kezia’s early years is provided by some British journalists: ‘At 18, Barack Hussein
Obama Sr. (Senior) married a girl called Kezia from the local village. It was Kezia who remained
his one true love and to whom he always returned. She was a 16-year-old schoolgirl while Senior,
two years older, had just got his first proper job as an office clerk in Nairobi. Senior convinced
Kezia to elope with him to Nairobi. Her father, a local driver, was furious. Kezia said: “He did not
like Obama. My father and brothers came to Nairobi to bring me back. They said I had to go back to
school. When I wouldn’t, they said they would never speak to me again. Barack was also worried
about what his father (Grandfather Obama) would think because I was so young, but he gave us his
approval. He sent my mother and father 14 cows for my dowry.” Kezia and Barack Sr. set up home
in Jericho, a section of Nairobi created for government employees, and began a family. First son
Roy was born in March 1958.’ (London Daily Mail, January 27, 2007)
20 Barack H. Obama: The Unauthorized Biography
In contrast to the media swoon of total adulation and uncritical acceptance of Obama here in the
United States, the British Daily Mail stresses that much of the account given in Dreams from My
Father is disingenuous and untrue. They comment: “Indeed, by offering up a conveniently plotted
account of his personal history in this way, he might even have made a pre-emptive strike on those
sure to pose the awkward questions that inevitably face a serious contender for the White House.
Yet an investigation by The Mail on Sunday has revealed that, for all Mr Obama’s reputation for
straight talking and the compelling narrative of his recollections, they are largely myth.” (London
Daily Mail, January 27, 2007)
Senior’s life began to change when he encountered two American women missionary teachers.
They helped him to sign up for a correspondence course leading to a secondary school certificate.
He took the equivalency test at the US Embassy, and passed. He then applied to numerous
universities in the United States, and in 1958 won a scholarship at the University of Hawaii. Senior,
then aged twenty-three, left as soon as possible for Hawaii, deserting his pregnant wife and son,
who took refuge with Grandmother Sarah. Thus, when Senior married Stanley Ann Dunham, he
was a bigamist from the point of view of US law.
These years represented an acute phase of the Cold War struggle between the United States and
the Soviet Union. At about this time, the Soviets created the Patrice Lumumba University in
Moscow as a special institution for the education and indoctrination of African students. The
Soviets sought actively to recruit the future leaders of African countries and bring them to Moscow
for a free university education in the hopes that they would remain sympathetic to the Soviet cause
during the rest of their careers. We must assume that a few were also recruited by the KGB. The
United States intelligence agencies carried out similar operations on a somewhat more decentralized
basis for the recruitment of young prospective African leaders as agents of US influence. The
recruitment of Obama Senior by the East-West Center of the University of Hawaii at Manoa could
very well have occurred within the framework of such a US effort. In fact, we are told that Obama
Senior and Stanley Ann Dunham met for the first time in a Russian class. Some commentators have
concluded from that that candidate Obama’s mother was a Soviet or communist sympathizer. There
is probably some truth in that thesis. But Obama Senior may have been studying Russian as part of
a US-backed program aimed at making him at the very least a US sympathizer in Kenyan society,
and perhaps something more. At any rate, it is quite possible that the spirit of the CIA hovered over
candidate Obama’s parents at the time of their wedding, if there was one. The marriage of Obama
Senior with Ann Dunham must be regarded as highly unusual at a time when interracial marriage
was still illegal in many U.S. states. There was, however, a high statistical correlation between
interracial marriage and proximity to the Communist Party.
OBAMA SENIOR: AN ABUSIVE POLYGAMIST AND EGOMANIAC
The Daily Mail account stresses that even though the image of Senior presented in candidate
Obama’s first book is hardly sympathetic, it is nevertheless an attempt to present this unattractive
individual in the best possible light: “We have discovered that his father was not just a deeply
flawed individual but an abusive bigamist and an egomaniac, whose life was ruined not by racism
or corruption but his own weaknesses. And, devastatingly, the testimony has come from Mr
Obama’s own relatives and family friends. Relatives say he was already a slick womaniser and,
once in Honolulu, he promptly persuaded a fellow student called Ann - a naive 18-year-old white
girl - to marry him. Barack Junior was born in August, 1961.” (Sharon Churcher, “A drunk and a
bigot - what the US Presidential hopeful HASN’T said about his father,” London Daily Mail,
January 27, 2007)
I. Obama’s Roots in Polygamy and the Ford Foundation 21
Part of candidate Obama’s technique in composing his reminiscences of his fugitive father is
unquestionably to project backward into the world of almost half a century ago the categories of
race, Afrocentrism, and multiculturalism which were not in fact operative in those days in the ways
that the current candidate suggests. As the British series points out, ‘“Mr Obama Junior claims that
racism on both sides of the family destroyed the marriage between his mother and father. In his
book, [candidate Obama] says that Ann’s mother, who went by the nickname Tut, did not want a
black son-in-law, and Obama Senior’s father didn’t want the Obama blood sullied by a white
woman. In fact Ann divorced her husband after she discovered his bigamous double life. She
remarried and moved to Indonesia with young Barack and her new husband, an oil company
manager. Obama Senior was forced to return to Kenya, where he fathered two more children by
Kezia. He was eventually hired as a top civil servant in the fledgling government of Jomo Kenyatta
- and married yet again. Now prosperous with a flashy car and good salary, his third wife was an
American-born teacher called Ruth, whom he had met at Harvard while still legally married to both
Kezia and Ann, and who followed him to Africa. A relative of Mr Obama says: “We told him
[Barack] how his father would still go to Kezia and it was during these visits that she became
pregnant with two more children. He also had two children with Ruth.” It is alleged that Ruth
finally left him after he repeatedly flew into whisky-fuelled rages, beating her brutally. Friends say
drinking blighted his life - he lost both his legs while driving under the influence and also lost his
job. However, this was no bar to his womanising: he sired a son, his eighth child, by yet another
woman and continued to come home drunk. He was about to marry her when he finally died in yet
another drunken crash when Obama was 21.”’ (Sharon Churcher, “A drunk and a bigot - what the
US Presidential hopeful HASN’T said about his father,” London Daily Mail, January 27, 2007)
The eyewitness accounts of Obama’s first trip to Kenya assembled by the Daily Mail suggest
that candidate Obama was filled with shock and consternation when he realized that his fantasy
picture of his absentee father did not correspond to anything real: ‘Mr Obama’s 40-year-old cousin
Said Hussein Obama told The Mail on Sunday: “Clearly, Barack has been very deeply affected by
what he has learned about his father, who was my father’s older brother. You have to remember that
his father was an African and in Africa, polygamy is part of life. We have assured Barack that his
father was a loving person but at times it must be difficult for him to reconcile this with his father’s
drinking and simultaneous marriages.” Said adds: “His father was a human being and as such you
can’t say that he was 100 per cent perfect. My cousin found it difficult when he came here to learn
of his half-brothers and sisters born to four different mothers. But just as Africans find the Western
world strange so Americans coming here will find Africa strange.”’ (Sharon Churcher, “A drunk
and a bigot - what the US Presidential hopeful HASN’T said about his father,” London Daily Mail,
January 27, 2007)
For years, candidate Obama had attempted to interpret the little he knew about his father’s life in
terms coherent with popular radical books like Fanon’s The Wretched of the Earth. In reality
Obama Senior might have been a sad and deluded drunk out of Eugene O’Neill: ‘Far from being an
inspiration, the father whom Mr Obama was coming to know seemed like a total stranger. In his
book, he attempts to put the best face on it. His father, he writes, lost his civil service job after
campaigning against corrupt African politicians who had “taken the place of the white colonials.”
One of Obama Senior’s former drinking partners was Kenyan writer Philip Ochieng. Ochieng says,
however, that his friend’s downfall was his weak character. Although charming, generous and
extraordinarily clever, Obama Senior was also imperious, cruel and given to boasting about his
brain and his wealth, he said. “He was excessively fond of Scotch. He had fallen into the habit of
22 Barack H. Obama: The Unauthorized Biography
going home drunk every night. His boasting proved his undoing and left him without a job, plunged
him into prolonged poverty and dangerously wounded his ego.”
Ochieng recalls how, after sitting up all night drinking Black Label whisky at Nairobi’s famous
Stanley Hotel, Obama Senior would fly into rages if Ruth asked where he had been. Ochieng
remonstrated with his friend, saying: “You bring a woman from far away and you reduce her to
pulp. That is not our way.” But it was to no avail. Ruth sued for divorce after her husband
administered brutal beatings. In fact he was a menace to life, said Ochieng. “He had many
extremely serious accidents. Both his legs had to be amputated. They were replaced with crude false
limbs made from iron. He was just like Mr Toad [from The Wind In The Willows], very arrogant on
the road, especially when he had whisky inside. I was not surprised when I learned how he died.”’
(Sharon Churcher, “A drunk and a bigot - what the US Presidential hopeful HASN’T said about his
father,” London Daily Mail, January 27, 2007)
The Daily Mail was able to track down Obama Senior’s third wife. ‘Ruth refused to comment on
the abuse charges when we tracked her down to the Kenyan school where she now works. She said:
“I was married to Barack’s father for seven years so, yes, you could say Barack is my stepson.
Barack’s father was a very difficult man. Although I was married to him the longest of any of his
wives he wasn’t an easy person to be around.” Mr Obama has acknowledged that his father
grappled with a drinking problem. But with a gift for words that makes Mrs Clinton’s utterances
seem stiff and stale, he has turned it into another component of the myth. Drink, he says, like drugs
is one of “the traps that seem laid in a black man’s soul.”’ (Sharon Churcher, “A drunk and a bigot -
what the US Presidential hopeful HASN’T said about his father,” London Daily Mail, January 27,
2007)
This other American wife is named Ruth Nidesand. The son she had with Obama Senior, who is
therefore Obama’s half-brother, has been located by the British press in China. We read: ‘Barack
Obama’s half-brother has been helping to promote cheap Chinese exports in a low-profile business
career while the Democratic senator has been winning worldwide fame in his race for the White
House. He has gone to extraordinary lengths to avoid public attention and his family links remain
unknown to most of his acquaintances in Shenzhen, a border boomtown in southern China where he
has lived since 2002. Mark Ndesandjo is the son of Barack Obama’s late father and his third wife,
an American woman named Ruth Nidesand who runs the up-market Maduri kindergarten in
Nairobi.3 Obama, however, refers to him simply as “my brother” and says he was the only
uncontested heir after their father, a Kenyan, died in a car crash in 1982.’ (Sunday Times, July 27,
2008)
As for the rest of Obama’s eight to ten siblings: ‘The Italian edition of Vanity Fair said that it
had found George Hussein Onyango Obaa living in a hut in a ramshackle town of Huruma on the
outskirts of Nairobi. Mr Obama, 26, the youngest of the presidential candidate's half-brothers, spoke
for the first time about his life, which could not be more different than that of the Democratic
contender. "No-one knows who I am," he told the magazine, before claiming: "I live here on less
than a dollar a month." According to Italy's Vanity Fair his two metre by three metre shack is
decorated with football posters of the Italian football giants AC Milan and Inter, as well as a
calendar showing exotic beaches of the world. Vanity Fair also noted that he had a front page
newspaper picture of his famous brother - born of the same father as him, Barack Hussein Obama,
but to a different mother, named only as Jael. He told the magazine: "I live like a recluse, no-one
knows I exist." Embarrassed by his penury, he said that he does not does not mention his famous
half-brother in conversation. "If anyone says something about my surname, I say we are not related.
I. Obama’s Roots in Polygamy and the Ford Foundation 23
I am ashamed," he said. For ten years George Obama lived rough. However he now hopes to try to
sort his life out by starting a course at a local technical college. He has only met his famous older
brother twice - once when he was just five and the last time in 2006 when Senator Obama was on a
tour of East Africa and visited Nairobi.’ (Daily Telegraph, August 21, 2008) Obama has often
paraded his devotion to the poor, to the “least of these” in Gospel terms. But although Obama talks
a good game of charity, it appears that he has never given a penny to this wretched man who lives in
poverty and despair made more acute by the contrast with his half-brother, the glittering
international celebrity. If Obama’s black African brother gets no charity from Barky and Michelle,
what can the American people expect except snake-like cruelty?
The Daily Mail account of Obama Senior in Kenya concludes with the finding that candidate
Obama has been permanently traumatized by his discovery as an adult in his mid-30s of the sordid
details of his father’s actual biography. These details are worthy of attention, since psychological
dramas, reaction formations, and related forms of psychological vulnerability have often been used
in the recent past by the various White House palace guards to manipulate and control elected
presidents. We must therefore pay special attention to the Daily Mail’s conclusion that: ‘Family
members and acquaintances believe that the real cloud over Mr Obama’s life has been the discovery
that his father was far from the romantic figure that his mother tried to portray. A family friend said:
“He is haunted by his father’s failures. He grew up thinking of his father as a brilliant intellectual
and pioneer of African independence only to learn that in Western terms he was basically a drunken
lecher.” This ugly truth, say friends, has made Mr Obama ruthlessly determined to use every
weapon that he has to succeed, including the glossily edited version of his father’s story. “At the
end of the day Barack wants the story to help his political cause, so perhaps he couldn’t afford to be
too honest,” said Ochieng.
Significantly, it was only four years after his father’s death that Mr Obama travelled to his
father’s ancestral Kenyan village. There he learned the full story of his father’s life and met some of
his relatives. One of his half-sisters, Auma, is now a council worker in southern England, but some
of his other relatives are still living in huts in the village, without plumbing or electricity, farming a
few scrawny goats and chicken and growing fruit and maize. They speak the tribal Luo language
and depend on handouts from family members who have emigrated to the UK and the United States
for their few luxuries, notably the transistor radios that they use to follow Mr Obama’s rocketing
political fortunes. He has positioned himself as a devout Christian (having found God, he says, after
years as an atheist) ….”’ (Sharon Churcher, “A drunk and a bigot - what the US Presidential
hopeful HASN’T said about his father,” London Daily Mail, January 27, 2007)
Candidate Obama writes in Dreams of My Father, “Someone once said that every man is trying
to either live up to his father’s expectations or make up for his father’s mistakes, and I suppose that
may explain my particular malady.” Candidate Obama may therefore be aware to some degree of
the psychological drama which he exhibits. But this still leaves important questions: Has he ever
grown up? Does he have the psychological strength necessary for independent and autonomous
action, as mandated by the constitutional powers of the president enumerated in the U.S.
Constitution? Due in large part to the adulation and propitiation of Obama by the controlled
corporate media, these life-and-death questions are far from having been answered.
MATERNAL GRANDFATHER, STANLEY DUNHAM, KANSAS ATHEIST
Obama’s maternal grandparents came from Wichita, Kansas. His grandfather, Stanley Dunham,
the person he calls Gramps, had worked on oil rigs during the great depression of the 1930s. Stanley
24 Barack H. Obama: The Unauthorized Biography
Dunham had far less social standing than Madelyn Dunham, who came from a somewhat better
family; this class divide between a worker and petty bougeoise caused tension during their
marriage. According to one account, Madelyn Dunham’s family had been slaveholders: “one of
Obama’s great-great-great-great grandfathers, George Washington Overall, owned two slaves who
were recorded in the 1850 Census in Nelson County, Kentucky. The same records show that one of
Obama’s great-great-great-great-great-grandmothers, Mary Duvall, also owned two slaves.”
(Wikipedia) “When World War II came, Stanley enlisted in the Army. Madelyn became a Rosiethe-
Riveter at Boeing Co.’s B-29 production plant in Wichita. And Stanley Ann Dunham arrived in
late November 1942. (Chicago Tribune, March 27, 2007) After the war, Stanley went to college
with the help of the G.I. Bill, and bought a house with a subsidized loan from the Federal Housing
Program. Stanley and Madelyn Dunham would eventually live in 13 different places.
Stanley Armour Dunham is described by Obama as something of a freethinker or bohemian,
presumably meaning that he dabbled in atheism, which was considered something radical in the
early 1960s. He inclined toward the Unitarian Universalist point of view of religious syncretism,
and was proud that his church was able to draw on the sacred texts of five great world religions.4 He
was friendly with several Jews, Obama tells us, and liked to listen to Nat King Cole. (Dreams 17)
Grandfather Stanley was sympathetic to black issues and causes; Obama tells us that he had
suffered some insults himself because “he looked like a ‘wop.’” (Dreams 21) Later on, as we will
see, he took Barack Obama with him when he went to visit a group of black communists in Hawaii
around 1970. Stanley Dunham died in 1992.
MADELYN “TOOT” DUNHAM – GRANDMOTHER
Madelyn Dunham is called Tutu or Toot or Tut in Obama’s reminiscence and in other accounts;
this is the word for grandparent in the Hawaiian language. (Dreams 7) Interestingly, the Obama
campaign has refused to facilitate interviews by interested journalists with Madelyn Dunham: “the
Obama campaign declined to make Madelyn Dunham, 84, available.” (Chicago Tribune, March 27,
2007) For some reason, the Obama campaign has been very reluctant to allow Madelyn Dunham to
interact with the press. Do they think that a white grandmother would cause resentment among
blacks, or is there something that they are hiding? Madelyn Dunham is now well-known as the
grandmother whom Obama threw under the bus in his desperate maneuvering in the wake of the
explosion of the Jeremiah Wright “God damn America” scandal in mid-March 2008.
MOTHER: STANLEY ANN DUNHAM, PRO-COMMUNIST ANTHROPOLOGIST
Obama’s mother was unquestionably the greatest single influence on his formative years. Her
legal name was indeed Stanley Ann Dunham. She was named Stanley by her father because he had
wanted very much to have a son. This incongruous gesture recalls the predicament of “A Boy
Named Sue” in the humorous song by Johnny Cash. Obama makes some attempt in his
reminiscences to portray his mother as a bland Eisenhower-era middle American from Kansas, but
this once again represents typical disingenuous window-dressing. Obama’s attempt to spin his
mother into something she was not has even been noted in the normally deferential Chicago
Tribune account: ‘Implicit in [Obama’s portrayal of his mother] is this message: If you have any
lingering questions or doubts about the Hawaiian-born presidential candidate with a funny name,
just remember that Mom hails from America’s good earth. That’s the log cabin story, or his version
of Bill Clinton’s “Man from Hope.” That presentation, though, glosses over Stanley Ann Dunham’s
formative years, spent not on the Great Plains but more than 1,800 miles away on a small island in
I. Obama’s Roots in Polygamy and the Ford Foundation 25
the Pacific Northwest. Obama visited the Seattle area last October, and in a speech to a Democratic
Party rally at Bellevue Community College, he mentioned that his mother attended Mercer Island
High School before moving on to Hawaii. In Dreams, Obama wrote that the family moved to
Seattle “long enough for my mother to finish high school.”’ (Chicago Tribune, March 27, 2007)
In reality, Ann Dunham started out as something of a bluestocking, a nonconformist and radical
who was profoundly ill-at-ease with the superficial normalcy of the Eisenhower years. She was a
left liberal, a feminist and a parlor atheist. The Dunham family moved to the Seattle area in the mid-
1950s, and it was there that Ann Dunham attended Mercer Island High School, where not just the
existentialists Sartre and Kierkegaard, but even “The Communist Manifesto” were in the
curriculum. Coming as she did from a heterodox and nonconformist family, it is not surprising to
find Ann Dunham described as having been both a communist sympathizer and a liberal. Obama
thus qualifies in some sense as a red diaper baby.
Madelyn and Stanley, originally Methodist and Baptist respectively, along with their daughter
joined the East Shore Unitarian Church in nearby Bellevue, Washington. ‘“In the 1950s, this was
sometimes known as ‘the little Red church on the hill,” said Peter Luton, the church’s senior
minister, referring to the effects of McCarthyism. Skepticism, the kind that Stanley embraced and
passed on to his daughter, was welcomed here.’ (Chicago Tribune, March 27, 2007) Ann Dunham
actively embraced the cause of skepticism and freethinking. ‘“She touted herself as an atheist, and it
was something she’d read about and could argue,” said Maxine Box, who was Dunham’s best friend
in high school. “She was always challenging and arguing and comparing. She was already thinking
about things that the rest of us hadn’t.”’ (Chicago Tribune, March 27, 2007) Ann Dunham also
showed a lively interest in international politics, quite possibly with a tendency to sympathize with
the Moscow line: ‘“If you were concerned about something going wrong in the world, Stanley
would know about it first,” said Chip Wall, who described her as “a fellow traveler. . . . We were
liberals before we knew what liberals were.”’ (Chicago Tribune, March 27, 2007) “Fellow traveler”
is a term used during the McCarthy era to describe a communist sympathizer.
The “fellow traveler” issue became prominent at Mercer Island High School when Ann was
studying there, thanks to one of the anti-Communist witch hunts of the House Committee on Un-
American Activities, the infamous HUAC. ‘In 1955, the chairman of the Mercer Island school
board, John Stenhouse, testified before the House Un-American Activities Subcommittee that he
had been a member of the Communist Party. At Mercer High School, two teachers — Val Foubert
and Jim Wichterman — generated regular parental thunderstorms by teaching their students to
challenge societal norms and question all manner of authority. Foubert, who died recently, taught
English. His texts were cutting edge: “Atlas Shrugged,” “The Organization Man,” “The Hidden
Persuaders,” “1984” and the acerbic writings of H.L. Mencken.’ (Chicago Tribune, March 27,
2007) As we can see, there is nothing communist about these texts, which are variously libertarian,
British intelligence, foundation-funded, and simple muckraking, but Foubert and Wichterman must
have loomed as a new Lenin-Trotsky or Stalin-Mao duo in the provincial imaginations of the local
parents. ‘Wichterman taught philosophy. The hallway between the two classes was known as
“anarchy alley,” and students pondered the challenging notions of Wichterman’s teachings,
including such philosophers as Sartre and Kierkegaard. He also touched the societal third rail of the
1950s: He questioned the existence of God. And he didn’t stop there.’ (Chicago Tribune, March 27,
2007)
With Stanley always looking for better opportunities, the family moved to Hawaii. Ann Dunham
“began classes at the University of Hawaii in 1960, and shortly after that…had fallen in love with a
26 Barack H. Obama: The Unauthorized Biography
grad student. He was black, from Kenya and named Obama.” (Chicago Tribune, March 27, 2007)
Ann married Obama Senior when she was 18 years old. They met in a Russian language class,
which may or may not indicate sympathy for Soviet communism (it could have indicated a desire to
join the intelligence community): each one could have been there for many reasons, including
training by a US intelligence agency. One person who knew Barack Obama Senior and Ann
Dunham and their social set in those days is the Democratic Congressman Neil Abercrombie, who
has recalled that ‘while Obama was impatient and energized, Stanley Ann, whom Abercrombie
described as “the original feminist,” was endlessly patient but quietly passionate in her arguments.
She was the only woman in the group.’ (Chicago Tribune, March 27, 2007)
Those who had known Ann Dunham as an independent woman not interested in marriage and
children were surprised by her sudden decision to marry Obama Senior. ‘“I just couldn’t imagine
her life changing so quickly,” said [one such friend], thinking about her independent-minded friend
who had disdained marriage and motherhood.’ (Chicago Tribune, March 27, 2007) Evidently the
irresistible appeal of a husband from the third world had eclipsed Ann’s feminism. Ironically, the
third world turned out not to be the repository of unalloyed goodness which a disciple of Rousseau
would have expected. The original feminist Ann Dunham would soon find herself the victim not
just of a bigamist but of a polygamist who would abandon her and her infant son without a second
thought. Barack Obama today bears the mental scars of this experience.
Grandfather Onyango, back in Kenya, was fiercely opposed to Obama Senior’s marriage. He
wrote the Dunhams a ‘“long, nasty letter saying that he didn’t approve of the marriage.” This
former house servant for the British colonialists “didn’t want the Obama blood sullied by a white
woman.” His main argument was that this American girl would never agree to return to Kenya and
live under conditions of polygamy. Onyango wrote: “How can you marry this white woman when
you have responsibilities at home? Will this woman return with you and live as a Luo woman?
Will she accept that you already have a wife and children? I have not heard of white people
understanding such things. Their women are jealous and used to being pampered. But if I am
wrong in this matter, let the girl’s father come to my hut and discuss the situation properly. But this
is the affair of elders, not children.”’ (Dreams 422)
Ann Dunham may have felt compelled to get married because she was already pregnant. As we
read in one journalistic account; ‘Six months after they wed, another letter arrived in Kenya,
announcing the birth of Barack Hussein Obama, born Aug. 4, 1961. Despite her husband’s
continued anger, Sarah Obama said in a recent interview, she “was so happy to have a grandchild in
the U.S.”’ (Chicago Tribune, March 27, 2007) There is also some question about the documentation
and thus of the legality of the marriage of Obama Senior to Ann Dunham. This wedding may not
have been properly documented, as Obama himself tells us. “How and when the marriage occurred
remains a bit murky, a bill of particulars that I have never quite had the courage to explore,” Obama
writes in Dreams. In other words, this may have been a common law marriage.5 The implication is
that presidential candidate Barack Obama may be an illegitimate child born outside of wedlock, or,
in plain English, a bastard.6
A FEMINIST DOORMAT FOR A POLYGAMIST
The later Congressman Neil Abercrombie sensed at the beginning that this marriage was not
destined to last. Obama Senior was self-absorbed and self-centered, and evidently regarded the
marriage as a mere temporary convenience for the time of his stay in Hawaii: ‘Obama was one of
the most ambitious, self-focused men he had ever met. After Obama was accepted to study at
I. Obama’s Roots in Polygamy and the Ford Foundation 27
Harvard, Stanley Ann disappeared from the University of Hawaii student gatherings, but she did not
accompany her husband to Harvard. Abercrombie said he rarely saw her after that. “I know he
loved Ann,” Abercrombie said, but “I think he didn’t want the impediment of being responsible for
a family. He expected great things of himself and he was going off to achieve them.”’ (Chicago
Tribune, March 27, 2007)
In 1963, Obama Senior abandoned his wife and infant son in order to enter a doctoral program in
economics at Harvard University in Cambridge, Massachusetts. His decision can only be
characterized as cruelly egotistical and irresponsible. Obama Senior had received two fellowships.
One was to pursue a doctorate in economics at the New School for Social Research in New York
City. This fellowship was generous enough so as to permit both Ann and baby Barack to
accompany him to New York. The Harvard fellowship was smaller, reportedly not sufficient to
support Ann and her baby. Obama Senior callously argued that he had no choice but to accept the
Harvard fellowship. As Ann Dunham later told her son Barack: ‘“He received two scholarships, one
in New York, which paid enough to support all three of us. Harvard had just agreed to pay tuition.
‘How can I refuse the best education?’ he told me. That’s all he could think about, proving that he
was the best.”’ (Dreams 126)
Naturally, Obama Senior and/or Ann could have supplemented the fellowship with a part-time or
full-time job if the main goal had been to keep the family together. Once it was clear that Obama
Senior was determined to abandon his family, Ann could have sued him for divorce and child
support payments, since Obama Senior’s polygamous outlook had no standing under US law.
Instead of acting to assert the best interests of her infant child, Ann Dunham chose supinely to let
herself be abused and mistreated by Obama Senior, who thus emerges as a monster of egomania.
Ann was apparently so deluded by her relativistic and Rousseauvian ideological categories that she
was unable to fight for her son’s future.
Barack Obama glosses over Obama Senior’s abandonment of his mother in detached prose in the
passive voice: “A separation occurred, and he returned to Africa to fulfill his promise to the
continent.” (Dreams 10) Obsessed with his racialist ideology, Obama chooses not to recognize that
his mother was treated as a doormat, and was too weak to assert herself against the outrageous
actions of Obama Senior. Perhaps Obama’s contempt for women is rooted in his mother’s craven
willingness to capitulate to the selfishness of Obama Senior. For Ann Dunham, Rousseau was much
more powerful than feminism when it really mattered. When Obama was about to visit Senior in
Kenya for the first time, poor Ann Dunham told Obama: I hope you don’t feel resentful towards
him…It wasn’t your father’s fault that he left, you know. I divorced him.” (Dreams 125) This
account is at variance with the fact of abandonment, and shows that even after many years, Ann
refused to accept the reality of the outrageous treatment she had received, and of her own failure to
fight for her son.
It is worth noting in passing that Obama qualifies as a fatherless young boy who was also
abandoned by his mother before the age of 10. This pattern produces a psychological profile full of
debilitating psychological complexes, including the obsessive quest for an ersatz or substitute
father, and the need to be assured of one’s own personal worth by a series of sexual partners, be
they male or female. The last president to exhibit this pattern was William Jefferson Blythe III, the
posthumous son better known as Bill Clinton, whose father was killed in an automobile accident
before he was born. For some time after that, young Bill Clinton lived with his grandparents while
his mother allegedly worked as a nurse in another city. Bill Clinton’s case of this syndrome was
complicated by the fact that his stepfather, Roger Clinton, was an alcoholic who physically abused
28 Barack H. Obama: The Unauthorized Biography
the future president’s mother. Bill Clinton’s need to obtain the validation of his ego from the wellknown
parade of women requires no further comment. Bill Clinton’s philandering clearly resulted
from a lack of ego strength: no matter how much he achieved in life, he always needed to be
assured of his personal worth by a parade of women, one of whom turned out to be Miss Lewinsky.
However, there is already evidence that before all is said and done, it will become evident that Bill
Clinton has done a much better job of controlling his own compulsive urges than Obama has, since
there is evidence that the Illinois Senator has veered recklessly into the world of bisexuality.
As the columnist Spengler of the Asia Times points out, Michelle Obama – who often sounds
like a feminist when she is talking about her own immediate concerns – shows no indignation about
the tragic spousal abuse which Ann was willing to undergo: ‘Michelle Obama speaks with greater
warmth of her mother-in-law than of her husband. “She was kind of a dreamer, his mother,”
Michelle Obama was quoted in the January 25 Boston Globe. “She wanted the world to be open to
her and her children. And as a result of her naivete, sometimes they lived on food stamps, because
sometimes dreams don’t pay the rent. But as a result of her naivete, Barack got to see the world like
most of us don’t in this country.” How strong the ideological motivation must be of a mother to
raise her children on thin fare in pursuit of a political agenda. “Naivete” is a euphemism for Ann
Dunham’s motivation… Many Americans harbor leftist views, but not many marry into them,
twice.’ (Asia Times, February 26, 2008) Indeed: what kind of left liberal feminist is going to accept
abandonment by a man whom she knew to be at least a bigamist?
ANN DUNHAM, FORD FOUNDATION OPERATIVE:
THE MICROLOAN RACKET
Ann Dunham became famous posthumously when Time Magazine placed a picture of her with
Barry (Obama) as a toddler – complete with halo – on the cover of its April 21, 2008 issue – in a
forlorn attempt to humanize the recently bittergated Obama just before the Pennsylvania primary.
The overall intent here is to whitewash this quasi-Marxist, Rousseauvian leftist anthropologist into a
sort of middle American humanitarian – an attempt so transparent that Time began receiving letters
impugning its journalistic integrity. Nevertheless, we do learn more about Ann’s later career as Ford
Foundation operative. Her specialty was the cynical financier racket known as microloans or
microcredits – tiny sums of money lent at substantial interest rates to tiny third world entrepreneurs,
with the classic case being the purchase of a cell phone to provide phone service to some rural
village – all in lieu of real communications and transportation infrastructure which the finance
oligarchs at the World Bank and the regional lending agencies had no intention of financing.
Microloans represented the World Bank’s notion of small is beautiful “appropriate technology” –
meaning that if you are a backward country, then backward, third-rate technology is all you will get,
so you had better take it with gratitude. Microloans also served to tether the third world masses to
the mentality of finance capital, familiarizing them with notions of interest rates, the deadlines for
installment payments, and all the dreary apparatus of usury. This entire cynical enterprise reached a
paroxysm a decade after Ann Dunham’s death, when Muhammad Yunus of the Bangladeshi
Grameen Bank won the 1996 Nobel Peace Prize for his work in pioneering micro-credits. By this
time, the micro-credit was widespread, with a 2004 report showing that some 3,200 micro-credit
institutions were reaching more than 92 million clients, mainly in the poorest countries of the
underdeveloped world. It was an exercise in loan sharking and predatory lending to the most
desperate people in the world, the most defenseless victims of economic globalization. When Yunus
won his Nobel, he was widely praised: “Muhammad Yunus is a revolutionary in the best sense of
the word,” said Sam Daley-Harris, director of the Microcredit Summit Campaign in Washington,
I. Obama’s Roots in Polygamy and the Ford Foundation 29
D.C. He was in fact a counter-revolutionary in the service of rapacious finance capital, and this was
a good description of the mature Stanley Ann Dunham, Obama’s mother. As for Ann, she no doubt
kept telling herself that she was doing something very radical.
The adulatory Time account tells us that after her divorce from her Indonesian second husband
Lolo Sotero or Soetero, Ann ‘took a big job as the program officer for women and employment at
the Ford Foundation, and she spoke up forcefully at staff meetings. Unlike many other expats, she
had spent a lot of time with villagers, learning their priorities and problems, with a special focus on
women’s work. “She was influenced by hanging out in the Javanese marketplace,” [her
acquaintance] Zurbuchen says, “where she would see women with heavy baskets on their backs
who got up at 3 in the morning to walk to the market and sell their produce.” Ann thought the Ford
Foundation should get closer to the people and further from the government, just as she had.’ In
other words, her programs would subvert the existing government by pretending to take the side of
the oppressed masses – just what Soros and the other Wall Street jackals would have desired. Ann’s
‘home became a gathering spot for the powerful and the marginalized: politicians, filmmakers,
musicians and labor organizers. “She had, compared with other foundation colleagues, a much more
eclectic circle,” Zurbuchen says. “She brought unlikely conversation partners together.”’ These
eclectic and bohemian tastes live on in Barry. Time goes on: ‘Ann’s most lasting professional
legacy was to help build the microfinance program in Indonesia, which she did from 1988 to ‘92—
before the practice of granting tiny loans to credit-poor entrepreneurs was an established success
story. Her anthropological research into how real people worked helped inform the policies set by
the Bank Rakyat Indonesia, says Patten, an economist who worked there. “I would say her work had
a lot to do with the success of the program,” he says. Today Indonesia’s microfinance program is
No. 1 in the world in terms of savers, with 31 million members, according to Microfinance
Information Exchange Inc., a microfinance-tracking outfit. […] Every so often, Ann would leave
Indonesia to live in Hawaii—or New York or even, in the mid-1980s, Pakistan, for a microfinance
job.’ (Amanda Ripley, “Raising Obama,” Time, April 21, 2008) As for Barack Obama, his thoughts
were elsewhere; he writes that in these years of living in the ethnically diverse atmosphere of
Hawaii, “I was too young to know that I needed a race.” (Dreams 27) A strange attitude for a
candidate who now poses as being virtually trans-racial and even post-racial.
LOLO SOETERO AND INDONESIA:
COSMOPOLITANISM AND ANTI-AMERICANISM
Obama’s mother Ann then remarried; her second husband was Lolo Soetero Mangunharjo, a
student from Indonesia who was also studying at the University of Hawaii. Lolo Soetero later
became an official of the Director General’s office in the TNI Topography division of the
Indonesian Army, and still later worked as an oil company executive in Indonesia. Soetero was
studying in Hawaii under a program sponsored by the Indonesian government. At first the
Indonesian government was that of Sukarno, who had led the independence struggle against Dutch
colonialism in the 1940s. Sukarno, along with Nkrumah of Ghana, Nasser of Egypt, Tito of
Yugoslavia, and Nehru of India had founded the non-aligned movement at the Bandung conference
of 1955. This movement was made up of Third World developing countries who refused to
subordinate themselves permanently to the United States or the Soviet Union, but who tried to
constitute a third way in world affairs during the Cold War era.
In 1965, the CIA supported the Indonesian coup d’état of General Suharto, who overthrew the
Sukarno regime and initiated a bloody reign of terror which lasted for several years and which
30 Barack H. Obama: The Unauthorized Biography
included the massacre of several hundred thousand Indonesian communists, leftists, and supporters
of Sukarno. In 1967, when Soetero’s Indonesian passport was revoked because of political unrest in
Indonesia, Ann Dunham and Barack, who was then in first grade, accompanied him back to Jakarta.
It appears that Lolo Soetero was called back to Indonesia because as a student he was automatically
considered a politically unreliable supporter of the now ousted Sukarno regime. As soon as he
returned to Indonesia, Soetero was interrogated by the authorities and then was drafted into the
Indonesian army, spending at least a year in military service in New Guinea. Obama lived with his
mother and stepfather in Jakarta between 1968 and 1973. Obama attended local schools in Jakarta
from ages 6 to 10, where classes were taught in Indonesian. When he was in third grade he wrote an
essay saying that he wanted to become president, although he was not sure of what country.
ANN DUNHAM: RAGE AGAINST THE UGLY AMERICAN
During the time that Lolo was employed in the government relations office of an American oil
company, Ann was massively exposed to The Ugly American. Obama tells us: “sometimes I would
overhear him and my mother arguing in their bedroom, usually about her refusal to attend his
company dinner parties, where American businessmen from Texas and Louisiana would slap Lolo’s
back and boast about the palms they had greased to obtain the new offshore drilling rights, while
their wives would complain to my mother about the quality of the Indonesian help. He would ask
her how it would look for him to go alone, and remind her that these were her own people, and my
mother’s voice would rise to almost a shout. They are not my people.” Obama describes his mother
during this phase: “in a land where fatalism remained a necessary tool for enduring hardship, where
ultimate truths were kept separate from day-to-day realities, she was a lonely witness for secular
humanism, a soldier for New Deal, Peace Corps, position-paper liberalism.” (Dreams 47, 50)
SENIOR AND LOLO: FAITHFUL TO JOHNNY WALKER, NOT THE KORAN
The two third-world men Ann Dunham had chosen to marry had a few things in common: both
were nominal Moslems whose devotion to Johnny Walter Black Label scotch whiskey was greater
than their devotion to the Koran. Her marriage to Lolo Soetero also ended in divorce, but she
remained in Indonesia until her life was almost over; she died in 1995. One witness to Ann
Dunham’s life during these years was one of her later professors; this was “Alice Dewey, a
granddaughter of the philosopher John Dewey and an emeritus professor of anthropology at the
University of Hawaii, who was the chairman of Ann Dunham’s Ph.D. thesis committee and became
a close friend over many years.” Alice Dewey told a reporter that ‘Dunham “divorced happily”
from Soetero—who died in 1987 of complications from a liver ailment—in part because “he
gradually became more and more like a Westerner and she became more and more like a Javanese.”
Obama told me he could only laugh at the false press accounts that portray Soetero as some kind of
radical Muslim who had sent him to an Islamic school. “I mean, you know, his big thing was
Johnny Walker Black, Andy Williams records,” Obama said. “I still remember ‘Moon River.’ He’d
be playing it, sipping, and playing tennis at the country club. That was his whole thing. I think their
expectations diverged fairly rapidly.” (Purdum, Vanity Fair, March 2008) Ann Dunham, we see,
had gone native in Indonesia. The commonality between the two men she married was Islam
according to some, but the deeper commonality would appear to have been Johnny Walker, in
which they both indulged heavily.
After Ann Dunham’s divorce from Lolo Soetero, she went back to live in Hawaii, where she
began the graduate study of anthropology. But she then returned to Indonesia to carry out her
I. Obama’s Roots in Polygamy and the Ford Foundation 31
anthropological field work. At this point, Barack Obama, aged about 9, was left with his
grandparents. Abandonment by his father was now thus followed by prolonged separation from his
mother, leading to unpredictable psychological consequences. If Larry Sinclair’s allegations are
accurate, Barack Obama is a closet bisexual, and the resulting potential for the blackmailing of a
possible future president is an issue which voters will obviously need to consider very carefully
before putting such a person into the White House.7
Alice Dewey further described Obama’s mother as ‘the most hardworking person I maybe ever
have met. And did it without seeming to. She was cheerful, down to earth. She absolutely was the
kind of person you wanted on your side in any situation, from a barroom brawl to an academic
argument, and she was always there for the little guy, particularly the little woman.” For most of the
1970s, 80s, and 90s, she shuttled between Hawaii and Indonesia, doing academic research and
paying the bills by teaching English or working for nonprofit organizations such as the Ford
Foundation.’ (Purdum, Vanity Fair, March 2008) The Ford Foundation looms large over Obama’s
life: it was his mother’s employer, and later the decisive influence over his church in Chicago.
ANN DUNHAM’S LATER YEARS: FORD FOUNDATION,
US AID, WORLD BANK OPERATIVE
Some journalistic accounts have correctly stressed that Ann Dunham in the latter part of her
career became a much more important person than is commonly recognized. One reason that she
has been underestimated is undoubtedly the attempt by the Obama campaign to make the
candidate’s mother appear as bland and conventional as possible. But she was in fact an
international civil servant who played a key role in developing the notion of microloans, one of the
main tokenist World Bank strategies for parrying the demand for real Third World economic and
infrastructural development under the reign of globalization. As Kim Chipman of Bloomberg
writes, ‘Barack Obama’s mother was most at home a world away from her Midwest roots, trekking
the old Silk Road or arranging small loans for weavers in Indonesia. “I’m so tired of seeing her
described as just a white woman from Kansas,” says Bronwen Solyom, 63, who first met Ann
Dunham in the 1970s when they were graduate students in anthropology at the University of Hawaii
in Honolulu. “She was much more than that.”’
Ann Dunham was also known for her later work as an anthropologist and social activist for Ford
Foundation counter-insurgency projects in Indonesia under the reactionary Suharto regime.
Chipman notes, ‘Terance Bigalke, who worked with Dunham at the Ford Foundation in Jakarta,
says she also fostered social activism in her children through her work on behalf of the world’s
poor. “She had such a strong concern for people who were in difficult circumstances economically,”
says Bigalke, 59. That concern led her to study the underground economy of Jakarta street vendors.’
Ann Dunham’s interest in anthropology had begun in Indonesia, Chipman found. Her first months
in Indonesia “sparked a lifelong passion that later led Dunham to return to Hawaii for graduate
studies in anthropology and an 800-page Ph.D. thesis on Indonesian blacksmithing. Her interest in
the local culture was aroused almost immediately, when she started teaching English to
Indonesians.” In effect, whatever her subjective intentions, Ann Dunham profiled the Indonesian
population for the United States Agency for International Development (US AID), the Ford
Foundation, the World Bank, all key institutions for dollar imperialism.
Chipman shows that Ann Dunham’s interest in anthropology was closely linked to her
contributions to imperialist strategy: ‘Friends say Dunham found her calling through her work,
which evolved from studying batik and ironwork to obtaining microfinancing for craftspeople,
32 Barack H. Obama: The Unauthorized Biography
especially women, in rural areas of developing countries. “She was a scholar who was one of the
first to see about microbanking,” Abercrombie says. In 1986, Dunham did a one-year development
project in Pakistan. That year, mother and daughter took a two-week journey along the old Silk
Route to China. Dunham’s work for the Agricultural Development Bank of Pakistan was followed
by stints at People’s Bank of Indonesia and Women’s World Banking in New York. She also did
consulting work for the World Bank and US AID. “She was getting to pretty high-powered
positions, working in world organizations as an expert, but she always liked the people at the
bottom.”’ Naturally, any anthropologist doing field work needs to feel or feign a sympathetic
interest in people being interviewed, the ethnographic material of the study. This does not mean that
the sentiments are always genuine, but the anthropologist will be more effective if they are.
According to the Time magazine cover-up cover story in April 2008, Dunham became an
important official of the Ford Foundation with special responsibility for women’s and gender issues.
Her own track record in serving as a doormat for her first husband, the imperious Obama Senior,
would hardly qualify her as a feminist. Dunham’s subjective devotion to third world people was by
all indications sincere. ‘In her 40s, Dunham talked about adopting a baby. “She loved kids, and we
were taking too long making her a grandmother,” says Maya, noting that her mother never got to
meet any of her grandchildren. After seeing a news report about the offspring of children in Korea
born to African-American soldiers, she decided that would be the perfect addition to her multiethnic
family, Dewey says. Dunham was “very specific about what she wanted,”’ Maya says. Instead,
Dunham found herself battling both ovarian and uterine cancer. Until her death, she displayed the
unflappable temperament that she passed on to Obama, Dewey says. “She took it in stride,” she
says. “She didn’t fuss about it.”’ (Kim Chipman, “Obama Drive Gets Inspiration From His White
Mom Born in Kansas,” Bloomberg, February 11, 2008) Obama’s mother thus evokes a stoic or
quietist quality which we have seen in her passivity when she was abandoned by her first husband.
If, as candidate Obama categorically states in his own book, Ann Dunham represented the
decisive influence on his formative years, what can we conclude to be the content of that influence?
We have followed Ann Dunham from her youth as a provincial atheist and radical left liberal,
through her subsequent phases as a communist sympathizer, Third World enthusiast, anti-racist,
anthropologist, and to her final stage as a consultant to the Ford Foundation, US AID, and the
World Bank. Is there an invariant to this process? Ann Dunham was certainly concerned about the
problems of global poverty and economic underdevelopment, but she appears to have been
incapable of understanding which institutions were responsible for holding back mankind’s
economic progress. Worse, she ended up by going to work for precisely those institutions. Who
then, in her mind, was responsible for underdevelopment?
The acerbic but perceptive commentator Spengler of the Asia Times believes that he has
discovered the ruling passion of both Ann Dunham and her son Barack Obama, and that this ruling
passion is radical anti-Americanism. Spengler’s perspective is doubtless tinged with the cultural and
historical pessimism of Mitteleuropa, but his findings nevertheless compel careful attention.
Spengler starts by noting that
Soetero had been sponsored as a graduate student by one of the most radical of all Third World
governments…. When Ann Dunham chose to follow Lolo Soetero to Indonesia in 1967, she
brought the six-year-old Barack into the kitchen of anti-colonialist outrage, immediately
following one of the worst episodes of civil violence in post-war history. Dunham’s experience
in Indonesia provided the material for a doctoral dissertation celebrating the hardiness of local
I. Obama’s Roots in Polygamy and the Ford Foundation 33
cultures against the encroaching metropolis. It was entitled, “Peasant blacksmithing in
Indonesia: surviving against all odds.
In this respect Dunham remained within the mainstream of her discipline. Anthropology broke
into popular awareness with Margaret Mead’s long-discredited Coming of Age in Samoa (1928),
which offered a falsified ideal of sexual liberation in the South Pacific as an alternative to the
supposedly repressive West. Mead’s work was one of the founding documents of the sexual
revolution of the 1960s, and anthropology faculties stood at the left-wing fringe of American
universities.’ (Spengler, Asia Times, Feb. 26, 2008) It might be more accurate to call this left-wing
fringe the postmodern fringe.
The specific brand of leftism in play here is once again Rousseau’s doctrine of the noble savage,
which unquestionably provides the foundation for the anthropology of the entire 20th century.
Rousseau’s argument was that the original sin of human civilization had been to develop beyond the
most primitive stage of Paleolithic hunting, gathering, and foraging. The fall from grace occurred
with the introduction of village life, metallurgy, and most of all the state, with accompanying
notions of property. Rousseau, who had lived in Venice as a secretary to the French ambassador,
asserted that it was civilization itself which made human individuals evil and corrupt. The healing
of civilization therefore required a return to the reign of the noble savage — meaning in practice the
retrogression of civilization back to the old stone age. Margaret Mead’s fake scholarship about the
sexual mores of the South Sea Islanders represented a part of this effort to put civilization into
reverse gear. Various modern day thinkers, from radical environmentalists to neocon theoreticians
like Leo Strauss have also endorsed this notion of turning back the clock of civilized progress: it is a
very, very reactionary notion, and would of course imply genocide on an unimaginable scale if ever
attempted.
Spengler goes on to note: “Barack Obama received at least some instruction in the Islamic faith
of his father and went with him to the mosque, but the importance of this experience is vastly
overstated by conservative commentators who seek to portray Obama as a Muslim of sorts. Radical
anti-Americanism, rather than Islam, was the reigning faith in the Dunham household. In the
Muslim world of the 1960s, nationalism rather than radical Islam was the ideology of choice among
the enraged. Radical Islam did not emerge as a major political force until the nationalism of a
Gamal Abdel Nasser or a Sukarno failed.” It might be more accurate to state that radical Islam was
one of several ideological counteroffensives launched by Anglo-American imperialism during the
1950s in order to undercut the vast appeal of Nasser, Sukarno, and the other militant nonaligned
leaders.
OBAMA: AN ANTHROPOLOGIST PROFILING
THE AMERICAN PEOPLE AS ETHNOGRAPHIC MATERIAL
Spengler comes to the following chilling conclusion: “Barack Obama is a clever fellow who
imbibed hatred of America with his mother’s milk, but worked his way up the elite ladder of
education and career. He shares the resentment of Muslims against the encroachment of American
culture, although not their religion. He has the empathetic skill set of an anthropologist who lives
with his subjects, learns their language, and elicits their hopes and fears while remaining at
emotional distance. That is, he is the political equivalent of a sociopath. The difference is that he is
practicing not on a primitive tribe but on the population of the United States.” (Spengler, Asia
Times, Feb. 26, 2008)
34 Barack H. Obama: The Unauthorized Biography
It is in this context that we should interpret the following comment from Ann Dunham’s former
anthropology professor, Alice Dewey. ‘“It’s too bad she’s not here,” Alice Dewey says. “She’d be
saying, with a little chuckle, ‘Here’s one of our own’ and ‘He’s going to show them.’” (Kim
Chipman, “Obama Drive Gets Inspiration From His White Mom Born in Kansas,” Bloomberg,
February 11, 2008) This raises the question of a possible future president who would be animated
by a resentment of or even hatred towards the American people, or at least towards the blue-collar
or white lower middle-class sectors of the American people, the ones most frequently accused by
wealthy elitists of harboring racial prejudice. Obama may indeed harbor such feelings of hatred or
resentment. It does no good to object that Obama does not propose an explicit program of using
austerity and sacrifice (as demanded by the Trilateral financier oligarchy) as a means for punishing
blue-collar American and the white working poor for their alleged racist crimes; Obama is much too
slick an operator to make any such admissions. If anything, it is Jeremiah Wright who has already
made the admissions for him. Obama approaches his task of campaigning with the cynical and
manipulative detachment of an anthropologist carrying out field work among some old stone age
people, like the Yanomami Indians: he is treating the American people as ethnographic material in
the great Trilateral experiment of depression crisis management, and the results will be horrifying.
“HE’S GOING TO SHOW THEM”
Precisely what is it, we must ask, that Obama is going to show the American people if he should
succeed in taking power? Will he proceed to act out the deeply felt resentments of his mother
against American society? Will he exact revenge for the racial slights and humiliations which he
believes he has undergone?
It was during his time in Indonesia that young Barack Obama underwent a dramatic experience
which helped to establish the primacy of race and racial identity in his thinking. (Dreams 51 ff.) He
was at the time nine years old, and his mother was working at the US Embassy in Jakarta. While
sitting in an office waiting for his mother, young Obama was looking through some issues of Life
magazine. Here he found an article which he says he experienced as an “ambush attack.” The article
described the plight of a black man who had decided to use a harsh chemical treatment in order to
lighten the color of his skin. Obama says he was horrified to see a picture of the man, whose skin
had been flayed off by the chemicals, leaving him scarred and disfigured. ‘“I imagine other black
children, then and now, undergoing similar moments of revelation,” Obama later wrote. According
to a recent magazine article, Obama’s account cannot be taken at face value because ‘no such photo
exists, according to historians at [Life] magazine. No such photos, no such article. When asked
about the discrepancy, Obama said in a recent interview, “It might have been in Ebony or it might
have been ... who knows what it was?” (At the request of the Chicago Tribune, archivists at Ebony
searched their catalogue of past articles, none of which matched what Obama recalled.) In fact, it is
surprising, based on interviews with more than two dozen people who knew Obama during his
nearly four years in Indonesia, that it would take a photograph in a magazine to make him conscious
of the fact that some people might treat him differently in part because of the color of his skin.’
(Purdum, Vanity Fair, March 2008) Perhaps Obama is bending the facts in order to document what
he considers to be his own growth in personal awareness from a relative indifference to racial
matters to race and racial identity as a central concern, which he obviously believed by 1995 —
perhaps under the influence of such race theoreticians as the Reverend Jeremiah Wright — to
represent a superior level of awareness. Obama’s mother Ann Dunham died in 1995 of ovarian
cancer, a few months after the publication of Dreams from My Father.
I. Obama’s Roots in Polygamy and the Ford Foundation 35
OBAMA AND ISLAM
Because Obama’s biological father and stepfather were both at least nominally Moslems, and
because Obama attended Moslem schools for at least part of the time that he lived in Indonesia, a
controversy has arisen due to the accusation by right-wing commentators that Obama remains a
crypto-Moslem. In an attempt to answer this drumbeat, on January 24, 2007, the Obama campaign
released the following statement: “To be clear, Senator Obama has never been a Muslim, was not
raised a Muslim, and is a committed Christian who attends the United Church of Christ in
Chicago.” But this seemed to dodge the issue of Obama’s attendance at the Moslem schools in
Indonesia. On March 14th, 2007, the Obama campaign offered this statement to correct their
previous statement: “Obama has never been a practicing Muslim.” The statement added that as a
child, Obama had spent time in the neighborhood Islamic center during his stay in Jakarta. In his
book Dreams from My Father, Obama talks of studying the Quran and describes the public school
as “a Muslim school.” (See Dreams) The testimony of Obama’s half-sister is also relevant: “My
whole family was Muslim, and most of the people I knew were Muslim,” said Maya Soetoro-Ng,
Mr. Obama’s younger half sister. But Mr. Obama attended a Catholic school and then a Muslim
public school….” (New York Times, April 30, 2007)
Tine Hahiyary was one of Obama’s teachers and the principal of the school he attended in
Indonesia from 1971 through 1989, and has testified that Obama attended Islamic religious training
during his time at the school. His teacher was named Maimunah and she resided in the Puncak area,
the Cianjur Regency. “I remembered that he had studied mengaji” (or mengagi, meaning rote
recitation of the Quran), Tine reported.8 Obama himself writes that “In the Muslim school, the
teacher wrote to tell mother I made faces during Koranic studies.” (See Dreams)
A blogger from Jakarta has written more recently that ‘The actual usage of the word ‘mengaji’ in
Indonesian and Malaysian societies means the study of learning to recite the Quran in the Arabic
language rather than the native tongue. ‘Mengagi’ is a word and a term that is accorded the highest
value and status in the mindset of fundamentalist societies here in Southeast Asia. To put it quite
simply, ‘mengaji classes’ are not something that a non-practicing or so-called moderate Muslim
family would ever send their child to. To put this in a Christian context, this is something above and
beyond simply enrolling your child in Sunday school classes. The fact that Obama had attended
mengaji classes is well-known in Indonesia and has left many there wondering just when Obama is
going to come out of the closet.” In another internet report posted in 2007, Obama’s classmate Rony
Amiris, now a manager of the Bank Mandiri in Jakarta, describes him as being a devout Muslim.
“Barry was previously quite religious in Islam,” Amiris recalled. “We previously often asked him to
the prayer room close to the house. If he was wearing a sarong he looked funny,” added Rony. In
2007, Emirsyah Satar, CEO of Garuda Indonesia, stated in an internet interview: “He [Obama] was
often in the prayer room wearing a sarong, at that time.”9 A blogger calling himself American Expat
in Southeast Asia, who says he has lived in Indonesia for some 20 years, has written on
laotze.blogspot.com that “Barack Hussein Obama might have convinced some Americans that he is
no longer a Muslim, but so far he has not convinced many in the world’s most populous Muslim
country who still see him as a Muslim and a crusader for Islam and world peace. Barack Hussein
Obama’s race, his staunch opposition to the war in Iraq, his sympathy to Islam and Muslims
worldwide and his Muslim heritage receive Indonesian media coverage. There is no mention of his
apostasy.”10
Mussolini, as part of his propaganda towards the Moslems of North Africa and the Middle East,
described himself once as holding a Bible in one hand and a Koran in the other. Napoleon did the
36 Barack H. Obama: The Unauthorized Biography
same. Hitler appealed to Moslems living under British rule from Egypt to Afghanistan by dropping
hints that he was either sympathetic to Islam or else actually a Moslem, and many Moslems were
either flattered by these references or actually believed them. Mussolini and Hitler were in reality
atheists.
OBAMA’S SIBLINGS: NINE CHANCES FOR A NEW BILLY CARTER OR NEIL BUSH
The siblings of sitting presidents have often been a source of corruption and scandal. Dwight
Eisenhower was lucky in that his brother Milton was eminently respectable and served as the
president of Johns Hopkins University in Baltimore. But Richard Nixon had much trouble with his
brother Donald. Bill Clinton was embarrassed by his brother Roger, and this has also been the lot of
Hillary Clinton in regard to her brother Hugh. George Bush the elder harvested negative publicity
from the cooperation of his brother Prescott Bush Jr. with Japanese organized crime figures. A
famous presidential brother implicated in criminal or unethical activity was Billy Carter, who
accepted large bribes from the government of Libya. Most damaging of all to the taxpayers has been
Neil Bush, the younger brother of the current tenant of the White House, whose role in the
bankruptcy of Silverado Savings and Loan cost the Resolution Trust Corporation upwards of $3
billion. Neil Bush was also scheduled to meet with Scott Hinckley, the elder brother of purported
lone assassin John Hinckley Jr., on the day after John Hinckley opened fire on President Reagan.
(See Tarpley, George Bush: The Unauthorized Biography, 1992)
But all of this pales in comparison with the nepotism, graft and corruption we are likely to
witness in an Obama presidency. Obama has an estimated total of 9 siblings, all half brothers and
half sisters. One who has appeared in his campaign is Maya Sotero-Ng, a daughter of Ann Dunham
and Lolo Soetero. The offspring of Barack Hussein Obama Senior are thought to number eight in
all, by three mothers in addition to Ann Dunham.
CHAPTER II: COLUMBIA UNIVERSITY AND
RECRUITMENT BY ZBIGNIEW BRZEZINSKI
… the intelligence community has deposited provocateurs in at least some of our schools so that
the conditions necessary for learning have been, through the ensuing turmoil, destroyed. –
Vincent J. Salandria, 1971.
Obama was fortunate enough to enjoy some very special educational opportunities. These
opportunities were not due to any special intellectual ability or capacity for hard work on the part of
our future candidate. They were rather due to the fact that his mother by now had become an
important operative for the Ford Foundation, and the foundation community takes care of its own
because of the obvious advantages of recruiting from households in which the oligarchical,
multicultural, and postmodern values of the foundation world are assumed as axiomatic. Obama’s
mother and grandparents clearly did everything they could to advance his upward mobility through
schooling, and this paid off when he was accepted into the most exclusive prep school in Hawaii.
Because of Obama’s much-advertised racial identity, there can also be no doubt that preferential
admissions for minorities based on affirmative action must also have played a significant role.
Obama is therefore not the product of a meritocracy or a career open to talents; he is rather the fruit
of special treatment meted out under the aegis of minority quotas favored by the foundation world
as the keystone of their strategy for keeping the American people so fragmented as to perpetuate
oligarchical financier rule. If we need to generalize about Obama, we can say that his hardware was
provided by the Ford Foundation and its various lesser foundation satellites, while his software was
added later through his association with the Trilateral Commission and the Bilderberger Group in
the person of Zbigniew Brzezinski, the evil genius of the Jimmy Carter administration of 1977-
1981. To these phases of Obama’s story we now turn.
ELITIST PREPPY AT THE PUNAHOU SCHOOL OF HAWAII
When Obama was ten years old, his mother Ann sent him back to Honolulu to live with his
maternal grandparents so he could attend the prestigious Punahou School, an elite and exclusive
prep school whose alumni also include America Online founder Steve Case: ‘“Ann saw first of all
that he was so bright that he needed to come and really be challenged by a good school,” says Benji
Bennington, 73, the retired curator of the East-West Center at the University of Hawaii. Dunham
also hoped that “maybe he’d meet a few blacks while here, because he was not meeting them in
Jakarta.” The family was reunited about a year later when Dunham separated from Soetero and
returned to Honolulu for graduate school.’ “He was very much the patriarch as a young person,”
says sister Maya. “Our mother was incredibly strong but also incredibly sensitive. She would cry
easily. He was always protective of her.” When Dunham moved back to Jakarta for her
anthropology field work, Barack saw his mother and half-sister only for Christmas and summer
break.’ (Kim Chipman, Bloomberg, op. cit.)
Obama entered the fifth grade at Punahou and stayed there until he graduated from high school
with honors in 1979. He reports that he was one of three black students at the school, although there
were many Asians and Pacific islanders. Obama’s Dreams from My Father provides incidents of
Obama’s feeling of racial humiliation while attending this school and chronicles his embrace of a
specific black or African-American racial identity as a matter of his own deliberate and conscious
choice. This path of development may be compared with Hitler’s discovery of his own Germanic
38 Barack H. Obama: The Unauthorized Biography
racial identity which forms an important part of Mein Kampf. There is, however, some question as
to whether Obama’s account of his repeated racial mortification by racist or thoughtless whites is
accurate, or whether it represents a fictitious construct designed to bolster his credibility for his later
career in Chicago as a black identity politician. Obama was on the basketball team at Punahou and
seems to have enjoyed some prestige. Some accounts report that, while he was a student in the late
1970s, he carved his name in the pavement outside the cafeteria of Punahou School. These graffiti
reportedly read: “King Obama.”
Here begins Obama’s intense, consuming preoccupation with race, the great central issue of his
subsequent life, in spite of what he now says. He learns about the imperative of race from a black
friend named Ray: “Our rage at the white world needed no object, he seemed to be telling me, no
independent confirmation; it could be switched on and off at our pleasure.” (Dreams 81) Obama
experiences this assumption of a racial identity as a narrowing and constriction of the spirit of his
own personality which he is nonetheless driven to accept: “following this maddening logic, the only
thing you could choose as your own was withdrawal into a smaller and smaller coil of rage, until
being black meant only the knowledge of your own powerlessness, of your own defeat. And the
final irony: should you refuse this defeat and lash out at your captors, they would have a name for
that too, a name that could cage you just as good. Paranoid. Militant. Violent. N****r.” (Dreams
85)
During one phase, Obama became intensely preoccupied with the literary expression of his own
situation as found in the works of such writers as James Baldwin, Ralph Ellison, Langston Hughes,
Richard Wright, W.E.B. DuBois, and Malcolm X. All but the last of this number, he judged, had
been consumed by anguish, doubt, and self-contempt. Almost all of them had “eventually
succumbed to its corrosive force,” and these had ended up as “exhausted, bitter men, the devil at
their heels.” (Dreams 86) Malcolm X, Obama found, was better and stronger: “even as I imagined
myself following Malcolm’s call, one line in the book stayed with me. He spoke of a wish he’d
once had, the wish that the white blood that ran through him, there by an act of violence, might
somehow be expunged. I know that, for Malcolm, that wish would never be incidental.” (Dreams
86)
The Daily Mail stresses Obama’s later account of racial humiliation at Punahou: ‘…while there,
says Mr Obama, he was tortured by fellow pupils – who let out monkey hoots – and turned into a
disenchanted teenage rebel, experimenting with cocaine and marijuana. Even his grandparents were
troubled by dark skin, he says in his book, recalling how once his grandmother complained about
being pestered by a beggar. “You know why she’s so scared?” he recalls his grandfather saying.
“She told me the fella was black.” Mr Obama says his soaring ‘dream’ of a better America grew out
of his ‘hurt and pain.’ This is the incident Obama referred to later in his Philadelphia speech on
racism of March 2008, after the first phase of the Jeremiah Wright scandal had exploded. The
British reporters doubt that this was the real story: ‘“Friends, however, remember his time at school
rather differently. He was a spoiled high-achiever, they recall, who seemed as fond of his
grandparents as they were of him. He affectionately signed a school photo of himself to them, using
their pet names, Tut and Gramps. The caption says: “Thanks... for all the good times.” He worked
on the school’s literary magazine and wore a white suit, of the style popular with New York writers
like Tom Wolf at the time. One of his former classmates, Alan Lum, said: “Hawaii is such a melting
pot that it didn’t occur to me when we were growing up that he might have problems about being
one of the few African-Americans at the school. Us kids didn’t see colour. He was easy-going and
well-liked.” Lon Wysard, who also attended the academy, said the budding politician was in fact
II: Columbia University and Recruitment by Zbigniew Brzezinski 39
idolised for his keen sportsmanship. “He was the star basketball player and always had a ball in his
hand wherever he was,” Wysard recalled.’ (London Daily Mail, January 27, 2007)
OBAMA AS EXISTENTIALIST POET
One of Obama’s classmates and friends during this time was Keith “Ray” Kakugawa, who later
observed that “Barry’s biggest struggles then were missing his parents. His biggest struggles were
his feelings of abandonment.” Ray later went deeply into the drug culture and served three years in
prison because of illegal narcotics, emerging as homeless in the spring of 2007. A window into the
mentality of the youthful Obama is available in the form of a short poem he wrote during these
years, and which is quoted by Purdum in Vanity Fair. Purdum reports that Obama ‘immersed
himself in the writings of James Baldwin, Ralph Ellison, Langston Hughes, and Malcolm X, only to
find the same anguish, the same self-doubt, a self-contempt that neither irony nor intellect seemed
able to deflect,” as he did in this poem for the school literary magazine, Ka Wai Ola:
I saw an old, forgotten man
On an old, forgotten road.
Staggering and numb under the glare of the
Spotlight. His eyes, so dull and grey,
Slide from right to left, to right,
Looking for his life, misplaced in a
Shallow, muddy gutter long ago.
I am found, instead.
Seeking a hiding place, the night seals us together.
A transient spark lights his face, and in my honor,
He pulls out forgotten dignity from under his flaking coat,
And walks a straight line along the crooked world.
When I mentioned the poem to Obama, he at first had no memory of it. After I read it to him, he
said, “That’s not bad. I wrote that in high school? You know, it sounds in spirit that it’s talking a
little bit about my grandfather.”’ (Purdum, Vanity Fair, March 2008) Based on this evidence,
Obama was most likely a typical teenage existentialist, preoccupied above all with his own feeling
states, self-doubt, and pessimism. It is curious that he cannot remember a statement as personal as
this, even when shown it years later. Is Obama’s memory still intact? And if not, why not? A whole
range of possibilities, from drug abuse to early onset Alzheimer’s to simple prevarication need to be
considered.
HAWAII CPUSA CELL: FRANK MARSHALL DAVIS
During Obama’s high school years in Hawaii, he came into close contact with an older black
man whom he described in his memoir as Frank. This turns out to be one Frank Marshall Davis, a
devoted long-term member of the Communist Party of the United States. Marshall had moved to
Honolulu from Kansas in 1948; according to the pro-communist history Professor Gerald Horne of
the University of Houston, Davis made the move “at the suggestion of his good friend Paul
Robeson,” the well-known black singer and actor who was also a CPUSA member. Both Davis and
Robeson were from Chicago, and this may have something to do with Obama’s later decision to
move there. ‘As Horne describes it, Davis “befriended” a “Euro-American family” that had
“migrated to Honolulu from Kansas and a young woman from this family eventually had a child
with a young student from Kenya East Africa who goes by the name of Barack Obama, who
40 Barack H. Obama: The Unauthorized Biography
retracing the steps of Davis eventually decamped to Chicago.” (Cliff Kincaid, “Obama’s
Communist Mentor,” Accuracy in Media, February 18, 2008) Obama’s association with a
prominent Communist furnished the basis for the charge made against Obama by Allen Keyes
during the Senate campaign of 2004 that he was a “hard-core academic Marxist.” Frank Marshall
Davis was publicly identified as a member of the Communist Party USA (CPUSA). Obama was
almost like a son to Davis, listening to his poetry and hanging on each word of his advice. Davis,
along with some other older black men, appear to have constituted a sort of CPUSA cell or sleeper
cell in Hawaii. Obama was taken to visit them in his early teens by his grandfather, Stanley
Dunham. Davis was a part of this now-informal group.
Frank Marshall Davis was mentioned in the 1951 report of the Commission on Subversive
Activities to the Legislature of the Territory of Hawaii as a CPUSA member. The House Un-
American Activities Committee (HUAC) accused Davis of involvement in several communist-front
organizations. The identification of Obama’s “Frank” as Frank Marshall Davis is confirmed by
Trevor Loudon, a New Zealand libertarian activist, researcher and blogger in a posting of March
2007. Obama writes that he knew “a poet named Frank” who was a purveyor of “hard-earned
knowledge,” and advice. Frank had had “some modest notoriety once,” and was “a contemporary of
Richard Wright and Langston Hughes during his years in Chicago...,” Frank was now “pushing
eighty.” Obama was impressed that “Frank and his old Black Power dashiki self” gave him advice
before he left Hawaii for Occidental College in 1979, when Obama was 18.
Davis has been seen by some critics as a precursor to Maya Angelou and Alice Walker. There is
at least one book-length study of Davis entitled Black Moods: Collected Poems of Frank Marshall
Davis by John Edgar Tidwell, a professor at the University of Kansas. In his review of Tidwell’s
study published in the summer/fall 2003 issue of African-American Review, James A. Miller of
George Washington University comments: “In Davis’s case, his political commitments led him to
join the American Communist Party during the middle of World War II – even though he never
publicly admitted his Party membership.” Tidwell is an expert on the life and writings of Davis.
The decrepit intellectual periphery of the CPUSA has been notably stirred up by Obama’s
candidacy, doubtless in part because of Davis. Professor Horne, who is a contributing editor of the
Communist Party journal Political Affairs, mentioned the Obama-David connection in March 2007
at the Communist Party USA archives at the Tamiment Library at New York University; Horne’s
talk was entitled “Rethinking the History and Future of the Communist Party.” Davis also figures
prominently in The New Red Negro: The Literary Left and African-American Poetry, 1930-1946 by
James Edward Smethurst, associate professor of Afro-American studies at the University of
Massachusetts-Amherst. Here Davis appears as a black writer who remained loyal to the CPUSA
even after Stalin’s infamous Ribbentrop-Molotov Pact with Hitler, at a time when other black
intellectuals like Richard Wright broke with the CPUSA line. For Frank Marshall Davis,
communism was the god that did not fail. But what was Frank’s understanding of communism?
Obama writes in Dreams from My Father that he saw “Frank” only a few days before he left
Hawaii for college, and that Davis seemed just as radical as ever. Davis called college “an advanced
degree in compromise” and warned Obama not to forget his “people” and not to “start believing
what they tell you about equal opportunity and the American way and all that s**t.” Davis also
complained about foot problems, the result of “trying to force African feet into European shoes,”
Obama wrote. Horne gloated that the Obama-Davis connection will emerge as a theme of wide
study in the near future. Horne says that Obama’s giving credit to Davis will be important in
history. “At some point in the future, a teacher will add to her syllabus Barack’s memoir and
II: Columbia University and Recruitment by Zbigniew Brzezinski 41
instruct her students to read it alongside Frank Marshall Davis’ equally affecting memoir, Living the
Blues and when that day comes, I’m sure a future student will not only examine critically the
Frankenstein monsters that US imperialism created in order to subdue Communist parties but will
also be moved to come to this historic and wonderful archive in order to gain insight on what has
befallen this complex and intriguing planet on which we reside,” he said.
Dr. Kathryn Takara, a professor of Interdisciplinary Studies at the University of Hawaii at
Manoa agrees that Davis is the “Frank” in Obama’s book. Takara wrote her dissertation on Davis
and interviewed him frequently between 1972 and 1987, before Davis died. Takara concludes that
Davis demonstrated “an acute sense of race relations and class struggle throughout America and the
world.” For her, Davis was a “socialist realist.” Davis had been urged by Paul Robeson and Harry
Bridges, the pro-CPUSA head of the International Longshore and Warehouse Union (ILWU), to
become a columnist for the Honolulu Record where he could work to advance the communist cause.
Takara sums up Davis’s program at that time as “freedom, radicalism, solidarity, labor unions, due
process, peace, affirmative action, civil rights, Negro History week, and true Democracy to fight
imperialism, colonialism, and white supremacy. He urged coalition politics.”
COMMUNIST PARTY USA: OBAMA IS MARX’S OLD MOLE OF REVOLUTION
To advance this ideological Walpurgisnacht to an even more monstrous level, the CPUSA
organ, People’s World Weekly, recently published a letter from CPUSA supporter Frank Chapman
gloating over Obama’s victory in the Iowa caucuses. Chapman commented: “Obama’s victory was
more than a progressive move; it was a dialectical leap ushering in a qualitatively new era of
struggle. … Marx once compared revolutionary struggle with the work of the mole, who sometimes
burrows so far beneath the ground that he leaves no trace of his movement on the surface. This is
the old revolutionary ‘mole,’ not only showing his traces on the surface but also breaking through.”
(Cliff Kincaid, “Obama’s Communist Mentor,” Accuracy in Media, February 18, 2008) The
CPUSA has formally endorsed Obama for the presidency.
Obama may well have learned a lot more from Davis than dialectical materialism. There are
indications scattered across the internet that Davis was bisexual. Officially he was married to Helen
Canfield David of Chicago, reportedly a woman of some social standing.11 If Obama’s mentor of
those years in fact had homosexual proclivities, this would be significant in explaining the later
bisexual features of Obama’s life.
Shortly before leaving Hawaii to go to Occidental College, Obama experiences one of his many
racial epiphanies when he learns that his grandmother Toot has been frightened in the street by a
black man whom she suspects of being a mugger. Obama recounts that when he heard of this
incident, “the words were like a fist in my stomach, and I wobbled to regain my composure. In my
steadiest voice, I told [Gramps] that such an attitude bothered me, too, but assured him that Toot’s
fears would pass and that we should give her a ride in the meantime. […] after they left, I sat on the
edge of my bed and thought about my grandparents. They had sacrificed again and again for me.
They had poured all their lingering hopes into my success. Never had they given me reason to
doubt their love; I doubted if they ever would. And yet I knew that men who might easily have
been my brothers could still inspire their rawest fears.” (Dreams 89) When it comes to matters of
race, we have already learned that Obama is jumpy as an eyeball, and here his racial
hypersensitivity is displayed once again. In recent years, we have had many illustrious
representatives of the American black community come forward to acknowledge that they, too, are
sometimes uneasy when they are approached by aggressive black panhandlers in the streets.
42 Barack H. Obama: The Unauthorized Biography
Obama, by contrast, continues to be so obsessed with this trifling incident that he included it in his
notorious Philadelphia speech on race of March 18, 2008, where he compared the fears of a woman
in late middle age with the violent invectives of the foundation-funded racist provocateur Jeremiah
Wright. When it comes to matters of race, Obama clearly loses all sense of reality and proportions,
and there is no reason to assume that anything whatsoever has changed in this regard.
“FRANK” – MARXIST OR GAY EXISTENTIALIST?
If Frank Marshall David had been a thorough Marxist, that would already have been bad enough.
Karl Marx, as I have shown in Surviving the Cataclysm, was in most respects a kept ideologue of
British intelligence, sponsored by David Urquhardt of the British Foreign Office, with a mission of
fomenting destabilization by pitting workers against industrialists in continental Europe, and with a
secondary task of whipping up sentiment against Russia. Like Mazzini the ultra-nationalist and
Bakunin the hyper-anarchist, Marx the apostle of plebeian revolution was a prong of an ideological
deployment by British intelligence to divide and conquer the main rivals of the British Empire. In
an age when the oppressive dominion of the British Empire, then at the apogee of its power, was the
leading reactionary political fact in the world, Marx chose to ignore that fact almost completely, and
focus almost entirely on the opportunities for conflict that were emerging during the process of
industrialization in the countries the British did not yet completely control. Marx, in other words,
had a permanent blind spot when it came to the mixture of Whig Venetian party aristocrats and
financiers who populated the City of London, and this blind spot lives on in his followers today.
Still, Marx as a serious charlatan does reject Malthus, and does admit that economic science must
face the problem of social reproduction, something that cruder charlatans like Malthus and Adam
Smith are not willing to address. There is every reason to believe that Frank Marshal Davis imbibed
the major negative aspects of Marx without absorbing the minor positive ones.
“Frank” was almost certainly a member of the Communist Party USA. But the quality of his
assimilation of Marxism is quite another matter. The level of Marxist theoretical development in the
CPUSA was notoriously very low. The lack of theory in the old CPUSA was one of the factors that
made it so easy for the FBI to infiltrate it to the point of becoming a majority. Especially when it
came to recruiting in the black community, the CPUSA was infamously opportunistic, always ready
to jettison dialectical materialism when it appeared possible to recruit some new members on the
basis of resistance to white racism. Based on what he says, Frank is not interested in proletarian
internationalism in the struggle against world imperialism. He thinks that white people cannot
understand his experiences as an oppressed black man. He rejects the unity of world history. Frank
has nothing to do with Marxism. He is already a black cultural nationalist, with hardly a veneer of
Marxist phraseology. Frank is more of an existentialist than a Marxist himself.
Immediately after the incident just reported, Obama narrates that he went to visit Frank Marshall
Davis. From Davis, Obama received quantities of whiskey accompanied by a lecture on the
incommunicability of race-based experience to persons on the other side of the color line, namely
Obama’s grandparents, the “white folk.” Frank tells Obama that his grandfather is basically a good
man but that the black experience for Gramps is a book sealed with seven seals: “He can’t know
me,” says the communist Frank, “not the way I know him. Maybe some of these Hawaiians can, or
the Indians on the reservation. They’ve seen their fathers humiliated. Their mothers desecrated.
But your grandfather will never know what that feels like.” (Dreams 90) Frank concludes: “what
I’m trying to tell you is, your grandma’s right to be scared. She’s at least as right as Stanley is. She
understands that black people have a reason to hate. That’s just how it is. For your sake, I wish it
were otherwise. But it’s not. So you might as well get used to it.” (Dreams 91)
II: Columbia University and Recruitment by Zbigniew Brzezinski 43
OBAMA AS RACE-BASED EXISTENTIALIST: “UTTERLY ALONE”
By all indications, this is the experience which made Obama not only a confirmed racialist
ideologue, but also a thoroughgoing existentialist in the tradition of Heidegger and Jaspers. Obama
recounts the moment thus: “The earth shook under my feet, ready to crack open at any moment. I
stopped, trying to steady myself and knew for the first time that I was utterly alone.” (Dreams 91)
This experience is of vital importance for understanding the mentality of the adult Obama. If
Obama had been taught Marxism by Frank Marshall Davis, he would at this point say that he had
decided to submerge his own existence in the greater reality of the march of class struggle through
history. But he does not say that he is part of the vanguard of millions of workers. He says rather
that he is absolutely, metaphysically alone. The finding here is that Obama was by this point a
convinced existentialist, and that Obama’s embrace of existentialism, the point of view which
pervades so much of Dreams, gave him the prerequisites for becoming a full-fledged disciple of
Frantz Fanon, an implacable enemy of Western civilization, proto-fascist, an apostle of purgative
violence in the Sorel-Mussolini tradition. Obama spent years wallowing in existentialist self-pity.
Obama’s eager embrace of the existentialist world outlook provided some of the indispensable
preconditions for his current career as a mob orator. It has equipped him to write his speeches out
of a bag of alienation, despair, and absolute metaphysical loneliness, appealing with some
semblance of pathos to the desire of his target audiences for community, hope, and change. At the
same time, however, Obama’s existentialism has provided him with his own personal path to
fascism.
Many American readers may be surprised at the idea that existentialism is somehow connected
to fascism, or can serve as an immediate prelude to fascism. This is probably because of the
popular identification in this country of existentialism with such French writers as Jean-Paul Sartre
and Albert Camus, both of whom were at pains to make a show of having supported the resistance
against the Nazi occupation of their country. Later research has raised doubts about how much
Sartre ever did to oppose the Nazis. Sartre was a disciple of Heidegger who took part for a while in
a literary group with anti-occupation overtones, but this group, called Socialisme et liberté, “soon
dissolved and Sartre decided to write, instead of being involved in active resistance. He then wrote
Being and Nothingness, The Flies and No Exit, none of which was censored by the Germans, and
also contributed to both legal and illegal literary magazines….the French philosopher and resistant
Vladimir Jankelevitch criticized Sartre’s lack of political commitment during the German
occupation, and interpreted his further struggles for liberty as an attempt to redeem himself.”
(Wikipedia) (Obama clearly knows the French existentialists.)
We must remember that Sartre and Camus represent lesser gods in the international existentialist
pantheon which is actually presided over by Martin Heidegger. Heidegger was a full throated, cardcarrying
member of the National Socialist party who delivered a public paean to Hitler in the form
of his inaugural address as rector of the University of Freiburg. It is in this speech that Heidegger
made the comment that the decision in favor of National Socialism had already been made by the
youngest part of the German nation, thereby validating the fascist myth that it is youth and youth
alone who are the arbiters of the political destinies of great nations — an absurd fiction which
echoes through the empty vessels of the Obama lemming legions. In Obama, we see the intimate
epistemological and ethical proximity of existentialism and fascism which is exemplified by
Heidegger, the world’s leading existentialist thinker and a Nazi at the same time.
44 Barack H. Obama: The Unauthorized Biography
EXISTENTIALISM AS ANTECHAMBER TO FASCISM
The Hungarian Marxist philosopher Georg Lukacs has provided the most detailed study of the
ideological precursors of fascism and National Socialism in his 1952 book Die Zerstörung der
Vernunft (The Destruction of Reason). Lukacs’ summary of the existentialists Heidegger and
Jaspers, both much touted by US and British philosophy departments, may give us some insights
into Obama’s mentality today. Lukacs sums up: “The philosophy of Jaspers as well as that of
Heidegger concludes without any achievements but nevertheless with extremely important social
consequences. Heidegger and Jaspers take extremely individualistic, petty bourgeois-aristocratic
relativism and irrationalism to their most extreme consequences. They end up in the ice age, at the
North Pole, in a world which has become empty, a senseless chaos, nothingness as the surroundings
of humanity; and their despair about themselves, about their incorrigible loneliness is the inner
content of their philosophy. […] Through this, the general mood of despair in broad layers of the
German bourgeoisie and above all of the intelligentsia was exacerbated, while possible tendencies
towards protest were discouraged, and the aggressive reactionaries received through this a
significant assistance.” (Lukacs 457) If fascism was able to educate wide sectors of the German
intelligentsia into a more than benevolent neutrality, no small amount of the credit was due to the
philosophy of Heidegger and Jaspers.” In the same way that existentialism helped to open the door
for fascism in central Europe, we can see that existentialism served as a kind of prelude to further
fascist developments in Obama’s own mental life.
Lukacs is especially interested in the role of despair in fascist ideology, both before and after
1945. Lukacs writes: “The mere word ‘despair’ as content of this ideology is not enough to explain
it, because we have seen that Heidegger’s despair was actually a direct preparation for Hitlerism.
[…] We are dealing here with something different with something greater and something more
concrete. It is not just general despair about all human activity; just despair has led thinkers from
Schopenhauer to Heidegger into the reactionary camp or at least into collaboration with the
reactionaries. [Post-1945 existentialists] are not only in despair about things in general; their doubts
and their despair are directed above all against those glad tidings which they are supposed to be
proclaiming, namely the defense of the ‘free world,’” understood as the Anglo-American sphere of
world power.” (Lukacs 704) For Lukacs, the pre-1945 fascists displayed cynical nihilism, while the
post-1945 fascists have been characterized by cynical hypocrisy. This is a shoe that may well fit
Obama.
We are arguing, in other words, that Obama’s embrace of the philosophy of academic
postmodernism has constituted an important stage in his development towards fascism. The
postmodernism of which we speak has of course been the dominant intellectual outlook among
most college and university faculties since about the 1970s. Intellectually speaking, it is a thin and
unappetizing gruel, suitable for crabbed little people operating in a phase of imperialist decline.
The starting point of postmodernism is the despair, disorientation, demoralization, and defeatism
which emerged from the collapse of the positive social movements of the 1960s. From its very
beginning, postmodernism has been much more interested in race and gender than in class.
Postmodernism is an unsavory stew of existentialism, structuralism, deconstructionism,
anthropological relativism, and Malthusianism, all thrown together in the cauldron of historical
pessimism and cultural pessimism. The aspect of relativism has been especially important for the
rejection and destruction of classical culture with its indispensable notions of human reason, human
freedom, human greatness, and the heroic sense of the world historical individual. Instead, the
drawings of patients in mental institutions are placed on the same plane as the works of Leonardo
and Rafael, and Athens and Florence are compared unfavorably to hunting and gathering societies
II: Columbia University and Recruitment by Zbigniew Brzezinski 45
where cannibalism and infanticide proliferate. Postmodernism is the creed of the morally insane. A
thoroughgoing postmodernist (or “postie”) must axiomatically reject any notion of objective reality;
postmodernism when challenged beats a hasty retreat into a dream world of myth, metaphor, and
archetype. Postmodernism gets its philosophical underpinnings most of all from Nietzsche and the
other exponents of what the academics like to call “Continental philosophy,” so as to avoid talking
about the strong fascist overtones of many of these thinkers. The latent fascist potentialities of
present day academic postmodernism are immense, and have only been waiting behind masks of
cynicism and apathy for the appearance of an appropriate demagogue to mobilize them into the
obvious forms of frenetic sociopathic activism.
FRANK WARNS OBAMA HE IS ABOUT TO BE RECRUITED
Before leaving for Occidental College, Obama visits Frank one last time to get his advice,
somewhat on the model of Laertes going to Polonius in Hamlet. Frank tells Obama that college
represents “an advanced degree in compromise.” Frank explains that Obama has to understand the
“real price of admission.” The real price is “leaving your race at the door. Leaving your people
behind. Understand something, boy. You’re not going to college to get educated. You’re going
there to get trained. They’ll train you to want what you don’t need. They’ll train you to manipulate
words so they don’t mean anything anymore. They’ll train you to forget what it is that you already
know. They’ll train you so good, you’ll start believing what they tell you about equal opportunity
and the American way and all that s**t. They’ll give you a corner office and invite you to fancy
dinners, and tell you you’re a credit to your race. Until you want to actually start running things and
then they’ll yank on your chain and let you know that you may be a well-trained, well paid n****r,
but you’re a n****r just the same.” (Dreams 97)
This is one of the most illuminating passages in Obama’s personal memoir. He is in effect
confessing to the reader what is about to happen to him at Occidental College and above all with his
encounter with Zbigniew Brzezinski at Columbia University: to become a wholly-owned asset and
career sponsored by the networks of the Trilateral Commission, the Bilderberger group, and the
Council on Foreign Relations. Obama describes a process of training and indoctrination so
thorough that it needs to be described as brainwashing. The personal identity of the individual is
largely erased, resulting in a kind of automaton or zombie. Obama has now passed beyond the
stage of brainwashing into the phase of spouting slogans to get ahead. He knows that what awaits
him is a phase of nominal authority masking the reality of his role of abject puppet and stooge of his
masters. This chapter might be subtitled “The Confessions of St. Barack,” since he gives us a
thumbnail sketch of his life, past, present, and future. This extraordinary revelation of the real
nature and basis of Obama’s career is of course a potential source of immense embarrassment, so it
must have taken a compulsive urge to impel Obama to include it in the published text. This
elementary lack of prudence illustrates another aspect of Obama’s existentialism and fatalism:
powerful, sincere emotions acquire for the existentialist a validity and justification which cannot be
questioned, no matter how irrational and sociopathic those sincere emotions may be.
OCCIDENTAL COLLEGE: BONG HITS FOR FANON
Obama has conceded that he had made “some bad decisions” as a teenager involving drugs and
drinking; this admission was made in a talk to high school students in New Hampshire in November
2007. The adulatory Vanity Fair profile attempts to make a silk purse out of a sow’s ear by
congratulating Obama on his frankness in admitting his systematic drug use. Here we read: “Mr.
46 Barack H. Obama: The Unauthorized Biography
Obama’s admissions are rare for a politician (his book, Dreams from My Father, was written before
he ran for office.) They briefly became a campaign issue in December when an adviser to Senator
Hillary Rodham Clinton, Mr. Obama’s chief Democratic rival, suggested that his history with drugs
would make him vulnerable to Republican attacks if he became his party’s nominee. Mr. Obama, of
Illinois, has never quantified his illicit drug use or provided many details. He wrote about his two
years at Occidental, a predominantly white liberal arts college, as a gradual but profound awakening
from a slumber of indifference that gave rise to his activism there and his fears that drugs could lead
him to addiction or apathy, as they had for many other black men.” It was doubtful that the GOP’s
Karl Rove attack machine would be so charitable with Obama.
Occidental black students self-segregated themselves; Obama writes that they were “like a
tribe.” (Dreams 98) They attempted to enforce conformity on students they considered non-white.
Obama recounts the story of Joyce, a smart young multiracial woman. Joyce complains that it is
“black people who always have to make everything racial. They’re the ones making me choose.
They’re the ones who are telling me that I can’t be who I am.” (Dreams 99) Obama comments that
“Only white culture had individuals.” (Dreams 100) His obsession with race and identity remains
constant throughout.
OBAMA’S “I DIDN’T INJECT’ MOMENT
At Occidental College near Los Angeles, Obama began to experiment intensively with illegal
narcotics. He claims that he dabbled with marijuana and cocaine, but stopped short of shooting up
heroin. Obama himself writes: “I blew a few smoke rings, remembering those years. Pot had helped,
and booze; maybe a little blow when you could afford it. Not smack, though – Mickey, my potential
initiator, had been just a little too eager for me to go through with that.” (Dreams 93) Obama says
he was confronted with “the needle and the tubing” and then got cold feet (while standing in a meat
freezer in a deli) and backed out. He had been on his way to the life of an addict, like his friend
Ray: “Junkie. Pothead. That’s where I’d been headed: the final, fatal role of the young would-be
black man.” (Dreams 93) So Obama was on the verge of heroin but did not inject, a familiar refrain.
As a freshman at Occidental, Obama had an international circle of friends — “a real eclectic sort
of group,” recalled Vinai Thummalapally from Hyderabad, India. Obama became especially
friendly with Mohammed Hasan Chandoo and Wahid Hamid, two wealthy Pakistanis.
Thummalapally also recalls a French student, plus black and white Americans. One of these was
Jon K. Mitchell, who later played bass for country-swing band Asleep at the Wheel. Mitchell says
he remembers that Obama wore puka shell necklaces all the time, even though they were not in
style, and that “we let it slide because he spent a lot of time growing up in Hawaii.”) (Adam
Goldman and Robert Tanner, “Old friends recall Obama’s years in LA, NY,” AP via Newsday, May
15, 2008) Later, these friendships would make it possible for Obama to visit Pakistan in 1981. At
that time Obama traveled to Pakistan and spent “about three weeks” with Hamid, and staying in
Karachi with Chandoo’s family, said Bill Burton, Obama’s press secretary. “He was clearly
shocked by the economic disparity he saw in Pakistan. He couldn’t get over the sight of rural
peasants bowing to the wealthy landowners they worked for as they passed,” commented Margot
Mifflin, who has a bit part in Obama’s memoir. Obama often claims that the fact he has traveled
abroad makes him better able to understand international relations; his trip to Pakistan appears to
have prepared him above all to make his outrageous demand for the unilateral US bombing of
Pakistan, with all the inevitable slaughter, in search of “al Qaeda.” There is also some suggestion
that Obama may have been visiting gay friends on this trip.
II: Columbia University and Recruitment by Zbigniew Brzezinski 47
Obama tells us that it was at Occidental College that he came under the influence of Frantz
Fanon. Obama writes: “To avoid being mistaken for a sellout, I chose my friends carefully. The
more politically active black students. The foreign students. The Chicanos. The Marxist professors
and structural feminists and punk-rock performance poets. We smoked cigarettes and wore leather
jackets. At night, in the dorms, we discussed neocolonialism, Frantz Fanon, Eurocentrism, and
patriarchy.” (Dreams 100) Here is the aspiring president wandering through the post-modernist
proto-fascist rubble field. He is overwhelmingly other-directed, obsessed with his image in the eyes
of others. The name that stands out is that of Frantz Fanon, probably the biggest intellectual
influence on the young Obama.
BEFORE POL POT AND KHOMEINI, THERE WAS FANON
Fanon (1925-1961) was a French-speaking psychiatrist born on the island of Martinique in the
Caribbean. Like Rousseau before him, Fanon was promoted and made famous by Venetian cultural
operatives, notably by Umberto Campagnolo of the enormously influential Société Européenne de
Culture, one of the most important international think tanks of the time between 1945 and 1975. It
was the Venetian foundation operative Campagnolo who first brought Fanon to Europe and made
him a celebrity. The preface to the first edition of Fanon’s Wretched of the Earth in Paris in 1961
was written by the French existentialist pope, Jean-Paul Sartre. Fanon attempted to identify himself
with the merging anti-colonial revolutions of the third world and joined the Algerian FLN, but he
always remained a European existentialist decadent in methodological terms, and not a denizen of a
third world rice paddy or favela. Fanon, a disciple of Merleau-Ponty, was always a hater of science,
technology, and human progress, since he always thought of technology as something imposed by
the European colonial masters which had to be rejected as part of liberation from the colonial yoke.
This made Fanon a direct precursor of the New Dark Ages faction which emerged during the 1970s
in the form of such figures as Pol Pot of Cambodia, the “Islamo-marxists” Ali Shariati and Bani-
Sadr of Iran, and other declared enemies of western civilization. The problem was the aspirations of
the third world peoples to a better life could never be fulfilled without the large scale realization of
science and technology. Fanon was accordingly a thinker who appealed to degenerate third world
oligarchies, anxious to get independence but equally determined to prevent the masses from gaining
upward mobility through the social effects of industrialization, which this school tried to define as
ethnocide because it wiped out the backward and primitive dead-end cultures festering in the
backwaters of the planet.
The other leading idea of Fanon was the necessity of violence, which he exalted in direct
contradiction to Gandhi and Martin Luther King. Fanon was evidently under the spell of Georges
Sorel, the theoretician of purgative violence who was so important for the young Mussolini. The
combination of anti-science demagogy couched in hyper-revolutionary third world terms, plus a
demand for violence which easily shaded over into terrorism, made Fanon’s writings a key tool for
the left wings of US, British and French intelligence during the phase of decolonization in the 1960s
and 1970s. Fanon was also important for the European terrorists of the Italian Red Brigades and the
German Baader-Meinhof group. Fanon, much more than Marx, must be seen as one of the
permanent keys to Obama’s thinking. Obama turns out to be an ultra-left existentialist, with
Fanonist-Sorelian fascist overtones.
Fanon expresses the utopian desire to eliminate all the problems inherited from European
colonialism by bringing an entirely new world, a utopia, into being. As so often happens, the chosen
tool to abolish the historical past is “absolute violence.” (Fanon citations are from The Wretched of
the Earth, chapter VI, conclusion, transl. Dominic Tweedie) Violence purifies, and it is only
48 Barack H. Obama: The Unauthorized Biography
through violence that the dichotomy of white and black can be transcended. “Violence,” says
Fanon, “is a cleansing force. It frees the native from his inferiority complex and from his despair
and inaction; it makes him fearless and restores his self-respect.” Fanon also posed as an ideologue
of world revolution, opining: “In guerrilla war the struggle no longer concerns the place where you
are, but the places where you are going. Each fighter carries his warring country between his toes.”
And again: “The national bourgeoisie will be greatly helped on its way toward decadence by the
Western bourgeoisies, who come to it as tourists avid for the exotic, for big game hunting, and for
casinos. The national bourgeoisie organizes centers of rest and relaxation and pleasure resorts to
meet the wishes of the Western bourgeoisie. Such activity is given the name of tourism, and for the
occasion will be built up as a national industry.”
At the center of the belief structure of the mature Fanon is the total rejection of European
civilization on racial grounds: “We must leave our dreams and abandon our old beliefs and
friendships of the time before life began. Let us waste no time in sterile litanies and nauseating
mimicry. Leave this Europe where they are never done talking of Man, yet murder men everywhere
they find them, at the corner of every one of their own streets, in all the corners of the globe. For
centuries they have stifled almost the whole of humanity in the name of a so-called spiritual
experience. Look at them today swaying between atomic and spiritual disintegration. And yet it
may be said that Europe has been successful in as much as everything that she has attempted has
succeeded. Europe undertook the leadership of the world with ardour, cynicism and violence. Look
at how the shadow of her palaces stretches out ever farther! Every one of her movements has burst
the bounds of space and thought. Europe has declined all humility and all modesty; but she has also
set her face against all solicitude and all tenderness. She has only shown herself parsimonious and
niggardly where men are concerned; it is only men that she has killed and devoured. So, my
brothers, how is it that we do not understand that we have better things to do than to follow that
same Europe? Come, then, comrades, the European game has finally ended; we must find
something different. We today can do everything, so long as we do not imitate Europe, so long as
we are not obsessed by the desire to catch up with Europe. Let us decide not to imitate Europe; let
us combine our muscles and our brains in a new direction. Let us try to create the whole man, whom
Europe has been incapable of bringing to triumphant birth.”
FANON: THE UNITED STATES IS A MONSTER
In Fanon’s world picture, the only thing worse than Europe is the United States. Fanon’s
condemnation of the United States should be carefully read, since it is here that we find the roots of
Obama’s hatred of the country he chose to be his own: “Two centuries ago, a former European
colony decided to catch up with Europe. It succeeded so well that the United States of America
became a monster, in which the taints, the sickness and the inhumanity of Europe have grown to
appalling dimensions. Comrades, have we not other work to do than to create a third Europe? The
West saw itself as a spiritual adventure. It is in the name of the spirit, in the name of the spirit of
Europe, that Europe has made her encroachments, that she has justified her crimes and legitimized
the slavery in which she holds four-fifths of humanity.”
Fanon also makes clear that European workers have become integrated into European capitalist
society; contrary to Marxist theory, they have sold out. Nothing positive can be expected from these
workers, since they are just as corrupt as the other Europeans. Fanon thinks that race is everything,
that class is nothing, and that race war, the more violent the better, will be the answer. Here we see
the germ of the anti-working class hatred which was common to Fanon, to the Ayers-Dohrn
Weatherman terrorist faction of SDS, and which lives on in the statements of the Obama campaign
II: Columbia University and Recruitment by Zbigniew Brzezinski 49
today: “Yes, the European spirit has strange roots. All European thought has unfolded in places
which were increasingly more deserted and more encircled by precipices; and thus it was that the
custom grew up in those places of very seldom meeting man. A permanent dialogue with oneself
and an increasingly obscene narcissism never ceased to prepare the way for a half delirious state,
where intellectual work became suffering and the reality was not at all that of a living man, working
and creating himself, but rather words, different combinations of words, and the tensions springing
from the meanings contained in words. Yet some Europeans were found to urge the European
workers to shatter this narcissism and to break with this un-reality. But in general the workers of
Europe have not replied to these calls; for the workers believe, too, that they are part of the
prodigious adventure of the European spirit.” Working class voters are right to identify in Obama a
class enemy, since that is exactly what he is.
The utopian theme of the New Man, the radical reform of human nature itself, and the
overcoming of alienation are all utopian themes which play a central role in fascist movements, as
we will show in more detail in the final chapter of this book. Fanon argues strongly for a utopian
approach of this type, which depends on rejecting western civilization: “The Third World today
faces Europe like a colossal mass whose aim should be to try to resolve the problems to which
Europe has not been able to find the answers. If we wish to live up to our peoples’ expectations, we
must seek the response elsewhere than in Europe. Moreover, if we wish to reply to the expectations
of the people of Europe, it is no good sending them back a reflection, even an ideal reflection, of
their society and their thought with which from time to time they feel immeasurably sickened. For
Europe, for ourselves and for humanity, comrades, we must turn over a new leaf, we must work out
new concepts, and try to set afoot a new man.”12
Just to make sure that the point about violence was thoroughly understood by Fanon’s gullible
young readers, the premier French existentialist Jean-Paul Sartre in 1961 contributed the following
preface to the edition of Fanon which Obama is likely to have read: “… read Fanon; for he shows
clearly that this irrepressible violence is neither sound and fury, nor the resurrection of savage
instincts, nor even the effect of resentment: it is man re-creating himself. I think we understood this
truth at one time, but we have forgotten it — that no gentleness can efface the marks of violence;
only violence itself can destroy them. The native cures himself of colonial neurosis by thrusting out
the settler through force of arms. When his rage boils over, he rediscovers his lost innocence and he
comes to know himself in that he himself creates his self. Far removed from his war, we consider it
as a triumph of barbarism; but of its own volition it achieves, slowly but surely, the emancipation of
the rebel, for bit by bit it destroys in him and around him the colonial gloom. Once begun, it is a
war that gives no quarter. You may fear or be feared; that is to say, abandon yourself to the
disassociations of a sham existence or conquer your birthright of unity. When the peasant takes a
gun in his hands, the old myths grow dim and the prohibitions are one by one forgotten. The rebel’s
weapon is the proof of his humanity. For in the first days of the revolt you must kill: to shoot down
a European is to kill two birds with one stone, to destroy an oppressor and the man he oppresses at
the same time: there remain a dead man, and a free man; the survivor, for the first time, feels a
national soil under his foot.” The decadent French intellectual embraces Fanon most of all because
of his call for violence, thus unerringly singling out the sickest part of Fanon’s work.
OBAMA’S NICOTINE ADDICTION BEGINS
Obama apparently started smoking when he was at Occidental College. In his fawning cult
biography of Obama, author David Mendell writes about Obama’s life as a “secret smoker” and
how he “went to great lengths to conceal the habit.” Jeff Stier has analyzed the degree to which
50 Barack H. Obama: The Unauthorized Biography
Obama’s quarter century of smoking may have impacted his health: the conclusion is that Obama
may well have more health problems than John McCain. Stier writes: “So how long and how much
did Sen. Obama smoke? The information has not been officially released, and the campaign has not
returned calls or emails posing this question. But he smoked a lot over his life. He admits to having
smoked up to ten cigarettes a day, but usually closer to five or six. Most people underestimate how
much they smoke, but let’s take him at his word. Let’s also assume he really did quit when he said
he did, in February 2007 (although he admits to having fallen off the wagon). That’s about twentysix
years, given that we know he was smoking by the time he was a freshman at Occidental College.
That’s more than 55,000 — maybe 70,000 cigarettes! Has this aspect of Sen. Obama’s ability to
serve really been explored? Just because he’s young, looks great, and exercises doesn’t mean he’s
healthy. Recall Jim Fixx. An overweight smoker when he turned his life around at thirty-five, Fixx
became the icon of fitness. He quit smoking and started running. Then he died in 1984 at age fiftythree
— while running. Sen. Obama, while not overweight, smoked a lot longer than Jim Fixx did.
And while the stresses of running may have contributed to Fixx’s death, it was his years of
smoking, not his running, that caused the plaque to build up in his arteries. Doctors say the stress of
being president may in fact exceed the stress of running. And it’s an unhealthier kind of stress. The
public deserves to know how long and how much Sen. Obama really smoked. Does he have other
risk factors for heart disease? Compared to whites, for instance, African-Americans are more likely
to die of a stroke, according to the American Heart Association. This, in fact, is probably the only
time race is a legitimate question to raise this campaign season — and just one of several health
question on voters’ minds.” (Jeff Stier, Obama’s Health, April 19, 2008) McCain, we see, may be
in better health than Obama, despite appearances.
Smoking is subject to an ineffable taboo in the rich elitist, affluent suburbanite, academic, and
global warming circles which provide Obama’s base of support, so he has striven to hide his
horrible dirty vice from public view. Pictures showing Obama smoking have been greeted with
unalloyed horror by Obama’s backers. However, the candidate has confessed that he has gone back
to puffing his coffin nails as a result of the stress of the campaign trail. One reporter who penetrated
Obama’s terrible secret, despite his evasive action, was the perceptive Jake Tapper, who exposed
the issue in April 2008: ‘As any close friend or family member can attest, I have an unusually keen
sense of smell and immediately I smelled cigarette smoke on Obama. Frankly, he reeked of
cigarettes. Obama ran off before I could ask him if he’d just snuck a smoke, so I called his
campaign. They denied it. He’d quit months before, in February [2007], they insisted. He chewed
nicorette. But I knew what I’d smelled and I asked his campaign to double-check and to ask him if
he’d had a cigarette. They reported back that he had told them he hadn’t had a cigarette since he
quit. And maybe that was true. Maybe I imagined the cigarette smoke. My olfactory nerve
somehow misfired. Except….last night on MSNBC’s Hardball, Obama admitted that his attempt to
wean himself from the vile tobacco weed had not been entirely successful. “I fell off the wagon a
couple times during the course of it, and then was able to get back on,” he said. “But it is a struggle
like everything else.”’ (Jake Tapper, “Obama is Smokin’,” abcnews.com, April 3, 2008) Because of
the importance of the presidency, it is imperative that all candidates release their medical records,
including the results of any mental health treatments and of any and all HIV testing.
THE LOST YEARS AT COLUMBIA UNIVERSITY:
OBAMA’S WALL OF SECRECY
Obama’s years at Columbia University between 1981 and 1983 constitute the greatest single
mystery of his life. From the point of view of all available biographical material published and in
II: Columbia University and Recruitment by Zbigniew Brzezinski 51
the public domain, these are quite simply Obama’s lost years. Dreams from My Father, as we have
seen, is a book prodigal with details about Obama’s drug use — a question that may have a serious
potential to damage his political career. By contrast Obama’s attendance at Columbia University, a
member of the prestigious Ivy League, ought to be a selling point and indeed a point of honor for
our candidate. Instead, any attempts to establish the relevant facts about Obama’s years at Columbia
runs up against a brick wall of silence, evasion, and prevarication. The result is a gaping hole in
Obama’s autobiographical narrative, a serious lacuna precisely where this inveterate showboater
would normally be showcasing his academic achievements. It is in part one, chapter 6 of Dreams
that Obama covers up these years at Columbia. There is almost nothing about his activity as a
student, or about his mental life. The Associated Press ran up against the same wall: “The Obama
campaign declined to discuss Obama’s time at Columbia and his friendships in general. It won’t, for
example, release his transcript or name his friends. It did, however, list five locations where Obama
lived during his four years here: three on Manhattan’s Upper West Side and two in Brooklyn — one
in Park Slope, the other in Brooklyn Heights. His memoir mentions two others on Manhattan’s
Upper East Side.” (Adam Goldman and Robert Tanner, “Old friends recall Obama’s years in LA,
NY,” AP via Newsday, May 15, 2008)
The biographical surveys of Obama published by the New York Times and the Chicago Tribune
are equally incapable of providing any details about Obama’s time on the Columbia campus. As
Janny Scott of the New York Times reported, ‘Senator Obama, an Illinois Democrat now seeking
the presidency, suggests in his book that his years in New York were a pivotal period: He ran three
miles a day, buckled down to work and “stopped getting high,” which he says he had started doing
in high school. Yet he declined repeated requests to talk about his New York years, release his
Columbia transcript or identify even a single fellow student, co-worker, roommate or friend from
those years. “He doesn’t remember the names of a lot of people in his life,” said Ben LaBolt, a
campaign spokesman. Mr. Obama has, of course, done plenty of remembering. His 1995 memoir,
Dreams from My Father, weighs in at more than 450 pages. But he also exercised his writer’s
prerogative to decide what to include or leave out. Now, as he presents himself to voters, a look at
his years in New York — other people’s accounts and his own — suggests not only what he was
like back then but how he chooses to be seen now.’ Why so secretive when he could be
showboating, according to his preferred custom? Or, are we dealing with some form of mental
impairment?
In an article by the insufferable British snob and Obama partisan Richard Wolffe (know to the
few viewers of the Olberman propaganda show, Newsweek magazine attempted to convinced its
readers that Obama is some kind of Christian. This required grotesque contortions, which need not
concern us here. Wolffe reflects the same cone of silence encountered by other researchers into
Obama’s lost years at Columbia, about which he reports virtually no facts and few lies: Obama,
alleges Wolffe, ‘enrolled at Columbia in part to get far away from his past; he'd gone to high school
in Hawaii and had just spent two years "enjoying myself," as he puts it, at Occidental College in
Los Angeles. In New York City, "I lived an ascetic existence," Obama told Newsweek in an
interview on his campaign plane last week. "I did a lot of spiritual exploration. I withdrew from the
world in a fairly deliberate way." He fasted. Often, he'd go days without speaking to another person.
For company, he had books. There was Saint Augustine, the fourth-century North African bishop
who wrote the West's first spiritual memoir and built the theological foundations of the Christian
Church. There was Friedrich Nietzsche, the 19th-century German philosopher and father of
existentialism. There was Graham Greene, the Roman Catholic Englishman whose short novels are
full of compromise, ambivalence and pain. Obama meditated on these men and argued with them in
52 Barack H. Obama: The Unauthorized Biography
his mind.’ Notice that the racist-terrorist-Luddite Fanon, the writer who influenced Obama the most,
has disappeared. He is now replaced by Nietzsche, the classic protofascist philodoxer of the
nineteenth century. The top Nazi ideologue, Alfred Rosenberg rightly claimed Nietzsche along with
Richard Wagner, the antisemite Lagarde and the racist Houston Stewart Chamberlain as a precursor
of the Nazi movement. As we argue elsewhere, it is most likely through existentialism, of which
Nietzsche was a precursor, that Obama developed as a social fascist. (“Finding His Faith,”
Newsweek, July 12, 2008, http://www.newsweek.com/id/145971)
Obama’s acolytes at the reactionary Chicago Tribune found even less about Obama’s Columbia
years than the swooning liberals at the New York Times.
Obama spent just two years at Occidental. He said in a recent interview that he had begun to
weary of the parties and fretted about a lackadaisical approach to his studies. He grew more
introspective and serious. His mother’s warnings were beginning to take hold. Seeking a fresh
start, he transferred to Columbia University in New York City. Classmates and teachers from
those days remember him as studious and serious, someone who hit the library in his off hours
instead of the bars. “If I had to give one adjective to describe him, it is mature,” said William
Araiza, who took an international politics class with Obama. “He was our age, but seemed older
because of his poise.” (Maurice Possley, “Activism Blossomed in College,” Chicago Tribune,
March 30, 2007)
That’s it. Nothing more. No Dink Stover at Yale, no This Side of Paradise. Before you know it,
Obama has left Columbia and is out in the big world: “After his graduation from Columbia
University in 1983, he worked briefly for a New York financial consultant and then a consumer
organization.” Bob Secter and John McCormick, “Portrait of a Pragmatist,” Chicago Tribune,
March 30, 2007) Some postings on the Internet have alleged that Obama is seeking to hide a phase
of flamboyant homosexuality during his years at Morningside Heights. This may be so. However,
the principal thesis argued here, based on very strong circumstantial evidence, is that Obama is
seeking to conceal the central event of his entire personal story: his recruitment by Zbigniew
Brzezinski as a long-term controlled political asset and sponsored career of the Rockefellercontrolled
Trilateral Commission.
OBAMA AND ZBIGNIEW BRZEZINSKI AT COLUMBIA, 1981-1983
Brzezinski during these years was fresh from having directed the National Security Council
during Jimmy Carter’s sole term in office. As we have seen elsewhere in this book, it was in
precisely this period of the early 1980s that Brzezinski, Samuel Huntington, and other long-term
Trilateral planners were reflecting on the results of the Carter regime, while looking forward to
wrecking and frustrating a general political upsurge in the United States (known in Huntington’s
parlance as a creedal passion period) which they could already see on the horizon, and which they
located at that time in the years between 2010 and 2030. It is safe to assume that Brzezinski and
Huntington were also concerned with recruiting young political talent which they could develop,
groom, indoctrinate, and brainwash for various purposes, including that of political candidate, over
the coming decades. Brzezinski and Huntington, in short, were looking for political assets which
they might employ during a quarter century perspective which was the framework for their future
activity. Because of the strong Ford Foundation pedigree of Obama’s mother, young Barack would
have been an obvious choice as a subject to be interviewed and vetted. The contention here is that
Obama was recruited in the context of this effort, and that since then, his career has been fostered
and sponsored by the circles of the Trilateral Commission.
II: Columbia University and Recruitment by Zbigniew Brzezinski 53
Zbigniew Brzezinski during these years was working as the boss of the Institute for Communist
Affairs at Columbia — a notorious anti-Soviet think tank and propaganda center. What little we
know about Obama includes that he was a politics major with a specialty in international relations
who wrote his senior thesis on the topic of Soviet nuclear disarmament. This, needless to say, is a
topic which has Zbigniew Brzezinski written all over it. If Senator Obama wishes to refute the
contention that he has been a member of the Brzezinski Trilateral stable of politicians and other
operatives since approximately 1981-1983, he is invited to offer documentation to that end. For his
part, Zbigniew Brzezinski understood quite soon in his career that his Dr. Strangelove television
persona was a decided political liability in this country. It has been forgotten today, but at the time
he left office at the end of the Carter administration, Brzezinski was by all odds the most hated
member of a very unpopular administration. In fact, it would seem that Brzezinski ranks down to
this day as the most hated government official serving in Democratic administrations since the
departure from the White House of Lyndon B. Johnson in January 1969. Any doubts about this
profound unpopularity had been clarified when Brzezinski was loudly booed by the delegates to the
1980 Democratic National Convention. Since those times, Brzezinski has been extraordinarily gun
shy when it comes to publicity or to stating in public what he actually thinks and intends.
Brzezinski, in other words, has learned that he must conceal his own political operations, lest they
be disrupted by hostile scrutiny. Obama has represented one of these long-term, concealed
Brzezinski operations.
Obama’s presence at Columbia remains shrouded in mystery. According to published reports,
many of his classmates don’t remember Obama. According to one account, he does not appear in
the yearbook of his graduating class. In response to inquiries made by journalists during 2007,
Columbia University was unwilling or unable to find a picture of him during his years at that
university. Obama has attempted to conceal his years at Columbia with the usual cloak of
complaints about the alleged racism of the place: ‘Mr Obama was later admitted to read politics and
international relations at New York’s prestigious Columbia University where, his book claims, “no
matter how many times the administration tried to paint them over, the walls remained scratched
with blunt correspondence (about) n****rs.” But one of his classmates, Joe Zwicker, 45, now a
lawyer in Boston, said yesterday: “That surprises me. Columbia was a pretty tolerant place. There
were African-American students in my classes and I never saw any evidence of racism at all.”’
(London Daily Mail, January 27, 2007) Nevertheless, Obama does reveal in veiled terms that
coming to Columbia was a great watershed in his life: ‘“There was a fundamental rupture in my life
between Occidental and Columbia, where I just became more serious,” Obama said.’ (Purdum,
Vanity Fair, March 2008) It was Brzezinski’s intervention that made the difference, we believe.
And: is Obama suggesting that this was when he turned away from illegal drugs? He never says so
specifically, leaving a plethora of questions.
In a September 5, 2008 interview with Matt Welch, the Libertarian Party candidate for vice
president Wayne Allyn Root, a member of Obama’s Columbia class of 1983, reports that he never
met or heard of anybody called Obama, and has not been able to find anyone who can among his
fellow alumni. Root majored in the same department where Obama claims to have majored. Here is
an excerpt from this revealing exchange:
“Wayne Allyn Root: I think the most dangerous thing you should know about Barack Obama is
I don’t know a single person at Columbia that knows him, and they all know me. I don’t have a
classmate who ever knew Barack Obama at Columbia. Ever!
Matt Welch: So tell us what we should know about Barack
54 Barack H. Obama: The Unauthorized Biography
Welch: Yeah, but you were like selling, you know, Amway in college or something, weren’t
you?
Root: Is that what you think of me! And the best damned Amway salesman ever!
Welch: No, I’m sure that you were an outgoing young man, I’m just guessing.
Root: I am! That’s my point. Where was Obama? He wasn’t an outgoing young man, no one
ever heard of him.
Tim Cavanaugh: Maybe he was a late bloomer.
Root: Maybe. Or maybe he was involved in some sort of black radical politics.
Welch: Ooooooooooh.
Root: Maybe he was too busy smoking pot in his dorm room to ever show up for class. I don’t
know what he was doing!
Welch: Wait, you weren’t smoking pot in your dorm room?
Root: No, I wasn’t. I wasn’t. But I don’t hold that against anybody, but I wasn’t.... Nobody
recalls him. I’m not exaggerating, I’m not kidding.
Welch: Were you the exact same class?
Root: Class of ‘83 political science, pre-law Columbia University. You don’t get more exact
than that. Never met him in my life, don’t know anyone who ever met him. At the class reunion,
our 20th reunion five years ago, 20th reunion, who was asked to be the speaker of the class?
Me. No one ever heard of Barack! Who was he, and five years ago, nobody even knew who he
was.
Other guy: Did he even show up to the reunion?
Root: I don’t know! I didn’t know him. I don’t think anybody knew him. But I know that the
guy who writes the class notes, who’s kind of the, as we say in New York, the macha who
knows everybody, has yet to find a person, a human who ever met him. Is that not strange? It’s
very strange.
Welch: That’s peculiar! Do you have any theories?”13
In spite of his intent to deceive and dissemble, Obama has lavished praise on Zbigniew, as for
example in his first foreign policy speech in Iowa in 2007, when he called in Zbiggy to introduce
him. On this occasion, Obama paid homage to the Polish revanchist in effusive terms: “Brzezinski
is someone I have learned an immense amount from,” and “one of our most outstanding scholars
and thinkers.” The New York Times account of this critical and decisive phase in Obama’s life
stresses the obsessive secrecy with which the Obamakins attempt to shroud this entire phase.
Barack Obama does not say much about his years in New York City. The time he spent as an
undergraduate at Columbia College and then working in Manhattan in the early 1980s surfaces
only fleetingly in his memoir. In the book, he casts himself as a solitary wanderer in the
metropolis, the outsider searching for a way to “make myself of some use.” He tells of
underheated sublets, a night spent in an alley, a dead neighbor on the landing. From their fire
escape, he and an unnamed roommate watch “white people from the better neighborhoods”
bring their dogs to defecate on the block. He takes a job in an unidentified “consulting house to
multinational corporations,” where he is “a spy behind enemy lines,” startled to find himself
with a secretary, a suit and money in the bank.
He barely mentions Columbia, training ground for the elite, where he transferred in his junior
year, majoring in political science and international relations and writing his thesis on Soviet
II: Columbia University and Recruitment by Zbigniew Brzezinski 55
nuclear disarmament. He dismisses in one sentence his first community organizing job — work
he went on to do in Chicago — though a former supervisor remembers him as “a star
performer.” […] In a long profile of Mr. Obama in a Columbia alumni magazine in 2005, in
which his Columbia years occupied just two paragraphs, he called that time “an intense period
of study.” “I spent a lot of time in the library. I didn’t socialize that much. I was like a monk,”
he was quoted as saying. He said he was somewhat involved with the Black Student
Organization and anti-apartheid activities, although in recent interviews, several prominent
student leaders said they did not remember his playing a role. (Janny Scott, “Obama’s Account
of New York Years Often Differs From What Others Say,” New York Times, October 30, 2007)
One person who did remember Mr. Obama was Michael L. Baron, who taught a senior seminar
on international politics and American policy. Mr. Baron, now president of an electronics
company in Florida, said he was Mr. Obama’s adviser on the senior thesis for that course. Mr.
Baron, who later wrote Mr. Obama a recommendation for Harvard Law School, gave him an A
in the course. Columbia was a hotbed for discussion of foreign policy, Mr. Baron said. The
faculty included Zbigniew Brzezinski, the former national security adviser, and Zalmay
Khalilzad, now the American ambassador to the United Nations. Half of the eight students in
the seminar were outstanding, and Mr. Obama was among them, Mr. Baron said.
One of Obama’s friends at Columbia was his roommate Sadik or Siddiqi, who is described as “a
short, well-built Pakistani” who smoked marijuana, snorted cocaine and liked to party. Obama’s
campaign adamantly refused to identify “Sadik,” but the Associated Press located him in Seattle,
where he raises money for a community theater. When Obama arrived in New York, he already
knew Siddiqi — a friend of Chandoo’s and Hamid’s from Karachi who had visited Los Angeles.
Looking back, Siddiqi acknowledges that he and Obama were an odd couple. Siddiqi would mock
Obama’s idealism — he just wanted to make a lot of money and buy things, while Obama wanted to
help the poor. “At that age, I thought he was a saint and a square, and he took himself too
seriously,” Siddiqi said. “I would ask him why he was so serious. He was genuinely concerned with
the plight of the poor. He’d give me lectures, which I found very boring. He must have found me
very irritating.” Siddiqi offered the most expansive account of Obama as a young man. “We were
both very lost. We were both alienated, although he might not put it that way. He arrived disheveled
and without a place to stay,” said Siddiqi, who at the time worked as a waiter and as a salesman at a
boutique…. The apartment was “a slum of a place” in a drug-ridden neighborhood filled with
gunshots, he said. “It wasn’t a comfortable existence. We were slumming it.” What little furniture
they had was found on the street, and guests would have to hold their dinner plates in their laps. …’
Obama commented: ‘“For about two years there, I was just painfully alone and really not
focused on anything, except maybe thinking a lot.” In his memoir, Obama recalls fasting on
Sunday; Siddiqi says Obama was a follower of comedian-activist Dick Gregory’s vegetarian diet. “I
think self-deprivation was his schtick, denying himself pleasure, good food and all of that.” But it
wasn’t exactly an ascetic life. There was plenty of time for reading (Gabriel Garcia Marquez, V.S.
Naipaul) and listening to music (Van Morrison, the Ohio Players, Bob Dylan). The two, along with
others, went out for nights on the town. “He wasn’t entirely a hermit,” Siddiqi said. Siddiqi said his
female friends thought Obama was “a hunk.” “We were always competing,” he said. “You know
how it is. You go to a bar and you try hitting on the girls. He had a lot more success. I wouldn’t outcompete
him in picking up girls, that’s for sure.” Obama was a tolerant roommate. Siddiqi’s mother,
who had never been around a black man, came to visit and she was rude; Obama was nothing but
polite. Siddiqi himself could be intemperate — he called Obama an Uncle Tom, but “he was really
patient. I’m surprised he suffered me.” Finally, their relationship started to fray. “I was partying all
56 Barack H. Obama: The Unauthorized Biography
the time. I was disrupting his studies,” Siddiqi said. Obama moved out.’ (Adam Goldman and
Robert Tanner, “Old friends recall Obama’s years in LA, NY,” AP via Newsday, May 15, 2008)
TRILATERAL COMMISSION POST-CARTER PERSPECTIVE, 1981-1983
During these years, Trilateral leaders Brzezinski and Samuel Huntington were pondering the
future transformation of the United States into a bureaucratic-authoritarian or totalitarian state. In
his book American Politics, Huntington developed a perspective for the future based on conflict
between increasingly authoritarian and ultimately totalitarian state control, on the one hand, and an
underlying American value system and world-outlook – which he calls the “American Creed” – on
the other. In Huntington’s view, there was no doubt that the regime would become more oppressive:
“An increasingly sophisticated economy and active involvement in world affairs seem likely to
create stronger needs for hierarchy, bureaucracy, centralization of power, expertise, big government
specifically, and big organizations generally.” (p. 228) This is a kind of shorthand for what most
experts could identify as the fascist corporate state.
The problem Huntington saw was the American Creed, based on liberty, equality, individualism,
and democracy and rooted in “seventeenth-century Protestant moralism and eighteenth-century
liberal rationalism.” (p. 229) Huntington predicted in 1981 that the conflict between individualistic
values and the centralized regime may explode early in the coming century, specifically between
2010 and 2030, in a period of ferment and dislocation like the late 1960s: “If the periodicity of the
past prevails, a major sustained creedal passion period will occur in the second and third decades of
the twenty-first century.” At this time, he argued, “the oscillations among the responses could
intensify in such a way as to threaten to destroy both ideals and institutions.” (p. 232) Such a
process would be acted out as follows:
“Lacking any concept of the state, lacking for most of its history both the centralized authority
and the bureaucratic apparatus of the European state, the American polity has historically been
a weak polity. It was designed to be so, and the traditional inheritance and social environment
combined for years to support the framers’ intentions. In the twentieth century, foreign threats
and domestic economic and social needs have generated pressures to develop stronger, more
authoritative decision-making and decision-implementing institutions. Yet the continued
presence of deeply felt moralistic sentiments among major groups in American society could
continue to ensure weak and divided government, devoid of authority and unable to deal
satisfactorily with the economic, social and foreign challenges confronting the nation.
Intensification of this conflict between history and progress could give rise to increasing
frustration and increasingly violent oscillations between moralism and cynicism. American
moralism ensures that government will never be truly efficacious; the realities of power ensure
that government will never be truly democratic. This situation could lead to a two-phase
dialectic involving intensified efforts to reform government, followed by intensified frustration
when those efforts produce not progress in a liberal-democratic direction, but obstacles to
meeting perceived functional needs. The weakening of government in an effort to reform it
could lead eventually to strong demands for the replacement of the weakened and ineffective
institutions by more authoritarian structures more effectively designed to meet historical needs.
Given the perversity of reform, moralistic extremism in the pursuit of liberal democracy could
generate a strong tide toward authoritarian efficiency.” (p. 232)
Huntington then quotes Plato’s celebrated passage on the way that the “culmination of liberty in
democracy is precisely what prepares the way for the cruelest extreme of servitude under a despot.”
II: Columbia University and Recruitment by Zbigniew Brzezinski 57
The message is clear: sooner or later, all roads lead to Behemoth. (Tarpley, Project Democracy,
[Washington: EIR, 1987])
Trilateral fascination with a totalitarian transformation in this country did not start after Carter,
but began well before he came on the scene. A good example is Brzezinski’s own book, Between
Two Ages: America’s Role in the Technetronic Era (1970), where the Polish revanchist conjured up
the glittering image of a “technetronic era,” whereby a more controlled society would gradually
emerge, dominated by an oligarchical elite unrestrained by traditional values.
Brzezinski predicted that “Power will gravitate into the hands of those who control information”
(Brzezinski 1), adding that surveillance and data mining will foster “tendencies through the next
several decades toward a technocratic era, a dictatorship leaving even less room for political
procedures as we know them” (Brzezinski 12). Information Technology would become the key to
mass social control: “Unhindered by the restraints of traditional liberal values, this elite would not
hesitate to achieve its political ends by the latest modern techniques for influencing public behavior
and keeping society under close surveillance and control.” (Brzezinski 252) These are remarks
which ought to remind fatuous left liberals, who have been deluded by Zbig’s re-invention of
himself in an anti-Bush and anti-Iraq war mode, that they are dealing here with one very sinister
totalitarian elitist.
HYPOTHESIS: A QUARTER CENTURY OF TRILATERAL INDOCTRINATION
The inevitable corollary of the Brzezinski-Huntington analysis as developed in the post-Carter
era is the need to prepare political operatives to intervene in the creedal passion period or general
political upsurge which was expected to emerge around 2010. This would suggest that Brzezinski,
Huntington, and other Trilateral operatives were keeping their eyes open for suitable political talent
which they could identify, recruit, and begin grooming for use a quarter-century in the future. To
those for whom such a protracted process might seem to be fantastic and conspiratorial, let it be
pointed out that the career timescale involved hardly differs from the typical career of a military
officer, a bank executive, or a top-flight academic. To those who are accustomed to living from one
paycheck to the next, a 25-year perspective may seem like extraordinary foresight. To those
accustomed to viewing the world from the apex of huge organizations, it looks like something
rather routine and prosaic.
The hypothesis advocated here is therefore that Obama has been a protected and controlled asset
of the Trilateral Commission since his time at Columbia University between 1981 and 1983. Since
the moment of his recruitment, Obama’s career has been promoted, fostered, preferred, and
otherwise protected by the Trilateral financier network.
DEVAL PATRICK: BRZEZINSKI’S SPARE OBAMA
The interchangeability of Obama and Massachusetts governor Deval Patrick is important
because the two of them remind us of the procedures used by the Trilateral managers the last time
they installed a puppet president – Jimmy Carter. As Zbigniew Brzezinski tells us with startling
brutality in his memoir entitled Power and Principle, the Trilaterals did not put all their eggs in one
basket when it came to grooming a puppet for the 1976 election. Their favored choice was that
messianic peanut farmer from Plains, Georgia who in fact won the presidency. But they always
retained a fallback option as well. As Brzezinski relates, this was another southern Democratic
Governor, Reubin Askew of Florida. If Carter had overdosed, suffered a nervous breakdown, or
58 Barack H. Obama: The Unauthorized Biography
been indicted, Askew would have been rushed into the breach to take his place. Since the spare
candidate or fallback option needed had to be a relatively prominent public figure, it is virtually
impossible to conceal the fact that an understudy is waiting in the wings. The existence of Patrick
as Obama’s virtual twin is therefore of critical importance for the argument that Obama is in fact a
Manchurian candidate created and controlled by the Trilateral commission and its allies.
The parallels are indeed striking, starting with the fact that both Obama and Patrick are fatherless
boys who are therefore susceptible to seeing a powerful institution or authority figure as an ersatz
father. Patrick was born on the South Side of Chicago, Illinois, into an African-American family
living on welfare in a two-bedroom slum apartment. In 1959, his father Laurdine “Pat” Patrick, a
member of jazz musician Sun Ra’s band, deserted Deval, his mother, and his sister in order to
pursue his music career in New York City, where he had fathered a daughter by another woman.
Deval’s relationship with his father, like Obama’s, was a lamentable one. Deval was in middle
school when he was picked up by a foundation called A Better Chance, a national non-profit
organization for identifying, recruiting, co-opting, and developing leaders among smart black
students. Thanks to this foundation backing, Deval was able to attend the exclusive, costly, and elite
Milton Academy in Milton, Massachusetts – a local prep school equivalent to Obama’s Punahou
School in Hawaii. Patrick graduated from Milton Academy in 1974, and from Harvard College in
1978. At Harvard, Patrick was co-opted into the ultra-elitist Fly Club, Harvard’s answer to Yale’s
Skull and Bones secret society. He then spent a year working for the United Nations in Africa. In
1979, Patrick enrolled in Harvard Law School. While in law school, Patrick was elected president
of the Legal Aid Bureau; Obama would top that by becoming the editor of the law review. Patrick
got his first job defending poor families in Middlesex County, Massachusetts – similar to Obama’s
apprenticeship as a community organizing counter-insurgency operative. Patrick’s wife, like
Obama’s, is an upwardly mobile member of the black affirmative-action overclass.
OBAMA DISCREDITED IN MASSACHUSETTS,
NEW HAMPSHIRE, RHODE ISLAND
Patrick spoiled Massachusetts, New Hampshire, and Rhode Island (where the television comes
from Boston) for Obama’s future chances by his blatant nepotism and greedy rapacity in office. He
spent $11,000 on drapery for the governor’s state house suite, changed the governor’s car from a
Crown Victoria to a Cadillac, and hired a chief of staff for his wife at an annual salary of almost
$75,000. He commandeered a state helicopter for his private use. Patrick lavished all this on himself
while demanding austerity and service cuts for the people, as Obama is also sure to do. Patrick was
also remarkably corrupt: he placed a call to Citigroup Executive Committee chair Robert Rubin on
behalf of the financially beleaguered mortgage company Ameriquest, a subsidiary of ACC Capital
Holdings, of which Patrick is a former board member. Patrick later attempted to lie his way out of
this predicament with the absurd claim that he was calling not as governor but as a private citizen.
When this ploy failed, the skewered Patrick plaintively confessed: “I appreciate that I should not
have made the call. I regret the mistake.”
Patrick, like Jeremiah Wright, was a devotee of the blowback theory of the 9/11 terrorist attacks,
a hallmark of left CIA sponsorship. On the sixth anniversary of the 9/11 events on September 11,
2007, Patrick declaimed: “It was a mean and nasty and bitter attack on the United States. But it was
also about the failure of human beings to understand each other and to learn to love each other. It
seems to me that lesson of that morning is something that we must carry with us every day.” In
II: Columbia University and Recruitment by Zbigniew Brzezinski 59
another telling incident, one of Patrick’s aides (a certain Carl Stanley McGee) was arrested in
Florida in December 2007 for the sexual assault of a 15-year old boy in a Florida hotel.
Early in Patrick’s term, only 48 percent of Massachusetts voters approved of the way he was
handling the job, while 33 percent disapproved — a relatively high number for a governor’s
honeymoon period, said Andrew E. Smith, director of The Survey Center at the University of New
Hampshire. 44 percent said Massachusetts is headed in the right direction, while 56 percent said the
state is off course. (Boston Globe, April 8, 2007)
BUSINESS INTERNATIONAL CORPORATION
Obama’s first job after leaving Columbia was with Business International Corporation (BIC), a
private intelligence company which provided information and know-how to US companies seeking
to do business overseas. Obama worked as a consultant and financial journalist. So far as is known,
Business International Corporation was never identified as a CIA front company, but it had the telltale
earmarks of one. Its business of journalism and reporting, ferreting out information about
conditions in foreign countries was a perfect cover story for spying of all sorts. Business
International went out of existence when it was acquired the London Economist Intelligence Unit,
an operation that notoriously moved in the orbit of British intelligence.
Once again, Obama covers up whatever may have happened in reality by throwing up a
smokescreen of racial conflict. This time it was the first temptation of St. Barack by the devil
(“white” society, as always). Dan Armstrong, who knew Obama when he was working at BIC, has
stressed that Obama’s account of the firm and his job there is far from accurate: ‘Mr. Armstrong’s
description of the firm, and those of other co-workers, differs at least in emphasis from Mr.
Obama’s. It was a small newsletter-publishing and research firm, with about 250 employees
worldwide, that helped companies with foreign operations (they could be called multinationals)
understand overseas markets, they said. Far from a bastion of corporate conformity, they said, it was
informal and staffed by young people making modest wages. Employees called it “high school with
ashtrays.” Mr. Obama was a researcher and writer for a reference service called Financing Foreign
Operations. He also wrote for a newsletter, Business International Money Report. […] “It was not
working for General Foods or Chase Manhattan, that’s for sure,” said Louis Celi, a vice president at
the company, which was later taken over by the Economist Intelligence Unit. “And it was not a
consulting firm by any stretch of the imagination. I remember the first time I interviewed someone
from Morgan Stanley and I got cheese on my tie because I thought my tie was a napkin.”’ (Janny
Scott, “Obama’s Account of New York Years Often Differs From What Others Say,” New York
Times, October 30, 2007) Armstrong’s view is that Obama has distorted what went on at BIC to
make himself look good, specifically by concocting a moment in which he turns away from the
corrupt fleshpots of whitey’s world.
THE TEMPTATIONS OF ST. BARACK
Obama writes the following about his career at BIC in Dreams: “Eventually a consulting house
to multinational corporations agreed to hire me as a research assistant. Like a spy behind enemy
lines, I arrived every day at my mid-Manhattan office and sat at my computer terminal, checking
the Reuters machine that blinked bright emerald messages from across the globe. As far as I could
tell I was the only black man in the company, a source of shame for me but a source of considerable
pride for the company’s secretarial pool.” Armstrong refutes most of these points, noting that there
were other black people working there at the time, and noting:
60 Barack H. Obama: The Unauthorized Biography
… after reading his autobiography, I have to say that Barack engages in some serious
exaggeration when he describes a job that he held in the mid-1980s. I know because I sat down
the hall from him, in the same department, and worked closely with his boss. I can’t say I was
particularly close to Barack – he was reserved and distant towards all of his co-workers – but I
was probably as close to him as anyone. I certainly know what he did there, and it bears only a
loose resemblance to what he wrote in his book. First, it wasn’t a consulting house; it was a
small company that published newsletters on international business. Like most newsletter
publishers, it was a bit of a sweatshop. I’m sure we all wished that we were high-priced
consultants to multinational corporations. But we also enjoyed coming in at ten, wearing jeans
to work, flirting with our co-workers, partying when we stayed late, and bonding over the low
salaries and heavy workload. Barack worked on one of the company’s reference publications.
Each month customers got a new set of pages on business conditions in a particular country,
punched to fit into a three-ring binder. Barack’s job was to get copy from the country
correspondents and edit it so that it fit into a standard outline. There was probably some
research involved as well, since correspondents usually don’t send exactly what you ask for,
and you can’t always decipher their copy. But essentially the job was copyediting. It’s also not
true that Barack was the only black man in the company. He was the only black professional
man. Fred was an African-American who worked in the mailroom with his son. My boss and I
used to join them on Friday afternoons to drink beer behind the stacks of office supplies. That’s
not the kind of thing that Barack would do. Like I said, he was somewhat aloof.
Out of these mundane facts, Obama (or more likely his ghostwriters) construct a modern
morality play to burnish the credentials of an ambitious young proto-pol: “…as the months passed, I
felt the idea of becoming an organizer slipping away from me. The company promoted me to the
position of financial writer. I had my own office, my own secretary; money in the bank. Sometimes,
coming out of an interview with Japanese financiers or German bond traders, I would catch my
reflection in the elevator doors—see myself in a suit and tie, a briefcase in my hand—and for a split
second I would imagine myself as a captain of industry, barking out orders, closing the deal, before
I remembered who it was that I had told myself I wanted to be and felt pangs of guilt for my lack of
resolve.” (Dreams)
Armstrong notes ironically: “If Barack was promoted, his new job responsibilities were more of
the same – rewriting other people’s copy. As far as I know, he always had a small office, and the
idea that he had a secretary is laughable. Only the company president had a secretary. Barack never
left the office, never wore a tie, and had neither reason nor opportunity to interview Japanese
financiers or German bond traders.” Obama wants the reader to believe that he was saved from a
life of corporate ambition by a telephone call from his African, Kenyan sister, who wanted to tell
him that their brother (or half-brother) David had been killed in a motorcycle accident: “Then one
day, as I sat down at my computer to write an article on interest-rate swaps, something unexpected
happened. Auma called. I had never met this half sister; we had written only intermittently …a few
months after Auma called, I turned in my resignation at the consulting firm and began looking in
earnest for an organizing job.” (Dreams) Armstrong points out that what Obama “means here is that
he got copy from a correspondent who didn’t understand interest rate swaps, and he was trying to
make sense out of it.”
PORTRAIT OF THE CANDIDATE AS A YOUNG MEGALOMANIAC
In Armstrong’s view, the entire story of this turning point in the life of the selfless young
community organizer was a tissue of lies: “All of Barack’s embellishment serves a larger narrative
II: Columbia University and Recruitment by Zbigniew Brzezinski 61
purpose: to retell the story of the Christ’s temptation. The young, idealistic, would-be community
organizer gets a nice suit, joins a consulting house, starts hanging out with investment bankers, and
barely escapes moving into the big mansion with the white folks. Luckily, an angel calls, awakens
his conscience, and helps him choose instead to fight for the people. I’m disappointed. Barack’s
story may be true, but many of the facts are not. His larger narrative purpose requires him to
embellish his role. I don’t buy it. Just as I can’t be inspired by Steve Jobs now that I know how
dishonest he is, I can’t listen uncritically to Barack Obama now that I know he’s willing to bend the
facts to his purpose.” Dan Armstrong, “Barack Obama Embellishes His Resume,”
http://analyzethis.net/blog/index.php
Here appears an aspect of Obama’s life which has since become notorious – the identification of
his undistinguished self with Jesus Christ, the Messiah and Son of God. If Armstrong is right about
this parable of the temptations, Obama really does believe that he is the Savior, and has thought this
for almost fifteen years at minimum. Some choose to mimic Christ, some choose to mimic
Napoleon, but the common denominator is megalomania, the most succinct summary of Obama’s
mentality – and, ironically, one that puts him in the same psychopathological class with his apparent
polar opposite, George W. Bush, who is also a megalomaniac, as Dr. Justin Frank has pointed out.
There was another dangerous temptation lurking in Obama’s life. Obama had expressed his
scorn for those he called “half-breeds” who preferred white people to blacks. After college, he lived
with a white woman, but then decided to push her away when he realized that he would have to
assimilate into her (“white”) world, and not vice versa. He later married Michelle, the upwardly
mobile black woman lawyer. Obama’s choices were based on very solid political reasoning: if he
had come forward to run for the presidency with a white woman for his consort, he would have
been politically doomed by the resentment of black women, many of whom would have interpreted
this choice as a confirmation of racial stereotypes held by black males against them, stereotypes
concretely expressed in preference for white women. A white wife would have been political
suicide. When the Greenwich Village poetaster LeRoi Jones wanted to become the black nationalist
organizer Amiri Baraka, it was imperative that he jettison his white wife, who would have been a
fatal impediment for his planned activity in the service of the Prudential Insurance Company –
provoking clashes with poor Italians in the streets of Newark, New Jersey as part of a
counterinsurgency scheme.
NADERITE PUBLIC INTEREST RESEARCH GROUP, NEW YORK CITY
After BIC, Obama moved on for a stint at Ralph Nader’s Public Interest Research Group in New
York City, a nonprofit group which billed itself as promoting “consumer, environmental and
government reform.” According to Janny Scott, Obama “became a full-time organizer at City
College in Harlem, paid slightly less than $10,000 a year to mobilize student volunteers.” Nader’s
groups attempt to carry out feasible reforms in the areas of health, safety, and consumer issues, all
under the banner of “good government” – the eternal slogan of reform Democrats and upscale
suburbanites who are horrified by the venality of politics among poor people and the underclass.
Obama’s specific assignment was the one he has tried and failed to carry out in 2008: to take
projects that were designed to appeal to affluent suburbanites and sell them to people much lower
on the socioeconomic scale. His job was an exercise in condescending Malthusian elitism: ‘Mr.
Obama says he spent three months “trying to convince minority students at City College about the
importance of recycling” — a description that surprised some former colleagues. They said that
more “bread-and-butter issues” like mass transit, higher education, tuition and financial aid were
62 Barack H. Obama: The Unauthorized Biography
more likely the emphasis at City College. “You needed somebody — and here was where Barack
was a star — who could make the case to students across the political spectrum,” said Eileen
Hershenov, who oversaw Mr. Obama’s work for Nypirg. The job required winning over students on
the political left, who would normally disdain a group inspired by Ralph Nader as insufficiently
radical, as well as students on the right and those who were not active at all.”’ (Janny Scott,
“Obama’s Account of New York Years Often Differs From What Others Say,” New York Times,
October 30, 2007) Obama failed then, and he is failing again this time in his quest to market elitist
issues among those with urgent economic needs.
GAMALIEL FOUNDATION, CHICAGO: ALINSKYITE COUNTERINSURGENCY
Obama embarked on what he says, even now, was the hardest work of his life: the three and a
half years of community organizing in the impoverished neighborhoods of Chicago’s far South
Side. His job: to work with the Developing Communities Project, a church-based effort that aimed
to organize low-income residents to improve local conditions. … his friend Valerie Jarrett, former
chairman of the Chicago Stock Exchange, told me. Obama himself described the years in Chicago
to me as the time when he “finally and fully grew up.” (Purdum, Vanity Fair, March 2008)
Obama loves to boast that he served for some years as a community organizer. The problem for
most people is that they have very little concrete notion what this might mean. This needs a few
words of explanation. The Developing Communities Project was an operation of the Gamaliel
Foundation, the temple of the organizing methods associated with Saul Alinsky, who had been
preaching community organizing since the World War II era. The Gamaliel Foundation was also a
satellite of the Ford Foundation, the flagship US foundation devoted to preventing the emergence of
any social-political challenge to the dominance of Wall Street financiers over the crumbling US
society. Money for Obama also came from the Woods Fund, a foundation created by the reactionary
Woods family, who owned coal mines that provided the coal for Commonwealth Edison, where the
dominant figure was Thomas Ayers, the father of Obama’s terrorist friend, foundation operative Bill
Ayers.
The best term for Saul Alinsky was that he was a counter-insurgent, quite independent of his
personal understanding of the matter. Alinsky’s community organizing specified that people ought
to be organized locally and on the basis of the lowest common denominator, generally some petty
local grievance, although sometimes based on poverty, but only if it were understood as a purely
local issue. Alinsky was obsessed with everything that was fragmented, parochial, localistic,
balkanized, sub-divided neighborhood by neighborhood, precinct by precinct, block by block. In his
dream world, one local group of Hungarian steelworkers would fight to get a sewer fixed. A few
hundred yards away, a black community group would fight the city government to get a public
library. Nearby a group of women would be demanding a daycare facility. A men’s club would
struggle to clean up the public park. None of these groups would be in any contact with any others.
They would not act politically, would not support candidates; they would only exert pressure on
corporations, governments, and so forth.
Each of these tiny groups would be fragmented and impotent and helpless in a real emergency,
like a depression, a war, or a police state. Above all, they would never be able to advance an
alternative to Wall Street domination, which was so far beyond the local purview that it never came
up – and yet, this was always the heart of the matter. It was more likely that a black local group
would fight a white one, with unemployed or parents fighting the teachers’ union, or some other
futile clash. Sometimes Alinsky’s methods won some trifling local concession, but often the yield
II: Columbia University and Recruitment by Zbigniew Brzezinski 63
was nil. The more common outcome was that the local organizers became demoralized by a long
series of defeats, and drifted off into boredom, despair, and de-politicization. This is in fact the
outcome that appears to have crowned the career of Barack Obama as a community organizer in
Chicago in the 1990s; after three years of futility, Obama was canny enough to depart the scene in
favor of the Harvard Law School, another stepping stone in his glittering political career.
Obama went to Chicago in 1985. He worked as a community organizer among low-income
residents in Chicago’s Roseland community and the Altgeld Gardens public housing development
on the city’s South Side. The Developing Communities Project (DCP) counter-insurgency effort
was funded by the Gamaliel Foundation, which was heavily funded by the flagship Ford
Foundation. DCP purported to offer job training and college prep on Chicago’s South Side. The real
problems of blacks on the South Side of Chicago were the soaring unemployment and
imprisonment among the area’s mostly black workers – issues that Obama never addressed.
The Gamaliel Foundation’s own website informs the public that “the Gamaliel Foundation
receives grants from the Bauman Family Foundation, the Public Welfare Foundation, the Carnegie
Corporation of New York, the W.K. Kellogg Foundation, the Ford Foundation, George Soros’ Open
Society Institute, and others.” (www.gamaliel.org) Obama has thus been a Ford Foundation-Soros
asset going back more than twenty years. The Developing Communities Project (DCP) was
associated with the Calumet Community Religious Conference (CCRC) in Chicago. Both the
CCRC and the DCP were built on the Alinsky model of community agitation, wherein paid
organizers learned how to “rub raw the sores of discontent,” as Alinsky put it. The element of
manipulation is clear enough, even in the abstract theory. One of Obama’s early mentors in the
Alinsky method was Mike Kruglik, presumably the Marty Kaufman (or part of that composite
character) that Obama writes about in Dreams. Kruglik later told the New Republic that Obama
“was a natural, the undisputed master of agitation, who could engage a room full of recruiting
targets in a rapid-fire Socratic dialogue, nudging them to admit that they were not living up to their
own standards. As with the panhandler, he could be aggressive and confrontational. With probing,
sometimes personal questions, he would pinpoint the source of pain in their lives, tearing down their
egos just enough before dangling a carrot of hope that they could make things better.”
Alinsky had told his agitators to bring people to the “realization” that they are indeed miserable,
that their misery is the fault of unresponsive governments or greedy corporations. (This is already
absurd, since it is the economic breakdown crisis itself that radicalizes those who experience it. The
task of an organizer is to develop strategy and programs to allow a popular movement to challenge
the financier elite at the highest level – state power, not petty community control or local control,
where defeat is always guaranteed.) The task of the agitator is then to help them to bond together to
demand what they deserve, and to agitate so energetically that governments and corporations will
see “self-interest” in granting the demands of the local agitators. Obama had a four-year education
in these crude Alinsky methods, which he often says was the best education he ever got anywhere –
in profiling and manipulation, since these are the essence of the Alinsky divide-and-conquer method
of counterinsurgency.
PREVARICATION IN THE HOOD
Obama paints a moderately flattering picture of himself as a community organizer in Dreams.
But even here, he has faced charges of embroidering and embellishing his record to make himself
look good. The criticism comes from the long-time local activist Hazel Johnson, who has disputed
the account of events at Altgeld Gardens that Obama put into his book, and which he has repeated at
64 Barack H. Obama: The Unauthorized Biography
innumerable political appearances over the years. The local CBS affiliate in Chicago went to the
Altgeld neighborhood and found that ‘some say Illinois Senator Barack Obama gave himself a little
too much credit for his work as a community organizer. Obama’s past work in the troubled Altgeld
Gardens housing project is a staple of his presidential stump speeches, and a significant part of his
first book. …at least one resident who worked with Obama back then is unhappy with the senator’s
recollection. Hazel Johnson and her daughter Cheryl are disputing some parts of the version of
events Obama tells. They do not, however, dispute that he worked hard at Altgeld Gardens and say
they are supporting his presidential campaign. But, Johnson says in his book, Dreams from My
Father, and in campaign stump speeches, Obama gets some things wrong about the months he spent
working in Altgeld Gardens in the 1980s. She and her daughter Cheryl produced a document, for
example, showing Obama’s 1987 salary as an organizer in the development to be $25,000 – not the
$13,000 he often talks about. There is a very simple explanation for that, Obama’s aides say. He did
indeed make $25, 000 in 1987, but he was initially hired in 1985 at a salary of $13,000. And, they
claim, Obama didn’t work cleaning up asbestos at Altgeld, but fiberglass, another environmental
hazard. They also dispute his version of an incident in which Obama claimed Altgeld Gardens
residents beat on the car of a government official they were unhappy with. “I think he portrayed us
as barbaric that we ran behind CHA officials beating on the car, and that didn’t take place, because I
was in that particular meeting” Cheryl Johnson said.’ Perhaps Obama thinks that the masses are
after all a great beast.
Interestingly, the one community source who came forward to endorse Obama’s version of
events is a person who was currently on the payroll of the Gamaliel Foundation, and who can thus
be located in the larger orbit of the Ford Foundation. This was the Jesuit priest Greg Golluzzo. ‘“I
discussed every item of this,” said Greg Golluzzo of the Gamaliel Foundation. … Johnson says that
since all of this has come up, she thinks Obama should go talk to her.’(Mike Flannery, “Altgeld
Gardens Resident Who Worked With Senator in 1980s Says He Is Exaggerating His Role,”
Cbsnews.com, 2007) Obama has not returned to Altgeld to answer the criticisms of Hazel Johnson.
When Obama’s fellow foundation operative Gerald Kellman summed up Obama’s years of work,
he recognized that it had all been a big failure: “It is clear that the benefit of those years to Mr.
Obama dwarfs what he accomplished. Mr. Kellman said that Mr. Obama had built the
organization’s following among needy residents and black ministers, but “on issues, we made very
little progress, nothing that would change poverty on the South Side of Chicago.”14 So Obama was a
failure as a community organizer. His other big project, the Chicago Annenberg Challenge, was also
a failure in improving education in Chicago, as we will see.
HILLARY REJECTED ALINSKY; OBAMA EMBRACED HIM
Other commentators have tried to show that Obama is still using Alinsky methods in the running
of his presidential campaign. One right-wing observer writes: “Obama also appears to have
mastered the playbook used by…the legendary amoral guru of left wing activism, Saul Alinsky….”
(Kyle-Anne Shiver, Obama’s Alinsky Jujitsu, American Thinker, February 25, 2008) In fact, rightwing
writers on the Clinton-Obama contest have attempted to equate the outlooks of these two
candidates based on the bare fact that they both came into contact with the Alinskyite counterinsurgency
doctrine. The big difference is that Obama looked at the Alinskyite school of organizing,
and decided to join it. Hillary looked at Alinsky in considerable depth, found it totally inadequate,
and turned away.
Hillary’s views are found in her senior thesis from Wellesley College which, contrary to popular
belief, is readily available to the public. Hillary saw an Alinsky who tried to escape ideological
II: Columbia University and Recruitment by Zbigniew Brzezinski 65
categories: ‘“Alinsky, cringing at the use of labels, ruefully admitted that he might be called an
existentialist,” she found. [We already know what that can mean.] Rodham tried to probe his moral
relativism — particular ends, Alinsky maintained, often justify the means — but Alinsky would
only concede that “idealism can parallel self-interest.” Hillary tentatively accepted Alinsky’s
contention that the problem of the poor isn’t so much a lack of money as a lack of power, as well as
his skeptical view of federal anti-poverty programs as ineffective. (Alinsky took the facile view,
shared by the GOP, that Johnson’s War on Poverty was a “prize piece of political pornography,”
even though he collected funds from the Office of Economic Opportunity.) It is clear that Alinsky
wanted everything to come out of the do-it-yourself bag of the local community organizer, a kind of
nomadic left-wing anarchist who viewed the state as an adversary. Organizing in the Democratic
Party was too broad, and might develop into an actual challenge to the ruling class, the very thing
that Alinsky’s owners were using him to head off. Hillary conceded what was obvious: “A cycle of
dependency has been created,” she wrote, “which ensnares its victims into resignation and apathy.”
Hillary advanced a “perspective” or critique of Alinsky’s methods, citing especially scholars who
claimed that Alinsky’s small gains actually delayed attainment of bigger goals for the poor and
minorities.
Hillary noted the “few material gains” that Alinsky’s methods were capable of obtaining, such as
forcing Kodak to hire blacks in Rochester, New York, or delaying the University of Chicago’s
expansion into the Woodlawn neighborhood, the very Hyde Park community later represented by
Barack and policed by Michelle. Hillary attributed part of Alinsky’s failure to shifting demography
and the diminishing role of neighborhoods in American life. She also showed that many projects
depended completely on the presence of Alinsky personally – hardly a recipe for empowering
others: “One of the primary problems of the Alinsky model is that the removal of Alinsky
dramatically alters its composition,” she wrote; “Alinsky is a born organizer who is not easily
duplicated, but, in addition to his skill, he is a man of exceptional charm.”
Hillary’s final verdict was that the Alinsky school of micro-organizing could never work in a
mass society; the Alinsky “power/conflict model is rendered inapplicable by existing social
conflicts” — over-arching national issues such as racial tension and segregation, prosperity and
economic depression. Alinsky never had any success in forming an effective national movement,
she said, suggesting the futility of “the anachronistic nature of small autonomous conflict.” Alinsky
sometimes threatened small-scale disruptions to extort temporary, local concessions. Hillary
concluded that the mini-conflict approach to large-scale power is limited. “Alinsky’s conclusion
that the ‘ventilation’ of hostilities is healthy in certain situations is valid, but across-the-board
‘social catharsis’ cannot be prescribed,” she wrote.
Hillary brought Alinsky to Wellesley in January 1969 to speak at a private dinner for a dozen
students; he expressed dissatisfaction with New Left protesters such as the Students for a
Democratic Society. Rodham closed her thesis with the obligatory flourish by saying that she
reserved a place for Alinsky in the pantheon of social justice activists next to Martin Luther King,
Walt Whitman, and perennial socialist presidential candidate Eugene Debs. She also ironically
suggested that Alinsky was a part of the establishment: “In spite of his being featured in the Sunday
New York Times,” she wrote, “and living a comfortable, expenses-paid life, he considers himself a
revolutionary. In a very important way he is. If the ideals Alinsky espouses were actualized, the
result would be social revolution. Ironically, this is not a disjunctive projection if considered in the
tradition of Western democratic theory. In the first chapter it was pointed out that Alinsky is
regarded by many as the proponent of a dangerous socio/political philosophy. As such, he has been
feared — because each embraced the most radical of political faiths — democracy.”’ (Bill Dedman,
66 Barack H. Obama: The Unauthorized Biography
“Reading Hillary Clinton’s Hidden Thesis,” MSNBC, May. 9, 2007) Alinsky offered Hillary a job
as a community organizer, which she had the good sense to refuse. Obama later accepted just such a
job from the Gamaliel Foundation after Alinsky’s death.15
OBAMA’S ROOTS TRIP TO KENYA
After quitting his job as a community organizer, Obama decided to make his obligatory
pilgrimage to Kenya, where he had never been. By this time his father was deceased. He traveled by
way of London. A conversation about political and economic conditions in Africa with a young
Englishman in the airplane gives Obama another chance to reflect on his favorite obsession, race.
Here he found yet another opportunity to reflect on his “own uneasy status: a Westerner not entirely
at home in the West, an African on his way to a land full of strangers.” (Dreams 310) He has an
opportunity to travel around Europe for three weeks in a grand tour that most American middle
class families of whatever race were already unable to provide for their children, or for themselves
in retirement. Obama tells us that he visited London, Paris, Madrid, and Rome, and then concluded
that it was all a terrible mistake:
…by the end of the first week I realized that I’d made a mistake. It wasn’t that Europe wasn’t
beautiful; everything was just as I’d imagined it. It just wasn’t mine. I felt as if I were living out
someone else’s romance; the incompleteness of my own history stood between me and the sites
I saw like a hard pane of glass. I began to suspect that my European stop was just one more
means of delay, one more attempt to avoid coming to terms with the Old Man. Stripped of
language, stripped of work and routine – stripped even of the racial obsessions to which I’d
become accustomed and which I had taken (perversely) as a sign of my own maturation – I had
been forced to look inside myself and had found only a great emptiness there. (Dreams 301-
302)
Obama, we see, was a convinced existentialist.
OBAMA AND THE DECLINE OF THE WEST
Here Obama’s racist psychopathology is displayed in the sharpest relief. Had he already been
imbibing Wright’s hate-mongering theories about the Italian garlic noses and the inferiority of the
Irish? Europe represents a huge chunk of the historical experience of humanity as a whole, but
Obama’s racist obsession leads him to conclude that it does not belong to him – despite the obvious
facts that the language, institutions, science, technology, and all the related components of his life
derive from European models. Obama rejects what he sees, and clings to the empty abstraction of
Afrocentrism, albeit tinged with a heavy dose of existentialism. If he had gone to China, Obama
would not have pondered that the majority of the man-days lived by humanity have probably been
Chinese; he would have rejected China too, on the same explicitly racist grounds. Obama explicitly
rejects the unity and wholeness of human history. He imagines that history is made up of a series of
self-contained and hermetically sealed races, and that no race exercises any influence over the
internal life of another race. With this, historical reality goes out the window, and is sure to be
replaced by racist myths.
Obama turns out to be close to the pre-fascist pessimist Oswald Spengler, the 1920s theoretician
of the Decline of the West, who also thought of each Kultur as being axiomatically independent of
and untouched by all the others, with each one living out its own appointed life span. Obama’s
contemptuous dismissal of Europe obliges us to label him as a fanatic and an incurable racist.
II: Columbia University and Recruitment by Zbigniew Brzezinski 67
Obama’s maître à penser Jeremiah Wright has mocked and derided European classical music in
general and Georg Friedrich Handel in particular. The common ground between Obama and Wright,
which some have suspected even as others indignantly denied it, turns out to be quite substantial.
Turning away from Europe, Obama was confronted with the pervasive polygamy of his own
father, his own tribe, and his own Kenyan ancestors. Obama’s 40-year-old cousin Said Hussein
Obama later recalled, “My cousin found it difficult when he came here to learn his six half-brothers
and sisters were born to four different mothers.” In reality, the number of Obama Senior’s offspring
may be even greater, as we have already seen. “The person who made me proudest of all,” Obama
added in his memoir, “was Roy. Actually, now we call him Abongo, his Luo name, for two years
ago he decided to reassert his African heritage. He converted to Islam, and has sworn off pork and
tobacco and alcohol.” (Dreams 441) This Abongo “Roy” Obama is a Luo activist and a militant
Muslim who now contends that the black man must “liberate himself from the poisoning influences
of European culture.” In other words, Roy has also embraced Fanon. Roy has called on his younger
half-brother to embrace his African heritage. (Dreams 441) Roy’s role, if any, in the violent tribal
conflict which has been convulsing Kenya in 2007-2008 is not known.
HARVARD LAW SCHOOL: ANOTHER WALL OF SECRECY, 1988-1991
Obama then entered Harvard Law School in 1988. In February 1990, he was elected the first
African-American editor of the Harvard Law Review, and received a first wave of positive publicity
in the New York Times. Obama graduated from Harvard Law magna cum laude in 1991. Obama’s
professors were aware that he was slippery: “He then and now is very hard to pin down,” said
Kenneth Mack, then a classmate and now a professor at the law school. Becoming the first black
president of the law review was a highly political process, and not only an academic or technical
one. Winning the position was a matter of political finesse, and clearly of some successful
manipulation. “He was able to work with conservatives as well as liberals,” says Obama’s friend
Michael Froman, who is currently an executive at Citigroup.
Obama’s greatest fan appears to have been Professor Laurence Tribe, the Carl M. Loeb
Professor at Harvard University. Tribe taught Obama and employed him as a research assistant. He
remembers him as a “brilliant, personable, and obviously unique” person. Tribe said that Obama’s
theoretical perspective on applying modern physics to law was “very impressive.” Obama never
talks about this theory, but it reeks of the unbridled relativism that can make of the Constitution
whatever one wants. Tribe is of course a darling of the liberal media who later argued Al Gore’s
Florida case before the Supreme Court in December 2000. Tribe says that Obama was one of his
two best students ever, and adds: “He had a very powerful ability to synthesize diverse sources of
information.” (Wallace Wood, Rolling Stone)
Obama is alleged to have contributed to Tribe’s bizarre 1989 article in the Harvard Law Review
entitled “The Curvature of Constitutional Space: What Lawyers Can Learn From Modern Physics.”
This is a 39-page treatise which argues that constitutional jurisprudence should be revised in a way
which recalls the process by which Einstein’s theory of relativity replaced Newtonian mechanics.
On the surface, Tribe and Obama were arguing against the absurd and suffocating “original intent”
method of the right-wing reactionary Federalist Society. But their arguments would also open the
door to boundless arbitrary caprice and abuse by removing any notion of natural law from the
method of construing the Constitution. Obama is thus capable of rejecting the manacles of original
intent for a Cole Porter doctrine of “anything goes” in legal positivism, which would open the door
68 Barack H. Obama: The Unauthorized Biography
to fascist innovation in a way that even “original intent” has not been able to do. Once again, we are
looking here at the transition from reaction to fascism.
OGLETREE AND REPARATIONS
Another significant mentor for Obama was the black Professor Charles Ogletree, who is one of
the leading proponents of reparations for slavery. Reparations are a favorite tactic of the foundations
and the counter-insurgency community in general, since this ploy holds out the promise of a whole
new cycle of futile and self-defeating racial conflict in the United States, thus safeguarding financier
rule for another historical epoch. It is especially absurd in the light of the growing numbers of
Latinos, Asians, and other more recent immigrants who have no connection whatsoever to slavery
and Jim Crow. The serious approach would be a class-based approach, with working people of all
ethnic and racial groups forming a united front to extract from Wall Street the necessary means for
social and economic renewal in housing, health care, jobs, education, mass transit, and related areas.
This is exactly what the reparations issue is designed to prevent.
When Wright went to the National Press Club, the only specific demand he made was for an
apology for slavery. It is widely assumed that such an apology, while fully justified in itself, would
be seized on by the foundation-funded affirmative action black overclass to demand reparations, of
which the black overclass would receive the lion’s share, while the inner-city ghetto would sink
ever deeper into despair and poverty. “This matter is growing in significance rather than declining,”
Ogletree recently commented. “It has more vigor and vitality in the 21st century than it’s had in the
history of the reparations movement.” Professor Ogletree was an advisor to Obama during his 2004
Senate candidacy and serves as an advisor to him now. (AP, July 9, 2006) It is therefore quite
possible that, in addition to a global warming tax and a third world solidarity tax, a future Obama
regime might try to impose a slavery reparations tax. Under the likely conditions of economic
breakdown in this country such an attempt, whatever the abstract balance of equities, might well
lead to the worst of all possible outcomes, civil war. We will have more to say about Obama’s
secret agenda for reparations later in this study.
Evelyn Pringle, who has delved into the labyrinth of Chicago corruption in which Obama
wallowed for so many years, has found that the mafioso and underworld figure Antoin Rezko,
Obama’s prime moneybags for much of his earlier career, came into contact with Obama while he
was still in law school and tried to hire him immediately as a mouth-piece for Rezko’s underworld
empire: in the arguments at the spring 2008 Rezko trial, it was revealed that he ‘“met Barack
Obama when he was in Harvard Law School and tried to hire him” to be the lawyer for his
development company.’
A well-informed expert on Chicago political corruption, Pringle shows that Rezko and Obama
go way back together: ‘Obama says he met Rezko, when he got a call right out of the blue from
David Brint, after he was elected president of the Harvard Law Review, wanting to know if he
would be interested in being a developer for Rezko’s real estate company, Rezmar. Because they
read that he was interested in community development work, Obama says, Rezko and his two
partners, Mahru and Brint, met with him to discuss the job. “I said no, but I remained friendly with
all three of them,” Obama said in the Chicago Tribune on November 1, 2006. In fact, Obama told
the Tribune that Rezko “might have raised $50,000 to $75,000” for one campaign alone in his failed
run for Congress in 2000.’ (Evelyn Pringle, op-ed news) In Obama’s life, there are too many of
these coincidences; we can feel the mysterious action of the Trilateral invisible hand. As for Obama
and Rezko, they go back to 1991 or earlier.
II: Columbia University and Recruitment by Zbigniew Brzezinski 69
OBAMA’S WORLD: THE FOUNDATIONS
We have already seen Obama in his role as a community organizer for the Gamaliel foundation.
We must stress that Obama’s role as a foundation operative begins here, but certainly does not end
when he goes off to law school. No indeed: the vocation of being a foundation operative constitutes
Obama’s family business. His mother was a Ford Foundation operative, and most of the jobs
Obama has ever held were with foundations. When it came time for Obama to start going to
church, he unfailingly chose a congregation where Ford Foundation race theory is projected onto
the plane of heaven and eternity in the form of the provocateur religion of Black liberation theology.
Before we go any further with Obama’s own story, it will be useful to offer an overview of the
strategic orientation of US foundation operations during this timeframe. Foundations represent an
extremely important part of the social control mechanisms which prevail today in the United States.
The foundations are all the more effective in their chosen work of social control, engineering and
political manipulation because many people are simply unaware of the immense scale of their
operations, even though every broadcast on public television or National Public Radio is always
accompanied by a litany of the foundations which have financed that program. One way to
understand the pervasive influence of foundations is to say that they are as omnipresent in this
country today as the CIA and the FBI were during the Cold War. This is partly because many
intelligence community operations of the 1950s, 60s, and 70s have morphed into foundations under
the auspices of President Reagan’s Executive Order 12333, which privatized many of the existing
spook activities. Many naïve people still think of foundations as being humanitarian or charitable
institutions concerned with education, health, and the improvement of the human condition.
Nothing could be further from the truth. Like Henry Ford himself, the Pew family and many other
oligarchical plans whose family fortunes have been transformed into foundations harbored fascist
sympathies during the 1920s and 1930s. Today, they are overwhelmingly multicultural, politically
correct, Malthusian, and neo-Luddite in their ideology. They hate science and technology because
these are seen as avenues of upward social mobility for the lower orders, and as a threat to
continued financier domination. Perhaps more than any other agency, the foundations have
engaged in the strangulation and perversion of the American spirit over these past four decades in
particular.
The late Christopher Lasch, in his classic study The Revolt of the Elites and the Betrayal of
Democracy (New York: Norton, 1995), notes the important role of class prejudice in forming elite
attitudes in this country today. He describes how well-to-do liberals, when confronted with
resistance to their ideas of social engineering, “betray the venomous hatred that lies not far beneath
the smiling face of upper-middle-class benevolence,” and turn on those who “just don’t get it.”
(Lasch, 28) The result is an academic culture which appears to be contemptuous of the human
potential of vast strata of the American population. This is the kind of mentality which we can see
in Obama’s infamous San Francisco “Bittergate” rant. This is a condensed version of the elitist and
left authoritarian mental world of the pro-oligarchical foundation bureaucrats. In order to
understand Obama’s mentality and the decisions he might make as the head of the future regime, we
are therefore obliged to review some critical points about the recent historical record of the Ford
Foundation and its satellites.
Most discussions of Obama’s career as what he calls a “community organizer” are crippled by a
total lack of historical background on the Ford Foundation and its satellites, and further by any
comprehension of the goals of foundation-funded social engineering. Because Obama is so totally a
product of the Ford Foundation and the foundation world of which it is the center, we will have to
70 Barack H. Obama: The Unauthorized Biography
repeat several times in this volume that the main purpose of these foundations by the latter half of
the 20th century was to exercise social control, so as to perpetuate the uncontested political
domination of Wall Street financial interests over the legitimate aspirations of the various ethnic
groups, economic strata, and other components of the American population.
The watchword of the Ford Foundation is Divide and Conquer. The goal of its projects is
always to play one group in the population against some other group so as to create conflict, strife,
and division, so that the Wall Street interests can emerge unscathed and triumph. The
individual foundation grant officers involved in this process may well be motivated by some
hallucination of Marxism, multiculturalism, or political correctness, but it is not these values which
the foundations finally serve: their goal is to disrupt and abort the emergence of anything
approaching a politically conscious united front of the American people capable of demanding
radical economic reforms, and especially to ward off a revival of the New Deal, new political
formations based on economic populism, a Marshall Plan for the cities, including the urban ethnic
minority populations, and so forth.
POVERTY PIMPS FOR THE FOUNDATIONS
When Obama says that he was a community organizer, it would be far more accurate to say that
he was a poverty pimp for the Ford Foundation network, a paid race-monger whose job it was to
organize politically naïve and desperate groups on the south side of Chicago into corporatist, deadend,
fragmented, parochial projects from which they would derive little or no benefit, and the goal
of which was simply to use up enough of their lives in futility until they dropped out altogether in
despair. The only exception to this was the use of these community control or local control or
community action advocacy projects as political pawns against certain state and local political
factions, or as battering rams against other groups of working people, above all trade unions made
up of municipal employees, especially teachers. This is where Obama learned to support “merit
pay” as a weapon against teachers’ unions.
In order to understand the foundation world, it is necessary to recall that these foundations
generally represent the family fortunes of industrialists and businessmen of the 19th and early 20th
centuries – the robber barons – which have been placed into tax-free status as charitable trusts, all
the while perpetuating the urge for power of their founders. The foundations represent family
fortunes or fondi which have attained a kind of oligarchical immortality by transcending the mere
biological existence of the individuals and families who created them, and becoming permanent
institutions destined to endure indefinitely.
These foundations once upon a time had to maintain some credibility by funding hospitals,
universities, libraries, scientific research, and other projects which often had genuine social utility.
Shortly after the Second World War, there began a trend towards social engineering and social
action on the part of the foundations. The leader in this was the Ford Foundation, which, because it
was the largest and wealthiest of the US foundations quickly became the flagship and opinion leader
for the other foundations. Foundation officers represent the very essence of the financier oligarch
mentality, and one result of this is that they generally all do the same thing at the same time in their
respective fields of specialization. Because of this, control over the Ford Foundation represents a
social control mechanism of great strength, which has been a decisive force in shaping the decline
of US society and national life, especially over the last 40 years.
Dean Rusk had served Averill Harriman and Dean Acheson during the Truman administration,
and then became president of the Rockefeller Foundation in the late 1950s; he ‘once described
II: Columbia University and Recruitment by Zbigniew Brzezinski 71
Ford’s influence on other foundations: What the “fat boy in the canoe does,” he said, “makes a
difference to everybody else.” And Ford’s influence was never stronger than after it adopted the
cause of social change. Waldemar Nielsen’s monumental studies of foundations, published in 1972
and 1985, only strengthened the Ford effect, for Nielsen celebrated activist philanthropy and berated
those foundations that had not yet converted to the cause. “As a result,” recalls Richard Larry,
president of the Sarah Scaife Foundation, “a number of foundations said: ‘If this is what the
foundation world is doing and what the experts say is important, we should move in that direction,
too.’” The Rockefeller Brothers Fund, for example, funded the National Welfare Rights
Organization—at the same time that the organization was demonstrating against Governor Nelson
Rockefeller of New York. The Carnegie Corporation pumped nearly $20 million into various leftwing
advocacy groups during the 1970s.’ (Heather Mac Donald, “The Billions of Dollars That
Made Things Worse,” City Journal, Autumn 1996)
AGGRESSIVE FOUNDATION ACTIVISM OF THE LATE 1960S
In the second half of the 1960s, the social ferment generated by defeat in Vietnam, the student
movement, the antiwar movement, the civil rights movement, and the gathering economic decline
of the country spurred the foundations into action. With unerring oligarchical class instinct, they
could see the grave danger that might be represented for financier domination by the possible fusion
in a united front of the civil rights movement, the antiwar movement, the labor movement, and the
student movement. Their answer to this was to promote and fund organizational forms that were so
narrow, so fragmented, and so parochial, that they prevented the necessary cooperation among these
movements, thus blocking them from attaining most of their principal goals. Alan Pifer was the
head of the Carnegie Foundation in 1968; in his annual report for that year, Pifer
exhorts his comrades [sic] in the foundation world to help shake up “sterile institutional forms
and procedures left over from the past” by supporting “aggressive new community
organizations which . . . the comfortable stratum of American life would consider disturbing
and perhaps even dangerous.” No longer content to provide mainstream knowledge
dispassionately, America’s most prestigious philanthropies now aspired to revolutionize what
they believed to be a deeply flawed American society. […] Foundation-funded minority
advocates fought for racial separatism and a vast system of quotas—and American society
remains perpetually riven by the issue of race. On most campuses today, a foundation-endowed
multicultural circus has driven out the very idea of a common culture, deriding it as a relic of
American imperialism. Foundation-backed advocates for various “victim” groups use the courts
to bend government policy to their will, thwarting the democratic process. […] The net effect is
not a more just but a more divided and contentious American society. (Heather Mac Donald,
“The Billions of Dollars That Made Things Worse,” City Journal, Autumn 1996)
Right-wing commentators like the one just cited are generally incapable of analyzing the real
motivations for what the foundations do; they usually attribute the catastrophic results of foundation
social engineering to some misguided instincts to do good. Nothing could be further from the truth:
the goal of the foundations is to maintain the brutal regime of finance capital, and this presupposes
that there be no national coalition capable of expressing a national interest in contradiction to the
dictates of the Wall Street financiers. The rightwingers are therefore forced to make up fantastic
stories of how Marxists have crept in to the temples of finance capital by the dark of the moon, so as
to advance their work of revolution. In reality incendiary race baiting and pseudo-revolutionary and
hyper-revolutionary rhetoric are most often the stock in trade of the foundation-funded political
operative, who gets paid good money to inflame the mutual animosities and resentments of groups
72 Barack H. Obama: The Unauthorized Biography
that ought to be uniting against Wall Street, rather than squabbling with each other for some petty
and futile local concession. Barack Hussein Obama is precisely one of these foundation-funded
political operatives or poverty pimps.
The Ford Foundation became more aggressive in its social engineering and more radical in its
methods in order to ward off the threat which was latently present in the political upsurge of the late
1960s: ‘From its start, Ford aimed to be different, eschewing medical research and public health in
favor of social issues such as First Amendment restrictions and undemocratic concentrations of
power, economic problems, world peace, and social science. […] But by the early 1960s, the
trustees started clamoring for a more radical vision; according to Richard Magat, a Ford employee,
they demanded “action-oriented rather than research-oriented” programs that would “test the outer
edges of advocacy and citizen participation.”’ (Heather Mac Donald)
FORD FOUNDATION COMMUNITY ACTION AND THE 1960s GHETTO RIOTS
The beginnings of the local control-community control-poverty pimp apparatus of domestic
social engineering and counterinsurgency goes back to the Ford Foundation’s Gray Areas Project of
the 1960s, which was spearheaded by an obscure and highly influential Ford Foundation operative
named Paul Ylvisaker. ‘The first such “action-oriented” program, the Gray Areas Project, was a
turning point in foundation history and—because it was a prime mover of the ill-starred War on
Poverty—a turning point in American history as well. Its creator, Paul Ylvisaker, an energetic social
theorist from Harvard and subsequent icon for the liberal foundation community, had concluded
that the problems of newly migrated urban blacks and Puerto Ricans could not be solved by the “old
and fixed ways of doing things.” Because existing private and public institutions were unresponsive,
he argued, the new poverty populations needed a totally new institution—the “community action
agency”—to coordinate legal, health, and welfare services and to give voice to the poor. According
to Senator Daniel Patrick Moynihan… Ford “proposed nothing less than institutional change in the
operation and control of American cities . . . . [Ford] invented a new level of American government:
the inner-city community action agency.” Ylvisaker proceeded to establish such agencies in Boston,
New Haven, Philadelphia, and Oakland.’ (Heather Mac Donald)
The initial phase of Ford Foundation intervention into the black inner-city ghetto under the
rubric of the Gray Areas strategy helped to fuel the Watts, Detroit, and Newark riots of 1965-67.
The community action projects that were begun in these years did not deliver what they promised,
but did set the stage for the futile and self-defeating violence of “Burn, baby, burn,” which was
considered fashionable in the radical chic salons of the day. “Unfortunately, because it was so
intent on persuading the federal government to adopt the program, Ford ignored reports that the
community action agencies were failures,” according to historian Alice O’Connor.
Reincarnated as federal Community Action Programs (CAPs), Ford’s urban cadres soon began
tearing up cities. Militancy became the mark of merit for federal funders, according to Senator
Moynihan. In Newark, the director of the local CAP urged blacks to arm themselves before the
1967 riots; leaflets calling for a demonstration were run off on the CAP’s mimeograph machine.
The federal government funneled community action money to Chicago gangs—posing as
neighborhood organizers—who then continued to terrorize their neighbors. The Syracuse, New
York CAP published a remedial reading manual that declared: “No ends are accomplished without
the use of force. . . . Squeamishness about force is the mark not of idealistic, but moonstruck
morals.” Syracuse CAP employees applied $7 million of their $8 million federal grant to their own
salaries.’ (Heather Mac Donald) McGeorge Bundy should have been arrested for inciting to riot,
II: Columbia University and Recruitment by Zbigniew Brzezinski 73
since that is exactly what he was doing. The political benefits of the resulting backlash would of
course be harvested by demagogues like Nixon and Agnew.
THE 1968 NEW YORK CITY TEACHERS’ STRIKE AS A TURNING POINT
A much-neglected turning point of recent American history was unquestionably the disastrous
events associated with the New York City teachers’ strike of 1968. These events have almost been
forgotten, one suspects, because no foundation is eager to dredge them up. Contemporary
observers, however, were clear that they had lived through a deliberately provoked catastrophe:
‘One of the most polarizing events in our recent history was the Ocean Hill-Brownsville dispute
over decentralization and community control which led to the New York teachers’ strike of 1968.
Martin Mayer said of this strike: “The New York teachers’ strike of 1968 seems to me the worst
disaster my native city has experienced in my lifetime.” McGeorge Bundy’s Ford Foundation’s
experiment caused New York City to shut down its educational system. That city became polarized:
new - black militant radicals against old - left radicals, black trade unionists against anti-union
black-power advocates, black against Jew, black against white, striker against non-striker, and
ACLU civil libertarians against seekers of due process.’ (“The Promotion of Domestic Discord,”
Vincent J. Salandria, October 23, 1971)16
MCGEORGE BUNDY:
FROM VIETNAM STRATEGIC HAMLETS TO COMMUNITY CONTROL
In order to fragment, divide, and frustrate the ongoing political upsurge, the organizational forms
which the Ford Foundation was using its fabulous wealth to create had to be as narrow,
fragmented,apolitical, exclusive, and petty as possible. “Community Action Programs were a
calculated means of keeping control. To deliver a particular point of view, foot soldiers got busy.
Militants and Black Power were a joke! The Ford Foundation, through its president, McGeorge
McBundy, was one step ahead and positioned to penetrate the movement. In promising to help
achieve full domestic equality, they played a vanguard role and become the most important
organization manipulating the militant black movement.” (Pulling No Punches, October 28, 2007)
McGeorge Bundy was a Skull and Bones graduate of Yale, a protégé of Dean Acheson, and the
director of the National Security Council under President Kennedy who bears one of the heaviest
individual burdens of responsibility for unleashing the genocidal Vietnam War. Bundy had left
government in 1966, and would stay on as boss of the Ford Foundation until 1979. For much of
this time, Bundy was considered to be the informal spokesman for the US Eastern Anglophile
banking establishment, otherwise known as the financier oligarchy or ruling class. Accurate
accounts of Bundy’s activities are very hard to come by, because no foundation has been willing to
pay for an in-depth analysis of how foundation-funded social engineering is destroying this country.
Bundy was, in short, a butcher, but he was also a sophisticated ruling-class political operative.
Bundy was a slightly younger colleague of the generation of self-styled “wise men” who had
reorganized the Anglo-American world empire in the wake of World War II. Bundy was a dyed-inthe-
wool, hereditary, silver-spoon oligarch, who was conscious of representing one of the most
powerful and aggressive centers of imperialist social engineering. ‘David Halberstam was correct to
quote one of McGeorge Bundy’s colleagues as stating that Bundy “... is a very special type, an
elitist, part of a certain breed of men whose continuity is to themselves, a line to each other and not
the country.”’ (Vincent J. Salandria, “The Promotion of Domestic Discord,” an address at the
74 Barack H. Obama: The Unauthorized Biography
conference of the New England Branch of the Women’s International League for Peace and
Freedom, October 23, 1971)
Bundy was determined to ram through the Ford Foundation counterinsurgency strategy,
whatever the cost to New York City and its people: as one student of these events observes,
‘McGeorge Bundy was not a man given to self-doubt. (He once cut off discussion at a foundation
meeting by announcing to a group of program officers: “Look, I’m settled about this. Let’s not talk
about it any more. I may be wrong, but I’m not in doubt.”) And if he had second thoughts about the
path down which he was taking the foundation, he did not express them at the time. Indeed, his
speeches and writings in that period showed a confident determination to continue working with
black militants.’ (“McGeorge Bundy: How the Establishment’s Man Tackled America’s Problem
with Race,” Tamar Jacoby) 17
GONZALEZ: FORD FOUNDATION “REVERSE RACISM” AMONG LATINOS
Bundy started by revamping the grant priorities inside the Ford Foundation to focus on black
oppression, as well as the parallel problems of other ethnic minorities. It is important to note that
racial oppression was never defined by the Ford Foundation in broad-based economic terms, such as
the need for modern housing, new urban mass transit, top-flight medical care, high-tech jobs with
union wages, a quality college education for all ghetto youth, and other reforms which would have
necessitated a domestic Marshall Plan costing hundreds of billions of dollars. This was something
which the oligarchs had no intention of paying for. Rather, the Ford Foundation claimed that the
oppression of the black community was a matter of white racist attitudes, as reflected in institutional
arrangements which prevented black self-determination, community control, and self-esteem. In
this case, the oligarchs could claim that white blue-collar workers were the real culprits, since they
were the ones who came into the most intensive daily contact with oppressed blacks. “Bundy
reallocated Ford’s resources from education to minority rights, which in 1960 had accounted for 2.5
percent of Ford’s giving but by 1970 would soar to 40 percent.” The same methods were also
applied to Hispanics and Latinos in programs that were the precursors of the lunatic provocateur
propaganda of groups like Atzlan, which makes the absurd demand that many American states be
restored to Mexico. The only purpose of such raving delirium is to provide grist for the right-wing
xenophobic radio talk show hosts and other ideologues, who can use this transparent posturing as
“proof” in the minds of their gullible listeners of a nefarious Mexican plot to subvert the United
States.
Under Bundy’s leadership, Ford created a host of new advocacy groups, such as the Mexican-
American Legal Defense and Educational Fund (a prime mover behind bilingual education) and
the Native American Rights Fund, that still wreak havoc on public policy today. Ford’s support
for a radical Hispanic youth group in San Antonio led even liberal congressman Henry B.
Gonzalez to charge that Ford had fostered the “emergence of reverse racism in Texas.” (Heather
Mac Donald)
Congressman Gonzalez, a real fighter who later pioneered in the effort to impeach George Bush
the elder,
complained that the Ford Foundation had promoted racism among his people, Mexican-
Americans. He related how the Ford Foundation made a grant of $630,000 to the Southwest
Council for LaRaza. He said: The Ford Foundation wanted to create new leadership, and in fact
the new leaders it has created daily proclaim that existing leadership is no good ... ... the
president of MAYO, ... likes to threaten to ‘kill’ what he terms ‘gringos’ if all else fails ... ... I
II: Columbia University and Recruitment by Zbigniew Brzezinski 75
must come to the sad conclusion that, rather than fostering brotherhood, the foundation has
supported the spewings of hate, and rather than creating a new political unit, it has destroyed
what little there was ...’ (Salandria)
We will see later on that the methods of the Ford Foundation in regard to the subversion and
manipulation of the American Indian movement for financier and provocation purposes are virtually
identical to the approach employed towards black and Hispanic target populations.
THE FORD FOUNDATION VS. MARTIN LUTHER KING
Martin Luther King was perceived by the Ford Foundation as a very serious threat, because of
the inclusive united-front methods by which he proposed to merge the struggles of the black
community with those of labor and the antiwar movement. The oligarchical class instinct of the
Ford Foundation therefore dictated that ultra-radical racist provocateurs be thrown into the fray who
would condemn Dr. King as a collaborationist Uncle Tom who was out of touch with younger
firebrand radicals. The general heading for these Ford Foundation provocateurs was the Black
Power movement or the pork chop cultural nationalists, who were always notoriously eager for their
foundation checks.
In a sense, in this, Ford was only following up on its own early initiative: the foundation’s Gray
Areas program, working in six inner cities in the early 1960s, had pioneered the idea of helping
the ghetto help itself. But in 1964 the War on Poverty had taken the notion one step further,
urging “maximum feasible participation” by the poor as a virtue in itself - calling on ghetto
people not just to help run local services but teaching them to organize politically so that they
could bargain with the government. As the idea gained credence, the emphasis of many antipoverty
programs shifted away from health care and education and job-training to teaching
“leadership” and in effect telling “Whitey” off. Some people at the foundation were troubled by
this new development. But they were largely unable to resist the growing pressure for any and
all kinds of participatory programs. And it wasn’t long before Ford found itself paying for street
gangs and avowed Black Power leaders. (Tamar Jacoby)
And again, the decision to fund the most incendiary lunatic agitators was a very conscious one,
since their outrageous statements could be used to fuel the backlash of the white middle class
against the militants and their demands.
FORD’S MCKISSICK, ANTI-MARTIN LUTHER KING
Thanks to the sheer power of its multi-billion-dollar endowment, the Ford Foundation was able
to create a new fad for shameless, race-baiting provocateurs on the national scene. H. Rap Brown
became infamous for his favorite slogan that “violence is as American as cherry pie.” Rap also
issued ominous threats, including his classic “If America don’t come around, we’re gonna’ burn it
down.” This was the age of “burn, baby, burn,” while reactionary Republican strategists around
Nixon and others thanked heaven for their extraordinary good fortune.
A good example of the Ford Foundation sponsorship for the most extreme black power militants
as a countergang to Martin Luther King was the grant allocation in Cleveland, Ohio:
Among the most controversial of these grants went to the Cleveland chapter of CORE
[Congress of Racial Equality]. Like even the most moderate civil-rights organizations, CORE
had been drifting leftward through the 1960s. Its integrationist national director James Farmer
76 Barack H. Obama: The Unauthorized Biography
had been replaced in 1966 by the younger and angrier Floyd McKissick, who along with
Carmichael was among the first proponents of Black Power. Outflanked on the left by SNCC
[Student Non-Violent Coordinating Committee] and even tougher ghetto leaders advocating
violence and a separate black nation, McKissick felt under strong pressure to prove his
militancy. He began to talk of “revolution” and to forge links with black Muslims; he explicitly
repudiated the phrase “civil rights,” replacing its appeal to morality with bristling talk of racebased
“power.” Before long, his escalating racial rhetoric had driven most white members out
of CORE. By 1967, SNCC had actually expelled whites, and in July CORE deleted the word
“multiracial” from its constitution. With this, it dropped all pretense that it was pursuing
integration or the hope of progress based on racial harmony.
None of this apparently bothered the Ford Foundation, which announced two weeks later - even
as the Newark ghetto erupted in riots - that it was giving $175,000 to CORE’s Cleveland
chapter. Bundy explained at a press conference that his board had considered the grant “with
particular care.” (In fact among some 16 trustees, only Henry Ford himself had expressed any
doubts.) What’s more, said Bundy, “neither Mr. McKissick nor I suppose that this grant
requires the two of us - or our organizations - to agree on all public questions.” The foundation
had chosen Cleveland because it had been particularly hard hit by riots the past summer; Ford’s
theory was that CORE might channel the ghetto’s grievances in a more constructive way,
averting further violence in the streets. The money was earmarked for voter registration and the
training of community workers who were then to help other blacks articulate their needs.’
(Tamar Jacoby, “McGeorge Bundy: How the Establishment’s Man Tackled America’s Problem
with Race,” http://www.aliciapatterson.org/APF1303/ Jacoby/Jacoby.html)
Bundy the patrician had made McKissick the minority plebeian into his mercenary as part of an
incipient war on the part of the financiers against the majority of the American people in the form of
the white middle class and lower middle class.
Rational spokesmen for the black community were horrified by the kinds of reckless and
irresponsible agitation which the Ford Foundation was creating: ‘In Cleveland, ‘A black city
councilman who opposed the program said the youths were being taught “race hatred” and that they
had been heard telling younger children that “we are going to get guns and take over.” Yet Ford
continued to defend the grant: “I see it,” said a foundation consultant, “as a flowering of what Black
Power could be.” In August 1968, the program was renewed, with explicit instructions to include
local gang leaders.’ (Tamar Jacoby) The Ford Foundation was not making mistakes; it was rather
acting with diabolical effectiveness to pursue its oligarchical class agenda.
BUNDY AND MAYOR LINDSAY ATTACK THE NEW YORK SCHOOLS, 1968
At this time, the mayor of New York City was a liberal Republican bankers’ boy named John V.
Lindsay. Lindsay was expected by Wall Street to maintain full payment on the municipal bonds of
the city, no matter what the consequences might be for schools, hospitals, transportation
infrastructure and so forth. The bankruptcy of New York City which would explode in 1974-75
was now on the horizon, so it was time for the finance oligarchs to take preemptive action to divide,
disrupt, and abort any potential for a united front of New Yorkers against their outrageous and
exorbitant demands, which would later be carried out by the infamous Municipal Assistance
Corporation or Big Mac, directed by the austerity fanatic and future Obama backer Felix Rohatyn.
Bundy was able to convince Lindsay that a counterinsurgency project based on black community
II: Columbia University and Recruitment by Zbigniew Brzezinski 77
control of the public schools would offer vast potential for mobilizing the black ghetto against the
largely Jewish teachers’ union, the United Federation of Teachers or UFT.
The result was a sinister triumph of foundation-funded social engineering and political
manipulation. The idea was to give the newly created community control apparatus the right to hire
and fire teachers, in flagrant violation of the legally binding contract the UFT had fought so hard to
obtain from the city only a few years before. Bundy was no doubt gleeful as he contemplated the
potential for busting a union in the short run, using duped black parents, egged on by foundationfunded
poverty pimps:
The most notorious Bundy endeavor, the school decentralization experiment in the Ocean Hill-
Brownsville section of Brooklyn, changed the course of liberalism by fracturing the black-
Jewish civil rights coalition and souring race relations in New York for years afterward. Bundy
had led a mayoral panel under John Lindsay that recommended giving “community control”
over local public school districts to parents. The panel’s report, written by a Ford staffer,
claimed that New York’s huge centralized school system was not sufficiently accountable to
minority populations. Black and Puerto Rican children could not learn or even behave, the
report maintained, unless their parents were granted “meaningful participation” in their
education. Translation: parents should hire and fire local teachers and school administrators.
(Heather Mac Donald)
Bundy launched the program with characteristic energy and dispatch. The very month he
arrived in New York, he secured the board’s formal blessing to make race the top priority. Then
he got down to studying the issue in earnest. He read everything he could get his hands on and
spared no effort to get to know “Negro leaders.” He reached out to individuals and heads of
organizations, meeting them individually and in small groups. There were Sunday lunches at his
home and dinner meetings at the elite, all-male Century Club. The Century round-tables became
a kind of an institution in themselves: a dozen or more black and white men, from government,
social work and academia, would gather on the club’s musty top floor and take turns around the
table, each speaking his piece, then removing their jackets and arguing late into the night.’
(Tamar Jacoby)
‘The Bundy Report on decentralization contains one inexcusable folly – inexcusable because ...
Bundy ... recognized it as folly ... that communities can ‘unite’ around the issue of education. In
fact, communities inevitably divide about the issue of education.’ (Salandria)
If this was folly on the part of Bundy, it was very willful folly. Later Obama would repeat the
same divisive tactics as head of the Chicago Annenberg Challenge.
RACIST RHODY MCCOY, FORD OPERATIVE AND ROLE MODEL FOR OBAMA
The success of the community control gambit for purposes of counterinsurgency and political
manipulation depended in large part on the personal qualities of the boss of the new experimental
community control school district. As could be expected, the Ford Foundation selected for this post
the most incendiary and outrageous racist provocateur in sight:
Ford chose as the head of its $1.4 million decentralization experiment in three Brooklyn school
districts a longtime white-hater, Rhody McCoy, who dreamed of creating an all-black school
system, right up through college, within the public schools. McCoy was a moderate, however,
compared to the people he tapped as deputies. Although the school board blocked his
appointment of a militant under indictment for conspiracy to murder, he did manage to hire Les
78 Barack H. Obama: The Unauthorized Biography
Campbell, the radical head of the Afro-American Teachers Association, who organized his
school’s most violent students into an anti-Semitic combat force. According to education
scholar Diane Ravitch, McCoy had an understanding with racist thug Sonny Carson that
Carson’s “bodyguards” would intimidate white teachers until McCoy would diplomatically call
them off.’ (Heather Mac Donald)
Since the majority of the New York City teachers were Jewish leftists with radical New Deal
backgrounds, the most scurrilous anti-Semitic baiting was prescribed for all the Ford Foundation
operatives who wished to advance their careers:
Ford’s experimental school districts soon exploded with anti-Semitic black rage, as militants
argued that black and Puerto Rican children failed because Jewish teachers were waging
“mental genocide” on them. The day after Martin Luther King’s assassination, students at a
junior high school rampaged through the halls beating up white teachers, having been urged by
Les Campbell to “[s]end [whitey] to the graveyard” if he “taps you on the shoulder.”
…white teachers at one school found an anti-Semitic screed in their mailboxes, calling Jews
“Blood-sucking Exploiters and Murderers” and alleging that “the So-Called Liberal Jewish
Friend . . . is Really Our Enemy and He is Responsible For the Serious Educational Retardation
of Our Black Children.” McCoy refused to denounce the pamphlet or the anti-Semitism behind
it. Nor did Ford publicly denounce such tactics—or take responsibility after the fact. McGeorge
Bundy later sniffed self-righteously: “If private foundations cannot assist experiments, their
unique role will be impaired, to the detriment of American society.” But if the experiment goes
awry, the foundation can saunter off, leaving the community to pick up the pieces. (Heather
Mac Donald)
Another commentator noted, “Not the least of the political questions left dangling at the end of
the tragedy of the teachers’ strikes is the best way to make tax-exempt foundations responsible for
the consequences of their actions.” (Salandria) In reality, American society would be best served by
a policy of taxing these oligarchical parasites out of existence, and returning their ill-gotten loot to
the public treasury.
FORD OPERATIVES PROVOKE THE TEACHERS TO STRIKE
With the start of the new school year in September 1968, the great Ford Foundation experiment
in community control and social engineering exploded into chaos, a chaos which engulfed New
York City as a whole.
Everything the skeptics predicted – and more – came to pass in Ocean Hill-Brownsville, one of
the three experimental districts funded by Ford. Within weeks of the foundation’s $59,000
grant, the militant activists who made up the board in this forsaken Brooklyn ghetto found
themselves at odds with some dozen allegedly “incompetent” teachers charged by the board
with being disloyal to the decentralization experiment. (The board was largely black, the
teachers were white – and even a black judge who later investigated the dispute could find little
cause, apart from race, for the board’s dissatisfaction.) In May 1968, the offending teachers
were asked to leave their posts, and when the union rallied to their defense, the local board went
to war against the union. The union struck; the board resisted — by hiring several hundred
irregular teachers and organizing people from the ghetto to demonstrate at the schools. Then,
throughout the fall of 1968, the Ocean Hill-Brownsville schools were the scene of daily
violence. (Tamar Jacoby)
II: Columbia University and Recruitment by Zbigniew Brzezinski 79
Every institution in the city quickly chose sides between the teachers union and the black
community control apparatus, splitting New York into two opposed camps. It is this kind of
ominous precedent which allows us to predict that an Obama presidency carried on with these same
foundation methods of social engineering will bring civil war in the United States as a whole much
nearer. In the fall of 1968,
a typical day brought out pickets and counter-pickets, shouting at each other across wooden
police horses, threatening each other and inciting schoolchildren. Both sides organized rallies at
City Hall; both spread hateful and largely racial innuendo. Black anti-Semitism (many of the
teachers were Jewish) vied in fury with whites’ race-charged fear and anger, and the cumulative
venom spiraled out of control. The eight schools in the Ocean Hill-Brownsville district were at
the center of the storm – and many white teachers there reported they feared for their lives. But
the striking union gave as good as it got, spreading bitterness throughout the city by shutting
down the entire school system and causing more than 1 million students to miss nearly 40 days
of the fall term. By November, when the strike was settled, integration – and race relations in
general – had been set back 20 years or more. (Tamar Jacoby)
Naomi Levine described how the Ford Foundation under McGeorge Bundy used Ocean Hill-
Brownsville to deliberately provoke a confrontation:
Why did the Ocean Hill governing board order the “termination of employment” of the nineteen
teachers and administrators in Ocean Hill in such a peremptory manner and at a time when the
State Legislature was considering various proposals that would have enacted into law many of
the Bundy report recommendations? Why did the union react so strongly? […] The conclusion
is inescapable that the Ocean Hill governing board wanted a confrontation with the Board of
Education in order to fix its powers and responsibilities once and for all, and that it created the
situation to provoke such confrontation. (Salandria, “The Promotion of Public Discord,”
http://educationforum.ipbhost.com/lofiversion/index.php/t7653.html )
Significant parts of the community control experiment were rolled back, but by then the vast
damage had already been done. There was even a backlash against the high-handed and elitist
approach of the Ford Foundation, but this fell far short of wiping out this poisonous and malignant
institution:
In the end, state education authorities approved a much watered-down version of the Bundy
panel proposals. But Ford was made to pay dearly for its activist involvement. Conservative
journalists and congressmen riding the backlash of the late 1960s seized on the foundation’s
involvement in both Ocean Hill and Cleveland. These were only two small grants, a few
hundred thousand dollars of the many millions Ford had spent on race relations – for education,
voter registration, housing integration and poverty research. But that did not stop critics like
Texas congressman Wright Patman, who suggested apocalyptically on the House floor that “the
Ford Foundation [had] a grandiose design to bring vast political, economic and social changes
to the nation in the 1970s.” Thanks largely to his efforts, in 1969 Congress passed legislation
that significantly restricted all foundation giving (not just Ford’s) with excise taxes and federal
oversight. (Tamar Jacoby)
Wright Patman was that rarity, a genuine populist fighter against the Federal Reserve and the
financier elite in general.
The events around the New York City teachers’ strike of 1968 partially destroyed the
government of the City of New York in a manner from which it has never really recovered. It also
80 Barack H. Obama: The Unauthorized Biography
set the stage for the personal ruin of Mayor Lindsay, who had in effect turned over large parts of the
city to unelected and unaccountable Ford Foundation mindbenders. Here is an account of these
events from the point of view of City Hall which appeared in the New York Times obituary for
Mayor Lindsay in 2000:
Lindsay initiatives… were widely viewed as special concessions to black New Yorkers…
In 1968, Mr. Lindsay responded to black parents’ demands for more control and more black
teachers in their neighborhood schools by putting into effect, on an experimental basis, a school
decentralization plan in several black areas of the city, including Ocean Hill-Brownsville, in
Brooklyn.
Studies were cited that said integration was sputtering in New York, that schools had a poor
record educating black children, that it was psychologically harmful for blacks to attend schools
with mostly white teachers and administrators. The Ford Foundation, among others, had urged
the city to pursue decentralization, and the Legislature had agreed to finance the plan.
Challenging a white, largely Jewish school bureaucracy, whose authority was to be pared by
decentralization, Rhody McCoy, the administrator of Ocean Hill-Brownsville, transferred 13
teachers and 6 administrators, most of them Jewish, out of his district. In effect, he dismissed
them without pedagogic reasons, and it was said that their real offense was to oppose
decentralization.
The action was denounced as illegal by the United Federation of Teachers, which called a strike
that closed 85 percent of the city’s 900 schools for 55 days, putting a million children out of
classrooms and disrupting thousands of families. The strike’s bitterness was horrendous, with
threats of violence and diatribes laced with racism and anti-Semitism; Mr. Lindsay denounced
the slurs and ugly conduct as intolerable.
The strike ended when the state suspended Mr. McCoy and the Ocean Hill-Brownsville board
on grounds that it had violated valid union contracts by transferring the teachers and
administrators without cause. Later, the Legislature fashioned a compromise, decentralizing city
schools into 32 districts and giving locally elected boards power to run their elementary and
junior high schools, but adopting strong protections for teachers’ jobs. But the episode left a
legacy of tensions between blacks and Jews that went on for years, and Mr. Lindsay called it his
greatest regret.
The last six months of 1968 were “the worst of my public life,” Mr. Lindsay later said. The
schools were shut down, the police were engaged in a slowdown, firefighters were threatening
job actions, sanitation workers had struck for two weeks and the city was awash in garbage, and
racial and religious tensions were breaking to the surface.
The depth of feeling against Mr. Lindsay in the boroughs outside Manhattan was not widely
understood beyond New York. But it became apparent to the nation after a Feb. 9, 1969,
blizzard buried the city in 15 inches of snow. While major arteries were plowed quickly, side
streets in Queens were buried for days, and homeowners greeted the visiting mayor with boos,
jeers and curses. The scenes, captured on national television, conveyed a message that the
mayor of New York was indifferent to the middle class. (New York Times, Dec. 21, 2000)
In other words, Lindsay was widely seen as an arrogant elitist full of contempt for blue-collar
and middle-class New Yorkers; these harbingers of a possible Obama regime in Washington are too
obvious to require any further commentary.
II: Columbia University and Recruitment by Zbigniew Brzezinski 81
A CLASSIC PATRICIAN-PLEBEIAN ALLIANCE
TO CRUSH THE MIDDLE CLASS
In Machiavelli’s Discourses, the perspicacious Florentine secretary points out that one of the
most dangerous political alliances that can come to dominate a state is one between the wealthy
patricians and the poorest inhabitants of the city. This seems to have been exactly what McGeorge
Bundy was aiming at, and the results were and continue to be catastrophic based on any rational
conception of American national interest. As Vincent Salandria, an intelligent lawyer, observed
several years after the dust began to settle,
A new political alliance is being forged in this country between the super-rich and the superpoor
– especially the alienated and activist members of minority groups.
The Ford Foundation, under the aggressive leadership of McGeorge Bundy, is providing the
major thrust for this power bloc ... This is a dangerous game but it doesn’t seem to worry those
members of the “Eastern Establishment” who are involved. They’re sure that no matter what
happens they’ll still be on top.
Salandria saw that the scope of the social manipulation being attempted by the Ford Foundation
was so vast that it implied nothing less than a foundation coup to impose a new oligarchical political
order in the United States:
The Ford Foundation’s support of provocateurs and revolutionaries throughout the nation is
raising numerous eyebrows. Many believe Bundy, former coordinator of intelligence for
President Kennedy, is fostering a new political alliance. Its effect, at the moment, appears to be
the destruction of the American constitutional system. The Foundation seems to be bypassing
the legally constituted federal bureaucracy, Congress and state and local governments in order
to build a movement of revolutionary proletarians.’ (Salandria, “The Promotion of Public
Discord.”)
It was clear that the teachers and the black parents were essentially fighting each other for a
share of a pie of economic concessions that was rapidly shrinking because of the incipient economic
decline and deindustrialization of the United States. These two groups would have had everything to
gain by forming an alliance to extract urgently needed concessions from the Wall Street banks. As
Salandria puts it,
I feel that McGeorge Bundy’s social engineering experiments with ethnics are designed to
cause this country to unravel under a systematic program of polarization. Where the foundations
leave off, the government agencies directly involve themselves in provocateur attempts to
splinter this nation. […] Coleman McCarthy has very wisely shown the evil and cynicism
behind the approach used by McGeorge Bundy. He points out the only legitimate function that
the intellectual should play in dealing with ethnics and racism is to: ... explain that the blacks
and white working class are actually in the same urban fix together. Instead of letting them fight
each other for useless inner-city leftovers, the intellectuals could act as a referee, creating a
black-white coalition based on hard, mutual needs, not any sentimental notions of integration.
(Salandria)
It was also very clear that the Ford Foundation continues to regard the black community as
second-class citizens who had to be maintained as wards and clients of the foundation community.
Edith Kermit Roosevelt describes this process: The operations in New York City of the Ford
Foundation typically illustrate the ruthless tactics used by the foundation’s self-described ‘elite’
82 Barack H. Obama: The Unauthorized Biography
in their drive for political power. One of the Ford Foundation’s goals has been to fundamentally
change the direction and control of New York City’s public-school system. City educational
institutions provide the Ford Foundation with a vehicle in their drive to control minority and
ethnic groups in urban areas through dollars distributed to key personnel who will be beholden
to them. (Salandria)
A DISASTROUS WATERSHED IN AMERICAN HISTORY
Salandria, who was a leftist, typifies the rage of Italian, Jewish, Irish, Polish, and other New
Yorkers who had witnessed the rape of the city by a group of leftist elitists in the pay of the Ford
Foundation. He reflects:
But let us not be so outraged as to lose our bearings. Yes, admittedly I have difficulty at times
in maintaining my poise. This is especially true when I hear that McGeorge Bundy, the greatnephew
of A. Lawrence Lowell, one of the murderers of my Italian brothers, Nicola Sacco and
Bartolomeo Vanzetti, through Ford Foundation grants will provide aid aimed at increasing
minority opportunities in higher education. How ironic that the Ford Foundation which has
polluted the urban school systems with its provocateur activities and thereby foreclosed
educational opportunities for so many ethnic children, seeks to parade as the ethnics’ friend by
buying off scholars of ethnic backgrounds! (Vincent J. Salandria, “The Promotion of Domestic
Discord,” an address at the conference of the New England Branch of the Women’s
International League for Peace and Freedom, October 23, 1971)
The aftermath of the strike was marked by a rapid rightward shift by many of the white ethnic
groups. In fact, the emergence of the neoconservative or neocon movement is unthinkable without
the backlash generated by the foundation operatives through these events. There were of course
many other causes, but this strike was the one which more than any other turned the nation’s largest
city into a raging political and social battlefield, where reason and reconciliation were inevitably the
first casualties. Every left-wing organization in New York City had to take a position on one side or
the other of the teachers’ strike. The Columbia University chapter of Students for a Democratic
Society split into two factions over this issue. The anarchist, proto-fascist “action faction” of
spoiled suburbanite youth under Weatherman co-founder Mark Rudd enthusiastically supported the
Ford Foundation racist provocateurs, and were eager to bust the union. Rudd was reportedly already
on the foundation payroll as a provocateur. This group quickly joined forces with the SDS national
office clique around Bernardine Dohrn, and became the terrorist-fascist Weatherman tendency.
Obama’s affinity for the Weather Underground bombers Ayers and Dohrn accordingly has deep
roots, since these figures represent the most militant and aggressive anti-working class figures from
that degraded sector of the self-styled left who chose to support and uphold the fiendish strategy of
the Ford Foundation and the US intelligence community to divide and conquer on racial lines. The
Weathermen gave precious left cover to McGeorge Bundy, and it is no accident that they find
themselves today at the side of Obama, a second-generation racist provocateur for the foundations.
The Weathermen were the most violent of those who wanted radical politics to follow the line
dictated by the oligarchical foundations. So it is not surprising to find Ayers and Dohrn as darlings
and grant recipients of the foundations today, even as they act as the core of Obama’s support
network. The pro-labor part of the Columbia SDS chapter was the part already known as the Labor
Committee, and soon expanded to other cities as the New York-Philadelphia Labor Committees,
and then as the National Caucus of Labor Committees; the present author was a member of the
II: Columbia University and Recruitment by Zbigniew Brzezinski 83
Cornell University branch in Ithaca, New York, starting in September 1968. The issues of those
days are still central today, despite Obama’s attempt to push them out of public view.
The methods used by McGeorge Bundy in New York City in 1968 to exacerbate racial conflict
are essentially identical to the underlying approach of the Annenberg Chicago Challenge of the
1990s, which was organized through a consortium of foundations by the Weatherman terrorist
bomber Bill Ayers, who had suddenly become respectable as a professor of education and
foundation operative. Ayers recruited Obama to be the chairman of the board of this Annenberg
Chicago challenge, and this was unquestionably one of the biggest steps up the career ladder for our
young Messiah.
The centerpiece of the Annenberg Chicago challenge was the decentralization of the school
system through the creation of local school councils (LSCs), with the same kind of community
control and local control illusions which had been peddled by Bundy. In this case, the effect was
less explosive than in New York City, because during the 1990s a much larger percentage of the
Chicago teachers’ union was black. Nevertheless, the existence of the local school councils allowed
the Chicago banking community through its political operatives like Ayers and Obama to play
desperate black parents against the teachers union, against municipal agencies, and against the
mayor, if that were required. This is why the New York example of 1968 is so indispensable in
understanding what the goals of Obama’s operations actually were.
BUNDY DICTATES AFFIRMATIVE ACTION TO THE SUPREME COURT
The crowning achievement of McGeorge Bundy’s career was doubtless his success in
engineering a majority on the United States Supreme Court in favor of affirmative action programs
by which token numbers of organic black intellectuals and community leaders would be co-opted
into the elite career tracks of the prevailing finance oligarch institutions, while leaving the vast
majority of the black ghetto in a situation of worsening poverty and despair. Bundy thus scored his
last, and perhaps most significant, achievement in the realm of race relations – his role in the
Supreme Court’s Bakke decision endorsing the use of racial criteria in university admissions.
Bundy’s contribution was an article in The Atlantic making the case for affirmative action. It
was, even for Bundy, an unusually subtle and brilliant argument – but if that was all it was, it
would hardly matter today. What made it important was its impact on one particular reader:
Supreme Court Justice Harry Blackmun, who provided a crucial fifth vote in favor of the use of
racial criteria. His short opinion on the case was so close to Bundy’s piece that it all but quoted
him. “Precisely because it is not yet ‘racially neutral’ to be black in America,” Bundy wrote, “a
racially neutral standard will not lead to equal opportunity.” Thus, he concluded. “To get past
racism, we must here take account of race.” Blackmun borrowed the phrase almost verbatim,
and it has stood for [many] years as the nation’s primary rationale for affirmative action. For
better of worse, it encoded the key idea of the late 60s - that racial progress can come only
through racial consciousness - at the center of American law. The distilled essence of Bundy’s
thinking on “the Negro question,” it remains a telling emblem of all that he did to encourage
black consciousness and race-based strategies. (Tamar Jacoby)
With the Bakke decision, which was argued under the Carter regime, we come to the world of
racial quotas, set-asides, and preferential treatment in such areas as college admissions. Far from
favoring a relaxation of racial tensions and an improved climate of national unity, these methods
have kept racial issues and racial stereotypes alive, as part of a cynical divide-and-conquer strategy.
Clinton sponsored an extensive debate about race, and today we have Obama announcing that yet
84 Barack H. Obama: The Unauthorized Biography
another racial conversation is needed. Instead, the view here is that what is needed is political
education based on class, poverty, exclusion, and economic decline. How can the government
determine race? Will we use light meters? Will we measure skulls, as in phrenology? Will we
demand family trees? These ideas must be rejected. What we can determine is if someone is in
poverty, and those are the people we must urgently assist into modern, productive employment.
Today, 30 years later we are in a position to see the real shape of the river as we observe the
characteristic human types which this system has created. Notable among these are Barack Hussein
Obama and Michelle Obama, who both assume the hypocritical stance of victims of racial
discrimination, when in fact the only discrimination they have known has all been in their favor,
and against the competition. Even as they amass luxury automobiles, significant wealth, mink
coats, and their legendary mansion, they must parade themselves as people who repeatedly rejected
the materialistic allure of the corporate world for a life of ascetic dedication and personal sacrifice
in the service of high principle. They also know that at least two-thirds of the black community for
which they claim to speak does not benefit, but demonstrably suffers, from this system.
Because of the obvious psychological stress between their rapacious greed, and their public pose
of altruism in the service of the black community, their troubled consciences require special care,
and it is this care which Reverend Jeremiah Wright, Otis Moss, and Dwight Hopkins have been
funded by the foundations to provide. Today Obama is running as the affirmative action candidate
for president, demanding and getting unprecedented and unheard of special treatment from the
hacks of the Democratic National Committee in the form of delegates from the state of Michigan,
where he deliberately took his own name off the ballot to avoid humiliating defeat while saving
resources. Obama demands the Democratic nomination despite the fact that Senator Clinton won
the popular vote or raw vote. All this will provide yet another lesson that affirmative action
perpetuates racial conflict, condemns the poor to a life of despair, and promotes a parasitic overclass
of race-mongers notable for their personal mediocrity and incompetence.
THE RACIST WORLD VIEW OF THE FOUNDATIONS
Let there be no confusion that racial problems in the United States have proven to be so
intractable precisely because they have been continuously exacerbated by never-ending campaigns
of foundation-funded social engineering.
Today, the full-blown liberal foundation worldview looks like this: First, white racism is the
cause of black and Hispanic social problems. In 1982, for example, Carnegie’s Alan Pifer
absurdly accused the country of tolerating a return to “legalized segregation of the races.” The
same note still sounds in Rockefeller president Peter C. Goldmark Jr.’s assertion, in his 1995
annual report, that we “urgently need . . . a national conversation about race . . . to talk with
candor about the implications of personal and institutional racism.” Second, Americans
discriminate widely on the basis not just of race but also of gender, “sexual orientation,” class,
and ethnicity. As a consequence, victim groups need financial support to fight the pettymindedness
of the majority. Third, Americans are a selfish lot. Without the creation of courtenforced
entitlement, the poor will be abused and ignored. Without continuous litigation,
government will be unresponsive to social needs. Students in foundation-funded ethnic studies
courses learn that Western culture (whose transmission is any university’s principal reason for
existence) is the source of untold evil rather than of the “rights” they so vociferously claim. […]
Liberal foundations are straining to block popular efforts to change the country’s discriminatory
racial quota system.’ (Heather Mac Donald)
II: Columbia University and Recruitment by Zbigniew Brzezinski 85
The dead hand of foundation grant officers has also helped to throttle the creative arts in this
country by imposing their bankrupt and artificial notions of diversity and multiculturalism. These
can be seen for example in the world of drama, where
The large foundations now practice what Robert Brustein, director of the American Repertory
Theater, calls “coercive philanthropy,” forcing arts institutions to conform to the foundations’
vision of a multicultural paradise—one that, above all else, builds minority self-esteem.’
(Heather Mac Donald)
During the 1990s, it sometimes seemed that the counterinsurgency and social manipulation
efforts of the foundations have been so successful as to turn the United States into a political
graveyard. As Heather Mac Donald of the neocon Manhattan Institute comments,
the impulse toward the activism that over the past 30 years has led the great liberal foundations
to do much more harm than good remains overwhelming. In a pathetic statement of
aimlessness, the president of a once great foundation recently called up a former Ford poverty
fighter to ask plaintively where all the social movements had gone.’ (Heather Mac Donald)
1980s COMMUNITY DEVELOPMENT CORPORATIONS AND
COLLABORATIVES: OBAMA’S BACKGROUND
By the time Barack Hussein Obama arrived on the foundations scene in the mid-1980s, the
original community action/community control/local control counterinsurgency strategy of the
foundation community had somewhat evolved into community development corporations. These
CDCs were first of all a reflection of the fact that economic conditions had become much more
desperate as a result of rampant economic misrule under the Reagan regime. The trade union
movement in its traditional form had now been largely broken. The CDCs were basically apolitical,
in that they presuppose that any attempt to change the policies of the government in Washington
was hopeless, and that the most that could be attempted was to make the slide into deindustrialization
and poverty a little more comfortable. The CDCs were also corporatist in the strict
sense borrowed from the Mussolini fascist corporate state: as an organizational form, they brought
together workers, bankers, foundation bureaucrats, and government officials in an attempt to cajole
corporate interests into creating a few jobs in poverty-stricken and blighted neighborhoods.
Alternatively, they sought some minor reform such as measures to reduce asbestos or lead
poisoning in schools and public buildings.
This is precisely the strategy which Barack Hussein Obama was implementing for the Gamaliel
foundation, a satellite of the Ford Foundation, in the Altgeld neighborhood on the south side of
Chicago. Obama was therefore a second-generation poverty pimp carrying out an overtly
corporatist political plan designed to maintain the control of bankers and financiers over the city of
Chicago in just the same way that McGeorge Bundy had done this in New York.
Ford never exactly repudiated community control – or Black Power. Nor did it give up entirely
on Bundy’s paradoxical idea that the best way to spur integration was to bolster separate black
institutions and strengthen black identities. Yet Bundy and his officers quietly retreated to a far
safer form of black institution-building – investment and grants for ghetto-based enterprises
known as “community development corporations.” […] The theory is simple: Ford - and the
government and private lenders - funnel money to a local nonprofit “board” that builds up the
neighborhood and tries to attract business. These businesses create jobs, while the “corporation”
– acting as a kind of local government – provides an array of social services. In the past 20
86 Barack H. Obama: The Unauthorized Biography
years, Ford has spent some $200 million on what it now estimates to be 2000 CDCs. The
difference between today’s CDC and the community activism of the 1960s is small but critical:
participation is still the key word, but the emphasis is on substantive participation – community
involvement in a particular activity like rehabilitating local housing – rather than on
participation for participation’s sake. Success is hard to measure. Few of these “corporations”
could exist without outside support: yet to Ford and to the communities that host them, they
represent an important kind of “self-help.” And that, for the moment, is still the most urgent
priority – with the goal of integration still deferred indefinitely. (Tamar Jacoby)
This is the kind of thing Obama is talking about when he claims that he was trying to organize a
community to bring back jobs that had been lost when a steel mill shut down. The way to create
jobs is to organize politically and expand the New Deal policies which have been proven effective
in creating high technology jobs at union wages. Instead, Obama offered an exercise in futility
leading to no tangible gains and the burnout of most of his main cadre, which was the plan.
These community development corporations were also termed “collaboratives.” Once again, the
scale of organization is always minuscule, the dominant ideology localist in the extreme, and the
chances of any success asymptotically approaching zero. The collaboratives also include an attempt
to wipe out prevailing moral values in the target population, which reminds us of Obama’s
infamous San Francisco “Bittergate” tirade, in which he criticized rural populations facing high
unemployment for their devotion to religion, gun ownership, ethnic pride, and the resistance to
economic globalization. This is the mental world of the foundation-funded social engineer and
political manipulator in unalloyed form. One analyst notes that
The so-called “collaboratives” movement in community development is emblematic of the 30-
year-long foundation assault on the bourgeois virtues that once kept communities and families
intact. The idea behind this movement, which grows out of the failed community action programs of
the 1960s, is that a group of “community stakeholders,” assembled and funded by a foundation,
becomes a “collaborative” to develop and implement a plan for community revitalization. That plan
should be “comprehensive” and should “integrate” separate government services, favorite
foundation mantras. To the extent this means anything, it sounds innocuous enough, and sometimes
is. But as with the foundations’ choice of community groups in the 1960s, the rhetoric of
“community” and local empowerment is often profoundly hypocritical. (Heather Mac Donald)
This is the world of local, small-scale corporatism, with communitarian overtones – this is truly
Obama’s world.
“PATRONAGE TROUGHS FOR POLITICAL OPPORTUNISTS”
Here is another example of the same foundation social control strategy based on community
development corporations as it has been implemented over the past decades in Miami, Florida, in
the wake of a serious urban riot a quarter of a century ago. We quote it at length because it is
important for the reader to understand as clearly as possible what cynical manipulation lurks behind
the benevolent-sounding job description of “community organizer” in Obama’s constantly touted
resume:
If you haven’t had a couple of bloody, terrifying urban riots down the street from your
corporate headquarters, the experiences of Knight-Ridder’s CEO, James K. Batten, 53, can help
you capture the feeling, and lead you to one of our first “heroes.” After Miami’s lacerating
Liberty City riot of 1980, Batten helped mobilize the business community. Says he: “Suddenly
II: Columbia University and Recruitment by Zbigniew Brzezinski 87
there was a surge of conscience among businessmen — some of it sparked by idealism and
concern for humankind, and some of it by pragmatism and self-interest. Nineteen-eighty left a
sense of foreboding about what Miami really was and where it was headed. Even the most
cynical recognized that no one wants to vacation in a war zone.” In the aftermath, officials from
a newly formed Ford Foundation-backed outfit called LISC, for Local Initiatives Support Corp.,
came to Liberty City in search of struggling community development organizations to help.
They found none, but they did discover Otis Pitts, an educated native of Liberty City with a
varied background as a military policeman, railroad cook, and Miami city cop. After his police
partner was killed by his side on a call in Liberty City, he took up youth counseling work and
was running a successful agency in Liberty City when LISC found him. LISC and Pitts set up
something called the Tacolcy Economic Development Corp., to which LISC provided money
for plans and such, plus a small loan and expertise to get additional financing for rebuilding a
looted supermarket on a pivotal corner. LISC acted as a facilitator, but the project was
essentially on Pitts’s shoulders, and it had to make commercial sense. It took off when he
persuaded Winn-Dixie Stores to come in as anchor tenant, after the original tenant refused to
return. “I learned quickly that a deal is finite,” he recalls now. “You can’t put too many risks on
one deal. As soon as something like this gets started, all the aspirations and demands of the
community come together. We were under pressure to hire minority employees, to build with
minority contractors, even to help start a minority grocery chain. Well, if you just keep piling
up the risks like that with unrealistic expectations, the deal will collapse.”
So, says Pitts, he became single-minded. “The major objective,” he says, “was to build a damn
shopping center to provide quality goods and services at competitive prices in a safe and decent
environment” — basically the economic cornerstone of any community. At that, he did bring in
mostly black subcontractors and workers. Today, Pitts’s crisply appointed offices are located in
Edison Plaza, which is just what he describes. Its success has attracted a McDonald’s to an
opposite corner, and Pitts has gone on to other victories. His most recent accomplishment is the
121-unit, eight-story Edison Towers apartment house for low-income tenants, a beautifully
appointed, exquisitely maintained private residence with excellent security smack in the middle
of Liberty City. Financed with LISC help and mostly private funds, Edison Towers is a model
of how community development corporations get the job done. The financing included a
$100,000 grant from the Ford Foundation, plus loans from the foundation, LISC, Dade County,
Southeast Bank, and Equitable, as well as a $1.6 million grant from a developer called Swire
Properties. […] LISC — basically a creation of the Ford Foundation — is far in front of the
curve on business involvement with poverty. With tax credits as a partial inducement, it has
assembled more than $200 million from some 500 corporations and foundations and leveraged
over $1 billion of direct investment in more than 500 community development corporations
across the country. In the South Bronx alone, LISC has invested upwards of $5 million in some
36 development projects. “We make it an attractive proposition for a corporation or foundation
to work through us,” says LISC President Paul S. Grogan. “They may want to attack these
problems, but they don’t have the capacity themselves to evaluate the opportunities, or to make
judgments about these community organizations. They don’t know the landscape. There’s still
sort of a stereotype of unscrupulous neighborhood organizations that don’t do anything but take
the money.” LISC officials admit that many community development corporations aren’t as
successful as Pitts’s or Rivero’s, but all of them counter the “poverty pimp” images from the
1970s. “We’re able to provide the opportunity recognition and the screening, and that’s been
crucial to us,” says Grogan. The lesson we can learn from LISC: “There’s an appetite and an
interest on everybody’s part if you can make something happen in a businesslike way, and that
88 Barack H. Obama: The Unauthorized Biography
says something about the directions for the future.” (John Huey, “How We Can Win the War on
Poverty,” Fortune, April 10, 1989)
“POVERTY PIMPS, POVERTY-CRATS, POVERTICIANS,
BUREAUCRAT-POLITICIANS”
The same patterns can be observed in the history of the National Puerto Rican Coalition, a group
which billed itself as having been established in 1977 to advance the interests of the Puerto Rican
community. In 1981, the NPRC received about 90% of its funding in the form of a grant from the
US Department of Housing and Urban Development. By 1991, 50% of the funding came from
corporate grants, while 30% came from foundations, with the Ford Foundation leading the pack.
The Puerto Rican community generated numbers of militant leaders, but these were so extreme that
they had little or no impact on elections. Leaders who were moderate enough to be able to run for
office posed other crippling problems: these moderate leaders
were more concerned with good government goals than with poverty issues. These leaders,
variously referred to as “bureaucrat-politicians,” “poverty-crats,” “poverticians,” and “poverty
pimps,” were intensely focused on the acquisition of power. But instead of using it to improve
the economic condition of Puerto Ricans, they invested it in shoring up their organizations. At
times they did this under the guise that the quality of life for Puerto Ricans depended on the
resources they controlled, while in effect securing “nothing more than patronage troughs for
political opportunists.”’ (José E. Cruz, “Unfulfilled Promise: Puerto Rican Politics and
Poverty,” Centro Journal XV:1 2003)
Back during the Cold War, retired spies wrote books with titles like I Led Three Lives. An
honest autobiography by a foundation operative like Obama might thus have a title along these
lines:
“I WAS A POVERTY PIMP FOR THE FOUNDATIONS”
The role of poverty pimp within the framework of foundation-funded strategies for mass
political and social manipulation, with a view to keeping the American people in a state of apathy,
fragmentation, passivity, and oppression, is a very exact characterization of what Obama did during
his years as a “community organizer.” To talk about poverty pimps is of course politically incorrect
in the extreme, but it is the only way to convey the social reality of what we are dealing with in the
case of Obama. For further background, we read in Wikipedia:
Poverty pimp or “professional poverty pimp” is a sarcastic label used to convey the opinion that
an individual or group is benefiting unduly by acting as an intermediary on behalf of the poor,
the disadvantaged or other some other “victimized” groups. Those who use this appellation
suggest that those so labeled profit unduly from the misfortune of others, and therefore do not
really wish the societal problems that they appear to work on so assiduously be eliminated
permanently, as it is not in their own interest for this to happen. The most frequent targets of
this accusation are those receiving government funding or that solicit private charity to work on
issues on behalf of various disadvantaged individuals or groups, but who never seem to be able
to show any amelioration of the problems experienced by their target population.
This self-serving cynicism, in feeding off the plight of a group of desperate dupes who are
turned into a salable political commodity, is the essence of Obama’s career.
II: Columbia University and Recruitment by Zbigniew Brzezinski 89
SOCIAL ENGINEERING THROUGH ENDLESS LITIGATION
There is one further aspect of foundation activity which should be mentioned, since it bears on
the activities of Barack Hussein Obama, Michelle Obama, and their close friend Bernardine Dohrn
in their professional careers as lawyers. Bernardine Dohrn in particular received a large grant from
the John D. and Catherine T. MacArthur Foundation to undertake the institutional reform of the
juvenile justice and Family Court systems in Chicago. The veteran terrorist bombthrower Dohrn
was supposed to do this through a special institute she controlled at Northwestern University. This
MacArthur grant to the aging terrorist pasionaria is coherent with another dimension of foundation
strategy, which is to pervert the courts into tools of social engineering and political manipulation.
Heather MacDonald writes:
Public interest litigation and advocacy embodies the foundations’ longstanding goal of
producing “social change” by controlling government policy. Foundations bankroll public
interest law groups that seek to establish in court rights that democratically elected legislatures
have rejected. Foundations thus help sustain judicial activism by supporting one side of the
symbiotic relationship between activist judges and social-change-seeking lawyers. Foundations
have used litigation to create and expand the iron trap of bilingual education; they have funded
the perversion of the Voting Rights Act into a costly instrument of apartheid; and they lie
behind the transformation of due-process rights into an impediment to, rather than a guarantor
of, justice. Foundation support for such socially disruptive litigation makes a mockery of the
statutory prohibition on lobbying, since foundations can effect policy changes in the courts,
under the officially approved banner of “public interest litigation,” that are every bit as dramatic
as those that could be achieved in the legislature.
ANN DUNHAM’S LONG MARCH THROUGH THE INSTITUTIONS
In the world of the foundations, the only ones who really know what they are doing are the
finance oligarchs and elitists at the top. The McGeorge Bundy types are the only ones who are
getting their money’s worth. The local people, the black parents, are dupes who are being used by
the financiers as a battering ram to maintain Wall Street’s control of society. Many of the
community control operatives and many of the middle and lower level foundation personnel are
dupes. They are often dupes who think they are fooling the foundation bosses. Obama’s mother,
Stanley Ann Dunham, the disillusioned late Marxist who went to work for the Ford Foundation, was
in all probability a person who thought that she was tricking the McGeorge Bundy types by carrying
out programs and projects which she imagined were very radical and very anti-capitalist, according
to her somewhat diluted Marxist criteria. She might have thought that she was burrowing from
within the institutions to help advance the revolution. By about 1970, there were many radicals who
embarked on this same type of long march through the institutions, as the popular phrase of the time
described it. What these radicals could not see was that their smattering of Marxism had in reality
done little more than make them into useful idiots for the aristocratic financier types, just as Marx
himself had ultimately served the British Empire.
McGeorge Bundy doubtless understood all this when he gave all that money to the raving
firebrand Floyd McKissick so as to create an artificial opposition to Dr. King. Bundy doubtless
knew that Rhody McCoy probably saw himself as a black revolutionary. It was precisely this
dimension of self-delusion that made people like this into such useful idiots. Henry Ford II
obviously lacked this level of sophistication, and was genuinely shocked at what the Ford
Foundation staff had become: a nest of failed radicals and subversives marching through the
90 Barack H. Obama: The Unauthorized Biography
institutions. Henry Ford II did not understand that these were exactly the people needed for
effective counter-insurgency and divide-and-conquer operations: credible left cover operatives. As
Heather MacDonald relates,
Many foundations had turned against the system that had made them possible, as Henry Ford II
recognized when he quit the Ford Foundation board in disgust in 1977. “In effect,” he wrote in
his resignation letter, “the foundation is a creature of capitalism, a statement that, I’m sure,
would be shocking to many professional staff people in the field of philanthropy. It is hard to
discern recognition of this fact in anything the foundation does. It is even more difficult to find
an understanding of this in many of the institutions, particularly the universities, that are the
beneficiaries of the foundation’s grant programs.” Did Ford exaggerate? Not according to
Robert Schrank, a Ford program officer during the 1970s and early 1980s. Schrank, a former
Communist, recalls the “secret anti-capitalist orientation” of his fellow program officers.
“People were influenced by the horror stories we Marxists had put out about the capitalist
system,” he says; “it became their guidance.”
This is the world of Obama’s mother, a weak, disillusioned late Marxist working for the Ford
Foundation. In the case of her son, the magnetic power of Marxism had declined precipitously, and
his outlook was based on race in Fanon’s sense, not class. This combination suffices to make
Obama the most radical subversive ever to seriously contend for the US presidency.
CHAPTER III: FOUNDATION-FUNDED RACISM IN
CHICAGO: JEREMIAH WRIGHT AND MICHELLE
White folks’ greed runs a world in need. – Jeremiah Wright, “The Audacity of Hope” sermon
“What we need is the destruction of whiteness, which is the source of human misery in the
world.” – James Cone.
Well, my pastor is certainly someone who I have an enormous amount of respect for. I have a
number of friends who are ministers. Reverend Meeks is a close friend and colleague of mine in
the state Senate. Father Michael Pfleger is a dear friend, and somebody I interact with closely. –
Obama to Cathleen Falsani, 2004.18
The Obama campaign is very fond of pointing to the great personal sacrifice made by their
candidate after leaving Harvard Law School. They stress that with his prestigious law degree,
Obama could have written his own ticket to any number of lucrative positions in Wall Street, the
corporate world, or the top law firms. But this type of propaganda ignores the fact that Obama’s
career was now being guided, fostered, assisted, and directed by the networks of the Trilateral
Commission and its banking allies. Obama was now a young man who was destined for great
things thanks to these super-rich and powerful backers. Again and again we will see the marvelous
process by which obstacles are removed from Obama’s path, and adversaries are eliminated, even
as wonderful and unprecedented opportunities open up for him as if by magic. It was clear to
Obama’s Trilateral case officers that a career solely played out in the elitist world of board rooms
and country clubs would not be sufficient to provide him with a left cover required should
candidacy for political office be part of his future, as they fully intended that it would. Therefore,
Obama had to be sheep-dipped in the world of community organizing during the 1980s to develop
his ability to manipulate and con the people he met in the streets. Now, he needed an entrée into the
left-leaning Chicago Democratic political machine, where radical black nationalists and veterans of
the Weatherman terrorist group were well represented. Obama needed to burnish his resume with
activities that would reinforce his image and credentials as a true progressive, while banishing any
suggestion that he was in fact an agent of finance capital.
‘Interestingly, after his first year in law school Obama returned in the summer of 1989 to work
as a summer associate at the prestigious Chicago law firm of Sidley & Austin. This in and of itself
is a bit unusual. Very few top tier law students work for big law firms during their first summer.
The big law firms discourage it because if you work for them in the first summer you are likely to
work for a second firm the following year and then the firms have to compete to get you. So, why
or how did Obama - at that point not yet the prominent first black president of the Harvard Law
Review (that would happen the following year) - end up at Sidley? Sidley had been longtime
outside counsel to Commonwealth Edison. The senior Sidley partner who was Comm Ed’s key
outside counsel, Howard Trienens, was a member of the board of trustees of Northwestern
alongside Tom Ayers (and Sidley partner Newton Minow, too). It turns out that Bernardine Dohrn
worked at Sidley also. She was hired there in the late 80s, because of the intervention of her fatherin-
law Tom Ayers, even though she was (and is) not a member of any state bar. Dohrn was not
admitted in either NY or Illinois because of her past jail time for refusing to testify about the
murderous 1981 Brinks robbery in which her former Weather Underground (now recast as the
“Revolutionary Armed Task Force”) “comrades,” including Kathy Boudin (biological mother of
Chesa Boudin, who was raised by Ayers and Dohrn) participated. She was finally paroled after
serving 22 years of a plea-bargained single 20-to-life sentence for her role in the robbery where a
92 Barack H. Obama: The Unauthorized Biography
guard was shot and killed and two police officers were killed. … Trienens recently explained his
unusual decision to hire Dohrn, who had never practiced law and had graduated from law school
(before going on her bombing spree 17 years before in 1967) to The Chicago Tribune saying, “[W]e
sometimes hire friends.” I can only speculate, but it is possible that Tom Ayers introduced Obama
to Sidley. That might have happened if Obama had met up with Bill and Tom and John Ayers prior
to attending law school when Obama’s DCP group was supporting the reform act passed in 1988.
Or it might have been Dohrn who introduced Obama to the law firm. Dohrn’s CV indicates that she
left Sidley sometime in 1988 for public interest work prior to starting a position at Northwestern
(again, hired there by some accounts because of the influence of Tom Ayers and his Sidley counsel
Howard Trienens). Obama and Dohrn would likely not have been at the firm at the same time,
although if Obama and Dohrn met before Obama left to attend Harvard Law School, she might have
discussed the firm with him and introduced him to lawyers there. My best guess, though, is that it
would have been Tom Ayers who introduced Obama to Sidley and that would have helped him get
the attention of someone like Newton Minow. And that would have come in very handy later in
Obama’s career as Kaufman suggests. (Recently I heard from Nell Minow, daughter of Newton
Minow, who tells me her sister Martha, a Harvard law professor, had Obama as a student at HLS
and that she called her father to tell him about Obama. While Nell contends on the basis of this
anecdote that her family met and supported Obama before he met Bill Ayers, she was unable to
provide me any evidence of when in fact Obama met Ayers, either Bill or Tom.) In any case the
summer of 1989 was eventful for Obama as he did meet his future wife, Michelle, there, already a
lawyer and working as a Sidley associate. Michelle was Obama’s first supervisor or mentor there.
Obama went back to Harvard in the fall of 1989 where, of course, he became president of the law
review in the spring of 1990. After graduation in 1991 he went back to Chicago to run a voter
registration campaign (which would turn out to be an important step in his career).’ (Steve
Diamond, ‘Who “sent” Obama?’ globallabor.blogspot.com, April 22, 2008)
AFTER LAW SCHOOL: BUILDING A RESUME FOR A POLITICAL CAREER
After law school, Obama returned to Chicago to work as a civil rights lawyer, joining the firm of
Miner, Barnhill & Galland, an unsavory enterprise to which we will return later… He became a
modest adjunct lecturer at the University of Chicago Law School, while helping to organize a voter
registration drive during Bill Clinton’s 1992 presidential campaign. Abner Mikva, a five-term
congressman from Illinois who was at that time Chief Judge of the United States Court of Appeals
for the D.C. circuit, tried to recruit Obama as his law clerk, a position that might have been a
stepping stone to clerking on the Supreme Court, but Obama declined the offer. David B. Wilkins,
the Kirkland and Ellis professor of law, said he advised Obama in 1991 to become a Supreme Court
Clerk. “Obama knew there was honor in pursuing that post,” Wilkins said, but Obama quickly
added that it was not for him. “He said that he wanted to write a book about his life and his father,
go back to Chicago, get back into the community, and run for office there. He knew exactly what he
wanted and went about getting it done,” Wilkins said. More accurately, Obama’s Trilateral case
officers knew what the next steps for their young protégé and asset needed to be.
“He could have gone to the most opulent of law firms,” said David Axelrod, the Chicago
machine hack who is now Obama’s campaign boss gushed. “After Harvard, Obama could have
done anything he wanted.” Axelrod’s specialty has long been to help black candidates get white
votes with a utopian litany of messianic platitudes; he also got Deval Patrick elected as Governor of
Massachusetts. Obama served as an associate attorney with Miner, Barnhill & Galland from 1993 to
1996. During this time, he says he represented community organizers, discrimination claims, and
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 93
voting rights cases. His part-time adjunct work in constitutional law at the University of Chicago
Law School lasted from 1993 until his election to the U.S. Senate in 2004.
THE MACHINE PICKS OBAMA TO LEAD PROJECT VOTE, 1992
Obama was now on his way to becoming a Chicago machine pol, but his drooling acolytes seek
to portray his choices as reflecting a self-denial worthy of a holy ascetic. One writes: “When Obama
returned to Chicago, he turned down big-money firms to take a job with a small civil rights practice,
filing housing discrimination suits on behalf of low-income residents and teaching constitutional
law on the side. He had thought he might enter politics since before he left for law school, and
eventually he did, winning a seat in the state Senate at the age of thirty-seven.”(Wallace Wood,
Rolling Stone)
Obama, clearly not acting alone, but rather helped along by his Trilateral mother ship and by the
corrupt Chicago Democratic machine, now became a leader of Illinois Project Vote, which claimed
to have registered 150,000 new voters for the 1992 election. Estimates of those registered vary;
another acolyte relates: “In 1992, he served as executive director of Illinois Project Vote! a voterregistration
drive that added an estimated 125,000 black voters to the rolls and was credited with
helping elect Carol Moseley Braun to the U.S. Senate.” (Purdum, Vanity Fair, March 2008) The
real goal of all this may have been the modernization of the traditional Cook County vote fraud
machine, which has helped so many cadavers send in absentee ballots over recent years. This
activity would become one of Obama’s main talking points in his advertisements for himself when
he was running for state senate a few years later. Obama, with characteristic megalomania, seems to
think that Project Vote was the reason Bill Clinton won the 1992 election. Therefore, when Clinton
endorsed Obama’s opponent Bobby Rush in the Perfect Master’s losing 2000 congressional race,
Obama felt betrayed, and his grudge against the Clintons came to the fore in the venom of the 2008
primaries.
OBAMA: A “VACUOUS OPPORTUNIST”
The political scientist Adolph Green of the University of Pennsylvania came into contact with
Obama around this time, and later wrote:
I’ve never been an Obama supporter. I’ve known him since the very beginning of his political
career, which was his campaign for the seat in my state senate district in Chicago. He struck me
then as a vacuous opportunist, a good performer with an ear for how to make white liberals like
him. I argued at the time that his fundamental political center of gravity, beneath an empty
rhetoric of hope and change and new directions, is neoliberal. (“Obama No,” The Progressive,
May 17, 2008) And there were other layers beneath that.
Obama published his autobiography in 1995; this was Dreams from My Father: A Story of Race
and Inheritance. During his presidential bid, he would get another wave of adoring publicity when
he won a Grammy for the audio version of this book. What kind of a person writes an
autobiography before he is 40? Surely one that is self-centered or self-absorbed, or possibly selfobsessed.
Such an autobiographer might well be a megalomaniac, with delusions of grandeur on the
scale of Nero.
94 Barack H. Obama: The Unauthorized Biography
JEREMIAH WRIGHT AND THE THEOLOGY OF HATE
But if Obama was a megalomaniac, we was not the only megalomaniac on the south side of
Chicago. There was also the Reverend Jeremiah Wright, the central figure of an affluent
congregation that called itself the Trinity United Church of Christ. Even before going to Kenya,
Obama had come into contact with Jeremiah Wright. Obama had often been questioned about his
religious faith during his years as a community organizer. During this time Obama, who said he
“was not raised in a religious household,” was asked by pastors and church ladies, “Where do you
go to Church, young man?” (Dreams) The guess here is that he was not a Moslem during those
years, but rather an existentialist like his idol Frantz Fanon, and therefore most likely an atheist on
the model of Nietzsche and Heidegger. Obama now realized that membership in a church was a
political necessity. He chose Wright’s church not merely because it was very large, very influential,
and very wealthy, but also because it professed black liberation theology, which Obama certainly
would have known by that time to be the brand preferred by his backers in the foundation world, of
which the Ford Foundation was the flagship. Another name for Wright’s church might have been
the Foundation Church of the Counter-insurgency, since those were the doctrines that were taught
there. It was a church based on Afrocentrism, on black nationalism, and on the rejection of western
civilization. Ironically, it was also a church frequented by some of the most successful practitioners
of affirmative action, meaning the small minority of the black community who had benefited
immensely from quotas, set-asides, and racial preferences, while the majority of the black inner-city
ghetto sank deeper and deeper into poverty and despair. Indeed, Wright’s doctrines were designed
to soothe the consciences of the upwardly mobile black overclass even as they were co-opted into
the financier power structure of the city.
Obama experienced some friction with Wright at their first meeting: ‘“Some people say that the
church is too upwardly mobile.” It was in fact the richest black congregation in Chicago. Wright
shot back: “That’s a lot of bull. People who talk that mess reflect their own confusion. They’ve
bought into the whole business of class that keeps us from working together.”’ (Dreams 283)
Wright means that racial unity is everything, and socioeconomic class is nothing. With this, the
essence of Wright’s method is exposed: he is a follower of the proto-fascist German sociologist
Ludwig Gumplowicz, whose main work was Der Rassenkampf (The Racial Struggle, 1909).
Gumplowicz was a product of the decaying Austro-Hungarian Empire, whose nationalities policy is
one of the models for the Ford Foundation’s current doctrines of multi-culturalism. Gumplowicz
taught that the main clash in human society was the racial one, and not class struggle – not Plato’s
authentic class struggle, and not Marx’s fake version either. It is a tune repeated by many a
reactionary, irrationalist, and obscurantist.
Here are some impressions of Trinity United and of Wright personally: ‘The Trinity United
Church of Christ, the church that Barack Obama attends in Chicago, is at once vast and
unprepossessing, a big structure a couple of blocks from the projects, in the long open sore of a
ghetto on the city’s far South Side. The church is a leftover vision from the Sixties of what a black
nationalist future might look like. There’s the testifying fervor of the black church, the Afrocentric
Bible readings, even the odd dashiki. And there is the Rev. Jeremiah Wright, a sprawling, profane
bear of a preacher, a kind of black ministerial institution, with his own radio shows and guest
preaching gigs across the country. Wright takes the pulpit here one Sunday…. This is as openly
radical a background as any significant American political figure has ever emerged from, as much
Malcolm X as Martin Luther King Jr. Wright is not an incidental figure in Obama’s life, or his
politics. The senator “affirmed” his Christian faith in this church; he uses Wright as a “sounding
board” to “make sure I’m not losing myself in the hype and hoopla.” Both the title of Obama’s
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 95
second book, The Audacity of Hope, and the theme for his keynote address at the Democratic
National Convention in 2004 come from Wright’s sermons. “If you want to understand where
Barack gets his feeling and rhetoric from,” says the Rev. Jim Wallis, a leader of the religious left,
“just look at Jeremiah Wright.”’ (Wallace Wood, Rolling Stone) Indeed.
JEREMIAH WRIGHT’S GREATEST HITS
Wright was a racist provocateur operating in the orbit of the Ford Foundation and other counterinsurgency
institutions. He was a guardian of a social order dominated by financiers and bankers.
But he did this with radical black nationalist or Afrocentric cover, which guaranteed support from
guilt-ridden white liberals. Rev. Dr. Jeremiah A. Wright, Jr. became the Pastor of Trinity United
Church of Christ (TUCC) on March 1, 1972. The church motto is “Unashamedly Black and
Unapologetically Christian,” which was a phrase coined by his predecessor, the Reverend Dr.
Reuben Sheares, and was officially adopted by Wright. Trinity goes on to say: “Our roots in the
Black religious experience and tradition are deep, lasting and permanent. We are an African people,
and remain ‘true to our native land,’ the mother continent, the cradle of civilization…. “Trinity has
a non-negotiable commitment to Africa, is committed to the historical education of African people
in diaspora and committed to liberation, restoration, and economic parity.” Some have seen here a
claim to Afrocentric racial superiority, which could only be grounded in irrationalist mysticism.
Trinity United Church of Christ claims to be founded upon the “Black Value System,” written
by the Manford Byrd Recognition Committee chaired by Vallmer Jordan in 1981. Trinity supports
the following 12 precepts and covenantal statements. These Black Ethics, Trinity says, must be
taught and exemplified in homes, churches, nurseries and schools, wherever Blacks are gathered.
They must reflect on the following concepts:
1. Commitment to God
2. Commitment to the Black Community
3. Commitment to the Black Family
4. Dedication to the Pursuit of Education
5. Dedication to the Pursuit of Excellence
6. Adherence to the Black Work Ethic
7. Commitment to Self-Discipline and Self-Respect
8. Disavowal of the Pursuit of “Middleclassness”
9. Pledge to make the fruits of all developing and acquired skills available to the Black
Community
10. Pledge to Allocate Regularly, a Portion of Personal Resources for Strengthening and
Supporting Black Institutions
11. Pledge allegiance to all Black leadership who espouse and embrace the Black Value System
12. Personal commitment to embracement of the Black Value System.
Wright was born in Philadelphia, Pennsylvania. He did not attend the largely black high school
in his neighborhood, but instead took an exam which he passed to be able to attend an elite citywide
high school which was largely white. This is an instance of Wright’s failure to practice the
racial solidarity which he preaches when his own advantage is concretely at stake. Morton A. Klein,
the president of the Zionist Organization of America, happened to have attended the same public
96 Barack H. Obama: The Unauthorized Biography
high school from which Wright graduated. Klein noted that Wright had chosen a highly competitive
college prep program in a school which was largely white:
It happens that, as a Philadelphian, I attended Central High School – the same public school
Jeremiah Wright attended from 1955 to 1959. He could have gone to an integrated
neighborhood school, but he chose to go to Central, a virtually all-white school. Central is the
second-oldest public high school in the country, which attracts the most serious academic
students in the city. The school then was about 80 percent Jewish and 95 percent white. The
African-American students, like all the others, were there on merit. Generally speaking, we
came from lower/middle class backgrounds. Many of our parents had not received a formal
education, and we tended to live in row houses.” (Morton A. Klein, “Obama’s pastor: Product
of privilege, not poverty,” World Net Daily, March 25, 2008)
Wright’s choice of an affluent white neighborhood for his retirement was a clear violation of the
ban on middle class values contained in his church program. But it did represent a return to
Wright’s origins.
After high school, Wright entered Virginia Union University. After three and a half years at
Virginia Union, Pastor Wright left and entered the United States Marine Corps. He transferred from
the USMC into the United States Navy where he served as a cardiopulmonary technician, assisting
President Lyndon B. Johnson during the heart attack he suffered in office. After six years in the
service, Pastor Wright transferred to Howard University where he completed his undergraduate
studies and received his first Master’s Degree. His second Master’s Degree was from the University
of Chicago Divinity School. His Doctorate was received from the United Theological Seminary, the
noted smithy of synthetic religions near Columbia on Morningside Heights, under Dr. Samuel
DeWitt Proctor. In addition to Pastor Wright’s four earned degrees, he has been the recipient of
eight honorary doctorates.
Some vintage Wright: “Fact number one: We’ve got more black men in prison than there are in
college,” he intones. “Fact number two: Racism is how this country was founded and how this
country is still run! We are deeply involved in the importing of drugs, the exporting of guns and the
training of professional KILLERS. . . . We believe in white supremacy and black inferiority and
believe it more than we believe in God. . . . We conducted radiation experiments on our own people.
. . . We care nothing about human life if the ends justify the means! We are selfish, self-centered
egotists who are arrogant and ignorant and betray our church and do not try to make the kingdom
that Jesus talked about a reality. And — and — and in light of these 10 facts, God has got to be sick
of this s**t” Some reports include an additional peroration, in the classical style recommended by
Cicero and Quintilian: “And. And. And! GAWD! Has GOT! To be SICK! OF THIS S**T!”
(Wallace Wood, Rolling Stone, Kyle-Anne Shiver)
When some authentic representatives of the historical black church were allowed on television to
respond to Wright’s claims that he represented them, at least one of them offered the criticism that
many black families would not want to stay in a church where “the pastor was cussing.” Wright did
more: in one scene from his tapes, he began ranting that “Some argue that blacks should vote for
Clinton “because her husband was good to us,” he continued. “That’s not true,” he thundered. “He
did the same thing to us that he did to Monica Lewinsky.” He turned around and humped his own
altar to emphasize that Bill Clinton had been “riding dirty” with Miss Lewinsky.
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 97
OBAMA HELPED FUND WRIGHT’S MICROPHONE
Obama did not just listen to this tripe; he financed it and made it possible financially. In 2006,
the Obamas gave $22,500 to Wright’s church, and this represented the vast majority of their
charitable contributions. Wright’s church was foundation-funded: for example, in 2001 the Woods
Fund, where Obama was a board member, awarded a $6,000 grant to Trinity United. They were
paying for an agitational machine disguised as a church. Wright, for his part, needed the money to
buy his new Porsche. Worldly asceticism was not a part of the Protestant ethic as interpreted by
Wright. He rejected middleclassness in favor of upperclassness, or, more simply, elitism.
Obama has described Wright as his spiritual mentor and his sounding board. A key phrase from
one of Wright’s sermons is the “audacity of hope,” which Obama has affixed as the title of his
compendium of observations on his own presidential campaign. Wright is a great admirer of Louis
Farrakhan of the Nation of Islam, and traveled with Farrakhan to visit with Libyan leader Muammar
Qaddafi. Farrakhan has gotten his picture on the cover of Wright’s parish magazine several times,
sometimes in the company of Obama. Wright’s church gave Farrakhan the “Dr. Jeremiah A.
Wright, Jr. Lifetime Achievement Trumpeteer” Award at the 2007 Trumpet Gala at the United
Church of Christ. According to some reports, Wright himself was for a time a member of
Farrakhan’s Nation of Islam.
Washington Post columnist Richard Cohen noted that the Trinity United house organ had once
named Louis Farrakhan as its person of the year, praising the Nation of Islam leader. Cohen called
on Obama to denounce such praise of Farrakhan, known for statements deemed anti-Semitic. In his
January 15, 2008 Washington Post column, Richard Cohen wrote: “Every year, [Trumpet] makes
awards in various categories. Last year, it gave the Dr. Jeremiah A. Wright Jr. Trumpeter Award to
a man it said ‘truly epitomized greatness.’ That man is Louis Farrakhan.”
Farrakhan was a hero to some, but for others who looked at him from the left, he fell far short of
what was needed. There was for example Farrakhan’s address to the Million Man March of 1995,
when titanic efforts had been marshaled by ordinary black men to demonstrate for the survival of
the black family. Farrakhan was the main speaker. He had no legislative program to outline to
mobilize and sustain the efforts of the black men who had come so far at such expense to hear him.
Instead, he launched into a raving tirade about numerology, babbling about the number of steps
leading to various buildings in Washington, or their height as measured in feet. It was an appalling
performance. He finished up with a kind of pledge by those present, but there was no mention of a
political party or something concrete to express so much need and so much energy. Not
surprisingly, the momentum generated by the Million Man March quickly dissipated. Farrakhan had
proven once and for all that he was no political leader. He had not been able to point to the next
step, to the next link in the chain of meaningful political action.
Many wondered what Farrakhan was about after all, with his idiotic and self-destructive anti-
Semitic outbursts. There had been a time after that fabled trip to Libya when he had seemed to
suggest that he had become a kind of paymaster for Qaddafi. Some claimed that he had had a role in
the assassination of Malcolm X, who had been a rival of sorts to him for the NOI succession. Did
Farrakhan have connections to the US intelligence community? If he did, then everything would
begin to fall into place, including his indirect association to Obama. Farrakhan has endorsed Obama
for the presidency, saying that the Illinois senator “is the hope of the entire world, that America will
change and be made better.” It was Farrakhan who had been quoted saying, “White people are
potential humans — they haven’t evolved yet.” Was Farrakhan a provocateur for the FBI? When
the spotlight was trained on this matter, Obama has run away in the other direction.
98 Barack H. Obama: The Unauthorized Biography
In the week ending March 14, 2008, the American public came to know the intemperate
rhetorical outbursts of this Reverend Jeremiah Wright, the pastor of the Trinity United Church of
Christ which Obama and his family had by then been attending for some 20 years. It turned out that
videotapes and audiotapes of Reverend Wright’s incendiary sermons had long been available for
public sale, but that the controlled corporate media, had pooh-poohed any attempt to dig beneath
their favorite candidate’s messianic-utopian veneer, had not paid any attention to this mass of
damning material until the Obama candidacy had begun to falter after his loss of the Ohio and
Texas primaries. Until this time, only a limited number of taped sermons had been presented on
television, although some had been widely available on the Internet. During the critical week in
question, Brian Ross of ABC news was one of the first to present extensive excerpts from Reverend
Wright’s ranting performances. He was quickly followed by Hannity, O’Reilly, and Greta Van
Susteren, and then by CNN, followed by the diehard Obama hysterics at MSNBC. On March 14
2008, a media firestorm swirled around the increasingly daemonic figure of Reverend Jeremiah
Wright, prompting Obama to drop the ranting Reverend from a committee of spiritual advisers to
his campaign.
WRIGHT: “GOD DAMN AMERICA”
The culmination of Wright’s doctrine was this: “The government gives them the drugs, builds
bigger prisons, passes a three-strike law and then wants us to sing ‘God Bless America.’ No, no, no,
God damn America, that’s in the Bible for killing innocent people.” “God damn America for
treating our citizens as less than human. God damn America for as long as she acts like she is God
and she is supreme.” (2003) “God damn Wall Street” would have been above reproach. “God damn
Bush” would have gotten applause on any street. “God damn the CIA” would have been warmly
received in many quarters. But “God damn America,” is the subjunctive form of a wish that God
visit evil upon the American people, and that is quite another matter. “God damn” is considered a
form of blasphemy since it amounts to giving orders to God, telling God to hate. It shows that
Wright was not a Christian at all, but a purveyor of hate. If Obama says he got to Christ through
Wright, then he never got there, since Wright’s religion was a satanic cover story for Mammon and
Pluto. In this case, Obama never got to Christianity at all, and may well be a Satanist himself.
WRIGHT’S LEFT CIA BLOWBACK THEORY OF 9/11
Wright raved on and on: “We bombed Hiroshima, we bombed Nagasaki, and we nuked far more
than the thousands in New York and the Pentagon, and we never batted an eye. We have supported
state terrorism against the Palestinians and black South Africans, and now we are indignant because
the stuff we have done overseas is now brought right back to our own front yards. America’s
chickens are coming home to roost.” (Sept. 16, 2001)19
This is the CIA’s favorite blowback theory, most famously embraced by the ex-Weatherman
bomb expert and sometime professor at the University of Colorado Ward Churchill. Churchill
called the 9/11 victims “little Eichmanns,” and argued that those who did not embrace the official
myth of 9/11 complete with the 19 hijackers, Mohammed Atta, Osama bin Laden, Khalid Sheikh
Mohammed, and Ramzi Binalshib were in fact racists who were seeking to deny that the Arabs
were after all capable of great things. Ward Churchill taught the pseudo-revolutionary provocateur
group the Weathermen how to make bombs and fire weapons, according to a Fox News report
citing the Jan. 18, 1987 issue of the Denver Post. The revelation is among many reported since
Churchill prompted a national furor with publicity over an essay he wrote entitled “Some People
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 99
Push Back: On the Justice of Roosting Chickens.” (“9-11 professor trained terrorists: Radical group
Weathermen assisted by Ward Churchill, World Net Daily, February 11, 2005) The parallels to
Wright are evident. An entire left CIA, foundation-funded domestic intelligence and
counterinsurgency network was primed to spout the “chickens coming home to roost” line right
after 9/11.
This blowback theory had broad appeal to morally insane leftists who wanted to see 9/11 as the
just punishment and retribution for US imperialist crimes. The problem was that 9/11 had been a
cynical provocation staged and manufactured by the CIA and the rest of the US intelligence
community to start a unilateral version of the war of civilizations.20 Blowback was the most
insidious defense of the official 9/11 story. In honor of his role, blowback advocate Ward Churchill
had been awarded the Arlen Spector Award for 2005. Named in honor of the originator of the
“magic bullet” theory of the Kennedy assassination, the Arlen Spector Award goes yearly to the
person who offers the most imaginative and demagogic defense of an official big lie. This jest had
been mine, but the point was no jest.
The newspaper of record, as usual, attempts to obfuscate this issue: ‘On that Sunday after the
terrorist attacks of 9/11, Mr. Wright also said the attacks were a consequence of violent American
policies. Four years later he wrote that the attacks had proved that “people of color had not gone
away, faded into the woodwork or just ‘disappeared’ as the Great White West went on its merry
way of ignoring Black concerns.” “The violence of 9/11 was inexcusable and without justification,”
Obama said in a recent interview. He was not at Trinity the day Mr. Wright delivered his remarks
shortly after the attacks, Mr. Obama said, but “it sounds like he was trying to be provocative. …
Reverend Wright is a child of the 60s, and he often expresses himself in that language of concern
with institutional racism and the struggles the African-American community has gone through,” Mr.
Obama said. “He analyzes public events in the context of race. I tend to look at them through the
context of social justice and inequality.”’ (“A Candidate, His Minister and the Search for Faith,”
New York Times, April 30, 2007)
Like Wright, Deval Patrick, and Weatherman veteran Ward Churchill, Obama embraced the
blowback theory of 9/11. Here are Obama’s remarks right after 9/11, which are worth citing
because they show his complete alignment with the left wing of the US intelligence establishment:
Even as I hope for some measure of peace and comfort to the bereaved families, I must also
hope that we as a nation draw some measure of wisdom from this tragedy. Certain immediate
lessons are clear, and we must act upon those lessons decisively. We need to step up security at
our airports. We must reexamine the effectiveness of our intelligence networks. And we must
be resolute in identifying the perpetrators of these heinous acts and dismantling their
organizations of destruction. We must also engage, however, in the more difficult task of
understanding the sources of such madness. The essence of this tragedy, it seems to me, derives
from a fundamental absence of empathy on the part of the attackers: an inability to imagine, or
connect with, the humanity and suffering of others. Such a failure of empathy, such numbness
to the pain of a child or the desperation of a parent, is not innate; nor, history tells us, is it
unique to a particular culture, religion, or ethnicity. It may find expression in a particular brand
of violence, and may be channeled by particular demagogues or fanatics. Most often, though,
it grows out of a climate of poverty and ignorance, helplessness and despair. We will have
to make sure, despite our rage, that any U.S. military action takes into account the lives of
innocent civilians abroad. We will have to be unwavering in opposing bigotry or discrimination
directed against neighbors and friends of Middle Eastern descent. Finally, we will have to
100 Barack H. Obama: The Unauthorized Biography
devote far more attention to the monumental task of raising the hopes and prospects of
embittered children across the globe—children not just in the Middle East, but also in Africa,
Asia, Latin America, Eastern Europe and within our own shores.21
This is terrorism as a purely spontaneous sociological phenomenon, the direct reaction to
economic issues, without the intervention of intelligence agencies. I have provided an exhaustive
refutation of this point of view in my 9/11 Synthetic Terror: Made in USA (2005 ff.)
WRIGHT: “I’M A BAD MAMMA JAMMA!”
Even the left liberals at the New Yorker were uneasy with some of Wright’s more incendiary
positions, no doubt because they represented a threat that the Perfect Master might be unmasked:
Wright, who drives a Porsche and references Bernie Mac and Terry McMillan in his unorthodox
sermons (“Take what God gave you and say, ‘In your face, mediocrity, I’m a bad mamma
jamma!’”)…. Wright preached. Wright espouses a theology that seeks to reconcile African-
American Christianity with, as he has written, “the raw data of our racist existence in this strange
land.” The historical accuracy of that claim is incontestable. But his message is more
confrontational than may be palatable to some white voters. In his book Africans Who Shaped Our
Faith —an extended refutation of the Western Christianity that gave rise to “the European Jesus . . .
the blesser of the slave trade, the defender of racism and apartheid”—he says, “In this country,
racism is as natural as motherhood, apple pie, and the fourth of July. Many black people have been
deluded into thinking that our BMWs, Lexuses, Porsches, Benzes, titles, heavily mortgaged condos
and living environments can influence people who are fundamentally immoral.” In portraying
America as “a Eurocentric wasteland of lily-white lies and outright distortions,” Wright
promulgates a theory of congenital separatism that is deeply at odds with Obama’s professed belief
in the possibilities of unity and change. (New Yorker, March 11, 2008)
Obama had warned Wright to stay away from his pseudo-Lincolnesque announcement of his
campaign in early 2007, but that had not been enough for the egomaniac Wright, it seemed. Asked
about the incident almost a year before the Wright scandal blew up in grand style, the Obama
campaign stated: ‘“Senator Obama is proud of his pastor and his church.” In March 2007, Wright
commented in an interview that his own family and some close associates were angry about the
canceled address, for which they blamed Obama’s campaign advisers, but that the situation was
“not irreparable.” The haughty and vindictive Wright added menacingly: “Several things need to
happen to fix it.” When asked if he and Mr. Wright had settled this quarrel, Obama said: “Those are
conversations between me and my pastor.” “If Barack gets past the primary, he might have to
publicly distance himself from me,” Mr. Wright said with a shrug. “I said it to Barack personally,
and he said yeah, that might have to happen.”’ (“A Candidate, His Minister and the Search for
Faith,” New York Times, April 30, 2007)
Wright, in his moments of lucidity, was aware of himself as a violently controversial figure.
Wright told The New York Times in a March 6, 2007 interview: “When his [Obama’s] enemies find
out that in 1984 I went to Tripoli,” with Nation of Islam leader Louis Farrakhan to visit Libyan
leader Muammar Qaddafi, “a lot of his Jewish support will dry up quicker than a snowball in hell.”
Note that for Wright, all political categories are racial and racist categories. Nevertheless, in a
March 2008 campaign appearance, Sen. Obama said, “I don’t think my church is actually
particularly controversial.” This argued for very poor judgment indeed, since Wright was about to
become a huge obstacle to Obama’s presidential power grab.
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 101
The ranting sermons of Reverend Jeremiah Wright established beyond doubt that he is a
purveyor of racial hatred, and that this hatemongering was a constant, habitual, and structural
feature of his pulpit oratory. If Obama were as conciliatory and irenic as he claims to be, why does
he associate with such a person? Why not quit this church and find another one more consonant
with traditional Christianity? Instead, we find that Reverend Jeremiah Wright officiated at Obama’s
wedding, at the christenings of his two daughters, and that the title of Obama’s second book, The
Audacity of Hope, the book we have referred to as the postmodern Mein Kampf, is a direct citation
from one of Reverend Wright’s incendiary sermons.
BLACK LIBERATION THEOLOGY: THE CONE-HEADS
In a spring 2007 television interview with Hannity, Reverend Wright stated that he is an
exponent of Black liberation theology, with special reference to the works of theologians like James
Cone and Dwight Hopkins. These writers, Reverend Wright argued, are the sources of the black
and Afrocentric Christianity which is taught in his church. James Cone is a professor at the Union
Theological Seminary, located near Columbia University in New York City. Union Theological
Seminary is for all practical purposes a factory for new and improved synthetic religions, structured
according to the needs of the oligarchical financier elite to manipulate, dominate, and control
various target populations.
Cone, the founder of black liberation theology, concocted a synthetic religion combining porkchop
black nationalism, third-world pseudo-Marxism, and primitive Christianity. He describes his
own handiwork as “a theology which confronts white society as the racist anti-Christ.” In a war
against “white values,” black pastors, like Wright, must reject “white seminaries with their middleclass
white ideas about God, Christ and the church.” (Rich Lowry, “The Real Rev. Wright,”
realclearpolitics.com, April 29, 2008) “What I write is urged out of my blood,” writes Cone. A
religion of blood means a religion of blood consciousness and race, taking us back to National
Socialism. We are close to Fichte’s Volksgeist and Mazzini’s idea that the races are the real actors
of history. We are also close to Michelle Obama’s advice to her husband to be visceral, to feel and
not to think, which will be discussed below.
Cone gives up any notion of supernatural religion and makes religion derive from a contingent
historical experience when he writes: “To put it simply, Black Theology knows no authority more
binding than the experience of oppression itself. This alone must be the ultimate authority in
religious matters.” Whites are presented as “madmen sick with their own self-concept.” Cone lays
particular stress on his contention that Jesus Christ was black: “The ‘raceless’ American Christ has
a light skin, wavy brown hair, and sometimes - wonder of wonders - blue eyes. For whites to find
him with big lips and kinky hair is as offensive as it was for the Pharisees to find him partying with
tax-collectors. But whether whites want to hear it or not, Christ is black, baby, with all of the
features which are so detestable to white society.” (In Christianity, by contrast, God is a spirit, and
the issue of skin color does not arise.) In Cone’s theology, eternal salvation is equated with black
people rising up against their white oppressors. As a coherent gnostic, Cone re-interprets the notions
of eternity and paradise as rewards that can and should be obtained in this world.
CONE: “IF GOD IS NOT FOR US AND AGAINST WHITE PEOPLE,
THEN HE IS A MURDERER”
Cone went much further, attempting to transform Christ from the universal living God to a kind
of totemic or animistic tribal god suitable to lead a raiding party in a race war:
102 Barack H. Obama: The Unauthorized Biography
Black theology refuses to accept a God who is not identified totally with the goals of the black
community. If God is not for us and against white people, then he is a murderer, and we had
better kill him. The task of black theology is to kill Gods who do not belong to the black
community ... Black theology will accept only the love of God which participates in the
destruction of the white enemy. What we need is the divine love as expressed in Black Power,
which is the power of black people to destroy their oppressors here and now by any means at
their disposal. Unless God is participating in this holy activity, we must reject his love.” And
again: “In the New Testament, Jesus is not for all, but for the oppressed, the poor and unwanted
of society, and against oppressors ... Either God is for black people in their fight for liberation
and against the white oppressors, or he is not.” (See William R. Jones, “Divine Racism: The
Unacknowledged Threshold Issue for Black Theology,” in African-American Religious
Thought: An Anthology, ed. Cornel West and Eddie Glaube [Westminster John Knox Press];
cited by Spengler, “The peculiar theology of black liberation,” Asia Times).
Christianity allows and indeed requires class distinctions, with a preferential bias in favor of the
poor and the destitute, as expressed in the imperative to feed the hungry, clothe the naked, house the
homeless, visit the sick and prisoners, and bury the dead. It is easier for a camel to pass through the
eye of a needle than for a rich man to enter the kingdom of heaven. But the apostles are commanded
to preach the gospel to all nations, without exception, and St. Paul is adamant that there can be no
difference between Jew and Greek, Jew and Gentile, Syrian, or Samaritan. What Cone is preaching
here is a new synthetic religion which can only be described as satanic, since it is most explicitly
based on hatred. If Obama claims that he reached Christianity thanks to Reverend Wright, we can
only conclude that he never became a Christian, since as a disciple of Cone, Wright himself could
never be classified as a Christian. What Cone has elaborated is a religion of hatred which is the
opposite of Christianity.
DISTURBING PRECEDENTS FOR ETHNIC RELIGION
Cone’s work calls to mind the outlook of Houston Stewart Chamberlain, the racist and antisemitic
friend of the German Emperor William II and later a supporter of Hitler. Chamberlain was
an Englishman who chose to become a German; he was a relative of Sir Neville Chamberlain, who
appeased Hitler at Munich in an attempt to turn him east against Russia. Chamberlain was one of
only four persons whom the National Socialists acknowledged as their ideological forebears: the
three others were the composer Richard Wagner, the anti-semite Lagarde, and the philodoxer
Nietzsche; Chamberlain was the only one who did not come from the German-speaking area of
central Europe. Chamberlain’s argument was that the Germanic master race was the bearer and
originator of all civilization and culture and admirable in all things save one: it did not have its own
ethnic religion, and was saddled with an alien Christianity, a religion which Chamberlain rejected
for racist reasons since so many of the main figures were Jews, and also because of doctrines like
charity, which were incompatible with the way of the Germanic warrior. Chamberlain called for the
creation of a specifically and exclusively Germanic ethnic religion, he called this “eine arteignene
Religion” or “eine artmäßige Religion.”
Cone’s work can be most clearly understood if we view him as a new Houston Stewart
Chamberlain, attempting to create a new and synthetic ethnic religion in the service of the
oligarchical foundation community, with the same kind of reactionary and anti-human intent which
animated Chamberlain. Cone’s talk of killing God also puts him in a class with another proto-Nazi,
Nietzsche. In modern America, the intent of all this is a transparent strategy of divide and conquer,
splitting the population into more or less fictitious subject nationalities, each with its own ethnic
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 103
idol, thus guaranteeing that no united front against the preponderance of the financiers can ever
emerge.
What is the extent of Cone’s influence? Apologists for Obama have argued that two-thirds of
black preachers in America sound like Wright, but empirical studies suggest that the real figure is
far less, perhaps one-third at the very most. C. Eric Lincoln and Lawrence H. Mamiya carried out a
ten-year statistical study of the black church in America, published as The Black Church in the
African-American Experience (1990). One of the questions asked in this study dealt with black
liberation theology: “In our urban questionnaire we asked the pastors of 1,531 urban churches,
‘Have you been influenced by any of the authors and thinkers of black liberation theology?’“ It
turned out that only 34.9 percent of urban black clergy said they had been influenced by black
liberation theologians, as opposed to 65.1 percent who said they had not. Lincoln and Mamiya
found a class divide in this regard, with more affluent and educated congregations more likely to be
influenced by black liberation theology. Pastors with a high school and lower educational
background said that they were minimally influenced by liberation theology, while those with a
college education had the most positive views of the movement. The majority of the less educated
pastors had neither heard of the movement nor of the names of theologians associated with it.
Among clergy familiar with the movement, James Cone had the highest name recognition. (Ron
Rhodes, “Black Theology, Black Power, and the Black Experience”) The implication is clear: black
liberation theology is in fact an ideology of the black overclass.
FORD OPERATIVES AT TRINITY UNITED
Dwight N. Hopkins, the other named mentioned by Wright, is a professor of theology at the
University of Chicago and an ordained American Baptist minister. He teaches at the Rockefellerfunded,
right-wing elitist University of Chicago, and also teaches at Obama’s Trinity United Church
of Christ, where his students expect to be treated as his university students. During the Reverend
Wright crisis of the Obama campaign, Hopkins acted more and more as a spokesman for Wright’s
church in numerous cable television interviews. Hopkins is the “Communications Coordinator for
the International Association of Black Religions and Spiritualities, a Ford Foundation sponsored
global project,” as we learn from the Trinity United web site. Hopkins is thus an operative of the
notorious Ford Foundation, a flagship institution of the US financier oligarchy. He is also an official
of Obama’s church, and the dominant figure of Wright’s Center for African Biblical Studies.
Wright says of Hopkins: “His work covers what has transpired over the past 30 years in the area of
black theology. The developments he covers are a ‘must’ for Generation X-ers” – including,
therefore, Obama. Hopkins’ standpoint is that of a “theological interpretation of black power.” It is
the attempt to project the privileges and psychological defenses of the black overclass into the
heaven of theology, and must thus be classed as a blasphemous abuse of religion for venal and
demagogic goals.
In his notorious performance at the National Press Club in April 2008, Wright attempted to
camouflage the fact of a new synthetic religion entirely separate from Christianity behind a smoke
screen of relativism. Wright’s relativism means that all alternatives are axiomatically equal, no
matter what their quality or what their consequences for human survival might be. Wright’s
universe recalls Hegel’s description of Schelling in the preface to his Phenomenology of Mind — a
night in which everything looks the same: “The prophetic theology of the black church in our day is
preached to set African-Americans and all other Americans free from the misconceived notion that
different means deficient. Being different does not mean one is deficient. It simply means one is
different, like snowflakes, like the diversity that God loves. Black music is different from European
104 Barack H. Obama: The Unauthorized Biography
and European music. It is not deficient. It is just different. Black worship is different from European
and European-American worship. It is not deficient. It is just different. Black preaching is different
from European and European-American preaching. It is not deficient. It is just different. It is not
bombastic. It is not controversial. It’s different.”
Using this boundless relativism, Wright can level good and evil, charity and hatred. He can and
did mock the “garlic-nosed” Italians, the Irish, and the music of Georg Friedrich Handel. Wright
was a great hater of Europe. As well as being the purveyor of a wholly fantastic and utopian vision
of Africa and its history, Wright was an obscurantist of the first magnitude. Obama alleged that he
had come to Christianity through Wright, but it was clear that Wright was light years distant from
Christianity. Wright was a worshipper of Ford Foundation grants, a racist provocateur and merchant
of hatred working to preserve Wall Street’s domination over American society. The only religion
that Obama could have learned at Wright’s knee was hate-based Satanism, concocted in the service
of Mammon, Pluto, and all the other gods of wealth. To make matters worse, there is no proof that
Obama was ever baptized. Chicago-based journalist, broadcaster and critic Andy Martin, when
asked about Obama’s baptism, wrote, “I have never been able to obtain any evidence that he was
baptized, although I asked for those records.”
A body of doctrine which claims to be a religion, as distinct from a political ideology, must deal
with an eternal truth growing out of the ontological situation of God and humanity in the world.
Religion is not the distillation of anybody’s specific predicament or historical experience. Cone
wants to celebrate the triumph of postmodern “cultures” over any notions of what is universal and
eternal. God is either an eternal spirit with no color at all, or is nothing. There cannot be a white god
nor a black god nor a Russian god nor a Chinese god – there can be only one universal God, unless
we wish to regress to polytheism or totemism. As soon as we have a separate god for every skin
color, religion is out the window, replaced by a kind of deus ex machina useful mainly for
propaganda purposes. If we have a black god who wants to rise up against whites, we should not be
surprised if another god appears who recommends white supremacy, soon followed by another god
who supports Serbia against Albania, still another one who is mainly concerned with global
warming, and yet another one who wants more tax cuts for the rich. God is not a figment of a
political perspective nor of a strategy for health and wealth. But Cone’s god appears to be precisely
something of this order – the embodiment of an ideology of accumulation of wealth under
conditions of affirmative action, in late US-UK imperialism.
FORD FOUNDATION THEOLOGY
Where does this pseudo-theology come from? Since the 1960s, the Ford Foundation has been a
leading agency for funding black cultural nationalism and separatism (sometimes referred to as
“pork chop cultural nationalism”) as a strategy for divide-and-conquer counterinsurgency in the
black ghetto and among economically disadvantaged inner-city populations more generally. In
these efforts, the watchwords of the Ford Foundation have been community control, local control,
and self-management. The goal is always to fragment, divide, and Balkanize the oppressed subject
populations according to every conceivable fault line of ethnicity, color, religion, national origin,
sexual preference, age, gender, and any other splinter factor that the social engineers can devise. In
this way, a general political challenge to the rule of the financiers will never emerge.
Martin Luther King, by contrast, was opposed to racial quotas during his entire career, and this
view was shared by both Robert Kennedy and by the black civil rights advocate Bayard Rustin.
Rustin wrote that “any preferential approach postulated on racial, ethnic, religious, or sexual lines
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 105
will only disrupt a multicultural society and lead to backlash. However, special treatment can be
provided to those who have been exploited or denied opportunities if solutions are predicated on
class lines, precisely because all religious, ethnic, and religious groups have a depressed class who
would benefit.” The class-based strategy is one that would tend to unite all of the present
squabbling and contending oppressed groupings of American society in a united front against their
common oppressor, as in the Wall Street financier class and their minions. The Ford Foundation,
the left CIA, and the domestic counterinsurgency apparatus have always been mobilized to head off
precisely this possibility. Racial quotas were introduced by President Richard Nixon and his
secretary of labor George Schultz, who used a quota system called the Philadelphia plan to pit black
unemployed against white construction workers, to the detriment of both and to the greater glory of
the bosses. Support for racial quotas came from such black activists as Ford Foundation operative
Floyd McKissick of the Congress of Racial Equality, CIA provocateur Stokely Carmichael of the
Student Nonviolent Coordinating Committee, the famous FBI provocateur H. Rap Brown, and
James Forman. All of these figures performed the precious service of giving black nationalist
radical and left cover to what was inherently a divide-and-conquer strategy invented by the ruling
class for the purpose of playing one group in the population off against another. Racial preferences
and quotas boiled down to a system of somewhat enhanced tokenism, having as an additional
purpose the recruitment of the most active and intelligent elements of the oppressed groups as
privileged tools of the ruling class, whose characteristic outlook and methods they assimilate and
internalize to a large degree as their own.
AFFIRMATIVE ACTION IMPOSED BY NIXON AND SHULTZ
Most left liberals naively assume that affirmative action is the only conceivable approach to the
race problem, despite the fact that it has failed over 40 years to improve the poverty of the black
inner city. Most people do not know that affirmative action was born as a counterinsurgency
strategy devised by none other than Richard Milhous Nixon and his retainers, most notably the
current boss of the neocon establishment, George Shultz. Here are some considerations which I
advanced a decade ago in my Surviving the Cataclysm.
Michael Lind correctly notes that post-1968 multiculturalism represents a demagogic and
successful form of tokenism applied as a counterinsurgency strategy; for Lind, “identity politics
is merely America’s version of the oldest oligarchic trick in the book: divide and rule.” (Lind,
The Next American Nation: The New Nationalism and the Fourth American Revolution, 141)
The atrophy of class analysis in modern America is partly the fault of the 1960s New Left, which
was much more interested in race and gender than in class. The New Left was interested in
community control for the black community, which happened to be the main domestic
counterinsurgency tactic of the Sargent Shriver Office of Economic Opportunity and the Ford
Foundation. This is the classic divide-and-conquer approach to ethnic groups which has been
assumed by imperial ruling classes from time immemorial, from the Ottoman milliyet-bachi (or
ethnark) system to the British Raj in India to the Soviet autonomous republics set up by Stalin.
MARSHALL PLAN FOR THE CITIES, OR RACIAL QUOTAS?
The basic problems of black ghetto victims by 1970 (or 1997) were in reality largely economic —
jobs, wages, health care, education, mass transit, housing, and related issues. The same was true of
the black rural poor. To even begin to address these problems would have required a domestic
Marshall Plan, a second New Deal on a vast scale. The post-1957 stagnation of productive
106 Barack H. Obama: The Unauthorized Biography
employment and industrial investment would have had to be reversed. Such an approach would
necessarily have treated the disadvantaged layers of all ethnic groups, and would have required
very substantial investments and other expenditures. The US financial elite, fixated on its new
runaway shop opportunities in the globaloney economy, was not interested in such a domestic
Marshall Plan. The finance oligarchs also had reason to fear a multiracial coalition from below,
which had been attempted during the Detroit mass strikes of the 1930s and 1940s, as documented
in the section “Black and White, Unite” of Maurice Zeitlin’s Talking Union. These mass strikes
had forced the finance oligarchs to accept the existence of unions. A program of domestic
counterinsurgency based on racial tokenism and “shucks” for the oppressed ethnic groups now
seemed far more attractive to them. The basic mentality involved is subtly hinted at by Albert
Blumrosen, who as a 1970 functionary of the Equal Employment Opportunity Commission helped
to lay the groundwork for the current system. Blumrosen wrote in his book on Black Employment
and the Law: “If discrimination is narrowly defined, for example, by requiring an evil intent to
injure minorities, then it will be difficult to prove that it exists. If it does not exist, then the plight of
racial and ethnic minorities must be attributable to some more generalized failures in society, in the
fields of basic education, housing, family relations, and the like. The search for efforts to improve
the condition of minorities must then focus in these general and difficult areas, and the answers can
come only gradually as basic institutions, attitudes, customs and practices are changed.”
This same outlook had been expressed a little earlier by George Shultz. Over the years Shultz has
been Secretary of Labor, of the Treasury, and of State, and is said to have a Princeton tiger tattooed
on his posterior. During Nixon’s first term, Shultz revived the so-called Philadelphia Plan, a system
of racial quotas for hiring in the then largely white construction trades which had been developed
by Labor Secretary Willard Wirtz of the Johnson administration. John Ehrlichman of Nixon’s
palace guard later commented in his memoirs that Tricky Dick “thought that Secretary of Labor
George Shultz had shown great style constructing a political dilemma for the labor union leaders
and civil rights groups....Before long, the AFL-CIO and the NAACP were locked in combat over
the passionate issues of the day.” (Ehrlichman, 228-229) Later, the McGovern group in the
Democratic Party would inscribe racial and gender quotas on their own banner so prominently that
Nixon in 1972 could get away with attacking McGovern as “the quota candidate.” The Democratic
Party and the unions should at this point have adopted a plank calling for expanded production and
productive jobs for all Americans, rather than accept the logic of quotas, which amount to
quarreling over the distribution of the shrinking pie. The decline of the Democratic Party and of the
labor movement over the reactionary quarter century after 1970 is the result of the failure to
advocate economic expansion, and not quotas, during Nixon’s first term. Quotas and associated
practices like school busing have become lightning rods for white backlash and resentment, which
in turn made possible the successful Republican southern strategy in the Electoral College and the
long night of Reagan, Bush, and Gingrich. 22
NIXON- SHULTZ PHILADELPHIA PLAN PLAYS BLACKS AGAINST UNIONS
According to one account, in a meeting with Republican Congressional leaders “Nixon emphasized
the importance of exploiting the Philadelphia Plan to split the Democratic constituency and drive a
wedge between the civil rights groups and organized labor.” [Hugh Davis Graham, The Civil
Rights Era (New York: Oxford, 1990)] Civil rights leader Bayard Rustin told a 1969 AFL-CIO
gathering that Nixon’s successful playing off of black groups against the unions was “a source of
tremendous satisfaction to powerful enemies of the labor movement.” To underline the consensus
in the ruling elite, the blue-ribbon commission chaired by former Illinois Governor Otto Kerner
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 107
which studied the causes of the ghetto riots of the mid-1960s concluded that “white racism” was
the cause of black discontent and of the race problem in America — white racism alone, and not
slums, low wages, wretched schools, nonexistent health care, and unemployment. The Kerner
Commission report was the voice of the white and inept US ruling elite scapegoating white
workers and the white middle class for its own sorry record.
Originally, racial quotas and affirmative action were supposed to represent redress for past
discrimination. After a decade or two, that was transformed into the need to enhance diversity among a
series of artificial, bureaucratically defined “cultures,” including African-Americans, Asians and
Pacific islanders, Hispanics, Native Americans, and whites as the five official variants. Race quotas,
preferences, set-asides, offsets and the rest of the dismal apparatus of multiculturalism amount to a
sophisticated and insidious counterinsurgency strategy which fosters the co-opting of talented black,
Hispanic and other organic leaders into an artificial stratum of clients of the ruling elite.
Multiculturalism, it must be stressed again, has not led to economic development or to broad-front
improvement in the condition of any ethnic group. Multiculturalism is tokenism. Black and Hispanic
ghetto victims have not been helped by this approach. Multiculturalism has delivered material
advantages for the few, and has betrayed the hopes of the many. In the world of education, the
irrationalist attempt to justify quotas and discrimination has debased the quality of intellectual and
cultural life, which cannot escape the fact that the hopes of the majority of all ethnic origins have been
betrayed. Barack and Michelle Obama are examples of the greedy opportunists who have been the
winners under affirmative action.
SALVING THE BAD CONSCIENCE OF THE BLACK OVERCLASS
Forty years later, these policies have resulted in the creation of a black overclass made up to
some degree of the beneficiaries of affirmative action, racial quotas, set-asides, preferential
treatment in government contracts at all levels for minority-owned businesses, and the like. This
black overclass likes to portray itself as the authentic representatives of the black community as a
whole, but in reality it looks down on the black underclass caught in the cycle of ghetto inner-city
poverty as if it were a completely separate group. More accurately, the affirmative-action portion of
the black overclass regards the oppressed black underclass as a useful political commodity which
can be exploited for the purposes of obtaining more concessions from the white establishment —
concessions which should flow into the pockets of the black overclass, and never reach the
sidewalks of the inner-city ghetto. The black overclass thus combines a militant black nationalist or
black empowerment ideology with extreme forms of economic individualism, rent-seeking, and
personal aggrandizement of all kinds. It is a cynical exercise in duplicity, and is at least one of the
contributing factors for a situation in which the inner-city black ghetto is getting poorer, while the
income gap between the black overclass and the black underclass is also rapidly expanding.
What then is the psychological consequence of such a situation for the individual member of the
black overclass? The black overclass is rapidly accumulating mansions, BMWs, mink coats,
diamond jewelry, and the other apparatus of conspicuous consumption. The black ghetto victim, by
contrast, is sinking deeper and deeper into abject poverty. In the face of the situation, however, the
black overclass continues to demand additional privileges for itself, while continuing to neglect the
urgent material needs of the vast majority of the black community. The kind of black liberation
theology purveyed by Dwight Hopkins, the Reverend Jeremiah Wright, and the Trinity United
Church of Christ provides a kind of answer to the resulting psychological tensions. The more
BMWs you have in your garage and the more mink coats you have in your closet, the more
vehemently you must complain about the Atlantic slave trade, apartheid and the Sharpeville
108 Barack H. Obama: The Unauthorized Biography
massacre, the Tuskegee experiment, and similar atrocities, often quite real but all far from your own
privileged existence. The more Ivy League degrees you have on your wall, the louder you must
chant, “God damn America!” The more government contracts you have obtained, the more you
must profess the blowback theory of 9/11, citing the 3,000 deaths of innocent people as God’s
punishment for the racist crimes of US imperialism. All these points represent nothing but the
characteristic outlook of the foundations. The religion preached by the Reverend Jeremiah Wright
and the theologian Dwight Hopkins at the Trinity United Church of Christ is demonstrably not
Christianity, but rather a gnostic-synthetic ersatz belief structure which has been whipped up and
concocted for the special emotional needs of a narrow segment of the black overclass under
conditions of affirmative action in the late Anglo-American imperialist development. To be more
concise, Reverend Wright’s church is a foundation-funded cult. It teaches an ethnocentric, synthetic
religion.
Some in the black community offered criticisms of Wright; here is one from Jonetta Rose
Barras, a well-known radio commentator in the Washington DC area, who was confused about
Obama, but not about that fact that Wright was at least obsolete:
I’ve known preachers like the Rev. Jeremiah A. Wright Jr., former pastor to Sen. Barack Obama.
Like many of them, he no doubt sees his congregation as full of victims, and thinks that his words
will inspire them to rise out of their victimhood. I understand that. Once upon a time, I saw myself
as a victim, too, destined to march in place. In the 1970s and ‘80s, as a clenched-fist-pumping black
nationalist with my head wrapped in an elaborate gele, I reflected that self-concept in my speech.
My words were as fiery as the Rev. Wright’s. And more than a few times, I, too, damned America,
loudly, for its treatment of blacks. But I turned away from such rhetoric. Is it time that Wright and
other ministers do, too? But just as spirituals eventually lost their relevance and potency as an
organizing tool against discrimination — even as they retained their historical importance in the
African-American cultural narrative — so, I believe, has Wright-speak lost its place. It’s harmful
and ultimately can’t provide healing. And it’s outdated in the 21st century. I came to this realization
gradually. As I expanded my associations and experiences — organizing in places such as San
Francisco, Providence, R.I., Patterson, N.J. and Northeast Washington, meeting caring Hispanics,
Asians and whites — I came to know that we are all more alike than different. I saw that our dreams
sat inside each other. All of us wanted a better America, not so much for ourselves as for our
children, and their children. Achieving this meant that we had to get beyond our past segregated
lives and work together, inspiring the best in ourselves — not the bitterness and the biases. […]And
today, there is an entire generation of young people who know nothing of segregation, who see one
another as individuals, not as symbols of a dark past. They do not look into white faces and see, as I
once did, a burning cross, a white sheet and a vicious dog on a police officer’s leash. This is the
coalition pushing for a new America. (Jonetta Rose Barras, “He’s Preaching to a Choir I’ve Left,”
Washington Post, March 23, 2008)
DOROTHY TILLMAN, OBAMA ALLY: “AMERICA OWES US” GRAFT
Another of Obama’s Chicago political cronies is Dorothy Tillman, an alderwoman of the city.
Tillman’s specialty is to try to extort payments from banks and corporations which reportedly go to
herself and her clients, based on the accusation that the bank or company in question participated in
slavery. Tillman has been quoted as saying her goal is to “repair the damage of 400 years” of
slavery. “America owes us,” she says. (Chicago Sun-Times, March 26, 2007) Again, this is not the
demand for broad-based economic development programs for the black underclass. It is often an
attempt to extort cash payments to specific individuals to make a public relations problem go away,
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 109
leaving the black ghetto in its current predicament. Alderman Tillman’s record must be read in
connection with her track record for corruption: ‘Obama had endorsed …Dorothy Tillman, calling
her “a very early supporter of my campaign.” Tillman was then under fire for her stewardship of the
scandal-plagued Harold Washington Cultural Center, where contracts benefited members of her
family. Obama rejected the notion that such endorsements conflict with his promotion of ethics
reform in government.’ (Chicago Tribune, June 12, 2007)
Reverend Wright argued in his sermon on Christmas Day 2007 that resistance against the Obama
presidential candidacy was predicated on the fact that Obama did not “fit the mold.” “He ain’t
white!” exclaimed the Reverend. A half truth at best, since Obama is half white. “He ain’t rich!”
Manifestly false, since the Obamas reported a 2005 income of about $1.6 million, with Michelle
pulling down $325,000 as gatekeeper to push black ghetto victims out of the University of Chicago
Hospital, plus $101,083 in 2006 for serving on the board of the wage-gouging, union-busting Tree
House (a Walmart supplier). Obama got almost $70,000 per year as a mere lecturer at the
University of Chicago Law School, a very good deal for a mere adjunct. They live in a mansion
with a wine cellar containing a thousand bottles of the finest vintage wine – as many bottles of wine
as Imelda Marcos had pairs of shoes. By mid-2008, it was estimated that the Obamas were worth
about $7 million overall. They were rich by anybody’s measure. “He ain’t privileged!” Another lie,
as Michelle’s Princeton and Harvard degrees, made possible by affirmative action, sufficiently
document.
In a cynical attempt at deceiving voters, Obama has tried to pretend that sermons with incendiary
contents were the exception rather than the rule at Trinity United. This is obviously disingenuous.
Obama was not just listening to Reverend Wright, he was also subsidizing the oratory of hatred with
his generous financial contributions to the church. Obama was helping to pay for Reverend
Wright’s microphone! Hatred was obviously Reverend Wright’s weekly stock in trade. Did Obama
ever walk out of a sermon? Did he ever tell Reverend Wright to tone it down — before he began
running for president at the end of 2006? Did he ever threaten to quit the congregation? Evidently,
he did not.
By mid-March 2008, the Reverend Wright affair had placed Obama in a bind. Would he remain
a member of the Trinity United Church of Christ under Reverend Wright’s hand-picked successor,
reportedly a worthy disciple in his apostolate of hatred? If he did, you could be sure that Reverend
Wright’s taped outbursts would continue to knock him off message. If he tried to cut his losses by
exiting from the congregation, he could be sure that an entire phalanx of Reverend Wright’s coreligionists
of the black theology school would condemn him as a sellout who was capitulating
under the pressure of the white man. All Obama could do was to attempt to paper over the entire
question with his mellifluous and ambiguous rhetoric of reconciliation, which was sounding
increasingly hollow in this new context. Even when he later pretended to repudiate Wright, it was
done with qualifiers – he said that his relationship with Wright had changed, not that it was over. He
also remained an active member of Trinity United, which now passed under the leadership of Ford
Foundation grantee Otis Moss III. Obama left Trinity United only when the primaries were over and
he was beginning his hard right turn.
THE CASE OF FATHER PFLEGER, RENEGADE THEOLIB PRIEST
The new Otis Moss regime brought new problems for Obama. On Easter Sunday, Moss preached
that Wright had been subjected to a crucifixion, thus returning to the rhetorical tropes of
victimization and persecution so favored by affirmative-action race-mongers when they get into
110 Barack H. Obama: The Unauthorized Biography
trouble. Moss also had a policy of inviting incendiary racist provocateurs to join him during divine
services at Trinity United. One of these firebrands was a certain Father Michael Pfleger, a fiery
liberal social activist of the liberation theology school and a white reverend at an African-American
church, St. Sabina’s Catholic Church on the South Side of Chicago. Pfleger, an expert in racial
pandering, is a longtime friend and associate of Obama, having known him since the Perfect Master
was a community activist poverty pimp. In September, the Obama campaign had brought Pfleger to
Iowa to host one of several interfaith forums for the campaign. So here we have yet another close
personal friend of Obama over more than two decades who turns out to be a race-baiting
provocateur.
Pfleger’s appearance at the post-Wright Trinity United was introduced by Rev. Otis Moss
personally with much praise for the visiting priest. Pfleger then launched into a tirade about the
importance of taking on “white entitlement and supremacy wherever it raises its head.” This goes
back directly to the classic Weatherman line of “white skin privilege” still embraced by Dohrn and
Ayers. Pfleger then turned his attention to those who have the temerity to oppose the ascendancy of
the Perfect Master: “Rev. Moss, when Hillary was crying, and people said that was put on, I really
don’t believe it was put on,” Pfleger raved from the pulpit. “I really believe that she just always
thought, ‘This is mine! I’m Bill’s wife, I’m white, and this is mine! I just gotta get up and step into
the plate.’ And then out of nowhere came, ‘Hey, I’m Barack Obama,’ and she said, ‘Oh, damn!
Where did you come from? I’m white! I’m entitled! There’s a black man stealing my show!’
Pfleger then mocks Hillary weeping, much to delight of the crowd, many of whom stand up and
applaud. “She wasn’t the only one crying, there was a whole lot of white people crying!” Pfleger
says to laughter. The tape, which shows only this one controversial part of Pfleger’s “sermon,” then
cuts to Moss thanking Pfleger: “We thank God for the message, we thank God for the messenger,
we thank God for Father Michael Pfleger,” Moss says.’ (Aaron Klein, World Net Daily, June 1,
2008)
PFLEGER: “AMERICA IS THE GREATEST SIN AGAINST GOD”
“Racism is still America’s greatest addiction,” Pfleger says. “I also believe that America is the
greatest sin against God.” There seems to be a mixed reaction to that from the pews. But Pfleger
explains: “If the greatest command is to love, than the sin against love must be the greatest sin
against God who IS love and who calls us to love one another. So that this greatest sin against God,
racism, it’s as natural as the air we breathe.” (Taylor Marsh, June 1, 2008) The New York Times
recently reported that Father Pfleger had “long worked with South Side political leaders to reduce
crime and improve the community” — so being a racist provocateur is only a sideline. “But he has
drawn fire from some quarters for defending the Nation of Islam leader Louis Farrakhan and
inviting him to speak at his church.” (Jake Tapper, “Priest and Obama Ally Mocks Clinton’s Tears
from Obama’s Church’s Pulpit,” ABC New, May 29, 2008)
There could now be absolutely no doubt that Obama’s church represents an incendiary beacon
and clearing house of racist provocation, is the atmosphere of race-baiting and scurrilous insults
which Obama chose and embraced, not just for himself but for his entire family. Obama long
remained a member of this cesspool of hatred, thus guaranteeing that the entire issue will live on all
the way to the November election. ‘Sen. Barack Obama’s chief political strategist sits on the finance
committee of the Chicago church led by controversial pastor Michael Pfleger, who claimed in a
sermon last weekend Sen. Hillary Clinton cried in public because she thought being white entitled
her to the Democratic presidential nomination.’ (Aaron Klein, World Net Daily, June 1, 2008)
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WRIGHT’S $1.6 MILLION MANSION IN A RICH WHITE GATED COMMUNITY
Wright himself was apparently taken underground by the Obama campaign, who did not want
this racist provocateur doing any media interviews. Speculation was rife on right-wing talk radio
that the racist reverend had been sequestered by Axelrod, and that he now slept with the fishes. In
reality, he was ensconced at a luxury resort hotel in the Caribbean. Then it became known that
Wright was about to move into a newly constructed $1.6 million mansion in the Chicago suburbs in
a gated community where the black population was less than 2%. He was reported to enjoy a $10
million line of credit provided by Trinity United. His Porsche was in the garage. Wright was not an
ascetic.
Wright is also a highly political reverend, who gets around to the Gamaliel Foundation’s
schedule of conferences. On June 21-22, 2007, for example, Gamaliel held its “African-American
Leadership Conference” in Pittsburgh under the theme of “Uniting for Power.” The keynote speaker
was none other than Jeremiah Wright. At this conference, Reverend John C. Welch of Pittsburgh
made a thinly veiled call to mobilize politically for Obama: “I hope that when you leave you will
also have a plan for your cities so that collectively we can make sure that this country will undergo
an unprecedented cosmetic surgery in the 2008 presidential election,” said Welch. Welch was right:
an Obama presidency, as is argued in this book, would constitute nothing more than a cosmetic
makeover or facelift for a moribund empire. The goal needs to be to turn away from the path of
empire and return to the ways of the constitutional republic. But Obama is too much of a puppet to
be able to contemplate that route.
When Otis Moss III, who replaced Wright at Trinity United, took advantage of the national
attention focused on Trinity United to devote his Easter Sunday sermon to defending Wright from
what he termed a “crucifixion.” The point was that the affirmative action beneficiary needed above
all things to cultivate the metaphysical pose of the eternal victim – in order to get more grants. One
was reminded of a right-wing reactionary who had benefited from affirmative action (even if he
proposed to remove it for others). This was Clarence Thomas, who told his 1992 Senate
confirmation hearings that he had been the victim of a “high-tech lynching.” Otis Moss III had gone
to college at Morehouse College thanks to a grant from the Ford Foundation.
NATIONAL SOCIALISM: THE CYNICAL USES OF IDENTITY POLITICS
The activities of the Ford Foundation and the other foundations for which it serves as a flagship
do not represent the first time that racial issues have been cynically used for the pursuit of political
ends. The leader of the National Socialist movement will always be associated with the most
virulent exploitation of crackpot race doctrines which furnished the staples of his demagogy. But it
is also interesting to note that even this greatest racist of the 20th century was fully aware that the
concept of race was a fraud and a sham. Here is Hitler in an unguarded moment speaking to
Hermann Rauschning, the leader of the Nazi movement in Gdansk or Danzig, sometime in the
autumn 1934:
The conception of the nation has become meaningless. The conditions of the time compelled
me to begin on the basis of that conception. But I realized from the first that it could have only
transient validity. The ‘nation’ is a political expedient of democracy and liberalism. We have
to get rid of this false conception and set in its place the conception of race, which has not yet
been politically used up. The new order cannot be conceived in terms of national boundaries of
the peoples with an historic past, but in terms of race which transcends those boundaries. All
112 Barack H. Obama: The Unauthorized Biography
the adjustments and corrections of frontiers, and in regions of colonization, are a plowing of the
sands… I know perfectly well, just as well as all these tremendously clever intellectuals, that in
the scientific sense there is no such thing as race. But you, as a farmer and cattle breeder,
cannot get your breeding successfully achieved without the conception of race. And I as a
politician need a conception which enables the order which has hitherto existed on historic
bases to be abolished and an entirely new anti-historic order enforced and given an intellectual
basis. Understand what I mean… I have to liberate the world from dependence on its historic
past. Nations are the outward and visible forms of our history. So I have to fuse these nations
into a higher order if I want to get rid of the chaos of an historic past which has become an
absurdity. And for this purpose the conception of race serves me well. It disposes of the old
order and makes possible new associations. France carried her great revolution beyond her
borders with the conception of the nation. With the conception of race, National Socialism will
carry its revolution abroad and remake the world. (Hermann Rauschning, Voice of Destruction
[New York: Putnam, 1940], 231-232)
It is worth underlining that a racist outlook and the outlook of the modern state are antithetical.
The US financier elites may have found that playing the race card has functioned as an effective
form of counterinsurgency over the last four decades, but they also need to recognize that the
politically correct and multicultural cult of racial diversity is a highly corrosive factor weakening
the American state and polity.
OBAMA’S RACE SPEECH: A HYPOCRITE WITH A TELEPROMPTER
Obama’s speech on race, delivered with much fanfare in Philadelphia on March 18 in response
to the initial explosion of the Jeremiah Wright controversy, was a microcosm of the moral and
intellectual bankruptcy of his presidential campaign. Prior to any content, the setting and method
deserve attention. Obama as a candidate is as controlled and scripted as, say, Elizabeth Dole most of
the time. He avoids answering questions and does not like unstructured repartee or give and take.
His typical formats often offer no opportunity for questions and answers, only soaring rhetoric and
platitudes. He is no debater; he is a pontificator. His favorite approach is the Nuremberg rally, with
the speech read off the glass panes of a teleprompter to his left and right, an apparatus not noticed
by so many of his fawning disciples and dupes. This was the method used in his Iowa victory
speech, and this was the method in Philadelphia. Obama appeared with his head thrown back,
literally looking down his nose at the audience: he was literally talking down to them. The tone was
self-righteous, lecturing, even hectoring. His approach was condescending, patronizing, belittling
his audience. Voters have complained that Obama simply lacks any credible credentials for talking
down to them in this way.
Obama had been caught consorting with the racist provocateur, Jeremiah Wright. But he did not
apologize. He turned the actual moral situation on its head by portraying Wright as a reflection of
American racism, and blaming the American people and their inveterate racism. This method of
blaming the public for one’s own blunders and incompetence has been a staple of the Trilateral
political faction going back to Carter’s infamous malaise speech of July 1979. Obama has never
sincerely apologized for anything. Those who were shocked in 2004 when Bush was unable to think
of any error or mistake that he had made should be more concerned about Obama, who also lacks
the moral courage to admit a mistake or a failing. The sole exceptions are his attempt to get off the
hook for shady and unethical transactions that may have crossed the line into actual felonies: thus,
his stock line for responding to questions about his smelly house-flipping deal with underworld
kingpin Tony Rezko is to say that this was a “boneheaded” mistake. In the case of Wright, Obama
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 113
had been imbibing racist hatred in the pews for 20 years, and exposing his wife and children to the
foul-mouthed tirades of the raving reverend. But he never apologized, never uttered a self-critical
word. Obama is like Bush: structurally incapable of self-criticism. This may in turn be rooted in the
mental defect we find in both of them: megalomania.
A plausible defense for Obama would have gone like this: “I ask the American people to forgive
me for my terrible political opportunism. I came to Chicago and needed to build a political base.
Wright was a popular preacher, and he had a following among the upwardly mobile black opinion
leaders I wanted to meet and to cultivate. He also had a program of church social work which gave
him a veneer of credibility among poorer blacks. I joined the church and brought my wife and
children there. We sat through the “God damn America” two-minute hate tirades and gave Wright
as much as we could afford, over twenty-five grand last year, to get his support and endorsement.
He was mobilizing his national network of black liberation theology ministers for me, and nobody
else could do that for me. Wright drives a Porsche and is about to move into a $1.6 million house,
so he always wanted money. But now Wright has become a colossal political liability, so I am
dumping him. I condemn him and repudiate him, I am quitting his church, and I will never speak to
him again as long as I live. I will never give him another penny as long as I live, and neither will
anyone in my family. I will not allow him anywhere near the White House, and I will not steer
government patronage money his way. This is a clean break, irrevocable and unalterable. No more
Jeremiah Wright. I sincerely apologize to the American people and ask for their forgiveness. I am
guilty of political opportunism, and I will work to win redemption. God bless America.”
This would have been the best possible damage control in regard to Wright, but Obama was
structurally incapable of giving a speech like this, even if he had not meant it and fully intended to
keep Wright in a secret priest hole in the White House to serve as his confessor and spiritual
director for all four years and beyond. This would have involved the three steps of penitence – the
contrition of the heart, the confession of the mouth, and the restitution and satisfaction of works.
Obama could never be a penitent. Instead, Obama reached back to the Carter malaise speech of July
1979.23
From this speech Obama abstracted the characteristic method of a Trilateral-Ford puppet who is
caught in malfeasance: blame the American people, especially the working class. Backed by a row
of American flags, with his head thrown back (partly in arrogance and partly to facilitate reading off
the glass plates of the teleprompter) Obama attempted to turn reality on its head, and especially to
turn the tables on the critics of Wright. He tried to contort himself from a sleazy Chicago wardheeling
pol who had been caught in the company of a widely hated extremist, to a moralistic social
critic sagaciously diagnosing the pathologies of the American body politic. The words flickered
across the glass plates of the teleprompter and out of Obama’s yap, rife with Harvardian
modulations. Obama morphed from the defendant that he was into the divine state prosecutor of the
judgment day, reading the American people the list of their sins, original, mortal, and venal: racism,
racism, racism.
It turned out that Reverend Wright was not a satanic huckster projecting the Ford Foundation’s
divide-and-conquer strategy of financier oligarch domination into the realm of pseudo-Christian
theology, oh no. Reverend Wright was a microcosm who reflected the conflicts of American
society, and the chief of these was once again racism. Wright’s specific comments could always be
rejected, but Wright could not be rejected, because he had become part and parcel of Obama’s hardwon
race identity, his völkische Identität. And Wright was not the only one to be tainted by racism:
there was also Obama’s grandmother Toot, who had once been frightened by a potential mugger
114 Barack H. Obama: The Unauthorized Biography
who had happened to be black. Obama droned on mercilessly, reading the words off his trusty glass
plates.
At the end, it turned out that the country needed a new dialogue about race. Not about
foreclosures that were hitting the black community harder than any other sector of the population.
Not about mass layoffs, that were hitting blacks hardest, since they were the last hired and the first
fired in such industries as remained. Not about food price inflation, which was undermining the
living standards of blacks along with everyone else. Not about the black high school dropout rate,
nor the incarceration rate of young black men. Not about banking panic. Not even about soaring
college tuition costs. Just about race, understood as an attitude, as an autonomous force in history,
divorced from its material basis, and divorced from any class analysis that might account for social
tensions in some other way.
OBAMA: NO SPECIFIC PROPOSALS TO HELP THE BLACK UNDERCLASS
It was worth noting that Obama labored very hard to create the appearance of a campaign that
studiously avoided all racial issues, at least as far as the candidate himself was concerned. He had
not proposed anything to help Harlem, Anacostia, Watts-South Central, or the Cabrini Greens. Up
to this point, Obama had made zero proposals specifically designed to help poor inner city blacks,
nor did he make any such proposals now. The Obama campaign ethos was on the surface postracial,
trans-racial, globalized. But beneath the surface, the Obama campaign was a brutal racist
slander machine, capable of generating the absurd myth that Bill Clinton was a racist (a myth which
Sean Wilentz has dismantled and exposed). This was a trick which the political thug David Axelrod
had learned in Chicago, where he had sometimes managed the campaigns of black candidates who
wanted to attract the votes of upper-middle class white voters. The trick was to project an image of
trans-racial and post-racial beatitude on the part of the candidate, but to have surrogates and
campaign spokespersons ruthlessly slime the opponent as a racist any time he dared to raise the
most minute criticism. The classic stance of the Obama campaign was, in a nutshell, that if you dare
criticize our man, you are revealing yourself as a racist. It was a masterpiece of self-righteous
duplicity.
Needless to say, the controlled corporate media and their media whores swooned in ecstasy.
Obama’s speech joined the Declaration of Independence and the Gettysburg Address among the
foundational documents of the United States, raved quite a few. It should be printed by the million
and made required reading in every school, raved others. For the left liberals, the speech had the
unique merit of expressing their own class-based race-dominated world view through the mouth of
someone who claimed to be black, but using the jargon of the academic oligarch. The left liberals
crowed that Obama had turned the tables on his critics and opponents, and that the Reverend Wright
issue had now been successfully neutralized; no longer would the South Side Savonarola be a millstone
around the neck of the Perfect Master as he strove towards the seizure of power.
Ordinary working people, American voters, had other ideas. The racist provocations of Wright
were a permanent guarantee that Obama could not be elected president in the normal way, that is,
without the destruction of his competition by Gestapo methods through the FBI and Department of
Justice, in the way that Governor Spitzer had been taken down. The danger was that Obama had so
many ogres and monsters in his left CIA-Ford Foundation base of support and in his past in general
that, if he were at the top of the Democratic ticket, he would drag the entire party down to defeat
with him. Obama had no coat-tails. He had reverse coat-tails; he was a burden for Democratic
candidates down the ticket. The burden was composed of Jeremiah Wright the racist provocateur,
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 115
Bill Ayers and Bernardine Dohrn the Weatherman terrorist bombers and butchers, Tony Rezko and
Auchi the gangsters, Michelle Obama the fascist ideologue, and most of all of Obama’s own secret
persona as the Marx-Fanon-Rousseau anthropologist and theoretician of bitterness. This was a
crushing, intolerable, unsustainable burden for any Democratic candidate who wanted to win an
election anywhere other than Berkeley, Big Sur, Jackson Hole, Hyde Park, the Upper West Side, or
Takoma Park.
MICHELLE ROBINSON, QUOTA QUEEN AND ETERNAL VICTIM
Obama’s future wife Michelle now enters our narrative as Michelle Robinson. She was born into
what she always claims was a working-class family of modest means from the South Side of
Chicago in 1964. She graduated from Whitney Young High School in Chicago in 1981 and majored
in sociology at Princeton University, graduating cum laude with the Class of 1985. She received her
Juris Doctor degree from Harvard Law School in 1988.
Michelle needs very much for the public to believe that she came from a very humble
background. Why should this be so? It is because Michelle’s stance is metaphysically that of the
eternal victim. Part of this pose must be related to bad conscience, assuming that she has a
conscience. She has been the recipient of privileged treatment. She constantly repeats that her
Scholastic Aptitude Test scores were not good enough to get into Princeton. But she was admitted,
with a scholarship. The only explanation is that she benefited from a preferential racial quota.
Michelle is thus in reality what Lani Guinier was called in the press 15 years ago: she is a Quota
Queen. She then went to Harvard Law School. In the meantime, the black underclass has been left
to its own devices in festering inner-city ghettos. How does this brutal class reality impact the
mentality of someone like Michelle? She needs to reject class, and embrace race with a vengeance.
Above all, she must assume the pose of a victim, of a person with an overwhelming grievance. This
sense of victimhood is an indispensable component in the mentality of fascism. The Italians and
Germans of the 1920s and 1930s felt that they had been treated very badly, humiliated, betrayed,
stabbed in the back, and the fruits of their sacrifices mutilated. Michelle Obama has this basic
prerequisite to be a fascist ideologue; as we will see, she has realized that potential.
Michelle Obama’s illusory account of a grim and disadvantaged youth on the edge of poverty
has not withstood examination. The distinguished University of Pennsylvania political scientist
Adolph Reed has pointed out the essential inaccuracy of what has been alleged about Michelle by
her backers. Reed observes:
The Obama campaign has even put out a misleading bio of Michelle Obama, representing her as
having grown up in poverty on the South Side, when, in fact, her parents were city workers, and
her father was a Daley machine precinct captain. This fabrication, along with those
embroideries of the candidate’s own biography, may be standard fare, the typical log cabin
narrative. However, in Obama’s case, the license taken not only underscores Obama’s more
complex relationship to insider politics in Daley’s Chicago; it also underscores how much this
campaign depends on selling an image rather than substance. (Adolph Reed, “Obama No,” The
Progressive, May 17, 2008)
NEWTON MINOW OF SIDLEY, AUSTIN, FRIEND OF BARKY
Barry encountered Michelle for the first time thanks to the efforts a top establishment fixer, the
venerable Newton Minow, who still wraps himself in the banner of Camelot. Minow has been one
116 Barack H. Obama: The Unauthorized Biography
of Obama’s key backers. Minow is still widely known today for belaboring the obvious: it was
Minow who popularized the phrase “vast wasteland” for American broadcast television in 1961,
when he was the head of the Federal Communications Commission under Kennedy. Minow spoke
as an elitist, perhaps preparing the way for the foundation-funded PBS system, a Rockefeller idea
which expresses the view of the foundation oligarchy. Now in advanced age, Minow can be seen as
a patriarch of the Chicago oligarchy, a leading grandee of the Chicago establishment. Minow may
be one of the case officers working Obama on behalf of the Trilaterals, Bilderbergers, and the
banking establishment in general. Minow’s political judgment is very much open to question: he
was a prominent backer of Adlai E. Stevenson, the liberal Illinois governor and supercilious elitist
who lost the presidency to Eisenhower not once but twice, in 1952 and 1956 as well. Minow’s
fortunes improved when he battened on to the Kennedy bandwagon. We read in a recent account:
At 81, sitting in his law office at Sidley Austin, in the Loop, above a stretch of street christened
Honorary Newton N. Minow Way, Minow is talking about the young man his daughter Martha,
a professor at Harvard Law School, recommended for a summer associate’s job two decades
ago. At Minow’s firm Obama fell in love with a young lawyer, Michelle Robinson, who would
become his wife. “I adored Jack Kennedy,” Minow explains, “and I saw the 21st-century
version of Jack Kennedy in my mind. He is astonishing. I think the fundamental point is the
country wants a different kind of politics.” He adds, “I also believe the race issue and the
gender issue are yesterday, particularly with young people.” One-upping Justice Oliver Wendell
Holmes’s famous summary of Franklin D. Roosevelt’s gifts, Minow, a former Supreme Court
clerk, says, “I believe as the country sees Barack, gets to know him, they will see the same thing
I see: really a combination of a first-class mind and a first-class temperament, all in the same
person.” (Purdum, Vanity Fair, March 2008)
For our present purposes, the point is that Barry met Michelle thanks to the mediation of old
Newt Minow in the Sidley Austin law firm one summer.
MICHELLE OBAMA REVEALED
Sharon Churcher, writing for the right-wing London paper The Daily Mail, provides a
penetrating look at Michelle Obama as she really is as a person and as a life story. The emphasis is
on Michelle’s attempt to deceive the public, always for the purpose of painting herself as a victim.
Churcher observes that
Michelle’s pitch is far from sophisticated, playing heavily on her humble beginnings and
traditional values: “I was raised in a working-class family on the south Side of Chicago. That’s
how I identify myself, a working-class girl,” she has told the voters, time after time. It helps that
she cuts a fine figure on the stump, tall and slender with a hair ‘flip’ reminiscent of Jackie
Kennedy. And it does no harm that, while Barack, 46, comes from mixed Kenyan and white
parentage, Michelle, 44, is authentically African-American, giving the Obamas an unmatched
breadth of appeal. Last week it seemed the mask had slipped when, speaking unscripted for
once, a sharper, less emollient Michelle emerged. “For the first time in my adult life I feel really
proud of my country,” she said, an apparent lack of patriotism immediately seized on by her
Republican opponents. When The Mail on Sunday went back to the gritty district of Chicago
where Michelle LaVaughn Robinson was raised, we found a rather different picture from the
one so single-mindedly promoted by Camp Obama. Instead of the one-room tenement that now
appears in most accounts of her upbringing, we found a well-kept neighbourhood of red-brick
Arts and Craft-style houses which have long been home to respectable black families.’ (Sharon
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 117
Churcher, “Mrs O.: The truth about Michelle Obama’s ‘working class’ credentials, London
Daily Mail, February 23, 2008)
So Michelle was from a very comfortable family, after all. In fact, some of Michelle’s early
advantages came from her father’s status as a ward heeler for the Chicago Democratic machine,
long associated with the Daley family:
“Michelle was from a middle-class family,” confirmed one of her long-time friends, Angela
Acree. “She came from a regular family. They had a nice home. It wasn’t a mansion, but it was
just fine. It was a decent neighbourhood.”
The Robinsons grew up on the upper floor of a house built in the Twenties. Number 7436 South
Euclid Avenue - a classical reference to the Greek mathematician which found an appropriate
echo in Michelle’s subsequent respect for traditional learning - even has a small garden, shaded
by a large elm tree, and an ornate stone bench.
The South Side of Chicago has long had its share of gang-infested housing ‘projects’ but with
the University of Chicago hospital close by, there were plenty of white professionals in the area
as well as hard-working families in the Robinsons’ own image.
No one could pretend they were rich and it is true that her father, Frasier Robinson, spent some
time as a maintenance worker for Chicago’s Department of Water Management.
However, he was a good deal more than the labourer that many seem to imagine.
Indeed, according to family friends, Michelle’s father was a volunteer organiser for the city’s
Democratic Party, a by-word for machine politics in America, and his loyalty was rewarded
with a well-paid engineering job at Chicago’s water plant. Even before overtime, he earned
$42,686 – 25 per cent more than High School teachers at the time.
Michelle’s mother stayed at home and devoted her energies to her and her older brother Craig.
Marian Robinson nurtured great ambitions for both her children, along with the traditional
values which are now serving Michelle so well.
Television was all but banned in favour of homework, debates about the issues of the day and
improving games of chess.
Bright and determined, Michelle was awarded a place at one of Chicago’s first ‘magnet’
schools, which offered special programmes for gifted children. By the time she was 13, she was
taking a college-level biology course.
Even as a child, she was not to be underestimated, says Craig, now 45, who works as the head
basketball coach at high-flying Brown University. There was no doubt who was in charge.
“We had this game where we set up two rooms and played ‘Office’,” he recalled. “She was the
secretary, and I was the boss. But she did everything. It was her game, and I kind of had nothing
to do. My sister is a poor sport. She didn’t like to lose.”
She rarely did. Michelle beat huge competition to win a place studying sociology at Princeton,
one of America’s most venerable and expensive universities.
Once she had arrived amid the fauxgothic precincts, however, she found herself surrounded by
spoilt white students from wealthy families. She, in contrast, was obliged to take out loans to
pay her way and this rankled, as she revealed in a 1985 thesis. (Sharon Churcher, “Mrs O.: The
truth about Michelle Obama’s ‘working class’ credentials, London Daily Mail, February 23,
2008)
118 Barack H. Obama: The Unauthorized Biography
This is the domineering Michelle Obama we have come to know; a supermarket tabloid story
claims that she controls everything that husband Barack does.
MICHELLE OBAMA AND CHERIE BLAIR: VULGAR, GRASPING ARRIVISTES
The British author compares Michelle to Cherie Blair, the wife of former British Prime Minister
Tony Blair. The suggestion is that Michelle is the same kind of grasping, greedy, striving, socialclimbing,
vulgar arriviste or nouveau riche which the British public had learned to hold in
contempt. Turning to Michelle’s thesis, she writes:
The document …betrays an angry, campaigning brand of politics which in no way fits with the
mild-mannered advocate of common sense now winning hearts and minds from coast to coast…
There are those who, in any case, suggest that her ideological roots have always remained rather
shallow and that, for the most part of her life, politics have been overshadowed by the
straightforward business of ‘getting on’.
Even at university, Michelle was well aware that there was more to life than politics, admitting
in that same thesis that a ‘high-paying position’ could prove more attractive than a life of placards
and late-night meetings.
It was little surprise to those who knew her at the time that it was commerce not campaigning
that claimed her when she graduated with a law degree from Harvard, taking a post with Sidley
Austin, an eminent Chicago law firm. Her specialist area was not human rights or family law, but
the lucrative detail of copyright and trademark cases.
An acquaintance of Obama’s family compares her with another political wife, another lawyer as
it happens, with a keen interest in making money.
“Michelle is very much like Cherie Blair. She is a middle-class girl who has discovered that
money is nice and doesn’t see that as a contradiction with having radical beliefs,” he said.
Chicago’s veteran political consultant and pundit Joe Novak agrees, saying: “She [Michelle] is now
motivated more by personal gain than by social consciousness. She saw her opportunities, and she
took them.” (Sharon Churcher, “Mrs O.: The truth about Michelle Obama’s ‘working class’
credentials, London Daily Mail, February 23, 2008)
Sharon Churcher focuses on the affluent, opulent life style now affected by the arriviste
Michelle, who is now thoroughly addicted to the finer things in life:
The rewards have been significant. Despite the image she projects on the Newsweek cover,
Michelle owns an impressive collection of diamond jewelry, designer outfits and £400-a-pair
Jimmy Choo shoes.
When she is wooing working-class voters, however, she favours austere black skirts and white
blouses. “Our lives are so close to normal, if there is such a thing when you’re running for
president,” she declared during a campaign stop in Delaware, shortly before her husband’s
latest victories were announced.
“When I’m off the road, I’m going to Target to get the toilet paper.”
She did not bother to mention, however, that the paper, like the rest of the family shopping, is
taken to an £825,000 three-storey [c. $1.6 million] red-brick Georgian revival mansion, set
amid beautifully manicured lawns in one of Chicago’s most affluent districts.
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 119
Even the house became a source of controversy when it emerged that the wife of a Chicago
slum landlord, Tony Rezko, helped them buy land to enlarge its grounds.
More contentious still was Michelle’s appointment as the £150,000-a-year vice-president of
external affairs at the University of Chicago hospital in 2005.
It came only two months after Barack was sworn in as a U.S. senator, and was attacked by
critics as a blatant attempt by the hospital’s hierarchy to curry favour with her husband, in an
era when some politicians want to rein in the vast profits of America’s medical system.
They questioned why the wife of a committed Democrat would work for a hospital that has
been accused of ruthless greed.
Michelle’s image was further tarnished in May 2006, when it was revealed that the centre -
despite earning some £50 million a year – had refused to treat a man who could not afford to
pay his bill. He died.
All of which has led some political veterans to accuse Michelle of the very lack of compassion
and moral scruples that her husband has lambasted in his Republican rivals for the White
House. (Sharon Churcher, “Mrs O.: The truth about Michelle Obama’s ‘working class’
credentials, London Daily Mail, February 23, 2008)
Michelle is thus a gatekeeper against the black community, and her activity has already claimed
victims.24
Some sources reached by Sharon Churcher have been able to draw the necessary conclusions
about Michelle Obama’s substandard moral and political qualities. Unlike Hillary Clinton, they
point out, neither Obama has endorsed far-reaching healthcare reforms.
Michelle also is under attack for joining the board of a food company where she allegedly took
part in a 2005 decision to close a pickle and relish plant in La Junta, Colorado, putting 150 mostly
Hispanic labourers out of work. The small town was devastated. “It totally amazed me when they
closed it,” said La Junta mayor Don Rizzuto, who had believed that Michelle and her husband were
“the champions of the little guy.”
In their most recently publicised tax returns, for 2005, the Obamas earned £800,000. This
included royalties from the senator’s autobiography Dreams from My Father, and his £82,600
Senate salary. Under a three-book deal which he subsequently signed, he stands to earn at least £1
million.
To Joe Novak, this only goes to prove that Michelle is distorting reality when she attempts to
depict herself as a champion of the masses. “For the past year (she and Barack) have jetted around
the country with Oprah Winfrey and Robert De Niro, enjoying penthouse parties and living the high
life,” he said.
Perhaps, when she contrasts her current red-carpet lifestyle with the unassuming world of South
Euclid Avenue, she genuinely may think that her childhood was impoverished. And the one thing
that is certain about the incredible Mrs O. is that she never intends to have to live that way again.’
(Sharon Churcher, “Mrs O.: The truth about Michelle Obama’s ‘working class’ credentials, London
Daily Mail, February 23, 2008)
Barack Obama has the mental structures of a fatherless boy, and he knows it. “The truth is that
none of the men in my life were that successful or that stable,” [Michelle] Obama told me. “They
made an awful lot of mistakes.” (Purdum, Vanity Fair, March 2008) Later, when it came time to
marry Michelle, he hesitated; Barack had a more bohemian attitude toward romance. “We would
120 Barack H. Obama: The Unauthorized Biography
have this running debate throughout our relationship about whether marriage was necessary,”
Obama told me. “It was sort of a bone of contention, because I was, like, ‘Look, buddy, I’m not one
of these who’ll just hang out forever.’ You know, that’s just not who I am. He was, like”—she
broke into a wishy-washy voice — ‘Marriage, it doesn’t mean anything, it’s really how you feel.’
And I was, like, ‘Yeah, right.’” (Jim Geraghty, “The Campaign Spot,” March 5, 2008)
At Obama’s wedding, his new brother-in-law, Craig Robinson, who had been an athlete at
Princeton, pulled him aside and inquired about his plans. Obama ‘“…said, ‘I think I’d like to teach
at some point in time, and maybe run for public office,” recalls Robinson, who assumed Obama
meant he’d like to run for city alderman. “He said no — at some point he’d like to run for the U.S.
Senate. And then he said, ‘Possibly even run for President at some point.’ And I was like, ‘Okay,
but don’t say that to my Aunt Gracie.’ I was protecting him from saying something that might
embarrass him.”’25 Obama did not tell his brother in law that his self and his career were controlled
assets of the Trilateral Commission, his sponsors.
MICHELLE OBAMA AS A CREATURE OF THE CORRUPT DALEY MACHINE
Michelle had made her way in the world as an asset of the corrupt Chicago Democratic machine,
the Daley family machine. She was in her own way a ward heeler and wheel horse for Daley’s city
hall apparatus, with one key contact being Valerie Jarrett, a political fixer on the make. ‘Obama
went straight from Princeton to Harvard Law School. After graduating, she became a junior
associate, specializing in intellectual property law, at the Chicago firm of Sidley & Austin. She
worked there for three years, eventually becoming, as she says in her stump speech, disenchanted
with “corporate America.” Valerie Jarrett hired her as an assistant to the mayor, Richard Daley. “In
the planning department, part of her job was to help businesses solve problems,” Jarrett told me.
Sort of like a one-woman 311? “No, a 911,” Jarrett responded. “She made problems go away just
that fast.”
In 1993, she was appointed the founding director of the Chicago office of a public-service
program called Public Allies, which places young adults from diverse backgrounds in paid
internships with nonprofit organizations. An early appearance in the Chicago Tribune was in an
article about Gen X-ers. Obama told the reporter, “I wear jeans, and I’m the director.” Michelle and
Barack met at Sidley & Austin, when she was assigned to advise him during a summer job.
Michelle’s co-workers warned her that the summer associate was cute. “I figured that they were just
impressed with any black man with a suit and a job,” she later told Barack.’ (New Yorker, March
11, 2008) We see that Michelle, too, has a record of serving the foundations. Among other things,
Michelle embodies the fascist potential of generation X, which is an echo of the Lost Generation
born between 1885 and 1905 – the generation that gave the world Hitler, Mussolini, and Stalin even
as it founded fascism.
THE BLACK OVERCLASS RAGE OF MICHELLE OBAMA
Reporters, even the drooling acolyte types, have observed that inordinate rage of the wealthy
elitist lawyer Michelle Obama. Early in 2008, she said that she wanted to assault and maim former
President Clinton: ‘In Wisconsin, I asked her if she was offended by Bill Clinton’s use of the phrase
“fairy tale” to describe her husband’s characterization of his position on the Iraq War. At first,
Obama responded with a curt “No.” But, after a few seconds, she affected a funny voice. “I want to
rip his eyes out!” she said, clawing at the air with her fingernails. One of her advisers gave her a
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 121
nervous look. “Kidding!” Obama said. “See, this is what gets me into trouble.”’ (New Yorker,
March 11, 2008) For Michelle, Bill was obviously a monster.
Michelle is famous for her diagnosis that America is a mean country, which appeared for the
first time in the New Yorker: ‘Obama begins with a broad assessment of life in America in 2008,
and life is not good: we’re a divided country, we’re a country that is “just downright mean,” we are
“guided by fear,” we’re a nation of cynics, sloths, and complacents. “We have become a nation of
struggling folks who are barely making it every day,” she said, as heads bobbed in the pews. “Folks
are just jammed up, and it’s gotten worse over my lifetime. And, doggone it, I’m young. Fortyfour!”’
(New Yorker, March 11, 2008) It is of course true that the US standard of living has been cut
by about two thirds over the last four decades, so Michelle is doubtless correct in that abstract sense.
It is the part about “cynics, sloths, and complacents” that needs examination. If you want to attack
the causes for the immiseration of America, then you should get busy attacking Wall Street, the
Federal Reserve, and their political puppets. But Michelle does not do this at all. She attacks the
supposed moral inferiority of the American people, while letting Wall Street off the hook along
with all the other power centers. The decline of the country becomes a matter of purely individual
responsibility, setting the stage, one senses, for a demand of austerity and sacrifice so as to make
expiation.
Spengler of the Asia Times argues that the real nature of Obama’s emotional makeup can be seen
most readily by looking at Michelle. Obama has learned to dissemble, but could not hide the criteria
that he used when choosing a wife. Michelle is a bubbling cauldron of racial hatred, and this pot has
boiled over from time to time during the campaign. This is the most important evidence that Obama
himself is also a compulsive hater. Obama, says Spengler, tries to hide this,
but Michelle Obama is a living witness. Her February 18 comment that she felt proud of her
country for the first time caused a minor scandal, and was hastily qualified. But she meant it,
and more. The video footage of her remarks shows eyes hooded with rage as she declares:
“For the first time in my adult lifetime, I am really proud of my country and not just because
Barack has done well, but because I think people are hungry for change. And I have been
desperate to see our country moving in that direction and just not feeling so alone in my
frustration and disappointment.”
The desperation, frustration and disappointment visible on Michelle Obama’s face are not new
to the candidate’s wife; as Steve Sailer, Rod Dreher and other commentators have noted, they
were the theme of her undergraduate thesis, on the subject of “blackness” at Princeton
University. No matter what the good intentions of Princeton, which founded her fortunes as a
well-paid corporate lawyer, she wrote,
“My experiences at Princeton have made me far more aware of my ‘Blackness’ than ever
before. I have found that at Princeton no matter how liberal and open-minded some of my
White professors and classmates try to be toward me, I sometimes feel like a visitor on campus;
as if I really don’t belong.” (Spengler, Asia Times, Feb. 26, 2008)
OBAMA BITCH-SLAPPED IN PUBLIC BY MICHELLE
Michelle has also been prodigal in her public abuse of Obama – a jarring note which was
extremely incongruous during the earlier, more seraphic phase of Obama’s campaign, before the
scandals and dossiers began to emerge. For the cynical central European Spengler, an experienced
man of the world, this is an index of Michelle’s vast power. Spengler observes:
122 Barack H. Obama: The Unauthorized Biography
Never underestimate the influence of a wife who bitch-slaps her husband in public. Early in
Obama’s campaign, Michelle Obama could not restrain herself from belittling the senator.
“I have some difficulty reconciling the two images I have of Barack Obama. There’s Barack
Obama the phenomenon. He’s an amazing orator, Harvard Law Review, or whatever it was, law
professor, best-selling author, Grammy winner. Pretty amazing, right? And then there’s the
Barack Obama that lives with me in my house, and that guy’s a little less impressive,” she told a
fundraiser in February 2007.
“For some reason this guy still can’t manage to put the butter up when he makes toast, secure
the bread so that it doesn’t get stale, and his five-year-old is still better at making the bed than
he is.” New York Times columnist Maureen Dowd reported at the time, “She added that the TV
version of Barack Obama sounded really interesting and that she’d like to meet him sometime.”
Her handlers have convinced her to be more tactful since then.
“Frustration” and “disappointment” have dogged Michelle Obama these past 20 years, despite
her US$300,000 a year salary and corporate board memberships…. Obama’s choice of wife is a
failsafe indicator of his own sentiments. Spouses do not necessarily share their likes, but they
must have their hatreds in common. Obama imbibed this hatred with his mother’s milk.’
(Spengler, Asia Times, Feb. 26, 2008)
MICHELLE OBAMA: THE THESIS OF SELF-ABSORPTION
In 1985, in order to graduate from Princeton with her AB in sociology, Michelle had to submit a
senior thesis, which was entitled “Princeton-Educated Blacks and the Black Community.” It is filed
under her maiden name, Michelle LaVaughn Robinson. It is 96 pages long, and reposes in the Mudd
Library on campus. This thesis attracted much attention when it was “temporarily withdrawn” from
Princeton’s library until after the November 2008 election. Some extracts had appeared previously
in the Newark Star Ledger. Because of Obama’s standard vapid rhetoric about hope, change, and
the new politics, the attempt to suppress Michelle’s thesis appeared at once as a cynical act of
stonewalling. Michelle looked very much like the super-secretive George Bush. Jonah Goldberg
reported on National Review Online, “A reader in the know informs me that Michelle Obama’s
thesis ... is unavailable until Nov. 5, 2008, at the Princeton library. I wonder why.” “Why a
restricted thesis?” chimed in Louis Lapides on his site, Thinking Outside the Blog. “Is the concern
based on what’s in the thesis? Will Michelle Obama appear to be too black for white America or not
black enough for black America?” Princeton librarians were so pestered by those wanting to see the
infamous thesis that they started reading their refusal from a script. Princeton media officers joined
in the stonewall claiming it is “not unusual” for a thesis to be restricted and refusing to discuss “the
academic work of alumni.” The embarrassment for Obama became so great that he decided to
release the thesis to the Politico, which is controlled by the reactionary Allbritton interests.26
The thesis deals mainly with Michelle’s own cahier de doléances of racist slights and her racebased
world outlook. “My experiences at Princeton have made me far more aware of my
‘blackness’ than ever before,” she states in the introduction. “I have found that at Princeton, no
matter how liberal and open-minded some of my white professors and classmates try to be toward
me, I sometimes feel like a visitor on campus; as if I really don’t belong. Regardless of the
circumstances under which I interact with whites at Princeton, it often seems as if, to them, I will
always be black first and a student second.” “I feel” is her pole star and compass as she goes
through life. She is an extreme example of the radical subjectivist world view of late AngloIII:
Foundation-Funded Racism: Jeremiah Wright and Michelle 123
American imperialism. She offers no analysis of conditions in the ghetto, or ideas for recovery,
reconstruction, and reform. Her axiomatic standpoint is her own greedy and infantile ego.
At that point in her life, Michelle thought that her future career after Princeton would bring her
towards “further integration and/or assimilation into a white cultural and social structure that will
only allow me to remain on the periphery of society; never becoming a full participant.” “In
defining the concept of identification or the ability to identify with the black community,” Michelle
elaborates, “I based my definition on the premise that there is a distinctive black culture very
different from white culture.” This is of course the central tenet of the pork-chop nationalist
position. It is not a scientific analysis of culture. It is rather a rhetorical strategy and political pose
for extracting more and better concessions from the affirmative action system, which has left two
thirds to three quarters of the black community in poverty for the last 40 years, since the system was
put in place by Nixon and George Shultz, his Secretary of Labor.
MICHELLE SHOCKED TO FIND WEALTHY SNOBS AT PRINCETON!
For this affirmative action method to work, it is indispensable that grievances be kept alive and
at the center of attention; if one is to be a beneficiary, one must always be a victim. Michelle writes,
with dubious orthography: “Predominately white universities like Princeton are socially and
academically designed to cater to the needs of the white students comprising the bulk of their
enrollments.” Warming to the victimhood that this analysis offers, she goes on to complain that
Princeton in 1985 had only five black tenured professors on its faculty. The Afro-American studies
program “is one of the smallest and most understaffed departments in the university.” There was
only one campus group “designed specifically for the intellectual and social interests of blacks and
other third world students.” Today her pose is that she is a typical home girl of the south side
Chicago ‘hood; before that, she was from the third world, as we see here. The stance is determined
by the object she is seeking at that moment. She strove mightily to get into Princeton, but she now
finds the place “infamous for being racially the most conservative of the Ivy League universities.” If
she had wanted to avoid wealthy snobs, why then did she choose Princeton in the first place? Was
she a complete fool? If she wanted third-world students, she could have headed for a dozen ultraleft
campuses. What Michelle is evidently seeking here is the pose of going to Princeton and
scorning the place at the same time, the better to enhance her status as a person who has secured the
invidious best, but rejected it as not good enough.
At this time Michelle was interested in the work of sociologists James Conyers and Walter
Wallace, who delved into white-black community relations. These two discussed the “integration of
black official(s) into various aspects of politics” and notes “problems which face these black
officials who must persuade the white community that they are above issues of race and that they
are representing all people and not just black people,” instead of seeking to build up “two separate
social structures.” This is the delicate question of how to make the transition from the affirmative
action black nationalist stance necessary to secure grants and set-asides, to the more inclusive
posture that would be necessary to run for office in any constituency not dominated by blacks.
Michelle had no solution for this problem then; the solution has been supplied by Axelrod, who
discovered that messianic platitudes and vapid utopian sloganeering about non-partisanship, hope,
and change would allow this shift to be carried out while duping the gullible and guilt-ridden white
liberals, who, after all, were eager to be fooled.
Michelle mailed out an 18-question survey to a sample of 400 black Princeton graduates, asking
them to estimate the amount of time and “comfort” level spent interacting with blacks and whites
124 Barack H. Obama: The Unauthorized Biography
before they went to Princeton, while they were on campus, and after graduation. Michelle also
asked about their religious beliefs, living arrangements, careers, role models, economic status, and
attitudes towards the black underclass. She asked the respondents to specify whether they agreed
more with a “separationist and/or pluralist” viewpoint or an “integrationist and/or assimilationist”
ideology. About 90 alumni sent back the questionnaires, yielding a response rate of about 22
percent. Michelle wrote that she was disappointed with the answers, since they indicated a
weakening of the race-based or Völkische Identität of the black Princetonians surveyed. Michelle
complained: “I hoped that these findings would help me conclude that despite the high degree of
identification with whites as a result of the educational and occupational path that black Princeton
alumni follow, the alumni would still maintain a certain level of identification with the black
community. However, these findings do not support this possibility...” (Politico.com, February 23,
2008)27
With this, Michelle had discovered that social reality was not in conformity with the race-based
view of life she had assumed as part of her quest for upward mobility under conditions of
affirmative action. Even her small sample suggested that race was an empty construct, that racial
solidarity could not function as the organizing principle of life, and that racialist or racist thinking
was above all alien to lived social reality. She was not pleased. Concerning the abysmal quality of
her work in the strict academic sense, the less said the better.
Michelle Obama is thus revealed to have been a self-absorbed, self-centered, self-obsessed, selfserving,
and self-righteous undergraduate. We can perhaps detect here an egomania or megalomania
which is evidently the psychological basis of her marriage with Obama: they both imagine
themselves as the centers of the world. The questionnaire was of course a mere formality, serving to
mask Michelle’s intense preoccupation with her own radically subjective feeling states. She was
interesting in delving into herself, and the forms she sent out and compiled were but a fig leaf in
that obsessively introspective process. She lacks any sense of reality, since she forgets that she is in
a position where she is envied by the vast majority of college youth; she needs to portray herself as
a victim of something, be it slights real or imagined. She also has no gratitude for the special
privileges that have been given her through no merit of her own.
Michelle Obama’s odious personality may well emerge as a telling argument in any future
debate about the viability of affirmative action as against color-blind, class-based programs that
recognize class, poverty, and exclusion, and no longer racial discrimination, as the critical problem
of US society. Michelle will become the poster child for abolishing quotas, preferences, set asides,
and the entire affirmative action apparatus. The argument will be that no system which has
produced such a person deserves to be perpetuated, while 60% or 70% of black America remains in
the despair of the inner city ghetto. Michelle can thus safely be said to constitute a huge
vulnerability among the many huge vulnerabilities of the Obama campaign. If we look back to
Jimmy Carter, we can perhaps see how dangerous a person like Michelle can become when she is
unleashed on the national stage, as she necessarily will be.
MICHELLE OBAMA: HATING THE AMERICAN PEOPLE
Speaking at a rally in Wisconsin on February 18, 2008 Michelle delivered the lines which have
made her infamous: “For the first time in my adult lifetime, I am really proud of my country, and
not just because Barack has done well, but because I think people are hungry for change.” This was
an element in her standard stump tirade on several subsequent occasions, leaving no doubt that she
really meant it and meant to say it. If nothing else, it was a catastrophic failure of deception and
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 125
concealment: Michelle cannot contain her own assiduously cultivated rage, even when the
expression of that rage becomes destructive to her and a threat to her consuming ambition.
National pride and national honor are not a bad thing. Honor, in fact, is the one ything that
humans cannot live without. Like everything else, much depends on how it is used. The American
New Deal state created by Franklin D. Roosevelt with the help of the sit-down strikers and the trade
union organizers represented the most advanced form of human organization ever seen. The New
Deal state battled the Great Depression, defeated Hitler, Tojo, Mussolini, and fascism, kept the UK
and USSR on their feet through Lend-Lease, contained and frustrated Stalin and Mao, unlocked the
secrets of the atom, and put humans on the moon. Abraham Lincoln was the greatest man of the
nineteenth century, and, together with Russia and Prussia, saved the world from the uncontested
universal despotism of the British Empire under Lord Palmerston. There was a dark side – generally
the handiwork of the finance oligarchs, north and south, yet there was much to be proud of. But not
for the racist Michelle Obama, partly because Michelle is also a postmodernist and multiculturalist.
Postmodernism holds that any conception of human greatness is an illusion, an obscene distortion of
human pettiness, fecklessness, and mediocrity. Nobody is a hero to a postmodernist – not because
there are no heroes and heroines, but because the postmodernist is too crabbed, deformed, and
envious to admit the category of human greatness in any form. Michelle has a perfect right to her
wretched opinions, but she has no right to take them to the White House and make it into the
bordello of world history.
Why does the super-privileged wealthy elitist Michelle hate the United States and the American
people? Partly, one thinks, because she forgets the largesse and holds fast to the memory of the
adversities. On February 29, 2008 Michelle visited Zanesville, Ohio, where she greeted some local
women at a local day care center. Michelle launched into sententious nostrums sharply contradicted
by her own greedy, rapacious, and social-climbing lifestyle: “We left corporate America, which is a
lot of what we’re asking young people to do,” she tells the women, not mentioning that she works
for the ultra-reactionary, Rockefeller-founded University of Chicago, and sits on the boards of jobdestroying
corporations. “Don’t go into corporate America. You know, become teachers. Work for
the community. Be social workers. Be a nurse. Those are the careers that we need, and we’re
encouraging our young people to do that. But if you make that choice, as we did, to move out of the
money-making industry into the helping industry, then your salaries respond.”
During this same appearance, Michelle demonstrated how out-of-touch she is, by bemoaning the
amount of money she has to spend on piano, dance, and other lessons for her two daughters. The
sum she cited came to nearly one-third of the median household income in Zanesville, which was
$37,192 in 2004, which is below both the Ohio and national averages. Just 12.2 percent of adults in
that county have a bachelor’s degree or higher, also well below the state and national averages.
About 20 percent don’t have a high school degree. Michelle was a multi-millionairess; she was
indeed out of touch. And she wanted to stay that way. She expects the group of women, whom she
could buy many times over, to sympathize with her. ‘“Everywhere I go, no matter what, the women
in the audience, their first question for me is, ‘How on earth are you managing it, how are you
keeping it all together?’” she pontificated to the women of modest means in Zanesville.28
One of Michelle’s favorite themes is that she had had to take out student loans to get through
Princeton and Harvard. She complains about how long it has taken her and Barry to pay off these
loans. She talks about how it has taken them years and years, well into middle age, to pay off their
debts. “The salaries don’t keep up with the cost of paying off the debt, so you’re in your 40s, still
paying off your debt at a time when you have to save for your kids,” Michelle laments. “Barack and
126 Barack H. Obama: The Unauthorized Biography
I were in that position. The only reason we’re not in that position is that Barack wrote two bestselling
books… It was like Jack and his magic beans. But up until a few years ago, we were
struggling to figure out how we would save for our kids.” “We left corporate America, which is a
lot of what we’re asking young people to do,” Michelle typically says, adding that “many of our
bright stars are going into corporate law or hedge-fund management.”
Michelle talks a good rap about hard times in America, but she makes it all turn on what has to
be done for her personally, not for the voters; For Michelle, the axiomatic point of view is always
but always herself: ‘Her frame of reference can seem narrow. When she talks about wanting “my
girls to travel the world with pride” and the decline of America “over my lifetime,” you wonder
why her default pronoun is singular if the message is meant to be concern for others and
inclusiveness.’ (New Yorker, March 11, 2008) For obvious demagogic reasons, Michelle also fails
to distinguish between the relative stabilization of falling real wages under Clinton, and the
precipitous decline that resumed under Bush the younger: ‘In Cheraw, Obama belittled the idea that
the Clinton years were ones of opportunity and prosperity: “The life that I’m talking about that most
people are living has gotten progressively worse since I was a little girl. . . . So if you want to
pretend like there was some point over the last couple of decades when your lives were easy, I want
to meet you!”’ (New Yorker, March 11, 2008)
MICHELLE OBAMA: BOUNCER FOR
THE UNIVERSITY OF CHICAGO HOSPITAL
Michelle’s job is that of a bouncer or gatekeeper for the University of Chicago Hospital, which
is located close to the edge of the black ghetto. The problem faced by the University of Chicago
managers is that too many sick and dying indigent black people come to their emergency room in a
desperate attempt to get some kind of treatment. Michelle’s job is to push these poverty-stricken
black people back into the ghetto to die in nondescript waiting rooms in poorly-equipped doctors’
offices or dingy substandard clinics there. Her qualifications of this job were that she had to be
black, and she had to be cruel, with no hint of the racial solidarity that she has hypocritically
paraded in public for most of her life. Michelle has made out like a bandit in this cruel and inhuman
line of work. In 2006, the Chicago Tribune reported that Mrs. Obama’s compensation at the
University of Chicago Hospital, where her title is vice president for community affairs, jumped
from $121,910 in 2004 (just before Barry was installed in the Senate), to $316,962 in 2005, just
after he took office. This does not include the honoraria Michelle takes in from serving on corporate
boards. 29
Michelle’s rapidly expanding personal income has raised more than eyebrows: ‘“Mrs. Obama is
extremely overpaid,” one citizen wrote in a letter to the editor of the Tribune, after the paper
published a story questioning the timing of the award. “Now, what is the real reason behind such an
inflated salary?” Her bosses at the University of Chicago Hospitals vigorously defended the raise,
pointing out that it put her salary on a par with that of other vice-presidents at the hospital. (As it
happens, Obama has spent most of her life working within the two institutions for which she most
frequently claims a populist disdain: government and the health-care system.)’ (New Yorker, March
11, 2008)
Michelle’s role in excluding indigent patients from the University of Chicago Hospital where she works
has also drawn attention from congressional investigators. One such instance: ‘The ranking minority member
on the Senate Finance Committee is seeking information from the non-profit University of Chicago Medical
Center about jobs held by Sen. Barack Obama's wife and one of his best friends,’ reported Joe Stephens of the
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 127
Washington Post. ‘Sen. Charles Grassley (R-Iowa) on Friday sent the center a letter saying he was "troubled"
by recent news reports about the hospital's efforts to steer patients with non-urgent complaints away from the
center' emergency room to local clinics. Michelle Obama was a key figure behind the initiative. The letter,
which Grassley released to the public September 2, 2008, does not directly mention the Democratic
presidential nominee, his wife or his campaign. Grassley also asked for financial data, board minutes and
other documents related to hiring, job promotion, business contracting and care for the poor.’ ‘For years,
Grassley has argued that non-profit hospitals should spend more resources on the poor and be more
financially accountable, in return for the millions of dollars they keep each year as a result of their tax-exempt
status. Grassley has periodically demanded financial data from selected hospitals and issued reports detailing
perceived shortcomings. He has also chaired a Senate hearing on the topic.’ Grassley also wanted information
on the hospital’s conflict of interest policy, and also wanted to probe hiring practices, evidently including the
public relations contract which went to Obama spinmeister David Axelrod, and a computer contract that was
awarded to Obama moneybags Robert Blackwell.
(http://voices.washingtonpost.com/washingtonpostinvestigations/2008/09/sen_grassley_seeks_university.html
) Here is how the hospital itself advertised a fall 2005 community forum, complete with free dinner, chaired
by Michelle Obama: ‘Michelle Obama, vice president for community affairs at the University of Chicago
Hospitals, will serve as moderator. The South Side Health Collaborative is a partnership, supported by the
federal Health Resources and Services Administration, which is devoted to improving access to quality
healthcare for the uninsured, underserved, and special needs populations. The Collaborative pulls together 13
Federally Qualified Health Clinics, two social service organizations, private physicians, and the University of
Chicago Hospitals. Its goal is to help patients find a medical home, enabling them to build a lasting
relationship with a primary care physician in their neighborhoods. Since the program began in January 2005,
members of the Collaborative have interviewed more than 12,000 patients who came to the emergency room
at the University of Chicago Hospitals for care because they did not have a regular physician. They have
helped more than 1,000 patients connect with a primary care provider, often making an appointment for
follow-up care before the patient leaves the ER.’ (http://www.uchospitals.edu/news/2005/20051108-
collaborative.html) The big question was of course whether Barky’s political clout as a newly minted US
Senator had been used to procure the federal grant for Michelle’s exclusion operation, raising Obama’s
signature problems of dirty politics, influence peddling, and graft.
The dividing line between the elite and the mass in modern America comes down to one
question: do you have servants? Bush did, and the Obamas emphatically do. As the New Yorker
reported, “The Obamas employ a full-time housekeeper, and Michelle tries to see a personal trainer
four times a week,” but they claim that they do not also have a nanny. In 2005, “the Obamas moved
to a $1.65-million Georgian Revival mansion in Hyde Park, which features a thousand-bottle wine
cellar and bookcases made of Honduran mahogany.”
TYPICAL PARVENU STYLE
The Obamas, in short, are typical parvenu arrivistes, and they revel in it: ‘The Obamas are
fixtures of Chicago’s philanthro-social scene: there they are, waving from a silver Mustang at the
annual Bud Billiken Parade and Picnic; there’s Michelle delivering remarks at the Alpha Kappa
Alpha Sorority’s Seventy-second Central Regional Conference; there she is arriving at the Black
Creativity Gala with a shopping bag full of “Obama for Senator” buttons. Cindy Moelis recalls
being shocked, after agreeing to host Obama’s baby shower, that the guest list included fifty people.
“Hmmm,” Michael Sneed, the Sun-Times columnist, reported in 2006. “Sneed hears rumbles a mink
coat reportedly belonging to Michelle Obama, wife of Sen. Barack Obama, may have gone missing
following the Rev. Jesse Jackson’s birthday bash at the South Shore Cultural Center.”’(New Yorker,
March 11, 2008)
128 Barack H. Obama: The Unauthorized Biography
Is Michelle being criticized unfairly? ‘Some observers have detected in Obama an air of
entitlement. Her defenders attribute these charges of arrogance to racist fears about uppity black
women. While it’s a stretch to call the suggestion that Obama projects an air of self-satisfaction
bigoted, it may at least reflect a culture gap: last April, after Maureen Dowd wrote a column
criticizing Obama for undermining her husband’s mystique, a blog riposte, circulated widely on the
Internet, was titled “The White Lady Just Doesn’t Get It.” The sentiment—that America was in a
mess, and Mrs. Obama was not happy about it—was not a new one, but her unfortunate formulation
instantly drew charges that she was unpatriotic. Bill O’Reilly spawned his own scandalette,
remarking, “I don’t want to go on a lynching party against Michelle Obama unless there’s evidence,
hard facts, that say this is how the woman really feels.” Victor Maltsev, of Rego Park, wrote to the
Post, “Obama wants to be our next first lady? Watch out, America!” Cindy McCain seized the
opportunity to draw a sniffy contrast between the Obamas and her and her war-hero husband, telling
a cheering crowd, “I don’t know about you—if you heard those words earlier—I’m very proud of
my country.”’ (New Yorker, March 11, 2008)
Michelle embodies the condescending, patronizing attitude of the entire Obama operation: it is a
mission to the benighted denizens of Middle America, viewed as ethnographic material. Michelle
has to ask for votes, and she finds that this is beneath her new-found opulence and social prestige:
‘Perhaps Obama’s high-handedness is preëmptive, her way of “claiming a seat at the table”—as she
is fond of calling enfranchisement in the power-brokering structure—rather than waiting to be
offered one. It’s as though she figures she might as well say that she and her husband are all that
before someone can say that they aren’t. And there’s a sort of strategic genius to her presentation of
campaigning as grinding work that takes her away from her family, rather than a glorious tour of the
world’s greatest country that she would be thrilled to be undertaking even if she didn’t have to. She
frequently tells her audiences, “I don’t care where I am, the first question is ‘How are you managing
it all? How are you holding up?’ “The effect, of course, is to set up an expectation of tribute, like
those hairdressers who display all their gifts in the days leading up to Christmas. By loudly voicing
her distaste for retail politicking, Obama makes people feel as though, by showing up, she were
doing them a favor.” (New Yorker, March 11, 2008)
Michelle may well be more devoted to Jeremiah Wright than Barry is. At a recent campaign
stop, her exordium went as follows: “You all got up bright and early just for me?” she asked the
mostly elderly, almost all-black crowd. “Yes!” they roared. Obama continued, “On behalf of my
church home and my pastor, Reverend Wright, I bring greetings.” After warming up the crowd,
Obama launched into her stump speech, a forty-five-minute monologue that she composed herself
and delivers without notes. (New Yorker, March 11, 2008)
The New Yorker, a bastion of pro-Obama devotion, provides some clues to the ultimate sources
of Michelle’s rage, hatred, and hauteur. She is tormented by feelings of inferiority, low self-worth
and self-esteem, and the sense of impending doom. One is reminded of Napoleon’s mother, who
kept repeating “longo mai,” meaning, in her Corsican dialect: Let’s hope all this lasts. People like
this generally try to sock away a stash of money in case it doesn’t last, and Michelle will likely be
no exception.
When the New Yorker began asking about this obvious internal stress, Michelle replied:
“What minority communities go through still represents the challenges, the legacies, of
oppression and racism. You know, when you have cultures who feel like second-class citizens
at some level . . . there’s this natural feeling within the community that we’re not good enough .
. . we can’t be as smart as or as prepared—and it’s that internal struggle that is always the
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 129
battle.” She talked about her first trip to Africa—Barack took her to Kenya to meet his father’s
family—and the realization that, as much as white society fails to account for the African-
American experience, so does any conception of pan-blackness. In The Audacity of Hope,
Barack Obama perceives a vulnerability in his wife, one so closely guarded that even her
brother professed to me never to have noticed it. There was “a glimmer that danced across her
round, dark eyes whenever I looked at her,” he writes, “the slightest hint of uncertainty, as if,
deep inside, she knew how fragile things really were, and that if she ever let go, even for a
moment, all her plans might quickly unravel.” (New Yorker, March 11, 2008)
Napoleon’s mother again. Could Michelle be a candidate for a nervous breakdown, or else for
uncontrollable transports of rage – likely to be couched in racist terms – out on the campaign trail?
We may be close to finding out.
OBAMA JOINS MINER, BARNHILL, AND GALLAND, REZKO’S LAWYERS
Obama went to work for the Chicago law firm of Miner, Barnhill, and Galland. The firm
presents itself on its current web site in these terms: “Miner, Barnhill, & Galland was founded in
1971 and today consists of fourteen lawyers in two offices. Ten lawyers are resident in the Chicago
Office and four lawyers office [sic] in Madison, Wisconsin. The firm has acquired a national
reputation in civil rights litigation and neighborhood economic development work. In addition to its
practice in these areas, the firm represents a broad range of individual and corporate clients,
providing a wide variety of legal services.” On the surface it was a mix of socially conscious left-ofcenter
causes, therefore, with a good dose of lucrative corporate work, meshing well with Obama’s
neoliberal camouflage profile. But note the “economic development work,” since here lies the rub.
According to at least one account, Obama already knew that he wanted to get elected in the
Hyde Park neighborhood, a region of great sensitivity to the University of Chicago, and thus to the
Rockefeller family and to the US intelligence community in general:
When Judson H. Miner invited a third-year Harvard Law School student named Barack Obama
to lunch at the Thai Star Cafe in Chicago before his 1991 graduation, Mr. Miner thought he was
recruiting the 29-year-old to work for his boutique civil rights law firm. Instead, Mr. Obama
recruited him.
Mr. Obama made it clear that he was less interested in a job than in learning the political lay of
the land from a man who had served at the right hand of the city’s first black mayor, Harold
Washington. Mr. Miner, who had helped with the historic 1983 election of Mr. Washington and
served as his corporation counsel, proved a willing tutor.
The confident younger man “cross-examined” Mr. Miner about how Mr. Washington had
managed to emerge from an election riven by bigotry to form a governing coalition in which he
“got along with all these different types of folks,” Mr. Miner recalled.
“During the course of our talking, it came out that people who knew he was having lunch with
me were trying to convince him that this was the worst place for him to go. He shared this with
me — he was amused,” Mr. Miner said, laughing. “This isn’t where you land if you want to
curry favor with the Democratic power structure.”
It was, however, exactly where an aspiring politician might land if he happened to want to run
for office from Hyde Park, a neighborhood with a long history of electing reform-minded
politicians independent of the city’s legendary Democratic machine. Mr. Obama chose to put
130 Barack H. Obama: The Unauthorized Biography
down roots in the neighborhood after graduating law school and marrying Michelle Robinson, a
Chicago native and fellow lawyer. […]
Mr. Miner was “enormously helpful” in introducing Mr. Obama to the liberal coalition of
blacks and whites that had helped elect Mr. Washington, said Valerie Jarrett, a longtime friend
and close adviser. “It brought in a whole new circle of people.” (Jo Becker and Christopher
Drew, “Pragmatic Politics, Forged on the South Side,” New York Times, May 11, 2008.)
At this critical point in his career, Obama once again seemed to have a guardian angel or familiar
spirit hovering overhead, this time in the form of Thomas Ayers, the august father of Barky’s
terrorist friend Bill Ayers, the aging Weatherman of whom we will have much to recount. The
solicitude of Thomas Ayers and his family, including Bernardine Dohrn, for Obama’s upward
mobility, we stress again, is part of a pattern of foundation and intelligence community intervention
in favor of Obama which started when his mother joined the Ford Foundation, and which became
intense during the years when Obama and Zbigniew Brzezinski were at Columbia in 1981-1983.
Steve Diamond suggested how Obama was hired:
The partner who hired him was Judson Miner. Miner was a well-known left wing lawyer in
Chicago who had been counsel to the progressive black mayor in the 80s, Harold Washington.
But Miner possibly also had ties to the Ayers family. He was law school classmates with
Bernardine Dohrn at the University of Chicago (both Class of 1967). He formed a lawyers
group against the war after graduation and organized a left wing alternative to the local Chicago
bar association.’ (Steve Diamond, ‘Who “sent” Obama?’ globallabor.blogspot.com, April 22,
2008)
Obama also taught in an adjunct teaching position at the University of Chicago, and he has
consistently tried to upgrade this into the claim that he was a law “professor,” a title to which he
never had any right. If he were to go to Germany, he could be prosecuted for Titelmißbrauch, the
abusive faking of academic titles. On March 27, 2007 Obama told a fundraiser, “I was a
constitutional law professor, which means unlike the current president I actually respect the
Constitution.” But Obama is an imposter. He has never been a professor, except in the most generic
sense. Obama has been a “Senior Lecturer (on leave of absence)” at the University of Chicago Law
School, which is controlled by his backers and controllers. He has taught courses in Constitutional
Law III: Equal Protection and Substantive Due Process, Current Issues in Racism and the Law, and
Voting Rights and the Democratic Process.
THE CHICAGO CESSPOOL OF CORRUPTION:
OBAMA’S HEART OF DARKNESS
But there was much more than meets the eye at the modest Chicago left-wing law firm now
called Davis, Miner, and Barnhill law firm. Evelyn Pringle has gone back to the time after Obama’s
graduation from Harvard Law School, when he was hired by what then was Miner, Barnhill, and
Galland. Even at that time, Allison Davis was the dominant personality at the firm. And the secret
of Miner, Barnhill, and Galland was that it was Tony Rezko’s law firm:
After turning down the surprise job offer from Rezko, Obama expects voters to believe that he
just happened to get hired at the small 12-attorney Davis law firm, which just happened to
represent Rezmar in development deals. And then a couple years later, Rezko’s companies just
happened to appear on the very first contributions made to the “Friends of Obama” committee
to launch his political career as a state senator.’ (Evelyn Pringle, op-ed news)30
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 131
Another Chicago analyst reminds us that it was Rezko who made Allison Davis a big man
through his patronage:
Rezko got Allison S. Davis appointed to the Illinois State Board of Investment, in control of
billions in state retirement funds. Although Davis has not been charged with wrongdoing, the
feds are reportedly pressing a probe of that agency. Davis is currently the president of that State
Board. Barack Obama was a Harvard Law student in 1990 when he interviewed for a job with
Tony Rezko’s slum-redevelopment firm. He didn’t go directly into the Rezko company. But in
1993 Obama was hired by Allison S. Davis, whose law firm (Davis Miner Barnhill & Galland)
represented Rezko’s operations over the years, while Rezko raised cash for Obama’s electoral
campaigns. Davis became Rezko’s personal financial partner in slum-redevelopment deals,
which were then backed by State Senator Obama. (John Desiderio, Working Life, January 27,
2008)
“Operation Board Games” is the code name for the prosecution of Rezko, joined potentially by
Chicago Mayor Richard Daley, Illinois Governor Rod Blagojevich, and other Democratic and
Republican pols, ward-heelers, and fixers. One of the central points of this probe is the Davis,
Miner, and Barnhill law firm, where Obama was employed. Pringle outlines the case as follows:
The investigation dubbed “Operation Board Games,” into the influence peddling within the
cesspool of corruption that encompasses Illinois politicians from both major parties, has
developed into multiple subplots, many of which feature Barack Obama. They also give the
details of Obama’s involvement in a slumlord business largely operating out of the Chicagobased
Davis, Miner & Barnhill law firm, which hired Obama in 1993, with his boss, Allison
Davis, reaping in the profits with Rezko’s development company, Rezmar. [Pringle’s] “Board
Games for Slumlord” article gives in-depth details of the federal investigation along with the
names of people who are listed as “Co-Schemers” and “Individuals” in the indictments issued
thus far. Therefore for the most part, this article will refer to all the scams collectively as what
prosecutors refer to as “pay-to-play” schemes. The Davis Miner Barnhill & Galland law firm,
where Obama worked for nearly a decade, served as a hub for a slew of slumlord deals, many
that benefited the firm’s founder, Allison Davis, and Obama’s claims that he knew nothing
about the inner workings of this small firm, represent an insult to the intelligence of the
American public…. Allison Davis, Obama’s boss at the law firm, is also listed in legal
documents as playing a part in setting up a major extortion attempt in the Board Games case.
(Pringle, oped news)
A recent expose published in the Boston Globe also points directly to Obama’s choice of law
firms to work for not as a selfless gesture of idealistic commitment, but rather as an entrée into the
sleazy world of Chicago graft:
Allison Davis, Obama’s former law firm boss, dabbled in development for years while he
worked primarily as a lawyer. He participated in the development of Grove Parc Plaza. And in
1996, Davis left his law firm to pursue a full-time career as an affordable housing developer,
fueled by the subsidies from the Daley administration and aided, on occasion, by Obama
himself. Over roughly the past decade, Davis’s companies have received more than $100
million in subsidies to renovate and build more than 1,500 apartments in Chicago, according to
a Chicago Sun-Times tally. In several cases, Davis partnered with Tony Rezko. In 1998 the two
men created a limited partnership to build an apartment building for seniors on Chicago’s South
Side. Obama wrote letters on state Senate stationery supporting city and state loans for the
project. In 2000 Davis asked the nonprofit Woods Fund of Chicago for a $1 million investment
132 Barack H. Obama: The Unauthorized Biography
in a new development partnership, Neighborhood Rejuvenation Partners. Obama, a member of
the board, voted in favor, helping Davis secure the investment. (Binyamin Appelbaum, “Grim
proving ground for Obama’s housing policy,” Boston Globe, June 27, 2008)
OBAMA: THE MOST CORRUPT SINCE HARDING? OR SINCE GRANT?
It was a form of corruption which siphoned off immense quantities of public resources in order
to slake the greed of a very small group of insiders, wheel horses, and fixers. In Pringle’s
evaluation, Barack Obama has a long history of working with Chicago Mayor Richard Daley and
governors of Illinois, including the current Governor Rod Blagojevich, in doling out government
funding for housing development in Chicago. His history is hardly a model of success, except for
the hundreds of millions in profits made by the chosen few slumlords. Less than a year ago, in the
April 26, 2007, Chicago Sun-Times, Fran Spielman reported that Chicago aldermen were accusing
the Daley administration “of being asleep at the switch while low-income housing projects
developed by the now-indicted Tony Rezko collapsed into disrepair…The spigot of loans, grants
and tax credits should have been cut off when the first of 30 taxpayer-supported Rezko buildings in
Chicago fell into disrepair, the aldermen said,” according to the report.’ Obama’s resume is
notoriously thin, but it already contains an ample dossier of graft, corruption, and malfeasance in
office.
Obama’s corruption, starting with the beginning of his law practice in Chicago, also has
implications for the future of US housing policy for lower income groups, sure to be a key item in
the wake of the mortgage crisis, and the collapse of the housing industry as it had existed since the
Carter years. According to Pringle, there are already signs that Obama wants to bring the
discredited, scandalous, and failed Chicago model to Washington, where he can launch a new phase
of gangsters and racketeers of the Rezko-Auchi stripe feeding at the public trough. Pringle foresees
that
Obama now wants to bring this dog and pony show to Washington. I can see it now. His former
boss, Allison Davis, at the Davis, Miner & Barnhill law firm, that served as a hub for Rezko’s
thriving slumlord business for a decade before Davis quit and became partners with Rezko, will
be appointed to head the Department of Housing and Urban Development. Davis and his
partners, which include his sons Jared and Cullen, have received more than $100 million in
taxpayer subsidies to build and rehab apartments and homes over the past 10 years and have
made at least $4 million in development fees, according to the Times. “Davis has gotten deal
after deal from the mayor, helping to make Davis one of the city’s top developers,” Tim Novak
noted in the November 7, 2007 Sun-Times. There’s already a plan in place to guarantee that the
Chicago model of “community development” is carried out in the White House. In his “Plan to
Fight Poverty in America,” Obama says, “we should create an Affordable Housing Trust Fund
to develop affordable housing in mixed-income neighborhoods.” The Plan will create a “White
House Office of Urban Policy” to develop a strategy for metropolitan America, and Obama will
appoint a Director of Urban Policy who will report directly to him, as president, to “coordinate
all federal urban programs,” the Plan states. Mayor Daley will probably be hired for this gig.
The Plan explains that Obama will task his new Director “to work across federal agencies and
with community and business leaders to identify and address the unique economic development
barriers of every major metropolitan area in the country.” (Pringle, oped news)
The last big scandal at HUD goes back to the tenure of “Silent Sam” Pierce, an African-
American who was appointed by Reagan. In this case, HUD official Deborah Gore Dean, a cousin
III: Foundation-Funded Racism: Jeremiah Wright and Michelle 133
of later Vice President Al Gore, was convicted of conspiracy to defraud the federal government,
plus perjury, and did some jail time. Sam Pierce was manifestly involved in mismanagement, abuse
and political favoritism, but an independent counsel was unable to get the goods on him. This gives
us the merest inkling of what an Obama administration may have in store. It may prove to be the
most corrupt administration since Warren Gamaliel Harding, almost a century ago.
Obama will doubtless seek to portray any abuses as the inevitable by-products of his valiant
attempt to redress the balance of minority oppression. Indeed, his legal colleagues appear to be
consummate masters in the gaming of the system of quotas, set-asides, preferences, and other
mechanisms of discrimination which have grown up under the aeges of the post-Nixon affirmative
action policies. As Pringle points out,
An example of the Chicago version of a minority-owned business is DV Urban Realty Partners,
where Allison Davis, who is amillionaire many times over, owns 51%, and Robert Vanecko,
Mayor Daley’s nephew, owns 49%. First of all, “Barack Obama you are no Robert Kennedy,”
and we’re still asking the question because the careers of politicians like Obama are funded by a
political mafia which has turned helping the poor into a cottage industry. Cursory review of
Illinois campaign records shows Allison Davis and his family members giving close to $16,000
to Obama’s presidential campaign. The Sun-Times reports that Davis has donated more than
$400,000 to dozens of political campaigns, and the top beneficiaries include Mayor Daley,
Blagojevich and Obama.” (Pringle, op-ed news)
It was also thanks to the Davis, Miner & Barnhill law firm that Obama was able to forge an
additional set of links with the Chicago foundation community, starting with the Woods Fund.
Pringle shows that Obama began serving on the board of Woods Fund, a Chicago charity
foundation, in 1993, the same year he was hired by Davis’ law firm. In 2000, Davis went to the
foundation to help fund his plans to build low income housing. Obama voted to invest $1 million
with Neighborhood Rejuvenation Partners, a $17 million partnership that Davis still operates,
according to a report by Novak in the November 29, 2007 Sun-Times. [Daley hack Martin] Nesbitt
is also vice president of the Pritzker Realty Group, where he procures new real estate investment
opportunities, retail investments and developments for the Pritzker Group….’ This is Martin
Nesbitt, a top official of the Chicago Housing Authority, where the slogan on the logo reads
“Change” – no doubt to comfort Rezko’s victims.31 A quick trip to the Huffington Post site showed
tens of thousands of dollars donated to Obama from people with the last name Pritzker in the
Chicago area,’ with many from the Pritzker clan. Penny Pritzker, whose family controls Hyatt
Hotels, is the National Finance Chair for the Obama campaign, and presides over Obama’s
equivalents of the Bush Pioneers or Rangers. The party label may change, but the plutocracy
remains. As for Nesbitt, he has been showing up in television profiles of Obama as a distinguished
commentator on issues like Barky’s anguish when he was forced to part company with Jeremiah
Wright, and so forth; Nesbitt is never asked about shady dealings in Chicago.
CHAPTER IV: APPRENTICESHIP WITH FOUNDATIONFUNDED
TERRORISTS: AYERS AND DOHRN
“We must be alert to the CIA agents who would promote the polarization of our society. We
must examine the evidence which indicates that fake revolutionaries, who are inciting
insurrection in our cities, have had their pockets and minds stuffed by the CIA.” – Vincent
Salandria, 1971.
“How could we have done the FBI’s work better for them?” –Mark Rudd, Weatherman leader.
“You don’t have to be a cop to do a cop’s work.” – Ward Churchill, ex-Weatherman
“God, what a great country. It makes me want to puke.” – Bill Ayers, Weather Underground
Public opinion is now broadly aware of the close personal relationship and friendly affinity
which has existed for two decades between the candidate Obama and the rehabilitated but
unrepentant and defiant Weatherman terrorist bombers, William Ayers and Bernardine Dohrn. As
David Axelrod told the Politico, “Bill Ayers lives in his neighborhood. Their kids attend the same
school … They’re certainly friendly, they know each other, as anyone whose kids go to school
together.”32 Ayers has written about his involvement with the group’s bombings of the New York
City Police headquarters in 1970, the U.S. Capitol in 1971 and the Pentagon in 1972. Obama’s
quest for elective office started in 1995 with a fund-raising meeting held at the home of Ayers and
Dohrn. A $200 campaign contribution from Ayers is listed on April 2, 2001 by the “Friends of
Barack Obama” campaign fund. The two appeared speaking together at several public events,
including a 1997 University of Chicago panel entitled, “Should a child ever be called a ‘super
predator?’” and another panel for the University of Illinois in April 2002, entitled, “Intellectuals:
Who Needs Them?” Ayers and Obama are friends. Ayers was the key man in giving Obama his
first big visible and public break in the foundation world, his job as the chairman of the board of the
Annenberg Chicago Challenge.
The basic facts of the meeting at the Ayers-Dohrn abode are these: ‘In 1995, State Senator Alice
Palmer introduced her chosen successor, Barack Obama, to a few of the district’s influential liberals
at the home of two well-known figures on the local left: William Ayers and Bernardine Dohrn.
While Ayers and Dohrn may be thought of in Hyde Park as local activists, they’re better known
nationally as two of the most notorious — and unrepentant — figures from the violent fringe of the
1960s anti-war movement. Now, as Obama runs for president, what two guests recall as an
unremarkable gathering on the road to a minor elected office stands as a symbol of how swiftly he
has risen from a man in the Hyde Park left to one closing in fast on the Democratic nomination for
president. “I can remember being one of a small group of people who came to Bill Ayers’ house to
learn that Alice Palmer was stepping down from the senate and running for Congress,” said Dr.
Quentin Young, a prominent Chicago physician and advocate for single-payer health care, of the
informal gathering at the home of Ayers and his wife, Dohrn. “[Palmer] identified [Obama] as her
successor.” Obama and Palmer “were both there,” he said. Obama’s connections to Ayers and
Dohrn have been noted in some fleeting news coverage in the past. But the visit by Obama to their
home — part of a campaign courtship — reflects more extensive interaction than has been
previously reported.’33
The period between 1991 and 1995 is the time when Obama assembles his network with its
various components – the politically connected lawyer Allison Davis, the mafioso slumlord Tony
Rezko, and the terrorists turned education operatives in the service of the foundations, Bill Ayers
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 135
and Bernardine Dohrn. It is a group redolent of the foundations and thus of the left wing of the
intelligence community, and it will remain in place around Obama until the present day. Obama
was now preparing for his first run at elective political office. To do this, he needed a base of
activists, supporters, and donors. Obama’s pedigree will be clearly exhibited by the method by
which he chose to go about addressing this task. As we have already seen, Obama can be
considered as a product of the Ford Foundation and its associated satellite foundations. Obama’s
mother worked directly for the Ford Foundation. Obama himself worked for the Gamaliel
Foundation, a satellite of the Ford mother ship. This is his time as a “community organizer.”
Obama’s church was fully stocked with theologians whose careers had been promoted by the Ford
Foundation. Thus, we may say that Obama’s hardware configuration was largely due to the efforts
of the Ford Foundation and its satellites.
The software, as we have stressed, came largely from Zbigniew Brzezinski and his associates in
the Trilateral Commission-Bilderberger-New York Council on Foreign Relations orbit, who had
been training and indoctrinating Obama for almost one and a half decades at this point. Since many
traditional functions of the US intelligence community had been privatized into the world of front
companies and especially the foundations and nongovernmental organizations, we can for purposes
of brevity and clarity label the matrix of Obama’s software as the left wing of the intelligence
community, or the left CIA. This is the network to which Obama quite naturally and indeed
inevitably turned when the time came for him to run for the Illinois State Senate. Over time,
intelligence networks cannot be hidden, since the same persons often appear in radically different
roles. This means that their momentarily announced loyalties and purposes were spurious and
fictitious: what counted all along was their loyalty to the intelligence network to which they belong.
Obama wanted to represent that part of Southside Chicago which is called Hyde Park, a
neighborhood which is split between the comfortable homes of professors at the University of
Chicago on the one hand, and a brutal and impoverished black inner-city ghetto on the other. Hyde
Park is a neighborhood split by fault lines of racial tension. The political importance of the
University of Chicago for the US intelligence community can hardly be overestimated. The
University of Chicago’s troubled frontier with the black ghetto has been something of a concern to
the US ruling financier oligarchy for some time, since relations there have been so bad that the
university might have to move away, a colossally expensive project. A whole cottage industry of
academic-grade poverty pimps and foundation operatives has grown up to provide border guards for
the line of demarcation between the university and the ghetto. Those who succeed as border guards
and gatekeepers along this line are marked for preferment; the striving Obama power couple are one
example.
Another is Danielle Allen, who (like Bernardine Dohrn) has been the recipient of the largesse of
the MacArthur Foundation – in Allen’s case via a coveted genius grant, which is a program used to
promote philistine mediocrities to help dumb down the academic world, according to the general
program of the foundations. Allen has just become UPS Foundation Professor in the School of
Social Sciences at the Institute for Advanced Study in Princeton, New Jersey – she is the first black
fellow of that elite think tank, where the arch-oligarchical operative Bernard Lewis (a key apostle of
the Iraq war) also resides. Lately, Allen has been going on the radio, voicing shrill indignation over
internet attacks on the Redeemer. A recent puff piece on the postmodern Allen stresses her role as a
gatekeeper active in ‘the University of Chicago’s surrounding Hyde Park neighborhood, where
town and gown have a long history of … “interracial distrust.”’ Allen, the article goes on to say,
learned in Hyde Park that ‘it was impossible to ignore the poor and often violent world not far from
campus. Hyde Park today is a racially mixed, mostly middle-class neighborhood, but you don’t
136 Barack H. Obama: The Unauthorized Biography
have to walk far to find real urban blight. In the ‘50s and ‘60s, as the South Side of Chicago was
getting poorer and blacker, the university administration grew increasingly concerned that parents
would refuse to send their children to such a place. There were rumors that the university was
considering moving its campus out of Hyde Park. Instead, it launched an aggressive policy of urban
renewal, relying heavily on draconian eminent domain laws that said that if a private developer
owned 60 percent of a block, it could claim the remaining 40 percent through eminent domain.
Those losing their houses were mostly black, while the university was mostly white. One
consequence of this was a feeling of bitterness and suspicion toward the university that has lingered
for decades. All of this was troubling….’ (Merrell Noden, “At home in two worlds,” Princeton
Alumni Weekly, March 5, 2008) So this is the area where Obama decided to pursue his political
career, obviously as a black-faced gatekeeper and protector of the University of Chicago’s interest
against the black poor.
As the veteran public servant Larry Johnson showed on his noquarterusa.net blog, the truth was
that Obama WAS an employee of a Bill Ayers enterprise for about eight years. In reality, the
terrorist Ayers had been Obama’s boss: “Barack also was essentially an employee of Bill Ayers for
eight years. In 1995, the Chicago Annenberg Challenge was created to raise funds to help reform
the Chicago public schools. One of the architects of the Challenge was none other than Professor
Bill Ayers. Ayers co-wrote the initial grant proposal and proudly lists himself on his own website as
the co-founder of the Challenge. And who did William Ayers, co-creator of the Challenge, help
select as the new director of the board for this program? Barack Obama. Barack Obama was the
first Chairman of the Board of the Chicago Annenberg Challenge. This appointment came at a
crucial time in Barack’s life. He was on the verge of challenging longtime state Senator Alice
Palmer for her job. When Barack decided to run, it is no surprise that he turned to William Ayers
and his wife, Bernardine Dohrn, for help in organizing the campaign and in hosting his first
fundraiser in the district. Obama served on the board for eight years until the Challenge ended in
2003. Bill Ayers was intimately involved in the Challenge over this same time period.”
(Noquarterusa.net, April 26, 2008) This was in addition to Ayers’ well-documented role in
organizing the fundraiser that kicked off Obama’s first run for elective office in 1995. The old
provocateurs of the left CIA were now serving as a support network for the next generation of
domestic counterinsurgency operatives.
THE WEATHERMEN’S LONG MARCH THROUGH THE INSTITUTIONS
HAS PRODUCED OBAMA
The University of Chicago is of course the home of the Milton Friedman Chicago boys, the archreactionary
or quasi-fascist economists who dictated the fascist austerity program imposed by the
Pinochet dictatorship in Chile in the middle 1970s, and who have helped destroy or impoverish
many other countries around the world from Bolivia to Poland to Russia. One of them is the
infamous Skull and Bones member Austan Goolsbee, a top economic controller of the Obama
campaign. But the intelligence community also has a left wing face. Here we find the Black
liberation theologian and Ford Foundation operative Dwight Hopkins, who shuttles back and forth
to Wright’s Trinity United Church of Christ. Here also we find the residue of many intelligence
community operations of previous decades, and in this context one group stands out above all
others: the veterans of the more extreme factions of Students for a Democratic Society, the most
important left wing organization of the 1960s and indeed the largest left-wing political formation in
all of American history. Here we find, in other words, a group of left-wing radicals who are well
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 137
advanced in the long march through the institutions, working within the system and achieving
remarkable positions of institutional authority in the process:
‘Today one of the approaches used by these types is the “long march” through the (presumably
“bourgeois”) institutions. (See [a] discussion of it by “Progressives for Obama” supporter, Fidelista
and former SDS leader Carl Davidson.) Of course, the “long march” referred to is that taken by
Mao and the People’s Liberation Army in 1934. Now, Davidson et al. apply the concept to the
tactics of the “left” inside various “reform movements” such as the anti-war movement. Davidson
was one of the organizers of the 2002 anti war rally at which Obama first spoke out against the
war.’ (Steve Diamond, ‘Who “sent” Obama?’ globallabor.blogspot.com, April 22, 2008)
Diamond also notes: ‘Bill Ayers appears to be attempting to lead a similar “long march” in the
education world. Ayers is a vigorous advocate of local control along with a related concept called
“small schools,” most likely because he believes it gives him the potential to build a political base
from which to operate. He has discussed these ideas in speeches and writings on his blog. As he
said in a speech he gave in front of Hugo Chavez in Venezuela in late 2006: “Teaching invites
transformations, it urges revolutions small and large. La educación es revolución!” (Steve Diamond,
‘Who “sent” Obama?’ globallabor.blogspot.com, April 22, 2008)
Some of Obama’s friends were openly terrorists and bombers from the incendiary Weatherman
faction, like Bill Ayers and Bernardine Dohrn. Others did not join the Weathermen in their long
years of underground urban guerrilla struggle: here we find such figures as Carl Davidson and
Marilyn Katz. Assorted leaders of various successor organizations to the Black Panthers and/or the
Black Liberation Army will also appear. The common denominator of many of these figures is that
they were seldom the spontaneous radicalized student militants that they pretended to be, but were
generally elements of pollution: police agents, provocateurs, wreckers, sent in to the radical student
left to do a job of sabotage, discrediting, and crippling.
If Bill Ayers and Bernardine Dohrn had been the authentic left-wing proto-fascist anarchists and
bombers they have always claimed to be, they might well have faced an appointment with the gas
chamber or the electric chair, given their implication in criminal conspiracies which led to the
deaths of a significant number of persons, including police officers. Instead, Ayers and Dohrn have
been rewarded and taken care of by some mysterious force through their receipt of prestigious
endowed professorships in which they now have tenure. Was the hand that rewarded Ayers and
Dohrn the same hand which has promoted and fostered the career of Obama? All indications are
that it was, and that it was a hand attached to the left side of the US intelligence establishment.
Right-wing commentators will rail that Ayers and Dohrn, Wright and Obama are authentic
communists seeking to carry out the revolutionary program of Karl Marx. The argument here, by
contrast, is that all of these figures are synthetic frauds who have been deployed to carry out the
program of finance capital, as articulated through certain key parts of the US intelligence
community who have never concealed their close relations with Wall Street. The difference is
highly important. It is the difference between an ignorant right-wing hallucination which deserves
to be mocked and laughed at, and an actual historical philosophical analysis of the systematic
deformation and manipulation of social life by the immense power of an intelligence community
that boasts a legal budget in the neighborhood of $100 billion, which is supplemented by hundreds
of billions more coming from drug-running, gun-running, slave trading, and other nefarious
activities, plus what the foundation endowments contribute. Only if they are understood in this way
138 Barack H. Obama: The Unauthorized Biography
can figures like Wright, Ayers, Dohrn, and the rest open a window into the process which has
dished up the Manchurian candidacy of Obama.
OBAMA’S NEST OF RACIST AND TERRORIST PROVOCATEURS
The fact that Obama emerges from such a nest of racist and terrorist provocateurs has begun to
dawn on a number of researchers. Steve Diamond writes: ‘The people linked to Senator Obama
grew to political maturity in the extreme wings of the late 60s student and antiwar movements. They
adopted some of the worst forms of sectarian and authoritarian politics. They helped undermine the
emergence of a healthy relationship between students and others in American society who were
becoming interested in alternative views of social, political and economic organization. In fact, at
the time, some far more constructive activists had a hard time comprehending groups like the
Weather Underground. Their tactics were so damaging that some on the left thought that
government or right-wing elements helped create them. There is some evidence, in fact, that that
was true (for example, the Cointelpro effort of the federal government.)’ (Steve Diamond, ‘Who
“sent” Obama?’ globallabor.blogspot.com, April 22, 2008) Correct. The Weathermen were spooks,
provocateurs who knew what they were doing, on some level.
THOMAS AYERS OF THE BOARD OF GENERAL DYNAMICS,
TOP PENTAGON CONTRACTOR AND SPOOK
If we try to identify Obama’s personal patron during the Chicago years, we must conclude that
Obama owed everything to the Ayers family – to ruling class patriarch Thomas Ayers, his son Bill
Ayers the terrorist, to his daughter-in-law Bernardine Dohrn (another terrorist), and to Bill’s brother
John. This is also the finding of Steve Diamond. So, who did “send” Obama? The key I think is his
ties not to well-connected über lawyer Newton Minow … but more likely to the family of
(in)famous former Weather Underground leader Bill Ayers.
Obama was a community organizer from about 1985 to 1988, when he left Chicago for Harvard
Law School. During that time a critical issue in Chicago politics was the ongoing crisis in the public
schools. A movement was underway from two angles: from below in black, Latino and other
communities for more local control of schools, and from above by business interests who wanted to
cut costs. For a fascinating account and analysis see Dorothy Shipps, “The Invisible Hand: Big
Business and Chicago School Reform,” Teachers College Record, Vol. 99, #1, Fall 1997, pp. 73-
116 or her later excellent book on the subject: School Reform, Corporate Style: Chicago, 1880-2000
(Kansas 2006.)
A 1987 teachers’ strike brought those two sides together to push for a reform act passed by the
Illinois legislature in 1988 that created “Local School Councils” (LSC) to be elected by residents in
a particular school area. According to Shipps, the strike “enrag[ed] parents and provid[ed] the
catalyst for a coalition between community groups and Chicago United [the business lobby] that
was forged in the ensuing year.” (The full story of this complicated process is provided by Shipps in
her book; see Steve Diamond, ‘Who “sent” Obama?’ globallabor.blogspot.com, April 22, 2008)
The central figure, establishment godfather, and spiritus rector of this entire network is Thomas
Ayers, the recently deceased father and protector of Bill Ayers. Thomas Ayers headed
Commonwealth Edison for seven years, ending in 1980. Before reaching the top job, he helped
negotiate the first labor contract between the energy giant and the International Brotherhood of
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 139
Electrical Workers. He served on many boards, including that of G.D. Searle, Chicago Pacific
Corp., Zenith Corp., Northwest Industries, First National Bank of Chicago and Tribune Co., owner
of the Chicago Tribune. He worked with many nonprofits, serving as the chair of the Chicago
Urban League, the Chicago Symphony Orchestra, the Chicago Chamber of Commerce and Industry,
Chicago United, Community Renewal Society and the Chicago Community Trust. Extremely
important is Ayers’ status as a member of the board of General Dynamics Corp. of St. Louis, one of
the largest US defense contractors.34 This role by itself is enough to certify that Thomas Ayers was
a high-level member of the US intelligence community. Thomas Ayers can be regarded as a civic
leader and trend setter of the upper crust of Chicago society, a high-level political fixer who was
comfortable hob-nobbing with bankers, top executives, trade union bureaucrats, gangsters, and
finally with terrorists like his son.
One of the remarkable things about the Weatherman faction was that so many of its leaders were
the sons and daughters of the US ruling class, and especially of those with obvious links into the
intelligence community, be it through the OSS, the CIA, or the foundations. One always wondered:
were these protofascist anarchists simply acting out their own personal Oedipal rebellions against
mommy and daddy? There is ample evidence of this in Ayers hyper-Oedipal “kill your parents”
outburst. But, at the same time there was always the suspicion that there might be something more
going on: were these spoiled little elitists being sent into the student movement to do a stage before
they moved on to some cushier form of employment, perhaps in the family business? A few of them
ended up dead or serving life terms in prison, but a military career would be no less risky. So there
is always the lingering suspicion that such an internship might have been what some of their parents
had in mind at the beginning.
Believe it or not, the foundation-funded left CIA (or left FBI, as the case may be) has taken care
of Bill Ayers so well that he is now a tenured professor of education at Northern Illinois University.
He may have gone from throwing bombs to tampering with the minds of defenseless young
students, but his program remains the same: to provoke an all-out race war in the United States. As
Steve Diamond has commented on noquarterusa.net, ‘Since the days of Weather Underground,
Ayers has advocated a viewpoint that argues that the fundamental issue in American life is “white
skin privilege” – that white Americans benefit from being white at the expense of blacks. As Ayers’
wife Bernardine Dohrn wrote in the introduction to a 2002 book she co-authored with Ayers and
their fellow Weather Underground veteran Jeff Jones: “One cannot talk separately about class,
gender, culture, immigration, ethnicity, or biology without being intertwined with race, as Katrina
and the systematic destruction of a major black U.S. city re-informs us. We were waking up [in the
late 1960s]. What to do once we had knowledge of the dimensions of white skin privilege? How to
destroy white supremacy? Well, that is another matter. And as burning today as it was then.”’
Bernardine Dohrn, Bill Ayers, Jeff Jones, Sing a Battle Song: The Revolutionary Poetry,
Statements, and Communiqués of the Weather Underground 1970 – 1974 (New York: Seven Stories
Press, 2006).
AYERS: “I DON’T REGRET SETTING BOMBS.
I FEEL WE DIDN’T DO ENOUGH”
“‘I don’t regret setting bombs,” Bill Ayers said [to the New York Times]. “I feel we didn’t do
enough.” Mr. Ayers, who spent the 1970s as a fugitive in the Weather Underground, was sitting in
the kitchen of his big turn-of-the-19th-century stone house in the Hyde Park district of Chicago. The
long curly locks in his Wanted poster are shorn, though he wears earrings. He still has tattooed on
140 Barack H. Obama: The Unauthorized Biography
his neck the rainbow-and-lightning Weathermen logo that appeared on letters taking responsibility
for bombings. And he still has the ebullient, ingratiating manner, the apparently intense interest in
other people that made him a charismatic figure in the radical student movement.” Does Ayers plan
to kill again? “I don’t want to discount the possibility. I don’t think you can understand a single
thing we did without understanding the violence of the Vietnam War,” he said, and the fact that “the
enduring scar of racism was fully in flower.” Ayers admits that he finds “a certain eloquence to
bombs, a poetry and a pattern from a safe distance.”’ (Dinita Smith, “No Regrets for a Love of
Explosives; In a Memoir of Sorts, a War Protester Talks of Life with the Weathermen,”’ New York
Times, September 11, 2001) Ayers later claimed that his threats to go back to terrorism were “a
joke.” Ayers describes the Weathermen descending into a “whirlpool of violence’ – and, we might
add, criminal insanity. What Ayers is saying is that, from the point of view of his terrorist
controllers and ruling class case officers, it was well worth a few dead cops to be able to break the
back of the protest movements of the 1960s, which is after all the only thing that Ayers and Dohrn
have ever accomplished, apart from some narcissistic preening.
The Weatherman symbol which Ayers bears, depending on how it is depicted, has something in
common with the semi-circle which stands out from the logo of the Obama campaign. According to
his own 2001 memoir, Fugitive Days, Ayers bears on his back the Weatherman logo, a rainbow
with a superimposed lightning bolt. The basic form of this logo was a semi-circle; it can be seen on
the dust jacket of the 2001 hardcover edition of Ayers’ book. It has curiously disappeared from the
later paperback edition. The Obama campaign logo was a blue O, with the lower half filled with red
and white stripes. When seen from certain angles and distances, the Obama logo bore a distinct
resemblance to the older Weatherman coat of arms, especially when it was the all-blue version
rather than the full-color one. In heraldry, one would have said that Obama’s escutcheon contained
a reference to the Weatherman crest. One can imagine Obama, Ayers, and Dohrn meeting in 2005
or 2006 and wickedly chortling about the new design, meant to symbolize the final revenge of the
Weather Underground terrorist killers and butchers in the form of the seizure of power in
Washington by a secret disciple of their left CIA belief structure. It was a risky gesture, since it
risked being recognized, denounced, and exposed. Would Americans ever vote to put a crypto-
Weatherman into the White House? Given the importance of emblems in fascism, this should not be
taken lightly.
At the time he was interviewed, Ayers was 56, and was flogging his self-serving
autobiographical cover story entitled Fugitive Days (Boston: Beacon Press, 2001). Ayers recounted
how he participated in the bombings of New York City Police Headquarters in 1970, of the Capitol
building in 1971, the Pentagon in 1972. Is this a confession? No, because Ayers by now has
embraced post-modernism with its categorical denial that any such things as reality and truth exist
or can ever exist: “‘Is this, then, the truth?” he writes. “Not exactly. Although it feels entirely honest
to me…. ‘Obviously, the point is it’s a reflection on memory,” he answered. “It’s true as I
remember it.” Ayers remembers much, and then disremembers it: “‘Everything was absolutely ideal
on the day I bombed the Pentagon,” he writes. But then comes a disclaimer: “Even though I didn’t
actually bomb the Pentagon — we bombed it, in the sense that Weathermen organized it and
claimed it.” He goes on to provide details about the manufacture of the bomb and how a woman he
calls Anna placed the bomb in a restroom. No one was killed or injured, though damage was
extensive.’ There is no doubt: Ayers is a post-modernist, a liar. (Dinita Smith, “No Regrets for a
Love of Explosives; In a Memoir of Sorts, a War Protester Talks of Life with the Weathermen,”’
New York Times, September 11, 2001)
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 141
The terrorist is now a suitably blasé and laid-back professor of education (not a professor of
English, as Obama evasively described him in the Philadelphia debate with Hillary when George
Stephanopoulos asked him about Ayers), and a very influential professor at that. According to the
review in the New York Times, ‘Mr. Ayers is probably safe from prosecution anyway. A
spokeswoman for the Justice Department said there was a five-year statute of limitations on Federal
crimes except in cases of murder or when a person has been indicted.” Ayers might still be
vulnerable on the murder technicality, some might argue. Ayers’ transitional program to the
Weatherman communist utopia was summed up in classically Oedipal terms as follows: “Kill all the
rich people. Break up their cars and apartments. Bring the revolution home, kill your parents, that’s
where it’s really at.” He is today distinguished professor of education at the University of Illinois at
Chicago. When questioned about his exhortation to homicide and terrorism, Ayers again retreats
into the postmodern briar patch: if I say terrorism, it’s just a metaphor, a piece of irony! Ayers
comments: “it’s been quoted so many times I’m beginning to think I did [say it],’ he sighed. “It was
a joke about the distribution of wealth.” (Dinita Smith, “No Regrets for a Love of Explosives; In a
Memoir of Sorts, a War Protester Talks of Life with the Weathermen,” New York Times, September
11, 2001) Too bad if you died.
Ayers’ consort is Bernardine Dohrn, the sado-masochistic heroine of new left Weatherman
terrorism who strutted as an elitist dominatrix in a leather mini-skirt on the stage of the SDS split
convention on Wabash in Chicago in June 1969, ready to rumble with the downscale pro-working
class nerds and Maoists of Milton Rosen’s Progressive Labor Party, a split-off from the CPUSA.
Bernardine was the MI-6 leather lady Diana Rigg of The Avengers – with a whip, she could have
started a brilliant career at such establishments as Dominique’s House of Pain. But Bernardine had
come from the left-communist circles around the National Lawyers’ Guild, deployed into SDS to
turn the organization towards lunatic purgative violence, the advocacy of race war in the US, and
speedy doom.
Ayers lived underground as a fugitive from the FBI from 1970 on. He disappeared from view
after his then wealthy elitist/terrorist girlfriend, Diana Oughton, along with Ted Gold from the Mad
Dog faction and the ultra-violent Terry Robbins, all died when their bomb factory, located in a posh
Greenwich Village townhouse, blew up because of their incompetent handling of explosives.35
Between 1970 and 1974 the Weathermen took responsibility for 12 bombings, according to Ayers’
count, and also helped spring narcotics guru Timothy Leary from jail where he was serving time.
This last caper was a piece of crude political theater, and showed anybody with a brain that the
Weathermen were in fact police agents and that the CIA wanted Leary freed to further inundate the
world with LSD under the auspices of Project MK Ultra. Dohrn is now the director of the Legal
Clinic’s Children and Family Justice Center of Northwestern University. Their old friends Kathy
Boudin and David Gilbert, whose child they have raised, are serving prison terms for a 1981
robbery of a Brinks truck in Rockland County, N.Y., in which the Weathermen murdered four
people, including two policemen and two armed guards.36 Gilbert is clearly hoping that a President
Obama would pardon him.
TERRORIST MÉNAGE À TROIS: AYERS, BERNARDINE, WARD CHURCHILL
Ayers, as the New York Times review concedes, was always suspect in SDS because he was the
son of a rich and powerful executive, and was suspected of having intelligence community links.
His father, Thomas Ayers, was, as we have seen, chairman and chief executive officer of
Commonwealth Edison of Chicago, chairman of Northwestern University and of the Chicago
Symphony. The little rich boy Bill Ayers attended Lake Forest Academy in Lake Forest, Ill., then
142 Barack H. Obama: The Unauthorized Biography
the University of Michigan, but dropped out to join Students for a Democratic Society. “In 1967 he
met Ms. Dohrn in Ann Arbor, Mich. She had a law degree from the University of Chicago and was
a magnetic speaker who often wore thigh-high boots and miniskirts,” wrote the Times. In 1970,
after the explosion of the Greenwich Village townhouse, Dohrn jumped bail and failed to appear for
her trial in connection with the Weatherman Days of Rage caper, a piece of absurd political
tragicomedy in which a few hundred Weathermen wearing football helmets proposed to start the
revolution by doing battle with the Chicago cops in the middle of the Loop. The Weathermen had
expected a massive turnout that would have allowed them to rule the streets and sweep the forces of
order aside. The whole lunatic exercise was predictably a tactical failure, and an even bigger
strategic political failure, since it marks the end of the student movement and of the Students for a
Democratic Society. Despite all of its problems, SDS had been by some measures the largest leftwing
membership organizations in the history of this country, and with reasonable leadership it
could have acted as a pressure group to the left of the Democratic Party for many years to come.
But that meant nothing to the Weatherman provocateurs, police agents, and wreckers, who seemed
determined to destroy SDS with all the tools at their disposal.
Later in the spring of 1970, Ayers and Dohrn were both indicted along with other Weathermen
in Federal Court under the Rap Brown law for crossing state lines to incite a riot during the Days of
Rage, and then for “conspiracy to bomb police stations and government buildings.” Those charges
were dropped in 1974, allegedly because of prosecutorial misconduct, including illegal surveillance,
but, some said, because the individuals in question were evidently assets of interest to the US
intelligence community.
FOUNDATIONS ALLEGED TO HAVE FUNDED THE WEATHERMEN
The now obscure but highly detailed survey entitled Carter and the Party of International
Terrorism,37 issued in the summer of 1976 by the long-defunct US Labor Party, alleged the
involvement of a number of foundations in the origins and development of the Weathermen. This
study expresses a heterodox view of the Weathermen which may nevertheless prove heuristic:
… The Weathermen were created as a joint project of the Ford Foundation, IPS, and the
Institute for Social Research (ISR) [at the University of Michigan].38 The group was spawned in
May, 1968 at a “secret meeting” in the midst of the Columbia University student strike.
Weatherman founder Mark Rudd constituted the initial cell around a Ford Foundation grant
under which the group agreed to bust the strike through anarchist provocations. The Ford
Foundation “blank check” was conduited through Tom Neumann, the [step-son] of OSS
ideologue Herbert Marcuse and the head of a New York City IPS anarchist project, “Up Against
the Wall Motherf****r.” Weathermen were constituted as a national faction within the IPSdominated
Students for a Democratic Society by means of the selection process conducted
during 1968-1969 through a series of position papers published in the Radical Education
Project, run by Marcus Raskin and Arthur Waskow. In fact, the position papers (including the
infamous “You Don’t Need a Weatherman…” were synthetic belief structures drafted by
psychological warfare experts at ISR and published under the bylines of SDS leaders like Bill
Ayers and Jim Mellen – both [Ann Arbor] ISR graduate students. SDSers attracted to the
anarcho-syndicalist Weatherman credo were put through a series of well-financed “military
maneuvers” during this period to refine the selection. The Democratic Convention riots in
Chicago: Led by IPS operatives Hayden and Waskow and heavily financed by the Carnegie
Fund ($85,000), the Office of Economic Opportunity ($194,000 conduited through IPS), plus
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 143
similar sums from the J.M. Kaplan Fund, the New World Foundation, and the Roger Baldwin
Foundation of the ACLU. […]
The Fall 1969 “Days of Rage” in Chicago [was] a Weatherman riot financed through a “war
chest” bankrolled by Raskin, Waskow, et al.; also funded through an IPS front called
“American Playground,” through the Congress on Racial Equality (CORE) and through the IPS
media project, Liberation News Service. By this point, the Weatherman belief structure was
psychotically fascistic, as demonstrated in the Dec. 1969 ‘War Council’ speech by IPS
controller Bernardine Dohrn referring to the recent Manson family murders’ [cited elsewhere in
this book]. (Carter and the PIT, 121)
The USLP authors explicitly accused the Ford Foundation of helping to call forth violent radical
groups:
The entire Ford operation took on an upgraded character in 1966 with the appointment of
McGeorge Bundy as the president of the Ford Foundation. Bundy’s experience as the special
National Security Adviser to President Kennedy provided for an upgraded interface between the
Foundation’s activities and the overall global warfare policies of the Rockefeller family empire.
Ford virtually orchestrated - along with the subsumed Institute for Policy Studies field
operations - the creation of the black nationalist “radical” apartheid operation, the domestic race
war prospectus, the building up of a nationwide network of urban brainwashing centers and the
creation of a nationwide Gestapo in the form of the Law Enforcement Assistance
Administration. By 1968, the Ford Foundation was openly funding domestic terrorism. The
Weatherman organization represents the most open case, although during the 1968 New York
City teachers’ strike, the Progressive Labor Party, the Socialist Workers Party and the
Communist Party USA, all by that point under Institute for Policy Studies control, were
bankrolled by Ford.” (Carter and the PIT, 19)
It has proven impossible to corroborate these charges using other sources, and the historical
record remains fragmentary and incomplete. The accuracy of some of these allegations cannot be
determined without access to the relevant government and foundation archives, which will hardly
be forthcoming in time to help vet Obama’s closest associates. If the charges made by the USLP
three decades ago are accurate, then the leading Weathermen, including Obama’s friends Ayers and
Dohrn, started working for the foundations more than forty years ago, and continue to receive grants
from many of these same foundations today.
THE WAR AGAINST MONOGAMY: AYERS GOES BISEXUAL
Ayers also figures as yet another homosexual or bisexual in Obama’s life, beyond Frank, Donald
Young, Larry Sinclair, and others. Ayers in Fugitive Days ‘also writes about the Weathermen’s
sexual experimentation as they tried to “smash monogamy.” The Weathermen were “an army of
lovers,” he says, and describes having had different sexual partners, including his best male
friend.”’39 If Ayers became bisexual, he may still be bisexual, and this would place another bisexual
or homosexual partner in Obama’s immediate circle, in addition to Wright (accused of closet
homosexuality by Rev. James David Manning of Harlem), Larry Sinclair, and the late Donald
Young, the gay choirmaster of Wright’s church who was found murdered on Christmas morning
2007. When Dohrn was asked about the revolutionary orthodoxy of settling into marriage after
efforts to smash monogamy, Ms. Dohrn said, “You’re always trying to balance your understanding
of who you are and what you need, and your longing and imaginings of freedom.” Ayers chimed in
144 Barack H. Obama: The Unauthorized Biography
that he shared the same conflicts about marriage. “We have to learn how to be committed,” he said,
“and hold out the possibility of endless reinventions.”
Indeed, a good agent provocateur should be able to re-invent himself or herself several times in a
career. A champion in this was Arthur Koestler, who went from being a Zionist in Palestine to a
KPD communist to a Cold War hardline anti-communist, to a Jungian dealer in paranormal and
psychic phenomena, ending up as a voluntary euthanasia advocate. He also changed nationalities
several times, from Hungarian to proto-Israeli to German to British. The best guess is that he was a
British agent from the very early stages on. Ayers, by contrast, still has a ways to go if he wants to
get into the Spy Museum.
WARD CHURCHILL, WEATHERMAN AND PARALLEL LIFE
TO AYERS AND DOHRN
Another key Weatherman supporter who figures in the life of Ayers and Dohrn is Ward
Churchill, who was up to the end of 2007 probably the best known former Weatherman still active
in politics, largely because of his statement noted earlier that the office workers who died in the
World Trade Center on September 11, 2001 were “little Eichmanns,” servants of imperialism who
deserved what they got. Churchill also became infamous as a supporter of the CIA’s blowback
theory of 9/11, which he saw not as a false flag operation by the Anglo-American intelligence
community, but rather as just retribution for the crimes of US imperialism. This tirade had made
Ward Churchill a favorite target of Fox News Channel personalities like O’Reilly and Hannity.
Churchill stated that anyone who doubted the official US version of 9/11 – the 19 Arab hijackers,
Osama Bin Laden, al Qaeda, etc.- was really a racist who did not believe that Arabs were capable of
great things – a very imaginative defense of the US government line. Especially in 2005-2007,
Churchill was repeatedly attacked by the reactionary Fox News Channel personalities O’Reilly and
Hannity, and was ousted from his tenured post at the University of Colorado with much fanfare.
Back around 1970, Ward Churchill had been a Weatherman, just like Ayers and Dohrn. Today
he poses as an American Indian activist. A recent critical account of Ward Churchill by Bob Black
alleges that c. 1970,
Ex-Weathermen were even less popular than Vietnam veterans. It took Churchill awhile to find
his way from the warpath to the career path. He became a staff writer for Soldier of Fortune
magazine. Finally he discovered, or invented, his Indian heritage. In 1978 he took on the new
role of professional Indian. By 1983, he was “director of Planning, Research and Development
for Educational Opportunity Programs at the University of Colorado/Boulder.” In plain English,
he was an affirmative-action bureaucrat, a paid race-monger. He made the most of the gig, and
very possibly wrote himself a job description to jump into academia. So he is now, without even
possessing a doctorate, a tenured ethnic-studies professor at the university in the posh resort
town of Boulder. Tom Giago, an enrolled Oglala Sioux born and raised on the Pine Ridge
reservation, the publisher of Indian Country Today, considers Churchill a “white profiteer, a
police agent and a terrorist.”… If Churchill’s indigenism is the radical threat he says it is, why
does the government pay him to propagate it? When Churchill first surfaces, he is killing
indigenous people for the U.S. Government. Next he is a member of the agent-ridden
Weatherman SDS; then a staff writer for Soldier of Fortune; and then a sachem in the agentriddled
American Indian Movement. Next, notwithstanding this unsavory background, he works
as a bureaucrat for a state university, from which gig he is bootstrapped into a tenure-track
faculty position for which he has no qualifications, and soon he is tenured. His noisy presence
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 145
in the Amerindian nationalist movement helps to splinter it. For Churchill, the test of indigenist
orthodoxy is simple: you pass it if – but only for so long as – you promote Churchill’s career. Is
Churchill, as many suspect, a police agent? Nobody’s said it better than Churchill himself:
“You don’t have to be a cop to do a cop’s work.” Indian identity, in Churchill’s windy words,
“is determined by cultural/intellectual/political attributes,” but he is careful not to identify what
these attributes are, for if he did, it would be obvious that he doesn’t possess them.’40
We have seen the race-based divide-and-conquer policies of the foundations at work against the
black and Hispanic communities; Ward Churchill’s operations remind us that similar policies have
been used against the American Indian or Native American parts of the population as well.
Back in 1969, Ward Churchill worked together with Weatherman leader Bernardine Dohrn at the
Chicago SDS National Office: ‘“I had my little medals, I went back to my tractor factory” - and
started hanging out in Chicago at the national office of the leftist Students for a Democratic Society,
where he ran into Bernardine Dohrn, an attractive leader of the Weather Underground, a radical
group that favored the bombings of buildings and confrontations with police in their fight against
racism, the Vietnam War and the ruling class. But the Weather Underground knew more about
Marxism than about bombs. Churchill briefly taught the Weathermen and Weatherwomen how to
make bombs and how to fire weapons - “which end does the bullet go, what are the ingredients,
how do you time the damned thing.”’ Ward Churchill’s instruction may have been faulty, however:
‘Thenthree of the radicals accidentally blew themselves up in a New York brownstone, and
Churchill decided that he had had enough. He became involved with Native American and Black
Panther causes - “I was identifying more with people of color than the white left” - and started
working for AIM in 1972, the year before the Wounded Knee, S.D., shootout between activists who
had seized the village and FBI men who joined the violent confrontation.’ (Denver Post, January
18, 1987)41 One of those who perished in the explosion of the Weatherman bomb factory in New
York’s Greenwich Village was, as we have seen, Bill Ayers’ then girlfriend, the wealthy heiress
Diana Oughton.
This was precisely the time when pro-terrorist professor Ward Churchill was teaching bombmaking
to the Weatherman, as he himself boasted in a 1987 Denver Post interview. The old
Weatherman ideology burns brightly in Ward Churchill, a veteran provocateur and wrecker. Ward
Churchill speaks with much greater frankness about the Weatherman world view than do Ayers,
Dohrn, and the rest of their circle, who need to be more careful of what they say in public. Ward
Churchill lets it all hang out – he is the Weatherman who tells you what the others are thinking
today. And this is what Ward Churchill is thinking these days: “One of the things I’ve suggested is
that it may be that more 9/11s are necessary,” Churchill said in a 2004 interview to Satya
magazine.42 Churchill specifies that he does not want a revolution; things are too far gone for that.
He does not want a new regime to take power in the U.S. Instead, he explained, he wants the state
destroyed. Like Wolfowitz after 9/11, he wants to “end states” – specifically this one. “I want the
state gone: transform the situation to U.S. out of North America. U.S. off the planet. Out of
existence altogether,” he concluded. This is indeed the hard line of the academic, foundationfunded,
and intelligence-community linked ultra-left provocateurs. These are the sorts of people
who will triumph in an Obama administration.43 Ward Churchill thus wants to annihilate and to
obliterate the United States. This is a proposal for genocide. One of the central ideas of this book is
that the old Weatherman program of destroying the American people in the service of the
intelligence community, the foundations, and the Wall Street finance oligarchy, expressed more or
less openly by Wright and with special violence and cynicism by Ward Churchill, is in fact the only
possible program of a future Obama administration.
146 Barack H. Obama: The Unauthorized Biography
We stress again that there are not many degrees of separation between Ward Churchill and
Obama. When Ward wanted to join SDS, he went straight to Obama’s friend, neighbor, and cothinker,
Bernardine Dohrn. It was also Ward Churchill who, just back from his tour of duty in
Vietnam in what looks like a branch of Army Intelligence (Long-Range Reconnaissance, the
equivalent of a multi-state killing spree. taught bomb-making to the aspiring terrorist
Weatherpeople in that posh Greenwish Village townhouse. When the townhouse blew up, one of
the dead was Diana Oughton, who was the girlfriend of Obama’s sponsor, benefactor, and friend,
Bill Ayers.(One-degree of separation: Obama’s ultra-leftist backers, Rezkowatch, Monday, April
28, 2008)44
HUMAN WRECKAGE
The years have done nothing to diminish the radical subjectivism of the Weatherman clique.
“Ms. Dohrn and Mr. Ayers had a son, Zayd, in 1977. After the birth of Malik, in 1980, they decided
to surface.” These names may reflect the influence of a general turn in spook circles towards
Islamic, rather than communist cover, which became evident at the end of the 1970s. “Ms. Dohrn
pleaded guilty to the original Days of Rage charge, received three years probation and was fined
$1,500. The Federal charges against Mr. Ayers and Ms. Dohrn had already been dropped.” This
happy ending was doubtless thanks to the efforts of the CIA Office of Security, which interfaces
with most domestic police agencies and courts. When Kathy Boudin was arrested and given a life
sentence for the New York Brinks robbery and the accompanying murders of policemen, Dohrn and
Ayers volunteered to care for Boudin and Dave Gilbert’s son Chesa, then 14 months old, and
became his legal guardians. Dohrn was called to testify about the robbery. When she refused to give
a handwriting sample, she was jailed for seven months. Chesa was without a mother during that
time. Ayers told the New York Times that Chesa was “a very damaged kid.” Given the criminal
irresponsibility of both his biological parents and his adoptive parents, this is no surprise. “He had
real serious emotional problems,” Ayers added. But after extensive therapy, “became a brilliant and
wonderful human being.” (Dinita Smith, “No Regrets for a Love Of Explosives; In a Memoir of
Sorts, a War Protester Talks of Life With the Weathermen,” New York Times, September 11, 2001)
Smith recounts: ‘As Mr. Ayers mellows into middle age, he finds himself thinking about truth
and reconciliation, he said. He would like to see a Truth and Reconciliation Commission about
Vietnam, he said, like South Africa’s. He can imagine Mr. Kerrey and Ms. Boudin taking part.”
Perhaps this is something we will see under a future Obama administration. And if there were
another Vietnam, he is asked, would he participate again in the Weathermen bombings? By way of
an answer, Mr. Ayers quoted from “The Cure at Troy,” Seamus Heaney’s retelling of Sophocles’
Philoctetes: “Human beings suffer,/ They torture one another./ They get hurt and get hard.”
He continued to recite:
History says, Don’t hope
On this side of the grave.
But then, once in a lifetime
The longed-for tidal wave
Of justice can rise up
And hope and history rhyme.’
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 147
Is this Ayers’ dark prophecy of a future America ruled by his protégé Obama? The New York
Times review moves towards its conclusion. Reflecting on his varied life in a mellow epiphany of
self-indulgence, Ayers added: “I was a child of privilege and I woke up to a world on fire. And hope
and history rhymed.” (Dinita Smith, “No Regrets for a Love Of Explosives; In a Memoir of Sorts, a
War Protester Talks of Life With the Weathermen,” New York Times, September 11, 2001) Too bad
for the dead and maimed cops and innocent bystanders whose blood purchased these epiphanies for
the privileged elitist Ayers, a gravedigger of protest politics in the US all his life.
The question of the continuing close friendship among Ayers, Dohrn, and Obama began to
emerge in February, thanks to the efforts of certain blogs such as noquarterusa.net, and to a
campaign on this issue conducted by the right-wing radio talk show host and television personality,
Sean Hannity.45 Gradually, the Ayers question began to seep into the controlled corporate media:
Joe Klein wrote ‘There are other guilt-by-association problems floating out there: the occasional
over-the-top racial statements by Obama’s pastor Jeremiah Wright; the fact that Obama has been
described as “friendly” with 1960s dilettante-terrorist William Ayers.”’ (Joe Klein, Time, March 6,
2008) The “friendly” was from arch-mindbender David Axelrod. But Bill Burton, Obama’s
spokesman, said Ayers “does not have a role on the campaign.” Ayers said he had no comment on
his relationship with Obama.
A brief look at the final phase of the Weatherman faction before it disappeared into clandestine
safe houses for a decade or more will permit us to understand the ideology of Ayers and Dohrn,
which is important because these ideas live on today most emphatically in the Obama campaign,
and are in danger of being accomplished under a future Obama regime. The atmosphere that
prevailed in the last days of the legal, aboveground existence of the Weatherman faction is
conveyed in an extraordinary article from Liberation News Service written in the final days of 1969.
WEATHERMAN: AN AGENCY OF THE PEOPLE OF THE WORLD
WILL RULE THE USA
We can start with an old article from Liberation News Service about one of the last legal public
events the Weathermen ever held, a kind of Christmas and New Years’ party for agents
provocateurs as the student movement entered its death agony: ‘The Weatherman controlling
faction of SDS held a national “war council” here Dec. 27-30. [1969] About 400 young people
showed up at the gathering—nominally SDS’s quarterly national council meeting—to practice
karate, rap in regional and collective meetings, dig a little music and hear the “Weather Bureau” lay
down its political line for revolution in America. The meeting hall was decked with large banners of
revolutionary leaders—Che, Ho, Fidel, Malcolm X, Eldridge Cleaver—hanging from the ceiling.
One entire wall of the ballroom was covered with alternating black and red posters of murdered
Illinois Panther leader Fred Hampton. An enormous cardboard machine gun hung from the ceiling.
Violence was the keynote of the long hours of talk that began Dec. 27. The distinction between
revolutionary armed struggle and violence for its own sake is a major point of contention between
Weatherman and its numerous critics. The strongest debate centered on the question of who is going
to make the American revolution. Weatherman, along with many others in the movement,
recognizes that the American revolution is part of the world struggle against U.S. imperialism, a
struggle for liberation from both colonial and capitalist oppression. Weatherman’s critics maintain,
however, that Weatherman’s internationalism is based on an analysis that ignores capitalist
oppression in America. Weatherman sees revolutionary change in America as happening almost
solely, if at all, as a belated reaction to a successful world revolution including a successful revolt
148 Barack H. Obama: The Unauthorized Biography
by the black colony inside the U.S.’ (“Weatherman Conducts a ‘War Council,’” Liberation News
Service, Flint, Michigan, Dec. 31, 1969)46
WEATHERMAN: ‘IF IT WILL TAKE FASCISM,
WE’LL HAVE TO HAVE FASCISM’
For our purposes today, the most interesting remarks made that day are probably those of
Weatherman extremist leader Ted Gold, who talked about what the US government and economy
would be like if the race war desired by the Weathermen ever came about. We need to pay careful
attention here, since we are learning something about the way a future Obama regime may treat the
US population:
The logic of that view was expressed in a statement by Ted Gold, a top Weatherman, who said
that “an agency of the people of the world” would be set up to run the U.S. economy and
society after the defeat of the U.S. imperialism abroad. A critic spoke up: “In short, if the
people of the world succeed in liberating themselves before American radicals have made the
American revolution, then the Vietnamese and Africans and the Chinese are gonna move in and
run things for white America. It sounds like a John Bircher’s worst dream. There will have to be
more repression than ever against white people, but by refusing to organize people,
Weatherman isn’t even giving them half a chance.” “Well,” replied Gold, “If it will take
fascism, we’ll have to have fascism.” Weatherman—virtually all white—continues to promote
the notion that white working people in America are inherently counter-revolutionary,
impossible to organize, or just plain evil — “honky -------,” as many Weathermen put it.
Weatherman’s bleak view of the post-revolutionary world comes from an analysis of American
society that says that “class doesn’t count, race does.” White workers are in fact fighting for
their survival, insisted people doing organizing of factory workers in California. They claim
that strikes for wage increases and job security can fairly easily be linked to the anti-imperialist
analysis. But Weatherman denies that survival is an issue for white workers. Weatherman
leader Howie Machtinger derided white workers for desiring better homes, better food and
essentially better lives. Machtinger [argued]: “When you try to defend honky workers who just
want more privilege from imperialism, that shows your race origins.” The Weatherman position
boiled down to inevitable race war in America, with very few “honkies”—except perhaps the
400 people in the room and the few street kids or gang members who might run with them—
surviving the holocaust. That notion is linked to Weatherman’s concept of initiating armed
struggle now and not waiting to build mass white support—that is, a small but courageous white
fighting force will do material damage that will weaken imperialism while the black liberation
movement smashes “the imperialist ___” by itself. Machtinger talked a lot about how the black
liberation movement is so far advanced at this point that the only thing left for white
revolutionaries is to support blacks by fighting cops as a diversionary tactic. Weatherman is
adamant in saying that whites cannot be organized into a mass revolutionary movement. To say
that they can or should, according to Weatherleaders, is “national chauvinism.”… A new
Weatherman catchword was “barbarism.” The Weathermen see themselves as playing a role
similar to that of the barbarian tribes, such as the Vandals and the Visigoths, who invaded and
destroyed the decadent, corrupt Rome.’
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 149
BERNARDINE DOHRN DEMANDS TERRORISM AND ARMED STRUGGLE
A central figure in these monstrous proceedings was Obama’s close friend Bernardine Dohrn,
who found a way to bring the conference to a new low of despicable anti-human barbarism, but
always under left cover:
Bernardine Dohrn, former inter-organizational secretary of SDS for 1968-69, gave the opening
speech.47 She began by admitting that a lot of Weatherman’s actions have been motivated by “a
white guilt trip.” “But we ------ up a lot anyway. We didn’t fight around Bobby Seale when he
was shackled at the Conspiracy Trial. We should have torn the courtroom apart. We didn’t
smash them when Move peace creeps hissed David Hilliard on Moratorium Day in San
Francisco. We didn’t burn Chicago down when Fred was killed.” Dohrn characterized violent,
militant response in the streets as “armed struggle” against imperialism. “Since Oct. 11 [the last
day of the SDS national window-breaking action in Chicago], we’ve been wimpy on armed
struggle... We’re about being a fighting force alongside the blacks, but a lot of us are still
honkies, and we’re still scared of fighting. We have to get into armed struggle.” Part of armed
struggle, as Dohrn and others laid it down, is terrorism. Political assassination—openly joked
about by some Weathermen—and literally any kind of violence that is considered anti-social
were put forward as legitimate forms of armed struggle. “We’re in an airplane,” Dohrn related,
“and we went up and down the aisle ‘borrowing’ food from people’s plates. They didn’t know
we were Weathermen; they just knew we were crazy. That’s what we’re talking about, being
crazy --------- and scaring the ----- out of honky America.”’ (“Weatherman Conducts a ‘War
Council,’” Liberation News Service, Flint, Michigan, Dec. 31, 1969)48
BERNARDINE DOHRN: MANSON MURDERS AS
THE ESSENCE OF THE REVOLUTION SHE WANTED
And what kind of revolution did top Weathergirl Bernardine Dohrn want? It was a revolution in
the spirit of Charles Manson, the demonic protagonist of that year’s grisly Tate-LaBianca murders
in Hollywood:
A 20-foot long poster adorned another wall of the ballroom. It was covered with drawings of
bullets, each with a name. Along with the understandable targets like Chicago’s Mayor Daley,
the Weathermen deemed as legitimate enemies to be offed, among others, the Guardian (which
has criticized Weatherman) and Sharon Tate, one of several victims in the recent mass murder
in California. She was eight months pregnant. “Honkies are going to be afraid of us,” Dohrn
insisted. She went on to tell the war council about Charlie Manson, accused leader of the gang
which allegedly murdered the movie star and several others on their Beverly Hills estate.
Manson has been portrayed in the media as a Satanic, magnetic personality who held nearhypnotic
sway over several women whom he lent out to friends as favors and brought along for
the murder scene. The press also mentioned Manson’s supposed fear of blacks—he reportedly
moved into rural California to escape the violence of a race war. Weatherman, the “Bureau”
says, digs Manson, not only for his understanding of white America—the killer purportedly
wrote “pig” in blood on the wall after the murder—but also a “bad --------.” (At least one press
report explained the “pig” on the wall by saying that Manson wrote that in order to throw
suspicion on black people.) [Dohrn gave a three-fingered “fork salute” to mass murderer
Charles Manson. Calling Manson’s victims the “Tate Eight,” Dohrn gloated over the fact that
actress Sharon Tate, who was pregnant at the time, had been stabbed with a fork in her womb.]
150 Barack H. Obama: The Unauthorized Biography
“Dig it, first they killed those pigs, then they ate dinner in the same room with them, then they
even shoved a fork into a victim’s stomach! Wild!” said Bernardine Dohrn.
This statement by Bernardine marks the maximum in subhuman degradation and degeneracy, a
level of despicable anti-human animus which can match the decadence of any World War II fascist.
Bernardine has lamely attempted to explain that this was all a metaphor, a joke. The Liberation
News correspondent of 1969 took it quite seriously, and so must we today as we look forward to
Bernardine Dohrn’s possible role in a future Obama administration.
WEATHERMAN: THE ‘WHITE DEVIL’ THEORY OF WORLD HISTORY
Bernardine functioned to all intents and purposes as the keynote speaker who set the exalted
moral tone for the rest of the speeches.
Women members of Weatherman held a panel discussion on women’s liberation. The fighting
women, “the women who can carry bombs under their dresses like in “The Battle of Algiers,”
were put forward as the only valid model for women’s liberation. Women’s liberation comes
not only with taking leadership roles and with asserting yourself politically, they said, but also
with overcoming hang-ups about violence.
In between the women’s raps, the people sang a medley of Weatherman songs, high camp
numbers such as, “I’m Dreaming of a White Riot,” “Communism Is What We Do,” and “We
Need a Red Party.” Spirited chants broke out, too: “Women power!” “Struggling power!” “Red
Army power!” “Sirhan Sirhan power!” “Charlie Manson power!” “Power to the People!” “Off
the pig!” […]
Another speaker referred to the white women’s role as reproduced and characterized white
women who bring up children in white America as “pig mothers.”
The “crazy violent ----------” theme was picked up in a long address by “Weather Bureau”
member John Jacobs, who laid out the “White Devil” theory of all world history and traced the
history of today’s youth from the Beat Generation of the 1950s. [Here Jeremiah Wright, Father
Pfleger, Dwight Hopkins, and Otis Moss III might have felt at home.]
“We’re against everything that’s ‘good and decent,’” Jacobs declared. That notion, coupled
with the White Devil theory, formed the basis of what they call “Serve the People --------.”
Serving the people, relating to people’s needs, is a crucial factor in many people’s minds of
organizing white working people in America, so that the revolution will come as class war and
end in socialism, rather than come as race war and end in fascism. (“Weatherman Conducts a
‘War Council,’” Liberation News Service, Flint, Michigan, Dec. 31, 1969)49
But the Weatherman perspective was precisely that there was no hope of revolution against the
financier ruling class, and that in any case race war against white blue collar workers was the thing
that was to be desired and provoked.
OBAMA’S WEATHERMAN CONNECTION: HARBINGER OF SWIFT BOATING
By spring 2008, it has been obvious for months that Obama’s close affinity with and friendship
for some of the most celebrated terrorists and murderers of recent US history was going to cause
him political problems, to say the least. As former CIA and State Department official Larry Johnson
commented, Obama was damaged goods from the moment that the average American heard about
his penchant for associating with known criminals:
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 151
There is now undeniable proof of a longstanding relationship between Barack Obama and
William Ayers. We are not talking about two guys who just happened to bump into one another
on the street. We are not talking about a secret admirer (Ayers) who quietly sent $200 to an
aspiring politician. No, we are talking about William Ayers hosting a fundraiser for Barack
Obama and actively working with him to secure Barack’s first electoral victory in Illinois. But
wait, there is more. Barack and Ayers also served on the board of the Woods Fund. And they
worked together to give money to some other folks, including a group with ties to the PLO. […]
Look at the beating that John Kerry took for tossing his medals over the White House fence.
Ayers did not toss medals, he threw bombs. Real ones. Bombs that exploded. Do you think that
Republicans will ignore Obama’s ties to Ayers? The two were serving on the same board in
2002. We are talking less than six years ago and the record will come out showing some
questionable grants by these two characters. William Ayers, in the age of terrorism, will be
Barack Obama’s Willie Horton.’ (noquarterusa.net, April 16, 2008)
THE SDS MENAGERIE AROUND OBAMA
The problem goes way beyond just Ayers and his fork-saluting spouse. The Obama campaign
presents the aspect of a storm cellar or assisted-living facility for the burned-out wreckage of the
intelligence community operations of yesteryear. Some of these figures were Weatherman terrorists,
some were simply SDS extremists, some flirted with Stalinism. In July 1996, the New York Times
reported that Marilyn Katz, a former aide to Chicago Mayor Harold Washington and now a wheel
horse of the Daley machine and a supporter of Obama, “oversaw security for Students for a
Democratic Society, a radical group at the eye of the Chicago protests” during the 1968 Democratic
National Convention. There was no “security” in the SDS contingent on that occasion. Ms. Katz
was presumably occupied with organizing provocations to provide cover for the police riot that
ensued.
On October 2, 2002, when Barack Obama delivered his obscure, unrecorded, and poorly
attended but now famous speech at a Chicago antiwar rally, Katz was one of the key organizers of
the rally. On the event’s fifth anniversary, Marilyn Katz, now a member of Obama’s national
finance committee, posted the following statement on the blog of Chicagoans Against the War and
Injustice (CAWI), which she had “put together,” relying upon “some of her old contacts she met
organizing anti-war demonstrations for Students for a Democratic Society in the 1960s.” Katz
described how the rally in Chicago on October 2, 2002, was “not organized by a politician or a
recognized political force. It was organized by a loose group of friends, mostly SDS veterans. Katz
was thus key to providing Obama’s only foreign policy credential and proof of his alleged good
judgment – his lame anti-war speech of October 2002, the horse that he mercilessly rode to death
during the 2008 primaries. What would Barky ever have done without his SDS friends?
MARILYN KATZ, SDS VET AND ORGANIZER
OF OBAMA’S OCTOBER 2002 ANTI-WAR SPEECH
Marilyn Katz later recounted: ‘Meeting in a living room in Chicago just ten days earlier, we
chose to act, agreeing that on October 2, 2002, we would assemble in Chicago’s Federal Plaza to
stand against the war. With a gut feeling that other Americans also thought the invasion of Iraq was
foolhardy, if not immoral and absurd, but with no assurance than anyone would come to a
demonstration we agreed that “If we were five, we would be five.” “If we were without any elected
officials, we would be an involved citizenry. But we would take a stand.” But we were not alone. In
152 Barack H. Obama: The Unauthorized Biography
fact nearly 3,000 people assembled in Federal Plaza on that day responding to the flurry of emails (a
new organizing technology for us) that seemingly liberated people from their sense of isolation and
offered them the opportunity of collective action - of community. Black, Latino, White, veterans of
the peace and women’s movements, the 60s, high school and college youth, community activist—a
mosaic of the City. Long-time leaders like Jesse Jackson, Juan Andrade and Julie Hamos and a new
voice.... not yet known to the crowd, to the media or to the nation.... the voice of State Senator
Barack Obama.”50
Katz was joined in the organizing by former SDS president Carl Davidson, like Klonsky
reputedly once upon a time close to the Communist Party USA line, so that Obama was getting help
from “two perennially engaged ‘60s veterans and ex-SDS members,” Jeff Epton wrote December
15, 2003, for In These Times. Katz and Davidson were “key organizers” of the October 2, 2002,
anti-war demonstration. Originating as Chicagoans Against War with Iraq (CAWI), by December
2003 CAWI had shifted into Chicagoans Against War and Injustice. Davidson later commented, “as
the war transformed from invasion to occupation, CAWI activists managed to avoid splits over
sectarian and strategic differences, and committed to stay together and move from ‘protest to
politics.’” In 2005, Katz and Davidson co-wrote a documented entitled “Stopping War, Seeking
Justice.” Davidson is “now a figure in the Committees of Correspondence for Democracy and
Socialism, an offshoot of the old Moscow-controlled CPUSA,” Cliff Kincaid wrote on February 18,
2008, for Accuracy in Media.
Davidson is also an Obama supporter, now leading Progressives for Obama. On his blog Keep
On Keepin’ On, Davidson recently endorsed Obama’s comments about small town people being
bitter. Katz is attempting to minimize her role in the old SDS. On April 18, 2008, the Chicago Sun-
Times quoted Katz as saying that she “met Ayers when he was 17 and they were members of
Students for a Democratic Society, a peaceful group from which the Weather Underground
splintered.” Katz also demanded that Obama’s relationship with former domestic terrorist William
Ayers and his wife, Bernardine Dohrn—with whom Obama launched his political career in 1995 at
the Ayers-Dohrn Hyde Park home— “should not be a campaign issue.” Katz is now the head of MK
Communications and a registered lobbyist with the City of Chicago; she has personally contributed
$1,000 to Obama for America, Obama’s presidential campaign fund. Marilyn Katz and her husband
Allan J. Katz, a shareholder and chairman of the Policy Practice Group at Akerman Senterfitt of
Tallahassee, Florida and a Tallahassee City Commissioner, as well as a Member of the Florida
Democratic Committee and Democratic National Committee, are joint bundlers committed to
raising a minimum of $200,000 for Obama’s campaign.’51
MIKE KLONSKY, FOUNDATION STALINIST
Another Katz and Ayers associate—and Obama supporter—is Mike Klonsky. In 1968, he was
the last pre-Weatherman SDS national chairman and a “demonstration organizer.” Klonsky ‘“would
go on in post-SDS years to form the October League (Marxist-Leninist) and Communist Party
(Marxist-Leninist), part of the new communist movement that emerged [born dead] in the 1970s.”
Klonsky was named by Ayers in the 1990s to head the Small Schools Workshop. In 1996, Klonsky,
like William Ayers, was a consultant for Mayor Richard M. Daley’s “agenda for public schools.”
Until June 25, 2008, when he was jettisoned for purposes of damage control and window dressing
in the course of Obama’s hard right turn after the primaries, Klonsky maintained a community blog
subtitled Freedom Teachers at MyBarackObama.com.
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 153
During the engineered breakup of SDS, Klonsky was a leader of the tendency called
Revolutionary Youth Movement I (RYM-I), a less extreme competitor of the Ayers-Dohrn-Mark
Rudd-Jeff Jones-John Jacobs-Ted Gold Revolutionary Youth Movement II (RYM-II), which
became the Weathermen and later the Weather Underground, otherwise known as Weatherpeople,
Weather Bureau, etc. Klonsky and Ayers appeared for a time as bitter factional opponents, but at
bottom this was simply role-playing, with Klonsky picking up the radicals who were only halfdemented,
and thus not crazy enough to join the kamikazes of the Ayers-Dohrn clique. If Ayers was
known in SDS as a likely spook and provocateur for the intelligence community, Klonsky was
regarded as a submarine for the Communist Party, USA, whose leaders were then in turn controlled
by the FBI. During the lean years that followed, Klonsky tried Maoism.
The cooperation of Ayers and Klonsky in favor of Obama’s seizure of power reproduces the old
CP-anarchist alliance, which was a common wrecking plan for SDS chapters in 1969-1970. When
Klonsky’s role in the Obama campaign’s internet effort became widely known, the Illinois Messiah
was quick to cut his losses so as to avoid the specter of yet another explosive flare-up of negative
publicity on the models of Rezko, Wright and Ayers. ‘No sooner than Global Labor blogged …
about the role in the Obama campaign of Mike Klonsky, former Weather Underground leader Bill
Ayers’ longtime comrade-in-arms from their days in SDS to the Chicago School Wars they fought
in the 80s and 90s alongside Barack Obama, and presto he’s gone. As of this evening, Klonsky is no
longer blogging on the Barack Obama for President website.’ (Steve Diamond,
http://globallabor.blogspot.com/, June 25, 2008)
Another fanatical Obama backer with SDS connections is Tom Hayden, the SDS co-founder
who helped promote the 1968 Democratic National Convention riots in Chicago. Hayden, a former
California state senator and ex-husband of radical chic Jane Fonda, has endorsed Sen. Obama. So
has Jane Fonda. Hayden authored the SDS political manifesto, known as the Port Huron Statement,
which the group’s founding members adopted in 1962. This document condemned the American
political system as the cause of international conflict and a variety of social ills — including racism,
materialism, militarism, and poverty. Instead, it offered the vacuous petty-bourgeois slogan of
“participatory democracy,” while offering no analysis and making no demands for labor rights,
rebuilding the inner cities, third-world economic development, or other urgent economic issues of
the day.
SDS derived from a group called the League for Industrial Democracy (LID), a transparent cold
war anti-Soviet CIA front group made up of right-wing social democrats. LID has a student and
youth branch called Student League for Industrial Democracy (SLID). SLID was running out of
steam in the early 1960s, so the intelligence community decided to re-invent it in the trendier format
of SDS. The name may have been taken from German SDS (Sozialistischer Deutscher
Studentenbund), the successful pseudo-radical student group of Willy Brandt’s German Social
Democratic Party (SPD), which many CIA officers had been able to observe first-hand during their
frequent postings in West Germany, the hub of the cold war.
During the course of the 1960s, large parts of the SDS membership would escape ruling-class
ideological control, which is what gave SDS the potential that had to be destroyed. But the SDS
leadership was confined to narrow cliques with strong intelligence community input, who were
easily able to defeat challengers and insurgents in conformity with Roberto Michels’ Iron Law of
Oligarchy.
Todd Gitlin, the SDS president from 1963 to 1964, has also been well taken care of, and now
serves as a tenured professor of journalism and sociology at Columbia University. Giltin is a regular
154 Barack H. Obama: The Unauthorized Biography
contributor to Josh Marshall’s TPM Cafe. He also blogs at ToddGitlin.com. In a new low for
tendentious, pro-Obama pseudo-journalism, Gitlin was contacted April 18, 2008, by The New
Republic to respond to Sen. Obama’s Philadelphia cover-up speech about his hate-spewing pastor,
Rev. Jeremiah Wright. Gitlin had endorsed Obama on February 4, 2008.
Paul Booth is yet another founder and former National Secretary of Students for a Democratic
Society (SDS) and former President of Chicago’s Citizen Action Program (CAP), formed in 1969
by trainees from counterinsurgent Saul Alinsky’s Industrial Areas Foundation (IAF), according to
Discover the Networks. Booth is a labor skate, acting as assistant to Gerald McEntee, president of
the public employees union AFSCME.
In 1973, “radical activists” Booth and his wife, Heather Booth, founded The Midwest Academy
(MA), a “training organization ... for a variety of leftist causes and organizations,” which
“describes itself as ‘one of the nation’s oldest and best known schools for community
organizations, citizen organizations and individuals committed to progressive social change.’”
This is the usual coded language for local control/ community control counterinsurgency. Not
surprisingly, one of The Midwest Academy’s funders is the Woods Foundation of Chicago, on
whose board Sen. Barack Obama (D-Ill.) served 1999 to December 2002 as a paid director with
domestic terrorist William Ayers. In 1999, The Midwest Academy received a $75,000 grant
from the Woods Fund. In 2002, The Midwest Academy received $23,500 for its Young
Organizers Development Program. Additionally, in February 2004 Paul Booth contributed $500
to Obama’s 2004 senatorial campaign.’ (“One-degree of separation: Obama’s ultra-leftist
backers,” Rezkowatch, Monday, April 28, 2008)
WEATHERMAN HATRED OF WHITE WORKERS FROM 1969 TO OBAMA
Obama’s top handler David Axelrod told NPR that it was a mistake to rely on white working
class voters in the first place. In a statement dripping with elitist class prejudice, Axelrod observed:
“The white working class has gone to the Republican nominee for many elections, going back even
to the Clinton years. This is not new that Democratic candidates don’t rely solely on those votes.”
This is simply factually wrong, since Bill Clinton won many of these voters. Obama’s campaign
manager David Plouffe was even more categorical that blue collar workers were out of reach. But
these were after all registered Democratic voters that Obama was losing in a Democratic primary.
These very damning statements illustrate the thesis of this book that Obama hates and resents white
working families and blue collar voters. Since white working people represent the absolute majority
of the US population, one must wonder by what system Axelrod hopes to win a general election.
Again, the conclusion must be that Obama really has no plan to win a general election, but will
hope for help from police state forces in the form of scandals which will conveniently destroy his
opponent. This is, after all, the main reason Obama is in the US Senate in the first place – ask the
hapless Trilateral victims Marson Blair Hull and Jack Ryan.
THE WOODS FUND AND THE CIA-CONTROLLED FACTIONS OF THE PLO
The Woods Fund of Chicago, with Ayers and Obama on the board for several years before 2002,
appears to function as a funding conduit for certain US-controlled or US-influenced factions of the
highly factionalized and crisis-ridden Palestine Liberation Organization and Palestinian Authority.
Whether these US-manipulated factions are violent or moderate is less important than the fact that
they represent CIA tentacles inside the PLO. The fact that various Palestinian or PLO factions are
controlled by foreign states is, or ought to be, well-known. The Soviets had some of these factions.
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 155
The Israelis were known to control a part of the central committee of the Abu Nidal Organization,
run by Sabri al-Banna, the son of the pro-British and later pro-Nazi founder of the Moslem
Brotherhood. Ariel Sharon helped to create Hamas, and so forth. The French and the Vatican are not
far behind. So, Obama is close to the apparatus that funds the pro-US fifth column in the PLO. The
PLO-linked groups funded by the Woods Foundation with the help of Obama’s august presence
also appear to be devices for the social control of the Arab populations of Chicago and the
surrounding areas, which are being managed according to the Hapsburg-style affirmative
action/racial identity counterinsurgency method we have already seen at work against black
Americans, Hispanics, and native Americans.
With Obama helping to get funding for his group, the radical Palestinian professor Rashid
Khalidi helped to set up a fund-raiser for Obama when he ran for congress in 2000.
Khalidi, now the Edward Said Professor of Arab Studies at Columbia University, and head of
that school’s Middle East Institute, in an interview in Tuesday’s Daily News, said he hosted the
fundraiser because he and Obama were friends while the two lived in Chicago. “He never came
to us and said he would do anything in terms of Palestinians,” Khalidi told the paper.
Nevertheless, one Hyde Park source close to Obama, speaking only on condition of anonymity,
recalled, “He often expressed general sympathy for the Palestinians — though I don’t recall him
ever saying anything publicly.” Khalidi helped to arrange the recent appearance of Iran’s
Ahmadinejad last summer at Columbia University. (Rashid Khalidi, “Middle East Professor at
Columbia University and PLO activist,” The Jewish Week, 2007, noquarterusa.net)
Ahmadinejad’s visit to Columbia University was marred by the university president’s scurrilous
insults against the foreign leader. In the estimation of this writer at the time, the visit created a
turbulent scene of protests which could have been used as a covering screen to assassinate the
Iranian leader and precipitate a general Middle East war. Thankfully, that had not occurred. But the
question remains about Khalidi’s motives in bringing the Iranian president into the chaotic and
dangerous situation that prevailed at Columbia. Had some case officer told him to do it? Even after
its privatization into foundations and private fronts under Executive Order 12333, US intelligence
still does not pay out its money for nothing. What was it that US intelligence was buying from
Khalidi?
As a pro-Israeli account details,
Ayers and Obama had teamed up for three years on the board of the Woods Fund, a Chicago
charitable organization. Together, they voted to donate $75,000 of the largesse they controlled
to the Arab American Action Network. The AAAN was co-founded by Rashid Khalidi…
Despite considerable evidence to the contrary, Khalidi denies having been a PLO operative or
having directed its official press agency for six years (from 1976 to 1982).’ (Aaron Klein,
“Obama worked with terrorist; Senator helped fund organization that rejects ‘racist’ Israel’s
existence,” WorldNetDaily, February 24, 2008)
The details on the grants are very interesting:
In 2001, the Woods Fund, a Chicago-based nonprofit that describes itself as a group helping the
disadvantaged, provided a $40,000 grant to the Arab American Action Network, or AAAN, for
which Khalidi’s wife, Mona, serves as president. The Fund provided a second grant to the
AAAN for $35,000 in 2002. Obama was a director of the Woods Fund board from 1999 to Dec.
11, 2002, according to the Fund’s website. According to tax filings, Obama received
compensation of $6,000 per year for his service in 1999 and 2001. …
156 Barack H. Obama: The Unauthorized Biography
The $40,000 grant from Obama’s Woods Fund to the AAAN constituted about a fifth of the
Arab group’s reported grants for 2001, according to tax filings obtained by WND. The $35,000
Woods Fund grant in 2002 also constituted about one-fifth of AAAN’s reported grants for that
year. The AAAN, headquartered in the heart of Chicago’s Palestinian immigrant community,
describes itself as working to “empower Chicago-area Arab immigrants and Arab Americans
through the combined strategies of community organizing, advocacy, education and social
services, leadership development, and forging productive relationships with other
communities.” It reportedly has worked on projects with the Illinois Coalition for Immigrant
and Refugee Rights, which supports open borders and education for illegal aliens. AAAN cofounder
Rashid Khalidi was reportedly a director of the official PLO press agency WAFA in
Beirut from 1976 to 1982….
Khalidi’s wife, AAAN President Mona Khalidi, was reportedly WAFA’s English translator
during that period. Rashid Khalidi at times has denied working directly for the PLO but
Palestinian diplomatic sources in Ramallah told WND he indeed directed WAFA. Khalidi also
advised the Palestinian delegation to the Madrid Conference in 1991…
While the Woods Fund’s contribution to Khalidi’s AAAN might be perceived as a one-time run
with Obama, the presidential hopeful and Khalidi evidence a deeper relationship. According to
a professor at the University of Chicago who said he has known Obama for 12 years, the
Democratic presidential hopeful first befriended Khalidi when the two worked together at the
university. The professor spoke on condition of anonymity. Khalidi lectured at the University of
Chicago until 2003 while Obama taught law there from 1993 until his election to the Senate in
2004. Khalidi in 2000 held what was described as a successful fundraiser for Obama’s failed
bid for a seat in the U.S. House of Representatives, a fact not denied by Khalidi. Speaking in a
joint interview with WND and the John Batchelor Show of New York’s WABC Radio and Los
Angeles’ KFI Radio, Khalidi was asked about his 2000 fundraiser for Obama. “I was just doing
my duties as a Chicago resident to help my local politician,” Khalidi stated. Khalidi said he
supports Obama for president “because he is the only candidate who has expressed sympathy
for the Palestinian cause.” Asked about Obama’s role funding the AAAN, Khalidi claimed he
had “never heard of the Woods Fund until it popped up on a bunch of blogs a few months ago.”
He terminated the call when petitioned further about his links with Obama. Contacted by phone,
Mona Khalidi refused to answer WND’s questions about the AAAN’s involvement with
Obama. (Aaron Klein, “Obama worked with terrorist; Senator helped fund organization that
rejects ‘racist’ Israel’s existence,” WorldNetDaily, February 24, 2008)
OBAMA AND THE CHICAGO ARAB UNDERWORLD: ATA “THE RAT”
In addition to such figures as Khalidi, Obama also came into contact with the gangsters, grafters,
hoodlums, and other sociopaths who populate the wormy underside of the Chicago Arab
community. We will talk in a coming chapter about the Syrian-Levantine Antoin Rezko, his fellow
Levantine Nadhi Auchi, and the renegade Iraqi Electricity Minister Alsammarae. Here we will refer
to a smaller fish, but a very significant one: Ali Ata, who was caught up in the FBI dragnet of
Operation Board Games around the Illinois Combine for graft and corruption, which has a division
for every ethnic group in Chicago. Ali Ata, now a convicted felon, gets us very close to Obama: all
the way to Obama’s godfather and moneybags Antoin Rezko, and all the way to Illinois Governor
Rod Blagojevich. Here we begin to see what kind of perks might emerge as by-products of Obama’s
role in helping get money for the US-controlled factions of the PLO:
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 157
The Tony Rezko trial opened the door to more Board Game cases not yet tried and more
Combine members threw in the towel. Ali Ata, the former director of the Illinois Finance
Authority, entered into a plea agreement on April 22, 2008… Ata pled guilty to charges that
included tax fraud, and lying to the FBI in saying he received nothing in return for $50,000 in
contributions to Blagojevich when according to the plea agreement, he did “receive something
for those contributions, specifically employment with a state agency ... with an annual salary of
approximately $127,000.” The agreement notes that Ata met with Blagojevich, not Rezko, in
2000 or 2001, and Blagojevich asked for his support because he was contemplating a run for
higher office. Ata testified that he held his first Blagojevich fundraiser in the 1990s when he
was asked to raise money for Blagojevich’s run for Congress within the Arab community. Ata
made a $5,000 donation to Obama on June 30, 2003. Talat Othman was also appointed to this
Board, and he donated $1,000 to Obama on June 30, 2003. David Gustman was made chairman,
and his wife, Lisa, also gave Obama $1,000 on June 30. Ata is a former president of the
Chicago Chapter of the American Arab Anti-Discrimination Committee. He represents “a
deeper corruption” in the Arab American community, “an aspect of the story that has not
received much attention,” according to a May 2, 2008 report by Ray Hanania in the Southwest
News-Herald. Hanania points out that many in the Arab community are calling Ata a “rat.” But
he’s not alone, Hanania says: “The real rats are those who used their positions as “leaders” to
rape and pillage their own community. The real rats are the so-called “leaders” who worked to
benefit themselves pretending they were doing it for the benefit of the community.” In his
report, Hanania explains how Ata and others would often gather at a “hookah” café on Harlem
Avenue, where they helped organize political dinners attended by Arab Americans from the
Southwest suburbs at which politicians where “honored.” “These Arab community leaders,” he
says, “would tell the community that if they bought tickets to their candidate’s nights,” their
organization fundraisers or donated through them to local politicians, these politicians would
respond by giving the Arab American community empowerment.” “They said the politicians
would give the Arab Americans a voice in their governments,” he reports. “In truth,” Hanania
says, “these political leaders lied…. They did get jobs, contracts and clout,” he notes, “but the
people who benefited were not members of the community but rather the relatives, children,
friends and business associates of these leaders.” (Pringle, “Curtain Time for Barack Obama -
Part IV,” op-ed news)
Here again, the narrow and divisive identity politics purveyed by the Ford Foundation reveals its
bankruptcy: it creates a thin layer of rich exploiters, while leaving the majority of each ethnic group
worse off than when they started.
THE ROBERT MALLEY AFFAIR AND THE SOROS-BRZEZINSKI
INTERNATIONAL CRISIS GROUP
Obama’s relations with the Middle East agent community were also illuminated by the Robert
Malley affair. Robert Malley worked for the International Crisis Group, which is heavily funded by
George Soros and has Zbigniew Brzezinski on its board. With this, we know everything we need to
know about the International Crisis Group: its operatives do not want peace in the Middle East, but
rather mobilization of the Arabs and Moslems against Russia and China in the framework of
Brzezinski’s apocalyptic vision of confrontation. Robert Malley’s father Simon Malley was born in
Cairo to a Jewish-Syrian family. He moved to France in 1969, where he founded the pseudo-left
journal Afrique Asie; the name was changed to L’Economiste du Tiers Monde in the 1970s. This
was supposedly radical third world nationalist, but gave ample scope to Fanon and the future Pol
158 Barack H. Obama: The Unauthorized Biography
Pots and Bani Sadrs. Many suspected that Simon Malley was in fact running a British operation.
Simon Malley was also used to sabotage French foreign policy in the third world, which is often in
conflict with London and Washington. In October 1980, the French had had enough of Malley’s
constant wrecking operations, and they deported him, hustling him onto a plane bound for New
York. Simon’s son Robert obviously continued the family business of being a left-cover operative
in the orbit of the US-UK imperial line.
After months of inconclusive sniping by various web sites against Robert Malley, he was
quickly dumped by the Obama campaign from his role in Obama’s Middle East Advisory Council
at the end of the first week in May when it became known that he had been meeting with the
Palestinian group Hamas. Malley told the London Times that he had been in regular contact with
Hamas, which rules Gaza. Malley claimed that, when he met with Hamas, he was wearing his
International Crisis Group hat, and not his Obama advisor’s hat. “I’ve never hidden the fact that in
my job with the International Crisis Group I meet all kinds of people,” Malley said. Ben LaBolt, a
spokesman for Obama, attempted damage control: “Rob Malley has, like hundreds of other experts,
provided informal advice to the campaign in the past. He has no formal role in the campaign and he
will not play any role in the future.” The rapid departure of Mr Malley came after two days of
heated clashes between John McCain, the Republican nominee-elect, and Mr Obama over Middle
East policy. (London Times, May 10, 2008) Malley was a much less important advisor to Obama
than the overall campaign controller and guru, Zbigniew Brzezinski. If Malley could be fired over a
few meetings with Hamas, why was Brzezinski not fired because of his sponsorship of Ilyas
Achmadov, the Chechen terrorist ambassador who was living high on the hog in Washington DC at
US taxpayer expense as a result of Brzezinski’s lobbying – lobbying in which Senator McCain was
also a key participant?
THE IKHWAN ENDORSES OBAMA
The Muslim American Society (MAS) is an organization closely linked to the Muslim
Brotherhood. On its website’s “Personality Page,” the MAS displays a photo and short bio of
Barack Hussein Obama along with those it calls other prominent Muslims, such as Malcolm X,
Saladin and Moqtada al-Sadr. A 2004 Chicago Tribune investigation revealed that, after a
contentious debate, U.S. leaders of the fundamentalist Muslim Brotherhood, the classic British
intelligence vehicle for fighting progressive nationalist regimes in the Arab world like Kassem of
Iraq and Nasser of Egypt with benighted mystical reactionaries, decided in 1993 to begin calling
themselves the Muslim American Society. The Brotherhood’s goal is ostensibly to spread the rule
of Islamic law throughout the world, but exceptions are made whenever required by British
interests. Key Muslim Brotherhood ideologues, including founder Hassan al-Banna (whom we
have already met as the father of British and Israeli-controlled provocateur Sabri al Banna/Abu
Nidal), have endorsed violence as a means of doing so. Today, MAS’ leaders admit that the group
was founded by the Muslim Brotherhood, but claim that MAS has evolved since then.
MARK RUDD: THE WEATHERMEN AS FBI PROVOACTEURS?
It must always be understood that the Weathermen were in no way honest radicals gone astray,
nor yet authentic communist revolutionaries: they were wreckers, saboteurs, and provocateurs who
had been sent by the intelligence community into the student and peace movements for the purpose
of destroying them. Here again, Thomas Ayers’ seat on the board of General Dynamics, the largest
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 159
US defense contractor for the Pentagon in most years, tells us everything we need to know about the
relations of the Ayers family to the intelligence community. Rumors that Bill Ayers was a spook
circulated in SDS in the late 60s. One Weatherman leader who appears obsessed by the appearance
that his old terrorist gang was in fact a tool of the FBI is none other than Mark Rudd. (Or, at least,
Rudd chooses to harp on the FBI, perhaps to draw attention away from his more likely sponsors in
the intelligence community, such as the domestic counterinsurgency operations of the Ford
Foundation, with which Rudd has been linked by published sources.) At the time of the SDS split
convention in Chicago in the summer of 1969, Mark Rudd was without question the most famous
Weatherman leader because of the media attention to his role at the Columbia strike, and it was he
who was chosen as the national secretary of the rump faction of SDS controlled by the Weatherman
crazies after the expulsion of the Progressive Labor Party, the International Socialists, the Labor
Committees, and a number of smaller Trotskyist groups. Rudd had been chosen by the New York
City television stations as the authentic student anarchist voice of the Columbia University strike in
April 1969, and this had given him a significant national profile. Rudd was sent on a national tour
of university campuses and SDS chapters to make the case for the lunatic Weatherman point of
view. The bomb throwing and cop killing Weatherman faction, however, considered Rudd as a
lightweight and intended only to use him as a disposable figurehead. These crazies soon drove
Rudd out of the Weatherman organization. In the following decades, Rudd appears to have
developed some rudimentary understanding of the precious services rendered to the FBI and the
intelligence community in general through the destruction of SDS by the Weatherman action
faction. Rudd returns again and again to the idea that the Weathermen were doing exactly what the
FBI wanted them to do, even though he also hysterically asserts that the Weathermen were not paid
agents, conscious agents, or witting operatives. Here is a sample of Rudd’s ruminations, dating back
to an interview recorded in 2004: ‘… we in the leadership of Weatherman (predecessor to the
Weather Underground Organization) made a historically criminal decision at the end of 1969 to
scuttle Students for a Democratic Society, the largest student anti-war and radical organization, with
over 300 chapters on college campuses and high schools. We mistakenly believed that we could
bring into existence a revolutionary movement, led by an underground revolutionary army; SDS,
with its purely legal above-ground existence and its reform agenda, was seen as an impediment to
the growth of the revolutionary army. Our faction was in control of the national and regional offices
of the organization, plus its newspaper. I remember sometime in January, 1970, dumping the
membership lists of the New York Regional Office into a garbage barge at the W. 14th St. pier. How
could we have done the FBI’s work better for them? I believe that we weakened the larger
movement, whose goal was uniting as many people as possible to end the Vietnam War. Besides
causing people to drop out, we gave the government ammunition to smear the whole anti-war
movement as violent crazies bent on destruction of the society. Did our actions help attract the huge
middle of American society who might otherwise have joined the anti-war movement, public
opinion being vastly against the war? “Bring the War Home,” was as counter-productive a line in
1969 and 1970 as it was in 2001 at the World Trade Center. Last, and probably most important, the
Weather Underground forced a debilitating ideological debate in the much larger anti-war
movement over the “necessity” of engaging in armed “revolutionary” actions. In the summer of
1969 Weather-organized actions even disrupted the Mobilization to End the War in Vietnam
(“Mobe”) mass anti-war events and demonstrations. People became demoralized and left the antiwar
movement because they didn’t want any part of an armed revolution. We destroyed SDS
because it wasn’t radical enough (it couldn’t take the final step of anti-imperialism to armed
action), thereby doing the work of the FBI.’ (Radical History Review, Spring, 2006, emphasis
160 Barack H. Obama: The Unauthorized Biography
added.) In fact, the control mechanism for the Weathermen ran through the foundations rather than
through the FBI, for obvious reasons.
These same themes are developed in Rudd’s retrospective analysis of how the proto-fascist
Weatherman provocateurs succeeded in destroying SDS, which had been growing rapidly until the
crazies seized control of the Chicago National Office in June and July of 1969: ‘Students for a
Democratic Society had been growing almost effortlessly since 1965 when the U.S. attacked
Vietnam with ground troops. By 1968 there were over 300 autonomous chapters on college
campuses, high schools, and even post-college; the number of active members may have been more
than 100,000 (though dues-paying national membership was much smaller). The story of what
happened became known as The Days of Rage has been told elsewhere, including the 2003
documentary, “The Weather Underground.” What’s significant for this story, though, is that the
SDS chapters rejected en masse support for the action. Most chapters had been independent, neither
PL nor RYM, and didn’t participate in or even understand the argument. The effect of the split at
the June Convention was to cut them off from the National Office. We in what became known as
Weatherman had lost our base. But we kept going without one. The effect on SDS as a whole was
disaster. By the beginning of 1970 the national organization had ceased to exist. We in the
Weatherman leadership had made a decision that SDS wasn’t radical enough, that it was an
impediment to the building of a revolutionary movement in this country. We needed an
underground guerilla army to begin the revolutionary armed struggle. So we disbanded the National
and Regional Offices, dissolved the national organization, and set the chapters adrift. Many chapters
kept organizing, in their own ways, against the war and racism; demoralized, others disbanded. We
couldn’t have done the FBI’s work better for them had we been paid agents, which I know we
weren’t. [Maybe not of the FBI, but how about the foundations?] We were just stupid kids too in
love with our ideas to realize they weren’t real. We believed they were real because we thought
them… My recall is that my comrades and I in the leadership of Weatherman made specific bad
decisions based on our evolving and deepening ideology toward the chimera of revolution and the
strategy revolutionary guerilla warfare. One thinks of the roads not taken. We could have chosen to
fight to maintain the organization, to strengthen its anti-imperialism and anti-racism among
students, to build the largest possible coalition against the war. Perhaps we could have ended the
war sooner, who knows?’52 Rudd is certainly right that without the efforts of the Weatherman
wreckers and saboteurs, the Vietnam War might have been brought to an end much sooner, and
other positive causes could have been advanced on the domestic front. But of course, the
Weatherman domestic program was nothing but race war. Rudd’s commentary on youthful
fanatics, not far removed from their delusions of infantile omnipotence, who hysterically insist that
their egocentric ideas must be real simply because they are thinking them gives us some insight into
the mentality of Obama’s swarming adolescents today. Perhaps someday, when the US and
foundation archives are opened, we will be able to reconstruct the story of how the intelligence
agencies destroyed SDS; we can be sure that an especially lurid chapter in this tale will feature the
activities of Bill Ayers and Bernardine Dohrn.
THE URGENCY OF COUNTERINSURGENCY, 1986-1988:
ADLAI STEVENSON’S DEBACLE, AXELROD, AND THE 1313 GANG
The beginning of Obama’s career with the Chicago Annenberg Challenge under the sponsorship
of Thomas Ayers and Bill Ayers takes us back to a moment when the bi-partisan, financiercontrolled
social control apparatus ruling Chicago appeared to be undergoing definite strain and
possible crisis. In the Illinois Democratic primary of March 18, 1986, the corrupt Chicago
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 161
Democratic machine was supporting the gubernatorial candidacy of Adlai Stevenson III, a former
US Senator and the son of two-time Democratic presidential candidate and Illinois governor Adlai
Stevenson, a favorite of the New York investment banks and a man who put a professorial face on
the dirty Cook County Democratic organization, but lost the presidency to Ike Eisenhower in 1952
and in 1956. For Illinois Secretary of State, the Democratic machine wanted the political hack
Aurelia Pucinski, who came from a politically prominent family and was supported by the party
organization. The Democratic machine was stunned when the Democratic nominations for
Lieutenant Governor and Secretary of State were won by Mark Fairchild and Janice Hart, two
supporters of the political movement of Lyndon LaRouche. The national media went berserk over
the idea that Illinois voters had chosen Fairchild and Hart, despite their association with LaRouche,
as the most effective vehicles for an explosive protest vote against the existing order of things.
Janice Hart said on the day after the primary: “I’m going to revive the spirit of Abraham Lincoln
and General Patton. We’re going to roll our tanks down State Street.” Democratic National
Committee chairman Paul Kirk joined in the hysteria, exclaiming, “Good Lord, we have a problem
here.” At this point, Stevenson could have kept his own hopes for the governorship alive by bowing
gracefully to the will of the voters, and gracefully and silently taking his place at the top of a
Democratic ticket including Fairchild and Hart for statewide office. After all, actual terrorist
bombers and accused murderers like Ayers and Dohrn had already been welcomed back into the
Chicago Democratic machine in those years. Fairchild and Hart had never killed or bombed
anybody. Neither one had ever appeared on the FBI’s most wanted list; neither had a criminal
record. But, of course, Ayers and Dohrn were different: they had always been working as
provocateurs for the intelligence community and the financiers. So Stevenson decided to go berserk,
slandering the candidates chosen by the Illinois Democratic voters, and ruining his own hopes for
the governorship in the process.
AXELROD PUSHES STEVENSON TO SELF-DESTRUCT
Ironically, the campaign manager who goaded the younger Stevenson to destroy himself was
none other than Obama’s current Svengali, the Chicago machine hack David Axelrod: ‘Political
consultant David Axelrod, who today runs Barack Obama’s Presidential campaign, was in 1986
managing the campaign of Adlai Stevenson III for governor. Axelrod told Stevenson he should quit
the race, rather than run in the general election on the same, Democratic, ticket with the LaRouche
supporters. ‘“I thought he should resign. He couldn’t run with those maniacs,” Axelrod said later.
Stevenson decided to quit the Democrats but to run as a third party candidate. Axelrod later recalled
how Stevenson fared, under his guidance: “In the following months, Stevenson was battered by the
press and deserted by the politicians. It reached the point of the absurd. It was the political
equivalent of AIDS.”’ (Chicago Magazine, December 1987). David Axelrod grew up in New York
City, where his mother, Myril Axelrod, was vice president of the Young & Rubicam advertising
agency and was a pioneer of the use of “focus groups” for profiling the population, long before
Frank Luntz and company had arrived on the scene. Attending the University of Chicago beginning
in 1972, majoring in political science, Axelrod became associated with the financier-directed
“political reform” movement centered at that University. While he was writing articles for the Hyde
Park Herald, he was taken under the wing of Don Rose, a political operative of the Public
Administration Service school at the University. That school was a component of the notorious
1313 building complex at the University of Chicago, a national center for the manipulation of
America’s public policy and municipal administrations. According to a 2004 article in the Hyde
Park Herald, “1313 grew from a 1930 lunchtime conversation in Geneva, Switzerland between
[University official Louis] Brownlow and Beardsley Ruml. Ruml was executive director of the
162 Barack H. Obama: The Unauthorized Biography
Spelman Fund of New York, a relatively new entity created to disburse Rockefeller dollars.
Brownlow pressed his case for a public administration clearing house, Ruml enthusiastically
embraced the idea and, in 1937 the [Rockefeller-controlled] Spelman Fund disbursed $1 million to
the University of Chicago to underwrite the construction of what became 1313.” (Mr. Ruml also
helped organize the fascist psychiatry enterprise known as the Josiah Macy Foundation.) Don Rose
recommended young Axelrod for an intern’s job at the Chicago Tribune daily newspaper, where the
intensely plugged-in Axelrod eventually rose to become political editor. Don Rose later told
Chicago magazine, “Axelrod was the first political reporter at the Trib who was really associated
with the liberal reform movement. He was sympathetic to the movement ... and he developed a lot
of contacts. One of the reasons he looked good was because the people he developed associations
with were on the ascendancy....” In 1984, Axelrod quit the Tribune to manage Paul Simon’s senate
race, followed later by jobs with Stevenson, Harold Washington, and others. Throughout, Axelrod
has been identified with the movement for political “reforms” — such as privatization, budget cuts,
etc. — representing the oligarchs at the University of Chicago and their financier sponsors. David
Axelrod is the Obama campaign’s overall director; Axelrod’s partner (in the firm AKP Media),
David Plouffe, is Obama’s official campaign manager; and Axelrod’s other partner, John Del
Cecato, is a strategist for the campaign.’ (larouchepac.com, April 24, 2008)
Stevenson formed the Solidarity Party and ran with Jane Spirgel as the Secretary of State
nominee and Mike Howlett for Lieutenant Governor. Hart achieved 15% of the vote, with Spirgel
taking 17%. Hart and Spirgel’s opponent, Republican incumbent Jim Edgar, won the election by the
largest margin in any state-wide election in Illinois history (until Barky’s 2004 defeat of the
carpetbagging buffoon Allan Keyes), with 1.574 million votes (67%). Fairchild was defeated, and
Republican Big Jim Thompson took the governorship over the hapless Stevenson.
THE 1987 CHICAGO TEACHERS’ STRIKE
As we have seen, one of the targets of any foundation-funded school reform is automatically to
weaken or bust the teachers’ union. In September 1987, the Chicago teachers’ union went on strike
for 19 days. This was the ninth strike in two decades. Secretary of Education William Bennett, in an
attempt to encourage the busting of the union after the 1987 school strike, declared the city’s
schools the “worst in America.” Under the late Mayor Richard J. Daley, Chicago had deliberately
maintained a highly segregated system. ‘As whites fled to the suburbs and many remaining white
families sent children to the large Catholic school system, citizen support for the public schools
diminished. Daley tried to buy labor peace with the unions through financial sleight-of-hand that,
after his death, resulted in full-scale crisis in 1979. In response to the crescendo of discontent which
was also orchestrated by foundation operatives, Mayor Harold Washington, the city’s first black
mayor, convened an “education summit” in 1986 to persuade businesses to guarantee jobs to public
school graduates if they met performance standards.” The LSC ploy also succeeded in splitting the
black community, with Jesse Jackson lobbying forcefully against reform, fighting implementation,
and battling, for example, to save the job of his old protégé, Manford Byrd, the superintendent of
schools who was forced out. The black middle class, many of whom were school employees, was
the political and financial base for Jackson’s Operation PUSH, despite his vocal advocacy of the
disenfranchised poor. When PUSH came to the shove of disgruntled black parents, Jackson’s
organization sided with the black administrators, above all, and the teachers.’ About 550 positions
have been cut out of a central bureaucracy of about 4,100, while top administrators have done
everything they could to save themselves. Veronica Anderson, writing in the March 2008 issue of
Catalyst Chicago, described the local control institutions as generally moribund, observing that
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 163
“The death knell is ringing for Chicago’s local school councils, as it has been for years.” ‘One of
the biggest abuses of the local control system is that principals have no tenure, and have to cater to
the whims of local groups of parents who often have no concept of education except their own likes
and dislikes. Anderson also reports that “the constant onslaught of negative buzz regarding LSCs
has created the widespread impression that LSCs are hapless, ineffective, and at times as the case of
Curie High School seemingly illustrates, dangerous to school improvement.” The interest of the
foundations, and their grant money, was steadily fading.’ (David Moberg, “Can Democracy Save
Chicago’s Schools?,” American Prospect, November 30, 2002) One of the few tangible results of
the creation of the LSCs at the individual school level was that several hundred experienced and
previously tenured principals were fired, which drastically lowered the administrative quality of the
system, but which promised a big savings to the greedy banks who owned the Chicago municipal
bonds marketed by firms like Nuveen and Co, and who wanted to be sure that their interest
payments had top priority.
BILL AYERS: FROM TERRORIST TO EDUCATION REFORMER
Thanks to the fact that his father Tom had intelligence community connections on a very high
level, Bill Ayers was able to emerge from clandestine criminal life and re-invent himself as an
education reformer. A key part of this was his magical ability to get money from the foundations.
His knack was so deft that it suggested that he had been a foundation operative all along, even
before Executive Order 12333. Steve Diamond has chronicled the process by which the former
fugitive Bill Ayers was transformed into a few short years into a top authority on education policy,
and above all into a dispenser of tens of millions of dollars of corporate largesse: ‘Bill raised money
to start the Small Schools Workshop in the early 90s and eventually hired another former Maoist
from the 60s (and actually someone who was a bitter opponent of Ayers as SDS disintegrated)
named Mike Klonsky to head it up. Bill’s brother John later got in on the small schools approach
also, raising money in part from the Annenberg Challenge program started by Bill and chaired by
Obama… A leading figure in the Chicago business groups that were lobbying for cost cutting and
“efficiency” in the Chicago schools in the 1980s was Bill Ayers’ father, Thomas Ayers…. Tom
Ayers co-authored a report of a joint public-private task force on school reform and was later
nominated to head up Chicago United, a business backed school reform group that Ayers helped
found, by Chicago Mayor Jane Byrne, but was opposed successfully by black community activists.
When the 1988 Reform Act was passed a group called Leadership for Quality Education (LQE) was
formed…by the elite business lobby that was in part behind the new reforms, to train the newly
elected local school council members. Some 6000 LSC members were elected. And they became a
huge thorn in the side of school administration in Chicago. Interestingly, one LSC member was
John Ayers, son of Tom and brother of Bill. In 1993, John was made head of the LQE - which, by
then, according to Shipps, was caught in the middle of the battle emerging to re-centralize control of
the schools in the hands of the mayor. In the fall of 1988, however, Obama left the city to go off to
law school. My best guess, though, is that it was in that 86-88 time frame that Obama likely met up
with the Ayers family.’ (Steve Diamond, ‘Who “sent” Obama?’ globallabor.blogspot.com, April 22,
2008) Again, this cannot be seen as a matter of pure coincidence, but rather of people like
Huntington and Brzezinski putting their protégé in contact with an important regional leader of the
US financier establishment.
164 Barack H. Obama: The Unauthorized Biography
OBAMA’S BIG BREAK: AYERS AND
THE CHICAGO ANNENBERG CHALLENGE
Diamond stresses that getting tapped to head up the prestigious and massively funded
Annenberg Chicago Challenge – based on no visible qualifications – constituted Obama’s key
inflection point or career take-off. Diamond is of course attempting to explain this process based on
more or less chance encounters among individuals, rather than being aware that we are watching an
intelligence network which goes back well over half a century. Obama and the Ayers clan came
together not by chance, but thanks to the fine Trilateral hand that fosters some careers and strangles
others. Diamond recounts: ‘Then, in late 1994 or early 1995, Obama made what I think was
probably the key move in his early career. He was named Chairman of the Board of the Chicago
Annenberg Challenge, a $50 million grant program to funnel money into reform efforts at Chicago
schools. It turns out that the architect of the Annenberg Challenge was Bill Ayers, who designed the
grant proposal and shepherded it to success. The purpose of the program was to defend the
controversial and troubled local schools council effort that had been put in place back in 1988. The
first Executive Director of the Challenge was Ken Rolling, who came there from the much
discussed Woods Fund (where he had been a program officer). The Woods Fund had provided
grants to Obama’s DCP in the late 80s and Rolling was a part of the school reform effort in which
both Bill Ayers and Obama participated. Obama joined the board of the Woods Fund in 1993 in
1999 he would be joined on the board by Bill Ayers.’ (Steve Diamond, ‘Who “sent” Obama?’
globallabor.blogspot.com, April 22, 2008)53
Obama’s role in heading up the Chicago Annenberg Challenge meant money, prestige, and
above all an excellent chance to network with the lakefront oligarchs: ‘… the Annenberg Challenge
money came through anyway due to the efforts of Bill Ayers, among others. It had to be matched 2
to 1 by corporate and foundation money (in fact, they raised an additional $60 million by 1999), so
the Board Chairmanship would have allowed Obama to be in touch with the powerful money
interests in Chicago, including possibly the Pritzker Family and others that Kaufman mentions in
his story. Penny Pritzker would join the board of the Chicago Public Education Fund which
received its startup funding from the Annenberg Challenge as the Challenge wound down in 2001 -
the Challenge, in effect, handed the baton of support for school reform to the CPEF. Penny Pritzker
[who owns a share of the Hyatt Hotel fortune, built on the backs of super-exploited Hispanic
cleaning ladies] is now a key Obama campaign insider in charge of fund raising.’ (Steve Diamond,
‘Who “sent” Obama?’ globallabor.blogspot.com, April 22, 2008)
Today, Ayers presents himself not as terrorist vermin, cowardly butcher and mass murderer, but
rather as a theoretician of educating children, and Midwest moralist to boot. Ayers wrote on his
website in a January 19, 2008 essay on school reform: “The dominant narrative in contemporary
school reform is once again focused on exclusion and disadvantage, race and class, black and white.
‘Across the US,’ the National Governor’s Association declared in 2005, ‘a gap in academic
achievement persists between minority and disadvantaged students and their white counterparts.’
This is the commonly referenced and popularly understood ‘racial achievement gap,’ and it drives
education policy at every level. Interestingly, whether heartfelt or self-satisfied, the narrative never
mentions the monster in the room: white supremacy….Gloria Ladson-Billings upends all of this
with an elegant reversal: there is no achievement gap, she argues, but actually a glancing reflection
of something deeper and more profound—America has a profound education debt. The educational
inequities that began with the annihilation of native peoples and the enslavement of Africans, the
conquest of the continent and the importation of both free labor and serfs, transformed into
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 165
apartheid education, something anemic, inferior, inadequate, and oppressive. Over decades and
centuries the debt has accumulated and is passed from generation to generation, and it continues to
grow and pile up.” (Emphasis added.)54
In April 2008 Sol Stern of the neocon Manhattan Institute gave a series of interviews seeking to
show that Ayers’ politics have hardly changed since his Weatherman days. According to Stern,
‘Ayers still boasts about working full-time to bring down American capitalism and imperialism, but
he does this now from his tenured perch as Distinguished Professor of Education at the University
of Illinois, Chicago.55 Instead of planting bombs in public buildings, Ayers now works to
indoctrinate America’s future teachers in the revolutionary cause, urging them to pass on the lessons
to their public school students. […] ‘In late 1994 or early 1995, Obama made what I think was
probably the key move in his early career. He was named Chairman of the Board of the Chicago
Annenberg Challenge….’56 This was initially a $50 million grant program to funnel money into
social engineering, manipulation, and divide-and-conquer efforts at Chicago schools. ‘It turns out
that the architect of the Annenberg Chicago Challenge was Bill Ayers, who designed the grant
proposal and shepherded it to success.’ (Pundita, noquarterusa.net)57 Naturally, this must be
considered a true elective affinity between Ayers and Obama, but it also reflects the network which
was supporting them both: the left CIA foundation network was promoting the careers of its
stalwarts, even as it carried out its appointed tasks for the banking elite.
Steve Diamond pointed out on Noquarterusa.net that ‘the link between Obama and Ayers had to
pre-date the November 1995 event because [by 1995] Obama was already Chairman of the Board
of the Chicago Annenberg Challenge grant program. The Annenberg Challenge was a $50 million
grant (to be matched by additional donors 2:1) to a new Chicago non-profit entity to make grants to
schools in Chicago. The grant proposal was conceived of and written by Bill Ayers. Ayers was
named Chicago’s “Citizen of the Year” for his efforts. He was featured on the PBS News Hour to
discuss the grant. In every assessment of the program Ayers was given credit for leading the charge
on the program. He began the design of the proposal in late 1993 and the grant was awarded in
January 1995.’ Steve Diamond goes on to elaborate that ‘the Annenberg Challenge was not a
random school improvement effort. The purpose of the Challenge was to help shore up the ongoing
reform effort then underway in the Chicago public schools. It was a counter-attack by Ayers in what
some commentators called the “Chicago school wars.” The reform effort was floundering and
facing increasing opposition from business groups and others. The reform was built on a 1988 law
that imposed “local school councils” (LSCs) on the school system to create a new power center that
would challenge both the Chicago teachers’ unions and the school system administration. Both
Ayers and Obama were supporters of these 1988 reforms. (One little discussed fact about the reform
effort - when it targeted the union and the school administration, it was taking on two institutions
that had been a new and important source of attractive professional jobs for black Chicagoans.)”’
Diamond’s suspicions are more than confirmed: since the New York City teachers’ strike was
broken in 1968-69, the stock in trade of the Ford Foundation and its co-thinkers has been to
organize black parents into community control councils which can then be used to attack the
teachers’ unions, while also tearing down the school system itself. The goal is the financiers’ aim of
destroying free universal public education of any sort in this country, to facilitate the reduction of
America into serfdom. So Ayers is doing his job as an affirmative action foundation provocateur
eager to play black parents against teachers, many of them also black or Hispanic. The name of the
game is always divide and conquer, playing one group of little people and victims of the system
against another, to keep Wall Street and the financier elite above the fray. Caught between the topdown
privatized business model, with private interests bilking the system, the voucher-school
166 Barack H. Obama: The Unauthorized Biography
choice-charter school route, and the lunatic left community control model peddled by Ayers with its
eternal petty conflicts, quality education would never stand a chance. Real progress required
resources, the rebuilding of neighborhoods, and the hope of good jobs on the horizon – all things
which the US ruling financier elite had proven itself incapable of providing.
Diamond adds that ‘…it was not clear that the LSCs were helping students learn more. In 1995 a
new law would pass in Springfield re-centralizing power, but this time in the hands of the mayor
(Richard Daley) through a new CEO for the school system. This gutted the power of the LSCs. Bill
Ayers opposed this re-centralization (I believe because Ayers saw the LSCs as a potential means by
which to impose his authoritarian “social justice” education agenda). To lead the Challenge Ayers
would certainly have wanted a board chairman who was sympathetic with his goals. That suggests
that Obama and he had already established a relationship that convinced Ayers that Obama was the
right man for this key leadership role. As I have said here, it is possible Ayers and Obama first met
during the campaign for the creation of the LSCs in the wake of the 1987 teachers’ union strike, an
event that galvanized community and business support in Chicago for the LSC idea. Both Ayers and
Obama were active in that campaign for the LSCs.’ The self-defeating counterinsurgency strategy
of community control had, of course, been what Obama was selling when he worked for the
Alinskyite wreckers at the Gamaliel Foundation. But there was also a Trilateral hand guiding his
destiny, as we must never forget.58
WILL OBAMA DEMAND REPARATIONS?
Other than Ayers, who qualifies as a top racist FOB (Friend of Barky), Senator Obama’s main
education advisor is Professor Linda Darling-Hammond, a prominent national theoretician of
education policy who teaches at Stanford University’s School of Education. Darling-Hammond
operates through something called the Forum for Education and Democracy (FED). Darling-
Hammond’s program for education reform starts off with the need to ‘Repay the “education debt.”’
This is a concept which is left vague, but which could very easily serve as a cloak for a demand for
reparations for the black community only, a demand sure to create a violent paroxysm of racial
tension and indeed race war if it were to gather strength under the present conditions of economic
breakdown. The education debt, says Professor Darling-Hammond, is a concept invented by
Professor Gloria Ladson-Billings, of the University of Wisconsin and a “convener” together with
Professor Darling-Hammond of the FED. It is aimed at replacing the concept that has dominated
much education reform discussion in recent years called the “achievement gap.” As Darling-
Hammond has written: “[T]he problem we face is less an ‘achievement gap’ than an educational
debt that has accumulated over centuries of denied access to education and employment, reinforced
by deepening poverty and resource inequalities in schools. Until American society confronts the
accumulated educational debt owed to these students and takes responsibility for the inferior
resources they receive, [Gloria] Ladson-Billings argues, children of color and of poverty will
continue to be left behind.”59 This might well serve as a cloak for reparations demands.
The suspicions grow when we find Ladson-Billings quoting veteran foundation race operative
Randall Robinson in an article on educational debt in Educational Researcher (Oct. 2005), where
we read: “What is it that we might owe to citizens who historically have been excluded from social
benefits and opportunities? Randall Robinson (2000) states: ‘No nation can enslave a race of people
for hundreds of years, set them free bedraggled and penniless, pit them, without assistance in a
hostile environment, against privileged victimizers, and then reasonably expect the gap between the
heirs of the two groups to narrow. Lines, begun parallel and left alone, can never touch. (p. 74)’”
The book by Randall Robinson which is cited here is The Debt: What America Owes to Blacks,
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 167
which is a strident demand for reparations to be paid by non-blacks to blacks to redress the impact
of slavery and discrimination. Darling-Hammond has also argued that there is in America “a
growing number of ‘apartheid’ schools that serve racial/ethnic minority students exclusively —
schools that have little political clout and are extraordinarily impoverished.” (Steve Diamond,
noquarterusa.net) Once more, the implied correct answer seems to be reparations. Let it be clear:
class-based, race-blind economic recovery programs for those facing poverty and exclusion will
enjoy wide support and will help to overcome the depression. Demands for some groups to pay
reparations to other groups because of a theory of collective guilt will lead towards race war and
civil war, to say nothing of deepening depression. Obama by all indications is leading towards the
latter.
OBAMA PROMISES DEEDS, NOT WORDS, FOR REPARATIONS
In a Chicago speech at the end of July 2008, Obama made clear that he will indeed attempt to
impose reparations if elected, doubtless on the basis of American collective guilt. These reparations
would apparently go to Native Americans and to African-Americans, and possibly to Hawaiian-
Americans as well. ‘“There’s no doubt that when it comes to our treatment of Native Americans as
well as other persons of color in this country, we’ve got some very sad and difficult things to
account for,” Obama told hundreds of attendees of UNITY ‘08, a convention of four minority
journalism associations. The Hawaii-born senator, who has told local reporters that he supports the
federal recognition bill for native Hawaiians drafted by U.S. Sen. Daniel Akaka, noted other ethnic
groups but did not mention native Hawaiians when answering a question about his thoughts on a
formal U.S. apology to American Indians. “I personally would want to see our tragic history, or the
tragic elements of our history, acknowledged,” the Democratic presidential hopeful said. “I
consistently believe that when it comes to whether it’s Native Americans or African-American
issues or reparations, the most important thing for the U.S. government to do is not just offer
words, but offer deeds.”’60 Let there be no doubt: under depression conditions, this policy is a recipe
to move the United States towards civil war in the form of race war. This is apparently the firm
intent of Obama’s Trilateral masters.
FATHER PFLEGER, REPARATIONS, AND RACE WAR
Another long-term close friend of Obama who is evidently supporting the concept of reparations
is the renegade priest, Father Pfleger, who became a focus of controversy in late May 2008. Pfleger
visited Trinity United, and was introduced by Otis Moss as “a friend of Trinity.” Pfleger then
launched in to a diatribe which seems to suggest a campaign for reparations: “I must now address
the one who says, ‘don’t hold me responsible for what my ancestors did.’ But you have enjoyed the
benefits of what your ancestors did! And unless you are ready to give up the benefits — Throw
away your 401 fund! [sic] Throw away your trust fund! Throw away all the money that been put
away in the company you walked into ‘cause your daddy and your granddaddy and your great
granddaddy — Unless you are willing to give up the benefits, then you must be responsible for what
was done in your generation! ‘Cause you are the beneficiary of this insurance policy!”61 There
seems to be little doubt that the first year of an Obama presidency will be marked by convulsive
campaign to impose punitive reparations on the non-black sectors of American society. Needless to
say, this entire concept has been spawned by the cynical ruling class operatives of the foundation
community as part of their eternal strategy of divide and conquer to keep the American people as a
whole in submission to the Wall Street financiers, who are the ones that ought to be taxed for the
benefit of the people as a whole.
168 Barack H. Obama: The Unauthorized Biography
Steve Diamond sums up the situation, noting that Obama’s backers are heavily committed to the
idea of reparations, specifically in the educational sphere: ‘If you believe the rhetoric of the “social
justice” crowd influencing the Obama camp’s approach to education policy - the authoritarian
leftists Bill Ayers and his sidekick Mike Klonsky as well as ed school professors like Linda
Darling-Hammond and Gloria Ladson-Billings - only reparations for 400 years of oppression of
non-whites will allow us to close the “achievement gap” between the oppressors, whites, and the
oppressed, minority kids….Lying behind this argument is a pernicious concept - that white workers
benefit at the expense of black workers and that more widely American workers live off the backs
of workers in the third world. This is at the heart of the authoritarian and anti-union politics of the
Ayers/Klonsky crowd.’ (http://noquarterusa.net/blog/2008/06/26/white-guilt-politics-of-Obamacrowd-
undermined/) Better than call Ayers an authoritarian, we should dub him a totalitarian liberal
who has already reached stormtroop junction.
Very large sums of money were involved in the Chicago Annenberg Challenge, and it is well
worth our while to follow them: ‘The CAC was established in 1995 as a result of a $49.2 million
grant from Walter Annenberg to support education reform in Chicago. Bill Ayers and Anne C.
Hallett co-signed a letter submitting the grant proposal to Brown University President Vartan
Gregorian on November 8, 1994 where the national Challenge office would be headquartered. The
letter was on the letterhead of the University of Illinois at Chicago (“UIC”). Ayers identified
himself as representing the UIC and the “Chicago Forum for School Change.” Ms. Hallett is
identified as the Executive Director of the Cross City Campaign for Urban School Reform. At the
bottom of the letter, a parenthetical states: “On behalf of the Chicago School Reform
Collaborative.”’ (Steve Diamond, ‘That “Guy Who Lives in My Neighborhood”: Behind the Ayers-
Obama Relationship,’ noquarterusa.net, June 19, 2008) ‘The letter and the attached detailed
proposal grew out of a process that began in December 1993 when a small group led by Ayers,
Hallett and Warren Chapman of the Joyce Foundation ‘met to discuss a proposal to the Annenberg
Challenge for support of this city’s public school reform efforts.” ‘This group became the nucleus
of the larger Chicago School Reform Collaborative, one of the two operational arms of the CAC,
which Ayers would co-chair and on which Hallett and Chapman would serve.’ (Program Report,
CAC, Jan. 1, 1995 through Mar. 31, 1996 at 1). (Steve Diamond, ‘That “Guy Who Lives in My
Neighborhood”: Behind the Ayers-Obama Relationship,’ noquarterusa.net, June 19, 2008)
The Chicago banking and finance elite includes the Chicago Board of Trade, the Chicago
Mercantile Exchange, and the Chicago Board Options Exchange, critical parts of the modern
derivatives bubble. Did these ruling interests fear that Chicago was on the verge of a mass strike, in
which white and black, employed and jobless, would demand economic concessions from the
parasites that ran the city? There is some evidence that this fear might at least have dawned on the
more far-sighted of them, especially after the Stevenson debacle of 1986 and the teachers’ strikes
leading up to 1987. Perhaps we can feel some of the ruling class fear in their bombastic prose when
they write: “Chicago is six years into the most radical system-wide urban school reform effort in the
country. The Annenberg Challenge provides an unprecedented opportunity to concentrate the
energy of this reform into an educational renaissance in the classroom.” (Steve Diamond, ‘That
“Guy Who Lives in My Neighborhood”: Behind the Ayers-Obama Relationship,’ noquarterusa.net,
June 19, 2008)
In reality, even before Bill Ayers became engaged in the CAC, patriarch Thomas Ayers of
General Dynamics had already started the ball rolling: ‘The Alliance for Better Chicago Schools
(“ABCs”) was formed then to push for the LSC idea in the Illinois state legislature. Active in the
ABCs was Bill Ayers, Barack Obama’s Developing Communities Project, and Chicago United, a
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 169
group of businessmen concerned about race and education issues founded by Bill Ayers’ father,
Tom Ayers, once CEO of the large Chicago utility, Commonwealth Edison (now Exelon).’ (Steve
Diamond, ‘That “Guy Who Lives in My Neighborhood”: Behind the Ayers-Obama Relationship,’
noquarterusa.net, June 19, 2008)
From the counterinsurgency point of view of Bill Ayers, it was the Local School Council
institutional machinery that mattered most, since these could be turned into a battering ram against
the teachers’ union on the one hand and the board of education bureaucracy on the other, wrecking
both while the municipal bond holders laughed all the way to the bank: ‘…in 1993 the CAC grant
proposal was seen by Ayers as an attempt, in part, to rescue the LSCs. The grant proposal states,
“We envision a process to unleash at the school site the initiative and courage of LSC’s….” Later, it
states “[t]he Local Schools Councils…are important both for guiding educational improvement and
as a means of strengthening America’s democratic traditions.” (Steve Diamond, ‘That “Guy Who
Lives in My Neighborhood”: Behind the Ayers-Obama Relationship,’ noquarterusa.net, June 19,
2008)
Chicago was competing against many other cities for the massive largesse of the Annenberg
Foundation. In writing the grant proposal, Ayers obviously had to show that the Annenberg
Foundation could get more bang for its counterinsurgency buck by investing in the Chicago system:
‘Indeed, the CAC proposal effort led by Ayers and Hallett was a critical part of what the Project
Director of the CAC, Ken Rolling, described as the “political wars” being waged over schools in
Chicago at that time. Ken Rolling was a veteran of those wars because in his previous role he had
been a program officer of the Woods Fund, which supported the school reform effort through its
grants, including grants to Barack Obama’s Developing Communities Project. Other groups in other
cities were competing for the same pool of funds (a total of $500 million made available by
philanthropist Walter Annenberg) and, perhaps even more importantly, other groups in the city of
Chicago with different policy views were applying to receive funds. However, the Ayers/Hallett
proposal was successful in the end with the decision made in late 1994. In January of 1995 the
formal announcement of a grant of $49.2 million was made. That money would have to be matched
by contributions from the private and public sector 2:1 for a total amount over the life of the project
of approximately $150 million dollars to be disbursed in Chicago. (Apparently the actual amount
raised was an additional $60 million for a total of $110 million.) The CAC set up an office in rentfree
space at the University of Illinois at Chicago, where Bill Ayers taught.’ (Steve Diamond, ‘That
“Guy Who Lives in My Neighborhood”: Behind the Ayers-Obama Relationship,’ noquarterusa.net,
June 19, 2008)
The one aspect of the Chicago Annenberg challenge which had no readily evident rational
explanation was the choice of the unknown mediocrity, Barack Hussein Obama, who, as we already
know, had been earmarked by the Trilateral Commission for greater things: ‘The first chairman of
the CAC Board was Barack Obama, at that point, 32 years old and a second year attorney at Davis,
Miner, Barnhill & Galland, a small Chicago law firm. He began the Board position in early 1995
and stepped down from the chairmanship in late 1999, though he remained on the Board until the
CAC phased itself out of existence and handed off its remaining assets to a permanent new
institution, the Chicago Public Education Fund, in 2001. The Board began to meet in March of 1995
and formally incorporated the CAC as a non-profit entity in April 1995. Other board members
included numerous already prominent Chicagoans: Susan Crown, Vice President of the Henry
Crown Company; Patricia A. Graham, President of The Spencer Foundation; Stanley Ikenberry,
President-Emeritus of the University of Illinois at Urbana-Champaign; Handy Lindsey, Executive
Director of the Field Foundation; Arnold Weber, former President of Northwestern University and
170 Barack H. Obama: The Unauthorized Biography
then President of the Civic Committee of the Commercial Club of Chicago; and Wanda White,
Executive Director of the Community Workshop on Economic Development. Some of these
individuals would resign and be replaced by other equally prominent Chicagoans.’ (Steve Diamond,
‘That “Guy Who Lives in My Neighborhood”: Behind the Ayers-Obama Relationship,’
noquarterusa.net, June 19, 2008)
For practical purposes, the Chicago Annenberg Challenge was a monster with two heads. One
was the Board, where Obama presided. ‘The second operating entity of the CAC would be the
Collaborative that would represent various constituencies in the Chicago schools and wider
community. […] The co-chair of the CAC’s Collaborative from 1995 until 2000 was Bill Ayers.
Thus, the leaders of the two operative arms of the CAC from its inception until 2000 were Bill
Ayers and Barack Obama. (Steve Diamond, ‘That “Guy Who Lives in My Neighborhood”: Behind
the Ayers-Obama Relationship,’ noquarterusa.net, June 19, 2008) Note the foundation jargon term,
“the collaborative,” which we have seen in a previous chapter.
One of the tasks which Obama and Ayers had to work on together derived from the fact that,
even though the grant proposals had alleged that there was an insatiable hunger for community
control among Chicago parents, there was overwhelming indifference throughout the city to the
Local School Councils, and it soon proved to be very hard to recruit any candidates to run for the
available posts. Accordingly, more foundation money had to be offered to convince parents to run
for the LSCs. (The Chicago local school councils each consisted of the principal, two teachers, six
parents, two community members, and a student representative in the case of high schools.) This
question can be regarded as a crucial experiment which shows that community control of schools is
generally not a spontaneous grass-roots demand by parents, but rather represents a completely
artificial tactic introduced from the outside by cynical foundation operatives for purposes of
manipulation and political wrecking. ‘The Collaborative and the Board became direct players in the
Chicago LSC elections held in 1996. According to the CAC Report: “In 1996 the Chicago Public
Schools were scheduled to hold the fourth election of Local School Council (LSC) representatives
since the school reform of act [sic] of 1988 was passed. As in the past two elections support from
the central office of the Chicago Public Schools appeared to be minimal. Until, that is, members of
the Collaborative coalesced with school reform groups around the city and began to put pressure on
the Chicago Public Schools’ central office to promote the elections both by recruiting enough
candidates for the open seats so that contested elections would be held and by urging parents and
community members to vote. […] The Board approved a grant of $125,000 for this effort. One of
the first grants awarded in 1995 was a $175,000 Implementation Grant to the Small Schools
Workshop. The Workshop had been founded by Bill Ayers in 1992 and was headed up by his
former Weather Underground comrade, Mike Klonsky.’ (Steve Diamond, ‘That “Guy Who Lives in
My Neighborhood”: Behind the Ayers-Obama Relationship,’ noquarterusa.net, June 19, 2008) We
have already seen that to suppose that conflicts between Ayers and Klonsky represented nothing
more than the division of labor between two operatives.
$100 MILLION OF GRANT MONEY, HUNDREDS OF PRINCIPALS FIRED, BUT
“NO MEASURABLE OR SIGNIFICANT GAIN” FOR CHICAGO SCHOOL KIDS
And how did the Annenberg Chicago Challenge pan out? If increasing levels of student
achievement were the goal, it was an abject failure. A posting by Steve Diamond on
noquarterusa.net pointed out that in a ‘study that was done on the Annenberg Challenge in Chicago
Public Schools—the one where Obama was Chairman of the Board, after all that funding which
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 171
included the $50 million from Annenberg and matching funds from state, Federal and other
resources, the study concluded that there was “no measurable or significant gain” on the part of
students.’62 In other words Ayers and Obama promoted a program that spent millions of private and
public funds and accomplished nothing. I would note that the rubric used for this evaluation
included not just student gains in hard core academic achievement areas but also in soft areas such
as self-image, personal efficacy, school attendance, persistence, etc. Voters, bloggers, media
analysts and MSM should be asking an essential question: If Obama was the chair of this Board (I
think for its duration adding up to about 8 years) and nothing was really accomplished to improve
the achievement and capacities of children to learn, what makes us think he will be successful on a
national scale?’63 A good question. The answer must reflect that the goal of the Annenberg Chicago
Challenge never had anything to do with helping students or improving schools. Its goal, and that of
the foundation community that funded it, was social control through the divide-and-conquer
counterinsurgency method of pitting Local School Councils against the unions and the
administration. In this regard, it appears to have been reasonably successful. The Chicago political
crisis of 1986-1987, which might have turned into a mass strike of all working people and
unemployed people against the lunatic policies of the Reagan-Bush-Big Jim Thompson-Thomas
Ayers financiers, was defused and deflected. The LSCs were also somewhat effective in providing
cover for the system to fire principals, managers, and other trained and experienced personnel,
possibly replacing them with political hacks looking for sinecures. Finally, the futility and constant
strife of the LSCs wore out the existing parent activists until the situation was ripe for a partial
privatization under corporate and business auspices, ratcheting everything down yet another big
notch. Soon, the foundation oligarchs could see, the useless burden of universal free compulsory
public education in the United States would cease to exist – a great savings from the point of view
of Wall Street, but the death-knell for representative government in the United States.
THE BIGGEST PROJECT OF OBAMA’S LIFE ENDS IN ABJECT FAILURE
In 2003 the final technical report of the CCSR on the CAC was published. The results were not
pretty. The “bottom line” according to the report was that the CAC did not achieve its goal of
improvement in student academic achievement and nonacademic outcomes. While student test
scores improved in the so-called Annenberg Schools that received some of the $150 million
disbursed in the six years from 1995 to 2001, “This was similar to improvement across the
system….There were no statistically significant differences in student achievement between
Annenberg schools and demographically similar non-Annenberg schools. This indicates that there
was no Annenberg effect on achievement.” The report identified the political conflict between the
Local School Council promotion efforts of the CAC – such as the $2 million Leadership
Development Initiative - as a possible factor hindering a positive impact on student achievement.
(Steve Diamond, ‘That “Guy Who Lives in My Neighborhood”: Behind the Ayers-Obama
Relationship,’ noquarterusa.net, June 19, 2008)
We must therefore conclude that Barack Hussein Obama, in the Chicago Annenberg Challenge,
the biggest and most ambitious project of his life up until 2007, was an abject failure. His efforts
produced no gain for Chicago school students. It should be clear in retrospect why he almost never
talks about the Chicago Annenberg Challenge. On the one hand, he would have to talk about his
close personal cooperation with the unrepentant terrorist bomber Bill Ayers. On the other hand, he
would have to dodge embarrassing questions about what the positive impact of all of this sound and
fury had finally been.
172 Barack H. Obama: The Unauthorized Biography
By 1997, the entire LSC community control project was visibly moribund, but it may well have
served its purpose of warding off a political upsurge by a united city against the lakeside financiers.
It had certainly functioned as a colossal manpower sink, consuming the energies of yet another
generation of ignorant and naïve activists. ‘The annual report for 1997 made special mention of the
surrounding political context of the CAC’s work. Director Ken Rolling noted that a goal of the CAC
was “seeking a changed policy environment” but that this “has been the most elusive to date with no
major progress to report at this time. He explained further: “The Challenge began its work in 1995
at the same time a dramatic change in the leadership and management of the Chicago Public
Schools took place. The Illinois state legislature awarded complete control of the…Schools to the
Mayor of Chicago in 1995. A new management team and Reform Board of Trustees was installed
and a major emphasis began on administration, financial stability and accountability measures that
are tied to specific test scores. The Challenge began its program at the time the central
administration of the public schools took off in a different direction.” Indeed, the 1995 law gave the
Mayor and the Board the power to dissolve LSCs – the very bodies that the CAC was trying to
bolster.’ (Steve Diamond, ‘That “Guy Who Lives in My Neighborhood”: Behind the Ayers-Obama
Relationship,’ noquarterusa.net, June 19, 2008) Counter-insurgency operations cannot be Johnny
one note — they must always be modulated and varied according to sharp turns in the political and
economic situation. ‘By the end of this 1999, … Barack Obama would step down from the role of
Board Chair as he anticipated an upcoming run for Congress.’ (Steve Diamond, ‘That “Guy Who
Lives in My Neighborhood”: Behind the Ayers-Obama Relationship,’ noquarterusa.net, June 19,
2008) Obama cultivated his glittering career, while the hapless victims of the Chicago Annenberg
Challenge drifted off into educational mediocrity and personal obscurity.
Evaluations of the impact of Obama’s Annenberg meddling have been largely negative. ‘A
report authored by Dorothy Shipps on the first three years of the Annenberg Challenge program,
when Obama was its Board chair, concluded: “The Challenge sought to build on the momentum of
the 1988 Chicago School Reform Act which had radically decentralized governance of the Chicago
Public Schools.” While apparently several hundred school principals had been fired by the LSCs,
kids were still doing poorly in schools and there was chaos of sorts in the system…. Interestingly,
Shipps concludes that the local control movement in Chicago, though backed by radicals like Ayers,
gave “business the clearest voice in system-wide reform.”’ (Steve Diamond, ‘Who “sent” Obama?’
globallabor.blogspot.com, April 22, 2008) Shipps discovered the obvious post festum when she
pointed out that the scale of the LSCs was too fragmented, too minuscule, to be able to implement
positive reforms; she recommended a district-wide or city-wide assembly, but this is still too narrow
and parochial, since schools cannot be successful unless there are good jobs waiting for the
graduates.
Diamond’s estimate is that the political sponsors of Obama were the extended Ayers family. As
long as we are limited to the purview of Chicago, this is doubtless a sound analysis: ‘Thus, we have
one possible answer to the question: Who “sent” Obama? It was the Ayers family, including Tom,
John, Bill and Bernardine Dohrn. It is highly unlikely that a 30-something second year lawyer
would have been plucked from relative obscurity out of a left wing law firm to head up something
as visible and important in Chicago as the Annenberg Challenge by Bill Ayers if Ayers had not
already known Obama very well. One possibility is that Obama proved himself to Ayers in the
battle for local school control when he was at the DCP in the 80s. One guess as to why Obama does
not play up his educational experience more thoroughly now – it certainly could be of use to him
one would think in beefing up his “I have the experience to be President” argument – is that it
would lead to a renewed discussion of the Ayers connection, which is clearly toxic for Obama. And
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 173
it turns out the impact of the Annenberg Challenge on actual students in Chicago schools is
considered mixed at best, although Bill Ayers deemed it a success on political grounds. Indeed the
1995 and 1999 legislative attempts to recentralize power over the schools in the hands of the mayor
did not quite succeed in wrestling control completely away from the LSCs, instead it helped, in the
words of Alexander Russo, “keep the flame alive for decentralized, community-based school reform
- even as the system was moving in a very different direction.”’ (Steve Diamond, ‘Who “sent”
Obama?’ globallabor.blogspot.com, April 22, 2008) Of course, Obama came from much farther
way – he came from the Trilateral Commission and the worldwide Bilderberger Group.
ABC DEBATE: OBAMA’S BLATANT LIES ABOUT
“ENGLISH PROFESSOR” BILL AYERS
On April 16, 2008, ABC News in the person of Charles Gibson and George Stephanopoulos
hosted a debate in advance of the Pennsylvania Democratic primary. This debate stood out from
more than a score of previous debates because of the refusal of the moderators to capitulate to the
blackmail of the Obamakins and their demand that the Perfect Master be given a free ride. Since
this was the first debate since the explosion of the Jeremiah Wright “God Damn America”
controversy, Obama was asked about his relations with Wright. Obama went into serpentine
contortions in response, at one point affirming that he had “disavowed” Wright, only to have to
backtrack and specify that he had only disavowed the hate-monger’s incendiary statements. Most
offensive to the Obama acolytes was Stephanopoulos’ query about Obama’s relations with the
deranged Weatherman terrorist bomber-provocateur, Bill Ayers. In response, the Perfect Master had
disappeared into a cloud of stuttering, stammering, and tergiversation. On these and other questions
regarding his personal associations and his character, Obama was exposed as a desperate
demagogue running away from most of his own past, while testily harrumphing that the inquiries
were irrelevant. This was network television, and the audience for this debate was by the far largest
of any debate of the 2007-2008 cycle, with 10.7 million viewers, some 96% of whom stayed until
the end. This was in many cases their first exposure to Obama, and they were treated to the
epiphany of a scoundrel.
We can argue that Bill Ayers and his charming consort Bernardine Dohrn, along with Tony
Rezko and the Jeremiah Wright TUCC crowd, represent Obama’s closest and most intimate circle
of backers, sponsors, benefactors, and cronies. Obama was thus lying big time in the Philadelphia
debate when Stephanopoulos asked him about Ayers and the Perfect Master massively played down
the nature of his symbiosis with the Weatherman leader and his pasionaria. As Diamond notes,
‘This likely explains why Obama tried a kind of head fake when asked about Ayers by George
Stephanopoulos in the TV debate with Clinton prior to the Pennsylvania primary. Obama said Ayers
was a “professor of English.” Yet, Obama chaired the Annenberg Challenge for three years and
served on its board for another three years, working closely with Ayers on grants to Chicago
schools. And he did not know that Ayers was a professor of education? That strains credulity.
(Steve Diamond, ‘Who “sent” Obama?’ globallabor.blogspot.com, April 22, 2008)
BILL AYERS IN OBAMA’S KITCHEN CABINET
Diamond summed up: ‘The Chicago Annenberg Challenge allowed Barack Obama and Bill
Ayers to work together, no doubt closely, in the heat of political battle to help disburse more than
$100 million to allies, particularly in the LSCs, in the Chicago School system. Under the
circumstances, it seems more than a bit disingenuous of Senator Obama to dismiss Bill Ayers as
174 Barack H. Obama: The Unauthorized Biography
“some guy who lives in my neighborhood.”’ (Steve Diamond, ‘That “Guy Who Lives in My
Neighborhood”: Behind the Ayers-Obama Relationship,’ noquarterusa.net, June 19, 2008) In
reality, there is every indication that Ayers functions as a close political adviser to Obama, and his
umbilical cord to key parts of the intelligence community who have a say in the actions of the
Perfect Master. As Diamond points out, ‘Perhaps this would be of just historical interest if it could
be firmly established that Bill Ayers no longer has any role in the Obama campaign. But that is not
something we know for sure yet. In a recent television interview with Greta Van Susteren, John
Murtagh, a Republican town council member from Yonkers, New York, said that Ayers is currently
an “advisor” to Obama. Murtagh has a particular and understandable sensitivity to the Ayers-
Obama connection besides his Republican politics: his father was a New York Supreme Court (in
NY the Supreme Court is a trial court) judge who presided over a trial of the “Black Panther 21” in
1970-71…. Murtagh was 9 years old at the time. During the trial Murtagh’s home was fire bombed
and Murtagh claims the Weather Underground was responsible for that bombing along with several
others in “solidarity” with the Panthers. He charges, specifically, that Bill Ayers’ wife Bernardine
Dohrn later took credit (apparently on behalf of the entire WU group) for the bombing.’ (Steve
Diamond, ‘Who “sent” Obama?’ globallabor.blogspot.com, April 22, 2008) Nor is this all. There
are indications that the Weatherpeople regard Obama as one of their own, whose seizure of power
will crown with unimagined success their long march through the institutions began in late 1969
and early 1970 when they went into clandestine and underground life. Does Obama bear the
Weatherman tattoo flaunted by Ayers? Will Obama function as a Weatherman in the White House?
Will he pardon Weatherman fanatic and butcher Dave Gilbert, thanks to whose efforts two cops and
a security guard died in the Brinks robbery attempted by the Weatherpeople?
Large parts of the federal bureaucracy might well be in continuous insurrection against Obama
from his hypothetical first day in office. This would include parts of the Justice Department and
various individual law enforcement officials. Here are some excerpts from an April 18, 2008
interview by CNN’s Lou Dobbs with Andrew McCarthy, a former federal prosecutor:
On CNN, April 18 — DOBBS: Bill Ayers, we’re hearing today from Mayor Daley that he also
knows Ayers and he’s just a fine fellow and no problem, don’t be — please don’t be
discomforted by Senator Obama’s relationship with him.
MCCARTHY: Look, of all the people who’ve ever bombed the Pentagon and the State
Department and the New York City police headquarters, I’m sure he’s one of the best. But I —
my sense is that regular Americans aren’t going to see it that way.
DOBBS: Senator Obama, you are declaring rather straight forwardly, is denying some relatively
close relationships that he is suggesting are not — are distant.
MCCARTHY: Yeah, well he’s denying the relationship, but I think more importantly what he’s
trying to obfuscate is that there’s a trajectory to all of this and there’s a theme that runs through
it and whether its some of the statements made by his wife or Reverend Wright or Bernardine
Dohrn and Ayers, the fact is he’s comfortable...Bernardine Dohrn being Ayers’ wife. The other
Weather Underground terrorist who was Ayers’ wife. But, he’s comfortable with people who
hate this country. And I think when he talks about and makes the theme of his campaign
“Change,” and since he hasn’t really explained to us much about the change, we’re entitled to
infer, from the people he’s comfortable with, who are social revolutionaries, the kind of change
he wants to make in America.
DOBBS: You’re including, obviously, Reverend Jeremiah Wright.
MCCARTHY: Of course, right.
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 175
DOBBS: And — and Ayers. Others?
MCCARTHY: Well, there’s Rashid Khalidi, who was a recipient of some of the largess that
Obama controlled when he was on the Woods Board. He is somebody who was –
DOBBS: He was on the board with Ayers?
MCCARTHY: Yes, when Obama was on the Woods Board with Ayers, they gave grants to
Rashid Khalidi, and his work…. (Lou Dobbs, CNN, April 18, 2008)
We note once again in passing that the primitive analysis which is typical of right-wing
observers insists on viewing figures like Ayers as authentic radicals or revolutionaries, rather than
the cynical foundation-funded intelligence community operatives which they actually are. In any
case, we can see here that a future President Obama would have a hard time bringing the executive
agencies of his own regime together, quite apart from his grandiose promises of bringing together
the majority and the opposition in Congress.
OBAMA FANATICS WANT THE AYERS QUESTION DECLARED TABOO
Even while the Philadelphia debate was continuing, there was much wailing and gnashing of
teeth among the Obamakins squatting in the outer darkness. The shrillest of the effete snobs that
evening was probably Tom Shales, the television critic of the Washington Post, which had long
since joined in the swoon for the new messiah. Shales howled that the debate “was another step
downward for network news – in particular ABC News, which hosted the debate from Philadelphia
and whose usually dependable anchors, Charlie Gibson and George Stephanopoulos, turned in
shoddy, despicable performances…Gibson and Stephanopoulos dwelled entirely on specious and
gossipy trivia that has already been hashed and rehashed.” Shales mocked Gibson for “looking
prosecutorial and portraying himself as a spokesman for the working class.” Obama had brought
“refreshing candor” into the debate. The moderators could only be compared to “dogs.” (Tom
Shales, “In the Pa. Debate, The Clear Loser is ABC,” Washington Post, April 17, 2008)
The center-right oligarch David Brooks, by contrast, found that the ABC questions were
“excellent. The journalist’s job is to make politicians uncomfortable, to explore evasions,
contradictions and vulnerabilities. Almost every question tonight did that. The candidates each
looked foolish at times, but that’s their own fault. We may not like it, but issues like Jeremiah
Wright, flag lapels and the Tuzla airport will be important in the fall. Remember how George H.W.
Bush toured flag factories to expose Michael Dukakis. It’s legitimate to see how the candidates will
respond to these sorts of symbolic issues. The Democrats have a problem. All the signs point to a
big Democratic year, and I still wouldn’t bet against Obama winning the White House, but his
background as a Hyde Park liberal is going to continue to dog him. No issue is crushing on its own,
but it all adds up. For the life of me I can’t figure out why he didn’t have better answers on Wright
and on the “bitter” comments. The superdelegates cannot have been comforted by his performance.
Final grades: ABC: A; Clinton: B; Obama: D+” (David Brooks, No Whining About the Media, New
York Times, April 16, 2008) The ABC questions, far from representing a modern Torquemada
treatment, had barely scratched the surface concerning Obama’s relation to Ayers.
THE JOYCE FOUNDATION AND RULING CLASS PLANS FOR GUN CONTROL
Larry Johnson has reported that for eight years, Obama sat on the board of Chicago’s Joyce
Foundation — earning $70,000 in compensation — an influential board that ‘funneled almost $3
million in grants to political groups opposing gun rights,” according to Politico.com reporter
176 Barack H. Obama: The Unauthorized Biography
Kenneth Vogel. This raised another duplicity problem for Obama, since his campaign has worked to
assure uneasy gun owners that he believes the Constitution protects their rights and that he doesn’t
want to take away their guns. As Jarlyn at TalkLeft indicated, “At Wednesday’s debate, Barack
Obama wouldn’t say what his position is on the DC law banning handguns.” In her view, Obama
“dodged, saying he wasn’t familiar with the facts of the case.” She had the audacity to wonder
didn’t Obama answer the question at the debate instead of weaving and bobbing? Was it because he
didn’t want to alienate PA voters, many of whom favor strong gun ownership rights? And, did he
fail to tell the truth? According to the said Jeralyn, in November, “his campaign told the Chicago
Tribune he supported the ban. (Chicago Tribune November 20, 2007.)’ (Larry Johnson, “Obama on
Board That Funded Handgun Bans,” Noquarterusa.net, April 20, 2008)
The Joyce Foundation website announces: “Our program areas are Education, Employment,
Environment, Gun Violence, Money and Politics, and Culture. We focus our grant making on
initiatives that promise to have an impact on the Great Lakes region, specifically the states of
Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin. A limited number of environment
grants are made to organizations in Canada. Education grant making in K-12 focuses on Chicago,
Cleveland, and Milwaukee; early childhood grant making focuses on Illinois and Wisconsin.
Culture grants are primarily focused on the Chicago metropolitan area, except for the Joyce
Awards, which extend to other Midwest cities. We do not generally support capital proposals,
endowment campaigns, religious activities, commercial ventures, direct service programs, or
scholarships.” This adds up to social engineering and mind control. Between the role of the Ford
Foundation as the flagship US counterinsurgency foundation, plus the influence of the terrorist
Bill Ayers as a theoretician of education, it is easy to see how Obama was able to become a
beneficiary of the Joyce Foundation after having served on the Gamaliel Foundation and the
Woods Fund, two other Ford satellites.
According to a focus group set up by the Pennsylvania television station WPVI held the night of
the debate, “Senator Clinton is the debate winner, at least according to our focus group. 23% believe
Senator Obama won while 50% believed Senator Clinton won.” (WPVI Post-Debate Analysis,
April 16, 2008) According to Chuck Todd of NBC News, Obama “did not have a good night….His
answer on Ayers and the flag question were simply weak; He seemed unprepared for them; Kinda
surprising because he normally has a decent rant against “old politics” and yet “old politics”
questions seemed to stump him.” (NBC First Read, April 16, 2008) The Atlantic’s Marc Ambinder
opined that there was “no way Obama could have fared worse. Chris Cillizza noted that Obama
“struggled quite a bit more when asked to answer for Wright, his former pastor.” (Washington Post,
The Fix, April 16, 2008) Katharine Seeyle of the New York Times was impressed by how much
better Hillary Clinton fared: “She’s becoming expansive, seemingly in her element as she goes into
details; Mr. Obama does not look as thrilled to be still standing there.” (New York Times, The
Caucus, April 16, 2008) A Philadelphia commentator chimed in: “Obama is again less certain, and
rambles a bit when asked about the Washington D.C. gun ban. Gibson asks him to deny that he has
ever advocated a complete ban on hand guns in 1996. Obama says no. But whatever the truth, no
other answer is possible.” (Philadelphia Inquirer Blog, April 16, 2008) This was actually a case of
bare-faced, outright lying by Obama, since he denied the authenticity of a policy questionnaire
which bore his own handwriting. Unnoticed by most was yet another pro-GOP testimonial by
Obama, who this time pontificated that the foreign policy of George H.W. Bush was “wise” – this
of the criminal adventurer who bombed Iraq back into the stone age in order to re-impose the
regime of his own former business partner, the slave-holding Emir of Kuwait, and by doing so
started the long agony of the US military presence in the Gulf.
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 177
BITTERGATE BY THE GOLDEN GATE;
FASCIST HATRED OF THE WORKING CLASS
During a visit to San Francisco, Obama unwisely blurted out a series of remarks which revealed
the extraordinary degree he shares the outlook of the present day foundation world. Obama showed
himself to be a very reckless individual, not capable of hiding thoughts and ideas which are proving
extremely damaging to his political ambition. This was especially the case when he turned away
from the glass plates of the Teleprompter and had to speak extemporaneously.
One can imagine Obama meeting with a group of wealthy, ultra left, San Francisco elitists from
whom he expects to get enormous amounts of bundled contributions for his political campaign. We
can imagine some elitist of the general type of Gordon Getty, the partial heir to the Getty oil fortune
and a person who shares with the Emperor Nero the conviction that he is the greatest lyric artist of
the age. Getty or someone like him must have asked Obama why he is doing so poorly in Ohio and
Pennsylvania, and the perfect Master is cut to the quick, since these are obviously the states which a
Democrat must win in order to get the presidency. Obama therefore responds with these fateful
words, which projected the questions of oligarchy, elitism, and class consciousness into the center
of the US political debate in a way so extraordinary that it has not been seen in many, many
decades:
OBAMA: “So, it depends on where you are, but I think it’s fair to say that the places where we
are going to have to do the most work are the places where people feel most cynical about
government. The people are mis-appre...I think they’re misunderstanding why the
demographics in our, in this contest have broken out as they are. Because everybody just
ascribes it to ‘white working-class don’t wanna work — don’t wanna vote for the black guy.’
That’s...there were intimations of that in an article in the Sunday New York Times today - kind
of implies that it’s sort of a race thing. Here’s how it is: in a lot of these communities in big
industrial states like Ohio and Pennsylvania, people have been beaten down so long, and they
feel so betrayed by government, and when they hear a pitch that is premised on not being
cynical about government, then a part of them just doesn’t buy it. And when it’s delivered by —
it’s true that when it’s delivered by a 46-year-old black man named Barack Obama (laughter),
then that adds another layer of skepticism (laughter). But — so the questions you’re most likely
to get about me, ‘Well, what is this guy going to do for me? What’s the concrete thing?’ What
they wanna hear is — so, we’ll give you talking points about what we’re proposing — close tax
loopholes, roll back, you know, the tax cuts for the top 1 percent. Obama’s gonna give tax
breaks to middle-class folks and we’re gonna provide health care for every American. So we’ll
go down a series of talking points. But the truth is, is that, our challenge is to get people
persuaded that we can make progress when there’s not evidence of that in their daily lives. You
go into some of these small towns in Pennsylvania, and like a lot of small towns in the Midwest,
the jobs have been gone now for 25 years and nothing’s replaced them. And they fell through
the Clinton administration, and the Bush administration, and each successive administration has
said that somehow these communities are gonna regenerate and they have not. So it’s not
surprising then that they get bitter, they cling to guns or religion or antipathy to people
who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to
explain their frustrations. Um, now these are in some communities, you know. I think what
you’ll find is, is that people of every background — there are gonna be a mix of people, you can
go in the toughest neighborhoods, you know working-class lunch-pail folks, you’ll find Obama
178 Barack H. Obama: The Unauthorized Biography
enthusiasts. And you can go into places where you think I’d be very strong and people will just
be skeptical. The important thing is that you show up and you’re doing what you’re doing.”64
This very imprudent outburst reveals much about the characteristic outlook of the foundationfunded
political intellectual in the United States today. First of all, this utterance is dripping with
patronizing condescension and contempt for the people he is describing. Obama, well-trained by
his procommunist anthropologist mother, has been in effect on fieldwork in Ohio and Pennsylvania,
and is reporting to a group of his peers about the strange mores of the peculiar populations he has
been attempting to profile and manipulate, with limited success. Obama is trying as hard as he can
to treat the American people like malleable ethnographic material, but they have realized this and
do not like it.
Obama does not mention that the deindustrialization of the United States, and thus the
destruction of the economic viability of the communities he has visited, were the direct result of the
policies imposed by his own Trilateral Commission backers back at the time almost 30 years ago
when Trilateral member Jimmy Carter, probably acting at the prodding of Trilateral member
Zbigniew Brzezinski, place Trilateral member Paul Adolph Volcker at the helm of the Federal
Reserve; it was Volcker’s 22% prime rate which effectively destroyed the industrial infrastructure
of the United States, including especially its export industries. This kind of historical background is
seldom included in the analysis developed by a bankers’ boy when it comes time to assign the
blame.
It is not surprising that Obama is contemptuous of religion, gun ownership, and sports shooting.
The reference to “antipathy” obviously suggests that the people he is dealing with really are racists
after all. Most interesting of all is the reference to “anti-trade,” since the suggestion here is that
anyone who disagrees with economic and financial globalization is somehow irrational, anti-social,
or even paranoid. This puts Obama’s statement closely in line with the classics of academic and
foundation-backed anti-worker ideology. We will not try to develop here the case that economic and
financial globalization have effectively wrecked the world economy, leading to an overall world
immiseration in the form of declining standards of living, and declining economic opportunity. We
have made this case already in Surviving the Cataclysm. Today, the financial order of globalization
is dissolving before the horrified eyes of world public opinion, with the entire system going to the
brink of a systemic explosion of the world banking system on the Ides of March with the looming
bankruptcy of Bear Stearns, which threatened to set off chain reaction bankruptcies throughout the
world financial community in 2008.
One of the sources for the idea that anyone who opposes the prevailing economic and financial
line of Wall Street, the US Treasury, and the Federal Reserve is suffering from some form of
psychopathology is the work of the deeply dishonest and much reviled Columbia University
historian, Richard Hofstadter. Hofstadter was the author of “The Paranoid Style in American
Politics,” (Harper’s, 1964), and Anti-Intellectualism in American Life. He was especially brutal in
his slanders of the late 19th century protest movement among farmers who called themselves the
Populists. Hofstadter was one of the leaders of the school of “consensus historians,” an approach
which he described with the remark that “It seems to me to be clear that a political society cannot
hang together at all unless there is some kind of consensus running through it.” His favorite
technique was to psychoanalyze protest movements, always coming to the conclusion that the
dissidents and critics of the established regime were hopelessly irrational, after probing into their
unconscious psychological motives, status anxieties, hatreds, and paranoia, presenting these
syndromes as the real cause for their political discontent. His favorite way of dismissing a critic was
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 179
to accuse that person of suffering from a “status panic.” Hofstadter’s work boils down to the idea
that politics is a morass of fear, hatred, provincial ignorance, and insanity, and that the only thing to
do is to support the Establishment and its existing order at all costs. Inevitably, Hofstadter had been
a communist, but he insulted Franklin D. Roosevelt by dismissing him as “The Patrician as
Opportunist.” Conservative commentator George Will once described Hofstadter as “the iconic
public intellectual of liberal condescension,” who “dismissed conservatives as victims of character
flaws and psychological disorders — a ‘paranoid style’ of politics rooted in ‘status anxiety,’ etc.
Conservatism rose on a tide of votes cast by people irritated by the liberalism of condescension.”65
Hofstadter, like so many pompous professors, was little more than a paid apologist of the financier
ruling class.
And even such ideas as Hofstadter had were not really original, since most of them came from
the 19th century French sociologist Emile Durkheim. Durkheim’s critique of religion is based on an
idea drawn from Feuerbach that God’s kingdom is merely the projection into eternity and theology
of the existing social relations in a given human group. Durkheim taught that God was “society
divinized,” that “God is society, writ large.”66 Here again there was a very strong overtone that
anyone in the position of a critic, a naysayer, an outsider, a maverick, or a protester was an example
of social pathology rather than being a valuable corrective to the undeniable abuses of a failing
system.
Most importantly, Obama’s Bittergate comments documented that once again his deep hatred for
the American working class, a hatred which constitutes the first and central point in the
Fanon/Weatherman political doctrine: blue-collar white workers are racist, warmongering
“honkies” who have been bought off by capitalist concessions and integrated into the system so that
no revolution, but only bloody race war, remains possible. This concept, in turn, is congenial to the
bosses of the foundations, and to the US financier oligarchy in general, since it happens to coincide
so totally with their plan for a campaign of savage austerity, draconian reductions in the standard of
living, and related genocidal policies against US working people as a means of dealing with the
current world economic and financial depression. Jimmy Carter was of course a useful tool to the
Trilateral bankers, but his effectiveness was sometimes undermined by the qualms, reticence, and
second thoughts suggested by the Christianity he professed. With Obama, there is no such danger;
quite the contrary, Obama will bring to his appointed task a ferocious criminal energy which will
help him to attempt to flay the American people alive.
OBAMA: A DEEP COVER AGENT OF THE 1313 GANG?
The dominant component controlling Obama in terms of his policies and tasks is, as we have
stressed, the Trilateral Commission, founded with Rockefeller family money by David Rockefeller
and Zbigniew Brzezinski, Carter’s controller and Obama’s top political director. In a general way,
Obama can be accurately described as a controlled asset of the Rockefeller family and its allies. The
Rockefeller apparatus of political and social manipulation which is sponsoring Obama has been
around for a long time – more than a century. For them, manipulating elections is nothing new. The
University of Chicago is a long-standing center for Rockefeller subversion. As we have seen, the
University of Chicago 1313 gang was set up with the help of the Spelman Fund, a foundation
created in December 1928 by the outrageous robber barons and sociopathic monopolists John D.
Rockefeller and John D. Rockefeller Jr., the great-grandfather and grandfather of today’s fanatical
Obama backer Senator John D. “Jay” Rockefeller IV of West Virginia. The Spelman Fund got $10
million 1928 dollars from the Laura Spelman Rockefeller Memorial, which were to be used for
social engineering in favor of financier interests in the field of child study, “parent education,” race
180 Barack H. Obama: The Unauthorized Biography
relations, and cooperation with public agencies–a whole range of meddling with the bitter clingers,
and not mere humanitarian concerns. The mission statement of the oligarchical Spelman Fund
bluntly stated that “the interest of the Spelman Fund is not in improvement of some social practice
or function, but is rather in the contribution which maybe made to all aspects of public welfare
through increase of efficiency, technical competence, and rational purposefulness in the operation
of the machinery of government.” Not social progress, but totalitarian control was the goal.
A recent journalistic account of 1313 informs us: ‘1313, completed in 1938, embodied the vision
of two men, Charles E. Merriam, and Louis Brownlow. Brownlow had forged a career (without
benefit of formal education) as a city manager and as a forceful advocate for the public service
professions. Merriam was a University of Chicago political science professor with a bent for
activism that led to service as a Chicago alderman and to two (unsuccessful) runs for the Mayoralty.
The two men conceived 1313 as a vibrant center for (in the words of a 1963 booklet) “the
improvement of the organization, administrative techniques, and methods of government –
municipal, county, state, and federal – in the United States.” Within a few years, 1313 had clearly
become a nerve center for American public administration. By 1963, it was organizational home to
22 non-profit entities, including: American Public Works Association, American Public Welfare
Association, Council of State Governments. American Society of Planning Officials, American
Society of Public Administration, National Legislative Conference, Public Administration Service,
National Association of State Budget Officers, and the National Association of Attorneys General.
Proximity was a key factor in the Merriam-Brownlow concept: proximity of the building’s
organizational inhabitants both to each other and to the resources of the University of Chicago. The
lively, continuous, cross-fertilizing exchanges ensuing from these proximities were to advance the
professionalization of public administration in the U.S.’67 1313 appears as a Rockefeller deployment
running parallel to European fascism, and aiming at the destruction, under the banner of good
government and efficiency, of the large urban political machines which were to be so important in
the 1932-33 coming of the New Deal, which the reactionary Rockefellers were eager to see headed
off.
AXELROD’S 1313 GANG AND THE NEW WORLD ORDER
Some of the 1313 gang’s efforts were disrupted by World War II, but the 1313 operatives were
quick to bounce back: ‘First, the 1313-Spelman boys were thinking hard about the ways and means
to organize a New World Order. A lot of them were involved in the brainstorming that was to
give birth to the new international organizations: their concern for integrating public administration
had now a new level, the international one, in the hope that it would be possible to build a more
efficient system than the League of Nations.’ Rockefeller-funded 1313 operatives played key roles
in creating the United Nations, UNESCO, the Food and Agriculture Organization (FAO), the
United Nations Relief and Rehabilitation Administration (UNRRA), which dealt with refugees and
displaced persons, the World Bank, and other components of the supernational bureaucracy. To
each of these organisms the Rockefeller men imparted their characteristic features of sinister
cruelty, manipulation, and the shameless pursuit of world supremacy for the Anglo-American
financier oligarchy. The 1313 gang is thus central to the efforts for new world order: ‘Thus, the
Ford consolidated the work of international organization that had begun in the 1930s, placing the
urban international under discrete but effective American patronage. It added stone to what could
be called a “Chicago consensus” on urban issues at the international scale, this consensus being
circulated through the net of links created since the 1930s, and put in action thanks to the
overlapping personnel of the Ford, the Chicago organizations, the international societies, and the
IV. Apprenticeship with Foundation-Funded Terrorists: Ayers and Dohrn 181
international institutions. It needs more work to be able to say if the US involvement supported or
engineered by the Big Foundations changed the way in which the city was imagined at the
international scale, or rather created some new frame in which the city was imagined and managed.
It seems that the big foundations heavily contributed to create a new market for governmental
consultancy, quite close in its operation to the one that had been created on the domestic scene in
the 1930s. A vital role in this development was the one played by 1313 leaders, when they
cooperated with the Spelman and when they shaped the action of the Ford.’68 Here, in typical
barbarous foundation-speak, is a good description of the interlocking nests of foundation operatives
which constitute the political, social, and intellectual milieu from which Obama has emerged: the
foundations.
During the Eisenhower years, right-wing critics of the financier elite inevitably viewed the 1313
gang – in reality the proponents of a collectivism based on Wall Street finance capital, not the
proletariat — as tinged with communism, and thus as ‘a secret nest and nexus of totalitarian evil in
the U.S. One lead voice in the chorus of accusations was a woman from southern California named
Jo Hindman. In 1959 and 1960 she published six articles in the American Mercury magazine that
identified an insidious threat to American values and traditions that she termed “Metropolitan
Government” – Metro, for short. In a 1963 book entitled Terrible 1313 Revisited, Hindman
disclosed to the world that “. . . .in the late 1950’s, location of the Metro capital was discovered at
1313 E. 60th Street, Chicago 37, Illinois, a twenty-two organization clearing house. This arsenal of
totalitarianism spews Metro directives, programs, and projects all over target U.S.A….In concept,
practices, and in rapidly multiplying instances, Metro has wrecked private homes, businesses,
property rights, and the ballot franchise. Upon the shambles of these basic concepts in American
government, Metro seeks to force upon Americans collectivized Metropolitan Government, totally.”
Metro’s key devices as enumerated by Hindman included zoning, public health measures, building
codes, urban renewal and transjurisdictional authorities like the New York Port Authority. An
Internet search still finds many references to Terrible 1313 on right-wing websites today.” (Bruce
Thomas, “1313’s Hidden History,” Hyde Park Herald, May 23, 2004) Ms. Hindman’s analysis may
have lacked sophistication, but she was surely on firm ground when she ascribed a basic world
outlook of malevolence and oligarchical arrogance to the 1313 gang. This look back at 1313 as the
later spawning ground for David Axelrod has also provided us with the immediate pre-history of the
Ford Foundation “community control” and “local control” counterinsurgency methods of the late
1960s.
Now a new generation of the 1313 project is poised to take power in the person of Ford-
Rockefeller operative Obama, the Manchurian candidate whose campaign is dominated by David
Axelrod, an operative who owes his training to the 1313 operation.
Obama’s sordid associations suffered another implicit blow on the eve of the Pennsylvania
primary, when Pope Benedict XVI concluded a visit to Washington and New York with the
benediction, “God bless America,” as he boarded his plane for the journey back to Rome. Many
recalled the “No! No! No! God damn America!” rant of the satanic racist provocateur Jeremiah
Wright of the foundation-funded black liberation theology synthetic religion, from whom the
Perfect Master had imbibed hatred and political support for two decades.
CHAPTER V: OBAMA’S HEART OF DARKNESS: REZKO,
AUCHI, ALSAMMARAE, AND CHICAGO GRAFT
“I am the first one to acknowledge that it was a boneheaded move….” – Obama
“If they bring a knife to the fight, we bring a gun.” – Obama
“Illinois is awash in scandal and corruption.” – Jay Stewart, Illinois Better Government
Association
“The Illinois Combine… the bipartisan Illinois political combine.” – US Senator Peter Fitzgerald
If Obama ever reaches the White House, he will certainly be classified as one of the most corrupt
winners of a presidential election in the history of our country. Past presidents from Grant to
Harding have been generally considered corrupt, but it is likely that a future Obama administration
would eclipse them all. As this chapter will make clear, Obama has climbed out of a veritable
sewer of corruption, crime, graft, bribery, kickbacks and rake offs to assume his current role as
seraphic advocate of good government and public probity. Obama may not be the most corrupt
individual ever to approach the presidency, but he is in all probability the person in whom the
reality of corruption and a hypocritical pretense of clean government are most at variance. In this
sense, Obama qualifies as a hypocrite greater than Molière’s Tartuffe, greater than Dickens’ Mr.
Pecksniff in Martin Chuzzlewit.
At the center of Obama’s universe of corruption are three godfathers. They are all Levantine
Arabs from the eastern Mediterranean, corsairs of those dark seas where dirty machine politics and
illegal financial manipulations flow together. The first is Antoin “Tony” Rezko, a nominal
Catholic from the port of Aleppo in Syria, who has been Obama’s most immediate sponsor, backer,
friend, and bagman during his entire political career. Rezko has probably bilked the public treasury
for something approaching one hundred million dollars in the form of public-and private
partnerships allegedly designed to rehabilitate, renovate, and restore decayed slum properties and
make them fit for human habitation. In reality, the properties have been given over to rats and
cockroaches, while Rezko has grown fabulously rich. Obama and his wife Michelle personally
participated in this ill-gotten gain when Rezko assisted them in acquiring the bombastic and
ostentatious mansion in the Kenwood district in which this nouveau riche couple now resides.
Rezko got his start in Chicago opening Subway sandwich shops in places that needed city
concessions. Rezko then became close to Jabir Herbert Muhammad, former manager of
heavyweight champion Muhammad Ali and son of the late Nation of Islam leader, Elijah
Muhammad, and he entered active politics in 1983 to support the successful mayoral candidacy of
Harold Washington, Chicago’s first black mayor.
The second of Obama’s three godfathers is Nadhmi Auchi, who was born in Iraq, professes the
Roman Catholic religion, and is ranked as the eighth (or 18th, depending on the account you read)
richest person in the United Kingdom with a personal fortune approaching £2,000,000,000 or about
$4 billion. In 2003, Auchi was convicted of fraud in the Elf Aquitaine bribery scandal, probably the
largest corruption investigation in the history of postwar Europe. Auchi has a 15 month suspended
sentence hanging over his head. The Elf scandal came complete with accusations against former
French police Minister Charles Pasqua and former French Foreign Minister Roland Dumas, plus the
involvement of the Corsican mafia and various Freemasonic lodges. The basic charge was that a
network including scores of oligarchs had conspired to lose the French state owned oil company
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 183
Elf-Aquitaine of about 3 billion French francs (about $750 million), principally during the 1980s
and 1990s. As a newspaper account related at the time of the Elf trial,
Another powerful figure whose dealings were examined by the magistrates is a British-Iraqi
businessman, Nadhmi Auchi. Defense attorneys said the magistrates investigated Mr. Auchi’s
alleged role in Elf’s 1991 purchase of the Spanish oil company, Ertoil, from its Kuwaiti owner.
According to French press reports, Mr. Auchi helped Elf by initially buying the company
quickly - and avoiding regulatory delays - and then selling it on to Elf. Defense attorneys said
Mr. Auchi allegedly received a commission from Elf of more than 300 million French francs for
his role. Among the magistrates’ questions is whether Mr. Auchi funneled any “retrocommissions”
on the deal back to Elf executives or political figures in France. Commissions
and corporate bribes for foreign officials were legal under French law at the time - indeed, they
were tax deductible. But it was illegal to kick money back to France through these so-called
retro-commissions, which nonetheless are thought to have been widespread on major oil and
arms deals. Mr. Auchi has denied any wrongdoing, and defense attorneys said he had offered to
buy Ertoil back and repay any commissions he received. But he has refused to appear in France
before the magistrates, who have issued an international arrest warrant for him. Although Mr.
Auchi’s name is almost unknown to the French or British public, he is sometimes described as
the eighth-richest man in Britain, with a broad portfolio of assets grouped under his holding
company, General Mediterranean. At one time, he was also reputed to be the largest individual
shareholder in the French bank, Banque Paribas, and a member of its international advisory
board. According to press reports, the French government last year seized his shares in Paribas,
said to be worth $500 million. Queried about his holdings Thursday, Paribas failed to respond.
(Joseph Fitchett and David Ignatius, “Lengthy Elf Inquiry Nears Explosive Finish, International
Herald Tribune, February 1, 2002)69
Aiham Alsammarae (also known as Ayham al-Samarie or Ahyam al Samarrai) is the third of
Obama’s godfathers, and a picaresque figure in the annals of international crime. Alsammarae is
officially listed as a Sunni Arab Iraqi politician and the former Iraqi Minister of Electricity. In his
ministerial post, Alsammarae was accused of looting funds from the Iraqi Electricity Ministry
during the reign of the feckless neocon proconsul, Paul “Jerry” Bremer, the Viceroy of the so-called
Coalition Provisional Authority. In August 2006 Al-Samarie was arrested on corruption charges
involving irregularities in the letting of contracts and the misappropriation of millions of dollars. He
was convicted in October 2006 of corruption relating to a $200,000 generator purchase, and was
sentenced to two years’ imprisonment. In December 2006, his conviction for corruption was thrown
out, but he remained in jail awaiting trial for twelve additional corruption cases. Alsammarae fled
his trial in Iraq on corruption charges after hiring Blackwater USA to break him out of prison. He
currently resides in Chicago. . Alsammarae’s international flight to escape prosecution on felony
corruption charges was openly aided and abetted by the Bush regime, since an American plane
carried him out of Iraq to Jordan. Alsammarae is one of the international jackals whose looting of
Iraq under the Coalition Provisional Authority helped to created the armed backlash of a national
resistance which has so far cost the United States well over 4000 dead.70
Now, o muse, let Nixon’s Bebe Rebozo be silent; let Albert Fall of Harding’s Teapot Dome and
Grant’s Credit Mobilier sink into obscurity. Let LBJ’s Billy Sol Estes and Reagan’s Gorbanifar and
Kashoggi go gibbering into Hades, while Carter’s Bert Lance and Clinton’s Marc Rich retreat to the
shadows wrapped in Sherman Adams’ vicuna coats from the Eisenhower era. A new champion of
crime and logothete of corruption is at hand, and he is Obama.
184 Barack H. Obama: The Unauthorized Biography
THEN: TINKER TO EVERS TO CHANCE;
NOW: ALSAMMARAE TO AUCHI TO REZKO TO OBAMA
Obama has boasted and strutted about his alleged October 2002 speech opposing the idea of a
US attack on Iraq, but it is quite possible that blood money looted from the Coalition Provisional
Authority may have found its way into Obama’s infamous Kenwood mansion. The old Chicago
Cubs double play went from Tinker to Evers to Chance. Obama’s new triple play of corruption may
have gone from Alsammarae to Auchi to Rezko to Obama, with the US taxpayer being one of the
main victims. As Jerome Corsi commented, “Following this twisted trail of suspicious millions,
investigative reporters have drawn a line from Obama to Rezko to Saddam Hussein’s Oil for Food
scandal, with the key connecting point being billionaire Nadhmi Auchi.”71
Most of the funding of Bremer’s Coalition Provisional Authority came from the Bush regime,
and this was the money appropriated from the Iraqi Electricity Ministry by Alsammarae. Might
Alsammarae then have transferred some of these funds to Auchi in London in the course of certain
joint ventures in which these two were engaged? Might some of those same dollars then have
made up part of a $3.5 million loan from Auchi to Rezko? Such money might have helped Rezko
recoup some of his largesse to Barky involved in the earlier below-cost purchase of the lot next door
to Obama’s mansion, a transaction which was indispensable to allow Barky and Michelle to get
control of the property they wanted and later to expand the size of their yard:
When Obama bought his mansion in Chicago’s Kenwood neighborhood, Rezko’s wife Rita,
purchased adjoining land for $625,000 – land that the house’s owners insisted on selling at the
same time. Seven months later, she sold the Obamas one-sixth of her lot, for $105,000, so they
could expand their yard.72
According to another account, this time from a left liberal source:
Troubling to the Obamas’ image of civic rectitude is their entanglement with a campaign
contributor named Antoin (Tony) Rezko in a 2005 real-estate deal. (Rezko is now awaiting trial
on corruption charges.) That year, as the Tribune reported, the Obamas moved to a $1.65-
million Georgian Revival mansion in Hyde Park, which features a thousand-bottle wine cellar
and bookcases made of Honduran mahogany. On the day they bought the house, Rita Rezko,
Tony’s wife, purchased the adjacent lot, which was wooded and empty, for $625,000. After the
deal went through, Michelle contacted the city’s landmarks commission, which she had served
on, and received an e-mail from a deputy commissioner with suggestions for obtaining permits
to erect a fence between the parcels. The Obamas paid for legal, architectural, and landscaping
work, while Rezko got the bill for the fence’s construction, for fourteen thousand dollars. (New
Yorker, March 11, 2008)
The impudence and flagrance of this corrupt transaction underline once again what can only be
called Obama’s megalomania, a sense that he has been absolved of obedience to the law in the same
way that earlier false messiahs have proclaimed the suspension of all the rules. It was reckless folly
for Obama to insist on getting the mansion with an assist from an organized crime figure, but he
went ahead anyway. This is the same kind of antinomian mentality which we can detect in the
crimes of presidents from Nixon to Bush. As Pringle comments,
Obama’s entering into real estate deals with Rezko, while it was public knowledge that he was
under investigation for funneling illegal contributions to Illinois politicians, was not a
“boneheaded” move, it was motivated by pure greed. While knowing that he would get caught
up in a major scandal, Obama went ahead with the deal because he and his wife wanted that
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 185
mansion, with four fireplaces, six bathrooms, and a wine cellar, period. (Evelyn Pringle,
opednews.com)
THE ILLINOIS BIPARTISAN COMBINE; MOTHER SHIP FOR OBAMA
At the center of this worldwide network of crime and intrigue we find the one form of bipartisan
political cooperation to which Obama is sincerely devoted: this sinister centerpiece is the bipartisan
Illinois Combine, a continuing criminal enterprise under the definitions of the RICO statute through
which a gang of racketeers composed of elected officials of the Democratic and Republican parties
have systematically looted and despoiled the public treasuries of the city of Chicago, Cook County,
and the state of Illinois in particular. In his specific capacity as a ward heeling machine hack
political operative, Obama looks to this criminal bipartisan Illinois Combine as his mother ship.
Due to the pervasive presence and overwhelming rapacity of the bipartisan Illinois Combine, it may
well be that Illinois and Chicago specifically represent the most filthy and corrupt jurisdictions
anywhere in the United States today. How ironic that Obama, the self-styled angel of clean
government, has chosen to climb out of this repulsive sewer.
The working hypothesis of this book is that the Rezko conviction, which may well be followed
by similar convictions of Illinois Governor Rod Blagojevich and of Chicago Mayor Daley, will not
be used by Soros and the Trilateral financiers to sabotage the candidacy of their own handpicked
bankers’ boy during the 2008 contest. This would of course represent a self-defeating exercise in
futility, a contradiction in terms. It is instead likely as Operation Board Games represents a
capability which will be kept in reserve for the future, should it ever become necessary for the
banking faction to remind the megalomaniac Obama about who is boss. If Barky becomes too
rambunctious, he can be threatened with indictment and incarceration using the testimony of his
longtime crony Rezko. Alternatively, Operation Board Games and the Rezko conviction might be
used as convenient detonation devices, should the Trilateral bankers ever feel the need to jettison
their puppet in a big hurry. This use of a large-scale federal investigation of the corrupt operations
of a statewide political machine recalls a similar pattern which emerged around the puppet President
Harry S. Truman, who could always be disciplined by reminding him that his patron and the
architects of his political career, boss Tom Pendergast, had been sent to the federal penitentiary in
1939, where Harry could also be sent at any time if he were to forget whose servant he actually was.
This grim reality of the Rezko conviction being available to enforce permanent puppet status on
Obama, no matter what the latter might desire to do once he got to the White House, is yet another
consideration for voters looking for an independent-minded president in 2008.
The Rezko case, like a lugubrious Greek chorus, provided an ominous counterpoint to Obama’s
activities during the primary season. Rezko was arrested at his home in Wilmette, Illinois on
January 29 by federal agents and was taken forthwith to the hoosegow. Federal authorities said that
Rezko had violated the conditions of his bail bond. Jury selection for the Rezko trial began about a
month later. At this time, the Chicago newspapers were much more aggressive than the swooning
national media who made up most of the press corps that was accompanying Obama on his
campaign travels. None of the national pundits was the least bit interested in the fact that the
Perfect Master had such a dirty godfather, but the Chicago types were more hard-bitten. Chicago
papers demanded that Obama come clean, issuing the following set of demands just as the Rezko
trial preparations were beginning:
Jury selection began Monday in the trial of political influence peddler Tony Rezko. This would
be the time — before a single witness takes the stand — for Barack Obama to finally share
186 Barack H. Obama: The Unauthorized Biography
every detail of his relationship with Rezko. Rezko stands accused of funneling state business to
companies that lined his pockets and made campaign contributions to Gov. Blagojevich. Rezko
allegedly directed $10,000 to Obama’s 2004 campaign for the U.S. Senate. For months, Sun-
Times investigative reporters have had a standing request to meet with Obama, face to face, to
get answers to questions such as these: How many fund-raisers did Rezko throw for Obama?
Obama is donating $150,000 to charity that Rezko brought into the campaign. But how much in
all did Rezko raise? Did Rezko find jobs for Obama backers in the Blagojevich administration
or elsewhere? Why did Obama only recently admit — after Bloomberg News broke the story —
that Rezko had toured his South Side mansion with him in 2004 before he bought it? Dribs and
drabs of people’s lives have a most unfortunate way of coming out in trials.’ (Chicago Sun-
Times, “Sen. Obama, time to call us about Rezko: (312) 321-2417,” March 4, 2008)
FITZGERALD DELIBERATELY SHIELDED OBAMA IN THE REZKO TRIAL
US Attorney Patrick Fitzgerald, whose status as a high-level enforcer for the ruling class had
been established during the Scooter Libby prosecution, elected not to bring Obama’s name into the
Rezko trial at the numerous points where mentioning Obama would have been pertinent. Even in
the original indictment against Rezko, Fitzgerald’s office had bent over backwards to avoid
negative publicity for Obama: ‘The list of names in the indictment includes about eight persons
referred to as “Co-Schemers,” and reads like a “who’s who list” of major campaign donors to
Obama, Blagojevich, Daley and other powerful Illinois politicians. Blagojevich is referred to as
“Public Official A,” Obama is referred to as a “political candidate,” and there is a list of
“Individuals” from “Individual A” all the way up to “Individual HH.”’ (Evelyn Pringle,
opednews.com) The same tender regard for Obama’s reputation continued through the entire Rezko
trial: ‘Newly unsealed documents show that prosecutors sought to call witnesses to testify about
Rezko’s ties to Obama, the presumptive Democratic nominee for president. The Illinois senator was
the recipient of “straw” campaign contributions made by others on behalf of Rezko — money that
Obama has since given to charities, but only after he got caught. The documents indicate that
prosecutors considered offering witnesses to explore why Rezko used others to contribute to Obama
and also to Blagojevich, and U.S. District Judge Amy J. St. Eve ruled that they could. But they did
not end up offering any such testimony during the trial. “Witnesses will testify that Rezko was a
long-standing supporter and fund-raiser of Barack Obama,” prosecutors wrote.74 This deliberate
decision to spare Obama for now, while his chief godfather and donor was hustled off to the federal
penitentiary, supports the Truman-Pendergast hypothesis of how the entire Rezko and Operation
Board Games verdicts are likely to be used in the future to ensure that Obama remains under strict
financier control.
OBAMA: “THIS ISN’T THE TONY REZKO I KNEW”
Rezko was then convicted just after the last primary elections were held:
One-time Barack Obama political fundraiser Tony Rezko has been convicted in federal court in
Chicago of corruption charges in a kickback scheme involving the Illinois state government. Rezko
was convicted of 12 counts of mail and wire fraud, two counts of corrupt solicitation and two counts
of money laundering. Rezko allegedly schemed to corrupt two state boards and solicited
contributions for the campaign of Governor Rod Blagojevich from companies seeking state
business. He was acquitted of one count of attempted extortion, four counts of corrupt solicitation
and three counts of fraud. (Yahoo Wires, June 4, 2008)
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 187
Obama released a statement announcing that he was “saddened,” adding in part that “this isn’t
the Tony Rezko I knew, but now he has been convicted by a jury ... that once again shines a
spotlight on the need for reform.” (cbs2chicago.com) This trope was now a very overworked topos
from Axelrod’s rhetorical grab bag, having previously figured in Obama’s boiler plate “This isn’t
the Jeremiah Wright I knew” evasive denial right after the ranting reverend’s geek act at the
National Press Club. As Pringle points out, ‘…Obama knew about the Operation Board Games
investigation during his year-long wheeling and dealing escapade with Rezko to arrange the
purchase of the mansion and lot, and any claim to the contrary by the “I did not know” candidate is
ludicrous.’ (Evelyn Pringle, opednews.com) This was all bad enough, to be sure. But these
monstrous crimes themselves are nothing but the tip of the iceberg. To estimate the real dimensions
of the bipartisan Illinois Combine, we call on Evelyn Pringle, an expert in the ethnic labyrinths that
are now the city of broad shoulders and former hog butcher to the world.
TONY REZKO: FROM CAMELOT TO OBAMA’S LOT
Pringle’s thesis is simple: Obama is an organized crime figure, and the Democratic Party should
never have allowed him to get anywhere near its presidential nomination:
The most trusted leaders of the Democratic party, such as John Kerry and Ted Kennedy, ought
to be ashamed of themselves for supporting Barack Obama. With use of the internet, a fifth
grader could connect the dots to show a picture of a guy who was picked up in college and
carried up the political ladder by a corrupt gang of influence peddlers. John McCain is just
drooling waiting for Obama to become the nominee so that he can come out with the trail of dirt
that the Democratic Party is too afraid to reveal this late in the game. If nominated, Obama will
not survive a month when faced with the Republican attack machine. If he becomes the
nominee, the web of corruption leading to Obama’s rise to power that this investigative
journalist was able to untangle in less than three weeks, will be front page news right up until
election day, handing the Republicans their only chance in hell of winning the White House.
(Evelyn Pringle, opednews.com)
The keystone in this vast edifice of corruption is the Rezko-Auchi axis, which, thanks to
Obama’s complicity, has allowed Rezko to become the owner of a huge piece of prime real estate in
the Loop, the central business district of the lakeside metropolis. Pringle writes:
The investigation called “Operation Board Games” will lead to Obama’s downfall and it will
begin with what he claims was a “boneheaded” mistake in entering into real estate deal with the
Syrian-born immigrant, Antoin ‘Tony’ Rezko, less than a month after Rezko received a $3.5
million loan from the Iraqi-born billionaire, Nadhmi Auchi, who ended up with Riverside Park,
a $2.5 billion 62-acre development project in the Chicago Loop. [This immense prize of
Riverside Park is a central feature of the entire scandal, since] … following the names linked to
Riverside Park is the key to understanding Operation Board Games.’ (Evelyn Pringle,
opednews.com)
Today, Obama is naturally running away from Tony Rezko as fast as his legs will carry him, but
the evasion is useless. At various times in his career, Obama has been a most assiduous frequenter
of the Levantine gangster.
‘For a year, [Obama] also minimized his relationship with Rezko by telling the media that he
only had dinner or lunch with Rezko one or twice a year. But when confronted by Sun-Times
reporters during the March 14 interview, with the allegation that an FBI mole saw him coming
188 Barack H. Obama: The Unauthorized Biography
and going to Rezko’s office often and that three sources said he talked to Rezko on the phone
daily, Obama changed his tune.’ (Evelyn Pringle, opednews.com)
‘In the media, Obama always made it sound like he rarely saw Rezko, saying they met for
breakfast or lunch once or twice a year. However, the FBI mole John Thomas helped
investigators “build a record of repeat visits to the old offices of Rezko and former business
partner Daniel Mahru’s Rezmar Corp., at 853 N. Elston, by Blagojevich and Obama during
2004 and 2005,” according to the February 10, 2008 Sun-Times.’ (Evelyn Pringle, “Curtain for
Barack Obama Part II,” opednews.com)
At the height of the Jeremiah Wright scandal in mid-March 2008, Obama finally gave in to the
demands of the Chicago press corps and agreed to answer some questions about his relations with
Rezko over the years. Obama was obviously seeking to use one scandal to eclipse another, but
Pringle has gone through the relevant articles and found much material which is damaging to the
Illinois Messiah. One aspect of this was the infiltrated FBI spy had testified that Obama was
constantly in the company of Rezko:
During his March 14, 2008 interview, the Sun Times told Obama, Thomas is an FBI mole and
he “recently told us that he saw you coming and going from Rezko’s office a lot.” “And three
other sources told us that you and Rezko spoke on the phone daily.” “Is that true?” the reporter
asked. “No,” Obama said, “That’s not accurate.” “I think what is true,” he said, “is that, it
depends on the period of time.” “I’ve known him for 17 years,” Obama stated. “There were
stretches of time where I would see him once or twice a year.” He told the Sun Times, “when he
was involved in finance committee for the U.S. Senate race, or the state senate races, or the U.S.
Congressional race, then he was an active member.” “During the U.S. Senate race, there’d be
stretches of like a couple of weeks - for example prior to him organizing the fundraiser that he
did for us - where I would probably be talking to him once a day to make sure that was going
well,” he said. “But the typical relationship was one that was fond,” he added. “We would see
each other.” Now the story is that he may have talked to Rezko daily at times during campaigns
but sometimes he went for a whole month without talking to him. “I have to say we’re talking
over the course of 10 years,” Obama said, “there might have been spurts where I talked to him
daily.” (Evelyn Pringle, opednews.com)
Further invasion is useless; Obama was as close to Rezko as the thumb is to the forefinger. One
way to document this is by following the money. Obama himself has confessed to accepting
something in the neighborhood of a quarter million dollars from his convicted felon backer.
‘Tony Rezko was Obama’s political Godfather. Obama received his first contributions of
$2,000, to launch his political career as a state senator on July 31, 1995, from Rezko. Obama
started out saying that Rezko only raised $50,000 or $60,000 for his political career but after a
year of lying his way through the primaries, the latest total he gave to the Sun-Times and
Tribune during interviews on March 14, 2008, adds up to $250,000.’ (Evelyn Pringle,
opednews.com)
OBAMA: REZKO “NEVER ASKED ME FOR ANYTHING” FOR THE $250K!
Rezko and Obama go back a long way together, back to the early 90s when Obama was
completing law school at Harvard. ‘Obama met Rezko soon after graduating from Harvard Law
School. Rezko was well connected in Chicago’s African-American community, in part because he
had worked with Jabir Herbert Muhammad, the son of Nation of Islam founder Elijah Muhammad,
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 189
when he was managing the career of boxer Muhammad Ali, according to a May 2005 profile in the
Chicago Tribune. Rezko moved into real estate and political fundraising, often a combustible
combination in Chicago. Rezko offered Obama a job with his real estate company soon after they
met, around 1991, but Obama declined. When Obama decided to run for the state Senate in 1995,
Rezko was his “first substantial contributor,” according to the Tribune. That money relationship
continued, with Rezko raising as much as $250,000 over the course of Obama’s five Illinois races,
reported the Chicago Sun-Times. The friendship may have reflected the fact that both men were
outsiders, trying to establish themselves in the rough-and-tumble world of Chicago. Obama told the
Sun-Times last month: “My assessment of Tony Rezko was that he was an immigrant who had sort
of pulled himself up by his bootstraps. ... I think he saw me as somebody who had talent, but he was
probably also intrigued by my international background.” Part of what Obama says he liked about
Rezko was his graciousness: “He never asked me for anything.” The relationship became
controversial because of the now-famous home-purchase deal: When Obama and his wife bought a
$1.65 million house in Chicago in June 2005, Rezko’s wife simultaneously bought the adjoining lot
and later sold part of it back to the Obamas so that they could have a bigger yard. Obama conceded
in an interview with the Chicago Tribune last month that in the real estate deal, “I made a mistake in
not seeing the potential conflicts of interest or appearances of impropriety.” He said of Rezko’s
motivation in buying the adjoining lot, “He perhaps thought that this would strengthen our
relationship. He could have even thought he was doing me a favor.” What’s troubling about this
story is that at the time Obama bought the house in June 2005, allegations had already surfaced
about Rezko’s alleged influence-peddling. A Feb. 13, 2005, story in the Chicago Tribune criticized
Rezko’s receipt of lucrative state contracts to operate restaurants on Illinois toll roads; an April 8,
2005, story said he was “under fire from Chicago’s city hall” because his restaurant chain had taken
two spots at O’Hare airport designated for minority firms; a May 17 article reported that Rezko had
been subpoenaed in a corruption probe. (David Ignatius, “Obama and the Chicago Insider,”
Washington Post, April 20, 2008)
Obama’s absurd claim that Rezko “never asked me for anything” shows his real contempt for the
intelligence of voters, and in any serious presidential debate he would have been questioned
mercilessly on this point. But Ignatius, a drooling acolyte of the Perfect Master, is more than
willing to accept this nonsense at face value.
OBAMA’S DON’T ASK, DON’T TELL POLICY FOR GRAFT
Obama returns to this particular lie (the one about Rezko never having asked him for any favors
whatsoever) again and again, like a dog to its vomit:
…Obama has continuously claimed that Rezko never asked him for favors. On November 5,
2006, the Sun-Times published his answers to questions that were submitted to him after the
news of the real estate deal with Rezko surfaced, and Obama stated: “I have never been asked to
do anything to advance his business interests.” A day later, on November 6, 2006, he told
reporters in Waukegan Illinois, “He had never asked me for anything. I’d never done anything
for him.” In December 2006, he told the Washington Post: “I’ve known him for 15 years.” “He
had never asked me to do anything.” (Evelyn Pringle, opednews.com)
Even the chickens are laughing at Obama’s mendacity.
But the record indicates that Obama did a large number of very dirty favors redolent of graft and
corruption for his sugar daddy Rezko.
190 Barack H. Obama: The Unauthorized Biography
On June 13, 2007, the Sun-Times reported that as a state senator, “Obama wrote letters to city
and state officials supporting his political patron Tony Rezko’s successful bid to get more than
$14 million from taxpayers to build apartments for senior citizens.” In the Sun Times, Novak
reported that the deal included $855,000 in development fees for Rezko and [ex Obama
employer and alleged public housing abuser Allison] Davis, while Obama was still working at
the Davis law firm, for a bid on a project that was “four blocks outside Obama’s state Senate
district.” Although the law firm represented several companies owned by Davis and Rezko
when Obama wrote the letters, the firm did not represent New Kenwood in the deal. According
to the Sun-Times, Davis and Rezko instead hired a firm owned by Mayor Daley’s brother
Michael, “to help them get $3.1 million from bonds issued by the city of Chicago.” (Pringle, oped
news)
MICHELLE OBAMA’S FASHION SHOW OF GRAFT
Michelle Obama joined her husband in eagerly cavorting in the cesspool of the bipartisan Illinois
Combine. Michelle was the guest of honor at a veritable fashion show of graft; among those present
was Patti Blagojevich the consort of the overlord of the entire bipartisan Illinois Combine.
‘In the November 2007, Chicago Magazine, James Merriner described a “fashion show” that
took place in the first week in November 2006, to benefit St Jude Children’s Research Hospital,
which he said, “attracted little if any media coverage, which may have been exactly as its organizers
and sponsors had hoped.” “The invitation to the affair,” he wrote, “offered a veritable guidebook to
political influence in Illinois, much of it centered on one St. Jude benefactor, Antoin ‘Tony’
Rezko.” “Just three weeks earlier,” Merriner pointed out, “Rezko had been indicted on charges of
extorting kickbacks from businesses seeking contracts from the Blagojevich administration.” The
“fashion show” was chaired by Rita Rezko, co-chaired by the Governor’s wife, Patti Blagojevich,
and Michelle Obama was a special guest that day, according to Merriner. Two weeks after the
“fashion show,” on November 17, 2006, the Sun-Times reported that Blagojevich’s wife Patti got
nearly $50,000 from a real estate deal in late 2002 involving Rezko. (Evelyn Pringle,
opednews.com)
VALERIE JARRETT, FRIEND OF BARKY
Michelle Obama had in fact been an integral part of the Illinois Combine even before Barky. It
was Michelle who introduced Obama into the secrets of the machine:
‘Obama’s ties to the corrupt Daley machine began when he was dating his wife Michelle and
she brought him into the fold. Valerie Jarrett, the deputy chief of staff to Mayor Daley, hired
Michelle as her assistant in 1991…. Obama’s introduction into the “Combine” came when his
wife Michelle was hired by Jarrett in the early 1990s, and served as Jarrett’s assistant in Daley’s
office and followed her to the Department of Planning and Development.’ (Evelyn Pringle,
opednews.com)
During the 2008 primaries, Valerie Jarrett was listed by Newsweek magazine as part of Obama’s
standard traveling entourage. Valerie Jarrett played a key role in introducing both Obama and
Michelle into the higher levels of the Combine:
‘Daley made Jarrett the chairman of the Chicago Department of Planning and Development and
Michelle worked as her assistant in that Department during 1992-93. From there Michelle
moved up the political tiers to the University of Chicago and ultimately got an overnight pay
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 191
raise from about $121,000 to close to $317,000, after Obama became a US Senator, as a vice
president at the University of Chicago.’ (Evelyn Pringle, opednews.com)
At the University of Chicago, the careers of Michelle Obama and Valerie Jarrett moved in
tandem, like Plutarch’s parallel lives:
On June 13, 2006, Michelle’s employer, the University of Chicago, announced that, “Valerie
Jarrett has been appointed as the new Chair of the University of Chicago Medical Center Board
and also Chair of a newly created Executive Committee of that board. She has also been named
Vice-Chair of the University’s Board of Trustees.” Jarrett served on Obama’s US Senate
campaign finance committee and serves on Obama’s presidential campaign finance committee
along with Alex Giannoulias and Mayor Daley’s brother Bill.’ (Evelyn Pringle, opednews.com)
Valerie Jarrett has also been important for the fundraising of the Obama campaign, the source of
Obama’s much-vaunted claims of superiority over all his rivals:
‘When it came time for Obama’s US Senate campaign, Valerie Jarrett became the campaign
finance chairman and worked hand and hand with fellow finance committee members, Rita and
Tony Rezko, and his [Obama’s] former boss at the law firm, Allison Davis, in fundraising
endeavors. The committee raised more than $14 million, according to Federal Election
Commission records, Tim Novak reported in the Sun-Times on April 23, 2007. Jarrett is now
the CEO of Habitat Co, a real estate development and management firm which manages the
housing program for the Chicago Housing Authority, the entity mandated to administer public
housing, and she serves as an unpaid advisor to Obama’s Presidential campaign.’ (Evelyn
Pringle, opednews.com)
DAVID AXELROD: A FLACK FOR THE COMBINE
The mastermind of Obama’s campaign, David Axelrod, whom we have already encountered as a
graduate of the infamous University of Chicago 1313 school of mind bending, can only be properly
understood in his role as a flack and public-relations man for the corrupt bipartisan Illinois
Combine.
On April 1, 2007, Dick Simpson, a former Chicago alderman who is now chairman of the
political science department at the University of Illinois at Chicago, told Ben Wallace-Wells in
the New York Times: “David Axelrod’s mostly been visible in Chicago in the last decade as
Daley’s public relations strategist and the guy who goes on television to defend Daley from
charges of corruption.” (Evelyn Pringle, opednews.com)
The need for such services has been increasingly evident:
‘On January 6, 2006, the New York Times ran the headline, “Corruption Scandal Loosening
Mayor Daley’s Grip on Chicago,” and reported that a “wide-ranging federal investigation into
what prosecutors describe as “pervasive fraud” in hiring and contracts at City Hall has led to 30
indictments, including two senior administrators close to the mayor, and a dozen cabinet-level
resignations.” (Evelyn Pringle, opednews.com)
Axelrod’s network in the Daley machine and the Chicago Tribune has been a priceless asset for
the Redeemer. Various websites have advanced the allegation that Patti Solis Doyle, Clinton’s
campaign manager in 2007-2008, had come under the influence of Axelrod as a result of Solis
Doyle’s Chicago connections to The Combine. In a posting on Taylor Marsh’s site, we find that
‘Daniel “Danny” Solis is a Chicago politician who serves as the alderman for the 25th ward which
192 Barack H. Obama: The Unauthorized Biography
includes the Lower West Side. He was appointed by Mayor Richard M. Daley in 1996. He is the
brother of Patti Solis Doyle, Senator Hillary Clinton’s former campaign manager. Solis was a
member of Clinton’s Illinois Steering Committee. Throughout his career as alderman, Solis has
been an ally of Mayor Daley and in 2001 was appointed President Pro Tempore of the City Council,
allowing him to oversee council proceedings in the mayor’s absence.’75 Some concluded from this
that Patti Solis Doyle had turned into a submarine in the Clinton camp. This would explain why
Clinton had little or no organization in the February 2008 post-Super Tuesday caucus and primary
states, a failing which allowed Barky to build up his lead in delegates thanks to caucuses in
Republican states where the Democratic Party was a restricted club dominated by rich elitists and
global warming neo-Luddite fanatics.76 The charges were plausible, but there was also the matter of
Mark Penn as another nefarious influence who shared responsibility for defeat.
AN OBAMA BODY COUNT?
During the Clinton era, right-wingers delighted in circulating a list of deceased persons which
they referred to with much stretching of the imagination as a Clinton body count. It may now be
time to revive this venerable institution for Obama and the bipartisan Illinois combine: John
Stroger was the Cook County Board President and thus the top-ranking African-American elected
official in the county in which Chicago is located. On January 31, 2006, Obama pointedly declined
to endorse Stroger for re-election. The Chicago Democratic machine turned against Stroger, forcing
him off the ticket and out of office. Stroger was elderly and not in good health, but he succumbed at
a time that was convenient for the Daley machine:
John Stroger will not be answering any questions about corruption, or any other matter, because
he died on January 18, 2008. His former chief of staff and godson, Orlando Jones, will not be
talking either because he was found dead of self-inflicted gun wounds in September 2007, “just
as a corruption inquiry targeting him was heating up,” according to a September 7, 2007 report
by CBS News channel 2 Chicago.’ (Evelyn Pringle, opednews.com)
Was Jones suicided?
‘“Jones left his position in county government to create a lobbying firm in association with
Tony Rezko, who has been indicted on fraud charges,” CBS reported. Cook County
Commissioner Tony Peraica [a Republican who had tried to get Stroger’s post] told CBS that
Orlando Jones’ death raised many questions about the Cook County president’s office. “Some
of these matters Jones was involved in that are currently being investigated by the FBI and the
U.S. Attorney’s Office are reaching to the highest level of county government,” Peraica said.
(Evelyn Pringle, opednews.com)
Other names that might figure on an Obama body count include Donald Young, the gay
choirmaster of Jeremiah Wright’s Trinity United Church of Christ, Larry Bland, and Nate Spencer,
the latter also black gay men from the south side of Chicago who have died recently under
mysterious circumstances. Nate Spencer was also a member of Wright’s Trinity United church.
Despite all the media attention for this highly politicized church, two murders in the cathedral have
not been reported by the controlled corporate outlets.
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 193
LOOTING OF PENSION FUNDS WAS OBAMA’S SPECIALTY
Important aspects of Combine operations in which Obama was involved dealt with the organized
looting of investment funds earmarked for the retirement income of state employees. Obama’s
contribution was to streamline the process by which these pension funds could be bilked.
Obama’s using the lure of the pension funds to raise campaign money goes way back. In 1999,
he “was instrumental in the formation of a coalition of black investment firm owners and
legislators in Illinois to create an initiative that would award black-owned firms with the
management of some of the state’s retirement funds,” according to a 2004 article on Black
Enterprise.com. […] However, the Times pointed out that Obama’s political career had
benefited many times over from his ties to the group. “Several of the businessmen or their
wives would help clear the debts from his Congressional race,” the Times wrote, “and six of the
group’s members are now among the top fund-raisers for his presidential campaign, according
to campaign finance records.” (Evelyn Pringle, opednews.com)
Obama’s services in making it easier for black oligarchs to siphon off money from these
retirement accounts led in turn to increased campaign contributions for the Perfect Master:
During this period, the Times says, campaign finance records show executives from Ariel
Capital, Loop Capital, Holland Capital and Capri Capital, “sharply increased their donations” to
Obama’s State Senate campaign fund. “And once he began his campaign for the United States
Senate,” the Times wrote, “they quickly became a fund-raising core that has carried over into
the presidential race.” (Evelyn Pringle, opednews.com)
These machinations also help to explain one of the legendary Damascus road conversions of the
2008 primary season, the decision of former Clinton ally and DNC Chairman David Wilhelm to
join the ranks of the renegades endorsing Obama. Wilhelm had been implicated for some years in
shady activities in which Obama had also been a protagonist:
Obama was chairman of the Senate Health & Human Services Committee in January
2003. A few articles in the media have mentioned that Obama sat on a committee that
reviewed matters related to the Planning Board in conjunction with the Governor’s staff but
none have discussed his integral part in getting the bill passed A June 2003 email exchange
produced in the trial shows Obama was one of eight officials who received the names of the
nominees for the new Board ahead of time, from the office of David Wilhelm, who headed
Blagojevich’s 2002 campaign for governor. The corrupt new appointees were all
contributors to the presidential hopeful, Blagojevich, and the US Senate hopeful Obama. On
February 14, 2008, Wilhelm endorsed Obama in a call with reporters, citing the senator’s
“masterful” campaign organization and strategy as well as his “undeniable momentum.”
“He has outworked, out-organized and out-raised his opponents every step of the way,”
Wilhelm said. “The Obama campaign, win or lose, will serve as a model for future
generations to come.” Wilhelm’s firm has received a subpoena for records related to
pension fund investments.’ (Evelyn Pringle, opednews.com)
Pringle thinks that the Combine wanted to put Blagojevich into the White House, but the
presidency is beyond the reach of gangsters at this level, unless the Trilaterals and related financier
forces approve.
194 Barack H. Obama: The Unauthorized Biography
The pecuniary rewards for Obama and his fellow racketeers were most gratifying, but the impact
on Chicago and Illinois was devastating. The Combine was a cancer so big that it was beginning to
drain the life blood of its host, causing a gradual strangulation of the real economy:
Illinois citizens are sick of paying the cost of corruption. A September 26, 2007 news release by
Steve Stanek of the Heartland Institute carried the headline: “Proposed Tax Hike Would Give
Chicago Nation’s Highest Sales Tax Burden” “Chicagoans would face an 11 percent sales tax
rate, highest in the nation, if Cook County officials go through with a plan to more than triple
the county’s portion of the area’s sales tax,” Stanek wrote. And let there be no doubt, Obama is
a member of this corrupt gang. On January 22, 2007 ABC News in Chicago announced that
Senator Obama “is supporting Mayor Daley’s re-election bid despite a series of City Hall
corruption scandals.” (Evelyn Pringle, opednews.com)
NADHMI AUCHI, PARTNER OF REZKO – AND BARKY?
Obama’s second Levantine godfather is the British billionaire Auchi, whose front company,
General Mediterranean Holdings (GMH), is now the owner of some prime Chicago real estate,
thanks to his close relations with the Illinois Combine. This is
Nadhmi Auchi, who ended up with Riverside Park, a 62-acre lot in the Chicago Loop estimated
to now be worth $2.5 billion. On September 29, 2005, Crain’s Chicago Business news reported
that General Mediterranean Holding, “a Luxembourg-based conglomerate headed by Nadhmi
Auchi, is buying Riverside Park, a yet-to-be-built development on a prime 62-acre parcel on
Roosevelt Road,” … General Mediterranean is owned by Nadhmi Auchi, who public source
documents describe as a British-based Iraqi billionaire who was convicted several years ago in
France on fraud charges. Auchi was sentenced to 15 months in prison and fined $2 million
euros, but the sentence was suspended as long as Auchi committed no new crimes…. Auchi’s
conviction was a part of the gigantic investigation into the corruption of the Elf oil company,
“the biggest fraud inquiry in Europe since the Second World War. Elf became a private bank
for its executives who spent £200 million on political favours, mistresses, jewelry, fine art,
villas and apartments,” according to the November 16, 2003 Guardian. (Evelyn Pringle,
opednews.com)
Auchi and Alsammarae both have their pied-à-terre in Chicago; Alsammarae, in fact, has three:
“The three homes belonging to former Iraqi Electricity Minister Aiham Alsammarae — a dual
U.S.-Iraqi citizen who broke out of a Baghdad jail in 2006 — are part of a long list made public
... following a Sun-Times request.” “Alsammarae is the weakest link in the chain of people who
stole money from the CPA and the Iraqi people since 2003. The evidence against him is strong
and convincing. His conviction is a problem for the people in his gang. The Baathists.” (Evelyn
Pringle, opednews.com)
There is little doubt that a serious probe of Chicago real estate and public housing graft would
reach all the way up to Mayor Richard Daley and beyond: Pringle has demanded that ‘an
“Operation Board Games” investigation should be conducted on the slumlord business in Illinois
over the past 15 years. Daley became Mayor in 1989 and Rezmar got its first city loan of $629,000
the same year, even though Rezko and Mahru had no construction experience.’ (Evelyn Pringle,
opednews.com)
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 195
According to Rawstory, “Auchi, a native of Iraq who lives in Great Britain, has a colorful past
of his own. The businessman set up a variety of deals with Saddam Hussein’s regime prior to the
1991 Gulf War, and was one of the largest private shareholders in BNP Paribas, the bank that
trafficked most of the funds involved in the UN Oil-For-Food scandal. He also admitted taking
kickbacks from the French petroleum company TotalFinaElf in the 1990s (Auchi later sued Elf for
entangling him in their criminal activities, according to Forbes).”
By late summer 2008, right-wing papers from the mainstream media were finally beginning to
realize the dimensions of the Auchi issue. Neocon John Fund wrote in the Wall Street Journal
online edition: ‘Rezko’s trial raised a host of questions. Was Mr. Obama able to save $300,000 on
the asking price of his house because Rezko’s wife paid full price for the adjoining lot? How did
Mrs. Rezko make a $125,000 down payment and obtain a $500,000 mortgage when financial
records shown at the Rezko trial indicate she had a salary of only $37,000 and assets of $35,000?
Records show her husband also had few assets at the time. Last April, the London Times revealed
that Nadhmi Auchi, an Iraqi-born billionaire living in London, had loaned Mr. Rezko $3.5 million
three weeks before the day the sale of the house and lot closed in June 2005. Mr. Auchi’s office
notes he was a business partner of Rezko but says he had “no involvement in or knowledge of” the
property sale. But in April 2004 he did attend a dinner party in his honor at Rezko’s Chicago home.
Mr. Obama also attended, and according to one guest, toasted Mr. Auchi. Later that year, Mr. Auchi
came under criminal investigation as part of a U.S. probe of the corrupt issuance of cell-phone
licenses in Iraq. In May 2004, the Pentagon’s inspector general’s office cited “significant and
credible evidence” of involvement by Mr. Auchi’s companies in the Oil for Food scandal, and in
illicit smuggling of weapons to Saddam Hussein’s regime. Because of the criminal probe, Mr.
Auchi’s travel visa to the U.S. was revoked in August 2004, even as Mr. Auchi denied all the
allegations. According to prosecutors, in November 2005 Rezko was able to get two government
officials from Illinois to appeal to the State Department to get the visa restored. Asked if anyone in
his office was involved in such an appeal, Mr. Obama told the Chicago Sun-Times last March, “not
that I know of.” FOIA requests to the State Department for any documents haven’t been responded
to for months.’77
REZKO JAILED BEFORE SUPER TUESDAY OVER PAYMENT TO REZKO
Auchi suddenly became big news just before Super Tuesday, when court proceedings
connected to the Rezko trial revealed that Auchi had transmitted a hefty sum of cash to
Rezko to help him to make bail and get sprung out of jail. When the judge in the Rezko trial
learned of Auchi’s conveyance of this cash, Rezko was ordered back to jail at a very
sensitive moment in the primary season – but most of the impact was blunted because of
the media smokescreen for Barky. Important background information was provided by the
London Times, the British newspaper of record: ‘An undeclared $3.5 million (£1.8 million)
payment from a Iraqi-British businessman has landed Barack Obama’s former fundraiser
behind bars. The payment, disclosed in court papers, is the first time that Mr Obama’s longserving
bagman Antoin “Tony” Rezko, a Syrian immigrant to the United States, has been
linked to Nadhmi Auchi, the Iraqi-born billionaire who is one of Britain’s richest men.
Court papers describe Mr Rezko as a close friend of Mr Auchi, although Mr Auchi disputes
this. The two are involved in a large Chicago land development together. But it is unclear
how long the two men have known each other or whether they were linked before the 2003
Iraq war. Neither side would discuss their relationship. The Times has, however, discovered
196 Barack H. Obama: The Unauthorized Biography
state documents in Illinois recording that Fintrade Services, a Panamanian company, lent
money to Mr Obama’s fundraiser in May 2005. Fintrade’s directors include Ibtisam Auchi,
the name of Mr Auchi’s wife. Mr Auchi’s spokespeople declined to respond to a question
about whether he was linked to this business. Mr Rezko, to be tried for corruption this
month, had his bail revoked on Monday after he disobeyed a court’s instructions to keep it
informed of changes to his finances. Prosecutors feared that he could try to flee abroad….
According to prosecution documents Mr Rezko tried to persuade unnamed Illinois officials
to help Mr Auchi to get a US visa after he was convicted of fraud in France. Mr Auchi
denies asking Mr Rezko to approach any officials and Mr Obama’s aides deny that he was
approached. There is no suggestion that any lobbying was related to the loan. Mr Rezko has
been indicted for pressuring companies seeking state business for kickbacks and campaign
contributions, although none for Mr Obama. He was granted bail in October 2006. He told
a judge that he had no access to overseas money. But in April 2007 Mr Auchi’s business,
General Mediterranean Holding (GMH), wired $3.5 million to Mr Rezko from a bank
account in Beirut via a law firm. Mr Auchi has attracted attention at Westminster because
of his closeness to politicians and the Establishment. He says that his brother was executed
by Saddam Hussein’s regime. His business partners in Britain have included Lord Steel of
Aikwood, the former Liberal leader, and Keith Vaz, the Labour MP and Home Affairs
Committee chairman. On the 20th anniversary of his business in 1999, Mr Auchi received a
greeting card signed by 130 politicians, including Tony Blair, William Hague and Charles
Kennedy, who were then leaders of their respective parties. Norman Lamb, the Liberal
Democrat MP, went on to table parliamentary questions asking why the Blair Government
appeared slow to respond to a French extradition request. Mr Lamb said last night: “It’s a
matter of public interest to understand why the payments were made. This deserves
thorough investigation.” Mr Auchi founded GMH in 1979, a year before he left Iraq. He
says that he did business with his native country when it was considered a friend of the
West but ceased to trade with Saddam’s regime once sanctions were imposed after the
invasion of Kuwait. US prosecution documents recall Mr Auchi’s suspended jail sentence
and €2 million fine for corruption in France five years ago. Defence lawyers said that Mr
Auchi lent the $3.5 million for legal and family expenses.’ (James Bone, “Obama bagman
is sent to jail after failing to declare $3.5m payment by British tycoon,” London Times,
February 1, 2008)
AUCHI IMPLICATED IN OIL FOR FOOD SCANDAL, CELL PHONE SCAM
In addition to his other escapades, Auchi has according to published reports also been implicated
by US government investigators in a bribery scheme to fix cell phone contracts let by the USimposed
Coalition Provisional Authority of Iraq, as well as of having played a key role in the Oil
for Food scandal. The Oil for Food scandal occurred when international profiteers embezzled
money from a UN program designed to deliver food and medicine to the people of Iraq during the
period of the genocidal US-imposed sanctions, which resulted n the needless deaths of hundreds of
thousands of Iraqis. A crucial component of this story was provided by neocon Bill Gertz, who
pointed out: ‘Auchi gave at least $10.5 million to Obama fundraiser Antoin "Tony" Rezko,
including a payment of $3.5 million that coincided with Mr. Obama's purchase in 2005 of a $1.65
million Chicago house, the London Times reported Tuesday. The newspaper said the timing of the
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 197
payment and the house purchase, along with the purchase of land next door by Mr. Rezko's wife
Rita from the same seller, raise questions about whether Auchi helped buy the house. Bill Burton, a
spokesman for Mr. Obama, would not answer when asked if Auchi helped buy the senator's house.
He said the senator did not recall ever meeting Auchi, who was convicted of corruption charges in
France in 2003. A 2004 Pentagon report obtained by The Washington Times identified Auchi as a
global arms dealer and Iraqi billionaire… The report to the Pentagon inspector general stated that
"significant and credible evidence was developed that a conspiracy was organized by Nadhmi
Auchi to offer bribes to 'fix' the awarding of cellular licensing contracts covering three geographic
areas of Iraq” under the U.S. Coalition Provisional Authority.”
“Additionally, significant and credible evidence has been developed that Nadhmi Auchi has
engaged in unlawful activities working closely with Iraqi intelligence operatives to:
“Bribe foreign governments and individuals prior to Operation Iraqi Freedom to turn opinion
against the American-led mission to remove Saddam Hussein.
“Arrange for significant theft from the U.N. Oil-for-Food Program to smuggle weapons and
dual-use technology into Iraq ....
“Organize an elaborate scheme to take over and control the post-war cellular phone system in
Iraq.”
The report suggests Auchi has ties to British intelligence through a 2002 association with a
former British intelligence chief, and that British telecommunications companies may have used
Auchi to gain access to cellular phone markets in post-invasion Iraq. Auchi has denied accusations
over the cell phone contract.’78
In a clear attempt to undermine free speech and the protections guaranteed to Americans by the
First Amendment, Alasdair Pepper of the British law firm Carter-Ruck has been busy attempting to
intimidate American web sites into taking down material deemed offensive by Auchi. Evelyn
Pringle is one writer who has received such threatening communications. This amounts to an
attempt to take down the First Amendment and impose the alien, British concept of libel, which
tends to protect powerful or wealthy public figures from criticism, thus chilling political debate. The
Obama campaign has been a direct beneficiary of the resulting suppression of news about Auchi.
Pro-Obama news organs like the New York Times have tacitly cooperated with these activities,
willingly weakening free speech to get their candidate elected79.
THE OBAMA-ALSAMMARAE MUTUAL AID SOCIETY
Alsammarae, a convicted felon in Iraq and an international fugitive, has contributed to Obama’s
presidential campaign, and also helped pay the bail necessary to spring Rezko from the cooler.
Obama reciprocated by doing favors for Alsammarae:
Three days after the Chicago Sun-Times reported that Aiham Alsammarae, the former
electricity minister convicted of corruption in Iraq, put up $2.7 million in property to help raise
$8.5 million to free Tony Rezko from jail in Chicago, the Times reported that Alsammarae had
contributed six times to Obama’s presidential campaign. The April 29, 2008 report also noted
that before he escaped from jail in Baghdad in December 2006, and returned to Chicago,
Obama’s US Senate office had sought information about Alsammarae from the State
Department on October 16, 2006 on behalf of Alsammarae’s family while he was being held in
jail in Iraq. As usual, when busted on the contributions given in January, February and March
[2008], the Obama camp said it would donate Alsammarae’s money to charity and his
198 Barack H. Obama: The Unauthorized Biography
spokesman, Ben LaBolt, put out the standard line that Obama does not ever “recall” meeting
Alsammarae. The Associated Press ran a follow-up story on April 14, 2008, calling Auchi a
“mysterious billionaire with his hands on a major chunk of Chicago real estate,” and described
his arrival in Illinois in April 2004, as a major event in which Lt. Governor Quinn “headed a
welcoming delegation that greeted Auchi when his private plane touched down at Chicago’s
Midway Airport.” (Evelyn Pringle, opednews.com)
REZKO’S 2004 RECEPTION FOR AUCHI:
DID OBAMA AND MICHELLE ATTEND?
Auchi was plainly treated like a head of state when he arrived at O’Hare in 2004 to meet with his
cohorts. How could a convicted felon enter the US so easily? Did Senator Obama help Auchi clear
some hurdles with the federal authorities? Pringle notes that ‘all members of the “Combine” have
tried to distance themselves from Auchi’s visit because, as previously explained, he is not allowed
in the US. However, the question that remains is, how did he enter this country in April 2004, after
his 2003 conviction in France. According to the February 28, 2008 Sun-Times: “Auchi’s Londonbased
lawyer, Alasdair Pepper, wouldn’t answer that.” “State Department and Homeland Security
officials said they couldn’t comment,” according to the Times. During a March 14, 2008 interview,
the Times asked Obama: “Did you ever help Auchi enter the country?” He said, “No.” But when
asked the follow-up question of whether “his office” helped Auchi enter the country, he replied,
“Not that I know of.” On January 28, 2008, Raw Story’s Michael Roston reported that after rumors
began spreading that Auchi may have met with Obama, “In what appears to be a clumsy ‘cleanup’
operation, evidence of Auchi’s visit to Illinois has now been deleted from two websites linked to his
company, General Mediterranean Holding.” (Evelyn Pringle, opednews.com)
Then there is the fascinating issue of a sumptuous reception, fit for a king, which was offered in
the honor of visiting dignitary Auchi by his close business associate, Tony Rezko. At the time of
this reception, invitations were doubtless very much in demand. But now, in a surprising reversal,
the local bigwigs who attended are frequently attempting to argue that they were not there at all:
because Auchi has now become a hot potato, especially for Obama, there is
… a disagreement over whether Obama did or didn’t attend a party at Rezko’s house for an
Iraqi-born billionaire named Nadhmi Auchi. A prosecution witness testified that Obama and his
wife were guests at the April 3, 2004, gathering in the Chicago suburb of Wilmette. The Obama
campaign responded that neither of the Obamas recalled attending such an event. Auchi
similarly has “no recollection of meeting Senator Obama at any party in 2004 or at any other
time,” according to his lawyer, Alasdair Pepper.’(David Ignatius, “Obama and the Chicago
Insider,” Washington Post, April 20, 2008)
There is a very good chance that we have just caught the distinguished senator and his charming
consort lying, once again. This scandal makes the Billygate scandal of the Carter administration
look like an innocent flirtation. The official position of the Obama campaign is that Obama has
never met Auchi, meaning that the sworn testimony of Stuart Levine in the Rezko trial on this issue
was perjury.
Obama may have been smart enough to make sure that he did not get photographed together
with Auchi, but his Governor Blagojevich apparently did not exhibit the same level of elementary
prudence. There are in fact pictures of Auchi together with Blagojevich:
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 199
ABC News first posted a link to photos showing Auchi meeting with Blagojevich on the site,
“Middle East Online.” The description under a picture of Auchi and Blagojevich, still
accessible on the internet a month ago, stated: “Governor of the State of Illinois, Mr Rod
Blagojevich hosted an official reception in honour of Mr Auchi.” Another picture, taken in the
Chicago office of the President of the Illinois State Senate bears the title: “Illinois State Senate
President Mr Emile Jones Jr. meets Mr Auchi.” (Pringle, op-ednews.com)
Jones is of course another of Obama’s friends and patrons, and a key wheel horse of the Illinois
Combine.
But there are other accounts, very embarrassing for Obama as a proponent of clean government,
that place him among those present at the 2004 Rezko-Auchi bash, with Obama leading the wellheeled
guests in drinking to Auchi’s health and long life:
…on April 16, 2008, Sun-Times columnist, Michael Sneed, reported that Obama had even made
toasts at Rezko’s party, and wrote: “Dem presidential contender Barack Obama’s handlers may
be telling the press Obama has NO “recollection” of a 2004 party at influence peddler Tony
Rezko’s Wilmette house, but a top Sneed source claims Obama not only gave Rezko’s guest of
honor, Iraqi billionaire Nadhmi Auchi, a big welcome . . . but he made a few toasts!”80 In an
April 26, 2008, interview with the Chicago Tribune reporter, John McCormick, Obama did not
deny that he and Michelle were at the party but said he did not recall being there, stating: “I
have to say that I just don’t recall it. I mean this has been, I guess, four years ago. My
understanding, through his lawyer, Mr. Auchi doesn’t recall meeting me and you know, I can’t
speak for other people’s recollections.” (Evelyn Pringle, opednews.com)
This is another example of Obama’s technique of rhetorical evasion under the guise of disarming
frankness.
On February 25, 2005, a report by Charles Smith for NewsMax said, “Newly released
documents from the Bush administration show that a former member of Saddam Hussein’s inner
circle has resurfaced inside the new Iraqi government, bringing charges of corruption, bribery and
bid-rigging.” “As a result,” he wrote, “millions of U.S. aid dollars and billions in Iraqi government
funds have disappeared in an ongoing scandal that is poised to engulf Baghdad and Washington.” :
US SENATOR PETER FITZGERALD: “THE BIPARTISAN ILLINOIS COMBINE”
Perhaps the most authoritative confirmation of the existence of the Illinois bipartisan Combine
from former US Senator Peter Fitzgerald of the GOP, an elected official who for some reason did
not completely fit in with the prevailing general agreement to loot the citizens. Senator Fitzgerald
categorically affirmed the existence of such an ongoing criminal conspiracy, in which Obama is
unavoidably implicated:
Journalist John Kass asked US Senator, Peter Fitzgerald, “what do you call that connection that
Stuart Levine describes from the witness stand [in the Rezko trial], you know that arrangement
across party lines, with politically powerful men leveraging government to make money —
what do you call it?” “The Illinois Combine,” he said. “The bipartisan Illinois political
combine.” “And all these guys being mentioned, they’re part of it,” he told Kass. “In the final
analysis,” the Senator said, “The Combine’s allegiance is not to a party, but to their
pocketbooks.” “They’re about making money off the taxpayers,” he added. According to Kass,
“the Rezko trial is part of the U.S. Justice Department’s attack on The Combine.” (Evelyn
Pringle, opednews.com)
200 Barack H. Obama: The Unauthorized Biography
AIHAM ALSAMMARAE OF MESOPOTAMIA
Alsammarae’s ability as a con man carried him all the way to a meeting with George Bush in the
White House.
Alsammarae moved to Chicago in the 1970s and met Rezko while attending engineering school.
Reports indicating the Combine’s corruption extended to the electricity minister in Iraq began
in mid-summer 2005. On July 29, 2005, Sandra Jones reported in Crain’s Chicago Business:
“Rezmar ... controlled by Tony Rezko, a controversial confidant of Gov. Rod Blagojevich,
entered into a joint venture with a British firm in a $150-million deal to build a power plant in
Iraq.” (Evelyn Pringle, opednews.com)
Paul Bremer, the leader of the notoriously corrupt Coalition Provisional Authority, appointed
him minister of electricity in August 2003. Alsammarae was photographed at a White House
ceremony in the Oval Office on September 22, 2003, at which Bush called him a “good soul,” who
“inherited a system of a corrupt tyrant.” (Evelyn Pringle, opednews.com) Bush met Alsammarae,
but Obama cannot be sure about his own track record:
During a March 14, 2008 interview with the Sun-Times, Obama was asked: “Did you ever meet
Nadhmi Auchi or Dr. Aiham Alsammarae?” “I have to say I do not recall meeting them. It’s
been reported that a dinner Tony hosted at the Four Seasons, I don’t have the exact date, so I
don’t know whether it was the before November ‘04 when I hadn’t been elected but had already
won the primary or whether it was after the election, in which I was . . . “Tony called and asked
if I could stop by because he had a number of friends that he had invited to dinner and he
wanted to meet them. “I told him that I would be happy to come by if my schedule allowed it.
And it did. Although I couldn’t, I think, stay for dinner, so I remember meeting a bunch of
people who I had not met before. I frankly don’t remember what their names were. “Business
was not discussed at the meeting. It was more of a social meeting and they asked me questions
about the senate race and so forth and so on. “I have no specific recollection. They may have
been there. I can’t say unequivocally that I did not meet them, but I just don’t recall.”’ (Evelyn
Pringle, opednews.com)
Again, these answers by Obama are as interesting for the technique of evasion as they are for the
factual situation they refer to.
OBAMA’S PUBLIC-PRIVATE PARTNERSHIPS FOR GRAFT IN ACTION
At the end of June 2008, when Obama believed that he already had the Democratic presidential
nomination locked up, the Boston Globe published a limited hang out investigative report on graft
and corruption involving public housing and related issues in Chicago. This series was valuable for
the first-person accounts it offered of the immense human suffering and despair left behind in the
wake of the looting operations championed by Obama. It is also remarkable that Obama still
maintains that the Chicago model of public-and private partnerships (PPPs), despite its blatant and
scandalous failure in the Windy City, is the model he wants to bring to Washington to be applied to
the entire United States. The PPPs represent catastrophic public policy, and probably also embody a
sleazy payback by the Perfect Master to the various shady characters that have contributed to his
campaign fund, and now want to feed at the federal trough.
The Boston Globe evokes Obama’s archipelago of despair in graphic terms:
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 201
The squat brick buildings of Grove Parc Plaza, in a dense neighborhood that Barack Obama
represented for eight years as a state senator, hold 504 apartments subsidized by the federal
government for people who can’t afford to live anywhere else. But it’s not safe to live here.
About 99 of the units are vacant, many rendered uninhabitable by unfixed problems, such as
collapsed roofs and fire damage. Mice scamper through the halls. Battered mailboxes hang
open. Sewage backs up into kitchen sinks. In 2006, federal inspectors graded the condition of
the complex as an 11 on a 100-point scale - a score so bad the buildings now face demolition.
Grove Parc has become a symbol for some in Chicago of the broader failures of giving public
subsidies to private companies to build and manage affordable housing - an approach strongly
backed by Obama as the best replacement for public housing. As a state senator, the
presumptive Democratic presidential nominee coauthored an Illinois law creating a new pool of
tax credits for developers. As a US senator, he pressed for increased federal subsidies. And as a
presidential candidate, he has campaigned on a promise to create an Affordable Housing Trust
Fund that could give developers an estimated $500 million a year. But a Globe review found
that thousands of apartments across Chicago that had been built with local, state, and federal
subsidies - including several hundred in Obama’s former district - deteriorated so completely
that they were no longer habitable. Grove Parc and several other prominent failures were
developed and managed by Obama’s close friends and political supporters. Those people
profited from the subsidies even as many of Obama’s constituents suffered. Tenants lost their
homes; surrounding neighborhoods were blighted. Some of the residents of Grove Parc say they
are angry that Obama did not notice their plight. The development straddles the boundary of
Obama’s state Senate district. Many of the tenants have been his constituents for more than a
decade. “No one should have to live like this, and no one did anything about it,” said Cynthia
Ashley, who has lived at Grove Parc since 1994.’ (Binyamin Appelbaum, “Grim proving
ground for Obama’s housing policy,” Boston Globe, June 27, 2008)
It is bad enough that things are this way in Chicago; is this then what we want to impose on
every city in the United States? Obama says it is.
CASE STUDY: CECIL BUTLER, SLUMLORD AND OBAMA BACKER
We have already encountered Valerie Jarrett as an early patroness of the rise of Michelle Obama
in the corrupt Chicago city bureaucracy. For the Boston Globe, she features prominently in the
Chicago housing story along with Allison Davis, the boss of Obama’s old law firm, and, of course,
with Tony Rezko:
Among those tied to Obama politically, personally, or professionally are: Valerie Jarrett, a
senior adviser to Obama’s presidential campaign and a member of his finance committee.
Jarrett is the chief executive of Habitat Co., which managed Grove Parc Plaza from 2001 until
this winter and co-managed an even larger subsidized complex in Chicago that was seized by
the federal government in 2006, after city inspectors found widespread problems. Allison
Davis, a major fund-raiser for Obama’s US Senate campaign and a former lead partner at
Obama’s former law firm. Davis, a developer, was involved in the creation of Grove Parc and
has used government subsidies to rehabilitate more than 1,500 units in Chicago, including a
North Side building cited by city inspectors last year after chronic plumbing failures resulted in
raw sewage spilling into several apartments….Rezko’s company used subsidies to rehabilitate
more than 1,000 apartments, mostly in and around Obama’s district, then refused to manage the
units, leaving the buildings to decay to the point where many no longer were habitable.
Campaign finance records show that six prominent developers - including Jarrett, Davis, and
202 Barack H. Obama: The Unauthorized Biography
Rezko - collectively contributed more than $175,000 to Obama’s campaigns over the last
decade and raised hundreds of thousands more from other donors. Rezko alone raised at least
$200,000, by Obama’s own accounting.
The Boston Globe also includes a somewhat lower level figure as an example of the broader
clientele implicated in these operations:
One of those contributors, Cecil Butler, controlled Lawndale Restoration, the largest subsidized
complex in Chicago, which was seized by the government in 2006 after city inspectors found
more than 1,800 code violations.’ (Binyamin Appelbaum, “Grim proving ground for Obama’s
housing policy,” Boston Globe, June 27, 2008)
The Chicago landscape is filled with individuals who claim to have once been civil rights
activists, but who now seem to be concentrating on graft; Obama himself is an example. The Boston
Globe writes:
Chicago’s struggles with the deterioration of its subsidized private developments seemed to
reach a new height in 2006, when the federal government foreclosed on Lawndale Restoration,
the city’s largest subsidized-housing complex. City inspectors found more than 1,800 code
violations, including roof leaks, exposed wiring, and pools of sewage. Lawndale Restoration
was a collection of more than 1,200 apartments in 97 buildings spread across 300 blocks of
west Chicago. It was owned by a company controlled by Cecil Butler, a former civil rights
activist who came to be reviled as a slumlord by a younger generation of activists. […] In 1995,
Butler’s company got a $51 million loan from the state to fund additional renovations at
Lawndale Restoration. In 2000 Butler’s company brought in Habitat Co. to help manage the
complex. Nonetheless, the buildings deteriorated badly. The problems came to public attention
in a dramatic way in 2004, after a sport utility vehicle driven by a suburban woman trying to
buy drugs struck one of the buildings, causing it to collapse. City inspectors arrived in the
ensuing glare, finding a long list of code violations, leading city officials to urge the federal
government to seize the complex.’ (Binyamin Appelbaum, “Grim proving ground for Obama’s
housing policy,” Boston Globe, June 27, 2008)
Valerie Jarrett, who has been part of Obama’s traveling entourage during much of the primary
season, turns out to be a dedicated ideologue of the public-and private partnership, that is to say, of
privatization in a way which would be typical of a Friedmanite economics professor at the
University of Chicago:
Jarrett, a powerful figure in the Chicago development community, agreed to be interviewed but
declined to answer questions about Grove Parc, citing what she called a continuing duty to
Habitat’s former business partners. She did, however, defend Obama’s position that publicprivate
partnerships are superior to public housing. “Government is just not as good at owning
and managing as the private sector because the incentives are not there,” said Jarrett, whose
company manages more than 23,000 apartments. “I would argue that someone living in a poor
neighborhood that isn’t 100 percent public housing is by definition better off.”’ (Binyamin
Appelbaum, “Grim proving ground for Obama’s housing policy,” Boston Globe, June 27, 2008)
This, we should recall, is one of Michelle Obama’s closest friends and indeed in many ways the
initial sponsor of her career. Concepts like the “Chicago development community” may translate
into “the Chicago graft community” on closer examination.
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 203
INSPIRATIONAL: OBAMA ONCE EYED A CAREER AS A SLUMLORD
As we have already seen, Obama’s close cooperation with Rezko and Davis goes back almost
twenty years. Obama now claims that part of the affinity among these figures was their shared
ideology in favor of the public-private partnership, a setup which appears to combine the worst
disadvantages of government ownership with all the pitfalls of private rapacity: Obama ‘once told
the Chicago Tribune that he had briefly considered becoming a developer of “affordable housing.”
But after graduating from Harvard Law School in 1991, he turned down a job with Tony Rezko’s
development company, Rezmar, choosing instead to work at the civil rights law firm Davis, Miner,
Barnhill & Galland, then led by Allison Davis. The firm represented a number of nonprofit
companies that were partnering with private developers to build affordable housing with
government subsidies. Obama sometimes worked on their cases. In at least one instance, he
represented the nonprofit company that owned Grove Parc, Woodlawn Preservation and Investment
Corp., when it was sued by the city for failing to adequately heat one of its apartment complexes.
Shortly after becoming a state senator in 1997, Obama told the Chicago Daily Law Bulletin that his
experience working with the development industry had reinforced his belief in subsidizing private
developers of affordable housing. “That’s an example of a smart policy,” the paper quoted Obama
as saying. “The developers were thinking in market terms and operating under the rules of the
marketplace; but at the same time, we had government supporting and subsidizing those efforts.”’
(Binyamin Appelbaum, “Grim proving ground for Obama’s housing policy,” Boston Globe, June
27, 2008) Smart policy? Chicago’s ghetto victims are not in agreement, as this article will show.
Obama’s election-year promises have generally turned out to be worthless, but the promise of
inflicting public-private partnerships on the entire country seems to be one promise which we really
can take to the bank:
Obama has continued to support increased subsidies as a presidential candidate, calling for the
creation of an Affordable Housing Trust Fund, which could distribute an estimated $500 million
a year to developers. The money would be siphoned from the profits of two mortgage
companies created and supervised by the federal government, Fannie Mae and Freddie Mac. “I
will restore the federal government’s commitment to low-income housing,” Obama wrote last
September in a letter to the Granite State Organizing Project, an umbrella group for several
dozen New Hampshire religious, community, and political organizations. He added, “Our
nation’s low-income families are facing an affordable housing crisis, and it is our responsibility
to ensure this crisis does not get worse by ineffective replacement of existing public-housing
units.” (Binyamin Appelbaum, “Grim proving ground for Obama’s housing policy,” Boston
Globe, June 27, 2008)
Given the Chicago results, Obama has negative credibility on this issue. Will he make Rezko or
Daley the Secretary of Housing an Urban Development, which is already one of the most corrupt
cabinet agencies? With Fannie Mae and Freddie Mac now insolvent, where would Obama get the
money for so much graft?
We have seen the reports from an FBI mole at various times in recent years that Obama was
meeting Rezko once a day and more than once a day. Despite this, the Perfect Master wants us to
believe that he was not aware that the properties Rezko had received from the city administration
were now in total disrepair and unfit for human habitation.
Eleven of Rezmar’s buildings were located in the district represented by Obama, containing 258
apartments. The building without heat in January 1997, the month Obama entered the state
204 Barack H. Obama: The Unauthorized Biography
Senate, was in his district. So was Jones’s building with rats in the walls and Frizzell’s building
that lacked insulation. And a redistricting after the 2000 Census added another 350 Rezmar
apartments to the area represented by Obama. But Obama has contended that he knew nothing
about any problems in Rezmar’s buildings. After Rezko’s assistance in Obama’s home purchase
became a campaign issue, at a time when the developer was awaiting trial in an unrelated
bribery case, Obama told the Chicago Sun-Times that the deterioration of Rezmar’s buildings
never came to his attention. He said he would have distanced himself from Rezko if he had
known. Other local politicians say they knew of the problems.’ (Binyamin Appelbaum, “Grim
proving ground for Obama’s housing policy,” Boston Globe, June 27, 2008)
Obama may have plausible deniability on some other issues, but he certainly has none here.
2004: A CECIL BUTLER BUILDING COLLAPSES
Things soon got so bad in the Cecil Butler concessions that the federal government had to step
into the midst of a mushrooming scandal. Given the regulatory laxity of the Bush regime, we can
gauge the horrendous situation that must have been required to get federal authorities to act.
Chicago’s struggles with the deterioration of its subsidized private developments seemed to
reach a new height in 2006, when the federal government foreclosed on Lawndale Restoration,
the city’s largest subsidized-housing complex. City inspectors found more than 1,800 code
violations, including roof leaks, exposed wiring, and pools of sewage. Lawndale Restoration
was a collection of more than 1,200 apartments in 97 buildings spread across 300 blocks of
west Chicago. It was owned by a company controlled by Cecil Butler, a former civil rights
activist who came to be reviled as a slumlord by a younger generation of activists. […] In 1995,
Butler’s company got a $51 million loan from the state to fund additional renovations at
Lawndale Restoration. In 2000 Butler’s company brought in Habitat Co. to help manage the
complex. Nonetheless, the buildings deteriorated badly. The problems came to public attention
in a dramatic way in 2004, after a sport utility vehicle driven by a suburban woman trying to
buy drugs struck one of the buildings, causing it to collapse. City inspectors arrived in the
ensuing glare, finding a long list of code violations, leading city officials to urge the federal
government to seize the complex.’ (Binyamin Appelbaum, “Grim proving ground for Obama’s
housing policy,” Boston Globe, June 27, 2008)
CECIL BUTLER’S VICTIMS RALLY AGAINST OBAMA, 2004
For those who had suffered from the rapacity of the “civil rights” slumlord Cecil Butler, there
was no doubt that Obama bore a major share of responsibility for the tragic decay of these housing
developments. At one point, the public rage was so great that Obama had to face a public
demonstration against his policies in the midst of his campaign to grab his Illinois seat in the U.S.
Senate. ‘In the midst of the uproar, a small group of Lawndale residents gathered to rally against the
Democratic candidate for the US Senate, Barack Obama. Obama’s Republican opponent, Alan
Keyes, trailed badly in the polls and was not seen as a serious challenger. But the organizers had a
simple message: Cecil Butler had donated $3,000 to Obama’s campaign. Habitat had close ties to
Obama. And Obama had remained silent about Lawndale’s plight. Paul Johnson, who helped to
organize the protest, said Obama must have known about the problems. “How didn’t he know?”
said Johnson. “Of course he knew. He just didn’t care.”’ (Binyamin Appelbaum, “Grim proving
ground for Obama’s housing policy,” Boston Globe, June 27, 2008)
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 205
This demonstration and the growing climate of public discontent, however, had absolutely no
impact on Obama, who was determined to continue on his path of graft:
Even as Lawndale Restoration and Rezmar’s buildings were foreclosed upon, and Grove Parc
and other subsidized developments fell deeper into disrepair, Obama has remained a steadfast
supporter of subsidizing private development.’ (Binyamin Appelbaum, “Grim proving ground
for Obama’s housing policy,” Boston Globe, June 27, 2008)
Nothing but nothing will pry Obama’s fingers away from the bankrupt and despicable model of
the public-private partnership, as the Obama campaign underlined once again after the close of the
primary campaign:
Throughout his career in public service, Barack Obama has advocated for the development of
mixed-income housing and public-private partnerships to create affordable housing as an
alternative to publicly subsidized, concentrated, low-income housing,” the Obama campaign
said in a statement provided to the Globe.’ (Binyamin Appelbaum, “Grim proving ground for
Obama’s housing policy,” Boston Globe, June 27, 2008)
A THREE-YEAR OLD TODDLER CRUSHED
TO DEATH AT THE CABRINI GREENS, JUNE 2008
The Chicago housing scandals have come to represent a massive political vulnerability for
Obama, even among those who would otherwise be sympathetic to his candidacy: “I’m not against
Barack Obama,” said Willie J.R. Fleming, an organizer with the Coalition to Protect Public Housing
and a former public housing resident. “What I am against is some of the people around him.” Jamie
Kalven, a longtime Chicago housing activist, put it this way: “I hope there is not much predictive
value in his history and in his involvement with that community.” (Binyamin Appelbaum, “Grim
proving ground for Obama’s housing policy,” Boston Globe, June 27, 2008)
The dirty public-private partnership deals favored by Obama claimed yet another victim in late
June when a small boy died in a bizarre accident when a piece of the steel barrier around his
housing complex came down on him, costing the toddler his life: ‘A 3-year-old boy was crushed to
death Friday evening by a large, rusted steel gate at the Cabrini-Green housing complex, prompting
a crowd to gather and hurl accusations of mismanagement at property managers. “How many
accidents happen over here because of failed inspections,” screamed Willie J.R. Fleming, a resident
and a director with the Coalition to Protect Public Housing. “There’s no accountability, there’s no
oversight of this.” (Chicago Tribune, June 28, 2008, noquarterusa.net)
The Cabrini Greens were already notorious in the late 1980s as one of the worst slum properties
in the world, buildings full of murder, narcotics, crime, and despair. 20 years later, Obama’s much
vaunted public-private partnerships had only made matters worse.
ALEXI GIANNOULIAS AND MICHAEL “JAWS” GIORANGO;
FRIENDS OF BARKY
Obama, who poses in public as a reformer who wants to restore good government and end
partisan haggling, has in fact been one of the most loyal soldiers of the corrupt Illinois Combine. It
is instructive to view the case of Alexi Giannoulias, the Combine’s 2006 choice for the sensitive
post of Illinois State Treasurer. Giannoulias, who had facilitated loans to a certain Michael
Giorango, a convicted bookmaker and prostitution ring promoter, was so sleazy that even some
206 Barack H. Obama: The Unauthorized Biography
Combine stalwarts found that it was not politic to offer him their public endorsement. But Obama
had no such qualms, and gave the shady Giannoulias his stamp of approval forth with.
During the campaign, the Democratic speaker of the state House and other party leaders
criticized Giannoulias because of loans his family bank made to Michael “Jaws” Giorango, a
convicted felon. Obama stuck with Giannoulias after the revelations, though he did call on him
to explain the matter. “I’m going to ask Alexi directly what is happening,” Obama said in April
2006, according to the Chicago Tribune.81
The public has never gotten an answer. But Obama gave full support to this sleazy character:
In the 2006 Democratic primary, for example, Obama endorsed first-time candidate Alexi
Giannoulias for state treasurer despite reports about loans Giannoulias’ family-owned
Broadway Bank made to crime figures. Records show Giannoulias and his family had given
more than $10,000 to Obama’s campaign, which banked at Broadway.’ Obama endorsed the reelection
of Gov. Rod Blagojevich, whose administration is now heavily embroiled in the Rezko
corruption probe.’ (Chicago Tribune, June 12, 2007)
Obama had to be tolerant about convicted felons: if Barky can associate with Rezko, then surely
Giannoulias can associate with Jaws Giorango and smaller sharks. If Obama were a member of a
big city police force like the NYPD, he would be fired for associating with known criminals.
OBAMA A “POLITICAL PSYCHOPATH”
This affair led Pringle to observe:
Obama is a political psychopath. He exhibits no shame, no matter where his money comes
from. On September 5, 2007, the New York Post reported that, “Alexi Giannoulias, who became
Illinois state treasurer last year after Obama vouched for him, has pledged to raise $100,000 for
the senator’s Oval Office bid.” “Giannoulias is so tainted by reputed mob links,” the New York
Post noted, “that several top Illinois Dems, including the state’s speaker of the House and party
chairman, refused to endorse him even after he won the Democratic nomination with Obama’s
help.”’ (Evelyn Pringle, opednews.com)
Obama was also happy to have Giannoulias organize a fund-raiser for his campaign shortly
before the Iowa caucuses and the opening of the 2008 primary season: On September 5, 2007, the
New York Post reported that: “A man who has long been dogged by charges that the bank his family
owns helped finance a Chicago crime figure will host a Windy City fund-raiser tonight for Senator
Barack Obama.” Alex Giannoulias had vowed to raise $100,000 for Obama’s campaign. Naïve
persons who believe the fairy tale that Obama is financed by millions of widow’s mites had better
think again in the light of these revelations.
PAY TO PLAY OBAMA: LOGOTHETE OF GRAFT AND CORRUPTION
Daniel J. Kelly of the Chicago Daily Observer examines Obama’s relation to and political
record regarding Alexi Giannoulias in the light of the mechanisms know to govern the Combine,
where the first commandment is Pay to play, meaning in effect pay bribes however disguised to
take part in the looting:
“Pay to play” seems to be another disturbing constant in Obama’s meteoric political rise. He
always seems to be available to the highest bidder. … the curious relationship between Obama
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 207
and his political protégé, Illinois State Treasurer Alexi Giannoulias has not been widely
publicized. Locally, the story generated some brief coverage, but the subject has been barely
examined by the mainstream media. Bloggers are familiar with the tale, but Obama has skated
on this subject with the general public. Some background is necessary: after spending a season
playing professional basketball in Greece, Giannoulias returned to the USA and enrolled in law
school at Tulane University in New Orleans, where every day is Mardi Gras. Less than three
years after being admitted to practice in Illinois, Giannoulias launched his campaign for State
Treasurer. With the financial support of his family banking business and US Senator Barack
Obama’s endorsement, this politically inexperienced individual secured the Democratic
nomination. In the general election campaign, State Democratic Party Chairman, Michael
Madigan, continued to keep Giannoulias at arm’s length. Madigan had supported a different
candidate in the primary and disseminated disquieting rumors about the business background of
Giannoulias, the former Vice President and Senior Loan Officer of the Broadway Bank, which
was owned by his family members. During his brief tenure in the banking industry, Giannoulias
appears to have approved loans to convicted felons with ties to organized crime. One such loan
applicant was a convicted bookmaker with an alleged sideline business promoting prostitution.
Our colleague Russ Stewart was one of the few who pointed out the fact that Obama played the
role of kingmaker in Giannoulias’ successful first time candidacy. At the age of thirty,
Giannoulias became the youngest treasurer in Illinois history. What qualified Giannoulias for
public office and earned him Obama’s endorsement? He plays basketball with Obama. No park
district field house or asphalt parking lot games for these two men of the people. When in
Chicago, Obama and his pal prefer to play at the exclusive East Bank Club. Throughout the
primary season, Giannoulias has hit the campaign trail to play Obama in pick up games on the
dates of the respective state primaries. Obama finds it relaxing to play hoops when ballots are
being cast. Apart from shooting buckets, it also helped that Giannoulias and his family members
have contributed so generously to the various Obama campaigns. Giannoulias and his family
are not absolutely committed true believers in the Democratic Party and its causes, however, as
they hedged their bets by contributing to the House Republican Congressional Campaign
Committee and to have also made campaign contributions to former Governor George H. Ryan.
(“A Consumer’s Guide to Obama and the Company That He Keeps,” Daniel J. Kelley, The
Chicago Daily Observer , May 22, 2008.)
Obama thus exhibits a pervasive pattern of graft through his policy of assisting his campaign
contributors to get their hands into the public till. This method of graft is applied to donors of all
ethnic groups and backgrounds, provided that they fork over campaign funds:
In 2001, for example, Obama steered $75,000 to a South Side charity called FORUM Inc.,
which promised to help churches and community groups get wired to the Internet. Records
show five FORUM employees, including one who had declared bankruptcy, had donated
$1,000 apiece to Obama’s state Senate campaign. As the grant dollars were being disbursed to
FORUM, the Illinois attorney general filed a civil lawsuit accusing the charity’s founder of
engaging in an unrelated kickback scheme. Just days after the suit was filed, Obama quietly
returned the $5,000 in donations. “I didn’t want to be associated with money that potentially
might have been tainted,” he said. FORUM founder Yesse Yehudah, who unsuccessfully ran for
state Senate against Obama in 1998, denied wrongdoing and, without admitting guilt, settled the
attorney general’s lawsuit by paying $10,000 to a charity. (Chicago Tribune, May 3, 2007)
208 Barack H. Obama: The Unauthorized Biography
STATE SENATOR FROM THE UNIVERSITY OF CHICAGO
The Hyde Park suburb which Obama represented in the Illinois State Senate was notorious as a
plantation for the University of Chicago, and thus for the Rockefeller (and Trilateral) interests more
broadly speaking. Hyde Park is located on the South Side of Chicago, about seven miles south of
the Loop. The University of Chicago is a citadel of reaction and oligarchism, having been founded
in 1890 by the American Baptist Education Society and the oil magnate John D. Rockefeller. One
of the university’s key leaders between the world wars was Robert Maynard Hutchins, a high-level
operative of the US ruling elite. The term “Chicago boys” is the object of worldwide execration
because of the unspeakable crimes against humanity of the Chicago school of economics, most
prominently associated with the name of the right-wing anarchist and extremist Milton Friedman,
the top advisor of the brutal and murderous Pinochet regime in Chile.
THE NEW YORK TIMES WHITEWASHES OBAMA
Having now acquired some notion of the cesspool of corruption in which Obama has been
natating for decades, we can now proceed to briefly contemplate the absurdity of the cover-up of
some of these matters dished up by Obama’s backers at the New York Times. In a classic fallacy of
composition, the newspaper of record makes Obama’s alliance with State Senate boss Emil Jones
look like an elective affinity at the personal level, when it in fact represents an internal transaction
of The Combine:
Obama ‘positioned himself early on as a protégé of the powerful Democratic leader, Senator
Emil Jones, a beneficiary of the Chicago political machine. He courted collaboration with
Republicans. He endured hazing from a few black colleagues, played poker with lobbyists,
studiously took up golf. (“An awful lot happens on the golf course,” a friend, Jean Rudd, says
he told her.) With the assistance of Senator Jones, Mr. Obama helped deliver what is said to
have been the first significant campaign finance reform law in Illinois in 25 years. He brought
law enforcement groups around to back legislation requiring that homicide interrogations be
taped and helped bring about passage of the state’s first racial-profiling law. He was a chief
sponsor of a law enhancing tax credits for the working poor, played a central role in
negotiations over welfare reform and successfully pushed for increasing child care
subsidies.’(Janny Scott, “In Illinois, Obama Proved Pragmatic and Shrewd,” New York Times,
July 30, 2007)
The measures sponsored by Obama, we sense, were simply acts of window dressing designed to
festoon his brag sheet later on as he moved up the ladder.
Naturally, even in an environment where most legislators were devoted supporters of the
Combine, Obama’s irrepressible arrogance and megalomania, his self-righteous posturing and
holier-than-thou gift for talking down to those around them, were sure to generate frictions, and so
it came to pass:
We could barely have meetings in caucus because Donne and Rickey [black legislators] would
give him hell,” said State Senator Kimberly A. Lightford, a Democrat and former chairwoman
of the Senate’s black caucus. “Donne would be, ‘Just because you’re from Harvard, you think
you know everything.’ Barack was like the new kid on the block. He was handsome and he was
mild mannered and he was well liked. Sometimes there was a little ‘Who’s this? He coming
here, he don’t know anything.” (Janny Scott, “In Illinois, Obama Proved Pragmatic and
Shrewd,” New York Times, July 30, 2007)
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 209
Already at this point in his life, Obama was exhibiting all the telltale signs of consuming
ambition for higher and higher public office, a quest wholly divorced from any notion of
achievement or public service on his part. This trait is so marked that even Obama acolytes
ventured to offer timid criticisms:
His critics say Mr. Obama could have accomplished much more if he had been in less of a hurry
to leave the Statehouse behind. Steven J. Rauschenberger, a longtime Republican senator who
stepped down this year, said: “He is a very bright but very ambitious person who has always had his
eyes on the prize, and it wasn’t Springfield. If he deserves to be president, it is not because he was a
great legislator.”’ (Janny Scott, “In Illinois, Obama Proved Pragmatic and Shrewd,” New York
Times, July 30, 2007)
All mincing of words aside, Obama was a thoroughgoing mediocrity in Springfield.
In a pattern which Americans have now come to know: after a short stint in the State Senate and
precious little to show for it, Obama tried to grab a seat in the US House of Representatives. But
this time he had a serious opponent in the person of Congressman Bobby Rush. Another pattern of
Obama’s public life is that he has been unable to win public office in any seriously contested
election, and his resounding defeat by Bobby Rush confirms this rule. But losing his congressional
race only made Obama more greedy for advancement, this time into the United States Senate with a
significant helping hand from Emile Jones of the Combine.
Within three years of his arrival, Mr. Obama ran for Congress, a race he lost. When the
Democrats took control of the State Senate in 2003 — and Mr. Jones replaced James Philip,
known as Pate, a retired Pepperidge Farm district manager who served as president of the
Senate — Mr. Obama made his next move. “He said to me, ‘You’re now the Senate president,’”
Mr. Jones recalled. “‘You have a lot of power.’ I said, ‘I do?’ He said, ‘Yes.’ I said, ‘Tell me
what kind of power I have.’ He said, ‘You have the power to make a U.S. senator.’ I said, ‘I
do?’ He said, ‘You do.’ I said, ‘If I’ve got that kind of power, do you know of anyone that I can
make?’ He said, ‘Yeah. Me.’” (Janny Scott, “In Illinois, Obama Proved Pragmatic and
Shrewd,” New York Times, July 30, 2007)
But these are not two drifting individuals who meet by chance; they are two cogs in The
Combine.
BETRAYING ALICE PALMER TO GET INTO THE STATE SENATE UNOPPOSED
In making his first run for the state Senate, Obama went out of his way to have all of his
opponents thrown off the ballot with the help of a high-priced election lawyer who appeared out of
nowhere as if by magic at precisely the right moment to help Obama’s career – no doubt an
example of Trilateral magic.82 One of the victims of this operation was a veteran black female civil
rights leader who had been something of a benefactress to Obama – long-time State Senator Alice
L. Palmer. With his usual ruthlessness and brutality, Obama had Palmer thrown off the ballot along
with the others without so much as a second thought:
Three years later, a congressman from the South Side of Chicago was convicted of having sex
with a minor. A Democratic state senator from his district, Alice L. Palmer, decided to run for
the seat. Carol Anne Harwell, Mr. Obama’s first campaign manager, said Ms. Palmer invited
Mr. Obama, then 35, to run for her seat. But after losing in the primary, Ms. Palmer had second
thoughts. A delegation of her supporters asked Mr. Obama to step aside. He not only declined,
but his campaign staff challenged the signatures on Ms. Palmer’s campaign petitions and kept
210 Barack H. Obama: The Unauthorized Biography
her off the ballot. It was nothing personal: They did the same thing to every other Democrat in
the race. “He knocked off the incumbent, so that right there gave him some notoriety,” said Ron
Davis, who served as Mr. Obama’s precinct coordinator. “And he ran unopposed — which for a
rookie is unheard of.”’ (Janny Scott, “In Illinois, Obama Proved Pragmatic and Shrewd,” New
York Times, July 30, 2007) Trilateral magic again.
Democratic Senator Paul Simon of Illinois may perhaps be recalled by some Americans as the
boring buffoon in the bow tie who competed in the Democratic primaries for the presidential
nomination back in the 1980s. Simon’s role appears to have been to put a professorial, “good
government” façade on the nefarious activities of the Combine. This included the absurdity of a
bipartisan ethics bill that would in effect apply a thin film of lipstick to the corrupt porker of graft
rollicking in the Combine’s pigsty.
Illinois had one of the least regulated campaign finance systems in the country and a history of
corruption. Paul Simon, the former United States senator, was running a public policy institute
at Southern Illinois University and asked each of the four legislative leaders to name a trusted
lawmaker to work on a bipartisan ethics bill. Mr. Jones recalls receiving a call from Abner J.
Mikva, a former Chicago congressman, federal judge and friend of Mr. Simon. Judge Mikva,
who had once tried to hire Mr. Obama as a law clerk, suggested him for the job. Mr. Jones says
he knew that the new senator was hard-working and bright and that few others would want the
assignment. “He caught pure hell,” Mr. Jones said of Mr. Obama. “I actually felt sorry for him
at times.” The job required negotiating across party lines to come up with reform proposals,
then presenting them to the Democratic caucus. Senator Kirk Dillard, the Republican Senate
president’s appointee, said, “Barack was literally hooted and catcalled in his caucus.” On the
Senate floor, Mr. Dillard said, “They would bark their displeasure at me, and then they’d unload
on Obama.” (Janny Scott, “In Illinois, Obama Proved Pragmatic and Shrewd,” New York Times,
July 30, 2007)
COSMETIC REFORMS TO CAMOUFLAGE THE COMBINE
Today Obama claims that his campaign does not take contributions from federal lobbyists, but in
reality he is eager to take contributions from the law partners, close associates, families, and friends
of those lobbyists through the notorious corrupt practice known as bundling. Here we see another
aspect of Obama’s method as it has evolved since his days in Springfield, Illinois. He defines some
aspect of the prevalent corruption in the most narrow and exclusive possible way, and then parades
his stance on this tiny slice of the overall corruption pie as offering proof of his peerless probity and
rectitude. So far, quite a few suckers have been taken in by this tactic.
“I know [Obama] wanted to limit contributions by corporations or labor unions, and he
certainly wanted to stop the transfers of huge amounts of money from the four legislative
caucus leaders into rank-and-file members’ campaigns,” Mr. Dillard said. “But he knew that
would never happen. So he got off that kick and thought disclosure was a more practical way to
shine sunlight on what sometimes are unsavory practices.” (Janny Scott, “In Illinois, Obama
Proved Pragmatic and Shrewd,” New York Times, July 30, 2007)
Affluent suburbanites interested in clean government rather than in securing broad-based
economic benefits for the disadvantaged went ga-ga over Obama’s exercise in cosmetic and
window-dressing reform. All the while, the wheels of the Combine were grinding out graft in the
back room. One example of Obama’s successful deception was a measure for public disclosure of
campaign contributions:
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 211
The disclosure requirement “revolutionized Illinois’s system,” said Cindi Canary, executive
director of the Illinois Campaign for Political Reform. By giving journalists immediate access
to a database of expenditures and contributions, it transformed political reporting. It also, she
said, “put Senator Obama on a launching pad and put the mantle of ethics legislator on his
crown.” (Janny Scott, “In Illinois, Obama Proved Pragmatic and Shrewd,” New York Times,
July 30, 2007)
OBAMA AS “THE WHITE MAN IN BLACKFACE IN OUR COMMUNITY”
Obama by now was receiving largess from a number of foundation payrolls, so he could afford
some clean government posturing which some of his colleagues could not. This again led to
conflicts:
By many accounts, there was already friction between him and Mr. Hendon, whose West Side
Chicago district is among the poorest in the state, and Mr. Trotter. When Mr. Trotter and Mr.
Obama both ran for Congress two years later — unsuccessfully, it turned out — Mr. Trotter told
a reporter that Mr. Obama was viewed in part as “the white man in blackface in our
community.” Mr. Dillard said, “I remember Rickey chiding Obama that, ‘What do you know,
Barack? You grew up in Hawaii and you live in Hyde Park. What do you know about the
street?’ To which Obama shot back: ‘I know a lot. I didn’t exactly have a rosy childhood. I’m a
street organizer by profession and a lot of my area, once you get outside the University of
Chicago neighborhoods, is just as tough as your West Side, Rickey.’ In an interview, Mr.
Trotter said Mr. Obama had arrived “wanting to change things immediately,” as though he
intended “to straighten out all these folks because they’re crooks.” … Mr. Hendon, who says he
is writing a book on electoral politics called “Backstabbers,” said ethics reform would have
passed with or without Mr. Obama because of scandals that preceded it. He said the sponsors of
ethics bills tended to be “wealthy kind of people, the same kind of people who vote against pay
raises, who don’t need $5,000 a year. Whereas senators like me from poorer communities, we
could use that $5,000.”’ (Janny Scott, “In Illinois, Obama Proved Pragmatic and Shrewd,” New
York Times, July 30, 2007)
ILLINOIS STATE SENATE: A RACE OF BETRAYAL
Of course, it was not just the old Weathermen who were mobilized to support Obama’s bid for
public office. Many parts of the left countergang scene were mobilized to advance the career of the
candidate chosen by the Trilateral financiers: As one ultra-right-wing observer notes,
Obama’s socialist backing goes back at least to 1996, when he received the endorsement of the
Chicago branch of the Democratic Socialists of America (DSA) for an Illinois state senate seat.
Later, the Chicago DSA newsletter reported that Obama, as a state senator, showed up to
eulogize Saul Mendelson, one of the “champions” of “Chicago’s democratic left” and a longtime
socialist activist. Obama’s stint as a “community organizer” in Chicago has gotten some
attention, but his relationship with the DSA socialists, who groomed and backed him, has been
generally ignored. (Cliff Kinkaid, http://www.aim.org/aim-column/Obamas-internationalsocialist-
connections/)
212 Barack H. Obama: The Unauthorized Biography
THE NEW MUSICAL: OBAMA’S LOT
The appalling contrast between Obama’s presidential campaign and its hypocritical slogans
about hope and change, on the one hand, and a horrendous reality of the senator’s corruption
was a national mockery of the first magnitude. Obama claimed that he was setting out to teach
the world to hold the United States in high regard once again, but the first result of his
candidacy was to demonstrate to any rational foreign observer that most Americans were abject
fools, eager to listen to edifying verbiage from the mouth of a sleazy Chicago ward heeler who
was lucky not to be standing in the dock next to his godfather Rezko. Fortunately, the spirit of
self irony is not dead in Chicago, and a local journalist parodied the resulting situation by
imagining a new musical comedy along the lines of Lerner and Lowe’s Kennedy era Camelot,
but this time featuring Obama and Rezko as knights of a roundtable of graft. John Kass asked
himself,
Can Tony Rezko — the indicted Illinois political fixer and Sen. Barack Obama’s personal real
estate fairy and fundraiser — carry a tune? Can Rezko really sing, loudly in a clear voice, in
that orange federal jumpsuit he’s forced to wear, after a federal judge on Tuesday revoked his
bond, figuring he’d run to Syria and skip out on his federal political corruption trial? If Rezko
can sing, there’s a starring role in a new musical I’m writing about politics and real estate called
“Obama’s Lot.” He’ll make a fortune if Obama becomes president. It’s sort of like “Camelot,”
with magic and demons and unicorns and an evil enchantress. Can’t you see Rezko now? He
waltzes across a national stage, surrounded by a chorus of Illinois politicians. They explain how
Rezko helped the Obamas in the purchase of their nice home and that sumptuous lot next door.
[…] But in a unique use of symbolism, “Obama’s Lot” involves a magical sword of power.
The brave young Obama pulls it from the cornerstone of Chicago’s City Hall and wields it
proudly before his superiors in the Illinois State Senate. And, after a limited Washington
engagement, he becomes president of the United States. A Hillary Clinton type plays the
sensual Morgan La Fay, who uses her husky voice as she’s constantly trying to wrest power
from the brave Obama. I’m not going to give it all away, but in my musical, Rezko walks
behind Obama, part willowy magician, part jealous jester. He’s constantly judging, winking
broadly at the audience during Obama’s few bouts with temptation.
In the finale, Rezko sings to the tune of “If Ever I Should Leave You,” familiar in the renditions
by Robert Goulet and Richard Harris:
If ever I would squeal on you/It shouldn’t be in autumn.
But it might just be in autumn/ as voters go to the polls.
I’m no rat in the springtime/ summer, winter or fall
But I don’t like being in here/No, not at all.83
REZKO AS OBAMA’S BOSS PENDERGAST:
A PERPETUALLY PENDING INDICTMENT
So why did the feds go to all the trouble of convicting Rezko and gathering plenty of evidence to
bring down Obama for good, if they were determined all along not to bring down the arrogant
Illinois senator? For the answer, we need to go back to 1944, a time when Franklin D. Roosevelt
had rescued and restored to the American presidency the full panoply of constitutional powers
intended by the framers. But Franklin D. Roosevelt, exhausted by his struggle with the world
economic depression and by his exertions to win World War II, was dying. Despite the fact that
V. Obama’s Heart of Darkness: Rezko, Auchi, Alsammarae, and Chicago Graft 213
FDR had saved their otherwise doomed system in 1933, the Wall Street oligarchs so hated and
resented the yoke of constitutional government that they were determined never again to allow a
real president to occupy the White House and exercise the actual powers prescribed by the U.S.
Constitution. From now, they vowed, only puppet presidents, mere marionettes obedient to the
dictates of Wall Street, would be permitted. The first step in reestablishing this Potemkin
presidency was to make sure that the Democratic Party’s 1944 vice presidential candidate would not
be Henry Wallace, a competent and capable representative of the basic philosophy of the New Deal
who might well have been capable of continuing the full constitutional presidency which Roosevelt
had been able to restore. Instead, the ruling class through various operatives demanded that Senator
Harry Truman of Missouri occupy the second place on the Democratic ticket. Truman had been an
artillery captain in World War I, had attempted to make a career of haberdashery, but had failed.
Truman had been attached himself to the corrupt political machine of boss Tom Pendergast, which
dominated Democratic party politics in Kansas City, Missouri. As a loyal cog in the corrupt Kansas
City machine, just as Obama has been a loyal cog in the filthy Chicago party apparat, Truman soon
found himself up to his neck in the then prevalent forms of graft and corruption. In 1925, thanks to
boss Pendergast, Truman was elected as a county judge. In 1933, again with Pendergast’s blessing,
Truman was named Missouri’s director for the Federal Re-Employment program, a sub-set of the
Civil Works Administration (CWA), at the request of FDR’s patronage boss Postmaster General
James Farley as payback to Pendergast for delivering the Kansas City vote to Franklin D. Roosevelt
in the 1932 presidential election. Truman then became boss Pendergast’s handpicked candidate for
the US Senate in 1934. But in 1939, Pendergast was indicted for income tax evasion involving a
bribe. Pendergast was released after serving 15 months in prison at the nearby United States
Penitentiary, Leavenworth, Kansas, and died in 1945. Truman showed more loyalty towards boss
Pendergast than Obama has shown towards Rezko and Wright: as Vice President, Truman attended
Pendergast’s funeral a few days after being sworn in, and just a few weeks before Truman
succeeded Franklin D. Roosevelt as President.
It is safe to say that Truman always remained aware of the definite possibility that he too might
be sent to the penitentiary at Leavenworth because of his participation in the same corrupt activities
which had brought down his friend boss Pendergast. The ruling elite desired a president with a
built-in detonator of this type: Truman, after all, was inheriting the presidency at the peak of its
powers, bequeathed to him by FDR. What Wall Street oligarch could be sure under these
circumstances that Truman would follow orders in the way that, say, Coolidge had? Accordingly it
was necessary to deploy a sword of Damocles over Truman said in the form of a perpetually
pending indictment in the Pendergast Kansas City corruption scandal. Naturally, the ruling elite
had other means of manipulating little Harry. In foreign policy, he was dominated by the rightwing
Democrat and anti-Roosevelt renegade Dean Acheson, and adept depth of one of the lesser
Yale secret societies. Working closely with Acheson was soon W. Averell Harriman of Skull and
Bones and the Brown Brothers Harriman investment bank in Wall Street, which also featured the
presence of Prescott Bush, the grandfather of the current tenant of the White House. Acheson and
Harriman successfully dominated Truman’s options in the arena of world politics. In domestic
policy, a committee of Wall Street operatives chaired by Clark Clifford, himself something of a
Harriman man, was able to manipulate Truman in ways he was not even aware of, as Clifford has
boasted in his memoirs. Generally, Truman’s handlers were able to manipulate him most easily
through his periodic rage fits, which gave the White House palace guard an opportunity to direct the
puppet president’s hatred against some target of their choosing. But beneath all this, and
underpinning the entire edifice of control of the sitting president by forces above and behind the
Oval Office, there always remained the specter that Truman could be indicted for some dirty
214 Barack H. Obama: The Unauthorized Biography
dealings connected to the Pendergast machine. Today’s Republicans and other opponents of
Obama would do well to realize that it is very unlikely that the Rezko case will spontaneously
emerge as his central campaign issue in 2008, if this matter is left up to the wishes of the Wall
Street elite. The Rezko-Auchi-Alsammarae Illinois Combine scandal can be made to explode, but it
will not explode on its own. The strategy of the Wall Street faction is to elect Obama now and to
use the Rezko affair as a means of guaranteeing his future obedience, even though he would be
president during a world economic and financial depression of unprecedented severity, and would
also be able to mobilize something closely resembling a fascist movement in the streets and on the
Internet in support of his power.
CHAPTER VI: GRABBING A SENATE SEAT WITH A LITTLE
HELP FROM HIS TRILATERAL FRIENDS
The emerging oligarchy of the United States holds the vast majority of the American population
in deep contempt, considering them as Okies, bubbas, ghetto-dwellers, white trash, wetbacks,
Appalachians, crackers, red-necks, losers, marginals, rubes, and hicks. – Webster G. Tarpley,
Surviving the Cataclysm, 1998.
No matter his ultimate political fate, there is already enough pathos in Barack Obama to make
him a cautionary tale. His public persona thrives on a manipulation of whites (bargaining), and
his private sense of racial identity demands both self-betrayal and duplicity. His is the story of a
man who flew so high, yet neglected to become himself. – Shelby Steele, March 18, 2008
As political candidates go, Obama is an intrinsically weak specimen. In this chapter we will
further illustrate the two sides of the proposition that Obama has never in his life won public office
through a genuinely contested and disputed election. Obama’s preferred mode of taking office has
been by having his patrons in the banking establishment mobilize their resources to destroy his
opponents. We will see the truth of this basic tenet first in Obama’s failed 2000 attempt to take
away the seat of popular Southside Chicago Black congressmen Bobby Rush, who represented a
real opponent capable of contesting an election, and thus defeated Obama by a wide margin. We
will then see the other side of the proposition in the form of Obama’s Senate race in the year 2004,
when not one but two reasonably formidable opponents had to be destroyed by piloted scandals, and
when a carpetbagger and buffoon had to be brought in from far away Maryland, all to make sure
that Obama finally got into the Senate as the Trilaterals wanted. In the course of telling this story,
we will comment on the hollow gesture represented by Obama’s October 2002 speech concerning
the Iraq war, which will be put into the necessary perspective by showing Obama’s support for the
Iraq war and rejection of impeachment as a remedy after he got to the Senate. Our story here takes
on the character of a Bildungsroman, a novel of coming of age, or a rake’s progress — in this case,
the growth and advancement of one of the most ruthless, treacherous, and unprincipled political
opportunists of our age, who is at the same time one of the most reckless of politicians in his
personal life as well as in his devil- may-care attitude towards his own flip-flops.
2000: FAILED CHALLENGE TO CONGRESSMAN BOBBY RUSH
In 2000, Obama made an unsuccessful Democratic primary run for the U.S. House of
Representatives seat held by four-term incumbent Bobby Rush. Obama radically overestimated his
own chances of winning this election, and insisted on forging ahead despite advice to the contrary
from some of his oligarchical sponsors, including Newton Minnow. In Obama’s rash behavior in
undertaking this long shot bid for the Congress, we can see the signs of the overweening pride and
arrogance verging on megalomania which already characterized his mentality. The megalomania,
as we will see, has grown over the years, and by the late summer of 2008 was reaching proportions
worthy of the Emperor Nero.
Obama’s failed bid for the Congress is also instructive because, since both major candidates
were black, it removes the race issue from consideration, and can thus be used as a crucial
experiment to show that Obama’s fundamental weakness lies in his elitism and systematic
oligarchical refusal to understand the situation of working families in the United States today. It
also shows that Obama can be a very stubborn and headstrong subject:
216 Barack H. Obama: The Unauthorized Biography
The rise of Barack Obama includes one glaring episode of political miscalculation. Even friends
told Mr. Obama it was a bad idea when he decided in 1999 to challenge an incumbent
congressman and former Black Panther, Bobby L. Rush, whose stronghold on the South Side of
Chicago was overwhelmingly black, Democratic and working class. “Campaigns are always,
‘What’s the narrative of the race?’” said Eric Adelstein, a media consultant in Chicago who
worked on the Rush campaign. “In a sense, it was ‘the Black Panther against the professor.’
That’s not a knock on Obama; but to run from Hyde Park, this little bastion of academia, this
white community in the black South Side — it just seemed odd that he would make that choice
as a kind of stepping out.” (Janny Scott, “In 2000, a Streetwise Veteran Schooled a Bold Young
Obama,” New York Times, September 9, 2007)
When the idea of challenging Congressman Bobby Rush first occurred to him, Obama made
some calls to his backers. One was Newton Minow, who as chief of the Federal Communications
Commission had coined the phrase “vast wasteland” to describe network television back during the
Kennedy administration. But Minow was now far from the New Frontier, and had settled in as an
official of the Sidley Austin law firm, the lawyers on retainer for Tom Ayers’ Commonwealth
Edison, where Bernardine Dohrn and Michelle Obama had worked, and where Barky met Michelle
one summer. Not just Minow, but also his daughter, apparently worked as his case officers for the
promising young property called Obama. Newton Minow was skeptical that Obama could win the
race:
Mr. Obama called Mr. Minow, his former boss, asking to see him. Mr. Obama was eyeing the
Hyde Park Congressional seat held by Bobby L. Rush, a former Black Panther leader. “Are you
nuts?” Mr. Minow recalled telling the younger man. “Barack, I think this is a mistake.” Mr.
Minow flipped through his Rolodex, calling black businesspeople and asking them if they
would help finance Mr. Obama’s bid. He said he received a uniform answer: “No — let him
wait his turn.” Nevertheless, the impatient Mr. Obama jumped into the race. Brimming with
confidence, he equated Mr. Rush with “a politics that is rooted in the past” and cast himself as
someone who could reach beyond the racial divide to get things done. (Jo Becker and
Christopher Drew, “Pragmatic Politics, Forged on the South Side,” New York Times, May 11,
2008.)
OBAMA BLINDED BY OVERWEENING AMBITION
As for Congressman Rush, he realized that he was dealing with an egomaniac at the very least:
“He was blinded by his ambition,” Mr. Rush said. “Obama has never suffered from a lack of
believing that he can accomplish whatever it is he decides to try. Obama believes in Obama.
And, frankly, that has its good side but it also has its negative side.” Mr. Rush’s district, the
state’s most Democratic, was 65 percent black. And in 1999, it included not only Hyde Park,
home of the University of Chicago, but several relatively affluent Irish-American
neighborhoods. (Janny Scott, “In 2000, a Streetwise Veteran Schooled a Bold Young Obama,”
New York Times, September 9, 2007)
LATTE LIBERALS FOR OBAMA
The divide between Rush and Obama therefore occurred along class lines rather than according
to any racial divide. The affluent and the elitists went for Obama, and the working families chose
the alternative of Rush.
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 217
There were plenty of college-educated, white, “latte liberals” with whom Mr. Obama polls well.
But he was barely known outside his state Senate district, in the eastern part of Mr. Rush’s
district. To win, he would have to expand his support among blacks, including the older,
church-going, Rush loyalists who vote disproportionately in primaries. “Taking on Bobby Rush
among black voters is like running into a buzz saw,” said Ron Lester, a pollster who worked for
Mr. Obama. “This guy was incredibly popular. Not only that, his support ran deep — to the
extent that a lot of people who liked Barack still wouldn’t support him because they were
committed to Bobby. He had built up this reserve of goodwill over 25 years in that community.”
(Janny Scott, “In 2000, a Streetwise Veteran Schooled a Bold Young Obama,” New York Times,
September 9, 2007)
Congressman Rush had a strong base in the community, but he had exhausted some of his
resources by attempting to oust Mayor Daley from City Hall:
Mr. Rush had grown up in Chicago, enlisted in the Army, joined the Student Nonviolent
Coordinating Committee and helped found the Illinois Black Panther Party in 1968. He
coordinated a medical clinic that pioneered mass screening for sickle cell anemia, which
disproportionately affects blacks. As an alderman in 1992, he had ousted a black political
legend — Representative Charles A. Hayes, a veteran of the civil-rights and labor movements
who was caught up in a scandal that year involving the House bank. In February 1999, Mr.
Rush lost the mayoral primary to Mr. Daley, getting just 28 percent of the vote. Toni
Preckwinkle, a city alderman, encouraged Mr. Obama to challenge Mr. Rush. … Mr. Shomon
said he and Mr. Obama did an amateur poll to gauge his chances. They designed questions,
recruited volunteers to telephone 300 people, and concluded that Mr. Rush was vulnerable. Mr.
Shomon, who became Mr. Obama’s campaign manager, said, “Obama will tell you that this poll
was not the best poll in the world.” Asked why, he said, “Because the results didn’t turn out to
be correct.” State Senator Terry Link, a friend of Mr. Obama, said he advised him not to run.
“He tried to justify it: He didn’t feel Bobby was representing the area, he thought he could do a
better job,” Mr. Link recalled. “I think he misread it. He didn’t analyze the strength of the
congressman in that area, the will of the people.” Mr. Obama, in a brief telephone interview,
said, “In retrospect, there was very little chance of me winning that race. That was a good
lesson — that you should never be too impressed with your own ideas if your name recognition
in a Congressional district is only eight or whatever it was.” (Janny Scott, “In 2000, a
Streetwise Veteran Schooled a Bold Young Obama,” New York Times, September 9, 2007),
It was not to be the last time that inaccurate polling shows up in an Obama campaign. Today,
polls favoring Obama are deliberately and repeatedly fabricated.
DAVID AXELROD, HOPEMONGER
Obama’s 2000 attempt to oust Rush is also the point in his career where he becomes
permanently wedded to the sinister political consultant, David Axelrod. Axelrod, as we have seen,
worked on political campaigns, and also dedicated much of his time to refuting charges of
corruption against Mayor Daley and other members of the Combine. In Obama’s tirades against
Rush as a practitioner of the old politics, we can already hear the rhetorical notes which have
resonated ad nauseam during Obama’s 2008 campaign, and which are building towards a crescendo
in Obama’s match up with the geriatric Senator McCain.
Obama…entered the race in late September, six months before the primary. He told voters that
Mr. Rush represented “a politics that is rooted in the past, a reactive politics that isn’t good at
218 Barack H. Obama: The Unauthorized Biography
coming up with concrete solutions.” He promised new leadership, reaching beyond the black
community and leading coalitions to take on contemporary problems, cut crime, expand health
care coverage, promote economic development and expand educational opportunities. But
several weeks later, Mr. Lester’s polling put Mr. Rush’s approval rating at 70 percent and Mr.
Obama’s at 8 percent. Forty-seven percent of the people polled favored Mr. Rush, 10 percent
favored Mr. Obama and 5 percent favored a third candidate, State Senator Donne E. Trotter,
who is also black. Almost all of Mr. Obama’s support initially came from whites, Mr. Lester
said.’ (Janny Scott, “In 2000, a Streetwise Veteran Schooled a Bold Young Obama,” New York
Times, September 9, 2007)
Rush thus had some vulnerabilities, but he could also count on significant loyalty in the black
neighborhoods. Part of the election result was also determined by the shooting of Rush’s son in
what appeared to be a random street crime.
“Bobby Rush had not been the most active member of Congress from Illinois, but there was no
issue that made him particularly vulnerable,” [Obama ally Abner] Mikva said. “He hadn’t
robbed a bank or beaten his grandmother or things like that. In that respect, I was concerned.”
“Also,” Mr. Mikva said, “I had seen reform candidates running against incumbents in African-
American areas. It’s hard. Reform is not the most compelling issue to people who don’t have a
job.” Then in mid-October, Mr. Rush’s 29-year-old son, Huey Rich, was shot on his way home
from a grocery store. He hung between life and death for four days. Mr. Rush benefited from an
outpouring of sympathy; the wake was studded with politicians and there were renewed calls
for gun control, one of Mr. Rush’s causes. “That incident seemed to wash away any bad
feelings that voters had or might have had about Bobby Rush,” said Chris Sautter, whose
communications firm worked on the Obama campaign.’ (Janny Scott, “In 2000, a Streetwise
Veteran Schooled a Bold Young Obama,” New York Times, September 9, 2007)
OBAMA AWOL ON KEY GUN CONTROL VOTE:
WAS MICHELLE RESPONSIBLE?
Obama also committed the fundamental political error of considering a family vacation more
important than a vote in the state legislature on a key piece of gun control legislation, of which he
had been one of the main backers. Here we may hear the strident voice of Michelle Obama
demanding that she get her vacation, and gun control be damned:
Later, Gov. George Ryan called the Legislature into special session to try to re-enact a package
of gun-safety bills that the Illinois Supreme Court had overturned. Mr. Obama was voting
consistently in favor of it. But the session dragged on toward Christmas and an annual trip to
Hawaii to visit his grandmother, who had helped rear him. He had planned to return after the
holiday when the session was to resume, Mr. Shomon said. But a crucial vote came up earlier
than expected. With Mr. Obama and others absent, it failed by five votes. Mr. Obama, in
particular, came under fire. In his defense, he said he had not flown back in time because his
18-month-old daughter was sick. But he was hammered by editorial writers, the governor and
Mr. Rush. “We were thrown under the bus,” Mr. Shomon said. “It was a terrible day of news
coverage, since, A, we got blasted for not being there and, B, the perception was that Obama
doesn’t care about gun safety.”
By this point, Obama was one chastened megalomaniac, as he tells us himself in his generally
self-serving memoir:
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 219
In his book “The Audacity of Hope,” Mr. Obama wrote: “Less than halfway into the campaign,
I knew in my bones that I was going to lose. Each morning from that point forward I awoke
with a vague sense of dread, realizing that I would have to spend the day smiling and shaking
hands and pretending that everything was going according to plan.” Billboards in the district
read: “I’m sticking with Bobby.” A few black elected officials endorsed Mr. Obama but most
fell in line behind the incumbent. Ministers closed ranks. The Rev. Michael Pfleger, pastor of
the St. Sabina Catholic Church, said other ministers and congregation members called to
complain when he endorsed Mr. Obama.’ (Janny Scott, “In 2000, a Streetwise Veteran
Schooled a Bold Young Obama,” New York Times, September 9, 2007)
Pfleger is the renegade priest whose hate-filled and sexist mockery of Senator Clinton became a
scandal at the end of the primary season; Pfleger, we see, is a close friend of Obama and has been
for a long time. If Pfleger had wanted to follow the black community, he would have gone with
Rush. Instead, he went with Obama, the darling of the elite law firms, the foundations, and the
University of Chicago. Pfleger renders much more to the foundations than he renders unto God, or
even to his crackpot race theories.
CONGRESSMAN BOBBY RUSH: OBAMA AN “EDUCATED FOOL”
When the vote came in, Obama had 30.36 percent, and Representative Rush had 61.02 per cent.
In 2000, just as in 2008, a deciding factor in the voting was Obama’s pedantic and condescending
professorial elitism and holier-than-thou demeanor, which gave the clear impression that he was
concerned about oligarchical opinion, and not about the wishes of the constituencies in the
congressional district he was asking to represent. This is a trait which, one thinks, will be with
Obama as long as he lives.
Mr. Obama’s Ivy League education and his white liberal-establishment connections also
became an issue. Mr. Rush told The Chicago Reader, “He went to Harvard and became an
educated fool. We’re not impressed with these folks with these Eastern elite degrees.” Mr. Rush
and his supporters faulted him for having missed experiences that more directly defined the
previous generation of black people. “Barack is a person who read about the civil-rights protests
and thinks he knows all about it,” Mr. Rush told The Reader. Mr. Obama was seen as an
intellectual, “not from us, not from the ‘hood,” said Jerry Morrison, a consultant on the Rush
campaign. Asked recently about that line of attack, Mr. Rush minimized it as “chest beating,
signifying.” The implication was not exactly that Mr. Obama was “not black enough,” as some
blacks have suggested more recently; his credentials were suspect. “It was much more a
function of class, not race,” Mr. Adelstein said. “Nobody said he’s ‘not black enough.’ They
said he’s a professor, a Harvard elite who lives in Hyde Park.” (Janny Scott, “In 2000, a
Streetwise Veteran Schooled a Bold Young Obama,” New York Times, September 9, 2007)
In the 2000 contest, class was trump, along with the uneasy perception that Obama talked a good
game in many fields in which he had never actually accomplished anything whatsoever.
Characteristically, Obama’s strong suit was fund-raising. Given the extent of Obama’s backing
from top elitist law firms and financial interests, this is hardly a surprise. Obama was a plutocandidate
in 2000, and remains one to the present day. But, as the Obama machine discovered in
places like Ohio and Pennsylvania in the spring of 2008, even outspending an opponent by three to
one, four to one or even five to one will not produce victory if the candidate is viewed as an
arrogant oligarchical elitist. In 2000,
220 Barack H. Obama: The Unauthorized Biography
Mr. Obama proved unusually good at raising money. He raised more than $500,000 — less than
Mr. Rush but impressive for a newcomer — tapping connections at the University of Chicago,
Harvard Law School, law firms where he had worked, and a network of successful, black,
Chicago-based entrepreneurs who have played an important role in subsequent campaigns. He
was also catching on among whites in the district thanks to Thomas J. Dart, then a popular state
representative who is now Cook County sheriff. But President Clinton’s endorsement of Mr.
Rush, an early supporter of Mr. Clinton, dealt a final blow. According to Mr. Adelstein, Mr.
Clinton — after a personal request from Mr. Rush — overrode his own policy of not endorsing
candidates in primaries. Mr. Rush won the primary with 61.02 percent of the vote; Mr. Obama
had just over 30 percent. Mr. Obama was favored by whites but lost among blacks, Mr. Lester
said. Looking back, some say the magnitude of the loss reflected Mr. Obama’s failure to
connect with black, working-class voters. Mr. Mikva said, “It indicated that he had not made his
mark in the African-American community and didn’t particularly have a style that resonated
there.” (Janny Scott, “In 2000, a Streetwise Veteran Schooled a Bold Young Obama,” New York
Times, September 9, 2007)
Clinton’s endorsement for Congressman Rush may account for some of the bitter hatred towards
the former president shown by Obama during the 2008 primary season. Obama, ever the
megalomaniac, had apparently gotten it into his head that his work on Project Vote in 1992 had
been decisive in delivering Illinois for Clinton in the 1992 presidential election. In 2000, Obama
evidently thought that Clinton owed him, and that the endorsement of Congressman Rush was
therefore a betrayal. Look for a President Obama to continue making emotional blunders of this
sort because of his hyper-inflated sense of his own importance.
A DEBUT FOR OBAMA’S DEMAGOGY OF “HOPE”
It was apparently in this race that Obama made the empty abstraction of “hope” into the
workhorse of his rhetorical arsenal. From a demagogic point of view, the multiple advantages of
using such a vacuous construct should be immediately evident. By using hope as his main slogan,
Obama was able to avoid specific commitments to concrete improvements in the living standards,
working conditions, and public infrastructure of the people he was appealing to. Hope is green, and
so is the chameleon most of the time. By talking about hope, Obama was able to skirt the issues of
how any new programs would be paid for, a touchy topic that would always grate on the ears of
greedy bankers who wanted to make sure that the bonded debt of the city of Chicago always came
first, since these were the payments which were flowing into their own pockets. We should also
note that the appeal to hope also presupposes very high levels of despair in the target community,
which apparently was indeed the case. One Obama backer from 2000 recalled:
“There was a gradual progression of Barack Obama from thoughtful, earnest policy wonk/civil
rights lawyer/constitutional law expert to Barack Obama the politician, the inspirer, the
speaker.” Denny Jacobs, a friend of Mr. Obama and a former state senator, agreed. “He
stumbled on the fact that instead of running on all the issues, quote unquote, that hope is the real
key,” he said. “Not only the black community but less privileged people are looking for that
hope. You don’t have to talk about health care, you have to talk about ‘the promise’ of health
care. Hope is a pretty inclusive word. I think he is very good at selling that.”’ (Janny Scott, “In
2000, a Streetwise Veteran Schooled a Bold Young Obama,” New York Times, September 9,
2007)
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 221
“Hope for sale” might be the real motto of the Obama-Axelrod machine since 2000. For the sake
of historical accounting, we should point out that the rhetorical promise to deal with the despair of
the masses emerges as a distinct characteristic of the irrationalist totalitarian mass movements of the
1920s and 1930s in Europe.
After Obama had emerged victorious from a very peculiar U.S. Senate contest four years later,
Congressman Rush, who had been backing an opponent of Obama who was destroyed by piloted
scandals at just the right moment, commented bitterly that Barky had now become accustomed to
winning without a fight:
In March 2004, Mr. Obama won the Democratic primary for the United States Senate with
nearly 53 percent of the vote, racking up huge totals in wards he had lost to Mr. Rush in 2000.
(Mr. Rush, still stung by Mr. Obama’s challenge to him, endorsed a white candidate in the race,
Blair Hull, a former securities trader.) Mr. Obama won the general election with the biggest
margin ever in an Illinois Senate race. “For what he’s doing now, he didn’t need to march
against police brutality,” Mr. Rush said, invoking his own record. “He didn’t need to
demonstrate against poor meat in substandard grocery stores. He didn’t need that kind of stuff
because obviously his audience was at a different level.” (Janny Scott, “In 2000, a Streetwise
Veteran Schooled a Bold Young Obama,” New York Times, September 9, 2007)
OBAMA NETWORKS WITH THE ELITE
After his defeat by Congressman Rush, Obama concentrated on building networks that would
assist him in the more grandiose projects that were now on his horizon. Having disregarded the
advice of his mentor Newton Minnow, Obama now assiduously cultivated this hoary patriarch:
Mr. Obama was comfortable attending performances of the Chicago Symphony Orchestra with
city scions like Newton N. Minow, the father of Martha Minow. Mr. Minow, who had served in
the Kennedy administration and managed the white-shoe law firm of Sidley Austin when Mr.
Obama worked there after his first year of law school, began introducing him to Chicago’s
business titans. “He felt completely comfortable in Hyde Park,” said Martha Minow, his former
law professor and a mentor. “It’s a place where you don’t have to wear a label on your
forehead. You can go to a bookstore and there’s the homeless person and there’s the professor.”
(Jo Becker and Christopher Drew, “Pragmatic Politics, Forged on the South Side,” New York
Times, May 11, 2008.)
OBAMA LAUDS TERRORIST AYERS’ 1998 BOOK:
“A SEARING AND TIMELY ACCOUNT”
Obama also drew closer to the unreconstructed Weatherman terrorist bomber Bill Ayers, the son
of Thomas Ayers, the dean of the Chicago financier establishment. The cover story for this tandem
between Obama and Ayers was, incredibly enough, educational and juvenile justice reform, in
which Ayers now paraded himself as an expert:
The two men were involved in efforts to reform the city’s education system. They appeared
together on academic panels, including one organized by Michelle Obama to discuss the
juvenile justice system, an area of mutual concern. Mr. Ayers’s book on the subject won a rave
review in The Chicago Tribune by Mr. Obama, who called it “a searing and timely account.”
(Jo Becker and Christopher Drew, “Pragmatic Politics, Forged on the South Side,” New York
Times, May 11, 2008.)
222 Barack H. Obama: The Unauthorized Biography
OBAMA: TERRORIST AYERS IS “COURAGEOUS”
We thus have from this time a rare published endorsement of Ayers by Obama which appears to
have been overlooked by many of the opposition researchers during the spring primary campaigns.
Obama’s encomium of Ayers came in a review of the terrorist bomber’s book on juvenile justice, a
review which was published just before Christmas in 1997: “As Bloomberg News reported
recently, Obama and Ayers have crossed paths repeatedly in the last decade. In 1997, Obama cited
Ayers’ critique of the juvenile justice system in a Chicago Tribune article on what prominent
Chicagoans were reading.”84 The title of Ayers’ work is A Kind and Just Parent: The Children of
Juvenile Court by William Ayers (Boston: Beacon Press, 1998). Obama’s full comment was: “A
searing and timely account of the juvenile court system, and the courageous individuals who rescue
hope from despair.” (Chicago Tribune, December 21, 1997) Even ten years ago, Barky was long on
hope.85 One can surmise that Ayers’ chances of becoming secretary of education under a future
Obama regime are higher than most observers would imagine.
Obama also pursued a relentless process of political networking:
Mr. Obama cultivated clients like Bishop Arthur M. Brazier, the influential pastor of an 18,000-
member black church and founding president of the Woodlawn Organization, which focuses on
improving conditions for blacks in a neighborhood adjacent to Hyde Park. The two men began
talking politics over tennis games at Chicago’s elite East Bank Club, Mr. Brazier recalled. (Jo
Becker and Christopher Drew, “Pragmatic Politics, Forged on the South Side,” New York
Times, May 11, 2008.)
Obama also solidified his relations with the foundation world, the ambient in which he feels
most at ease.
Mr. Obama further expanded his list of allies by joining the boards of two well-known charities:
the Woods Fund and the Joyce Foundation. These memberships have allowed him to help direct
tens of millions of dollars in grants over the years to groups that championed the environment,
campaign finance reform, gun control and other causes supported by the liberal network he was
cultivating. Mr. Brazier’s group, the Woodlawn Organization, received money, for instance, as
did antipoverty groups with ties to organized labor like Chicago Acorn, whose endorsement Mr.
Obama sought and won in his State Senate race. (Jo Becker and Christopher Drew, “Pragmatic
Politics, Forged on the South Side,” New York Times, May 11, 2008.)
The Acorn endorsement is proving to be of significant value for Obama down to the present day.
OBAMA SLIPPERY AND SHIFTY ON THE ISSUES
During this entire phase, Obama’s positions on issues go beyond the simple flip-flop to confront
us with a bewildering and shimmering kaleidoscope of variegated answers. The simple attempt to
catalog Obama’s positions on the issues would require a task force in its own right. The Roman god
Proteus was famous for his ability to assume any shape he wanted, and Obama has inherited some
of this gift. Around 2000, Obama claimed to be in favor of gun control and opposed to the death
penalty, whereas in 2008 these views have been transmuted into their opposites by the alchemy of
the Perfect Master:
Today, Mr. Obama espouses more centrist views [on guns and the death penalty] and says a
campaign aide had incorrectly characterized his views on those issues — a shift that does not sit
well with some in the group, the Independent Voters of Illinois Independent Precinct
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 223
Organization. “We certainly thought those were his positions,” said David Igasaki, the group’s
chairman, who noted Mr. Obama had also interviewed with the group. “We understand that
people change their views. But it sort of bothers me that he doesn’t acknowledge that. He tries
to say that was never his view.”’ (Jo Becker and Christopher Drew, “Pragmatic Politics, Forged
on the South Side,” New York Times, May 11, 2008.)
Obama was able to impress allies and observers with his matchless flexibility and ductility when
it came to compromise; this was all the easier for him because in the final analysis he had no
principles at all.
His willingness to negotiate — the interrogation law ended up with a host of exceptions —
gained him a reputation as a pragmatist who could sell compromise as a victory to all sides, said
Peter Baroni, then the legal counsel to the Republican caucus. “He took what came into the fray
as a very leftist bill, a very leftist proposal, a very non-law-enforcement bill,” Mr. Baroni said,
“and he appeased law enforcement and brought everyone around to support it.” (Jo Becker and
Christopher Drew, “Pragmatic Politics, Forged on the South Side,” New York Times, May 11,
2008.)
Obama has demonstrably always instinctively tended to the pro-austerity position demanded by
the financiers and bankers who own him and who have fostered his career. This approach is clearly
evident in Obama’s claims about his sponsorship of welfare to work programs, in which he claims
that he reduced the welfare rolls by 80% — meaning that many needy persons were simply
jettisoned by the system to preserve loot needed by the Combine and its clients. In his early years,
Obama would answer the pleas of his constituents for some practical benefit with a browbeating,
pedantic lecture on the tightness of the budget and the need for budget austerity. Now, Obama
became more cunning. He now preferred to co-opt demands for significant material improvements
in the life of the black community by delivering patronage payments to those who made themselves
spokespersons for such demands. Compared to real broad-based reform, the expense of this
approach for the system was trifling. An example of this is Obama’s transfer of something like a
quarter of a million dollars of public funds to the renegade priest Father Pfleger, who could be
counted on to suppress demands that might call into question the domination of Chicago by
parasitical financiers.
Before his loss to Mr. Rush, Mr. Obama’s typical response for requests for state money would
be a lecture, recalled Dan Shomon, a former Obama aide. “He would say something like: ‘You
know what, you’re not going to get your money, and you know why? Let me explain the state
budget,’” Mr. Shomon said. “Then he’d give a 20-minute treatise on how the Republicans
wouldn’t raise taxes, so there wasn’t any money to do what they wanted to do.” Now, Mr.
Obama more eagerly met the demands for spending earmarks for churches and community
groups in his district, said State Senator Donne E. Trotter, then the ranking Democrat on the
Senate Appropriations Committee. “I know this firsthand, because the community groups in his
district stopped coming to me,” Mr. Trotter said. Typical of Mr. Obama’s earmarks was a
$100,000 grant for a youth center at a Catholic church run by the Rev. Michael Pfleger, a
controversial priest who was one of the few South Side clergymen to back Mr. Obama against
Mr. Rush. Father Pfleger has long worked with South Side political leaders to reduce crime and
improve the community. But he has drawn fire from some quarters for defending the Nation of
Islam leader Louis Farrakhan and inviting him to speak at his church. Father Pfleger, who did
not return calls for comment, is one of the religious leaders whose “faith testimonials” Mr.
Obama has posted on his presidential campaign Web site. David Axelrod, the chief strategist for
224 Barack H. Obama: The Unauthorized Biography
the Obama presidential campaign, said that Father Pfleger was “remaking the face” of
Chicago’s South Side and that all of Mr. Obama’s earmarks went to worthy programs like his.
(Jo Becker and Christopher Drew, “Pragmatic Politics, Forged on the South Side,” New York
Times, May 11, 2008.)
OBAMA’S BID FOR THE US SENATE
With Republican Senator Peter Fitzgerald not getting along with the bosses of the Combine,
Obama it now sensed that the main chance might be in the offing:
With his black base more secure, Mr. Obama began in 2002 to contemplate a run for the United
States Senate. “I had lunch with him at the Quadrangle Club, and we were discussing the
different bases he had to touch. I said, ‘You have to talk to the Jackson boys first,’” Mr. Mikva
recalled, referring to Representative Jackson and his father, the Rev. Jesse Jackson. “Because
Jesse Jackson Jr. had his eye on that seat. He said, ‘I know. I’m working on that.’” Mr. Obama
soon sat down with the younger Mr. Jackson at the 312 Chicago restaurant. Michelle Obama
had attended high school with Mr. Jackson’s sister and been close to the family for years, and
the congressman had attended the Obamas’ wedding. “He said, ‘Jesse, if you’re running for the
U.S. Senate I’m not going to run,’” Mr. Jackson recalled. Mr. Jackson had already decided
against it, and he gave Mr. Obama his blessing. (Jo Becker and Christopher Drew, “Pragmatic
Politics, Forged on the South Side,” New York Times, May 11, 2008.)
With the Jesse Jackson machine neutralized, Obama had removed one significant obstacle on his
way to the world’s most exclusive club.
THE PHANTOM ANTI-WAR SPEECH OF OCTOBER 2002
Obama’s October 2002 speech in downtown Chicago opposing the notion of a US attack on Iraq
furnished the only concrete reason many of his followers could cite to justify his bid to take the
presidency. Unfortunately, this speech is as hard to pin down as ectoplasm. Obama’s antiwar
speech is like the Dao of the old Chinese mystic Lao-Tse: it is everywhere and nowhere at the same
time. There is no film of the speech. There is no audio recording. There is no authoritative text.
The version of the speech that some people believe they have seen is in fact a reenactment which
we can safely assume has been embellished and enhanced to a fare thee well.86 Naturally, it was
better to be against the Iraq war in October 2002 than it was to be in favor of it. But unfortunately
for Obama, his claim is much broader: he claims that he has consistently opposed the Iraq war from
October 2002 until the present. This is simply a big lie. Obama has gone through any number of
opportunistic transmogrifications in his Iraq position, as in his other positions on virtually every
issue. Most glaring in this context has been his hyper-aggressive proposals to bomb Iran, and more
recently Pakistan.
As for Obama’s much touted openness to the Arab world, even in his dubious allies from the
Chicago Arab community have at length realized that this was a purely opportunistic pose sure to be
jettisoned when expediency dictated:
“He has a pattern of forming relationships with various communities and as he takes his next
step up, kind of distancing himself from them and then positioning himself as the bridge,” said
Ali Abunimah, a Palestinian-American author and co-founder of the online publication
Electronic Intifada, who became acquainted with Mr. Obama in Chicago. (Jo Becker and
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 225
Christopher Drew, “Pragmatic Politics, Forged on the South Side,” New York Times, May 11,
2008)
Even the fabled October 2002 Chicago antiwar speech came equipped with a series of escape
hatches and emergency exits which the candidate could use to climb back on the warmonger
bandwagon if that seemed to be politic:
Even moments that supporters see as his boldest are tempered by his political caution. The
forceful speech he delivered in 2002 against the impending Iraq invasion — a speech that has
helped define him nationally — was threaded with an unusual mantra for a 1960s-style antiwar
rally: “I’m not opposed to all wars.” It was a refrain Mr. Obama had tested on his political
advisers, and it was a display of his ability to speak to the audience before him while keeping in
mind the broader audience to come. (Jo Becker and Christopher Drew, “Pragmatic Politics,
Forged on the South Side,” New York Times, May 11, 2008)
AN SDS PRODUCTION STARRING CRYPTO-WEATHERMAN OBAMA
We have seen in a previous chapter that Obama’s speech against the Iraq war was in fact an
opportunity delivered to him by his friends among the SDS veterans who seem to flock to his
support at every critical juncture, as if by Trilateral magic. A key figure in organizing this
performance was
Marilyn Katz, who gave him entry into another activist network: the foot soldiers of the white
student and black power movements that helped define Chicago in the 1960s. As a leader of
Students for a Democratic Society then, Ms. Katz organized Vietnam War protests, throwing
nails in the street to thwart the police. But like many from that era, Ms. Katz had gone on to
become a politically active member of the Chicago establishment, playing in a regular poker
game with Mr. Miner while working as a consultant to his nemesis, Mayor Daley. “For better or
worse, this is Chicago,” said Ms. Katz, who has held fund-raisers for Mr. Obama at her home.
“Everyone is connected to everyone.” (Jo Becker and Christopher Drew, “Pragmatic Politics,
Forged on the South Side,” New York Times, May 11, 2008.)
COURTESY OF AN OLD CARTER NETWORK
Obama’s antiwar speech, however, could hardly have taken place without crucial input from the
limousine liberals of Chicago’s Lakeshore Drive, North of the loop.
Betty Lu Saltzman, a Democratic doyenne from Chicago’s lakefront liberal crowd, convened a
small group of activists, including Ms. Katz, in her living room to organize a rally to protest the
United States’ impending invasion of Iraq. It was late September 2002, and Mr. Obama was on
the top of Ms. Saltzman’s list of desired speakers. She first met him when he ran the black voter
registration drive in the 1992 election, and was so impressed that she immediately took him
under her wing, introducing him to wealthy donors and talking him up to friends like Mr.
Axelrod. But with just a few days to go before the rally, Ms. Saltzman was having trouble
reaching Mr. Obama. Finally, she said she left word with his wife. But before Mr. Obama called
her back, he dialed up some advice. With his possible run for the United States Senate, he
wanted to speak with Mr. Axelrod and others about the ramifications of broadcasting his
reservations about a war the public was fast getting behind. An antiwar speech would play to
his Chicago liberal base, and could help him in what was expected to be a hotly contested
primary, they told him, but it also could hurt him in the general election. “This was a call to
226 Barack H. Obama: The Unauthorized Biography
assess just how risky was this,” said Pete Giangreco, who along with Mr. Axelrod described the
conversation. When Mr. Obama tossed out the idea of calling it a “dumb war,” Mr. Giangreco
said he cringed. “I remember thinking, ‘this puts us in the weak defense category, doesn’t it?’
(Jo Becker and Christopher Drew, “Pragmatic Politics, Forged on the South Side,” New York
Times, May 11, 2008.)
Betty Lu Salzman is the daughter of Philip Klutznick, who was Secretary of Commerce in the
final years of the Jimmy Carter regime. So it was evidently an old Carter network that gave the
anointed one his golden opportunity to go on record against Bush’s war.
A number of Obama critics have rightly stressed the pervasive role of Obama’s old SDS
networks in setting up this legendary rally. Steve Diamond, for example, writes: “…do not forget,
the Anti-war speech Obama gave in 2002, was organized by former terrorists of the SDS days, Carl
Davidson, Marylyn Katz and others!” And:
As it turns out, there are other ex-SDS types around the Obama campaign as well, including
Marilyn Katz, a public relations professional, who was head of security for the SDS during the
disaster in the streets of Chicago in 1968. She is close (politically) to Carl Davidson, a former
vice president of SDS and longtime Fidelista, who is webmaster for a group called Progressives
for Obama, that is headlined by other former 60s radicals like Tom Hayden and the maoist Bill
Fletcher. Davidson and Katz were key organizers of the 2002 anti-war demonstration where
Obama made public his opposition to the Iraq war that has been so critical to his successful
presidential campaign. Davidson apparently moved into the maoist movements of the 70s after
the disintegration of SDS.’ (Steve Diamond, ‘Who “sent” Obama?‘ globallabor.blogspot.com,
April 22, 2008)
Obama spoke before an undetermined number of persons, with aging SDS radicals from the
Ayers-Dohrn era setting the cultural tone. The following account is from the New York Times, and
must therefore be regarded with a dose of skepticism:
The rally was held on Oct. 2, 2002, in Federal Plaza before nearly 2,000 people.87 On the
podium before speaking, Mr. Obama joked about the dated nature of crowd-pleasing protest
songs like “Give Peace a Chance.” “Can’t they play something else? ” Ms. Saltzman recalled
his saying. The speech, friends say, was vintage Obama, a bold but nuanced message that has
become the touchstone of his presidential campaign: While he said the Iraq war would lead to
“an occupation of undetermined length with undetermined costs and undetermined
consequences,” he was also careful to emphasize that there were times when military
intervention was necessary. (Jo Becker and Christopher Drew, “Pragmatic Politics, Forged on
the South Side,” New York Times, May 11, 2008.)
Obama’s careful hedging could not have been more evident, and this hint of duplicity was not
popular with the assembled crowd:
Obama’s refrain about supporting some wars perplexed some in the crowd. An event organizer,
Carl Davidson, recalled that a friend “nudged me and said, ‘Who does he think this speech is
for? It’s not for this crowd.’ I thought, ‘This guy’s got bigger fish to fry.’ At the time, though, I
was only thinking about the U.S. Senate.” (Jo Becker and Christopher Drew, “Pragmatic
Politics, Forged on the South Side,” New York Times, May 11, 2008.)
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 227
OBAMA PATRON JAMES CROWN
OF GENERAL DYNAMICS AND J.P. MORGAN
Obama now began to receive more open support from the highest levels of the US ruling elite. It
will be recalled that Thomas Ayers had been a member of the board of directors of General
Dynamics. With the elder Ayers now ailing, Obama began to receive support from another member
of the General Dynamics board, the Chicago tycoon James Crown. James Crown is a close relative
of the late Colonel Henry Crown, who had become the majority stockholder in General Dynamics
back in 1959. Crown, currently one of Obama’s main backers, began giving the neophyte politician
advice:
As Mr. Obama moved closer to running, he paid a visit to James S. Crown and his father,
Lester, billionaire investors who presided over a sprawling Chicago business dynasty and
prominent leaders in the Jewish community. As the meeting ended, the younger Mr. Crown
said, his father — who is “fairly hawkish” about Israel’s security — was noncommittal about
Mr. Obama. But, James Crown said, “I pulled him down to my office, and I said, ‘Hey, look, I
think you should run, and I want you to win.’ (Jo Becker and Christopher Drew, “Pragmatic
Politics, Forged on the South Side,” New York Times, May 11, 2008.)
OBAMA A PUPPET OF GENERAL DYNAMICS, MERCHANTS OF DEATH
The Crown family were a pillar of the US industrial-military-financier complex. As we read in
the open-source literature,
James S. Crown is … is president of Henry Crown and Company, a private investment
company. He is a director of J.P. Morgan Chase & Co., General Dynamics and Sara Lee as well
as being the Chairman of the Board of Trustees for the University of Chicago. A member of
Chicago’s Crown family, James’ father is billionaire Lester Crown. He earned his BA from
Hampshire College in 1976 and his law degree from Stanford in 1980. It is believed his family
holds ownership in the following companies: CC Industries, Inc.; General Dynamics Corp.
(Resources Group); Material Service Corp.; Freeman United Coal Mining Co.; Freeman Energy
Corp.; Century-America LLC; Century Steel LLC; Tishman Speyer Crown Equities; Industrial
Insurance Agency, Inc.; Aspen Skiing Co. (Colorado); Citation Oil & Gas Corp.; Crown
Theatres, LP; Chicago Sweeteners, Inc.; Eltek, ASA; Great Dane Trailers L.P.; Van Vlissingen
& Co.; V & V Food Products, Inc.; Lakewood Homes, Inc.; Lennar Chicago; Crown Golf
Properties; Wireless One Network; Active Screw & Fastener, L.P.; Plasco, Inc.; Crown
Community Development; Ojai Resort Management (California); Bush Hog, LLC; Woodard,
LLC.88
The lesson is clear: Obama is anything but an insurgent; he is the carefully tended puppet of the
highest levels of finance capital and the military-industrial complex. Watch for General Dynamics
(currently the sixth largest defense contractor in the world) to take the inside track in Pentagon
contracts under a future Obama regime! Maybe Obama will decide that the US needs more nuclear
submarines, since that is the specialty of General Dynamics’ Electric Boat division.
THE CORRUPTION CROWN: A SWEETHEART MORTGAGE FOR THE OBAMAS
At the end of June 2008, a scandal emerged around the fact that Democratic senators had been
receiving sweetheart mortgages with extraordinarily low interest rates from lenders like the
228 Barack H. Obama: The Unauthorized Biography
infamous Angelo Mozillo of Countrywide bank. The first two Democratic senators involved were
Kent Conrad of North Dakota and Chris Dodd of Connecticut both of whom attempted to weasel
out of the charges. But then, at the beginning of July, it was revealed that the divine Barky had also
received a sweetheart mortgage when he bought the ostentatious mansion that his friend, convicted
felon Tony Rezko, had helped him to acquire. The Washington Post reported:
Shortly after joining the U.S. Senate and while enjoying a surge in income, Barack Obama
bought a $1.65 million restored Georgian mansion in an upscale Chicago neighborhood. To
finance the purchase, he secured a $1.32 million loan from Northern Trust in Illinois. The
freshman Democratic senator received a discount. He locked in an interest rate of 5.625 percent
on the 30-year fixed-rate mortgage, below the average for such loans at the time in Chicago.
The loan was unusually large, known in banker lingo as a “super super jumbo.” Obama paid no
origination fee or discount points, as some consumers do to reduce their interest rates.
Compared with the average terms offered at the time in Chicago, Obama’s rate could have
saved him more than $300 per month.’ Michelle and Barky had succumbed to the insatiable
greed which is typical of the parvenu in all places and in all ages, and does not vary according
to whether the oligarch in question is white, black, or some other color. The tastes of the man of
the people were revealed to be sybaritic: ‘The couple wanted to step up from their $415,000
condo. They chose a house with six bedrooms, four fireplaces, a four-car garage and 5 1/2
baths, including a double steam shower and a marble powder room. It had a wine cellar, a music
room, a library, a solarium, beveled glass doors and a granite-floored kitchen.’ (Joe Stephens,
“Obama Got Discount on Home Loan; Campaign Defends Lower Rate as Lender Competition
for Business,” Washington Post, July 2, 2008)
The question was now whether Northern Trust had given Obama the sweetheart rate because of
his honest face, or in the hope of building up chits that could be used to influence legislation later
on. A glance at the Board of Directors of Northern trust revealed the presence of none other than
Susan Crown, a close associate of her relative James Crown, whom we have already identified as
one of Obama’s most important backers and controllers. Susan Crown is the vice president of the
Crown family counting house, Henry Crown and Company, and has served on the Board of
Directors of Northern Trust since 1997. Susan Crown is an important oligarch in her own right: she
is also a trustee of Yale University.
OBAMA SELLS OUT MAYTAG WORKERS
The parasitical Crown family has played a major role in the demontage of the Maytag Corp.,
which was once one of the biggest appliance makers in the United States. To make the sweetheart
mortgage scandal even more outrageous, we must remember that Obama lent the Crown family in
the person of Lester Crown a helping hand by co-opting the protest of threatened Maytag workers
into his 2004 senate campaign, and, once he had their support, selling them down the river. This
particular stab in the back developed as follows:
Crown family members have been major donors to Obama’s campaigns, and serve on his elite
fundraisers group for his presidential campaign. Among the most disturbing stories of Obama’s
many efforts to give political and legislative advantages to the Crown family’s holdings, Senate
candidate Barack Obama promised Illinois’ Maytag workers he’d work to protect their jobs —
and took campaign donations from the beleaguered workers — but then met with Lester Crown,
on the board of directors of Maytag, to take his campaign donations. Crown later told the press
that Obama never raised the workers’ fate with him. The machinists lost their jobs to Maytag’s
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 229
Mexican plant. From [the] story, “Machinists’ Union TELLS It Like It Is,” quoting a must-read
article at TradingMarkets.com, “Obama’s fundraising, rhetoric collide: Union says senator did
little to save jobs.” Obama had a special connection to Maytag: Lester Crown, one of the
company’s directors and biggest investors whose family, records show, has raised tens of
thousands of dollars for Obama’s campaigns since 2003. But Crown says Obama never raised
the fate of the Galesburg plant with him. These are the ties that bind: The billionaire
industrialist Crown family’s board memberships with Exelon Corporation, Maytag Corporation,
and Northern Trust [and their close ties to] Barack Obama. Barack Obama plays the “populist”
routine in his campaign speeches, but he delivers to his billionaire benefactors, not the common
working stiffs who are losing their jobs and their homes. (susanunpc, noquarterusa.net, July 2,
2008)89
OBAMA’S LIMITLESS HYPOCRISY
Back in February 2008, susanunpc had called attention to Obama’s scandalous hypocrisy, which
had become an issue on the campaign trail, writing:
Machinists Union President Tom Buffenbarger, introducing Clinton, talks about Maytag. He
talks about the betrayal by Barack Obama, who only gave those Maytag workers a speech.
WORDS. Baloney. But then Obama collected huge sums from the Crown family of Chicago,
owners of Maytag who shipped those workers’ jobs out of the country.90 The Chicago Tribune
commented:
It is a ready applause line for the Illinois presidential hopeful, one that he has been reciting
almost verbatim since he was a candidate for U.S. Senate in 2004, when appliance giant Maytag
was in the process of shutting a refrigerator plant here, putting 1,600 people out of work. But
the union that represented most of those Galesburg workers isn’t impressed with Obama’s
advocacy and has endorsed his Democratic rival, Hillary Clinton. Its leaders say they wish he
had done more about their members’ plight. What rankles some is what Obama did not do even
as he expressed solidarity four years ago with workers mounting a desperate fight to save their
jobs. Obama had a special connection to Maytag: Lester Crown, one of the company’s directors
and biggest investors whose family, records show, has raised tens of thousands of dollars for
Obama’s campaigns since 2003. But Crown says Obama never raised the fate of the Galesburg
plant with him, and the billionaire industrialist insists any jawboning would have been futile.’91
OBAMA’S LEFT FLANK: ABUNIMAH, KHALIDI, AND RABBI WOLF
But at the same time that he was courting high finance and the military-industrial complex,
Obama was also at tentative to his left flank, and particularly to the interface between the US
intelligence community (to which Obama belongs under Executive Order 12333 thanks to his
foundation connections) and certain factions of the PLO:
For years, the Obamas had been regular dinner guests at the Hyde Park home of Rashid Khalidi,
a Middle East scholar at the University of Chicago and an adviser to the Palestinian delegation
to the 1990s peace talks. Mr. Khalidi said the talk would often turn to the Middle East, and he
talked with Mr. Obama about issues like living conditions in the occupied territories. In 2000,
the Khalidis held a fund-raiser for Mr. Obama during his Congressional campaign. Both Mr.
Khalidi and Mr. Abunimah, of the Electronic Intifada, said Mr. Obama had spoken at the fundraiser
and had called for the United States to adopt a more “evenhanded approach” to the
230 Barack H. Obama: The Unauthorized Biography
Palestinian-Israel conflict. Still, Mr. Khalidi said ascertaining Mr. Obama’s precise position was
often difficult. “You may come away thinking, ‘Wow, he agrees with me,’” he said. “But later,
when you get home and think about it, you are not sure.” A.J. Wolf, a Hyde Park rabbi who is a
friend of Mr. Obama’s and has often invited Mr. Khalidi to speak at his synagogue, said Mr.
Obama had disappointed him by not being more assertive about the need for both Israel and the
Palestinians to move toward peace. “He’s played all those notes right for the Israel lobby,” said
Mr. Wolf, who is sometimes critical of Israel. … Mr. Abunimah has written of running into the
candidate around that time and has said that Mr. Obama told him: “I’m sorry I haven’t said
more about Palestine right now, but we are in a tough primary race. I’m hoping that when
things calm down I can be more upfront.” The Obama camp has denied Mr. Abunimah’s
account. Mr. Khalidi, who is now the director of the Middle East Institute at Columbia
University, said, “I’m unhappy about the positions he’s taken, but I can’t say I’m terribly
disappointed.” He added: “People think he’s a saint. He’s not. He’s a politician.” (Jo Becker
and Christopher Drew, “Pragmatic Politics, Forged on the South Side,” New York Times, May
11, 2008.)
BARUCH OBAMA, GENERAL DYNAMICS, AND RIGHT-WING JEWS
James Crown is reportedly very pleased with how Obama has handled himself since entering the
US Senate; Crown’s investment has paid off in spades:
Mr. Crown, for his part, could not be more pleased. Since Mr. Obama was elected to the Senate
Mr. Crown said that even his father had been won over, helping to arrange meetings for Mr.
Obama in a visit to Israel. James Crown said he had “never had even the slightest glimmer of
concern that Barack wasn’t terrific” on Israel — a view that Mr. Obama jokingly reinforced at a
meeting last year in Mr. Crown’s office. As Mr. Mikva recounted it, after discussing a
lukewarm response by more conservative Jews to some of Mr. Obama’s comments, “I turned to
Barack and said, ‘Your name could be Chaim Weizmann, the founder of the Jewish state, and
some of these Jewish Republicans wouldn’t vote for you.’” And, Mr. Mikva said, “He joked,
‘Well, you know my name is “Baruch” Obama.’ (Jo Becker and Christopher Drew, “Pragmatic
Politics, Forged on the South Side,” New York Times, May 11, 2008.)
As he strove upwards, Obama jettisoned more and more of the trappings of a reform or anticorruption
Democrat and cultivated assiduously his ties to the notorious Chicago Democratic
machine:
…as Mr. Obama ascended to the larger stage, he also took the final step in his evolution from
Hyde Park independent to mainstream Chicago politician, establishing an overt alliance with
Mr. Daley. “Over the years, Senator Obama and I have been like-minded in most of the issues
facing Chicago,” the mayor said in a statement. His former chief of staff, Gary Chico, said the
mayor’s alliance with the senator was “based on mutual interest and what the mayor saw in the
man. They’re both pragmatic.” (Jo Becker and Christopher Drew, “Pragmatic Politics, Forged
on the South Side,” New York Times, May 11, 2008.)
The shared pragmatism was clearly of the Nietzschean variety, the antinomian kind that says that
everything is allowed.
Each one of these maneuvers, expedient though it were in its own right, left behind some
disillusioned reformers and good government types who began to see through Obama’s
opportunism.
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 231
… Mr. Obama’s closer relationship with the mayor, coupled with some of his endorsements of
Democrats who championed the kind of patronage politics Mr. Obama had once denounced, left
some supporters feeling as though he was straying from his roots in the reform movement. Last
year, Mr. Mikva said he took Mr. Obama aside to complain about his endorsement of an
alderwoman [almost certainly the infamous racist Dorothy Tillman, whom the Chicago Sun-
Times describes as using historical involvement in slavery by companies and others to extort
payments to herself and her allies] who had supported Mr. Obama in his United States Senate
run and was the focus of newspaper reports about questionable spending on a $19.5 million
cultural center. Mr. Mikva said Mr. Obama’s response was simple: “Sometimes you pay your
debts.” Early last year, Mr. Obama endorsed Mr. Daley in his re-election bid, asserting that
Chicago had blossomed during his tenure. Mr. Miner, the mentor who had brought Mr. Obama
into his law firm in the early 1990s, said he remained an enthusiastic Obama supporter. But,
when it comes to some of Mr. Obama’s endorsements, “I don’t know who he’s listening to.” (Jo
Becker and Christopher Drew, “Pragmatic Politics, Forged on the South Side,” New York
Times, May 11, 2008.)
ACORN: FOUNDATION-FUNDED STORM TROOPERS
Another foundation-funded organization that strongly supports Obama is ACORN, a group
which uses real issues like poverty and low wages as pretexts to create gangs of goons and thugs
which are used to target entities various entities to which the foundations are hostile. ACORN is
reportedly heavily funded by such entities as the Woods Fund and the Joyce Foundation, two leftleaning
tentacles of the foundation world where Obama has personally served as a board member.
For many decades, as we have seen, the foundations have used the race issue as the hinge of a
divide-and-conquer strategy designed to – preserve the supremacy of Wall Street financiers in this
society. Now, as the economic depression deepens, it is clear that the foundations have deployed
ACORN as a means of seizing control of social ferment around issues like unemployment, low
wages, poor working conditions, and the like among a broader population, and one not limited by
race. ACORN resembles the old KPD, the communist party of Weimar Germany, which organized
unemployed workers into goon squads and street-fighting units. It also bears more than a passing
resemblance to Bob Avakian’s provocateur organization, the Maoist Revolutionary Communist
Party. ACORN has been specifically responsible for vote fraud actions, and is deeply implicated in
the goon squad operations that were such a prominent feature of Obama’s exclusion and
intimidation tactics during the 2008 caucuses. Right-wing critics of Obama have a hard time
understanding ACORN, since they cannot realize the validity and mass appeal of themes like a
living wage, the fight against predatory lending, and restoring the social safety net provided by the
Aid to Families with Dependent Children or general welfare provisions of Franklin D. Roosevelt’s
great Social Security Act of 1935. The reality is that, with the Democratic Party failing to act on
these vital questions, the field is open for their demagogic exploitation by foundation-funded gangs
like ACORN who will bring growing numbers of the poor and the jobless into action as expendable
shock troops and pawns under the control of ruthless demagogues loyal to the financier ruling class.
One observer comments on ACORN:
Obama’s most questionable tie is to a leftist organization called ACORN. His connection to this
group begins with a woman named Madeleine Talbot. She embraced Obama and taught him the
ropes. He remained a part of this group’s training cadre. Obama taught leadership conferences
for the group while working for Miner, Barnhill & Galland. His connections don’t end there.
Obama actively sought and received the endorsement by ACORN for the US presidency….
232 Barack H. Obama: The Unauthorized Biography
According to its web site ACORN (an acronym for Association of Community Organizations
for Reform Now), is the nation’s largest community organization of low- and moderate-income
families, working together for social justice and stronger communities. At first glance, this
organization seems to be benign. This is not true since it uses very aggressive tactics to get its
work done. … Some recent reports about their activities include the following things. They
have disrupted and blocked activities within the Chicago City Council during living wage
discussions. In Baltimore, MD, they burst into the scene of a private law dinner. They bussed
four loads of protesters to the site of a mayor’s house, where they spewed profanities at the
mayor and his family. And these are just the ones we know about. … These are not their only
questionable actions. In the past they have been tied to illegal voter registration in at least three
states. These three states are Washington, Missouri, and North Carolina. … In Missouri, the
voter fraud case was tied to at least one campaign, the senate campaign of Claire McCaskill….
In 2004, the Washington state Secretary of State described ACORN’s illegal activity as the
“largest case of voter fraud in the state’s history”…. They were fined $25,000 and promised to
instruct their paid canvassers on the state election requirements. In 2005, according to the
complaint filed with Mecklenberg County, North Carolina, the voter fraud involved the
registration of homeless people. ACORN agrees they break the law but said “no one told us”. In
2006, in Kansas City, MO, five low-level operatives were charged with voter fraud. Four
pleaded guilty, with the fifth person released because it came out that an ACORN worker had
stolen her identity. … Their national goals are municipal “living” wage laws, targeting big
companies like Costco, rolling back welfare reform, and regulating banks.
If ACORN attacks COSTCO, does that mean they are paid by Wal-Mart? But the heart of the
matter is this:
ACORN as well as other groups was the recipients of foundation money from both the Woods
Fund and Joyce Foundation. Why is this important? Obama sat on both boards. Through his
board positions, he was able to assist in the funneling of many millions of dollars in grant
money to various ultra-liberal organizations like Chicago’s ACORN.92
Despite what right-wingers may think, the real danger posed by ACORN is that of fascism, not
communism. If actual assault sections appear on the streets of America, ACORN may well be
prominently involved. Only broad-based New Deal economic policies can pull the rug out from
under demagogues like these by neutralizing the problems they exploit to recruit useful idiots for
the ruling elite.
THE BLACK AGENDA REPORT EXPOSES OBAMA
One of Obama’s sharpest critics over the past several years has been the distinguished black
journalist Glenn Ford, a writer of real integrity who has earned the high regard of readers of the
Black Commentator, and now of the Black Agenda Report. Ford’s work on Obama allows us to
view the senator through the eyes of a black activist who over the years has fought consistently for
the real interests of the black community in the broadest sense, as distinct from the personal
ambitions of individual members of the black overclass. As a result, Ford has been very tough on
the members of the Congressional Black Caucus in particular. Ford tells the fascinating story of
how he first began to notice Obama’s tendency towards opportunism, specifically on the question of
Obama’s early support from the Democratic Leadership Council, the notorious nest of right-wing
Democrats who were always determined to appease the Republicans in every way possible, no
matter what the cost:
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 233
Although close friends and confidants had been talking up a run for national office since the
early 1990s, Barack Obama in 2003 was still an Illinois state senator running in the Democratic
primary for the U.S. Senate. This reporter, a longtime and former Chicago community and
political organizer, had worked with Obama in 1992’s highly successful Project VOTE Illinois
registration drive. After moving to Georgia in 2000, I managed to keep in touch with events at
home, and was well aware of Obama’s run for the US Senate. While researching a story on the
Democratic Leadership Council for the internet magazine Black Commentator in April and May
of 2003, I ran across the DLC’s “100 to Watch” list for 2003, in which Barack Obama was
prominently featured as one of the DLC’s favorite “rising stars.” This was ominous news
because the DLC was and still is the right wing’s Trojan Horse inside the Democratic party.
The DLC exists to guarantee that wealthy individuals and corporations who make large
campaign donations have more say in the Democratic Party than do flesh and blood Democratic
voters. The DLC achieves this by closely examining and questioning the records, the policy
stands and the persons of officeholders and candidates to ensure that they are safe and worthy
recipients of elite largesse. The DLC also supplies them with right-wing policy advisers
beholden to those same interests, and hooks up approved candidates with the big money donors.
Then as now, the DLC favors bigger military budgets and more imperial wars, wholesale
privatization of government functions including social security, and in so-called “free trade”
agreements like NAFTA which are actually investor rights agreements. Evidently, the giant
insurance companies, the airlines, oil companies, Wall Street, military contractors and others
had closely examined and vetted Barack Obama and found him pleasing. (Glenn Ford, “How
We Held Obama’s Feet to the Fire in 2003,” The Black Agenda Report)
OBAMA “THE WAR HO” –
“A LIAR OF THE FIRST ORDER” – “WE MUST REJECT HIM”
In a later article, Ford elaborated: ‘The Senator from Illinois masquerades as a “peace candidate”
– and then proposes the Americans invade Pakistan, the only Muslim nation that has The Bomb. …
Obama wants to invade Pakistan, the most dangerous place in the world. Obama wants to add
almost one-hundred thousand new troops to the U.S. military.’ Ford went on to quote a recent
speech by Obama: ‘“My plan would maintain sufficient forces in the region to target al Qaeda
within Iraq,” Obama told the fat cats at the Woodrow Wilson Center. In other words, he is not about
to get out of Iraq. Barack Obama is a liar of the first order. Obama masks himself as a peace
candidate, but he is really a son of war. He carries the “White Man’s Burden,” proudly. He will
carry us into a suicidal conflict, with relish. We must reject him.’ (Glenn Ford, “Barack Obama
Ain’t Nothin’ But a War Ho’,” Black Agenda Report)93
Glenn Ford proceeded to demolish the Obama mystique in a systematic refutation:
The 2008 Obama presidential run may be the most slickly orchestrated marketing machine in
memory. That’s not a good thing. Marketing is not even distantly related to democracy or civic
empowerment. Marketing is about creating emotional, even irrational bonds between your
product and your target audience. From its Bloody Sunday 2007 proclamation that Obama was
the second coming of Joshua to its nationally televised kickoff at Abe Lincoln’s tomb to the
tens of millions of dollars in breathless free media coverage lavished on it by the establishment
media, the campaign’s deft manipulation of hopeful themes and emotionally potent symbols has
led many to impute their own cherished views to Obama, whether he endorses them or not. To
cite the most obvious example, the Obama campaign cynically bills itself as “the movement”,
234 Barack H. Obama: The Unauthorized Biography
the continuation and fulfillment of Dr. King’s legacy. But the speeches of its candidate carefully
limit the application of all his troop withdrawal statements to “combat troops” and “combat
brigades,” omitting the six figure number of armed mercenary contractors in Iraq, along with
“training,” “counterinsurgency” and other kinds of troops. Obama also presses for an expansion
of the US Army and Marines by more than 100,000 troops and a larger military budget even
than the Bush regime. The fact that both these stands fly in the face of the legacy of Martin
Luther King, and flatly contradict the wishes of most Democratic voters is utterly invisible in
the establishment media, and in the discourse of established Black leaders on the Obama
campaign. The average voter is ill-equipped to read Obama’s statements on these and other
issues as closely as one might read a predatory loan application or a jacked up insurance policy,
trying to determine exactly what is covered. As we pointed out back in December: The Obama
campaign is heavy on symbolism, and long on vague catch phrases like “new leadership,” “new
ideas,” “a politics of hope,” and “let’s dream America again” calculated to appeal to millions of
disaffected Americans without actually meaning much of anything. Corporate media actively
bill Obama as “the candidate of hope,” and anointed representative of the “Joshua generation.”
There are good reasons campaign placards at Obama rallies say “change we can believe in”
instead of “stop the war - vote Obama” or “repeal NAFTA - Barack in ‘08.” The first set of
messages are hopeful and vague. The second are popular demands among the voters Obama
needs, against which his past, present and future performance may be checked. When the
comparison is made, the results are dismaying to many who want to support Barack Obama.94
2003: OBAMA DEEP SIXES HIS OWN 2002 ANTI-WAR SPEECH
As part of his research into Obama, Glenn Ford looked at the senator’s website and found that
Obama had gone silent on any opposition to the Iraq war, which at this point in 2003 seem to have
been decisively won. Ford tells us that he
revisited Obama’s primary election campaign web site, something I had not done for a month or
two. To my dismay I found the 2002 antiwar speech, the same one which Barack Obama touts
to this day as evidence of his antiwar backbone and prescience, which had been prominently
featured before, had vanished from his web site, along with all other evidence that Obama had
ever taken a plain-spoken stand against the invasion and occupation of Iraq. With the president
riding high in the polls, and Illinois’ Black and antiwar vote safely in his pocket, Obama
appeared to be running away from his opposition to the war, and from the Democratic party’s
base. Free, at last. After calls to Obama’s campaign office yielded no satisfactory answers, we
published an article in the June 5, 2003 issue of Black Commentator effectively calling Barack
Obama out. We drew attention to the disappearance of any indication that U.S. Senate candidate
Obama opposed the Iraq war at all from his web site and public statements. We noted with
consternation that the Democratic Leadership Council, the right-wing Trojan Horse inside the
Democratic party, had apparently vetted and approved Obama, naming him as one of its “100 to
Watch” that season. This is what real journalists are supposed to do - fact check candidates,
investigate the facts, tell the truth to audiences and hold the little clay feet of politicians and
corporations to the fire. Facing the possible erosion of his base among progressive Democrats in
Illinois, Obama contacted us. We printed his response in Black Commentator’s June 19 issue
and queried the candidate on three “bright line” issues that clearly distinguish between
corporate-funded DLC Democrats and authentic progressives. We concluded the dialog by
printing Obama’s response on June 26, 2003. For the convenience of our readers in 2007, all
three of these articles can be found here. It was our June 2003 exchange with candidate Obama
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 235
that prompted him to restore the antiwar speech on his web site, though not as prominently as
before, the same antiwar speech which is now touted as evidence of his early and consistent
opposition to the war. Our three “bright line” questions invited him to distinguish himself as an
authentic progressive on single-payer national health care, on the war in Iraq, and on NAFTA.
And it was our public exposure of the fact and implications of the DLC’s embrace of Obama’s
career which caused him to explicitly renounce any formal ties with the Democratic Leadership
Council. We didn’t do it because we were haters. We were doing our duty as agitators. (Glenn
Ford, “How We Held Obama’s Feet to the Fire in 2003,” The Black Agenda Report) 95
In the fall of 2006, accompanied by the leading black journalists Bruce Dixon, Margaret
Kimberley and Leutisha Sills of CBC Monitor, Glenn Ford left the Black Commentator which he
had co-founded and edited since 2002, and launched Black Agenda Report. The Black Commentator
continued under Bill Fletcher as executive editor. Fletcher is a Senior Scholar with the Institute for
Policy Studies, an important focus of the left wing of the US intelligence community, and the
immediate past president of TransAfrica Forum, a group linked with reparations advocate Randall
Robinson. It would appear that the issue of provoking this split was specifically whether or not to
support Obama for the presidency. Glenn Ford, for his part, has continued to maintain a critical
stance in regard to the Illinois Senator, while Fletcher has gone as far as the traffic will bear in the
direction of backing Obama. Here is Fletcher’s recent quasi-endorsement of Obama:
My conclusion, and I offer this with great caution, is that critical support for Obama is the
correct approach to take. Yet this really does mean critical support. It means, among other
things, that Senator Obama needs to be challenged on his views regarding the Middle East; he
must be pushed beyond his relatively pale position on Cuba to denounce the blockade; he must
be pushed to advance a genuinely progressive view on the rebuilding of the Gulf Coast and the
right of return for the Katrina evacuees; and he must be pushed to support single payer
healthcare. As I emphasized in an earlier commentary, it is up to the grassroots to keep the
candidates honest. Silence, in the name of unity, is a recipe for betrayal. What we have to keep
in mind is something very simple: the other side, i.e., the political Right, always keeps the
pressure on. If we do not pressure, in fact, if we do not demand, the reality is that the Right will
come out on top. To do the right thing, we must assess and appreciate Senator Obama for who
he is and what he is - politically - rather than engage in wishful thinking. To do anything else is
to be disingenuous to our friends and our base. Senator Obama, if elected President, will be
unlikely to reveal himself to have been a closeted progressive. Yet, with pressure from the base,
he may be compelled to do some of what is needed, despite himself and despite pressures to the
contrary. (Bill Fletcher, Jr., The Black Commentator)
OBAMA IN 2004: BOMB IRAN – AND PAKISTAN
Already in the 2004 Senate race, Obama displayed the incongruous and bizarre combination of
nominal opposition to the Iraq war, while explicitly recommending a much wider regional
conflagration involving Iran and Pakistan, amounting essentially to the beginnings of a new world
war. Obama expounded his war plans to the editorial board of the Chicago Tribune in late
September 2004:
U.S. Senate candidate Barack Obama suggested Friday that the United States one day might
have to launch surgical missile strikes into Iran and Pakistan to keep extremists from getting
control of nuclear bombs. Obama said the United States must first address Iran’s attempt to gain
nuclear capabilities by going before the United Nations Security Council and lobbying the
236 Barack H. Obama: The Unauthorized Biography
international community to apply more pressure on Iran to cease nuclear activities. That
pressure should come in the form of economic sanctions, he said. But if those measures fall
short, the United States should not rule out military strikes to destroy nuclear production sites in
Iran, Obama said. “The big question is going to be, if Iran is resistant to these pressures,
including economic sanctions, which I hope will be imposed if they do not cooperate, at what
point are we going to, if any, are we going to take military action?” Obama asked. Given the
continuing war in Iraq, the United States is not in a position to invade Iran, but missile strikes
might be a viable option, he said. Obama conceded that such strikes might further strain
relations between the U.S. and the Arab world. “In light of the fact that we’re now in Iraq, with
all the problems in terms of perceptions about America that have been created, us launching
some missile strikes into Iran is not the optimal position for us to be in,” he said. “On the other
hand, having a radical Muslim theocracy in possession of nuclear weapons is worse. So I guess
my instinct would be to err on not having those weapons in the possession of the ruling clerics
of Iran. … And I hope it doesn’t get to that point. But realistically, as I watch how this thing has
evolved, I’d be surprised if Iran blinked at this point.” As for Pakistan, Obama said that if
President Pervez Musharraf were to lose power in a coup, the United States similarly might
have to consider military action in that country to destroy nuclear weapons it already possesses.
Musharraf’s troops are battling hundreds of well-armed foreign militants and Pakistani
tribesmen in increasingly violent confrontations. Obama said that violent Islamic extremists are
a vastly different brand of foe than was the Soviet Union during the Cold War, and they must be
treated differently. “With the Soviet Union, you did get the sense that they were operating on a
model that we could comprehend in terms of, they don’t want to be blown up, we don’t want to
be blown up, so you do game theory and calculate ways to contain,” Obama said. “I think there
are certain elements within the Islamic world right now that don’t make those same
calculations. “… I think there are elements within Pakistan right now–if Musharraf is
overthrown and they took over, I think we would have to consider going in and taking those
bombs out, because I don’t think we can make the same assumptions about how they calculate
risks.” (David Mendell, “Obama would consider missile strikes on Iran,” Chicago Tribune,
September 25, 2004)
These remarks are a foreshadowing of Obama’s call in the July 2007 Democratic candidates’
debate in Chicago for US bombing raids to be conducted on a unilateral basis in northern Pakistan,
without consultation of the Musharraf government, and thus wantonly violating the national
sovereignty of a very large and very proud nation which happens to possess nuclear weapons. At
that time, Clinton, McCain, and even Bush had rejected this demand on various grounds, but by
January 2008 Obama’s demand for the reckless and unilateral US bombing of Pakistan had become
a reality, as reported by the Washington Post and other published sources. Naturally, Obama’s
motion had passed thanks to the ascendancy inside the US government of the Zbigniew Brzezinski
faction, as whose puppet Obama functions. But in September 2004, even the Chicago Tribune could
see that there was something strange about being a dove on Iraq and a hawk on the two larger
countries further east:
Obama’s willingness to consider additional military action in the Middle East comes despite his
early and vocal opposition to the Iraq war. Obama, however, also has stressed that he is not
averse to using military action as a last resort, although he believes that President Bush did not
make that case for the Iraq invasion… (David Mendell, “Obama would consider missile strikes
on Iran,” Chicago Tribune, September 25, 2004)
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 237
US SENATE: THE DEMOCRATIC PRIMARY
AND THE ELIMINATION OF BLAIR HULL
We must now attempt to explain how the mediocre and relatively obscure Obama was able to
force his way into the United States Senate in 2004 against other candidates who were better
known, better qualified, and better financed. Once again, Trilateral magic will play a central role.
Most accounts of this Senate race are purely fantastic, and try to explain Obama’s unlikely victory
as a product of some astute machinations by the anointed one. Here is an example from a
meretricious journalist whose notoriously slimy methods became a focus of attention during the
Spring 2008 primaries:
…the [Illinois] Senate race was crowded, dominated by two independently wealthy newcomers
to politics: on the Democratic side, Blair Hull, a former securities trader who had made his first
stake playing blackjack and pumped $29 million of his own money into the race, and for the
Republicans, Jack Ryan, a former Goldman Sachs investment banker who had made a fortune
and then spent time as a teacher in an inner-city Catholic school. Another Democratic contender
was the state controller, Dan Hynes, from an old Chicago political family, who figured to have
strong labor and organization support. But Obama had his own ace: Emil Jones, whose support
had the effect of tying the hands of Mayor Richard Daley and Governor Rod Blagojevich. “He
knew if he had me in the run for the Senate, it would put a block on the current mayor,” Jones
recalled. “The current mayor and the father of the controller, which was Dan Hynes, they were
roommates in Springfield when the mayor was a state senator, so they had a relationship.
Another big financial backer for the governor was Blair Hull. Barack knew if he had me it
would checkmate the governor, ‘cause the governor couldn’t come out and go with Blair Hull,
‘cause the governor needs me. Same with the mayor. So he had analyzed and figured all of that
out. He knew I could help him with labor support. And I could put a checkmate on some of the
local politicians that didn’t know him, but they couldn’t really go against me. It was just like in
a football game: you got this talented running back, but without those linemen opening the
holes and blocking, the running back would never get out of the backfield.” Obama secured the
nomination and in November 2004 won election to the Senate. (Todd Purdum, Vanity Fair,
March 2008)
This is the journalism of pure hallucination. The account given is absolutely fraudulent, and
makes no mention whatever of the decisive factors that determined the outcome of this Senate race:
these were two huge scandals which, with perfect timing, came out of nowhere and destroyed
Obama’s most formidable opponents in the Democratic primary, Marson Blair Hull, and then —
once again with perfect timing — brought down Jack Ryan, Obama’s Republican opponent in the
November election. The New York Times account was a little better, but still left out the main
things:
If freshman senators arrive as celebrities, it is usually because they are “dragon slayers,” having
ousted big-name incumbents. Mr. Obama was not one of those; two serious opponents in
Illinois self-destructed, smoothing his path to election in November 2004. (New York Times,
March 9, 2008)
What these establishment writers are trying to hide is the fact that Obama has never won election
to public office in a truly contested election. The 2004 Illinois Senate race confirms this adage,
since Obama faced no serious opposition in the Democratic primary or in the general election, since
his most formidable opponents had been knocked out by piloted scandals.
238 Barack H. Obama: The Unauthorized Biography
BARKY’S FIRST FOE: MARSON BLAIR HULL, OPTIONS MILLIONAIRE
The most dangerous opponent for Obama was Blair Hull, usually considered the richest person
to have ever run for statewide office in Illinois. Hull’s financial resources, accumulated during a
career as an investment banker with Goldman Sachs, were unusually formidable, and Hull was also
determined to avoid the rich man’s fallacy that everything necessary for a campaign can simply be
bought with money, whereas in reality there are some things that political organizing alone can
accomplish. As we read in an Internet source,
…in early polls leading up to the March 16, 2004, primary election, candidate Blair Hull
enjoyed a substantial lead and widespread name recognition resulting from a well-financed
advertisement effort. He contributed over $28 million of his personal wealth to the campaign.
However, Hull was soon embroiled by allegations of domestic abuse. Marson Blair Hull, Jr.
(born September 3, 1942), commonly known as Blair Hull, is an American businessman and
politician, notable for his attempt to win the Democratic Party nomination to serve in the United
States Senate from Illinois in 2004. He is the founder and CEO of the Hull Group, an equity
option market making firm that was sold to Goldman Sachs. He is currently chairman and chief
executive officer of Matlock Capital a family office. In early media polls leading up to the
March 16, 2004 primary election, Hull enjoyed a substantial lead and widespread name
recognition resulting from a well-financed advertisement effort. He contributed over $28
million of his personal wealth for the campaign. When allegations that Hull had abused his exwife
were made by the media, Hull’s poll numbers dropped and he failed to win the nomination.
Illinois State Senator Barack Obama later became the nominee. Challenger Barack Obama, an
Illinois state senator, won endorsements from four Illinois congressmen and former DNC
chairman David Wilhelm, increasing his name recognition among voters. In the final weeks of
the campaign, Obama’s primary campaign gathered support from favorable media coverage and
an advertising campaign designed by David Axelrod. The ads featured images of U.S. Senator
Paul M. Simon and the late Chicago Mayor Harold Washington; the support of Simon’s
daughter; and the endorsement of most of the state’s major papers, including the Chicago
Tribune and the Chicago Sun-Times. In the March primary, Obama won a majority of support,
earning 52% of the vote, fueled by an overwhelming victory in Cook County, including
Chicago. (Wikipedia on Blair Hull)96
This account captures certain features of the reality of what went on, but it stops at the
superficial level of phenomenon and is unable to explain anything in terms of causation.
THE ATLANTIC PROFILES HULL:
SELF-FINANCED CANDIDATES ARE VULNERABLE TO SCANDALS
We can begin to understand the surprising fall of Blair Hull more adequately once we recognize
that Hull’s campaign had been extensively observed and profiled over a period of months by a
number of journalists and operatives linked to institutions that would later emerge as key centers of
support for Obama. The most egregious example is that of the Atlantic Monthly, in many ways the
flagship magazine of the Boston and New York banking establishment in the same way that the
New York Times is their newspaper of record. The Atlantic Monthly became one of the first house
organs of pro-Obama hysteria in December 2007, with an adulatory cover story celebrating the
Perfect Master by neocon Andrew Sullivan. One suspects that the Atlantic Monthly has cultivated a
benevolent interest in the career of Obama going back several decades, as several other financier
institutions had. In any case, by the spring of 2004 the Atlantic Monthly had assigned an
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 239
investigative journalist to the task of profiling the hapless Blair Hull. Here is some of what this
operation unearthed:
Blair Hull can afford to be cavalier about a senator’s $158,000 salary, because he is the richest
person ever to seek office in Illinois. He has a larger staff than any of his competitors. He pays his
staffers more than any of the nine Democratic presidential candidates pay theirs. And there is a very
good chance that he will spend more just on Illinois’s March 16 Democratic primary than all but
one or two of the Democratic presidential hopefuls will spend nationwide throughout the campaign.
When I joined him for a few days in November, Hull was in the midst of the most expensive
campaign in Illinois history, having pledged to spend as much as $40 million in pursuit of the seat
being vacated by the Republican Peter Fitzgerald. Hull’s has all the trappings of a state-of-the-art
campaign: meetups, a blog, and a timeshare in a corporate jet, not to mention a red, white, and blue
“Hull-on-Wheels” RV that is featured prominently in his television commercials and has become a
rolling symbol of the campaign. And at least in theory Hull, who is sixty-one, is a formidable
candidate: as a former high school teacher, union worker, and board member of NARAL, he
appeals to important Democratic constituencies; as the lone veteran in the field, he can oppose the
war in Iraq unquestioned. His unusual life story, too, sets Hull apart from the drab lawyers, state
representatives, and political scions who normally pursue office in Illinois, though in fact he is less
flamboyant than his campaign and personal history suggest.
Trained in mathematics and computer science, Hull became part of a notorious card-counting
ring that operated in Nevada in the 1970s. … Hull always expected future gain. As if to
underscore his analytical rigor, he used his winnings to found Hull Trading Co., a computerized
options firm that earned him $340 million—and the means to run for the Senate—when
Goldman Sachs bought it, in 1999. … But Hull’s campaign does demonstrate a shrewd
understanding of what it takes to buy a Senate seat. In the past few years Corzine and Warner
(this time running for Virginia governor) got elected, laying out a strategy that Hull’s campaign
has largely adopted. Unlike Checchi and Huffington, Corzine went beyond television
advertising to build his base of support. “Any self-funded candidate who relies on mass media
to carry his message in the absence of creating a warm and lasting connection with voters is
going to lose,” Steve DeMicco, who managed Corzine’s campaign, warns. Corzine courted key
state officials and built an intricate grassroots network well in advance of the election.
(Hundreds of thousands of dollars in charitable donations to Jesse Jackson’s Rainbow/PUSH
Coalition and similar organizations didn’t hurt either.) And he largely resisted the urge to
overrule his advisers, though he did refuse the suggestion that he shave his beard. “For the most
part,” DeMicco says, “he knew what he didn’t know.” Hull, too, has assiduously cultivated the
grass roots—particularly downstate, where he is counting on outperforming his Chicago-based
competitors in the primary. Given that at least six other candidates are vying for the Democratic
nomination, the winner should need only 25 to 30 percent of the vote. Though the millions Hull
has spent to date have yet to make him the front-runner, his campaign is showing reasonable
progress in the difficult task of turning a virtual unknown into a serious prospect for the state’s
12 million citizens. Hull has already campaigned full time for more than a year, blanketing the
state with television ads, joining parades in the “Hull-on-Wheels” RV, and giving endless talks
in small towns similar to Orland Hills. Like other candidates, Hull supports drug re-importation
from Canada. He recently took a bus trip to Windsor, Ontario, with seniors who were buying
prescription drugs. Unlike other candidates, he paid for the bus, the hotel rooms, and even the
doctors’ visits. And just as Corzine did, he has spent an astonishing amount of money courting
240 Barack H. Obama: The Unauthorized Biography
state officials—donating to Rod Blagojevich’s successful 2002 campaign for governor of
Illinois, for instance, a total of $459,000 in loans, cash, and the use of his jet.
It turns out that Hull is that rare breed of candidate who will give an honest assessment of his
chances. “At the outset,” he told me, “I estimated there was about a ten percent probability” of
winning. But by the time he was six months into his campaign, Hull’s name recognition and
poll support had risen to the point where, he said, “it is clearly above that—and rising.” He
emphasized his continued willingness to bet millions of dollars that he can win. Hull is most
animated by those aspects of campaigning that can be quantified and formulated. “Politics is
very unpredictable,” he told me. “More so than blackjack.” When Elliott Close, a South
Carolina textile heir, ran for the Senate in 1996, his consultants thought it politically unwise for
him to drive a fancy foreign car. Close dutifully swapped it for a Cadillac. Not long afterward
he was ticketed for speeding, and a subsequent newspaper account emphasized his expensive
choice of automobile. Exasperated, Close bought a Buick and was said to carry the newspaper
clipping in his wallet for the remainder of the campaign. Other examples are not quite as
harmless. The Republican businessman Michael Huffington’s Senate campaign in California, in
1994, featured a get-tough-on-immigration platform unveiled in the final weeks of the
campaign. A few days after the announcement the Los Angeles Times reported that Huffington
employed an illegal alien as a nanny. Like Close, Huffington lost his election.
Nevertheless, there is compelling evidence that Illinois voters will accept a candidate who
draws on his own fortune to run for office. They have already elected one: Peter Fitzgerald, who
in 1998 spent $14 million of his personal fortune of $40 million to win the seat Hull wants. But
after Hull started campaigning, Fitzgerald announced that he would not seek re-election.
Spending part of a fortune to become a senator was one thing; going through the rest of it to
remain one, apparently, was another.
The central finding of the profile, perhaps suggesting what would come next, was this:
Self-financed candidates are usually facing media scrutiny for the first time. They are therefore
more susceptible to damaging revelations: a drunk-driving arrest, a history of domestic
violence, an illegal nanny. This reality can be daunting. (Joshua Green, “Blair Hull thinks he
has found the formula for how to buy a Senate seat A Gambling Man,” Atlantic Monthly,
February 2004) 97
As it turned out, the Obama machine could do better than a nanny. They would tar Hull with
domestic violence and threatening to kill his own wife.
HULL FALLS VICTIM TO AXELROD'S DIVORCE PAPERS GAMBIT
Blair Hull’s world began to get turned upside down when a group of Chicago media apparently
led by Axelrod’s network at the reactionary and neocon Chicago Tribune began demanding that the
sealed court papers regarding the divorce which had ended Blair Hull’s marriage be revealed to the
public. This procedure was highly irregular, since proceedings in Family Court are not
automatically open to the public, because of the interest of the minor children. But these mere
technicalities did not stop the Chicago Tribune, aided and prodded, as it was later learned, by the
Obama campaign and quite possibly by the anointed one himself. When the papers were finally
opened, they were an unmitigated disaster for poor Marson Blair Hull, including a physical beating
and a death threat. Things had reached such a level of intensity between Hull and his wife that she
had to ask for a special protective order to keep the allegedly violent husband away. Naturally,
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 241
these charges were all made ex parte by Hull’s wife, and therefore are not necessarily true at all.
However, they were just the thing that the Trilateral doctors ordered for the anemic campaign of
Obama. Here is a sampling of one journalistic account:
The divorce filings reveal a highly volatile relationship between a couple who were married and
divorced twice within four years. In the second divorce, the proceedings became so bitter that
each party hired a private investigator to look into the other’s life, the divorce filings show.
Before his first marriage to Sexton, Hull had been married for 29 years to another woman with
whom he had four children. For her part, Sexton, 49, alleged a pattern of emotional and mental
abuse by Hull. On March 12, 1998, she asked a Cook County Circuit Court judge to issue an
order of protection against Hull, in part, because she alleged Hull had threatened her life. “I am
in great fear that if this court does not enter a protective order in my favor and against Blair, as
well as exclude him from my residence in which I am residing with my child ... Blair will
continue to inflict mental, emotional and physical abuse upon me as he has done in the past,”
Sexton alleged to obtain a court order to keep Hull away from her. “At this point, I fear for my
emotional and physical well-being, as well as that of my daughter.” Sexton outlined several
incidents in which she accused Hull of becoming violent, profane and verbally abusive. During
one, she alleged that he “hung on the canopy bar of my bed, leered at me and stated, ‘Do you
want to die? I am going to kill you....’” Only once, however, did she accuse him of striking her,
which led to his arrest. But authorities declined to press charges against Hull because they
determined that “mutual combat” had occurred. Hull said he struck Sexton’s shin in retaliation
after she allegedly kicked him. A Cook County prosecutor “felt she would be unable to sustain
a burden of proof beyond a reasonable doubt” in the battery case, according to the divorce
filing. But just days after she asked for the protective order, the couple reached a settlement
agreement giving her $3 million and half the value of their North Side home. And despite her
allegations of abusive behavior by Hull, Sexton agreed to allow the protective order to expire
when the marriage was dissolved in court months later. (David Mendell, “Hull’s ex-wife called
him violent man in divorce file,” Chicago Tribune, February 28, 2004)
HULL CRUSHED BY TRILATERAL SCANDAL MACHINE
The impact of these revelations on the hapless Hull’s campaign can be likened to that of a
thermonuclear explosion. Here is an assessment of the state of Hull’s campaign on March 19, 2004
which stresses the collapse of
… Blair Hull’s extravagant quest for the Democratic nomination for U.S. Senate. Hull’s
campaign followed a trajectory more dramatic than Howard Dean’s, with big leads in the polls
preceding what the Chicago Tribune called “the most inglorious campaign implosion in Illinois
political history.” Hull finished a distant third in Tuesday’s voting, with barely 10% of the vote.
His campaign was financed, lavishly, from the personal fortune Hull made as the founder of an
options firm he sold to Goldman Sachs for $340 million in 1999. Hull spent at least $29 million
on the campaign; the Tribune estimates he paid $260 for each vote he received. Hull’s undoing
was a story that broke less than a month before the primary. His ex-wife had sought an order of
protection against him during their divorce in 1998. Hull tried to keep the divorce records
sealed, but pressure from journalists and opposing candidates forced him to release them. The
papers revealed that his ex-wife alleged that Hull had threatened her life, and that a physical
altercation between them had led to his arrest for battery, though no charges were filed. An
established politician with a reputation and a track record might have survived such publicity.
But Hull was a political novice. Not only had he never run for office before 2004, he hadn’t
242 Barack H. Obama: The Unauthorized Biography
bothered to vote for years at time. An article by Joshua Green on Hull, which appeared in the
Atlantic Monthly as his candidacy was cresting, was prescient: “Self-financed candidates are
usually facing media scrutiny for the first time. They are therefore more susceptible to
damaging revelations: a drunk-driving arrest, a history of domestic violence, an illegal nanny.”
The ubiquitous Hull television ads had given him far better name recognition than his obscure
opponents. But the footage of him chartering a bus to take Illinois senior citizens to Canada for
cheaper prescription drugs than they could buy in the U.S. did him no good once the divorce
story broke. Voters now knew one thing about Hull that didn’t come from his ads, and it made
even the least credulous suspect that the virtues and earnestness on display in the paid spots
were contrived. After the divorce story broke, Blair Hull posted a message on his campaign
website: “If voters want to judge me solely on the basis of my divorce, I’m willing to allow the
chips to fall where they may. However, what voters tell me they want this election to be about is
who has the independence to make health care more affordable, drive down the costs of
prescription drugs, get our economy moving and create jobs.” Jay Gatsby realized, finally, that
none of those people at his parties were his friends—they were just there for the food, the drinks
and the thrills. Blair Hull now knows that only a few of those earnest voters who spoke to him
were really interested in his gold-plated policy seminar. They wanted a tabloid story, and he
became it. (William Voegeli, “The Rise and Fall of Blair Hull,” The Claremont Institute, March
19, 2004)98
Note once again that the demolition of Hull followed the guidelines suggested by the profile in
the Atlantic Monthly, which is today one of the temples of the Obama cult.
OBAMA’S CAMPAIGN “WORKED AGGRESSIVELY” TO SMEAR BLAIR HULL
As the 2004 Senate primary neared, it was clear that it was a contest between two people: the
millionaire liberal, Hull, who was leading in the polls, and Obama, who had built an impressive
grass-roots campaign. About a month before the vote, The Chicago Tribune revealed, near the
bottom of a long profile of Hull, that during a divorce proceeding, Hull’s second wife filed for
an order of protection. In the following few days, the matter erupted into a full-fledged scandal
that ended up destroying the Hull campaign and handing Obama an easy primary victory. The
Tribune reporter who wrote the original piece later acknowledged in print that the Obama
camp had ‘worked aggressively behind the scenes’ to push the story.99 (emphasis added)100
Even with the support of this profiling and scandal machine, Obama was only able to eke out
52.77% of the primary vote in a crowded field. The Obama campaign was deeply implicated in the
mudslinging.
THE ELIMINATION OF JACK RYAN
Now Obama had to face the Republican candidate, who was yet another multimillionaire, this
time with a glamorous actress wife who had been a star of the television series Star Trek. A
standard Internet reference work gives the following account of what followed:
Obama was then pitted against Jack Ryan, the winner of the Republican primary. Ryan
campaigned in favor of across-the-board tax cuts, school choice, and tort reform, an effort to
limit payout in medical malpractice lawsuits. Ryan spent his childhood in Wilmette, Illinois,
with his five siblings, and attended New Trier High School. He graduated from high school in
1977 and went on to Dartmouth College, where he graduated summa cum laude and Phi Beta
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 243
Kappa. He earned his MBA from Harvard Business School, and his JD from Harvard Law
School. After this, he worked for Goldman Sachs as an investment banker and eventual partner,
first in New York City, and then in the Chicago branch. Ryan married actress Jeri Ryan in
1991; together they have a son, Alex Ryan. They divorced in 1999 in California, and the
records of the divorce were sealed at their mutual request. Five years later, when Ryan’s Senate
campaign began, the Chicago Tribune newspaper and WLS-TV, the local ABC affiliate, sought
to have the records released. Both Ryan and his wife agreed to make their divorce records
public, but not make the custody records public, claiming that the custody records could be
harmful to their son if released. On June 22, 2004, Los Angeles Superior Court Judge Robert
Schnider agreed to release the custody files. In those files, Jeri Ryan alleged that Jack Ryan had
taken her to sex clubs in several cities, intending for them to have sex in public. The decision to
release these files generated much controversy because it went against both parents’ direct
request and because it reversed the earlier decision to seal the papers in the best interest of the
child.101
This time around, Obama assumed a stance of Pecksniffian hypocrisy, deploring that such
scabrous and salacious material was coming up in a political campaign. ‘“I don’t think it’s an
appropriate topic for debate,” Obama said. Obama has consistently said that his campaign would
not focus on Ryan’s 1999 divorce from TV actress Jeri Ryan.’ (Chicago Sun-Times, April 3, 2004)
OBAMA AND THE ART OF PORNOGRAPHIC CAMPAIGNING
The usual suspects from among Axelrod’s pals at the Chicago Tribune intervened actively on
Obama’s behalf to dig up as much dirt as they could about Jack Ryan. Since divorce is now so
prevalent, it is perhaps not a big surprise that Obama’s journalistic myrmidons chose the tactic of
attempting to open up court papers from Ryan’s ugly divorce from the famous Star Trek actress Jeri
Ryan:
As the campaign progressed, a lawsuit brought by the Chicago Tribune and ABC-owned station
WLS-TV led to a California court’s opening of child custody files from Ryan’s divorce with
actress Jeri Ryan. In those files, she alleged that he had taken her to sex clubs in several cities,
intending for them to have sex in public. Although the sensational nature made the revelations
fodder for tabloid and television programs specializing in such stories, the files were also
newsworthy because Ryan had insisted to Republican leaders that there was nothing damaging
in them. As a result, many Republicans questioned Ryan’s integrity following the release, and
he dropped out of the race on June 25, 2004, leaving Obama without an opponent. (Wikipedia
on Jack Ryan)102
The stunning blow for Jack Ryan came on June 22, 2004 when, contrary to most legal precedent,
the divorce papers were opened and published before a candid world. An account from the gotcha
website The Smoking Gun describes the impact of these revelations on Ryan, who had tried to
portray himself as a family values conservative against the cosmopolitan and Bohemian Obama:
In what may prove a crippling blow to his U.S. Senate campaign, divorce records reveal that
Illinois Republican Jack Ryan was accused by his former wife, actress Jeri Ryan, of pressuring
her to have sex at swinger’s clubs in New York, Paris, and New Orleans while other patrons
watched. The bombshell allegation is contained amidst nearly 400 pages of records ordered
released yesterday by a Los Angeles Superior Court judge who ruled on media requests to
unseal documents from the Ryan case. The salacious charge leveled at the politician was made
by Jeri Ryan, who has starred in TV’s “Star Trek: Voyager” and “Boston Public,” in a court
244 Barack H. Obama: The Unauthorized Biography
filing in connection with child custody proceedings…. The performer alleged that she refused
Ryan’s requests for public sex during the excursions, which included a trip to a New York club
“with cages, whips and other apparatus hanging from the ceiling.” While Ryan, a former
Goldman Sachs executive, confirmed the trips with the actress, he described them simply as
“romantic getaways,” denying her claims that he sought public sex. The politician has
repeatedly claimed that his divorce file – portions of which were sealed in 2000 and 2001 –
contained no embarrassing information that would harm his chances against Democratic
nominee Barack Obama. The Ryans were married in 1991 and, in November 1998, Jeri Ryan
filed for divorce citing “irreconcilable differences.” Another unsealed document reveals that
Jeri Ryan, as part of the divorce settlement, received about $20 million in Goldman Sachs stock,
while Jack Ryan retained a $40 million stake in the investment giant.103
RYAN FREQUENTED “A BIZARRE CLUB WITH CAGES,
WHIPS, AND OTHER APPARATUS”
Here are some excerpts from the unusually prurient statements of Jeri Ryan about her former
husband’s penchant for dragging her into sex clubs:
“They were long weekends, supposed ‘romantic’ getaways,” Jeri Ryan said in the filing. “The
clubs in New York and Paris were explicit sex clubs. Respondent had done research.
Respondent took me to two clubs in New York during the day. One club I refused to go in. It
had mattresses in cubicles. The other club he insisted I go to.” In her 2000 filing, Jeri Ryan
alleged that after she and Jack Ryan left the first sex club they entered in New York, he asked
her to go to another. She said he told her that he had gone out to dinner with her that night even
though he didn’t want to and “the least I could do in return was go to the club he wanted me to
go.” She described the second place as “a bizarre club with cages, whips and other apparatus
hanging from the ceiling.” “Respondent wanted me to have sex with him there with another
couple watching. I refused,” Jeri Ryan continued. “Respondent asked me to perform a sexual
activity upon him and he specifically asked other people to watch. I was very upset. “We left
the club and respondent apologized, said that I was right and he would never insist that I go to a
club again. He promised it was out of his system.” “Then during a trip to Paris, he took me to a
sex club in Paris, without telling me where we were going. I told him I thought it was out of his
system. I told him he had promised me would never go. People were having sex everywhere. I
cried, I was physically ill. Respondent became very upset with me, and said it was not a ‘turn
on’ for me to cry.” (AP, June 22, 2004) 104 Ryan could only counter weakly that “We did go to
one avant garde nightclub in Paris which was more than either one of us felt comfortable with.”
With the tabloids full of these sensational accounts, Jack Ryan’s Republican allies began to run
away from him about as fast as they ran away from Mark Foley two years later.
After the records were made public, Congressman Ray LaHood of the 18th District immediately
called on Ryan to drop out of the race. By June 25, Dennis Hastert, another prominent Illinois
Republican (and the House Speaker) had “made some calls,” according to anonymous sources
reported in the Daily Southtown, and the consensus was for Ryan to step aside. The Southtown
newspaper also reported that Ryan was expected to step aside. Some commentators pointed out
that the information contained in the files involved private matters between a husband and wife
and should not have been grounds for the destruction of Ryan’s campaign. Others pointed out
that the allegations were never proven, and in fact, Ryan was awarded additional custody rights
at the end of the hearing, suggesting the allegations were not deemed reliable by the judge.
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 245
Ryan trailed Obama in early polls, with Obama opening up a 20-point lead after the media
reported that Ryan had assigned Justin Warfel, a Ryan campaign worker, to track Obama’s
appearances. Warfel followed Obama’s movements 24 hours a day, recording everything
Obama did in public on videotape. Warfel also heckled Obama by yelling questions at him in
public. Ryan eventually withdrew Warfel, but did not apologize. (Wikipedia on Ryan)105
THE CARPETBAG CAMPAIGN OF ALAN KEYES OF MARYLAND
It was now late June, and the Illinois Republican Party no longer had a credible candidate for the
United States Senate. At this point, given the typical Republican mentality and voter base, it would
have been natural for the Illinois Republicans to do the obvious thing and pick the best financed,
best known white candidate they could find in order to at least cut their losses. The normal
Republican reasoning would be that since Obama is black, a white candidate would automatically
acquire support from backlash voters, especially those in the rural areas of downstate Illinois. A
white candidate was the obvious choice. There was absolutely no reason to go far afield to recruit a
black candidate yet for some inexplicable (and probably Trilateral) reason, this is what the Illinois
Republicans did. Perhaps, after two of Obama’s opponents had been knocked out by perfectly timed
scandals, the Illinois GOP had detected the hand of Divine Providence and concluded that Obama’s
entry into the US Senate was now divinely ordained. Otherwise, there is no explanation of what the
Illinois Republicans did next. They went all the way to Maryland to recruit Alan Keyes, a former
State Department official under Reagan, a failed Senate candidate in his own state of Maryland, and
a former Republican presidential candidate who was widely thought to have run for the White
House in order to increase the standard fee he could demand for making lectures in front of groups
of reactionary students on college campuses. Keyes was a widely known windbag and buffoon, and
by making the trip from Maryland all the way to Illinois he compounded his problems by adding
carpetbagger and interloper to the list of epithets ready to be hurled against him.
In August 2004, with less than three months to go before election day, Alan Keyes accepted the
Illinois Republican Party’s nomination to replace Ryan. A long-time resident of Maryland,
Keyes established legal residency in Illinois with the nomination. Through three televised
debates, Obama and Keyes expressed opposing views on stem cell research, abortion, gun
control, school vouchers, and tax cuts. In the November 2004 general election, Obama received
70% of the vote to Keyes’s 27%, the largest electoral victory in Illinois history. (Wikipedia)106
Obama had received an important boost from Laurance S. Rockefeller, a senior member of the
Rockefeller family, in the form of some very generous contributions to Axelrod and some issue ads
designed to favor Obama’s Malthusian party line. Laurance, along with David, was one of the
surviving members of the Rockefeller brothers’ generation, the sons of John D. Rockefeller Junior.
Laurance died at the age of 94 in July 2004, so the Obama campaign was one of his last projects.107
OBAMA’S VOLKSGEMEINSCHAFT SPEECH
AT THE DEMOCRATIC CONVENTION
In the midst of these events, Obama was chosen by the party hacks and Wall Street operatives
who control the Democratic Party to deliver the keynote address of the 2004 Democratic national
convention in Boston, Massachusetts. This was an unmistakable symbol of the fact that Obama had
a support network that went far beyond the confines of the corrupt Chicago Democratic machine: it
reached to Wall Street and beyond. In an instant, the obscure mediocrity Obama became a national
and indeed international celebrity, and the Chicago Democratic wheel horses with whom he had
246 Barack H. Obama: The Unauthorized Biography
been rubbing shoulders in the various clubhouses of the South Side for a decade and more were
stunned to see the forces that were now promoting Barky’s meteoric career.
When Mr. Obama delivered a now-famous speech at the 2004 Democratic National Convention
that catapulted him onto the national stage, sitting in the audience was Mayor Daley of Chicago.
As Mr. Obama spoke, Mr. Daley and other Illinois officials “were just as wide-eyed as the
thousands of convention goers,” said James A. DeLeo, a Democratic leader in the Illinois
Senate. The mayor and the senator had some ties, but they had never had a close relationship.
Mr. Obama’s friend Ms. Jarrett had worked for Mr. Daley, and had hired Michelle Obama into
the administration in the early 1990s. Yet Mr. Obama had run multiple times as a candidate
without the mayor’s help. (Jo Becker and Christopher Drew, “Pragmatic Politics, Forged on the
South Side,” New York Times, May 11, 2008.)
Obama’s Boston keynote address of 2004 represents essentially the same speech that he has been
giving ever since: a tissue of patriotic clichés changed by New Age sensibilities, an oblique polemic
against the Lee Atwater-Karl Rove use of wedge issues by the Republican party, and above all a
cascade of vapid messianic slogans and Utopian rhetorical figures. The great overarching theme
was the mystical unity of the American nation and people. Obama’s oration had not a scintilla of
originality. It was a standard Democratic Party corporatist speech in the Volksgemeinschaft tradition
– the (at best) communitarian idea that the mystical unity of The People magically dispels all real
conflicts of interest, also a staple of the fascist rejection of class conflict. Congresswoman Barbara
Jordan at the 1976 Democratic National Convention had played the Volksgemeinschaft card against
Nixon and Ford. Jordan had intoned on that occasion:
This is the question which must be answered in 1976: Are we to be one people bound together
by common spirit, sharing in a common endeavor; or will we become a divided nation? For all
of its uncertainty, we cannot flee the future. We must not become the “New Puritans” and reject
our society. We must address and master the future together. It can be done if we restore the
belief that we share a sense of national community, that we share a common national endeavor.
It can be done.
This speech had doubtless been written for Ms. Jordan by the Trilateral managers who ran both
Jimmy Carter and the 1976 convention. Some of the rhetorical devices are actually echoed in
Obama’s boilerplate rhetoric.
“My story is part of the larger American story,” Obama pontificated in a performance that the
controlled corporate media uniformly touted as electrifying and inspirational. “In no other country
on Earth is my story even possible.” “We worship an awesome God in the blue states, and we don’t
like federal agents poking around our libraries in the red states,” he said. “We coach Little League
in the blue states, and yes, we’ve got some gay friends in the red states. There are patriots who
opposed the war in Iraq, and there are patriots who supported the war in Iraq. We are one people, all
of us pledging allegiance to the Stars and Stripes, all of us defending the United States of America.”
Here again was the mystical unity of the nation, a staple of standard fascist rhetoric.
THE APOTHEOSIS OF A MEGALOMANIAC
In the standard Roman triumphs, the victorious general returning to receive the tumultuous
accolades of the Senate and people was also provided with a slave whose job it was to keep
repeating that he was only mortal and that all glory was fleeting; this was a kind of Roman
preventive care lest megalomania ensue from too much adulation. Obama has always needed an
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 247
entire staff to try to keep his characteristic megalomania under control. In an instant, Obama had
leapt from relative obscurity to bask in the klieg lights of DC fame, and it was all going straight to
his head:
Obama’s good friend Martin Nesbitt, a successful black businessman in Chicago, spent the day
of the speech with him, traveling from appearance to appearance. “We were walking down the
street in Boston, and this crowd was growing behind us, kind of like Tiger Woods at the
Masters. And I turned to Barack and I said, ‘This is incredible. You’re like a rock star.’ And he
looked at me and said, ‘If you think it’s bad today, wait till tomorrow.’ And I said, ‘What do
you mean?’ and he said, ‘My speech is pretty good.’ ” It was an extraordinary display of selfconfidence,
and self-knowledge. (Purdum, Vanity Fair, March 2008)
We would rather call it an extraordinary display of megalomania on the part of a person who
somehow believes that magical oratory can automatically be used to produce concrete effects in the
real world — not a very healthy frame of mind for anyone, much less a president who will always
have to fight to get the bureaucracy to do anything at all. In the November 2004 general election,
Obama received 70% of the vote to Keyes’s 27%, the largest electoral victory in Illinois history.
Obama became only the third African-American elected to the U.S. Senate since Reconstruction,
after Edward Brooke of Massachusetts and Carol Moseley Braun of Illinois. We can expect Obama
to undergo acute bouts of megalomania if he should ever get the Democratic nomination, to say
nothing of the Nero-style performance he will put on if he should ever reach the White House. God
help us.
IN THE US SENATE: TACKING RIGHT WITH LUGAR
Despite the underlying megalomania, Obama has also developed a certain limited capacity to
display a self-deprecating humor. One example:
Senator Barack Obama stood before Washington’s elite at the spring dinner of the storied
Gridiron Club. In self-parody, he ticked off his accomplishments, little more than a year after
arriving in town. “I’ve been very blessed,” Mr. Obama told the crowd assembled in March
2006. “Keynote speaker at the Democratic convention. The cover of Newsweek. My book made
the best-seller list. I just won a Grammy for reading it on tape. “Really, what else is there to
do?” he said, his smile now broad. “Well, I guess I could pass a law or something.” … He was
running for president even as he was still getting lost in the Capitol’s corridors. “I think it’s very
possible to have a Senate career here that is not particularly useful,” he said in an interview,
reflecting on his first year. And it would be better for his political prospects not to become a
Senate insider, which could saddle him with the kind of voting record that has tripped up so
many senators who would be president. “It’s sort of logic turned on its head, but it really is
true,” said Tom Daschle of South Dakota, the former senator and Democratic leader who has
been a close adviser to Mr. Obama.’ (New York Times, March 9, 2008)
Obama appears to be preparing to go one step further in the departure from reality which the
neocons have thus far so nobly advanced: in the bizarro world of Obama, no experience is better
than vast experience, and no track record is far better than a voluminous track record, since only
perceptions, and never reality are involved. Unfortunately for Obama, this is just not the way the
world works.
248 Barack H. Obama: The Unauthorized Biography
THE HOPE POPE CREATES THE HOPEFUND
And then there were the kudos, the accolades which showered down on the anointed head:
Shortly after Obama’s swearing in, his beatification begins when Time magazine names Obama
one of “The World’s Most Influential People.” He is listed among other leaders and
revolutionaries. This same year, the British journal New Statesman names Obama one of “10
People Who Could Change the World.” After he was on the cover of Newsweek the same week
President Bush appeared as Time’s Man of the Year, his fellow Democratic senators gently
ribbed him at their first weekly luncheon of the new Congress. His memoir was on The New
York Times’ best-seller list for 54 weeks. And Washington society was eager to embrace him —
a Capitol Hill newspaper ranked him as No. 2 on its list of most beautiful people. Mr. Obama
was also pulling in big money. He created a political action committee, the Hopefund, to
increase his visibility and help other Democrats, and it raised $1.8 million the first year. He
disappointed some Democrats by not taking a more prominent role opposing the war — he
voted against a troop withdrawal proposal by Senators John Kerry and Russ Feingold in June
2006, arguing that a firm date for withdrawal would hamstring diplomats and military
commanders in the field. His most important accomplishment was his push for ethics reform.
Party leaders named him their point person in 2006, and when the Democrats assumed the
majority in Congress in January 2007, Mr. Obama and Mr. Feingold, a longtime Democratic
proponent of ethics reform, proposed curtailing meals and gifts from lobbyists, restricting the
use of corporate planes, requiring lobbyists who bundle donations to disclose individual
donors… “He folded like a cheap suit,” said Senator Lindsey Graham, Republican of South
Carolina and a close ally of Mr. McCain. “What it showed me is you are not an agent of change.
Because to really change things in this place you have to get beat up now and then.” (New York
Times, March 9, 2008)
Obama’s betrayal of the Kerry-Feingold bill of mid-2006 is by itself enough to make his claim
of consistent opposition to the Iraq war into a bitter mockery, but the Kool-Aid drinkers and
lemming legions who support his cultist candidacy are epistemologically incapable of seeing
this simple fact.
TOM DASCHLE, THE SENATOR FROM CITIBANK
As soon as Obama got to Washington, he immediately began recruiting a staff of classic
powerbrokers and influence peddlers.
Obama was sworn in as a senator on January 4, 2005. Although a newcomer to Washington, he
recruited a team of established, high-level advisers devoted to broad themes that exceeded the
usual requirements of an incoming first-term senator. Obama hired Pete Rouse, a 30-year
veteran of national politics and former chief of staff to Senate Democratic Leader Tom Daschle,
as his chief of staff, and economist Karen Kornbluh, former deputy chief of staff to Secretary of
the Treasury Robert Rubin, as his policy director. His key foreign policy advisers include
Samantha Power, author on human rights and genocide, and former Clinton administration
officials Anthony Lake and Susan Rice. Obama holds assignments on the Senate Committees
for Foreign Relations; Health, Education, Labor and Pensions; Homeland Security and
Governmental Affairs; and Veterans’ Affairs, and he is a member of the Congressional Black
Caucus. The U.S. Senate Historical Office lists him as the fifth African-American Senator in
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 249
U.S. history, the third to have been popularly elected, and the only African-American currently
serving in the Senate.’ (Wikipedia entry on Obama)108
Especially sinister is the presence of Tom Daschle, notorious as the senator from Citibank,
which happens to be one of the largest employers in the state of South Dakota because of the
presence of some of its back-office facilities there. Daschle embodies in the cringing appeasement
and milquetoast opposition which was typical of the Democratic Party during Bush’s first term. He
lost his seat to the upstart Thune because of his numerous betrayals and he is now attempting to
reinvent himself thanks to the Hope Meister.
STRIPPING THE RUSSIAN NUCLEAR DETERRENT WITH DICK LUGAR
Naturally, everybody in Washington is in favor of stripping away as much of the Russian nuclear
deterrent as can be managed, so this was a very noncontroversial choice for Obama, and happened
by some coincidence to also coincide perfectly with the anti-Russian priorities of his longtime
mentor and controller, Zbigniew Brzezinski. Soon after he was sworn into office on January 4,
2005, Obama partnered with Republican Sen. Richard Lugar of Indiana to craft a bill that attempted
to undermine the Russian deterrent under the pretext of destroying weapons of mass destruction in
Eastern Europe and Russia. The choice of the reactionary Lugar was significant, since this is a
figure whom Obama is known to be considering either for the vice presidency or for a post like
secretary of state.
Lugar was one of Obama’s first mentors in the Senate, and was at that time the chairman of the
Foreign Relations Committee. Lugar later invited Obama on a trip through the former Soviet
Union, inspecting projects to decommission Cold War-era weapons. The two joined hands to
pass legislation to control the spread of weapons. “I like him, and I appreciate working with
him,” Lugar said. “It seems to me that he was adept in finding partners and coalitions and
actually was able to achieve results.” In addition to a legislative accomplishment teaming with
Lugar, the partnership gave Obama the added credibility he sought in an association across
party lines. A former presidential candidate who has seen many fellow senators launch White
House bids during his 30-year Senate career, Lugar offers unusually strong praise for Obama.
“He does have a sense of idealism and principled leadership, a vision of the future,” Lugar said.
“At certain points in history, certain people are the ones that are most likely to have the vision
or imagination or be able to identify talent and to manage other people’s ideas. And I think he
does this well.” (New York Times, March 9, 2008)
AUSTERITY FANATIC TOM COBURN AND WARMONGER JOE LIEBERMAN
Obama also gravitated to another notorious reactionary, Republican Sen. Tom Coburn of
Oklahoma, with whom he created a website that tracks all federal spending. Radical right-wingers
were intrigued by Obama’s ability to camouflage proposals for brutal austerity and savage cuts in
the standard of living under the fatuous cloud of utopian babbling. By now, these reactionaries also
had a pretty good idea that Obama was a candidate with a glass jaw, and much less formidable in
the 2008 election than Senator Clinton would be.
“…nobody should imagine that the right-wing media whose voices now praise Obama will
continue to do so if he wins the Democratic nomination, or that the mainstream media, which
still takes so many cues from the right, will do likewise.” This article also talks about Obama’s
“free ride” that I have been talking about for the longest time along with his “mentor”
250 Barack H. Obama: The Unauthorized Biography
relationship to Joe Lieberman: “Should Obama hope to continue to enjoy his free ride, he
should consult his old mentor Joe Lieberman, the senator from Connecticut who used to be a
Democrat. Conservative commentators and right-wing media outlets always loved Lieberman
for his willingness to echo their talking points on subjects such as school vouchers and Social
Security privatization.” And in March 2006, Obama went out of his way to travel to
Connecticut to campaign for Senator Joseph Lieberman who faced a tough challenge by antiwar
candidate Ned Lamont. At a Democratic Party dinner attended by Lamont, Obama called
Lieberman “his mentor” and urged those in attendance to vote and give financial contributions
to him. This is the same Lieberman who Alexander Cockburn called “Bush’s closest
Democratic ally on the Iraq War.” Why would Obama have done that if he was truly against the
war? (Matt Gonzalez, “The Obama Craze,” Counterpunch)
Obama’s antics during his first months in Washington, DC before he left the Senate to go on the
presidential campaign trail give us some idea of what he means by bipartisan cooperation, which is
a blanket capitulation to reactionaries on virtually every issue, especially the economic ones.
Observers were astounded or a poll:
When Obama first got to Washington, he wanted to be a wonk, to keep his head down and
concentrate on small issues. “The plan was: Put Illinois first,” one of his aides tells me. Obama
himself admits that his initial agenda had a “self-conscious” modesty. His early legislative
accomplishments have been useful and bipartisan — he has even sponsored bills with
ultraconservative Sen. Tom Coburn, who believes that high school bathrooms breed lesbianism
— but they have been small-scale and off the headlines: a plan to make it easier for citizens to
find out about government spending, increased research into ethanol, more job training and tax
credits for “responsible fathers.” This is the kind of head-down diligence that plays well in the
Senate. “I am amazed by his sheer stamina,” says Sen. Dick Lugar, a Republican from Indiana
who has become something of a mentor to Obama. 109
Now even poor Tom Coburn has been thrown under the bus by Obama as a result of the
Philadelphia debate in which the anointed one cited Coburn as an example of a right-wing extremist
who wanted the death penalty for abortions as part of a rhetorical trick to seemingly balance his
decades-long friendship with the Weatherman terrorist bomber Bill Ayers. Obama’s concept of
friendship is clearly a very ephemeral one.
RECTOR OBAMA SNIFFS AT “THE MANUEVERINGS,
THE CHICANERY, THE SMALLNESS” OF THE US SENATE
Fundamentally, Obama is an apolitical and anti-political candidate who is opposed to a form of
government in which economic questions are decided primarily by the give and take and haggling
inherent in the parliamentary and legislative processes. Obama thinks that these decisions ought to
be made by bankers speaking among themselves in the measured tones of the corporate boardroom.
His entire campaign therefore has a decidedly anti-parliamentary thrust, a characteristic that it
shares with the early Italian fascism of Mussolini between 1919 in 1922. The Duce once described
the Italian parliament as a cattle pen, and his contempt for parliamentary methods was always
flagrant. Obama offers the same attitude in a somewhat laid-back postmodern or new age form, but
it is the same attitude, as we can see from this:
…Washington has plenty of wonks, and Obama wasn’t going to distinguish himself through
diligence alone. He came to the Capitol equipped with his own, swelling celebrity; the Senate
was not a perfect fit. Beyond his considerable charm, Obama can be righteous and cocky. He
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 251
came to Washington pushing the hope that politics could be better — but now he can give the
impression that he’d rather be just about anywhere other than in Washington. “It can be
incredibly frustrating,” he tells me. “The maneuverings, the chicanery, the smallness of politics
here.” Listening to a bloviating colleague at his first meeting of the Senate Foreign Relations
Committee, Obama slipped a three-word note to a member of his staff: “Shoot. Me. Now.” On a
recent day, as Obama made his way through the Capitol’s corridors, his fellow senators seemed
like good-natured sportscasters, jolly and easy with their power, bantering about the fortunes of
baseball teams in their home states... Obama is aloof and quiet. He prefers to listen, attentive as
a rector, not quite of this world, silently measuring it. “The typical politician pushes himself on
people to get them to pay attention,” says Frank Luntz, the Republican campaign strategist.
“Obama is quieter. He doesn’t push — he has a laid-back feel that pulls you in. That is so rare.”
(Wallace Wells, “Destiny’s Child,” Rolling Stone, February 27, 2007)
But no matter what the issue, Obama will always take any opportunity he is offered to
pontificate, lecture, hector, and talk down to his interlocutors:
The lesson the senator took from the meeting, he says, was this: “Politics is not a sport. The
debates we have in Washington are not about tactical advantages. They are about who we are as
people, what we believe in and what we are willing to do to make sure we have a country that
our children deserve.” Afterward, he signs autographs in the crowd for what seems like hours:
He can’t, he won’t, get away. (Wallace Wells, “Destiny’s Child,” Rolling Stone, February 27,
2007)
US SENATE: MEDDLING IN KENYAN DESTABILIZATION NECKLACING
As part of Obama’s efforts to demonstrate his continuing usefulness to Zbigniew Brzezinski and
the rest of the Rockefeller-Trilateral policy faction as they strive to reject the Chinese from Africa
and thus cut off the flow of African oil, raw materials, and minerals to the Middle Kingdom, Obama
— puffed up by his new senatorial dignity — now undertook a second roots trip back to Kenya.
This time it was no longer a matter of discovering inconvenient truths about his father and the rest
of his relatives; it was now a matter of documenting his ability to help destabilize Kenya with the
help of his murderous cousin, the Anglo-American provocateur Ryan Odinga: During Obama’s trip
to Kenya in August 2006, he openly meddled in tribal politics against the majority Kikuyu ethnic
group, which controlled the government, and in favor of his own Luo tribe, which had become
identified to some extent with the cause of Islam. It must be stressed that the motivation for Obama
as illegitimate interference in the internal affairs of a sovereign state was not dictated by religious
considerations, but had everything to do with the desire of the Zbigniew Brzezinski faction of the
US elite to overthrow the Kenyan government because it was open to cooperation with the People’s
Republic of China, which Brzezinski is targeting in the first phase of his final apocalyptic assault on
Russia. Under the Brzezinski strategy, all of Africa is to become a battlefield between the United
States and the Chinese, with the goal of denying Beijing access to oil, minerals, and other strategic
raw materials. Obama made his meddling so blatant and so obvious that the existing Kenyan
government labeled him in blunt terms as a “stooge” for the Luo-based and US-backed opposition
forces, who were led by his cousin, the murderous Raila Odinga. (Mike Flannery, “[Kenyan]
Government Says Obama is a Stooge for Political Opposition,” CBS2.com, August 2006)
252 Barack H. Obama: The Unauthorized Biography
KENYAN GOVERNMENT: OBAMA “A STOOGE”
Seeing Obama’s eagerness to meddle and interfere in the internal affairs of sovereign and
independent African states, some African leaders already began to understand what breed of cat this
Obama what is. As one right-wing Internet site comments,
There are signs of tension between Sen. Barack Obama and African leaders. On Monday,
Obama stepped up his criticism of government corruption in Kenya. At the University of
Nairobi, the senator offered more pointed criticism, something he’s done almost every day since
arriving last week. After remaining largely silent, the government of President Mwai Kibaki is
beginning to respond, suggesting that Obama may have fallen under the spell of opposition
leader Raila Odinga, Obama’s cousin. Odinga is the son of Senior’s sister, a direct first cousin
and nephew of Obama’s father. A potential presidential candidate himself, Odinga’s been at
Obama’s elbow here fairly often and is a member of the Obama family’s Luo tribe. “Sen.
Obama has to look at critically about where he’s receiving his advice from,” said government
spokesman Dr. Alfred Mutua. “Just because somebody, somewhere wants to run for president
and is using Sen. Obama as his stooge, as his puppet to be able to get to where he wants to get
to.” Raila Odinga, who is Obama’s first cousin, has, in his own words, a “close personal
friendship” with Obama. When Obama went to Kenya in August of 2006, he was hosted by
Raila and spoke in praise of him at several rallies in Nairobi…. When Raila Odinga lost the
presidential election to Mwai Kibaki, he claimed the vote was rigged, whereupon his tribal
followers went on murderous rampages, such as in the town of Eldoret, where on New Years’
Day dozens of Christians were burned to death in a church set on fire. Throughout Kenya,
hundreds of people have been politically murdered in the last few days.110
The problem is that the American people can have no conceivable interest in taking sides in the
conflict between the Luo and the Kikuyu; the American interest is to maintain mutually beneficial
relations with the government of a peaceful and united Kenya which is making forward progress in
its own national economic development.
THE CIA’S LUO-ISLAM ALLIANCE WRECKS KENYA
Right-wing websites and called attention to the fact that the Odinga-Luo party inclines towards
the Islamic political movements in Kenya. This may presently be the case, but no one should
mistake the underlying strategy, which is that the Kenyan government must be destroyed because it
is willing to conclude development accords with the People’s Republic of China. Odinga is not a
Moslem jihadi; when traveling overseas, he is in practice a CIA asset. Nevertheless, the details of
these operations show how cynically the Christian populations of Africa are being sacrificed by
Brzezinski in the service of his obsessive anti-Chinese and anti-Russian designs. We find on the
Internet that, for example,
the Evangelical Alliance of Kenya has posted on its website a photograph copy of a
Memorandum of Understanding, dated and signed on August 29, 2007, between Raila Odinga
and Shiekh Abdullah Abdi, chairman of the National Muslim Leaders Forum of Kenya. Here is
a summary on the agreement which was signed: It pledges the support of Kenyan Moslems for
Raila’s election. In return, as President of Kenya, Raila agrees to 14 actions, listed a) through n)
on page two. Within 6 months re-write the Constitution of Kenya to recognize Shariah as the
only true law sanctioned by the Holy Quran for Muslim declared regions. Within one year
facilitate the establishment of a Shariah court in every Kenyan divisional headquarters. (Note:
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 253
everywhere in Kenya, not just in “Muslim declared regions.”) Popularize Islam, the only true
religion… by ordering every primary school in Kenya in the regions to conduct daily Madrassa
classes. Impose a total ban on open-air gospel crusades by worshippers of the cross… Outlaw
gospel programs… on KBC, the National Broadcaster. Impose a total ban on the public
consumption of alcoholic beverages…Impose an immediate ban on women’s public dressing
styles that are considered immoral and offensive to the Muslim faith…111
OBAMA’S COUSIN ODINGA: NECKLACING IN THE FAMILY AND THE TRIBE
There is little doubt that Raila Odinga is no champion of either democracy or Islam, but rather a
brutal and power-hungry thug who happens to have hitched his wagon to US-British imperialism.
One observer writes that
Obama’s involvement in Kenyan politics, whether tribal or religious, is bothersome. On January
2nd, in classic Marxist tradition, Obama’s Kenyan 1st cousin, Raila Odinga, accused President
Mwai Kibaki of stealing the Dec. 27 election, and rallied his Luo followers in western Kenya,
demanding a new election. Kibaki “must step down or there must be a re-election — in this I
will not be compromised. You cannot steal my cow, and I catch you red-handed, and then
expect me to share the milk because the cow is mine.” More than 1,000 people, mostly Kikuyu
Christians, have been killed and 300,000 forced from their homes by Odinga’s followers.112
To some this may look like Marxism, but the method is that of the classical National
Endowment for Democracy people power coup or color revolution. An interesting side light to all
this is that “Raila Odinga named his daughter after Winnie Mandela, who championed the act of
necklacing – murdering an opponent by putting a burning rubber tire around his neck — in South
Africa some years back. His son is named for Fidel Castro.”113
BRZEZINSKI: KICK THE CHINESE OUT OF AFRICA
The calculation being made by Brzezinski and other diehard defenders of US-UK world
domination is that the novelty of Obama’s black face can be used to refurbish their own image to
the point where a counteroffensive against the Chinese in Africa will become possible in the short
run. Think first of George Bush attempting to convince African leaders that they should join in the
campaign of London and Washington to impose economic sanctions on Zimbabwe, because —
irony of ironies — Bush is offended by the alleged fact that Mugabe uses vote fraud to maintain his
hold on power! Clearly, Bush’s chances of prevailing in such requests would be minimal. But now
imagine that it is Barack Hussein Obama who is making the appeal to the African states to join in
the latest imperialist campaign. Now, the imperialist chances, although still low, have decidedly
improved. Obama went to Africa in large part to show that he could appeal directly to the African
masses, but once again the inherent professorial elitism and pedantry of this haughty Luo got in the
way. Here is a first-person account:
In late August, for the third time in his life, he traveled to Kogelo, the tiny, grassless village in
western Kenya where his father had grown up the son of a Muslim goat herder and where the
senator’s grandmother still lives. There is something absurd about the collision of Obama’s
worlds, right now, dozens of microphones thrust in the face of this eighty-five-year-old woman
who has spent her life in this amazingly obscure place and barely knows her grandson. But this
is part of the Obama legend, the globalized Abe Lincoln: This is his log cabin, a generation
removed. When his caravan pulls into the village, thousands of people are waiting for him, a
254 Barack H. Obama: The Unauthorized Biography
vast and disciplined crowd standing in long, silent lines, like those old photos of British
colonials reviewing the Zulus. They are rooting for him to say something big, something
feeling, about Africa, about the relation between America and Kenya, about the way history is
beginning to shift. Obama, instead, backs away. “I don’t come here as a grandson but as a U.S.
senator,” he tells them. “My time is not my own. Don’t expect me to come back here very
often.” And then again: “I’m not going to be here all the time.” He goes on in this vein: He
wants to help Kenyans, but he also wants them to help themselves. He begins to sound like any
other politician, a deputy to the trade commissioner. The crowd, full of hope, almost visibly
deflates. (Wallace Wells, “Destiny’s Child,” Rolling Stone, February 27, 2007)
Not a very promising beginning, but also perhaps a fair reflection of the predicament of Anglo-
American imperialism in Africa today.
GETTING RICH IN THE MILLIONAIRE’S CLUB
Obama and his wife are trying to cultivate the public image of an anti-materialist power couple
were urging young people to choose the path of idealism and not pecuniary aggrandizement. This is
a public relations ploy doubtless invented by Axelrod, and it is a cruel sham. One of Obama’s first
preoccupations upon arriving in the Senate was how to begin amassing wealth into a considerable
fortune as soon as he could:
Less than two months after ascending to the U.S. Senate, Barack Obama bought more than
$50,000 worth of stock in two speculative companies whose major investors included some of
his biggest political donors. One of the companies was a biotech concern that was starting to
develop a drug to treat avian flu. In March 2005, two weeks after buying about $5,000 of its
shares, Obama took the lead in a legislative push for more federal spending to battle the disease.
He also bought more than $50,000 in stock in a satellite communications business whose
principal backers include four friends and donors who had raised more than $150,000 for his
political committees. A spokesman for Obama says the senator did not know that he had
invested in either company.114
The perfect Master was too much involved in his idealistic meditations to ever think about all
that filthy lucre he was amassing by means of classical graft.
OBAMA REFUSES TO HELP END THE IRAQ WAR
Obama’s elusive October 2002 antiwar speech has remained for many years an isolated and
impotent gesture, clearly conceived and executed as part of a cynical marketing strategy as a means
of jumpstarting Barky’s Senate campaign by mobilizing a brigade old SDS leftists. in 2005 in
2006, Bush could count on Obama as a reliable vote in favor of the continued funding of the Iraq
war and against impeachment, which by late 2006 had become a genuine mass movement,
especially in the middle class. Even Obama’s allies in the controlled corporate media began to take
notice of his duplicity:
Campaigning for the Illinois Senate seat in 2003 and 2004, Obama scolded Bush for invading
Iraq and vowed he would “unequivocally” vote against an additional $87 billion to pay for it.
Yet since taking office in January 2005, he has voted for four separate war appropriations,
totaling more than $300 billion. Last June [2006], Obama voted no to Senator John F. Kerry’s
proposal to remove most combat troops from Iraq by July 2007, warning that an “arbitrary
deadline” could “compound” the Bush administration’s mistake. And now he’s voted for a
Republican-sponsored resolution that stated the Senate would not cut off funding for troops in
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 255
Iraq. He left it to others to lead public opinion. Sen. Russ Feingold (D-Wis.) and Rep. John
Murtha (D-Pa.) emerged as the strongest voices against the war. Those critics all spoke out
before Obama gave his first major policy speech on the war — 11 months after he took office.’
(Chicago Tribune, June 12, 2007)
JULY 2004: “NOT MUCH OF A DIFFERENCE”
BETWEEN BUSH AND OBAMA ON IRAQ
In July of 2004, Obama, replied to a question about his differences with Bush regime regarding
the Iraq war with this: “I’m not privy to Senate intelligence reports. What would I have done? I
don’t know.” He added: “There’s not much of a difference between my position on Iraq and George
Bush’s position at this stage.” (“Meet the Press,” 2004, MyDD, Nov. 11, 2007) The senator himself
tries to portray his many pro-war votes as being the result of his recognition of the nuanced
complexity of the situation in Iraq, rather than as the cynical sellouts that they are:
Obama defended his reluctance to call for withdrawal during most of his first year in the Senate.
“At the time, my view was that the [Iraqi] government was still forming and it would be
important to not give the impression, prior to the formation of that government, that we were
already on the way out,” Obama said. “Now, what changed? We have the breaking out of a
complete civil war, at least a significant low-grade civil war.” Feingold offers Obama mixed
reviews for his handling of Iraq. “I’ve been pleased that his opposition has intensified over
time. I was not that happy with his initial opposition to a timeline,” Feingold said. (Chicago
Tribune, June 12, 2007)
NADERITE MATT GONZALEZ: OBAMA FAILS ON THE ISSUES
Matt Gonzalez is a former president of the San Francisco Board of Supervisors and is currently
(2008) running on Ralph Nader’s ticket as a vice presidential candidate. Before declaring his
candidacy, he contributed an excellent overview of Obama on the issues. The first thing that
Gonzalez notices is the point we have just been stressing, namely that Obama’s self-portrait as a
consistent and reliable antiwar vote is, to use President Clinton’s term, a “fairy tale.” Generally
speaking, Obama is running away from his own voting record as fast as his legs will carry him,
preferring to pose as the purveyor of hope and change in the most vacuous and generic terms.
Gonzalez notes:
Let’s start with his signature position against the Iraq war. Obama has sent mixed messages at
best. First, he opposed the war in Iraq while in the Illinois state legislature. Once he was
running for US Senate though, when public opinion and support for the war was at its highest,
he was quoted in the July 27, 2004 Chicago Tribune as saying, “There’s not that much
difference between my position and George Bush’s position at this stage. The difference, in my
mind, is who’s in a position to execute.” The Tribune went on to say that Obama, “now believes
US forces must remain to stabilize the war-ravaged nation a policy not dissimilar to the current
approach of the Bush administration.” Obama’s campaign says he was referring to the ongoing
occupation and how best to stabilize the region. But why wouldn’t he have taken the
opportunity to urge withdrawal if he truly opposed the war? Was he trying to signal to
conservative voters that he would subjugate his anti-war position if elected to the US Senate
and perhaps support a lengthy occupation? Well as it turns out, he’s done just that. Since taking
office in January 2005 he has voted to approve every war appropriation the Republicans have
put forward, totaling over $300 billion. He also voted to confirm Condoleezza Rice as Secretary
256 Barack H. Obama: The Unauthorized Biography
of State despite her complicity in the Bush Administration’s various false justifications for
going to war in Iraq. Why would he vote to make one of the architects of “Operation Iraqi
Liberation” the head of US foreign policy? Curiously, he lacked the courage of 13 of his
colleagues who voted against her confirmation. (Matt Gonzalez, “The Obama Craze,”
Counterpunch) 115
Then there is the little matter of civil liberties, where Obama is actually looking more and more
like a crypto-totalitarian. In any case, it is certain that Obama was a supporter of renewal of the
Patriot Act in midsummer 2005, a time when anti-Bush sentiment was clearly the wave of the
future: “Obama voted to reauthorize the Patriot Act in July 2005, easily the worse attack on civil
liberties in the last half-century. It allows for wholesale eavesdropping on American citizens under
the guise of anti-terrorism efforts.” (Matt Gonzalez, “The Obama Craze,” Counterpunch)
Now, in the 2008 primary season, we have had another cycle of promises and betrayals inflicted
on us by Obama, who strutted as an implacable enemy of the Iraq war during 2007, but who, by mid
2008, is signaling more and more that he is open to prolonging the Iraq war virtually indefinitely.
Recently, with anti-war sentiment on the rise, Obama declared he will get our combat troops out
of Iraq in 2009. But Obama isn’t actually saying he wants to get all of our troops out of Iraq. At
a September 2007 debate before the New Hampshire primary, moderated by Tim Russert,
Obama refused to commit to getting our troops out of Iraq by January 2013 and, on the
campaign trail, he has repeatedly stated his desire to add 100,000 combat troops to the military.’
(Matt Gonzalez, “The Obama Craze,” Counterpunch) ‘At the same event, Obama committed to
keeping enough soldiers in Iraq to “carry out our counter-terrorism activities there” which
includes “striking at al Qaeda in Iraq.” What he didn’t say is this continued warfare will require
an estimated 60,000 troops to remain in Iraq according to a May 2006 report prepared b y the
Center for American Progress. Moreover, it appears he intends to “redeploy” the troops he takes
out of the unpopular war in Iraq and send them to Afghanistan. So it appears that under
Obama’s plan the US will remain heavily engaged in war. This is hardly a position to get
excited about. (Matt Gonzalez, “The Obama Craze,” Counterpunch)
At some points during the 2007 debates, Obama spouted vaguely anti-imperialist rhetoric, but
this was clearly yet another hoax: when all is said and done, Obama, like Kerry, is basically
claiming to be a smarter imperialist than Bush, and that is nothing to write home about.
OBAMA VOTES AGAINST CLASS ACTION LAW SUITS
These days in Washington, when a lobbyist wants to take some important right away from the
American people, it is customary to cloak such operation under the edifying term of “reform.”
Obama’s own parlance is rich in many examples of this kind of doubletalk. A good case study is
Obama support of what the corporate lobbyists like to call “class action reform,” which is no reform
at all but rather a high-handed outrage by the malefactors of great wealth.
‘In 2005, Obama joined Republicans in passing a law dubiously called the Class Action
Fairness Act (CAFA) that would shut down state courts as a venue to hear many class action
lawsuits. Long a desired objective of large corporations and President George Bush, Obama in
effect voted to deny redress in many of the courts where these kinds of cases have the best
chance of surviving corporate legal challenges. Instead, it forces them into the backlogged
Republican-judge dominated federal courts. By contrast, Senators Clinton, Edwards and Kerry
joined 23 others to vote against CAFA, noting the “reform” was a thinly-veiled “special interest
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 257
extravaganza” that favored banking, creditors and other corporate interests. David Sirota, the
former spokesman for Democrats on the House Appropriations Committee, commented on
CAFA in the June 26, 2006 issue of The Nation, “Opposed by most major civil rights and
consumer watchdog groups, this Big Business-backed legislation was sold to the public as a
way to stop “frivolous” lawsuits. But everyone in Washington knew the bill’s real objective was
to protect corporate abusers.” Nation contributor Dan Zegart noted further: “On its face, the
class-action bill is mere procedural tinkering, transferring from state to federal court actions
involving more than $5 million where any plaintiff is from a different state from the defendant
company. But federal courts are much more hostile to class actions than their state counterparts;
such cases tend to be rooted in the finer points of state law, in which federal judges are reluctant
to dabble. And even if federal judges do take on these suits, with only 678 of them on the bench
(compared with 9,200 state judges), already overburdened dockets will grow. Thus, the bill will
make class actions, most of which involve discrimination, consumer fraud and wage-and-hour
violations all but impossible. One example: After forty lawsuits were filed against Wal-Mart for
allegedly forcing employees to work “off the clock,” four state courts certified these suits as
class actions. Not a single federal court did so, although the practice probably involves
hundreds of thousands of employees nationwide.” Why would a civil rights lawyer knowingly
make it harder for working-class people (Or the people of Hunter Point suing Lennar) to have
their day in court, in effect shutting off avenues of redress? (Matt Gonzalez, “The Obama
Craze,” Counterpunch)
Washington is full of corrupt congressmen who are experts in this kind of flimflam; but the truly
galling thing about Obama is the sanctimonious hypocrisy with which he envelops each and every
criminal sellout of the public interest.
Obama has always been the trimmer, and has sought to avoid above all things an irrevocable,
clear, and principled stand on any major issue. One of his favorite tricks in the Illinois Senate was
to constantly vote present when he needed to take evasive action:
These seemingly unusual votes wherein Obama aligns himself with Republican Party interests
aren’t new. While in the Illinois Senate, Obama voted to limit the recovery that victims of
medical malpractice could obtain through the courts. Capping non-economic damages in
medical malpractice cases means a victim cannot fully recover for pain and suffering or for
punitive damages. Moreover, it ignored that courts were already empowered to adjust awards
when appropriate, and that the Illinois Supreme Court had previously ruled such limits on tort
reform violated the state constitution. In the US Senate, Obama continued interfering with
patients’ full recovery for tortious conduct. He was a sponsor of the National Medical Error
Disclosure and Compensation Act of 2005. The bill requires hospitals to disclose errors to
patients and has a mechanism whereby disclosure, coupled with apologies, is rewarded by
limiting patients’ economic recovery. Rather than simply mandating disclosure, Obama’s
solution is to trade what should be mandated for something that should never be given away:
namely, full recovery for the injured patient. (Matt Gonzalez, “The Obama Craze,”
Counterpunch)
OBAMA BLOCKS REFORM OF THE MINING LAW OF 1872
An entire separate detailed study would be necessary to fully cover the extent of Obama’s
involvement with been ruthless corporate barons who run the mining industry. Some Southern
258 Barack H. Obama: The Unauthorized Biography
Illinois coal mine owners clearly own a time share of Obama, and he has been shameless in
delivering on their demands:
In November 2007, Obama came out against a bill that would have reformed the notorious
Mining Law of 1872. The current statute, signed into law by Ulysses Grant, allows mining
companies to pay a nominal fee, as little as $2.50 an acre, to mine for hardrock minerals like
gold, silver, and copper without paying royalties. Yearly profits for mining hardrock on public
lands is estimated to be in excess of $1 billion a year, according to Earthworks, a group that
monitors the industry. Not surprisingly, the industry spends freely when it comes to lobbying:
an estimated $60 million between 1998-2004, according to The Center on Public Integrity. And
it appears to be paying off, yet again. The Hardrock Mining and Reclamation Act of 2007
would have finally overhauled the law and allowed American taxpayers to reap part of the
royalties (4 percent of gross revenue on existing mining operations and 8 percent on new ones).
The bill provided a revenue source to clean up abandoned hardrock mines, which is likely to
cost taxpayers over $50 million, and addressed health and safety concerns in the 11 affected
western states. Later it came to light that one of Obama’s key advisors in Nevada is a Nevadabased
lobbyist in the employ of various mining companies. (CBS News “Obama’s Position on
Mining Law Questioned. Democrat Shares Position with Mining Executives Who Employ
Lobbyist Advising Him,” November 14, 2007).
NUCLEAR REGULATION: THE SENATOR FROM EXELON
(AKA TOM AYERS’ COMM EDISON)
Naturally, Obama’s deepest loyalties (if that is the word) go to the late Thomas Ayers of
Commonwealth Edison, now known as Exelon. Thomas Ayers is one of the principal figures who
lifted Obama up out of nothingness and made him. Not surprisingly, Obama has done yeoman
service for the Ayers interests:
The New York Times reported that, while campaigning in Iowa in December 2007, Obama
boasted that he had passed a bill requiring nuclear plants to promptly report radioactive leaks.
This came after residents of his home state of Illinois complained they were not told of leaks
that occurred at a nuclear plant operated by Exelon Corporation. The truth, however, was that
Obama allowed the bill to be amended in Committee by Senate Republicans, replacing
language mandating reporting with verbiage that merely offered guidance to regulators on how
to address unreported leaks. The story noted that even this version of Obama’s bill failed to pass
the Senate, so it was unclear why Obama was claiming to have passed the legislation. The
February 3, 2008 The New York Times article titled “Nuclear Leaks and Response Tested
Obama in Senate” by Mike McIntire also noted the opinion of one of Obama’s constituents,
which was hardly enthusiastic about Obama’s legislative efforts: “Senator Obama’s staff was
sending us copies of the bill to review, and we could see it weakening with each successive
draft,” said Joe Cosgrove, a park district director in Will County, Ill., where low-level
radioactive runoff had turned up in groundwater. “The teeth were just taken out of it.” As it
turns out, the New York Times story noted: “Since 2003, executives and employees of Exelon,
which is based in Illinois, have contributed at least $227,000 to Mr. Obama’s campaigns for the
United States Senate and for president. Two top Exelon officials, Frank M. Clark, executive
vice president, and John W. Rogers Jr., a director, are among his largest fund-raisers.” (Matt
Gonzalez, “The Obama Craze,” Counterpunch)
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 259
CORN-BASED ETHANOL GENOCIDE FOR THE THIRD WORLD
Obama is also fully committed to the monstrosity of turning corn into gasoline at extravagant
expense while a hungry world starved to death. This is, after all, a strange way to appeal for the
friendship of the developing countries, where cheap corn often means the difference between life
and death. González notes that
…on energy policy, Obama is a big supporter of corn-based ethanol which is well-known for
being an energy-intensive crop to grow. It is estimated that seven barrels of oil are required to
produce eight barrels of corn ethanol, according to research by the Cato Institute. Ethanol’s
impact on climate change is nominal and isn’t “green” according to Alisa Gravitz, Co-op
America executive director. “It simply isn’t a major improvement over gasoline when it comes
to reducing our greenhouse gas emissions.” A 2006 University of Minnesota study by Jason
Hill and David Tilman, and an earlier study published in BioScience in 2005, concur. (There’s
even concern that a reliance on corn-based ethanol would lead to higher food prices.) So why
would Obama be touting this as a solution to our oil dependency? Could it have something to
do with the fact that the first presidential primary is located in Iowa, corn capital of the country?
In legislative terms this means Obama voted in favor of $8 billion worth of corn subsidies in
2006 alone…. (Matt Gonzalez, “The Obama Craze,” Counterpunch)
OBAMA REJECTS UNIVERSAL HEALTH CARE
Wall Street commentators have made no secret of the fact that they prefer Obama because he is
the only Democrat not to demand national, universal health care. Here it is extremely clear that
Obama has chosen to champion the financier interest while mortifying and betray the obvious
public interest of all Americans, and indeed of all persons under US jurisdiction. González has
drawn up the following catalog of Obama’s betrayals in this department:
Obama opposed single-payer bill HR676, sponsored by Congressmen Dennis Kucinich and
John Conyers in 2006, although at least 75 members of Congress supported it. Single-payer
works by trying to diminish the administrative costs that comprise somewhere around one-third
of every health care dollar spent, by eliminating the duplicative nature of these services. The
expected $300 billion in annual savings such a system would produce would go directly to
cover the uninsured and expand coverage to those who already have insurance, according to Dr.
Stephanie Woolhandler, an Associate Professor of Medicine at Harvard Medical School and cofounder
of Physicians for a National Health Program. Obama’s own plan has been widely
criticized for leaving health care industry administrative costs in place and for allowing millions
of people to remain uninsured. “Sicko” filmmaker Michael Moore ridiculed it saying, “Obama
wants the insurance companies to help us develop a new health care plan-the same companies
who have created the mess in the first place.”’ (Matt Gonzalez, “The Obama Craze,”
Counterpunch)
Michael Moore, no man of principle, did not let the little matter of universal health care get in
the way of a slobbering public embrace of Obama as soon as he thought that would represent a
career enhancing move. In the meantime, a 40 to 50 million Americans have no health care
insurance, and prospects for any improvement in the refuge or Obama regime are exceedingly grim.
260 Barack H. Obama: The Unauthorized Biography
OBAMA STRADDLES ON FREE TRADE SELLOUTS
During the Ohio and Pennsylvania primaries, Obama postured as a sharp critic of free trade
sellouts like NAFTA, CAFTA, and others. At the same time, Obama sent his top economic
controller, Skull and Bones alumnus Austin Goolsbee of the Friedmanite Chicago school, to
reassure the Canadians that Obama was simply bloviating for electoral purposes. Obama has
flipped on this issue literally countless times:
Regarding the North American Free Trade Agreement, Obama recently boasted, “I don’t think
NAFTA has been good for Americans, and I never have.” Yet, Calvin Woodward reviewed
Obama’s record on NAFTA in a February 26, 2008 Associated Press article and found that
comment to be misleading: “In his 2004 Senate campaign, Obama said the US should pursue more
deals such as NAFTA, and argued more broadly that his opponent’s call for tariffs would spark a
trade war. AP reported then that the Illinois senator had spoken of enormous benefits having
accrued to his state from NAFTA, while adding that he also called for more aggressive trade
protections for US workers.”’ (Matt Gonzalez, “The Obama Craze,” Counterpunch)
After Goolsbee’s secret contacts with the Canadians were revealed, Obama indignantly denied
that these talks had taken place. Nevertheless, at the close of the primary season, in June 2008,
Obama told Fortune magazine that he was indeed a friend free trade agreements and a dedicated
apostle of the supremacy of market forces. But, just as in the case of Obama’s warmongering
against Pakistan and other countries, the lemming legions loyal to Barky are epistemologically
incapable of seeing the reality before their eyes, meaning that they are hysterical in the strict sense
of the word.
By now, Obama has learned to recite the standard Democratic Party litany that labor and
environmental guarantees must be included in any future free trade sellouts — as if these trivial and
minimalist requirements would do anything to stop or even slow the destruction of the US economy
by the sinister forces of economic globalization. But when it comes to actually voting for
something concrete in this direction, Obama is as totally impotent and feckless as he usually is:
Putting aside campaign rhetoric, when actually given an opportunity to protect workers from
unfair trade agreements, Obama cast the deciding vote against an amendment to a September
2005 Commerce Appropriations Bill, proposed by North Dakota Senator Byron Dorgan, that
would have prohibited US trade negotiators from weakening US laws that provide safeguards
from unfair foreign trade practices. The bill would have been a vital tool to combat the
outsourcing of jobs to foreign workers and would have ended a common corporate practice
known as “pole-vaulting” over regulations, which allows companies doing foreign business to
avoid “right to organize,” “minimum wage,” and other worker protections. (Matt Gonzalez,
“The Obama Craze,” Counterpunch)
OBAMA THE WIMP
One of the issues discussed in the Democratic candidates debates in the early part of the primary
season was the need to fight the entrenched powers of Washington in order to make any progress at
all of the People’s agenda. Senator Edwards talked a very good game of fighting, and promised to
fight all the way to the convention, but then suddenly dropped out even before the Super Tuesday
primaries. Senator Clinton promised to fight, and then won wide admiration by actually delivering
on that promise, showing considerable courage in the process. Obama’s method was to take the
capitulation policy of someone like his mentor Tom Daschle, and raise that cowardice and
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 261
appeasement to the theoretical level of positive virtue. It was clear to many that Obama is a wimp
far worse than Bush the Elder, an incurable wuss and whiner. González senses the seriousness of
this problem and asks:
Why should we believe Obama has courage to bring about change? He wouldn’t have his
picture taken with San Francisco Mayor Gavin Newsom when visiting San Francisco for a
fundraiser in his honor because Obama was scared voters might think he supports gay marriage
(Newsom acknowledged this to Reuters on January 26, 2007 and former Mayor Willie Brown
admitted to the San Francisco Chronicle on February 5, 2008 that Obama told him he wanted to
avoid Newsom for that reason.) (Matt Gonzalez, “The Obama Craze,” Counterpunch)
We need to point out here that anything impinging on homosexuality evokes palpable terror on
the part of Obama, quite evidently because of his own bisexual practices, as Larry Sinclair has
pointed out. Another case in point is the death penalty, which Obama supports, for obvious
demagogic reasons. A politician who was willing to sacrifice human lives as the rhetorical props
for his own ambition is beneath contempt, and this fits the anointed one:
Obama acknowledges the disproportionate impact the death penalty has on blacks, but still
supports it, while other politicians are fighting to stop it. (On December 17, 2007 New Jersey
Governor Jon Corzine signed a bill banning the death penalty after it was passed by the New
Jersey Assembly.)’ (Matt Gonzalez, “The Obama Craze,” Counterpunch)
So far, Obama has proven undecided about how to play the Mexophobia card. Here his
maneuvering is complicated by the contradictory situation in which he desperately needs Latinos to
vote for him, while these Hispanic voters have shown that they simply cannot stomach Obama and
are against him by at least a two to one margin.
On September 29, 2006, Obama joined Republicans in voting to build 700 miles of double
fencing on the Mexican border (The Secure Fence Act of 2006), abandoning 19 of his colleagues
who had the courage to oppose it. But now that he’s campaigning in Texas and eager to win over
Mexican-American voters, he says he’d employ a different border solution. (Matt Gonzalez, “The
Obama Craze,” Counterpunch)
Gonzalez is surely on firm ground when he concludes: ‘It is shocking how frequently and
consistently Obama is willing to subjugate good decision making for his personal and political
benefit.’ (Matt Gonzalez, “The Obama Craze,” Counterpunch)
If Nader and González can develop an anti-Obama critique of the necessary depth and intensity,
they will be performing an important public and patriotic service in helping to disorganize and
demoralize the left wing of Obama’s movement of fanatical cultists.
OBAMA OPPOSES CAPS ON CREDIT CARD INTEREST, FAVORS USURY
One of the issues which was raised against Obama during the course of the Democratic
candidates’ debates was his vote against a mandatory federal limit on credit card interest rates. It
was clear to everyone that the interest rate cap included in the bill in question was far too high, but
on the other hand passing the bill meant regulating credit card rates at the federal level for the first
time in living memory. Obama predictably voted in favor of maintaining limitless usury in the
tradition of Jeremy Bentham, and at the same time retreated behind a pedantic, professorial
smokescreen about how the legislation had failed to meet his high standards. One might say that
262 Barack H. Obama: The Unauthorized Biography
Obama’s trick is to make the perfect the enemy of the good, thus blocking any concrete and
practical benefit that might actually be within reach. As Gonzalez points out,
Obama has a way of ducking hard votes or explaining away his bad votes by trying to blame
poorly-written statutes. Case in point: an amendment he voted on as part of a recent bankruptcy
bill before the US Senate would have capped credit card interest rates at 30 percent.
Inexplicably, Obama voted against it, although it would have been the beginning of setting
these predatory lending rates under federal control. Even Senator Hillary Clinton supported it.
Now Obama explains his vote by saying the amendment was poorly written or set the ceiling
too high. His explanation isn’t credible as Obama offered no lower number as an alternative,
and didn’t put forward his own amendment clarifying whatever language he found
objectionable. Why wouldn’t Obama have voted to create the first federal ceiling on predatory
credit card interest rates, particularly as he calls himself a champion of the poor and middle
classes? Perhaps he was signaling to the corporate establishment that they need not fear him.
For all of his dynamic rhetoric about lifting up the masses, it seems Obama has little intention
of doing anything concrete to reverse the cycle of poverty many struggle to overcome. (Matt
Gonzalez, “The Obama Craze,” Counterpunch)
OBAMA AS THE LEADING SABOTEUR OF IMPEACHMENT
Given the way the 2008 primaries worked, Obama was able to attract a very large part of the left
liberal wing of the Democratic Party into his camp. These left liberals had been the leading force
calling for the impeachment and removal from office of Bush and Cheney, and action which is not a
mere matter of opinion, but rather an objective necessity if we want to wipe the slate clean of all the
liberticide precedents and entrenched totalitarian practices of the Bush Cheney regime. There is in
fact an ample window for the impeachment of Bush and Cheney by the new Democratic Congress
during the 17 days between the convening of the two chambers on January 3, 2009, and Bush’s
departure from office (in so far as the law is observed) on January 20, 2009 at noon. But, by early
February 2008, it was clear that the left liberals supporting Obama were dropping impeachment like
a hot potato, evidently because it conflicted with the Perfect Master’s pledge to usher in a new
golden age of harmonious bipartisan cooperation, thanks to the beatific and transfiguring power of
Barky’s radiant personality. Impeachment, by contrast, is a very messy and a very partisan affair
indeed, but it happens to be necessary to preserve constitutional government in this country. One of
the reasons that the Trilateral financiers deployed Obama in the first place was because of their
desire to divert and deflect a very strong mass resentment against Bush, Cheney, the neocons, and
much of what they stand for. Obama has largely succeeded in fulfilling this task, since his
candidacy has coincided with the collapse of momentum in favor of impeachment up and down the
line. By sending forth Obama, the Trilateral banking faction is attempting to set in motion a process
of organizing masses of the American people against themselves with the help of a ruthless
demagogue financed by an avalanche of cash — a process which has all the essential characteristics
of fascism. González shows that
Obama aggressively opposed initiating impeachment proceedings against the president
(“Obama: Impeachment is not acceptable,” USA Today, June 28, 2007) and he wouldn’t even
support Wisconsin Senator Russ Feingold’s effort to censure the Bush administration for
illegally wiretapping American citizens in violation of the 1978 and Foreign Intelligence
Surveillance Act. In Feingold’s words “I’m amazed at Democrats cowering with this
president’s numbers so low.” Once again, it’s troubling that Obama would take these positions
VI. Grabbing a Senate Seat with a Little Help from his Trilateral Friends 263
and miss the opportunity to document the abuses of the Bush regime. (Matt Gonzalez, “The
Obama Craze,” Counterpunch)
In the final analysis, Obama emerges as a demagogue and word monger of a new and dangerous
type. González concludes:
Once I started looking at the votes Obama actually cast, I began to hear his rhetoric differently.
The principal conclusion I draw about “change” and Barack Obama is that Obama needs to
change his voting habits and stop pandering to win votes. If he does this he might someday
make a decent candidate who could earn my support. For now Obama has fallen into a
dangerous pattern of capitulation that he cannot reconcile with his growing popularity as an
agent of change.
OBAMA IN THE POCKET OF THE COAL LOBBY
One of the most grotesque contradictions which has emerged from Obama is relentless pursuit of
corporate sponsorship has been the Perfect Master’s relationship with the coal industry in Illinois
and beyond. After the primaries were over, Obama announced that an energy policy capable of
dealing with the pseudo-problem of global warming and climate change would represent one of his
three top priorities, and this is precisely what we would expect from such a deeply Malthusian
mentality. But, at the same time, Obama continues his loyal service to the holding companies that
control the coal industry, even though it is by now clear that coal is much more valuable when used
as an indispensable feedstock for the modern petrochemical production, rather than being used as a
fuel, where it is hopelessly outclassed by nuclear power. Nevertheless, Obama has attempted to
straddle this issue as well:
Reflecting the interests of southern Illinois coal producers, he sponsored legislation to provide
tax breaks and other incentives for refineries that turn coal into liquid fuel, generating criticism
from environmental groups that say the coal-based technology would contribute to global
warming. (Chicago Tribune, June 12, 2007)
The Washington Post has attempted to make a mockery of this important issue and get Barky off
the hook that way:
“Who, but who,” writes the Post, ‘would soil the environmental reputation of Barack Obama?
The Democratic senator from Illinois gets stellar marks from greens. Just a few months ago he
was calling global warming “real,” saying: “It is here.... We couldn’t just keep burning fossil
fuels and contribute to the changing atmosphere without consequence.” Sen. Barack Obama (DIll.)
has reintroduced the Coal-to-Liquid Fuel Promotion Act of 2007. It’s a development that
has the coal crowd cheering. (Charles Dharapak, AP)
So why then, environmentalists ask, is Obama backing a law supporting the expanded use of
coal, whose emissions are cooking the globe? It seems the answer is twofold: his interest in
energy independence — and his interest in downstate Illinois, where the senator’s green tinge
makes the coal industry queasy... (Elizabeth Williamson, “The Green Gripe With Obama:
Liquefied Coal Is Still . . . Coal,” Washington Post, January 10, 2007116
One way to make sense of this picture is to recall that the Rockefeller-Trilateral interests that
controlled the Carter administration were obsessed at that time with the notion of increasing US
coal production, and indeed with making domestic coal the central element of a national energy
policy for many decades to come. This lunatic project, like so many others, disappeared in the
264 Barack H. Obama: The Unauthorized Biography
general shipwreck of Carter’s ship of fools, but look for it to reemerge if Obama is able to seize
power over the coming months.
A FECKLESS AND CALLOW YOUTH BLINDED
BY MEGALOMANIA AND EASY SUCCESS
It was in October 2006 that Obama published a new edition of his memoir, The Audacity of
Hope. As is now widely known, the title is borrowed from a line which appears in one of his
sermons of the foundation-funded racist provocateur, the raving Reverend Jeremiah Wright, who
served as Obama as mentor and spiritual adviser for more than two decades, with Obama paying
through the nose for this dubious privilege with the majority of his charitable contributions yearover-
year. The original edition of this book first appeared in 1995. What kind of a man writes his
own autobiography when he has not yet reached the age of 35, and has accomplished virtually
nothing in life? The ominous answer may well be, a megalomaniac, a person suffering from
delusions of grandeur, like the stock inmate of a mental hospital who imagines that he is the
Emperor Napoleon Bonaparte. Obama appears to be aware of the megalomania which for him is
always nearby, and appears to be at pains to dispel the cold glare of these delusions with a kind of
frivolous and superficial, but also nervous and high-strung, attempt at humor:
When asked to speak in 2006 at the Gridiron Dinner — a white-tie-and-tails gathering that
brings together Washington’s political and media elites — he reached for humor to show a bit
of humility and deflate expectations. “Most of all,” he told reporters gathered for the function,
“I want to thank you for all the generous advance coverage you’ve given me in anticipation of a
successful career. When I actually do something, we’ll let you know.” (Chicago Tribune, June
12, 2007)
The American people are still waiting.
CHAPTER VII: THE HOPE POPE AND
HIS TRILATERAL MONEY MACHINE
A new political alliance is being forged in this country between the super-rich and the superpoor–
especially the alienated and activist members of minority groups. The Ford Foundation,
under the aggressive leadership of McGeorge Bundy, is providing the major thrust for this
power bloc ... This is a dangerous game but it doesn’t seem to worry those members of the
‘Eastern Establishment’ who are involved. They’re sure that no matter what happens they’ll still
be on top. Vincent J. Salandria, 1971.
“I serve as a blank screen on which people of vastly different political stripes project their own
views . . .” - Obama
Obama, as we have seen thus far, is the puppet candidate of an unparalleled combination of
institutions representing the Anglo-American ruling financier elite: his family traditions of those of
the Ford Foundation and of its satellite foundations. He enjoys the backing of the Rockefeller,
family, of George Soros, and now of Rupert Murdoch. His career has been fostered by the Trilateral
Commission and the Bilderberger group at the highest levels. His controllers, advisors, handlers,
and entourage come from the Council on Foreign Relations, the RAND Corporation, Skull and
Bones, and the Chicago school of reactionary economics. Many of these institutions had already
collaborated in the most elaborate previous attempt to create an entire presidential administration
around a candidate as the puppet of these financiers — the CFR 1980s Project, and the resulting
Jimmy Carter regime. Obama might be called the candidate of pan-oligarchy, that is to say of an
attempt to unite the warring factions of the US-UK elite for the purpose of securing another century
of world domination for London and Washington. Brzezinski, Huntington, and the other members
of the Trilateral brain trust had been expecting the domestic political upheaval inside the United
States to begin sometime after 2010, but the disasters of the Bush presidency had accelerated the
timetable. A suitable puppet demagogue was now urgently required for the 2008 contest.
Accordingly, after just a few months in the US Senate, Barky was given the go-code to begin his
presidential campaign, and the Rockefeller-Soros-Trilateral-Bilderberg-CFR-RAND-Skull and
Bones-Chicago Boys-foundation network went into high gear.
This unparalleled combination of financier factions and interest groups is prepared to spend
something approaching half a billion US dollars for the purpose of creating an Obama regime.
These are admittedly depreciated dollars, but this is still an impressive investment. Obama has now
emerged as the greatest Pluto-candidate in all of American history, a figure who is leading historical
characteristic may appear to future observers in the form of the unprecedented money machine
which his wealthy backers have assembled around the vapid utopian slogans and hollow messianic
rhetoric of the Hope Pope. Obama’s rich supporters, it should be obvious, are not paying through
the nose in this way because they find these demented slogans compelling. Rather, they are paying
top dollar for direct access to political power – naked, brutal, crushing, pitiless political power. In
this they are like Fritz Thyssen, a friend of Prescott Bush and the author of a book entitled I Paid
Hitler, a man who was not interested in Hitler’s idiotic and primitive views about race and history,
but was rather looking for a steady supply of slave laborers for the factory complexes that grow up
around the concentration camps. Obama, it must be added, is a far more degraded and abject
puppet then Jimmy Carter ever was, if only because he has been indoctrinated for a much longer
time. With Obama in the White House, and large Democratic majorities in both houses of Congress
standing ready to rubber-stamp his crimes, the financiers will be in a position to pursue their
266 Barack H. Obama: The Unauthorized Biography
fantastic design for permanent world domination, even as they flay the American people alive by
forms of austerity and sacrifice that will reduce the standard of living to perhaps one half or one
third of the current depressed levels. This is what Obama means when he pontificates about his
future regime: “I know I haven’t spent a lot of time learning the ways of Washington, but I’ve been
there long enough to know that the ways of Washington must change.” (Quoted in “Raising
Obama,” Todd Purdum, Vanity Fair, March 2008)
OBAMA AS PLUTOCRAT
The necessary fuel for this monstrous and cynical project is money, money in vast quantities.
De l’argent, encore de l’argent, toujours de l’argent. During the 2008 primaries, Obama
distinguished himself from most of the other candidates by his unparalleled hypocrisy on precisely
this score. Obama has tried to portray himself as an opponent of corruption, a candidate of good
government and clean government, a foe of the preponderant role of money in political campaigns,
a supporter of campaign finance reform and strict ethics requirements for government officials, and
as the implacable enemy of lobbyists, pork barrel spending, and earmarks of all sorts. But, upon
closer examination, this entire profile is revealed as a chimera, an illusion, a mirage. Obama bids
fair to become the most corrupt presidential candidate of all time. This is a corruption that goes far
beyond even the horrendous practices of the Alsammarae-Auchi-Rezko axis which we have already
discussed. The phalanx of plutocratic financier interests which is now uniting around the
figurehead candidacy of Obama reaches from Chicago to Wall Street for London and far beyond,
and includes some of the wealthiest banks, investment banks, brokerage firms, defense contractors,
and law firms in the entire world.
During the primaries, Obama had promised that he would find a compromise with Senator
McCain so as to allow the fall presidential campaign to be governed by the public financing rules of
the Federal Elections Commission, with each candidate pledging to use only public funds and to
respect the various rules inherent in the system. This commitment by Obama was one of the most
essential and qualifying parts of his entire campaign. In June 2008, however, Obama pompously
announced that this promise was no longer operational, and that he would become the first
candidate in United States history to reject the public financing system for the fall campaign, and
would rely exclusively on the contributions that he would gather from the backers. This showed,
for anyone who was still keeping score, that Obama is a liar and a scoundrel.
Obama’s hypocrisy and duplicity concerning campaign finance reform are matched by his
deceptive public pledge never to receive campaign contributions from lobbyists. Here, once again,
the Perfect Master is duping his gullible following. Obama knows very well that, in a law firm that
has lobbying the federal government as one of its primary objectives, the number of registered
lobbyists is generally a limited minority of the lawyers who own the firm. There are always lots
and lots of other partners, to say nothing of administrators, and even clerical personnel, plus
innumerable spouses, children, and other relatives who can be coerced into contributing $2,300
each to the Obama campaign. Indeed, it is clear enough that many such law firms make
contributions in this sort a condition for keeping one’s job in the first place. This practice is known
as bundling, and it makes a mockery of the austere limits to fundraising which Obama is so fond of
parading in his inimitable self-righteous way. If we were able to determine the amount of cash that
Barky has raked in at law firms and others engaged in lobbying, using the broad definition to
suggest that, we would probably find that Obama is the all-time champion when it comes to cashing
in with lobbyists.
VII: The Hope Pope and his Trilateral Money Machine 267
DECLARING FOR PRESIDENT WITH SOROS AND MOVEON.ORG
One of Obama’s most important supporters is the classic ultra left financier George Soros. Soros
has long-standing ties to the leadership clique of the New York branch of the Federal Reserve, the
flagship of the entire system. Soros is also deeply involved in the US intelligence community,
controlling a set of foundations whose activity has been key for subversion operations into with the
former Warsaw Pact and Soviet space. Soros is also the sugar daddy for many US left liberal and
ultra left activists, particularly in the antiwar movement. Without the sponsorship of Soros,
Moveon.org could hardly have gotten off the ground. The characteristic profile of those groups that
are on the Soros gravy train is that they demand an end to the Iraq war, but say nothing about
getting the US out of Afghanistan, since the Afghanistan component is fully coherent with
Brzezinski’s plan for bringing down China and Russia. Soros is also associated with a series of
projects designed to assault traditional moral values, such as his championing of legalized narcotics
to be made freely available, inevitably to young people as well. Soros endorsed Obama at the
Davos confab of global oligarchs in January 2007, just after Barky had announced his bid for the
White House:
“As for the U.S. 2008 presidential race, Mr. Soros, who gave $18 million to Democratic
advocacy groups seeking to defeat President Bush in 2004, said he supported Barack Obama.
But he also said he would support Hillary Clinton if she won the Democratic nomination.”117
Soros is acutely aware of the fact that the entire Anglo-American financial system is now
descending into a chaotic breakdown crisis. In this crisis, Soros knows what he wants, and that is
savage austerity, sacrifice, and a reduction of the living standards of working people across the
board. Since Soros is well aware that Obama nurses a hate-filled grudge against American bluecollar
workers, he is looking to Barky to serve as the exterminating angel of the austerity he wants
to institute. Here is Soros’ diagnosis of the present world economic depression:
The current financial crisis was precipitated by a bubble in the US housing market. In some
ways it resembles other crises that have occurred since the end of the Second World War at
intervals ranging from four to 10 years. However, there is a profound difference: the current
crisis marks the end of an era of credit expansion based on the dollar as the international reserve
currency. The periodic crises were part of a larger boom-bust process. The current crisis is the
culmination of a super-boom that has lasted for more than 60 years. (George Soros, Financial
Times, January 23, 2008)
Now that the boom is over, Soros wants to clear the decks for austerity, with Obama as his
chosen left-cover enforcer. Soros is the kingpin of Moveon.org, but he is also joined by a phalanx of
other limousine liberals eager to use a left-wing demagogue to obtain a new phase of aggressive
foreign policy, and a new round of austerity and sacrifice at home. This process started in the 2004
election, and it is Barky who is now the beneficiary, since the financier community feels they
cannot rely on Senator Clinton to deliver the kind of bone crushing reductions in the standard of
living which they know they will require: According to the March 10, 2004, Washington Post,
The Democratic 527 organizations have drawn support from some wealthy liberals determined
to defeat Bush. They include financier George Soros who gave $1.46 million to MoveOn.org
Voter Fund (in the form of matching funds to recruit additional small donors); Peter B. Lewis,
chief executive of the Progressive Corp., who gave $500,000 to MoveOn.org Voter Fund; and
Linda Pritzker, of the Hyatt hotel family, and her Sustainable World Corp., who gave $4 million
to the joint fundraising committee.
268 Barack H. Obama: The Unauthorized Biography
OBAMA’S NIGHT OF THE LONG KNIVES FOR LEFT FANATICS
It was of course Moveon.org who attacked General Petraeus with the famous “General Betray
Us” ads of September 2007 – hardly an act of great courage, since this was already the safe majority
view. When the Republicans tried to ram through a resolution condemning these ads, Obama did
not defend his friends, but characteristically ran like a rabbit. By June-July 2008, Obama would be
sniping at his own ultra-left storm troopers. The dynamic here is similar to Hitler’s Night of the
Long Knives in June-July 1934, when the brown shirts of the SA and their ideas of a second
revolution were liquidated. Obama needed the ultra leftist lemmings of moveon.org as shock troops
against the Clinton machine. Once he thought he had the nomination in his grasp, it was time to
dump the ultra lefts, whose hysterical fanaticism could easily become a liability. Soros understands
these tactics perfectly, since his goal is mainly to put his puppet Obama in the White House so
Obama can implement the policies that Soros wants.
MoveOn.org executive director Eli Pariser said the country needs a president to “change
business as usual in Washington.” Soros’ 34-year-old son Jonathan Soros, an attorney and financier,
recently promoted to deputy manager of Soros Fund Management LLC, is heavily involved with
MoveOn.org’s activities. Obama’s much touted opposition to the war helped him pick up the
backing of MoveOn.org, which claims to have 3.2 million members. Pariser claimed that Obama
had won the referendum by a vote of 70 percent to 30 percent for Clinton, but there were some who
saw vote fraud at work. ‘The group claimed that it had 1.7 million members in the 22 states
scheduled to vote in the primaries, that it would immediately begin a campaign to get them behind
Obama…’118
Worldly asceticism has no place in Obama’s method of operations. Obama is not shy about
accepting rides on corporate jets, especially when he is in a hurry to get to one of his own wellheeled
fund raising events.
Senator Barack Obama flew at least nine times on corporate jets last year, traveling to fundraisers
in New York and San Francisco, home to Chicago and to Rosa Parks’ funeral in Detroit.
Each time, he reimbursed the plane’s owners at first-class rates, as Senate rules require. But Mr.
Obama, freshman Democrat from Illinois, felt queasy about this perk of Senate life, so he said
he gave it up. “This is an example where appearances matter,” he said. “Very few of my
constituents have a chance to travel on a corporate jet.” (“Obama accepts rides on corporate
jets, some to attend his own fundraisers,” New York Times, March 7 2006)
Has he kept his pledge? In any case, he now has his own corporate jet.
OBAMA’S MONEY CARTEL
But flights in corporate jets are only the beginning. Obama’s money cartel is so immense that
we can only indicate some of its major components. A good starting point is Exelon, the former
Commonwealth Edison, and the company dominated for decades by Thomas Ayers, the father of
Obama’s close friend, the former Weatherman terrorist bomber, Bill Ayers.
Exelon’s executives and employees were big backers of Obama’s 2004 Senate bid and gave his
presidential campaign nearly $160,000 in the first quarter of this year, second only to UBSAmericas,
according to the Center for Responsive Politics, a watchdog group. (Chicago
Tribune, June 12, 2007)
VII: The Hope Pope and his Trilateral Money Machine 269
Pam Martens, a researcher with considerable Wall Street experience, has provided a useful
exposé of Obama’s money cartel. It turns out that some of Obama’s biggest donors are also among
the most predatory and parasitical jackals that the financial community has to offer. A case in point
involves the subprime and adjustable rate mortgage gang, who have victimized the black
community to an even greater degree than they have looted the rest of the US population. Obama is
the beneficiary of the largesse of these same predatory lenders:
Seven of the Obama campaign’s top 14 donors consist of officers and employees of the same
Wall Street firms charged time and again with looting the public and newly implicated in
originating and/or bundling fraudulently made mortgages. These latest frauds have left
thousands of children in some of our largest minority communities coming home from school to
see eviction notices and foreclosure signs nailed to their front doors. Those scars will last a
lifetime. These seven Wall Street firms are (in order of money given): Goldman Sachs, UBS
AG, Lehman Brothers, JP Morgan Chase, Citigroup, Morgan Stanley and Credit Suisse. There
is also a large hedge fund, Citadel Investment Group, which is a major source of fee income to
Wall Street. There are five large corporate law firms that are also registered lobbyists; and one
is a corporate law firm that is no longer a registered lobbyist but does legal work for Wall
Street. The cumulative total of these 14 contributors through February 1, 2008, was $2,872,128,
and we’re still in the primary season. (Pam Martens, Obama’s Money Cartel: How he’s fronted
for the most vicious firms on Wall Street, CounterPunch, February 23, 2008)
Martens notes the hypocrisy of Obama’s repeated lie that he does not take money from
lobbyists: ‘But hasn’t Senator Obama repeatedly told us in ads and speeches and debates that he
wasn’t taking money from registered lobbyists? Hasn’t the press given him a free pass on this
statement? Barack Obama, speaking in Greenville, South Carolina, on January 22, 2008:
“Washington lobbyists haven’t funded my campaign, they won’t run my White House, and they
will not drown out the voices of working Americans when I am president”. Barack Obama, in
an email to supporters on June 25, 2007, as reported by the Boston Globe: “Candidates typically
spend a week like this – right before the critical June 30th financial reporting deadline – on the
phone, day and night, begging Washington lobbyists and special interest PACs to write huge
checks. Not me. Our campaign has rejected the money-for-influence game and refused to accept
funds from registered federal lobbyists and political action committees.” The Center for
Responsive Politics’ website allows one to pull up the filings made by lobbyists registering
under the Lobbying Disclosure Act of 1995 with the clerk of the U.S. House of Representatives
and secretary of the U.S. Senate. These top five contributors to the Obama campaign have filed
as registered lobbyists: Sidley Austin LLP; Skadden, Arps, et al; Jenner & Block; Kirkland &
Ellis; Wilmerhale, aka Wilmer Cutler Pickering. Is it possible that Senator Obama does not
know that corporate law firms are also frequently registered lobbyists? Or is he making a
distinction that because these funds are coming from the employees of these firms, he’s not
really taking money directly from registered lobbyists? That thesis seems disingenuous when
many of these individual donors own these law firms as equity partners or shareholders and
share in the profits generated from lobbying. Far from keeping his distance from lobbyists,
Senator Obama and his campaign seems to be brainstorming with them. (Pam Martens,
Obama’s Money Cartel: How he’s fronted for the most vicious firms on Wall Street,
CounterPunch, February 23, 2008)
Obama is most eager to take money from law firms that are chock-full of registered lobbyists;
only the most naïve gulls and dupes can believe his repeated posturing that he will not be the
creature of lobbyists if he ever gets into power.
270 Barack H. Obama: The Unauthorized Biography
OBAMA AS CORPORATE MERCENARY AGAINST CLASS ACTION LAWSUITS
Martens analyzes Obama’s vote in favor of the outrageous and reactionary anti-class-action
legislation of some years back. Here there is a direct link between the money of Obama took and
his vote against the rights of ordinary people to seek recourse against corporate abuses through the
courts when they have been victimized:
On February 10, 2005, Senator Obama voted in favor of the passage of the Class Action
Fairness Act of 2005. Senators Biden, Boxer, Byrd, Clinton, Corzine, Durbin, Feingold, Kerry,
Leahy, Reid and 16 other Democrats voted against it. It passed the Senate 72-26 and was signed
into law on February 18, 2005. …
Three days before Senator Obama expressed that fateful yea vote, 14 state attorneys general,
including Lisa Madigan of Senator Obama’s home state of Illinois, filed a letter with the Senate
and House, pleading to stop the passage of this corporate giveaway. The AGs wrote: “State
attorneys general frequently investigate and bring actions against defendants who have caused
harm to our citizens... In some instances, such actions have been brought with the attorney
general acting as the class representative for the consumers of the state. We are concerned that
certain provisions of S.5 might be misinterpreted to impede the ability of the attorneys general
to bring such actions...”
The Senate also received a desperate plea from more than 40 civil rights and labor
organizations, including the NAACP, Lawyers Committee for Civil Rights Under Law, Human
Rights Campaign, American Civil Liberties Union, Center for Justice and Democracy, Legal
Momentum (formerly NOW Legal Defense and Education Fund), and Alliance for Justice.
They wrote as follows:
“Under the [Class Action Fairness Act of 2005], citizens are denied the right to use their own
state courts to bring class actions against corporations that violate these state wage and hour and
state civil rights laws, even where that corporation has hundreds of employees in that state.
Moving these state law cases into federal court will delay and likely deny justice for working
men and women and victims of discrimination. The federal courts are already overburdened.
Additionally, federal courts are less likely to certify classes or provide relief for violations of
state law.”
This legislation, which dramatically impaired labor rights, consumer rights and civil rights,
involved five years of pressure from 100 corporations, 475 lobbyists, tens of millions of
corporate dollars buying influence in our government, and the active participation of the Wall
Street firms now funding the Obama campaign. “The Civil Justice Reform Group, a business
alliance comprising general counsels from Fortune 100 firms, was instrumental in drafting the
class-action bill”, says Public Citizen.
One of the hardest-working registered lobbyists to push this corporate giveaway was the law
firm Mayer-Brown, hired by the leading business lobby group, the U.S. Chamber of Commerce.
According to the Center for Responsive Politics, the Chamber of Commerce spent $16 million
in just 2003, lobbying the government on various business issues, including class action reform.
(Pam Martens, Obama’s Money Cartel: How he’s fronted for the most vicious firms on Wall
Street, CounterPunch, February 23, 2008)119THE SENATOR FROM CITIBANK
The role of Citigroup, where former Clinton Secretary of the Treasury Robert Rubin is one of
the leading personalities, is very instructive. We should remember that former Senator Tom
VII: The Hope Pope and his Trilateral Money Machine 271
Daschle, one of Obama’s leading surrogates, is notorious as the Senator from Citibank, since this
dubious financial institution was long one of the largest single employers in South Dakota.
Obama’s newest economics controller, Jason Furman, comes from Rubin’s reactionary Hamilton
Project, a nest of monetarists attempting to camouflage their intentions under a few shreds of
center-left cover. Martens asks:
So, how should we react when we learn that the top contributors to the Obama campaign are the
very Wall Street firms whose shady mortgage lenders buried the elderly and the poor and
minority under predatory loans? How should we react when we learn that on the big donor list
is Citigroup, whose former employee at CitiFinancial testified to the Federal Trade Commission
that it was standard practice to target people based on race and educational level, with the sales
force winning bonuses called “Rocopoly Money” (like a sick board game), after “blitz” nights
of soliciting loans by phone? How should we react when we learn that these very same firms,
arm in arm with their corporate lawyers and registered lobbyists, have weakened our ability to
fight back with the class-action vehicle? (Pam Martens, Obama’s Money Cartel: How he’s
fronted for the most vicious firms on Wall Street, CounterPunch, February 23, 2008)
Martens goes on to ask, in despair:
Should there be any doubt left as to who owns our government? The very same cast of
characters making the Obama hit parade of campaign loot are the clever creators of the industry
solutions to the wave of foreclosures gripping this nation’s poor and middle class, effectively
putting the solution in the hands of the robbers. The names of these programs (that have failed
to make a dent in the problem) have the same vacuous ring: Hope Now; Project Lifeline. (Pam
Martens, Obama’s Money Cartel: How he’s fronted for the most vicious firms on Wall Street,
CounterPunch, February 23, 2008)
The answer to this problem is quite simply the necessity of opposing Obama by exposing his
actual role as a servant of the financier elite.
LOBBYISTS: BUNDLERS FOR BARKY
Martens is not the only one to notice the glaring contradiction between Obama’s “no lobbyists”
pledge, and a veritable river of swag that runs from the lobbying offices on K Street into the coffers
of the Obama campaign. A major article in USA Today noted:
Barack Obama often boasts he is “the only candidate who isn’t taking a dime from Washington
lobbyists,” yet his fundraising team includes 38 members of law firms that were paid $138
million last year to lobby the federal government, records show. Those lawyers, including 10
former federal lobbyists, have pledged to raise at least $3.5 million for the Illinois senator’s
presidential race. Employees of their firms have given Obama’s campaign $2.26 million, a USA
Today analysis of campaign finance data shows. Which lawyers bundle money? Thirty-one of
the 38 are law firm partners, who typically receive a share of their firm’s lobbying fees. At least
six of them have some managerial authority over lobbyists. “It makes no difference whether the
person is a registered lobbyist or the partner of a registered lobbyist, if the person is raising
money to get access or curry favor,” said Michael Malbin, director of the Campaign Finance
Institute, a non-partisan think tank. Obama spokesman Tommy Vietor said that while Obama’s
refusal to take money from lobbyists “isn’t a perfect solution or symbol, it does reflect Obama’s
record of trying to change the way that Washington does business.” He declined to elaborate.
Lobbyists have long played key fundraising and policymaking roles for candidates, and
272 Barack H. Obama: The Unauthorized Biography
lobbyists are raising money for both Hillary Rodham Clinton and John McCain. Obama
fundraisers who work for law firms that lobby and share the fees include:
•Allan Katz, a Florida lawyer who chairs the government relations practice of Akerman
Senterfitt. The firm took in $3.6 million for Washington lobbying last year, according to public
records compiled by the non-partisan Center for Responsive Politics. The firm touts on its
website “an enviable level of access” for clients.
•Mark Alderman, managing partner of Philadelphia’s WolfBlock law firm. The firm’s lobbying
subsidiary earned $930,000 in Washington last year representing clients including defense
contractor Lockheed Martin, records show.
•Scott Blake Harris, managing partner of Harris, Wiltshire & Grannis, a Washington
telecommunications law firm. Harris withdrew as a lobbyist for Microsoft and Cisco in June,
but his partners still lobby, he said. (Ken Dilanian, USA Today, April 16, 2008)
As could be expected, most of these lobbyists claimed that their hefty contributions had nothing
whatsoever to do with their lobbying practice, but this was obviously eyewash. Obama is obviously
living a lie. This article was accompanied by the following highly instructive chart, which ought to
be required reading for the Obama cultists who still believe that their Savior is going to reform the
way Washington works, despite the fact that he is beholden to an immense array of interest groups,
including some of the most predatory ones in town. The chart shows contributions to the Obama
campaign from law firms that also do lobbying work. Either we assume that Obama is getting all
this money because of his pretty face, or else it is clear that these lobbyists are paying for access and
influence in the usual Washington mode, but on a vastly expanded scale.
OBAMA FUNDRAISERS: LOBBYIST TIES
These 38 fundraisers for Barack Obama’s presidential campaign work for law firms that have
lobbying operations in Washington, D.C. The dollar figure reflects the minimum amount each has
pledged to raise for the campaign.
Bundler Min. pledge Location Firm
Scott Harris $200,000 DC Harris, Wiltshire and Grannis
Allan J. Katz $200,000 FL Akerman Senterfitt
Michael Lawson $200,000 CA Skadden, Arps
John Levi $200,000 IL Sidley Austin
Karol Mason $200,000 GA Alston & Bird
Thomas J. Perrelli $200,000 VA Jenner & Block
Thomas A. Reed $200,000 VA Kirkpatrick & Lockhart Preston Gates Ellis
Christina Tchen $200,000 IL Skadden, Arps
Tony West $200,000 CA Morrison & Foerster
Mark L. Alderman $100,000 PA Wolf, Block, Schorr and Solis-Cohen
Timothy M. Broas $100,000 MD Winston & Strawn
Peter Bynoe $100,000 IL DLA Piper
Gregory B. Craig $100,000 DC Williams & Connolly
Norman Eisen $100,000 DC Zuckerman Spaeder
VII: The Hope Pope and his Trilateral Money Machine 273
Nicole Lamb-Hale $100,000 MI Foley & Lardner
Andrew Schapiro $100,000 NY Mayer Brown
Charles C. Adams Jr. $50,000 Switzerland Hogan & Hartson
David Burd $50,000 DC Arnold & Porter
Tom Cole $50,000 IL Sidley Austin
Michael H. Dardzinski $50,000 China Reed Smith
Howard W. Gutman $50,000 MD Williams & Connolly
Jeff Horwitz $50,000 NY Proskauer Rose
David C. Jacobson $50,000 IL Sonnenschein Nath & Rosenthal
Hrishi Karthikeyan $50,000 DC Covington & Burling
Ronald Kirk $50,000 TX Vinson & Elkins
William T. Lake $50,000 DC WilmerHale
Edward Lazarus $50,000 CA Akin Gump
Jack Levin $50,000 IL Kirkland & Ellis
Kenneth G. Lore $50,000 DC Bingham McCutchen
Charles B. Ortner $50,000 NY Proskauer Rose
Susan Pravda $50,000 MA Foley & Lardner
Paul N. Roth $50,000 NY Schulte Roth & Zabel
John Schmidt $50,000 IL Mayer Brown
Robert M. Sussman* $50,000 DC Latham & Watkins
Kathryn Thomson $50,000 VA Sidley Austin
Barry B. White $50,000 MA Foley Hoag
Steven M. Zager $50,000 TX Akin Gump
Robert S. Litt n/a MD Arnold & Porter
* Robert M. Sussman retired as a partner on December 31, 2007
Source: Obama for America, Center for Responsive Politics, Public Citizen, from USA Today, April
16, 2008
OBAMA A CREATURE OF GOLDMAN SACHS, TOP OIL SPECULATORS
David Brooks of the New York Times, an avid chronicler of oligarchical affairs, discovered with
some surprise that Obama is far more venal even than his Republican rival, Senator McCain.
Brooks also found that one of the most important centers of bundling for Barky was the infamous
Wall Street investment house Goldman Sachs. Goldman Sachs, along with Morgan Stanley, was
responsible for the creation of the London ICE exchange or IntercontinentalExchange, the offshore
vehicle which now handles approximately one half of the oil futures contracts in the world.
Goldman Sachs co-founded ICE as a means of escaping even the desultory regulatory regime of the
US Commodity Futures Trading Commission, in favor of the nonexistent regulatory regime in
Great Britain. A back of the envelope calculation suggests that Goldman Sachs alone is responsible
for about 40% of the oil speculation which has doubled the price of oil for American consumers of
petroleum products over the last year. With Goldman Sachs employees checking in as Obama’s
biggest bundlers, we leave it to the imagination of the reader whether Obama will bring much
enthusiasm to the task of reining in this gang of hyenas if he ever gets to the White House. Brooks
wrote:
274 Barack H. Obama: The Unauthorized Biography
As in other recent campaigns, lawyers account for the biggest chunk of Democratic donations.
They have donated about $18 million to Obama, compared with about $5 million to John
McCain, according to data released on June 2 and available at OpenSecrets.org. People who
work at securities and investment companies have given Obama about $8 million, compared
with $4.5 for McCain. People who work in communications and electronics have given Obama
about $10 million, compared with $2 million for McCain. Professors and other people who
work in education have given Obama roughly $7 million, compared with $700,000 for McCain.
Real estate professionals have given Obama $5 million, compared with $4 million for McCain.
Medical professionals have given Obama $7 million, compared with $3 million for McCain.
Commercial bankers have given Obama $1.6 million, compared with $1.2 million for McCain.
Hedge fund and private equity managers have given Obama about $1.6 million, compared with
$850,000 for McCain. When you break it out by individual companies, you find that employees
of Goldman Sachs gave more to Obama than workers of any other employer. The Goldman
Sachs geniuses are followed by employees of the University of California, UBS, JPMorgan
Chase, Citigroup, National Amusements, Lehman Brothers, Harvard and Google. At many of
these workplaces, Obama has a three- or four-to-one fund-raising advantage over McCain.
(David Brooks, New York Times, July 1, 2008)
OBAMA FINANCED BY THE MERCHANTS OF DEATH
Obama’s ties with Wall Street are bad enough, and then there is the matter of his strong support
from certain defense contractors who deal with the Pentagon, otherwise known as the merchants of
death. Among Obama’s strongest backers in the defense contractor community, we must of course
again mention the Crown family of General Dynamics fame, who belong to Obama’s intimate circle
of Chicago supporters. General Dynamics builds nuclear submarines and some light tanks that have
not given a very good account of themselves in Iraq. The Washington Post pointed to crown is a key
component of the Obama lucre cartel:
The Chicago contingent also includes James Crown, a director of General Dynamics, the
military contractor in which his family holds a large stake. The company has been the
beneficiary of at least one Obama earmark, a request to spend $8 million on a high-explosive
technology program for the Army’s Bradley Fighting Vehicle. The program got $1.3 million.
The descendants of Henry Crown, architect of a great American fortune, James Crown and his
family donated more than $128,000 to Obama’s U.S. Senate race in 2004. Crown was among
the first people Obama approached as he contemplated a White House run Crown said he and
Obama never discussed General Dynamics, which, with its focus on Army programs, is a
defense contractor that has benefited directly from the Iraq war. Obama’s opposition to the war
never meant that he wanted the armed forces to be poorly equipped, Crown said. “I stand in
agreement with what he has said [about the Iraq war.] Those who work in the defense industry
are extremely focused on the national defense,” he said. “That doesn’t mean we want to be
fighting wars.”120
CROWN’S BRADLEY FIGHTING VEHICLE: AN “EXPLODING COFFIN”
Crown is one of the bosses of General Dynamics, which produces the woefully inadequate
Bradley fighting vehicle. Here is the opinion of an experienced military man about what this
vehicle, a cross between a light tank and armored personnel carrier, is worth.
VII: The Hope Pope and his Trilateral Money Machine 275
The M2 Bradley Infantry Fighting vehicle is a three million dollar version of the World War II
Sherman tank, with room in the back for six guys. It weighs 30 tons, so it’s too heavy to be
picked up by any helicopter and too large to be carried by a C-130, and is not truly amphibious.
It’s expensive to operate, expensive to maintain, and only carries six infantrymen. Worst of all,
it’s a huge vehicle with little armor and packed with explosive TOW missiles. The idea of
mechanized vehicles is to carry infantrymen behind tanks until they are needed. However, the
US Army cannot field a vehicle to safely transport a dozen grunts, it must add every known
gadget to field a golden “fighting vehicle”. The M1A1 tank is a fighting vehicle, the Bradley is
an exploding coffin. The Bradley is almost 10 feet tall, but can only carry six grunts who are
trapped inside with explosive TOW missiles. During live fire tests of the Bradley, a hit usually
ignited a stored TOW causing massive explosions. The Bradley looks good in peacetime
exercises, including the invasion of Iraq, but it will not do well with an enemy who shoots back.
The Army has tried to counter criticism by putting extra armor on the upgraded Bradleys, but its
still a huge target with little armor slope. Upgraded Bradleys are weighted down with external
armor plates, but even these can be penetrated with light infantry anti-armor weapons.121
Crown’s General Dynamics also manufactures the Stryker troop carrier, which has been
associated with heavy losses in the Iraq war because of its vulnerability to rocket propelled grenades
and roadside bombs. Recent press accounts have emphasized the inadequate engineering that went
into the high-priced Stryker:
The Strykers are the first new combat vehicle in 20 years and a cornerstone in the Army’s
efforts to transform itself into a new, 21st-century fighting force. Critics say the eight-wheeled
vehicles each costing an average of $1.5 million may be a costly misstep on that path. The
Army recently discovered flaws in the Stryker’s ceramic composite armor and is racing to fix it.
The vehicle’s remote weapon systems can’t be fired accurately on the move, and soldiers must
get out of the vehicle to reload, exposing them to enemy fire.122
As the Iraq war ground on, Stryker losses increased because they had not been designed to deal
with the weapons deployed by the Iraqi national resistance:
A string of heavy losses from powerful roadside bombs has raised new questions about the
vulnerability of the Stryker, the Army’s troop-carrying vehicle hailed by supporters as the key
to a leaner, more mobile force. Since the Strykers went into action in violent Diyala province
north of Baghdad two months ago, losses of the vehicles have been rising steadily, U.S.
officials said. A single infantry company in Diyala lost five Strykers this month in less than a
week, according to soldiers familiar with the losses, who spoke on condition of anonymity
because they are not authorized to release the information. The overall number of Strykers lost
recently is classified. In one of the biggest hits, six American soldiers and a journalist were
killed when a huge bomb exploded beneath their Stryker…. It was the biggest one-day loss for
the battalion in more than two years.123
In order to stop these unsustainable losses, the Pentagon had to invest $22 billion to set up an
assembly line capable of turning out 1,200 Mine Resistant Ambush Protected trucks per month. But
it was not General Dynamics that provided these vehicles, but International Military and
Government, a subsidiary of Navistar International. These new vehicles with their characteristic Vshaped
hulls were able to reduce losses significantly. How many GIs died to pad Crown’s bottom
line? Look for more sweetheart contracts to go to General Dynamics in any future Obama regime,
independent of the merits, and look for the death rates among American troops to go up
accordingly.
276 Barack H. Obama: The Unauthorized Biography
OBAMA FRONTS FOR RIVERBOAT GAMBLERS
A few other components of Obama’s Chicago Mafia are also worth mentioning; these include
notorious low-wage employers and union busters like the Pritzker family, who have made their
fortune exploiting the underpaid Hispanic cleaning ladies in their hotel chains, and also gambling
interests inevitably redolent of organized crime:
The Chicago finance elite has been a major hub of Obama’s fundraising, led by Pritzker.
Another major figure is billionaire Neil G. Bluhm, a hotel and office building developer. But
Bluhm has posed a symbolic problem for Obama in Pennsylvania, site of an April 22 primary,
because his latest endeavor is a push to open a controversial casino along the Philadelphia
waterfront. “Bluhm’s path crossed Obama’s in 2003, when Bluhm pursued a gaming license for
a Chicago riverboat. That June, he gave the first $1,000 of what would become more than
$78,000 in contributions from him and his family. In 2006, Pennsylvania awarded Bluhm one
of two coveted Philadelphia gambling licenses. Last year, his partners in the project, called
Sugar House, made $2,300 donations to Obama, including nearly $50,000 from the Philadelphia
law firm Cozen O’Connor, which represents him in the deal. Bluhm said that the gaming
project “has got nothing to do with” his support for Obama and that the two have never
discussed it. “My interest in him is, I think he’s inspirational, I think he will enormously
improve our economy and our relations with other countries,” he said.124
The impudence of a riverboat gambler who says that he is paying for inspiration, not for political
influence and favors, is one of the many grim ironies of the Obama cash cartel.
THE JOSHUA SPEECH AND OBAMA’S MEGALOMANIA
During the course of 2007, Obama began to experience his delusions of grandeur in public. As
he basked in the adulation of his adoring and fawning coterie, his tendency towards megalomania
became exacerbated. From this point on, Obama’s megalomania was destined to emerge in the
wake of every significant uptick in his march towards power. A foundational document for the
analysis of Obama as a case study in megalomania is provided by the speech he delivered to the
commemoration of the Selma, Alabama voting rights protest on March 4, 2007. Here Obama is
prepared to concede that Martin Luther King and others of his generation can be compared to the
prophetic figure of Moses in the Old Testament, but at the same time he demands that he, the young
whelp and upstart, be recognized as the new Joshua, the lieutenant of Moses and the civic organizer
destined to lead black America into the promised land. In reality, as we have attempted to show,
Obama must be considered a continuation of the anti-Martin Luther King tradition inaugurated
when the Ford Foundation massively funded black power demagogues hostile to Martin Luther
King during the last years of King’s life. Note Obama’s ritual nods to his teachers of the Reverend
Jeremiah Wright cabal:
But I got a letter from a friend of some of yours named Reverend Otis Moss Jr. in Cleveland,
and his son, Otis Moss III is the Pastor at my church and I must send greetings from Dr.
Jeremiah A. Wright Jr. but I got a letter giving me encouragement and saying how proud he was
that I had announced and encouraging me to stay true to my ideals and my values and not to be
fearful. And he said, if there’s some folks out there who are questioning whether or not you
should run, just tell them to look at the story of Joshua because you’re part of the Joshua
generation. So I just want to talk a little about Moses and Aaron and Joshua, because we are in
the presence today of a lot of Moseses. We’re in the presence today of giants whose shoulders
VII: The Hope Pope and his Trilateral Money Machine 277
we stand on, people who battled, not just on behalf of African-Americans but on behalf of all of
America; that battled for America’s soul, that shed blood , that endured taunts and torment and
in some cases gave — torment and in some cases gave the full measure of their devotion. Like
Moses, they challenged Pharaoh, the princes, powers who said that some are atop and others are
at the bottom, and that’s how it’s always going to be. I’m here because somebody marched. I’m
here because you all sacrificed for me. I stand on the shoulders of giants. I thank the Moses
generation; but we’ve got to remember, now, that Joshua still had a job to do. As great as Moses
was, despite all that he did, leading a people out of bondage, he didn’t cross over the river to see
the Promised Land. God told him your job is done. You’ll see it. You’ll be at the mountain top
and you can see what I’ve promised. What I’ve promised to Abraham and Isaac and Jacob. You
will see that I’ve fulfilled that promise but you won’t go there. We’re going to leave it to the
Joshua generation to make sure it happens. There are still battles that need to be fought; some
rivers that need to be crossed. Like Moses, the task was passed on to those who might not have
been as deserving, might not have been as courageous, find themselves in front of the risks that
their parents and grandparents and great grandparents had taken. That doesn’t mean that they
don’t still have a burden to shoulder, that they don’t have some responsibilities. The previous
generation, the Moses generation, pointed the way. They took us 90% of the way there. We still
got that 10% in order to cross over to the other side. So the question, I guess, that I have today
is what’s called of us in this Joshua generation? What do we do in order to fulfill that legacy; to
fulfill the obligations and the debt that we owe to those who allowed us to be here today? Now,
I don’t think we could ever fully repay that debt. Moses told the Joshua generation; don’t forget
where you came from. I worry sometimes, that the Joshua generation in its success forgets
where it came from. Thinks it doesn’t have to make as many sacrifices. Thinks that the very
height of ambition is to make as much money as you can, to drive the biggest car and have the
biggest house and wear a Rolex watch and get your own private jet, get some of that Oprah
money. And I think that’s a good thing. There’s nothing wrong with making money, but if you
know your history, then you know that there is a certain poverty of ambition involved in simply
striving just for money. Materialism alone will not fulfill the possibilities of your existence.
You have to fill that with something else. You have to fill it with the golden rule. You’ve got to
fill it with thinking about others. And if we know our history, then we will understand that that
is the highest mark of service. Second thing that the Joshua generation needs to understand is
that the principles of equality that were set forth and were battled for have to be fought each and
every day. It is not a one-time thing. I was remarking at the unity breakfast on the fact that the
single most significant concern that this Justice Department under this administration has had
with respect to discrimination has to do with affirmative action. That they have basically spent
all their time worrying about colleges and universities around the country that are given a little
break to young African-Americans and Hispanics to make sure that they can go to college,
too.125
Obama is doubtless familiar with the Strauss-Howe theory of generations, which his campaign
uses for profiling his dupes and gulls among generation Xers and the younger set.126 If so, Obama
has misread Strauss and Howe, since he and his ilk do not have the characteristics of a modern
Joshua, but rather must be classed among the worshipers of the golden calf, the faction that gave
Moses so much trouble as he attempted to lead the Israelites to the Promised Land. Obama’s ritual
acknowledgment of the foundation-funded racist provocateur Jeremiah Wright — a figure not of
austerity, but sybaritic hedonism — and the Ford Foundation grant recipient Otis Moss III only
make his membership in the golden calf congregation unmistakable for all. This was also the
occasion when Obama attempted to convince the Selma audience that he had been conceived by his
278 Barack H. Obama: The Unauthorized Biography
parents, Barack Obama Sr. and Ann Dunham, because they had been inspired by the fervor
following the “Bloody Sunday” voting rights demonstration that was commemorated March 4.
“There was something stirring across the country because of what happened in Selma, Alabama,”
he said, “because some folks are willing to march across a bridge. So they got together and Barack
Obama Jr. was born. So don’t tell me I don’t have a claim on Selma, Alabama. Don’t tell me I’m
not coming home to Selma, Alabama” The problem was that, as we have seen, Obama was born in
1961, and the Selma march occurred four years later, in 1965. The New York Times reported that
when the senator was asked about the discrepancy later that day, he clarified: “I meant the whole
civil rights movement.
OBAMA AS THE CONSUMMATE DIVIDER
The Joshua speech is an important document because it illustrates yet another dimension of
Obama’s efficacy as a divider and a splitter of the American population so as to leave them open to
further attacks by the financier oligarchy. Obama says he wants to bring the American population
together, but in practice the net effect of his well-financed presence, backed up by the formidable
Trilateral-Bilderberg network, has been to divide the American people six ways to Sunday. Obama
divides white against black, black against Hispanic, black against Asian, men against women, and
elitists and affluent suburbanites against blue-collar workers. With his spurious and self-serving
generational analysis, he can also play old against young in a generational conflict which can
further weaken the capacity of the American people to resist what the Trilateral financiers have in
store. Obama thus emerges as a fiendishly clever deployment to shatter the American people along
lines of race, national origin, religion, gender, class, and generation — quite an achievement for his
controllers. Bush the younger, by comparison, is a paragon of national unity. This is why the
Trilateraloids were willing to pay top dollar to finance such a mediocrity and attempt to make the
entire national debate revolve around his vapid and vacuous personality. One of the included
benefits was the likelihood that the Democratic Party would shatter along its fairly obvious fault
lines in the aftermath of a catastrophic Obama regime.
THE RACE CARD YET AGAIN
In the course of the Texas primary, it became obvious that Obama was pursuing what some
called a “two-track strategy” in his rallies. The candidate of authenticity had two distinct stump
speeches, one for black audiences and one for white audiences.
As he campaigns in the Lone Star State, Barack Obama has mostly stuck to his standard stump
speech about the economy, health care and Iraq. But when he spoke before a mostly black audience
in the coastal, working-class town of Beaumont, he talked about Popeye’s fried chicken and
individual responsibility. “I have a nine- and a six-year-old daughter, so I know how hard it is to
get kids to eat properly,” Obama told the audience of about 2000 as he broached the subject of
health care at a town hall-style meeting Thursday. “But I also know that if we are, if folks are just
letting kids drink eight sodas a day which some parents do. Or you know, even a bag of potato
chips for lunch or Popeye’s for breakfast –ya’ll have Popeye’s down in Beaumont? All right. I
know some of you all, you get that cold Popeye’s out for breakfast! I know! That’s why you all
laughing. I caught you out. You can’t do that! Children have to have proper nutrition.” The
audience, many of whom waited in line five hours or more for a chance to see Obama, cheered,
laughed and gave thunderous applause to the remarks, which he peppered with phrases straight from
VII: The Hope Pope and his Trilateral Money Machine 279
a Texas Southern Baptist church. “Can I get an amen here?” Obama said to the cheering crowd as
he compelled them to turn the TV off at home and make sure their kids hit the books. But these
risks did not resurface later at a rally in Fort Worth, where the audience was decidedly more racially
mixed and in a higher income bracket. Gone was the preacher-like cadence. He talked about health
care and education, but only made a passing reference to individual responsibility. Political
analysts say Obama is using a dual approach to win Tuesday’s primaries in Texas and Ohio and the
Democratic nomination beyond that — a race-neutral, rousing stump speech for most audiences and
a sermon like dialogue reserved for lower-income black audiences. “I called it a two-track
strategy,” said University of Maryland political science professor Ron Walters, who has written
extensively about blacks. “This requires two different kinds of politics and Barack Obama has been
able to synthesize both of them.” (Susan Ferrecchio, Washington Examiner, March 3, 2008)
THE MEDIA SWOON FOR BARKY, THE HOPE POPE
One of the things that Obama’s money machine could be used to mobilize was of course the
fawning adulation of those press whores who populated the controlled corporate media of this
unhappy nation. Here is a sample from the middle phase of the 2008 primaries. Notice how the
author tries to establish the unique world historical importance of Obama, and then goes on to
compare him to John F. Kennedy, before deciding to throw in Lincoln as well. We can only guess
how many of these hack writers were getting paid by the word for such moronic hyperbole:
The tides of history are rising higher and faster these days. Read them right and ride them, or be
crushed. And then along comes Barack Obama, with the kinds of gifts that appear in politics but
once every few generations. There is a sense of dignity, even majesty, about him, and
underneath that ease lies a resolute discipline. It’s not just that he is eloquent — with that ability
to speak both to you and to speak for you — it’s that he has a quality of thinking and
intellectual and emotional honesty that is extraordinary. I first learned of Barack Obama from a
man who was at the highest level of George W. Bush’s political organization through two
presidential campaigns. He described the first-term senator from Illinois as “a walking hope
machine.” All this was made clearer by the contrast with Hillary Clinton, a capable and
personable senator who has run the kind of campaign that reminds us of what makes us so
discouraged about our politics. Her campaign certainly proved her experience didn’t count for
much: She was a bad manager and a bad strategist who naturally and easily engaged in the
politics of distraction, trivialization and personal attack. The similarities between John Kennedy
and Barack Obama come to mind easily: the youth, the magnetism, the natural grace, the
eloquence, the wit, the intelligence, the hope of a new generation. But it might be more to the
point to view Obama as Lincolnesque in his own origins, his sobriety and what history now
demands. (Jann S. Wenner, “A New Hope,” Rolling Stone, March 20, 2008)127
The hysteria of this encomium was in inverse proportion to Obama’s substantive record. After
spending 2005 and 2006 pretending to be a senator, but in reality planning his presidential
campaign, the Illinois Messiah dropped out of his legislative functions completely, missing virtually
every vote. According to one press account, Obama had missed “the most votes of any Democratic
presidential hopeful in the Senate over the last two months, including a vote on an Iran resolution he
has blasted Sen. Hillary Clinton for supporting.” The Illinois Democrat had missed nearly 80
percent of all votes after September 2007. This was a great advantage, since no one could really
know what he stood for, if anything.
280 Barack H. Obama: The Unauthorized Biography
REUNION OF CARTER-ERA TRILATERALS TO SUPPORT OBAMA
Given Obama’s Trilateral-Rockefeller pedigree, it was not surprising to see that the supporters of
the Messiah’s campaign resembled nothing so much as a reunion of retreads from the catastrophic
Jimmy Carter regime of 1977 to 1981, an administration which had set in motion the disastrous
Great U-Turn of the United States towards deindustrialization, a low wage economy, pessimism,
and collapse. Now the Carter veterans gathered around their new clone, Obama. One of these was
Paul Adolph Volcker, the Trilateral boss of the Federal Reserve who had placed the United States
firmly on the course of deindustrialization and decay. Volcker was clearly overcome with
admiration for Obama:
“After 30 years in government, serving under five Presidents of both parties and chairing two
non-partisan Commissions on the Public Service, [said Volcker,] I have been reluctant to
engage in political campaigns. The time has come to overcome that reluctance,” Mr. Volcker
said …. “However, it is not the current turmoil in markets or the economic uncertainties that
have impelled my decision. Rather, it is the breadth and depth of challenges that face our nation
at home and abroad. Those challenges demand a new leadership and a fresh approach.” He
concluded: “It is only Barack Obama, in his person, in his ideas, in his ability to understand and
to articulate both our needs and our hopes that provide the potential for strong and fresh
leadership. That leadership must begin here in America but it can also restore needed
confidence in our vision, our strength, and our purposes right around the world.”128
This is from the man who succeeded in doing what Hitler, Tojo, Stalin, and Mao failed to do,
that is to say laying waste to the industrial might of the United States with interest-rate policies so
disruptive that they outclassed even nuclear weapons. Volcker’s endorsement was a real feather in
Obama’s cap.
President Carter himself had signaled a preference for Obama early on, but waited until the
primaries were about over before he formally endorsed Sen. Obama, D-Ill., after the South Dakota
and Montana primaries. ‘“The fact is the Obama people already know they have my vote when the
polls close tonight,” President Carter told The Associated Press earlier in the day.’129
The list would not be complete without the current patriarch of the Rockefeller family, John D.
Rockefeller IV, who has increasingly taken over from the now decrepit David Rockefeller, the last
surviving member of the Rockefeller Brothers generation.
Sen. Jay Rockefeller (D-W.Va.) endorsed fellow Sen. Barack Obama (D-Ill.) …. Rockefeller,
chairman of the Senate Intelligence Committee, said Obama’s position on the Iraq war in 2002 was
partially behind his decision to support the Illinois senator. “The indisputable fact is Barack Obama
was right about Iraq when many of us were wrong,” Rockefeller said in a statement. “It was a tough
call and the single greatest national security question, and mistake, of our time.”130
BRZEZINSKI’S GLOWING ENDORSEMENT OF OBAMA
The most important endorsement of all was of course that of Zbigniew Brzezinski, the cofounder
of the Trilateral Commission with David Rockefeller 35 years ago, and the person whose criminal
energy has only grown with the passing years when it comes to his lifelong obsession of destroying
Russia. Brzezinski was effusive in his praise of the Illinois Senator:
Obama “recognizes that the challenge is a new face, a new sense of direction, a new definition
of America’s role in the world,” Brzezinski remarked during an interview on Bloomberg
VII: The Hope Pope and his Trilateral Money Machine 281
Television’s “Political Capital with Al Hunt.” “Obama is clearly more effective and has the
upper hand,” Brzezinski said. “He has a sense of what is historically relevant, and what is
needed from the United States in relationship to the world.” Brzezinski dismissed Hillary
Clinton as totally inadequate: “Being a former first lady doesn’t prepare you to be president.
President Truman didn’t have much experience before he came to office. Neither did John
Kennedy,” Brzezinski said. Clinton’s foreign-policy approach is “very conventional,”
Brzezinski added “I don’t think the country needs to go back to what we had eight years ago.”
“There is a need for a fundamental rethinking of how we conduct world affairs,” he continued.
“And Obama seems to me to have both the guts and the intelligence to address that issue and to
change the nature of America’s relationship with the world.” (Bloomberg, “Zbigniew
Brzezinski Endorses Barack Obama,” Friday, August 24, 2007)
Serious students of history immediately recognized that this last point was an indispensable part
of classic fascist political doctrine; see the final chapter of this book.
BRZEZINSKI ATTEMPTS TO CAMOUFLAGE HIS DOMINANCE OF OBAMA
The columnist Colbert I. King of the Katherine Meyer Graham stable complained about a winter
2008 report in Newsweek magazine that the Clinton campaign was attacking Zbigniew Brzezinski to
get at Obama.
“In a January conference call with American Jewish organization leaders, the magazine reports,
Clinton senior adviser Ann Lewis attempted to denigrate Obama’s pro-Israel credentials by
pointing out that Zbigniew Brzezinski is Obama’s “chief foreign policy adviser.” Brzezinski,
Newsweek noted, “has a reputation that is close to toxic in the American Jewish community.”’
That sounded fair enough; Brzezinski was after all the father of modern Islamic fundamentalism
and the architect of the Khomeini regime in Iran. But for the devotees of Obama, any criticism
is ipso facto illegitimate. Colbert I. King took the occasion to whine: “it mattered not to
Clinton’s clan that Brzezinski is not a key Obama advisor, that Obama has said he has had
lunch with Brzezinski only once or that they have exchanged e-mails perhaps three times.
Linking Obama to someone who is anathema to the Jewish community was the point to be
scored — even if it meant committing a foul.” (Washington Post, March 1, 2008)
Colbert I. King is a liar. As we show in this book, Zbigniew Brzezinski is more than an adviser
to Obama — he is his controller, and the developer of the entire profile which Obama is using to
run for president. Unless and until Obama abandons his obsessive secrecy and tells the full story of
his years at Columbia University, we will persist in the suspicion that Obama was in fact recruited
by Zbigniew Brzezinski at Columbia in 1981-1983 as a member of the left CIA stable of
foundation-funded political assets. As far as Obama’s implausible denials are concerned, they leave
the door wide open to the obvious possibility that Brzezinski gives Obama his orders at breakfast or
dinner, or that he gives his instructions to the candidate by instant messaging or by phone. Henry
Kissinger is famous for never giving the clients of his influence peddling business even a single
scrap of paper with writing on it; maybe Brzezinski operates with the same kind of secrecy. As we
show elsewhere in this book, there were times during the Carter administration when Brzezinski had
to be kept off the TV networks and hidden in the closet; maybe Zbig has figured out that if you are
Dr. Strangelove it is best to keep a low profile. But the irrefutable fact remains that when
Brzezinski introduced Obama on the occasion of his first major foreign policy speech, the Polish
revanchist was unquestionably billed as the campaign’s senior foreign policy adviser.
282 Barack H. Obama: The Unauthorized Biography
BRZEZINSKI A GROWING LIABILITY FOR OBAMA
Thanks in part to the work of the present writer, the Brzezinski connection became a serious
embarrassment to Obama, just as the Polish revanchist (in 1980 arguably the most unpopular
Democratic official since LBJ) had been a huge albatross around the neck of Carter. Here are some
relevant excerpts from a transcript of the National Public Radio program “To the Point,” in which
the Jerusalem Post correspondent Caroline Glick and the Obama Middle East advisor Mel Levine131
comment on who is actually running the senator’s foreign policy in that part of the world:
Warren Olney: (directed to Caroline Glick) You have expressed very severe reservations about
Senator Obama and have reservations in regards to his stance on Israel. In particular his
association with some of his advisors and to Jeremiah Wright. Can you speak to some of the
concerns you have about Senator Obama.
Caroline Glick: Senator Obama surrounds himself with people who are overtly either anti
Semitic like Rev. Wright, anti-white like Rev. Wright, anti-American like Rev. Wright, or
simply and viscerally anti-Israel like Zbigniew Brzezinski, and Robert Malley, and Samantha
Power his former advisor, and then there are people who are messianically anti-Israel like Dan
Cursor, the former US Ambassador to Israel and Egypt. And each time then it’s pointed out to
him (Obama) that these people have made statements and followed policies that are inherently
hostile to Israel, he says, “Well, these aren’t reflective of my views.” And the fact is, among all
of these people there are no counter balancing force among Barack’s advisors or friends or Rev.
Wright’s that is supportive of Israel. So, I find the whole perception that he can say, I wasn’t at
church then, or the fact that Zbig was in Syria the same week that [Hezbollah leader] Imad
Mugniyah was assassinated in Damascus, and there is no one on his team that is different from
Brzezinski on Israel, so it is all but impossible not to conclude that views of ALL of his
advisors are reflective of his views.
Host: Mel Levine would you distinguish yourself from Mr. Zbigniew Brzezinski? And to what
extent is Zbig an advisor to Barack Obama?
Mel Levine: I, I, ah, I, ah, um, I’m speechless after what I heard from Ms. Glick. My views on
Israel are very clear to anyone I have ever worked with in Congress. I am one of his Middle
East Advisors and my views are very different from Zbigniew Brzezinski, and Zbigniew
Brzezinski is NOT one his foreign policy advisors, nor one of his advisors at all. This really
points out the nature of the type of distortions that have been leveled to Senator Obama for
quite some time. And what Ms. Glick has said is completely false.” (To the Point, NPR, April
21, 2008)
Obama’s attempted sleight of hand was obvious to the world: Moscow News referred on April 3,
2008 to “...Zbigniew Brzezinski, who is trying to conceal his involvement with Barack Obama’s
team.” It is worth repeating that, in the wake of the Samantha Power “monster” flap, Zbiggy had
been billed in published reports as an advisor to Obama: ‘In response to a request for reaction to her
resignation earlier today, the office of Brzezinski—another of Obama’s foreign policy advisers—
relayed the following statement: “I think an expression of regret for using an inappropriate
description of Senator Clinton should have sufficed. And I don’t think she should have resigned.”’132
Along with Brzezinski, a key to the entire Obama machine was Soros. House Speaker Nancy
Pelosi, an abject failure who stood long ago have been ousted and sent to the back benches,
distinguished herself during the primaries by her treachery against Senator Clinton on the question
of sexist and misogynistic propaganda favoring Obama. Pelosi pretended to be neutral, but it was
VII: The Hope Pope and his Trilateral Money Machine 283
clear that her heart beat only for Barky. In addition to her spontaneous ultra-left sympathies, it was
clear that Pelosi was also acting as a servant of Soros, who had one of his top operatives in Pelosi’s
office:
Let us connect the dots. In February, 2007, Nancy Pelosi hired Joseph Onek as her Chief
Counsel. Mr. Onek is also a chief policy advisor for the Open Society Institute, funded by none
other than George Soros. You may be curious about Felix Rohatyn. Mr. Rohatyn is a not only a
major financial backer of Nancy Pelosi but he is one of her top economics advisors. Mr. Obama
has called for the formation of a National Infrastructure Investment Bank (NIRB). This is a
derivative of the Rohatyn-Rudman National Investment Corporation (NIC) first proposed in
2005. Essentially, Mr. Obama is a surrogate for a private investment model controlled by
George Soros and those that subscribe to his world monetary monopoly model. The NIRB is
nothing more than a fascist economic model.’ (noquarterusa.net, June 30, 2008)
Indeed: the NIRB, as Bruce Marshall has shown in Obama — The Postmodern Coup would
employ the methods of Hjalmar Schacht and his infamous Mefo bills to create a post-crash bubble
in the wake of the current breakdown crisis.
SMALL DONORS AS A SCREEN FOR FATCAT BUNDLERS
In June 2008, after the Democratic primaries were over, and Obama had less need of the petit
bourgeois good government activists who are so important for winning Democratic caucuses, he
announced with consummate cynicism that he would not accept the restrictions inherent in public
funding for his fall campaign. With exquisite demagogy, Obama and his followers argued that they
are fundraising model had already fulfilled the need to democratize campaign finance contributions
by mobilizing so many millions of small donors to give their modest pittances and widow’s mites
for the greater glory of the Perfect Master. We have already seen that the real secret of the Obama
campaign was bundling on an unprecedented scale under the cover of Obama’s cynical “no
lobbyists” propaganda. A more granular analysis of Obama’s fundraising revealed that the role of
the small donors as compared to the corporate bundlers had been consistently and systematically
overstated by himself and his campaign flacks. One researcher reported
…that Obama received more than two-thirds (68 percent) of his first quarter 2007 fundraising
total “from donations of $1000 or more.” Obama has “played up populist themes of [campaign
finance] reform,” trumpeting his ‘“large number of small donations” and claiming (in the
Senator’s words) to be “launch[ing]a fundraising drive that isn’t about dollars.” But his
astonishing first-quarter campaign [2007] finance haul of $25.7 million included $17.5 million
from “big donors” ($1000 and up) - a sum higher than the much more genuinely populist John
Edwards’ total take ($14 million) from all donors. According to Chicago Sun Times columnist
Lynn Sweet: “Obama talks about transforming politics and touts the donations of ‘ordinary’
people to his campaign, but a network of more than 100 elite Democratic ‘bundlers’ is raising
millions of dollars for his White House bid. The Obama campaign prefers the emphasis to be on
the army of small donors who are giving — and raising — money for Obama. In truth, though,
there are two parallel narratives — and the other is that Obama is also heavily reliant on
wealthy and well-connected Democrats. ‘Bundlers’ are people who solicit their networks for
donations and, at the elite giving levels, often get some assistance from campaign fund-raising
professionals. Each of the 138 Obama bundlers promised to raise at least $50,000, and many are
from Chicago, not surprising since Chicago billionaire Penny Pritzker is the national finance
chairwoman. Among those from the city are major Democratic donors Lou Sussman, who was
284 Barack H. Obama: The Unauthorized Biography
John Kerry’s chief of fund-raising in 2004; Betty Lu [Klutznick] Saltzman, one of Obama’s
biggest boosters; personal-injury attorney Bob Clifford; Capri Capital CEO Quintin Primo;
activists Marilyn Katz and Michael Bauer, Ariel Capital’s John Rogers and Mellody Hobson.
Hollywood moguls David Geffen and Jeffrey Katzenberg; a string of Harvard Law School
friends; Broadway producer Margo Lion, and Bill Kennard, managing director of the Carlyle
Group, are among the other bundlers.” The hypocrisy is many-sided. Last week Sweet reported
that Obama had received large donations from at least eight executives at Island Def Jam, a hiphop
recording firm that markets rap artists Obama has accused of “degrading their sisters” with
sexist slurs. (Paul Street, “Big (Deceptive) Talk About ‘Small Donations,’” Zmag)133
In this interpretation, the swarms of small contributors function as a kind of screening operation
for the main force units of the Obama money cartel, who are the rapacious corporate bundlers.
When Obama finally turned away from public funding, many commentators joined Obama in his
cynicism, speculating that this whole issue had simply been a smokescreen for Democratic attacks
on their better funded Republican rivals in the first place. Prominent among the cynics was, as
usual, the oligarchical apologist David Brooks:
The media and the activists won’t care (they were only interested in campaign-finance reform
only when the Republicans had more money). Meanwhile, Obama’s money is forever. He’s got
an army of small donors and a phalanx of big money bundlers, including, according to The
Washington Post, Kenneth Griffin of the Citadel Investment Group; Kirk Wager, a Florida trial
lawyer; James Crown, a director of General Dynamics; and Neil Bluhm, a hotel, office and
casino developer. (David Brooks, New York Times, June 20, 2008)134
RUPERT MURDOCH SUPPORTS OBAMA, LATE MAY 2008
Obama is intrinsically a creature of what may be called in general terms the center-left side of
the US-UK financier establishment. This wing of the banking community is grouped around names
like David Rockefeller, George Soros, Robert Rubin, Felix Rohatyn, and Goldman Sachs. Its
political spokesmen include James Baker III, former Congressman Lee Hamilton, Pelosi, the
Kennedy family, and others. During 2007, it had been possible to distinguish another faction which
could be associated with the names of George Shultz, Rupert Murdoch, Tony Blair, and various
right-wing figures in Wall Street. During the primary season, it was significant that many of the
revelations which so damaged Obama came from O’Reilly, Hannity, and other commentators
employed by Rupert Murdoch’s Fox News Channel. It was therefore significant when archreactionary
Rupert Murdoch announced that he too was smitten by the Obama craze.
“We’re on the verge of a complete phenomenon,” Murdoch said. “Politicians are at an all-time
low and are despised by 80% of the public, and then you’ve got a candidate trying to put
himself out above it all. He’s become a rock star. It’s fantastic. “There are a lot of problems.
The education system in this country is a total disgrace.” Murdoch heaped praise on Obama,
saying he was a “highly intelligent man with a great record at Harvard”, but stopped short of a
full personal endorsement because he wanted “to meet him personally.” The Obama
phenomenon and undoubtedly the recession and everyone getting hurt... the average American
family today is really financially hurting and that all bodes well for him,” he said. “He may not
carry Florida because the Jewish people are suspicious of him, and so are Hispanics. But he’ll
probably add Ohio and others. He will probably win.” Despite saying he was a friend of John
McCain, Murdoch said the Republican presidential nominee had “a lot of problems.” “McCain
has been in congress a long time and you’ve got to make too many compromises,” he said.
VII: The Hope Pope and his Trilateral Money Machine 285
“What does he really stand for? He’s a patriot - he’s a friend of mine and a really decent guy -
but he’s unpredictable. “[He] doesn’t know much about the economy and - I say this
sympathetically - I think he has a lot of problems.” (London Guardian, May 30, 2008)
In July, billionaire oligarch Warren Buffett participated in Obama’s meeting of economists and
financiers along with Paul Adolph Volcker, Robert Rubin, and a few token labor leaders. Now,
there could be no doubt whatsoever that Obama was indeed the consensus candidate of the Wall
Street financier establishment and its British cousins. This provided thinking persons with the most
powerful motivation to mobilize against Obama.
THE OBAMA MONEY MACHINE SPUTTERS, JULY 2008
Yet, Obama’s path to financial supremacy was not quite that simple. Senator Clinton had
mobilized significant numbers of wealthy contributors. Many of these persons of considerable
means had been thoroughly antagonized by the scurrilous sexism and misogyny of the Obama
campaign. But, his vision clouded by his own rising megalomania, Obama assumed that at the end
of the primary season, these traditional Democratic Party financial backers would fall into line and
filled his coffers for the fall. A key turning point was a meeting for Democratic fatcats at the
Mayflower Hotel on K Street in Washington, where Obama held forth behind closed doors before a
group of deeply suspicious Hillary backers. Accounts of what had gone on in this tense and heated
meeting filtered out only gradually through the media:
“I would say he was pretty underwhelming,” a longtime Democratic activist said several days
after he and some 200 other big-money supporters of Hillary Clinton’s failed presidential
campaign met with the victor, Barack Obama, in Washington on June 26. … the tone of what
really happened inside the locked ballroom was quite different once Obama and Hillary Clinton
had their cordial say and the floor was opened for questions. The first “questioner,” an angry
woman from New York, demanded a roll call of presidential preference at the Denver
convention. Next came another distraught woman who declared that Clinton’s candidacy was
the victim of “misogyny.” One participant told me, “This is as tough a crowd as Obama is going
to face the whole campaign.” But, in the opinion of the Clintonites, he did not open the door to
his campaign, because he asked nothing of them. Big-money Democrats who could have
expected to be named U.S. ambassadors by a President Hillary Clinton realized that they would
get nothing from a President Obama. The train had left the station, and they were not aboard.135
Any machine pol knew that patronage handouts could be used to cement an effective political
apparatus, but Obama apparently had not even learned that.
SNOBBISH, ARROGANT, AND BORING: OBAMA DEMANDS TRIBUTE
Obama had promised a new politics of hope and change, but in practice he was delivering a bitter
and vindictive rebuff to Hillary’s supporters. The megalomania exhibited in an earlier stage in the
infamous Joshua speech was now taking over more and more of the Perfect Master’s personality,
causing him to commit stupid and easily avoidable political blunders. Here is another insider
account of Obama’s wretched performance at this critical meeting:
‘Hillary, ever the good trooper and team player, gave Barack an intro to her big dollar donors
and an opportunity to start the healing. But Barack continues to play the role of petulant bore.
He gave an uninspired, mechanical speech. The charm exhibited on the campaign trail that left
women swooning, was missing in action. Folks from the Hillary camp described the speech as
286 Barack H. Obama: The Unauthorized Biography
snobbish, arrogant, and boring. But it was Barack’s response to questions from Hillary’s
supporters that produced sour bile.
1. What about the Vice President slot? The questioner told Barack that if he named Hillary as
the Vice President that the Democrats would be in a position to own the White House for the
next 16 years. Barack said nothing to give Clinton supporters hope that he would consider the
Senator from New York.
2. Will you help Hillary retire her debt? On this one Barack said he had written a check for
$2300 (According to the AP, Michelle gave a check as well. A good first step.) but that his real
interest was getting access to the phone lists of Hillary’s donors and contacts. Hillary supporters
at the gathering sat on their hands, their checkbooks, and their lists.
3. What will you do to stop the sexist smear of Hillary? The questioner noted that Barack did
nothing to quell the rampant sexist attacks on Hillary during the campaign and that she
continues to be brutalized. Barack said, “Yes, I know. But there is another woman who has been
brutalized as well. The healing will take a long time to fix.” So there you have it. No vision. No
magnanimous gesture. It is still all about Barack and Michelle. Most of the Hillary supporters
left unassuaged. Instead of a promise from Barack to tell his supporters to stop the attacks on
Hillary and her supporters, he essentially put his hands in his pockets and shrugged his
shoulders.’ (Larry Johnson, “Breaking News: Obama Bombs,” June 26, 2008)136
As the primary season progressed, Obama would show himself a weaker and weaker candidate,
and more and more anemic as a vote-getter. The same thing occurred with Obama’s fundraising,
which has relentlessly declined from the peak hysteria among the lemming legions which was
registered in February, 2008. In that month, Obama had raked in $55 million, an all-time record for
any US presidential campaign in a single calendar month. But in March, as the Reverend Wright
scandal began to hit, this had gone down to $40 million. In April, as Obama’s blue-collar problems
multiplied and the Bill Ayers-Bernardine Dohrn scandal surfaced, Obama declined further to $31
million. In May, as Obama was being widely pronounced as a new George McGovern, the creaking
money machine was only capable of bringing in $22 million — only a half a million or so more
than McCain, who was supposed to be notoriously weak in this department.
All in all, it was estimated that Obama’s fundraising take in the second quarter of 2008 had come
in 70% lower than he had targeted. There were reports that Obama was running out of money that
he could spend before the beginning of the fall campaign around September 1. His burn rate must
have been staggering. In the meantime, even the notoriously pro-Obama Newsweek poll plummeted
from a lead of 15 points for the Perfect Master down to an advantage of a measly three, with the
Gallup tracking poll showing a statistical dead heat with Obama ahead by two.
States like Ohio and Pennsylvania had seen Obama outspend Senator Clinton by margins that
were variously estimated at three to one, four to one, and five to one. By July, McCain was ahead
of Barky in a Gallup-USA poll. During the primaries, Obama had spent about $285 million just to
eke out an outright loss in the popular vote to Senator Clinton. His handlers had boasted at the time
he dropped out of public financing in June 2008 that he could raise ‘hundreds of millions of dollars
over the next few months,” including $100 million in June alone.137
In reality, it was little more than half that. Obama’s hard right turn and multiple flip-flops on
issues from the Iraq war to FISA wiretapping to NAFTA to the death penalty to gun control and the
looming privatization of Social Security had begun to disillusion even some of his most fanatical
lemming legions.
CHAPTER VIII: “OUR SOULS ARE BROKEN” –
“FEEL, DON’T THINK! BE VISCERAL!” – MICHELLE
OBAMA, POSTMODERN FASCIST IDEOLOGUE
“Mrs. Obama’s statement is nothing less than a renunciation of democracy and an embrace of
fascism. The basic idea of liberty is that people have a natural right to live their lives as usual
and to be uninvolved and uninformed. And they certainly have a right to expect that their
government will butt out of their souls.” - (Caroline Glick, “Obama the Savior,” Jerusalem Post,
April 22, 2008)
As fascism’s founding father, Benito Mussolini, once said: …”Think with your blood.”138
“Denken mit eurem Blute!” - “Think with your blood!” - Hitler
One of the slogans of the Nazi S.A. was “Think with your blood.” We don’t need that.139
“Think with your blood.” – NSDAP slogan.
On January 31 of this year, the oaf Keith Olbermann donned his most serious face and most
indignant tone of voice to rail against George Bush for supporting telecom immunity and revisions
to FISA. In a 10-minute “Special Comment,” the MSNBC star condemned Bush for wanting to
“retroactively immunize corporate criminals,” and said that telecom immunity is “an ex post facto
law, which would clear the phone giants from responsibility for their systematic, aggressive and
blatant collaboration with [Bush’s] illegal and unjustified spying on Americans under this flimsy
guise of looking for any terrorists who are stupid enough to make a collect call or send a mass
email.” Olbermann added that telecom amnesty was a “shameless, breathless, literally textbook
example of Fascism — the merged efforts of government and corporations that answer to no
government.” Noting the numerous telecom lobbyists connected to the Bush administration,
Olbermann said: “This is no longer just a farce in which protecting telecoms is dressed up as
protecting us from terrorists’ conference cells. Now it begins to look like the bureaucrats of the
Third Reich, trying to protect the Krupp family, the industrial giants, re-writing the laws of
Germany for their benefit.140
Of course, this was before Obama voted in favor of the rotten compromise with FISA in June
2008. But the important idea here is the thesis about the nature of fascism that Olbermann is trying
to sell. In a later chapter, we will show that the Obama campaign is the closest thing to a classic
1919-1922 fascist movement that we have ever seen here in the United States. Fascism, we must
always remember, is not a top-down phenomenon; it starts with a radical, anti-establishment protest
movement with many grievances – a movement that masquerades as an authentic, grass-roots,
bottom-up social phenomenon, and hides the fact that it has been funded and created by bankers.
The movement centers around a demagogic mob orator who makes utopian promises about
overcoming despair and restoring the position of the nation in the world by refurbishing the
mystical unity of the people. The fascist movement struggles for power by striving to weaken and
destroy political parties, trade unions, sports groups, clubs, publications, media networks, and all
other institutions which might provide support for resistance against fascism.
Later on, if it is successful, the fascist mass movement will transform itself into a totalitarian and
dictatorial regime, often liquidating its own plebeian and populist tendencies in the process. As the
fascist regime consolidates and solidifies, it gradually comes to resemble an old-style, top-down
dictatorship or bureaucratic-authoritarian regime. But the point is that, without the destruction of
288 Barack H. Obama: The Unauthorized Biography
opposition institutions by the fascist mass movement, the top-down dictatorship could never have
emerged. The view peddled by such figures as Olbermann is that fascism occurs when an
authoritarian government becomes more and more oppressive, until it can be called fascist. This is
completely anti-historical and fails to explain why a new term of fascism had to be coined just after
World War I.
In the United States today, the prevalent understanding of fascist ideology is impoverished in the
extreme. If people know anything at all about fascism, they are likely to think of Hitler, and to
define him as someone who was a dictator, an anti-Semite, a genocidalist, and a military aggressor.
But this leaves out the whole question of fascist ideology and of how a fascist movement could
exercise mass appeal and take power in the first place. One of the purposes of this book is to fill in
some of these blank spaces. Here we will be concerned with a few characteristic points of
traditional and typical fascist ideology as they are reflected in the speeches and activities of
Michelle Obama, who has emerged as a clear case of fascist ideology in her own right.
The Obamas are like a pair of onions: they have several layers of built-in deception, and several
of these layers must be stripped away to get anywhere near reality. But of the two, it is Michelle
who displays her ideology more openly. As the present writer concluded in January-February 2008,
and as the Jerusalem Post has noted more recently, Mrs. Obama’s ideology, as expressed on
numerous occasions and in various forms, is in a very strict technical sense fascism. Not fascism in
the sense of the all-purpose epithet thrown at adversaries by superficial media whores like
Olbermann, but fascism as the belief structure actually embraced and preached by fascist leaders
such as the young Mussolini between 1919 in 1922, when the fascist movements were just getting
started. It is in this sense that Mrs. Obama qualifies without any doubt as a fascist. We should also
take the warning of the Jerusalem Post quite seriously. There is no doubt that the Jews have
suffered greatly as a result of European fascism. We should therefore take such a warning
seriously, and carefully examine whether it is true. The finding here is that Michelle qualifies as the
most open fascist ideologue yet seen in an American presidential campaign. But since it is left
fascism, more like the young Mussolini rather than the mature and consolidated dictator, the left
liberals are quite incapable of noticing this critical fact.
MICHELLE OBAMA: BROKEN SOULS
The principal document illustrating Michelle Obama’s fascist world outlook is the standard
stump speech which she delivered during the primaries and caucuses of January and February in
particular. It was in this phase that the messianic and utopian elements of the Obama campaign
were most pronounced, and Michelle appears to have been encouraged to reveal at least something
of her actual worldview over audiences. Through her words, Michelle was doubtless
communicating strong elements of subliminal and subconscious irrationalism to the excitable
lemming legions and Kool-Aid cultists who were her audience. She was suggesting that Obama is a
far more irrational and anti-rational candidate than he can afford to admit in public, with vast
projects of world transformation and reform which could not yet be articulated. All of this could be
read into her constant references to “broken souls” that needed to be healed and made whole; this
was a construct into which individual listeners could project vast amounts of their personal fantasy
lives, and could imagine themselves emerging in the form of a new species of humanity. Some
might hear in Michelle’s standard remarks with the veiled promise that Obama is capable of
constructing a new world order in which instinctual repression will no longer be necessary, and
instinctual gratification will be immediately available — in other words, the eternal antinomian
promise to abolish the law and liberate the Freudian id. Exactly this has been the promise of the
VIII: “Our Souls Are Broken” - Michelle Obama, Postmodern Fascist Ideologue 289
false Messiahs of past centuries – the abolition of the law and instant gratification, somewhat in the
mode of Herbert Marcuse’s Eros and Civilization. Such hints were indeed present in the oratory of
the irrationalist mass movements between the two world wars, especially in Europe. This is the
kind of suggestion which has so often been a premonition of unspeakable horrors in the real world
of politics, economics, and military affairs, as a glance at the history of the last two and a quarter
centuries will confirm. Here is what Mrs. Obama had to say in her appearance at the University of
California Los Angeles on February 15, 2008:
SAMPLE MICHELLE OBAMA STUMP SPEECH, MID-FEBRUARY 2008
In 2008, we are still a nation that is too divided. We live in isolation, and because of that
isolation, we fear one another. We don’t know our neighbors. We don’t talk. We believe that
our pain is our own - we don’t realize that the struggles and challenges of all of us are the same.
We are too isolated. And we are still a nation that is still too cynical. We look at it as them and
they as opposed to us - we don’t engage because we are still too cynical. Don’t get sick in this
country - not here. Americans are in debt not because they live frivolously but because someone
got sick. And even with insurance, the deductibles and premiums are so high that people are
still putting medication and treatments on credit cards. And they can’t get out from under. I
could go on and on and on, but his is how we’re living, people, in 2008. And things have gotten
progressively worse throughout my lifetime - through Democratic and Republican
administrations - it hasn’t gotten better for regular folks. We have lost the understanding that in
a democracy, we have a mutual obligation to one another - that we cannot measure our
greatness in the society by the strongest and richest of us, but we have to measure our greatness
by the least of these. That we have to compromise and sacrifice for one another in order to get
things done - that is why I am here, because Barack Obama is the only person in this race who
understands that. That before we can work on the problems, we have to fix our souls - our souls
are broken in this nation. If we can’t see ourselves in one another, we will never make those
sacrifices. So I am here right now because I am married to the only person in this race who has
a chance at healing this nation. The first major decision he had to make in his life, after college
- “Do I go to Wall Street and make money, or do I work for the people?” - Barack worked as a
community organizer in some of the toughest neighborhoods on the south side of Chicago.
Helping young mothers find their voice and their power - folks who had a reason to be cynical
because government had forgotten them long ago. There is no one else in this race who can
claim that kind of commitment to people on the ground. No one. And I would think in a nation
like ours, - Barack, as Oprah said, is one of the most brilliant men you will meet in our lifetime.
Barack is more than ready. He’ll be ready today, he’ll be ready on day one, he’ll be ready in a
year from now, five years from now - he is ready. That is not the question. The question is:
What are we ready for? Wait, wait, wait - because we say we’re ready for change, we say we’re
ready for change, butcha see, change is HARD. Change will always be hard, and it doesn’t
happen from the top down. We do not get universal health care, we don’t get better schools
because somebody else is in the White House. We get change because folks from the grass
roots up decide they are sick and tired of other people telling them how their lives will be -
when they decide to roll up their sleeves and work. And Barack Obama will require you to
work. He is going to demand that you shed your cynicism, that you put down your division, that
you come out of your isolation, that you move out of your comfort zones, that you push
yourselves to be better, and that you engage. Barack will never allow you to go back to your
lives as usual - uninvolved, uninformed...We have young kids all over the world who are
looking to this nation, and they are trying to figure out who we are, and what we wanna
290 Barack H. Obama: The Unauthorized Biography
become. We have a chance, not just to make history, but we can change the world. We can
change the world - yes we can, yes we can, yes we can, yes we can, yes we can... (Michelle
Obama at UCLA, February 15, 2008)141
Several sayings in this are notable here. First of all, Michelle effectively evokes the real
problems of the inadequate healthcare and other material privations which have been and are the
last of the American people on there for decades of overall reactionary Republican domination. But
it is equally striking that she does not propose any concrete measures to deal with these problems in
the real world. If anything, she rather argues that it is impossible to solve these problems in the
world the way it is presently constituted. Her line is that solving social problems and economic
problems is impossible, because our souls are defective. So this means that we cannot solve any
problems until we proceed to a complete reformation of the human personality itself. This is what
she means when she raises the issue of broken souls. How then should the human personality be
reformed, in Michelle’s opinion? The reference to turning away from Wall Street seems to indicate
that a de-emphasis of materialism in favor of spiritual benefits is required. We need to give up our
cynicism and think about the poor, she says. Naturally, all of this sententious advice stands in the
sharpest contrast to the greed, rapacity, and social climbing of Michelle and Barky, who have
become rich by working for the foundations, and by serving the corrupt Chicago political machine.
But few of the excitable lemmings attending an Obama rally will have any idea about that. Rather,
Michelle goes on to claim that Barky has an absolute monopoly on the path to salvation: he is the
only anointed one whose touch can heal and repair the broken souls of the people. There is the
strong implication that the process of fixing the broken souls is a painful process which will require
some kind of sacrifice, most likely in the form of economic austerity. But not only austerity:
Obama, she warns, will require that the population be kept in a constant state of mobilization and
activity in the service of the transformation which he means to initiate. These are the main features
of a process which will need to a complete utopian transformation of the world. At this point, the
crowd intervenes with chanting, in the best Mussolini-D’Annunzio tradition.
Let us now illustrate some of these aspects of Michelle’s standard speech by citing formulations
she has used on other occasions. The standard stump speech must necessarily very slightly from
place to place, and these differences of formulation will give us a further opportunity to see what
Michelle has in mind. The uniqueness of Obama as a savior (or Mahdi) is a constant feature. Here
is one journalistic account: ‘Michelle Obama declared that her husband is a needed anecdote to a
troubled nation torn by war and struggles for opportunity. “Before we can fix our problems, we
have to fix our souls,” she said. “Our souls are broken in this nation. We have lost our way. And it
begins with leadership. It begins with inspiration.” And: “Barack Obama will require you to work.
He is going to demand that you shed your cynicism. That you put down your divisions. That you
come out of your isolation, that you move out of your comfort zone . . . Barack will never allow you
to go back to your lives as usual - uninvolved, uninformed.”’142
Obama always appears as the source of transfiguration and beatification of the drab, isolated,
and alienated individual lives of his followers, even though this process is accompanied by forms of
pain and sacrifice. Here is the same motif in a slightly different form: “We need to fix our souls,”
she said. “Our souls are broken in this nation. We have lost our way. And it begins with inspiration.
It begins with leadership.” And again, in yet another variation: “Before we can fix our problems, we
have to fix our souls...our souls are broken. It begins with LEADERSHIP. This race is about
CHARACTER. I am married to the only person in this race who has a chance of healing this
Nation.” (Michelle Obama, February 3, 2008)
VIII: “Our Souls Are Broken” - Michelle Obama, Postmodern Fascist Ideologue 291
The alleged uniqueness of Obama as the indispensable leader recurs again and again: Michelle
Obama also urged the crowd not to overlook the importance of inspiration and hope. “Our souls
are broken,” she said. “And right now we need some inspiration. Inspiration and hope are not
words. Everything begins and ends with hope. And the only person in this race who has a
chance of getting us where we need to be is Barack Obama.”
Sometimes the note of difficulty, sacrifice, and travail becomes more prominent, as here:
“We need a leader who’s going to touch our souls because you see, our souls are broken,”
Michelle Obama said. “The change Barack is talking about is hard, so don’t get too excited
because Barack is going to demand that you too be different.”
In medieval Europe, there was a tradition that a true King could cure diseases such as scrofula
with his mere touch alone: here we see Obama promoted to the level of such a sacral king, without
the benefit of the special ancient unctions which were stored in the French case in the cathedral of
Rheims. As a rule, the dominant notes of hope and change are tempered by many less prominent
references to austerity and sacrifice, leaving no doubt that there is no purgation of the broken soul
without pain:
‘Obama brought her husband’s message of hope and change to a standing-room-only crowd.
“Our souls are broken in this nation, and we need some inspiration and a whole lot of hope,”
she told a packed auditorium…. though Obama’s speaking style is generally more
conversational than that of her husband, she has her own loftier, more rhetorically aspirational
moments. “We need a different leadership because our souls are broken. We need to be
inspired...to make the sacrifices that are needed to push us to a different place,” she said. And,
toward the climax of her speech, she said, “Dreaming does count. You need to dream to realize
your possibilities.’143
At times, selected surrogates are permitted to join in the paean to Obama the savior, but Michelle
generally plays the role of the high priestess or Pythoness of the mystery cult of Barky. One such
surrogate was Caroline Kennedy, who was used to depict the apostolic succession of Obama from
the martyred Kennedy brothers. As Craig Crawford put it, the Kennedys had no choice but to pass
the torch to Obama, because their own kids were all in rehab. This account evokes such a liturgical
moment:
At UCLA, Caroline Kennedy called Obama a generational figure “who inspires me the way
people say my father inspired them. “It’s rare to have a candidate who can help us believe in
ourselves and tie that belief to the highest ideals,” said Kennedy, who said Obama stands for
“the future of our party and the future of our country.” Michelle Obama declared that her
husband is a needed anecdote to a troubled nation torn by war and struggles for opportunity.
“Before we can fix our problems, we have to fix our souls,” she said. “Our souls are broken in
this nation.”144
Incredibly enough, the question of broken souls or, more commonly, “wounded souls” is a
commonplace in the psychological and sociological literature about the genesis of mass movements
and their demagogic leaders. The dialectic of such movements commonly involves the promise of
the demagogue to provide solace and healing, or else violent revenge, for the damage suffered by
the battered souls of the rank and file. An example of this sort of thinking can be found in Dr.
Jerrold Post’s book, Leaders and Their Followers in a Dangerous World: The Psychology of
Political Behavior (Psychoanalysis and Social Theory) (Ithaca NY: Cornell University Press, 2004).
292 Barack H. Obama: The Unauthorized Biography
Dr. Post had worked for two decades as the head of CIA bureau charged with developing
psychological profiles of the leaders of foreign states and other targets of Langley. Ironically, Dr.
Post was interviewed by Sam Litzinger on WWWT radio in Washington DC in early May 2008 at
some length precisely about this question of wounded souls. Michelle Obama was thus revealed as a
fascist ideologue so cynical that she introduced the technical jargon of mass brainwashing into her
standard stump speech. It was clear that the intelligence community’s professional mind-benders
were an integral part of the Obama campaign apparatus, helping to churn out the demagogy about
hope for broken souls when they were touched by the new false messiah.
“A RENUNCIATION OF DEMOCRACY AND AN EMBRACE OF FASCISM”
The older American common sense would suggest that if your soul is broken, you probably need
a priest, or else a shrink. The idea that you would turn to a politician is a decidedly novel one, and
by all indications a sign of decadence and degeneracy in a culture which has been made ripe for
fascism by the degradation of eight years of Bush-Cheney neocon domination, false flag terrorism,
and senseless wars. But, whatever the cause, fascism is fascism and it must be denounced wherever
it is found. Those who call attention to the presence of fascism deserve credit, whatever their
motives, and however objectionable other aspects of their own outlook might be. We must
therefore thank Caroline Glick for having had the courage to write the following:
Speaking in February of the man she knows better than anyone else does, Michelle Obama said
that her husband, Illinois Senator and candidate for the Democratic Presidential nomination
Barack Obama, is the only candidate for president who understands that before America can
solve its problems, Americans have to fix their “broken souls.” She also said that her husband’s
unique understanding of the state of souls of the American people makes him uniquely qualified
to be President. Obama can do what his opponent in the Democratic race Senator Hillary
Clinton, and Senator John McCain, the presumptive Republican presidential nominee, cannot
do. He can heal his countrymen’s broken souls. He will redeem them. But then, saving souls is
hard work, and Mrs. Obama won’t place the whole burden on her husband. He’ll make the
Americans work for him. As she put it, “Barack Obama will require you to work. He is going to
demand that you shed your cynicism. That you put down your divisions. That you come out of
your isolation, that you move out of your comfort zone. That you push yourselves to be better.
And that you engage. Barack will never allow you to go back to your lives as usual, uninvolved,
uninformed.” At base, Mrs. Obama’s statement is nothing less than a renunciation of
democracy and an embrace of fascism. The basic idea of liberty is that people have a natural
right to live their lives as usual and to be uninvolved and uninformed. And they certainly have a
right to expect that their government will butt out of their souls.’ (Caroline Glick, “Obama the
Savior,” Jerusalem Post, April 22, 2008)
Neocon or not, Ms. Glick is precisely on target. Perhaps in the near future American politics will
be divided into the broken souls faction, and another faction which will demand that government
butt out of their souls. It would be better to divide over real economic issues, and Obama has been
deployed among us for the precise purpose of making sure that such a reality-based economic
debate does not happen.
“FEEL – DON’T THINK! … BE VISCERAL!”
Another important window into Michelle Obama’s fascist ideology is provided by a report of the
advice she gave her husband early in the primary season. Here we read the following:
VIII: “Our Souls Are Broken” - Michelle Obama, Postmodern Fascist Ideologue 293
‘On a conference call to prepare for a recent debate, Barack Obama brainstormed with his top
advisers on the fine points of his positions. Michelle Obama had dialed in to listen, but finally
couldn’t stay silent any longer. “Barack,” she interjected, “Feel — don’t think!” Telling her
husband his “over-thinking” during past debates had tripped him up with rival Hillary Clinton,
she said: “Don’t get caught in the weeds. Be visceral. Use your heart — and your head.”’
(Monica Langley, “Michelle Obama Solidifies Her Role in the Election,” Wall Street Journal,
February 11, 2008)
This advice spotlights another indispensable aspect of fascist ideology, and that is the rejection
of reason and of thinking in general in favor of irrational intuition. In the modern US Hollywood
culture, the irrational elements are so pervasive that the average person has a very hard time
remembering the insistence on mass irrationality on the part of all the European fascist movements
of the first half of the 20th century. In those days, fascist demagogues and international bankers
recommended that the masses think with their blood; “May the Force be with you” is a more recent
Hollywood version of something quite similar. German fascists lived in the world of Wagner’s
Ring cycle, and cultivated myth, superstition, astrology, and occult folklore. Over the past decades,
Hollywood has churned out The Lord of the Rings, Harry Potter, and an avalanche of mummies,
vampires, witches, mutants, warlocks, super-heroes, and wizards. The latest Indiana Jones movie
now has the Russians as the enemy, just in time for the Brzezinski Plan. Those saturated in such
irrationalist banality have a very hard time resisting irrationality when it appears in political form.
Telling somebody to be visceral means telling them to think with their bowels or with their guts,
not with their head. This is very close to the classic fascist approach which is to tell them to think
with their blood. “Think with your blood” has come into English-speaking culture directly through
the translations of speeches by both Hitler, Mussolini, and their followers. It has also been
propagated by the works of a writer who is better known as a pornographer than as a fascist, but
who had very pronounced fascist sympathies which his literary promoters have found it convenient
to sweep under the rug: we mean of course D.H. Lawrence, the Nietzschean and fascist sympathizer
whose novel Lady Chatterley’s Lover was all the rage on American campuses a half century ago.
Lawrence was interested in the theme of blood consciousness especially as it related to erotic
mysticism and to his own pornographic vision in general. More important precursors of the theory
of blood consciousness which Michelle Obama seems to profess include first of all the Italian ultranationalist
provocateur and British agent Giuseppe Mazzini, who taught that the individual was in
the process of disappearing from world history to be replaced by a new protagonist in the form of
the ethnic or racial group, the popolo. Another important precursor was the German philosopher
Johann Gottlieb Fichte, a contemporary of Napoleon Bonaparte. Fichte’s concept of the Volksgeist
meant that every national grouping had its own characteristic mental outlook and way of thinking
which was not commensurable with the mentalities of other ethnic groups. This tended to
undermine the notion of universal reason as a general human characteristic or potential. A third
precursor to Michelle’s outlook can be found in National Socialism, where it was claimed that the
positive content of world culture was uniquely the product of the Germanic race, and that the
method of thinking characteristic of all other ethnic groups was inherently inferior, destructive, and
worthy of extirpation.
For the fascist ideologues, blood consciousness meant something slightly different: blood for
them meant race, and blood consciousness accordingly indicated a mental outlook that was
determined by one’s own race-based existence. For these fascists, “think with your blood” was a
way of demanding that you think like a member of your own ethnic or racial tribe. But today, the
general US public knows almost nothing about the “think with your blood” side of fascism, perhaps
294 Barack H. Obama: The Unauthorized Biography
because it is too close for comfort to the prevailing foundation-backed racial identities which
require certain groups to act black, act like la raza, and so forth. A few examples will be useful to
show how big a role the “think with your blood” slogan played in fascist agitation, as part of the
more general fascist attack on human reason and critical thinking, which the foundations continue
into our own time. Here blood consciousness finds its place in any array of better known fascist
slogans:
Slogans like “Who has betrayed us, the Social Democrats,” “The Jews are our Misfortune,”
“Think with your Blood,” “One Nation, One Race, One People,” are the slogans of fascist
movements….(Norman Markowitz, “Tom DeLay’s Kampf,” political affairs.net, April 9,
2005)145
Markowitz observes, in a totally different context and before Obama burst upon the scene,
Ultra-rightists and open Fascists are in effect cheap political crooks whose gaudy patter is
aimed at covering up their corruption, crimes, and drive to establish dictatorial political power.
Sing “God Bless America” (or “Deutschland Uber Alles,” or whatever) hate Communists,
Socialists, liberals, Jews, Muslims, or whomever is convenient in your political market, and
“think with your blood,” a Mussolini slogan that translates as think with your emotions and
ethnicity, not with your head. 146
The prominence of thinking with your blood as a fascist concept has also not been lost on
competent academic writers on the subject, at least until Michelle came along. A recent academic
survey notes:
In this respect, fascism is a reactionary ideology. It took shape in the years following World
War I as a reaction against the two leading ideologies of the time, liberalism and socialism.
Unhappy with the liberal emphasis on the individual and the socialist emphasis on contending
social classes, the fascists provided a view of the world in which individuals and classes were to
be absorbed into an all-embracing whole-a mighty empire under the control of a single party
and a supreme leader. Like the Reactionaries of the early 1800s, they also rejected the faith in
reason that they thought formed the foundation for liberalism and socialism alike. Reason is less
reliable, both Mussolini and Hitler declared, than intuitions and emotions – what we sometimes
call “gut instincts.” This is why Mussolini exhorted his followers to “think with your blood.”
(Terrence Ball and Richard Dagger, Political Ideologies and the Democratic Ideal (New York:
Longman Publishing, 1998), chapter 7; Fascism.)147
Other students of fascism have stressed the pervasive irrationalism, often tinged with
romanticism, of these movements, an irrationalism that is emphatically shared by Obama:
At its best this way of thinking — or rather, of feeling — is a usually harmless romanticism. At
its worst, and not uncommonly, lies the darker version of romanticism that resembles — to
many scholars, is the essence of — fascism. One such scholar was the great British philosopher,
Isaiah Berlin. According to this review (critical review, by the way) of his collection of essays,
The Roots of Romanticism (Princeton, 1999), Berlin argued that Romanticism’s emphasis on
passion over reason represented “a rupture with the Enlightenment’s commitment to reason and
objectivity.”148
Irrationalism in the United States received a huge boost 40 years ago with the failure of the
political movements of the 1960s, and the arrival – during the phase of acute demoralization,
VIII: “Our Souls Are Broken” - Michelle Obama, Postmodern Fascist Ideologue 295
disorientation, and despair that followed during the 1970s, of a tsunami of irrationalism under the
guise of the so-called counter culture:
The counter culture’s tie-in with Romanticism is important for one particular reason. In its latest
stages, Romantic culture degenerated into one of the central ingredients of fascism: “Feeling is
all,” Goethe’s Faust proclaimed: and a little more than a century later Hitler, almost
paraphrasing D. H. Lawrence, provided a distorted echo: “Think with your blood.” (Theodore
Roszak, “Youth and the Great Refusal” (1968)149
Has Michelle Obama been reading the classics of fascism? And if not, where could she have
gotten the specific form of the ideology she is expressing with her order to Barky to “be visceral”?
Maybe we should look for the obvious: the Reverend Jeremiah Wright, foundation-funded racist
provocateur. Wright offered the elements of a theory of Afrocentric or black-only irrationalism in
his speech to an NAACP dinner in Detroit on April 27, 2008, just before his speech to the National
Press Club which impelled Obama to dump him. Here Wright outlined a tradition of writers going
back to Carter G. Woodson, and then to
…two brilliant scholars and two beautiful sisters, both of whom hail from Detroit in the fields
of education and linguistics, Dr. Janice Hale right here at Wayne State University, founder of
the Institute for the Study of the African-American Child, and Dr. Geneva Smitherman formerly
of Wayne State University now at Michigan State University in Lansing. Hale in education and
Smitherman in linguistics. Both demonstrated 40 years ago that different does not mean
deficient.150
Janice Hale’s book Black Children (1986) is billed the Johns Hopkins University Press in these
terms:
As African-American children are acculturated at home and in the African-American
community, they develop cognitive patterns and behaviors that may prove incompatible with
the school environment. Cultural factors produce group differences that must be addressed in
the educational process.” Wright’s reading of Hale is summarized below. Smitherman travels in
the world of what the average person would possibly recognize as Ebonics, the attempt to
codify an African-American dialect or ghetto language of substandard grammar and limited
vocabulary (especially in the hard sciences) which would turn the black community in on itself,
cut off its channels of communication with the wider world, and render children speaking
Ebonics unemployable for life in the twenty-first century, when not just internationally
intelligible standard English, but one or two foreign languages will be in demand.151
Ebonics and its variations represents yet another weapon in the foundation and ruling class
armory to impose self-enforced separation, backwardness, and poverty on the black community.
Here is the left brain-right brain “race science” theory as expounded by Wright to the NAACP:
Dr. Hale’s research led her to stop comparing African-American children with European-
American children and she started comparing the pedagogical methodologies of African-
American children to African children and European-American children to European children.
And bingo, she discovered that the two different worlds have two different ways of learning.
European and European-American children have a left brained cognitive object-oriented
learning style and the entire educational learning system in the United States of America, back
in the early ‘70s, when Dr. Hale did her research, was based on left brained cognitive object
oriented learning style. Let me help you with fifty cent words. Left brain is logical and
analytical. Object oriented means the student learns from an object. From the solitude of the
296 Barack H. Obama: The Unauthorized Biography
cradle with objects being hung over his or her head to help them determine colors and shape to
the solitude in a carrel in a Ph.D. program stuffed off somewhere in a corner in absolute
quietness to absorb from the object. From a block to a book, an object. That is one way of
learning, but it is only one way of learning. African and African-American children have a
different way of learning. They are right brained, subject oriented in their learning style. Right
brain that means creative and intuitive. Subject oriented means they learn from a subject, not an
object. They learn from a person. Some of you are old enough, I see your hair color, to
remember when the NAACP won that tremendous desegregation case back in 1954 and when
the schools were desegregated. They were never integrated. When they were desegregated in
Philadelphia, several of the white teachers in my school freaked out. Why? Because black kids
wouldn’t stay in their place. Over there behind the desk, black kids climbed up all on them.
Because they learn from a subject, not from an object. Tell me a story. They have a different
way of learning. Those same children who have difficulty reading from an object and who are
labeled EMH, DMH and ADD. Those children can say every word from every song on every
hip hop radio station half of who’s words the average adult here tonight cannot understand.
Why? Because they come from a right-brained creative oral culture like the (greos?) [sic] in
Africa who can go for two or three days as oral repositories of a people’s history and like the
oral tradition which passed down the first five books in our Jewish bible, our Christian Bible,
our Hebrew bible long before there was a written Hebrew script or alphabet. And repeat
incredulously long passages like Psalm 119 using mnemonic devices using eight line stanzas.
Each stanza starting with a different letter of the alphabet. That is a different way of learning.
It’s not deficient, it is just different. Somebody say different. I believe that a change is going to
come because many of us are committed to changing how we see other people who are
different. What Dr. Janice Hale did in the field of education, Dr. Geneva Smitherman did in the
field of linguistics.152
When Wright says the right brain is intuitive, he means irrational. When he says the left brain is
logical, he is attacking reason. Not content with destroying the unity of world history by carving it
up into a multitude of hermetically sealed cultures in the manner of Oswald Spengler, modern
foundation-funded “race science” also attempts to demolish the unity of human reason. In reality,
human reason is the single invariant factor which can be observed at work in every society from the
emergence of humans down to the present day. It is a true universal, necessary and present in every
individual. It is present in Plato and in Confucius, in the Egypt of Akhnaton and in the Baghdad of
Haroun al Rashid, and it is neither eastern nor western, neither northern nor southern, neither black
nor white. It is present from Thales to Dr. George Washington Carver. It belongs to no race, and has
no color.
To attempt to mutilate or deform this universal reason is the greatest act of vandalism against
humanity that is possible, and it is likely to bring on catastrophic consequences that go far beyond
the world of ideas. This is what the foundation-funded racists, obscurantists, irrationalists, and
mythmongers are attempting to do. Wright is their publicist, and Barack and Michelle are the
fanatical cadre they have formed. Do Hale and Smitherman know that they are converging with
Gumplowitz, Houston S. Chamberlain and Alfred Rosenberg? They may or may not, but that is
what they are doing. Foundation-funded race theory is a desolate path that leads into the abyss of
blood consciousness. It should also be clear that the left brain-right brain mumbo-jumbo is the
mirror image of the Robert Herrnstein - Charles Murray Bell Curve racism, but decked out in
radical rhetoric to make it seem liberating and thus acceptable to the black community.
VIII: “Our Souls Are Broken” - Michelle Obama, Postmodern Fascist Ideologue 297
When Craig Venter went to the White House in 2000 to inform President Clinton that modern
science had mastered the human genome, he told Clinton that one of the results of his research was
that no such thing as race exists. President Clinton declared, “After all, I believe one of the great
truths to emerge from this triumphant expedition inside the human genome is that in genetic terms
all human beings, regardless of race, are more than 99.9% the same.” At the same press conference,
Craig Venter, president and CEO of Celera Genomics, reinforced Clinton’s message, asserting that
“the concept of race has no genetic or scientific basis.”153 Race is a fiction, an empty construct, a
pure mystification. The neurological differences that Wright asserts are the result of poverty and
exclusion, and can be dealt with by eliminating these factors.
“GNOSTIC” ELEMENTS IN THE OBAMA AGITATION
Another way of analyzing Michelle Obama’s speeches about the problem of broken souls is to
understand that she is claiming for political activity in government a much wider role than has
usually been the case in this country. Michelle Obama is trying to sell politics as a means of
reaching goals which have normally been associated with religion. The fixing or healing or making
whole of broken souls is the task of Paradise or Nirvana, and not of the politically rally or the ballot
box. The traditional view is the one expressed by St. Paul:
Charity never faileth: but whether there be prophecies, they shall fail; whether there be tongues,
they shall cease; whether there be knowledge, it shall vanish away. For we know in part, and we
prophesy in part. But when that which is perfect is come, then that which is in part shall be done
away. When I was a child, I spake as a child, I understood as a child, I thought as a child: but
when I became a man, I put away childish things. For now we see through a glass, darkly; but
then face to face: now I know in part; but then shall I know even as also I am known.154
According to this, it is only in the life of the world to come that the fragmentation, mutilation,
and alienation of this earthly vale of tears can be overcome. Virtuous pagans could and did have
wisdom, justice, temperance, and fortitude, but faith, hope and charity are specifically Christian
virtues – especially, for our purposes here, hope. Michelle Obama makes a radically different claim,
suggesting that the magical powers possessed by her husband can realize and accomplish in the
political form, on earth, and soon the sorts of deep changes that are usually reserved for heaven.
The political philosopher Eric Voegelin applied the label of Gnosticism to this kind of political
culture. Others suggested that the fascists could be called pagan or neopagan, but Voegelin insisted
on the term Gnostic, since he saw modern politicians in Europe as holding out the promise of
specifically Christian forms of Paradise or heaven (referred to as the eschaton), but brought down to
earth in the form of a political utopia thought to be within reach if only state power could be seized
and held.
A pre-Obama standard reference summary of Voegelin’s leading concept may make these
connections clear:
Voegelin was a political philosopher known most widely in America for The New Science of
Politics, his 1952 University of Chicago Walgreen lectures. In them Voegelin argued that
modern ideological movements such as communism and fascism repeated the gnostic heresy of
early Christianity. Early Christian gnosticism separated a person’s “spiritual” elements—
claimed to be real—from his or her “material” parts—claimed to be unreal. Jesus was perfect
because his spirit—his reason and motivation—was perfect. Gnostics believed humans who
grasped this truth could also achieve perfection on earth and not have to wait for the eschaton.
Voegelin argued that in modern times gnosticism has become politicized. Politicized gnosticism
298 Barack H. Obama: The Unauthorized Biography
asserts that personal and social perfection is possible. Such perfection, however, usually
requires a few sages who understand the truths and who must sometimes rather ruthlessly and
violently impose “perfection” on others. Both fascism and communism, according to Voegelin,
are gnostic-like attempts to “immanentize the eschaton;” that is, to overcome the limitations,
anxieties, and uncertainties of human experience for an enlightened vanguard to build a “heaven
on earth.” (A wonderful theory, its implementation always goes astray.) One destroys real
democracy and politics in the process of imposing a “perfect” social vision. (Wikipedia)
Pope Benedict XVI Ratzinger has made the following observations about communist ideology,
which are also highly relevant to our current discussion of a fascist mentality: “...where the Marxist
ideology of liberation had been consistently applied, a total lack of freedom had developed, whose
horrors were now laid bare before the eyes of the entire world. Wherever politics tries to be
redemptive, it is promising too much. Where it wishes to do the work of God, it becomes not divine,
but demonic.” These remarks are included in Ratzinger’s “Liberation Theology” (2007), a critique
of currents in theology which share a great deal with the James Cone “Black liberation theology”
taught by the foundation-funded racist provocateur Jeremiah Wright, who is evidently a special
favorite of Michelle.
THE SAVIOR
The gnostic mantle of the Obama campaign envelops both Barack and Michelle, each in their
assigned role. Obama supporters are often apolitical or anti-political. They are fans, groupies,
cultists, enthusiasts, adepts, and they avidly crowd around the divine couple. The great violinist
Yehudi Menuhin wrote that, having witnessed both modern rock concerts and Nazi party rallies, he
could sense something in common between the two, and concluded that rock concerts might well
represent a preparation for authoritarianism and fascism later on.
The first generations that cannot remember a world without orgiastic rock concerts and mosh
pits are also the ones that provide Obama with his idolaters:
“People don’t come to Obama for what he’s done in the Senate,” says Bruce Reed, president of
the centrist Democratic Leadership Council. “They come because of what they hope he could be.”
What Obama stands for, if anything, is not yet clear. Everywhere he goes he is greeted by thrilled
crowds, trailed constantly by a reporter from The Chicago Tribune who is writing a book about the
senator with a preliminary title so immodest that it embarrassed even Obama’s staff: The Savior.
The danger here is that the public has committed the cardinal sin of political love, forcing Obama
onto the national stage before knowing him well enough to gauge whether he’s ready for it. The
candidate they see before them is their own creation — or, rather, it is the scrambling of a skinny,
serious, self-reflective man trying to mold his public’s conflicted yearnings into something greater.
“Barack has become a kind of human Rorschach test,” says Cassandra Butts, a friend of the
senator’s from law school and now a leader at the Center for American Progress. “People see in him
what they want to see.” (Wallace Wells, Rolling Stone)
The London Sunday Telegraph reported: “Barack Obama criticized over ‘cult-like’ rallies.” The
article went on to report: “for a growing number of Barack Obama skeptics, there is something
disturbing about the adulation with which the senator and Democratic presidential frontrunner is
greeted as he campaigns for the White House – unnervingly akin to the hysteria of a cult, or the
fervour of a religious revival.”
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A recent London Times story (also appearing in The Australian) was headlined: “Early signs of a
Barack-lash.” Correspondent James Bone wrote:
The American presidential candidate who can do no wrong is experiencing the first signs of dip
in popularity, called the “Barack-lash”. Barack Obama has become a darling of the internet
generation since he started his underdog campaign to triumph over the wife of a former
president and become the first black leader of the free world. Millions downloaded a YouTube
video of his “Yes We Can” speech set to music by Black Eyed Peas front man will.i.am with
celebrity friends including actors Scarlett Johansson and Amber Valletta. But Obama’s
popularity has begun to rebound on him now that he has emerged as the Democratic
frontrunner. Even supporters are questioning whether he can really deliver on all their hopes.
Mathew Honan, a freelance writer and contributor to Obama’s campaign, set up a website
called www.obamaisyournewbicycle.com after his wife, Harper, a nurse and avid cyclist, began
exhibiting symptoms of “Obama-mania”. Within two weeks there were more than 2.3 million
visits to the site, which carries messages such as: “Barack Obama escorted your Gramma across
the street”; “Barack Obama baked you a pie”; “Barack Obama dedicated a song to you”;
“Barack Obama carries a picture of you in his wallet”; and “Barack Obama remembered your
birthday”. Website obamamessiah.blogspot.com asks “Is Obama the Messiah?” and boasts a
“transfiguration” scene of the Christ-like candidate addressing supporters from a staircase. In a
section on “Obama Conversion Stories”, it quotes author Deepak Chopra calling Obama’s
candidacy “a quantum leap in American consciousness”. The SenatorObamas.com site portrays
him in a variety of guises, from “Obamarama” to the nightwear-clad “Pajamabama”. Before the
Hollywood writers’ strike, Obama won sympathy on the widely watched Saturday Night Live
television comedy show on November 3, playing himself as a guest at a party thrown by the
presumptive Democratic nominee Hillary Clinton and her husband, Bill. With the writers back
at work, Saturday Night Live returned to lampoon the Obama media obsession. A white actor
played Obama in a sketch parodying the latest Democratic debate. The moderator confessed she
had been “clinically diagnosed as an Obamamaniac”. The New York Times columnist David
Brooks has diagnosed the mood swing experienced by many liberals as “Obama Comedown
Syndrome”. “The afflicted had already been through the phases of Obamamania — fainting at
rallies, weeping over their touch screens while watching Obama videos, spending hours making
folk crafts featuring Michelle Obama’s face,” Brooks writes. “These patients had experienced
intense surges of hope-amine, the brain chemical that fuels euphoric sensations of historic
change and personal salvation. But they found that as the weeks went on, they needed more and
purer hope injections just to preserve the rush. “They wound up craving more hope than even
the Hope Pope could provide, and they began experiencing brooding moments of suboptimal
hopefulness. “Anxious posts began to appear on the Yes We Can! Facebook pages. A sense of
ennui began to creep through the nation’s Ian McEwan-centred book clubs.” (James Bone,
London Times, February 25, 2008)
OBAMA: “LOOK AT THESE FOLKS WHO ARE BEING DUPED”
Obama tried to fight back against the “cult” description, and NBC’s Lee Cowan reported from
Toledo that there was
“…a subtle new argument that Barack Obama’s been using ... that’s starting to get some
traction.” “He says it’s not so much what Hillary Clinton says about him by way of criticism,”
Cowan explained, “but what she’s implying about his supporters that he says should get them
pretty riled up.” Obama first introduced this argument at Tuesday’s debate in Austin, where he
300 Barack H. Obama: The Unauthorized Biography
stated, “The implication is, the people who’ve been voting for me or involved in my campaign
are somehow delusional.” Obama’s stump speech was revamped to include the same argument.
“Some of these folks make fun of y’all,” he told one audience. “They say, ‘Y’all look at these
folks who are being duped.’“ “However they’re characterized, they are certainly energetic,”
Cowan concluded, seeming uncertain just what to make of Obama’s supporters. “And the more
they are criticized for that enthusiasm, the more it just seems to galvanize their cause.”’ There
was talk of Hare Krishna and the Manson family. Obama was mentioned as both the Messiah
and the anti-Christ, with elaborate web sites devoted to both themes. A slate.com editor noticed
that Obama’s rhetorical style was similar to that of Mussolini: ‘The deputy editor of a major
online magazine spent time in a weekly podcast explaining how the style of Senator Barack
Obama shares much in common with the speech of fascist dictators like Benito Mussolini.
“That’s slightly fascistic,” David Plotz, the deputy editor at Slate.com said in the magazine’s
weekly podcast when one of his fellow editors brought up Obama’s style. “That’s a very, like,
let’s rally the nation. I don’t want to be rallied.” After his fellow Slate editors lightly gibed him
for his statement, he continued the point: “My brother who is an academic wrote this wonderful
book about crowds, and crowd theory. And one of the sort of lessons that he’s always imparted
to me is just that crowds are terrifying. Crowds are horrifying for the most part because they
have a will of their own, and they act independently of rationality. And I think that Obama
relies hugely on that. That’s not to say, I don’t, I still support him, but I don’t like that fascistic,
I like him not for the fascistic elements of his candidacy, which I think are profound.”’ (Michael
Roston, “Slate editor calls Obama speech style ‘fascistic,’” Rawstory, February 4, 2008)
Right-wing Fox News Radio host Tom Sullivan took a call from a listener who stated that when
listening to Barack Obama speak, “it harkens back to when I was younger and I used to watch those
deals with Hitler, how he would excite the crowd and they’d come to their feet and scream and
yell.” Sullivan then played a “side-by-side comparison” of a Hitler speech and an Obama speech.
Sullivan mimicked the crowd during both speeches, yelling, “Yay! Yay!” Radio reactionary
Michael Savage agreed. It would be easy to disregard these comments because the sources have
discredited themselves so thoroughly in their support of Bush and his lunatic foreign wars. But then
again, gold is sometimes where you find it.
IRRATIONALIST MASS MOVEMENTS TARGET WOMEN
No account of the success of Mussolini and his imitators as mob orators would be complete
without some mention of the special hypnotic power which fascist rhetoric and the personality of
the fascist leader exercised on women. Some of the most enthusiastic swooners at fascist rallies
were women, many of whom had a special devotion for Il Duce. Obama seems to have acquired an
instinctive awareness of this set of issues from his own mother. If we are to judge by the
prominence that this episode receives in Obama’s memoirs, we must conclude that one of the
formative experiences of Obama’s life was the moment when his mother revealed to him that she
found Harry Belafonte to be sexually attractive. This experience seems to have furnished Obama
with the belief that he is able to exercise an almost hypnotic appeal over middle-aged white woman,
and his campaign has tried very hard to play this card, including through the use of special focus
groups. Here is the episode in question, as described in a recent puff piece of adulation offered by a
popular magazine to the Perfect Master:
There is an amazingly candid moment in Obama’s autobiography when he writes of his
childhood discomfort at the way his mother would sexualize African-American men. “More
than once,” he recalls, “my mother would point out: ‘Harry Belafonte is the best-looking man
VIII: “Our Souls Are Broken” - Michelle Obama, Postmodern Fascist Ideologue 301
on the planet.’” “What the focus groups his advisers conducted revealed was that Obama’s
political career now depends, in some measure, upon a tamer version of this same feeling, on
the complicated dynamics of how white women respond to a charismatic black man. “I
remember when we realized something magical was happening,” says Obama’s pollster on the
campaign, an earnest Iowan named Paul Harstad. “We were doing a focus group in suburban
Chicago, and this woman, seventy years old, looks seventy-five, hears Obama’s life story, and
she clasps her hand to her chest and says, ‘Be still, my heart.’ Be still, my heart — I’ve been
doing this for a quarter century and I’ve never seen that.” The most remarkable thing, for
Harstad, was that the woman hadn’t even seen the videos he had brought along of Obama
speaking, had no idea what the young politician looked like. “All we’d done,” he says, “is tell
them the Story.” From that moment on, the Story became Obama’s calling card, his political
rationale and his basic sale. Every American politician has this wrangle he has to pull off,
reshaping his life story to fit into Abe Lincoln’s log cabin. Some pols (John Edwards, Bill
Clinton) have an easier time of it than others (George Bush, Al Gore). Obama’s material is
simply the best of all. What he has to offer, at the most fundamental level, is not ideology or
even inspiration — it is the Story, the feeling that he embodies, in his own, uniquely American
history, a longed-for break from the past. “With Obama, it’s all about his difference,” says Joe
Trippi, the Democratic consultant who masterminded Howard Dean’s candidacy. “We see in
him this hope that the country might be different, too.”’ (Wallace Wood, Rolling Stone)
Obama’s handlers have devoted much special study to enhancing their candidates appeal among
women, specifically white women, and even more specifically middle-aged white women. This has
included attempts to capitalize on sexual tensions across racial lines, obviously a big issue for
Obama’s mother, and the phenomenon evoked by one blogger who observed about Obama:
‘Years later, when he’s working on Wall Street, he’s creeped out by his visiting mother’s
insistence on seeing her favorite film, the 1959 Brazilian art-house classic “Black Orpheus.” He
belatedly realizes that his very fair-skinned mother is sexually attracted to dark men. He pompously
intones, “The emotions between the races could never be pure; even love was tarnished by the
desire to find in the other some element that was missing in ourselves. Whether we sought out our
demons or salvation, the other race would always remain just that: menacing, alien, and apart.”’
Here is a description of the results of some of Obama’s white woman focus groups:
What the focus groups his advisers conducted revealed was that Obama’s political career now
depends, in some measure, upon a tamer version of this same feeling, on the complicated
dynamics of how white women respond to a charismatic black man. Early in his run for the U.S.
Senate in 2004, Obama’s pollsters discovered that women loved him, especially nice white
ladies who like personalities more than politics and definitely don’t like political arguments.
Then, running preliminary polls, his advisers noticed something remarkable: Women responded
more intensely and warmly to Obama than did men. In a seven-candidate field, you don’t need
to win every vote. His advisers, assuming they would pick up a healthy chunk of black votes,
homed in on a different target: Every focus group they ran was composed exclusively of
women, nearly all of them white.’ (Wallace-Wells, Rolling Stone) But these same middle aged
ladies were not happy with Jeremiah Wright, Bill Ayers, Bernardine Dohrn, and Anton Rezko,
and their view of Barky began to change. By late July 2008, Dick Morris was arguing that
Obama’s greatest vulnerability was his failure to convince older women to vote for him. Recent
national polls show Obama with just a 40% favorable ratio among white voters. “He is clearly
302 Barack H. Obama: The Unauthorized Biography
hitting up against some substantial sales resistance, particularly among middle aged and older
white women,” Morris argued.155
FEMINIST RENEGADES FOR OBAMA
The internet is now replete with women who are eager to recount their sexual fantasies about
Obama. Here we can see some of the pathos which Obama’s cynical handlers and controllers are
determined to exploit in order to seize power:
Have you ever gone through a really dry period sexually? At first you get angry that you’re
being neglected and ignored, and you act out. Then one day you wake up with a sense of
nonchalance and you start to marvel at how much you’re getting done, and how much easier it
is not to care. And then... one day, maybe a stranger comes and begins to romance you and
strokes your hair in a sort of contemplative way, uttering the most delightful insights. He
touches your hand softly and then a little more firmly, awakening the feelings that you thought
you’d left behind, and then you start speaking really poetically and hearing melodies and then
suddenly you WANT IN! You want back in the game and you think ‘spring is here’... YES WE
CAN!’ (Lili Haydn, “Why Obama is Like a Desert Lover,” February 29, 2008)
Although those involved will not appreciate the suggestion, it may well be that these focus
groups and the tactics developed from them have something to do with the failure of many feminist
leaders to honor their most obvious commitment and support Senator Clinton for president, turning
instead to the arch-manipulator Obama. One massive defection by these erstwhile feminists took
place at the beginning of February, and evoked a puff piece from the Huffington web site which
announced:
“New York Feminists for Peace and Barack Obama,” an organization of more than 100 New
York feminist leaders released a joint statement Sunday afternoon criticizing Hillary Clinton
and supporting Obama for president. Clinton’s support for the war in Iraq was the leading
reason she lost the support of the group. Those endorsing Obama include longtime peace
activist Cora Weiss; Katha Pollitt, columnist for The Nation; Pulitzer-prize winning New York
Times writer Margo Jefferson; award-winning women’s rights historians Alice Kessler Harris
and Linda Gordon; Barbara Weinstein, president of the American Historical Association, and
Ellen P. Chapnick, Dean for Social Justice Initiatives at Columbia Law School. Susan Sarandon
and Francis Fox Piven signed on Monday.”
MASTERS OF VENOM: THE OBAMA ATTACK MACHINE
It should also be mentioned that female critics of Obama, starting with Senator Clinton, Chelsea
Clinton, and Geraldine Ferraro, have received especially brutal treatment by the Obama aversive
attack apparatus. Here is a testimonial to this effect by the well-known writer and feminist Erica
Jong:
Ever since I wrote an article in the Washington Post ten days ago, I’ve been getting love letters
from women and super-smart men and brickbats from the Hillary-Haters. Unfortunately the
Hillary-Haters are in charge. They monopolize the networks, the newspapers, the talk shows —
both radio and TV. They are crossing their legs for fear of castration. They are wearing the
body armor our troops never got. Or got too late to matter. They are determined that a woman
will not prove herself competent as Commander in Chief. Patriarchy: 1000, Hillary: 0.”156
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LEFT CIA FOR OBAMA
Just as Lenin praised Mussolini from afar, all kinds of extremist political movements today have
shown a fascination with Obama, if only because of the promise he holds out to them that the US
will soon undergo a huge and crippling internal convulsion. One such admirer is President Danny
Ortega of Nicaragua, the radical-chic former Sandinista leader who was infamous for making his
shopping trips to procure designer sunglasses into his top priority, at international conferences
where he was supposed to be working for his country and people. If Danny Ortega survives today, it
is manifestly because he has made his deal with the CIA and has accepted the status of a radical
asset operating under anti-US cover within the bounds marked out for him by the State Department.
On February 14, 2008, Danny Ortega endorsed Obama, saying that the senator’s presidential bid is
a “revolutionary” phenomenon in the United States:
“It’s not to say that there is already a revolution under way in the U.S. ... but yes, they are
laying the foundations for a revolutionary change,” Ortega, described Obama as a spokesman
for the millions of Central American and Mexican citizens who migrate to the U.S., and said he
has “faith in God and in the North American people, and above all in the youth, that the
moment of great change in the U.S. will come and it will act differently, with justice and
equality toward all nations.”
The radical chic Ortega is out of touch. US Hispanics, except those on the foundation payroll,
have no love for Obama.
Obama also has the endorsement of the New Black Panther Party. ‘His website has a link to the
“New Black Panther party which has endorsed his run for the Presidency. From the website: “Why I
support Barack Obama: Barack Obama represents “Positive Change” for all of America. Obama
will stir the “Melting Pot” into a better “Molten America.”’157 This endorsement was expunged
during one of the frequent Orwellian purges which Barky has to carry out from time to time as he
morphs from one political profile into another.
MEDIA WHORES FOR OBAMA
If fascism is coming to the United States, the corrupt corporate media must bear a good deal of
the responsibility. During the 2008 primaries ordinary Americas, especially women, became aware
as never before that the television networks are not news organizations, but rather purveyors of
mass brainwashing. Reporters became the lightning rods for outbursts of popular rage:
ABC’s Kate Snow tells me that members of the public often bear down on her when they see
her TV mike, cursing her out as a stand-in for Tim Russert, even though he is at NBC. “They
feel we’re the people taking her down,” she said. (Tina Brown, Newsweek, 17 March 2008)
This was before the death and canonization of Russert, who was nothing more than another
sleazy propagandist among many. As a result of the media vilification of Senator Clinton, the
potential for a resistance to fascism on the part of women has surely increased: ‘Cynthia Ruccia,
a grass-roots political organizer in Columbus, told me that in these last beleaguered weeks,
women started showing up in waves at Clinton headquarters—women who told her they had
never volunteered in a campaign before. “There was just an outpouring about the way she was
being treated by the media,” Ruccia said. “It was something we hadn’t seen in a long time. We
all felt, as women, we had made a lot of progress, and we saw this as an attack of misogyny that
was trying to beat her down.”’ One leading exponent of New Age and other irrationalism for
consumption by women is Oprah Winfrey, whose ratings fell precipitously after she had
304 Barack H. Obama: The Unauthorized Biography
conducted a public fling with Obama, especially because of resentment from women over this
betrayal. One of Oprah’s previous darlings had been the writer James Frey, who had marketed a
fictional account as a real first person narrative of actual events. With Frey and Obama, Oprah
had struck out twice in a row. Women were appalled: “Even Oprah abandoned them when she
opted for Obama. Am I alone in suspecting that TV’s most powerful 54-year-old woman just
might have endorsed him so fast for reasons of desirable viewer demographics as much as
personal inspiration? Certainly, no TV diva in her 50s who values her ratings wants to be
defined by the hot-flash cohort.” (Tina Brown, Newsweek, 17 March 2008)
Seasoned and experienced observers, including some from within the black community, could
also see the negative potential of the Obama youth cult. Adolph Green is a professor at the
University of Pennsylvania and notes:
There is also something disturbingly ritualistic and superficial in the Obama camp’s young
minions’ enthusiasm. Paul Krugman noted months ago that the Obamistas display a cultish
quality in the sense that they treat others’ criticism or failure to support their icon as a character
flaw or sin. The campaign even has a stock conversion narrative, which has been recycled in
print by such normally clear-headed columnists as Barbara Ehrenreich and Katha Pollitt: the
middle-aged white woman’s report of not having paid much attention to Obama early on, but
having been won over by the enthusiasm and energy of their adolescent or twenty-something
daughters. (A colleague recently reported having heard this narrative from a friend, citing the
latter’s conversion at the hands of her eighteen year old. I observed that three short years ago
the daughter was likely acting the same way about Britney Spears.) (Adolph Green, “Obama
No,” The Progressive, May 17, 2008)
REPORTS OF A MICHELLE OBAMA “HATE WHITEY” TAPE
In the late spring of 2008, rumors circulated that Karl Rove was in possession of a video tape
which showed Michelle Obama denouncing the white race or white people in the most violent and
abusive terms. This video tape was thought to represent the “October surprise” against Obama
referred to by the Clinton campaign in its conference calls, a time bomb ticking underneath the
entire Obama candidacy, capable of wiping him off the political map within a few days. This may
also have been what right-wing columnist Robert Novak had been referring to in the fall of 2007
when he reported that
the Clinton campaign is spreading the word that it’s holding back on dishing dirt on Barack
Obama, and charged the Democratic frontrunner with playing “Nixon tricks.” … Novak’s initial
report said: “Agents of Sen. Hillary Clinton are spreading the word in Democratic circles that
she has scandalous information” about Obama, “but has decided not to use it. The nature of the
alleged scandal was not disclosed.”158
Novak’s story was published on November 19, 2007. As for Michelle, her growing reputation as
a race baiter was a growing liability for Obama’s chances. In late May 2008, Larry Johnson
reported the existence of a “hate whitey” tape depicting a racist tirade by Michelle, with vicious
attacks on white America, the “white race,” or just plain whitey in extreme terms. The tape was
reported to be in the possession of Karl Rove, who was organizing private screenings for GOP
fatcats to generate fundraising for his autumn 2008 October surprise designed to stun and defeat
Obama. By now Obama had almost repudiated Wright, but what was he going to do when the racist
rant came from Michelle?
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There was an interesting wrinkle in the story: Johnson wrote about a right-wing Republican who
hated McCain and did not want him elected to the presidency. This right-wing moneybags was
offering a cool million to get the tape for himself, with the intent of showing it at once, thus sinking
Obama before he ever got the Democratic nomination. That way, Hillary would get the Democratic
nod in Denver, and she would of course have a much better chance of defeating McCain. It was
clear that fall 2008 would see an unprecedented battle of the scandal dossiers.
In this new phase, scandal dossiers were like ICBMs in an all-out thermonuclear exchange. The
watchword had to be, “Use ‘em or lose ‘em.” If one acquired scandal material, it had to be launched
into public view immediately, since otherwise the other side might strike first. The flaw in Rove’s
plan was that if he waited until October to unload what he had, Obama’s FBI backers might strike
first against McCain, leaving Rove with no candidate left standing. Obama, we stress again, had no
real hope of winning except by way of piloted scandals.
There can be no doubt that Michelle Obama is a racist thinker, in addition to the elements of
fascist ideology which have already been noted. Indeed, the more robust versions of fascism, like
the German one, incorporate racism and “race science” (which of course means pseudo-science in
reality) as a foundational element of the fascist outlook. In her Princeton thesis, Michelle already
swore allegiance to a race-based outlook when she wrote that she would
use all of my present and future resources to benefit [the Black] community first and
foremost… Regardless of the circumstances under which I interact with whites…it often seems
as if, to them, I will always be black first… there is a distinctive Black culture different from
White culture…. [A] Black person may have all White friends and prefer these friends and their
activities to those with Blacks without the individual believing that he/she is White….159
This is hardly the voice of a person prepared to help a president govern in the name of all the
people.
A reported paraphrase and summary of Michelle Obama’s remarks in the reported tape soon
appeared on line: “Once again, the white man keeps us down, what’s up with Whitey, Why’d he
attack Iraq, Why’d he let Katrina happen, Why’d he leave millions of children behind. This is the
legacy the white man gives us.” 160 As the primaries were ending in Puerto Rico, Fox News Channel
carried an interview by Geraldo Rivera with Republican operative Roger Stone in which Stone
reported:
This has little to do with the general election and a lot to do with why Hillary Clinton is staying
in the race. Look, there is already a buzz in Washington at least seven news organizations have
contacted me wanting to know how to get their hands on this tape, giving me more information
than I had after I had spoken to each one of them. I now believe the tape exists and I believe a
network has it. If this pans to out to be true, based on Michelle Obama’s previous comment that
this is the first time she had been proud of her country, which I think shows an attitude, it is
problematic. (FNC 06/01/2008 14:43:30)161
MICHELLE TOGETHER WITH MRS. FARRAKHAN AND MEEKS
Soon the site HillBuzz was reporting more details about the circumstances in which Michelle
had delivered her tirade:
What’s on the Michelle Obama Rant Tape? Here’s what’s known so far: The Michelle Obama
Rant Tape was filmed between June 26th - July 1st 2004 in Chicago, IL at the Rainbow/PUSH
306 Barack H. Obama: The Unauthorized Biography
Coalition Conference at Trinity United Church: specifically the Women’s Event. Michelle Obama
appeared as a panelist alongside Mrs. Khadijah Farrakhan and Mrs. James Meeks. Bill Clinton
spoke during the Conference, as did Bill Cosby and other speakers, but not at the panel Michelle
attended. Michelle Obama spoke at the Women’s Event, but referenced Bill Clinton in her rant —
his presence at the conference was the impetus for her raving, it seems. For about 30 minutes,
Michelle Obama launched into a rant about the evils of America, and how America is to blame for
the problems of Africa. Michelle personally blamed President Clinton for the deaths of millions of
Africans and said America is responsible for the genocide of the Tutsis and other ethnic groups. She
then launched into an attack on “whitey”, and talked about solutions to black on black crime in the
realm of diverting those actions onto white America. Her rant was fueled by the crowd: they reacted
strongly to what she said, so she got more passionate and enraged, and that’s when she completely
loses it and says things that have made the mouths drop of everyone who’s seen this. The “tape” is a
DVD that Trinity United sold on its website, and possibly offered free for download up until March
2008 when Trinity’s site was scrubbed and the DVDs were no longer offered for sale. This outburst
happened just one month before the 2004 Democratic Convention, when Barack Obama delivered
the keynote address.162
The trolls who make up the Obama mercenary assault sections on the Internet soon concocted an
absurd explanation of what Michelle is supposed to have said. In doing this, they may have
indicated more or less the formulations which are in fact on the tape in question. Larry Johnson
summed up the state of the case by writing:
Our thanks to Martin Longman over at Booman Tribune. He performed a public service last
night by disseminating Barack Obama talking points even before I had published my update.
Two key points–First, the Obama campaign is admitting the tape exists by ponying up a bogus
explanation. Second, they don’t dispute that Michelle is sitting at the table with Louis
Farrakhan. So, here’s what Martin posted:
My old friend, Larry Johnson, knows about manipulating elections from his training with the
Central Intelligence Agency. He doesn’t want Obama to win the nomination for whatever
reason, and he’s in full propaganda mode to do everything he can to frighten the superdelegates.
He claims to have a shocking tape of Michelle Obama ranting in some anti-white diatribe. He
promises to produce this tape tomorrow at 9am. From what I understand, it is a tape of Michelle
Obama criticizing the Bush administration.
How you’d write it:
Why did Bush cut folks off Medicaid?
Why did Bush let New Orleans drown?
Why did Bush do nothing about Jena?
Why did Bush put us in Iraq for no reason?
How you’d say it:
Why’d he cut folks off Medicaid?
Why’d he let New Orleans drown?
Why’d he do nothing about Jena?
Why’d he put us in Iraq for no reason?
How Larry Johnson wants you to hear it:
VIII: “Our Souls Are Broken” - Michelle Obama, Postmodern Fascist Ideologue 307
Whitie cut folks off Medicaid?
Whitie let New Orleans drown?
Whitie do nothing about Jena?
Whitie put us in Iraq for no reason?163
As Johnson noted, this amounted to a confirmation of some of the internal features of the tape in
question. On June 3, Bob Beckel, a Democratic Party political hack who had worked for Zbigniew
Brzezinski in the Carter National Security Council before going on to help lead Walter Mondale’s
catastrophic election campaign in 1984, commented on the Fox and Friends morning program that
he was very worried indeed about the existence of a Michelle Obama tape and about the possible
political consequences if this were revealed to the public. This incident attracted wide attention and
became known as “The Beckel Bombshell” on the Internet.164
OBAMA FAILS TO DENY EXISTENCE OF TAPE, ATTACKS QUESTIONER
On June 5, a woman reporter for the McClatchy News Service, which still tries to be a news
organization, finally asked Obama whether this tape existed or not. The Perfect Master went into
evasive maneuvers, and failed to deny that the tape exists. Instead, he pontificated about the
pervasive presence of “dirt and lies,” and then attempted to chastise the reporter for being one of the
very few who was trying to do her job. One report described the incident thus:
Sen. Barack Obama on Thursday batted down rumors circulating on the Internet and mentioned
on some cable news shows of the existence of a video of his wife using a derogatory term for
white people, and criticized a reporter for asking him about the rumor, which has not a shred of
evidence to support it. “We have seen this before. There is dirt and lies that are circulated in emails
and they pump them out long enough until finally you, a mainstream reporter, asks me
about it,” Obama said to the McClatchy reporter during a press conference aboard his campaign
plane. “That gives legs to the story. If somebody has evidence that myself or Michelle or
anybody has said something inappropriate, let them do it.”
Asked whether he knew it not to be true, Obama said he had answered the question.
“Frankly, my hope is people don’t play this game,” Obama said. “It is a destructive aspect of
our politics. Simply because something appears in an e-mail, that should lend it no more
credence than if you heard it on the corner. Presumably the job of the press is to not to go
around and spread scurrilous rumors like this until there is actually anything, an iota, of
substance or evidence that would substantiate it.”
So was it even acceptable to ask the question? Before Obama could answer, communications
director Robert Gibbs interjected: “You just did.”
“That is my point,” Obama said. “I just think people have to think about it before they ask.”
(“Obama denies a rumor and questions the question,” Politico, June 5, 2008)165
This is once again a typical Obama style to which we have become accustomed: when nailed for
some outrageous action, the candidate immediately attempts to turn the tables and to transform
himself from accused into accuser. He begins pontificating about some general moral or social evil
which he can connect to the issue in question, and begins counterattacking those who are trying to
hold him accountable. This technique of attacking the questioner is of course a favorite ploy of
George W. Bush, the current tenant of the White House, as Dr. Justin Frank has pointed out in his
study, Bush on the Couch. Since Frank concludes that Bush is a megalomaniac, and since the
present study points to megalomania as one of the salient aspects of Obama’s personality, we may
308 Barack H. Obama: The Unauthorized Biography
find that this technique of dodging questions (the recent archetype of which is the Jimmy Carter
malaise speech on energy policy of July 1979) is rooted in the mental dynamics of megalomania
itself.
Responding to this exchange, Larry Johnson pointed out:
If someone was accusing my wife of saying something racist that was not true, and you asked
me in public, I would say emphatically and clearly, “it is not true.” So what is Barack’s problem. …
Huh? Are you kidding me? If it ain’t true say so. But when a politician tap dances on nuance–Baby
it is true. My sources have not backed off. They maintain they have a tape and will drop it on the
Dems in the fall. Now if Barack said, “No, and hell no” I would be wondering about my sources.
But he punted. He went for the weasel word. The non-denial denial.166
So, as the summer wore on, the Michelle Obama “hate whitey” rant continued to hang over the
Obama campaign like a sword of Damocles. Would it appear in September or October? Or would
the Trilateral-Bilderberg scandal machine destroy McCain first?
CHAPTER IX: OBAMA’S TRIUMPH OF THE WILL:
THE 2008 PRIMARIES
“Barack Obama is wheezing to the finish line.” - Chris Wallace, Fox News
“My faith in the American people has been vindicated.” –Obama in Florida, May 21, 2008.
PATROCLUS :Well said, adversity! and what need these tricks?
THERSITES: Prithee, be silent, boy; I profit not by thy talk:
thou art thought to be Achilles’ male varlet.
PATROCLUS: Male varlet, you rogue! what’s that?
THERSITES: Why, his masculine whore.
- Shakespeare, Troilus and Cressida.
The initial goal of the Obama-Trilateral forces was to stun all opposing candidates, and
especially Senator Clinton and Senator Edwards, by winning decisive victories in Iowa and New
Hampshire, and then setting up a clamor with the help of their brigade of media whores to demand
that all opposition candidates drop out and allow the acclamation of the Perfect Master as the
Democratic candidate. For Obama strategy to work optimally, it was essential that the Democratic
primary process be brought to an end as soon as possible, so as to rule out any possibility that
Obama’s real background might be investigated. All during 2007, the controlled corporate media
had failed abysmally in their normal task of informing the public about who this slick and
newcomer really was, including most emphatically his past associations, his own track record in
politics, and his current handlers, backers, and controllers. More accurately, the controlled
corporate media had succeeded in their appointed task of preserving a seraphic aura of postpartisan,
post-racial, post-political transcendence around their charismatic protégé. It was clear to
all that Obama’s pretensions as a messianic liberator could never stand up to even the most cursory
scrutiny. Therefore, it was essential that the primaries be ended as soon as possible so that Obama
could seize the nomination while most people still had no idea who he was. Obama was like a con
man who went from town to town plying his trade, but was always aware that he had to fleece his
dupes and move on before too long, since if he tarried, there was a good chance that his con job
strategy would be diagnosed by the authorities and he would be apprehended.
Obama strategy was that of a CIA people power coup or US backed color revolution as these
models have been applied in the Orange Revolution in Kiev, Ukraine in late 2004, and in the roses
revolution in Tiflis, Georgia a few years earlier. The color revolution model for subverting a
political process under the cover of an election included the presence of a telegenic and talented
demagogue and mob orator, the use of vast sums of money and narcotics, savvy exploitation of the
social networking sites on the Internet, the creation of an artificial media hysteria stoked by
intelligence agents inside the controlled media, catchy slogans, colors, and emblems for branding
purposes, fake polling, and rent-a-mobs and dupe-a-mobs of feckless and callow youth — the
swarming adolescents who can be easily mobilized in large numbers. These were the methods
which the Obama forces set in motion in Iowa during the winter of 2007-2008. At this time,
Senator Clinton had unwisely accepted the advice of her corrupt and mediocre campaign manager
Mark Penn, who had recently published a book arguing that there would be no more big upheavals
in American politics, but only a series of micro trends which had to be exploited one by one by
smart politicians aiming to win. The stupidity of Penn’s thesis could not have been in greater
310 Barack H. Obama: The Unauthorized Biography
contrast with the predictable reality that 2008 represented a watershed year of fundamental
reordering of American politics — it was a year of party realignment. Party realignment in
American history have come along every three to four decades, and have been characterized by the
majority and minority parties trading places, by the collapsible parties and the emergence of new
parties, or by other important and lasting shifts in the political landscape. 2008 was comparable to
the coming of Jacksonian Democracy in 1828, which inaugurated a time of disaster for the United
States, with a sickening slide into the greatest of all conceivable calamities, civil war. 2008 was
comparable to 1860, the year when the Lincoln Republican Party emerged out of the wreckage of
the Whigs, the Know-Nothings, and the Free Soil party, even as the Democratic Party split into two
parts thanks in large part to the treachery of Caleb Cushing, the king of the dough-faces; this cycle
allowed national unity to be preserved in a civil war and slavery to be eradicated, while setting the
stage for the United States to become the greatest industrial power that the world had ever seen.
2008 was in the same league with 1896, when the contest between William Jennings Bryan and
William McKinley gave the Republicans another cycle of dominance, but this time under the banner
of Wall Street Republicanism and the dominance of the House of Morgan, the emergence of an
invisible government controlled by financiers, the creation of the Federal Reserve, and the historical
vandalism of the US entry into World War I, all crowned by the beginnings of the Great Depression
under Herbert Hoover. 2008 might be similar to 1932, the most successful of all party realignments
in American history, which put an end to the dominance of the reactionary and pro-fascist
Republican financiers, and inaugurated the New Deal state of Franklin D. Roosevelt, the most
effective form of human organization ever seen in history, a force powerful enough to defeat
fascism, checkmate communism, open the secrets of the atom, and put humans on the moon. A
negative model for 2008 was 1968, the beginning of the Republican Southern strategy theorized by
Kevin Phillips, a retrogressive regime which consolidated itself after the horrors of Jimmy Carter
into the so-called Reagan coalition of white men, suburban voters, evangelical Christians, and the
Southern backlash against the Civil Rights Act of 1964. By 2006, the Reagan coalition had
demonstrably collapsed and this fact was announced in the current cycle by Ed Rollins, at that time
running the Huckabee campaign. 2008 was therefore destined to be a year of crisis and upheaval,
and the advice given by Mark Penn to Senator Clinton was the worst possible guidance she could
have received. Mark Penn recommended that Mrs. Clinton begin during the Democratic primaries
the phase of triangulation or moving towards the center which is normally reserved for the general
election campaign in September and October. Mark Penn’s premature triangulation was the key to
Mrs. Clinton’s defeat in Iowa. If Senator Clinton had had any competent polling, she would have
seen that her excessive moderation was setting her up for defeat, but there are hints that Penn was
skewing the internal polls of the campaign so that his bad advice would seen to be successful, and
would therefore continued to be followed. Mark Penn had worked with Zbigniew Brzezinski in the
Ukrainian Orange Revolution coup of 2004, and therefore was widely suspected of divided and
conflicting loyalties. When Obama won the Iowa caucus, there was grave danger that the
Democratic primaries would be over in less than a week, and that the process of politicization and
political education that the primaries implied would be a boarded and brought to a premature end.
This was the fervent wish of the Wall Street financiers who constitute the US ruling class, since
they much prefer the American people to be kept in an apolitical stupor of apathy and resignation.
OBAMA’S COUP SLOWED BY CLINTON AND EDWARDS
To Senator Clinton above all, and to some extent to Senator Edwards, goes the merit of having
foiled Obama’s plan for a cold coup d’état. By bouncing back from her disappointing third-place
finish in Iowa to win the New Hampshire primary, Clinton saved the Democratic Party and perhaps
IX: Obama’s Triumph of the Will: The 2008 Primaries 311
the United States as a whole from the terrible consequences of having the Democratic nomination
seized through a lightning campaign by a totally unknown political adventurer and con artist.
Senator Clinton was doubtless helped by the fact that New Hampshire voters had already been
exposed to the specific brand of demagogy which Obama was peddling. In New Hampshire, as
well as in Rhode Island, the main local television channels come from Boston, and therefore reflect
the internal politics of Massachusetts into these two nearby states. In 2006, Deval Patrick had been
elected as the first black governor of Massachusetts. Patrick’s campaign manager had been the
Chicago ward heeler David Axelrod, a member of the corrupt Daley machine who had specialized
in getting black candidates elected in situations where it was indispensable for them to obtain
significant numbers of white votes. Axelrod had attempted to solve this problem by recommending
that the black candidates he advised employee a vague and aspirational rhetoric of messianic
slogans and glittering utopian generalities, making the grubby details of another cynical exercise in
political hucksterism and corruption into a sublime idealistic quest. Axelrod had found that this
approach would deliver sizable support from affluent white voters and college youth which, when
supplemented by strong turnout from black inner-city voters, would often carry his candidates to
victory. But Patrick was failing as Governor of Massachusetts and voters there had been soured by
the Obama formula.
OBAMA: MANIPULATING AMERICAN VOTERS
AS ETHNOGRAPHIC MATERIAL
Even before Obama’s “Bittergate” remarks in San Francisco, the acerbic Spengler of Asia Times
had diagnosed Obama’s method of profiling and manipulating the American people: he was an
anthropologist, true to his mother’s method, doing field work, and reducing American voters to
ethnographic material in the process: ‘Obama profiles Americans the way anthropologists interact
with primitive peoples. He holds his own view in reserve and emphatically draws out the feelings of
others; that is how friends and colleagues describe his modus operandi since his days at the Harvard
Law Review, through his years as a community activist in Chicago, and in national politics.
Anthropologists, though, proceed from resentment against the devouring culture of America and
sympathy with the endangered cultures of the primitive world. Obama inverts the anthropological
model: he applies the tools of cultural manipulation out of resentment against America. The
probable next president of the United States is a mother’s revenge against the America she despised.
(Spengler, Asia Times, Feb. 26, 2008) The lesson was that if you do not have a full set economy,
including nuclear energy, you risk becoming ethnographic material in today’s world.
MESSIANIC AND UTOPIAN: THE IOWA TELEPROMPTER SPEECH
During and right after the Iowa caucuses, Obama began to attract attention as an orator. His
preference was to deliver a speech off a teleprompter before a huge crow in a stadium or sports
arena. The parallels to the Mussolini balcony speech or the later German Nuremberg party rallies
were overwhelming, but were seldom pointed out by the corrupt US corporate media. As Spengler
noted, ‘There is nothing mysterious about Obama’s methods. “A demagogue tries to sound as stupid
as his audience so that they will think they are as clever as he is,” wrote Karl Krauss. Americans are
the world’s biggest suckers, and laugh at this weakness in their popular culture. Listening to Obama
speak, Sinclair Lewis’ cynical tent-revivalist Elmer Gantry comes to mind, or, even better, Tyrone
Power’s portrayal of a carnival mentalist in the 1947 film noir Nightmare Alley. The latter is
available for instant viewing at Netflix, and highly recommended as an antidote to having felt
uplifted by an Obama speech. America has the great misfortune to have encountered Obama at the
312 Barack H. Obama: The Unauthorized Biography
peak of his powers at its worst moment of vulnerability in a generation. With malice aforethought,
he has sought out their sore point. This reversal has provoked a national mood of existential crisis.
In Europe, economic downturns do not inspire this kind of soul-searching, for richer are poorer,
remain what they always have been. But Americans are what they make of themselves, and the slim
makings of 2008 shake their sense of identity. Americans have no institutionalized culture to fall
back on. Their national religion has consisted of waves of enthusiasm - “Great Awakenings” –
every second generation or so, followed by an interim of apathy. In times of stress they have a
baleful susceptibility to hucksters and conmen. Be afraid - be very afraid. America is at a low point
in its fortunes, and feeling sorry for itself.’ (Spengler, Asia Times, Feb. 26, 2008)
THE DYNAMICS OF THE MASS MEETING
It was above all on the night that Obama won the Iowa caucus that the world began to see the
fully developed technique of Obama’s mass meetings, with hysterical crowds and teleprompter
delivery. All the well-worn clichés warning that those who fail to understand history are condemned
to repeat it now became operative, with a vengeance. American politics was rushing backward in
time to postwar Italy and depression-era Germany: the hour of the demagogue and mob orator was
at hand. Fascism had already been tried once, and it had failed. Now, American society had been
schooled in top-down totalitarianism for eight years by the Bush-Cheney-neocon regime, which had
brought military defeat and world economic depression. Now the ruling elite was reversing its field,
and trying a bottom-up approach to the demolition of real representative democracy. American were
however ignorant of the main internal features of fascist movements of the recent past. Would they
fall victim so easily to postmodern fascism? The founder of National Socialism had famously
argued that the masses were always and everywhere characterized by irrationalism: ‘“The people
(das Volk) are in their overwhelming majority so womanly in their views and attitudes that their
thought and action are much less determined by sober reflection than by emotional feelings.” The
goal of mass meetings of the Obama type is to attack the faculties of reason and free will in the
audience. As Georg Lukacs commented, National Socialism “wants manipulation instead of
convincing arguments, wants to create by any means necessary a sultry atmosphere of blind belief
and hysterical gullibility on the part of despairing people. Here again the struggle of existentialist
philosophy (Lebensphilosophie) against reason — quite apart from how much existentialism Hitler
may have known — forms the basis in terms of world outlook for a pure technique of demagogy.
Hitler’s ‘originality’ consists in the fact that he was the first to apply American advertising methods
in German politics and propaganda. His goal was to dumb down and swindle the masses. In his
principal work he confesses that his goal is demagogy and the breaking of the free will and
cognitive faculty of people. The only question that Hitler ever thoroughly and conscientiously
studied is by what tricks this goal can be reached. Here he discusses all possible external details of
manipulation and the manipulability of the masses.” (Lukacs, Zerstörung der Vernunft, 630-631)
Hitler was very explicit about the goals of his mass meeting: they were cynically planned as a
systematic assault on human reason and human freedom: “In all these cases we are seeking to erode
the freedom of the human will. And that is true especially of meetings where there are men whose
wills are opposed to the speaker and who must be brought around to a new way of thinking. In the
morning and during the day it seems that the power of the human will rebels with its strongest
energy against any attempt to impose upon it the will or opinion of another. On the other hand, in
the evening it easily succumbs to the domination of a stronger will. Because really in such
assemblies there is a contest between two opposite forces. The superior oratorical art of a man who
has the compelling character of an apostle will succeed better in bringing around to a new way of
IX: Obama’s Triumph of the Will: The 2008 Primaries 313
thinking those who have naturally been subjected to a weakening of their forces of resistance rather
than in converting those who are in full possession of their volitional and intellectual energies.”
(Mein Kampf, vol. II, chapter 6) Lukacs comments: “Hitler’s propaganda technique is closely
related to one of the few honest points in his entire world outlook: he is a passionate enemy of
objective truth and fights against objectivity in every aspect of his life.” (Lukacs 631) Hitler also
commented: “The masses are like an animal that obeys its instincts…. I have been reproached for
making the masses fanatics and ecstatic. In the opinion of these wiseacres, the masses must be
soothed and kept in apathy. No, gentlemen, the reverse is true. I can lead the masses only if I tear
them out of their apathy. Only a fanatic mass can be swayed. A master this apathetic and dull is the
greatest threat to unity.” And he continued: “At a mass meeting, thought is eliminated. And
because this is the state of mind I require, because it secures me the best sounding board for my
speeches, I order everyone to attend the meetings, will become part of the mass whether they like it
or not, ‘intellectuals’ and bourgeois as well as workers. I mingle with the people. I speak to them
only as the mass. I am conscious that I have no equal in the art of swaying the masses, not even
Goebbels…. And remember this: the bigger the crowd, the more easily it is swayed…. Don’t waste
time over ‘intellectual’ meetings and groups drawn together by mutual interests. Anything you may
achieve with such folk today by means of reasonable explanation may be erased tomorrow by an
opposite explanation. But what you tell the people in the mass, in a receptive state a fanatic
devotion, will remain like words received under a hypnotic influence, ineradicable, and impervious
to every reasonable explanation. (Hitler to Rauschning, Voice of Destruction, 211-212)
SUBPRIME OBAMA
At the same time, Obama continued to run to the right of the rest of the Democratic candidates,
to the right of Clinton and far to the right of Edwards, if the latter’s speeches could be believed.
Even some writers for The Nation began to realize that Obama was an apostle of right-wing
economics, especially in refusing to halt foreclosures; their shortcoming was that they failed to see
how destructive Obama’s economic approach would actually be: ‘Only Obama has not called for a
moratorium and interest-rate freeze. Though he has been a proponent of mortgage fraud legislation
in the Senate, he has remained silent on further financial regulations. And much like his broader
economic stimulus package, Obama’s foreclosure plan mostly avoids direct government spending in
favor of a tax credit for homeowners, which amounts to about $500 on average, beyond which only
certain borrowers would be eligible for help from an additional fund. “One advantage to the tax
credit is that there’s no moral hazard involved,” one of Obama’s economic advisers explains.
“There’s no sense in which you’re rewarding someone for taking too big a risk. If you lied about
your income in order to get a bigger mortgage, then you’re not qualified. Do you really want to give
a subsidy to the guy who wasn’t prudent?” Obama has used similar language on the campaign trail.
“Innocent homeowners,” he has promised, those “responsible” borrowers “facing foreclosure
through no fault of their own,” would get help restructuring their loans. But no such luck for those
“claiming income they didn’t have” or “lying to get mortgages.” “There’s been less emphasis from
the Obama campaign on the really dysfunctional role of the financial industry in the subprime
mess,” says Josh Bivens of the Economic Policy Institute. “Edwards and Clinton talk much more
about regulation of the financial industry going forward, and to the extent that blame is placed, they
tend to place it on the lenders for steering people into loans they couldn’t afford.” Obama’s
disappointing foreclosure plan stems from the centrist politics of his three chief economic advisers
and his campaign’s ties to Wall Street institutions opposed to increased financial regulation. David
Cutler and Jeffrey Liebman are both Harvard economists who served in the Clinton Administration,
and they work on market-oriented solutions to social welfare issues. Cutler advocates improving
314 Barack H. Obama: The Unauthorized Biography
healthcare through financial incentives; Liebman, the partial privatization of Social Security. Austan
Goolsbee, an economist at the University of Chicago who calls himself a “centrist market
economist,” has been most directly involved with crafting Obama’s subprime agenda. In a column
last March in the New York Times, Goolsbee disputed whether “subprime lending was the leading
cause of foreclosure problems,” touted its benefits for credit-poor minority borrowers and warned
that “regulators should be mindful of the potential downside in tightening [the mortgage market] too
much.” In October, no less a conservative luminary than George Will devoted a whole column in
the Washington Post to saluting Goolsbee’s “nuanced understanding” of traditional Democratic
issues like globalization and income inequality and concluded that he “seems to be the sort of
fellow – amiable, empirical, and reasonable – you would want at the elbow of a Democratic
president, if such there must be.” … Wall Street apparently has come to a similar conclusion.
Obama had received nearly $10 million in contributions from the finance, insurance and real estate
sector through October, and he’s second among presidential candidates of either party in money
raised from commercial banks, trailing only Clinton. Goldman Sachs, which made $6 billion from
devalued mortgage securities in the first nine months of 2007, is Obama’s top contributor. When
asked if Obama would hold these financial institutions accountable for losses incurred by
homeowners and investors, his campaign refused to comment.’ (Max Fraser, “Sub-prime Obama”
The Nation, February 110, 2008) Soon Goolsbee went into eclipse because he had warned the
Canadian government that Obama’s criticism of free trade sellouts like NAFTA was just demagogy
for the campaign trail to edify the plebs. Goolsbee was then supplanted by Jason Furman, another
monetarist. Well-informed sources from Goldman Sachs reported that the word on the Street was
that Furman, like Jeffrey Liebman, was on board with the idea of privatizing Social Security as a
means of “saving” it – the same policy that Bush had tried and failed to impose in 2005.
OBAMA USES RACISM, HOMOPHOBIA TO WIN SOUTH CAROLINA
Desperate to rebuild the momentum of his coup after his loss to Clinton in New Hampshire,
Obama turned to the most disreputable allies and methods in his bid to win South Carolina. Obama
turned to Reverend McClurkin, a local Elmer Gantry, to whip up support among the black churches.
One commentator noted, ‘Obama’s reliance on McClurkin, a homophobic black minister, to deliver
the black vote in South Carolina was eye-opening. What’s even worse, McClurkin is gay.’ This
combination of public homophobia on the part of public figures who are themselves homosexual
has been one of the hallmarks of recent Republican rule, as the Mark Foley and Larry Craig
scandals have underlined; Obama represents more of the same in this department. Obama also
developed a coded speech with which to appeal to South Carolina black voters, using echoes of
speeches by Malcolm X which would be understood by some of his listeners, but not by others. It
was a two-tiered technique, and rightly merited the name of duplicity. Here is a sample: ‘As the
South Carolina primary campaign built to a climax, Obama addressed a largely African-American
audience in Sumter. … Obama drops his eloquent Harvard accent, and says, “They’re trying to
bamboozle you. It’s the same old okie-dokie. — Y’all know about okie dokie, right? — They try to
bamboozle you. — Hoodwink ya. Try to hoodwink ya. Alright. — I’m having too much fun
here....” This speech had been borrowed from one of Obama’s heroes, Malcolm X, who said,
“You’ve been hoodwinked. You’ve been had. You’ve been took. You’ve been led astray, led amok.
You’ve been bamboozled.” It is strange that a candidate, who belongs to an “Afrocentric” church,
that bestows awards on Louis Farrakhan, would borrow from Malcolm X, who was a spokesman for
the Nation of Islam, right before complaining about e-mails claiming he is Muslim.’167
IX: Obama’s Triumph of the Will: The 2008 Primaries 315
OBAMA AND DEVAL PATRICK:
CLONES OF THE TRILATERAL MOTHER SHIP
When it was discovered in New Hampshire in 1987 that Senator Joe Biden, then running for
president, had lifted entire passages out of a speech by British Labour Party leader Neal Kinnock
and spouted them on the campaign trail, Biden had been buffeted by a tide of ridicule so merciless
that he was forced to drop out of the race in just a few days. Over the past twenty years, US political
standards had deteriorated sharply. Obama has been caught spouting passages already used in the
campaigns of Massachusetts Governor Deval Patrick, another client of Obama’s chief sophist,
David Axelrod. Patrick is in all probability a clone of the same Trilateral mother ship which runs
Obama. Patrick can in fact be viewed as Brzezinski’s spare Obama, a fall-back option who might
have been mobilized if Obama had overdosed or been apprehended in some nefarious activity.168
But this time Obama, unlike Biden two decades ago, was not forced to drop out. Public morality,
we see, had taken a massive turn for the worse.
Here is Deval Patrick on June 3, 2006, according to a YouTube video: “I am not asking anybody
to take a chance on ME. I’m asking you to take a chance on your own aspirations.” Here is Barack
Obama on Nov. 2, 2007 in Manning, S.C., according to a YouTube video: “I’m not just asking you
to take a chance on ME. I’m also asking you to take a chance on your own aspirations.” Another
quote from Obama, this time responding to the criticism that he is nothing but a word monger:
“Don’t tell me words don’t matter. ‘I have a dream’ — just words? ‘We hold these truths to be selfevident,
that all men are created equal’ — just words? ‘We have nothing to fear but fear itself’ —
just words? Just speeches?” Here now is Patrick responding to a similar stricture: “‘We hold these
truths to be self-evident, that all men are created equal’ — just words? Just words? ‘We have
nothing to fear but fear itself’ — just words? ‘Ask not what your country can do for you, ask what
you can do for your country.’ Just words? ‘I have a dream’ — just words?” Blogger Taylor Marsh,
who would end up drinking the Kool-Aid for Obama, summed up that Obama’s classic line would
never be “I have a dream.” Much more appropriate for the senator would be “I have a con.”
OBAMA: DUMMY; ZBIGNIEW BRZEZINSKI: VENTRILOQUIST
In my book Obama – The Postmodern Coup: The Making of a Manchurian Candidate, I argue
that presidential candidate Barack Obama is a wholly-owned puppet of Zbigniew Brzezinski and his
associates of the Trilateral Commission, founded by David Rockefeller. As some have noted,
Brzezinski has been attempting to conceal his actual domination of the Obama campaign, for which
he is the chief guru and controller. Now a rhetorical outburst by Obama on the campaign trail in
Oregon at the close of the primaries once again pointed to the reality that Obama is a ventriloquist’s
dummy, with the Russia-hating fanatic Brzezinski, a barbarous relic of the Cold War, acting as the
ventriloquist.
At a campaign stop in Oregon, Obama intoned:
“We can’t drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all
times … and then just expect that other countries are going to say OK,” Obama said. “That’s
not leadership. That’s not going to happen,” he added. If India and China’s “carbon footprint
gets as big as ours, we’re gone.” (AFP)
This remarkable statement reveals the true program of a future Obama administration: savage
austerity, brutal economic sacrifice, and a massive further reduction in the standard of living of the
depleted and exhausted US population – as demanded by David Rockefeller, George Soros, and
316 Barack H. Obama: The Unauthorized Biography
Obama’s Wall Street backers. This will be done under left cover – through a global warming tax, a
third world solidarity tax, and other demagogic frauds, with the revenue going to bail out Goldman
Sachs, Citibank, and JP Morgan Chase. The tired, discredited post-9/11 “war on terror” slogans will
be largely dumped. Most interesting is that Obama’s sound bytes are actually a sloganized version
of a key passage from Zbigniew Brzezinski’s recent book Second Chance: Three Presidents and the
Crisis of American Superpower.169 This book contains Zbig’s desperate strategy for preserving the
crisis-ridden US-UK world empire, including by making the US “social model” more attractive to
developing sector publics. Zbig writes:
In mutually compounding ways, material self-indulgence, persistent social shortcomings, and
public ignorance about the world increase the difficulty the American democracy faces in
formulating a globally appealing platform for effective world leadership. Americans must
recognize that their patterns of consumption will soon collide head-on with increasingly
impatient egalitarian aspirations. Whether through the exploitation of natural resources,
excessive energy consumption, indifference to global ecology, or the exorbitant size of houses
for the well-to-do, indulgent self-gratification at home conveys indifference to the persisting
deprivations of much of the world. (Just try to imagine a world in which 2.5 billion Chinese and
Indians consume as much energy per capita as Americans do.) That reality the American public
has yet to assimilate. To lead, America must not only be sensitive to global realities. It must
also be socially attractive. That calls for a broader national consensus in favor of correcting the
key failings of the American social model.
OBAMA’S OLIVER TWIST MOMENT
Obama has thus unmasked himself as the exterminating angel of super-austerity dictated by the
elitist Trilateral bankers’ clique. Will he cut the current US standard of living by 40%? By 50%?
When he does, will he still call it the politics of hope? The rhetoric recalls the malaise of the earlier
Trilateral puppet and austerity fanatic Jimmy Carter, but it goes much further. Is every American
child to be put on rations, like Oliver Twist, and forbidden to ask for some more? Obama is eager
for this kind of cruelty. Obama has been trained to hate the American people through two decades
of association with hate-mongers like Reverend Wright, Bill Ayers, Bernardine Dohrn, and
Brzezinski himself. For Rockefeller and Soros, Obama’s hatred of the American people is a positive
guarantee that he will enforce Wall Street’s austerity decrees with a vengeance. Forget the utopian
platitudes and the messianic rhetoric: Obama’s real economic program is now clear for all to see. It
is a path that leads to genocide against the US population, among others.
Obama’s Oregon outburst also needs to be read in the light of earlier unguarded statements by
Michelle Obama, who, as we have seen, has said at various times in her stump speech: “…before
we can work on the problems, we have to fix our souls - our souls are broken in this nation. If we
can’t see ourselves in one another, we will never make those sacrifices….We need a different
leadership because our souls are broken. We need to be inspired...to make the sacrifices that are
needed to push us to a different place…. The change Barack is talking about is hard, so don’t get
too excited because Barack is going to demand that you too be different.” Here the theme of
purification and redemption by means of sacrifice and economic austerity is clearly conveyed. Now
Barack has begun to fill in the details.
Insiders have long recognized that Zbigniew Brzezinski (helped by his son Mark) owns and runs
Obama. David Ignatius has pointed to Second Chance as a scenario for a future Obama
administration. Ignatius commented over a year ago: “Zbigniew Brzezinski has written a new book
IX: Obama’s Triumph of the Will: The 2008 Primaries 317
that might be a foreign policy manifesto for Barack Obama… The most intriguing part of
Brzezinski’s book is what I would describe as the Obama manifesto. (David Ignatius, “A Manifesto
for the Next President,” Washington Post, March 14, 2007) It has also long been known that Zbig
does the thinking for Obama; the London Economist last year hailed “a new brain for Barack
Obama! It’s 78 years old and it still works perfectly. It belongs to Zbigniew Brzezinski, the peppery
ex-national security adviser to Jimmy Carter.” (“A New Brain for Barack Obama, Economist.com,
March 14, 2007) Obama’s campaign has long been attacking Bush from the right, criticizing the
current regime for not exploiting 9/11 to impose savage economic austerity, as seen in Samantha
Power’s “monster” interview. We now have good evidence that Obama will flay the American
people alive with his elitist economic policies. Obama had committed a major error by showing his
hand. Would voters react in time to stop him?
OBAMAKINS AND NEOCONS SUPPORT THE SAVIOR
One area where Obama enjoyed strong support was at the arch-reactionary, Rockefeller-funded
University of Chicago, and especially among the neocons of the law school there. A middleman
between these neocons and the Obama campaign was evidently Cass Sunstein, who was considered
something of an antiwar liberal. Sunstein expressed his support for Obama in oblique but
unmistakable terms: ‘The University of Chicago Law School is by far the most conservative of the
great American law schools. It helped to provide the academic foundations for many positions of
the Reagan administration. But at the University of Chicago, Obama is liked and admired by
Republicans and Democrats alike. Some of the local Reagan enthusiasts are Obama supporters… he
appreciates the virtues and power of free markets. I do not deny that skeptics are raising legitimate
questions. After all, Obama has served in the Senate for a short period (less than four years) and he
has little managerial experience. Is he really equipped to lead the most powerful nation in the
world? Obama speaks of “change”, but will he be able to produce large-scale changes in a short
time? What if he fails? An independent issue is that all the enthusiasm might serve to insulate him
from criticisms and challenges on the part of his own advisers — and, in view of his relative youth,
criticisms and challenges are exactly what he requires.’ (Cass Sunstein, Huffington Post, March 5,
2008)
TEXAS: OBAMA PLAYS THE RACE CARD ONCE AGAIN
Obama confesses in his memoirs that he has a very good understanding of how the race card can
be used by a black candidate in an election where white votes were also important; he cites the
example of Chicago’s first black mayor, Harold Washington: ‘Black politicians less gifted than
Harold discovered what white politicians had known for a very long time: that race-baiting could
make up for a host of limitations. Young leaders, eager to make a name for themselves, upped the
ante, peddling conspiracy theories all over town - the Koreans were funding the Klan, Jewish
doctors were injecting black babies with the AIDS virus. It was a short cut to fame, if not always
fortune; like sex, or violence on TV, black rage always found a ready market.’(Dreams 203) Obama
himself played the race card with brutality, but under a mask of moderation; he also knew the
importance of letting his surrogates and backers do a lot of this dirty work. One example is
Obama’s response to Clinton’s Texas television ad about the 3 AM phone call to the White House,
which was meant to raise doubts about Obama’s reliability in national security emergencies. Obama
found a bizarre surrogate who was able to turn the whole thing into a race issue, where Obama
thought he had the advantage: The Clinton campaign had produced a television ad which depicted a
family scene with parents watching over their sleeping children. Then the camera shifted to the
318 Barack H. Obama: The Unauthorized Biography
White House, where Senator Clinton was shown answering an emergency telephone call at 3 AM in
what was obviously some sort of national security emergency. The suggested theme was that
Senator Clinton was prepared for the awesome responsibilities of the presidency, specifically in the
areas of national defense and crisis management. The Obama campaign immediately screamed that
this was a highly negative ad – despite the obvious fact that Obama’s name was not even
mentioned. Not content with this, the Obominables trotted out the Harvard sociology professor
Orlando Patterson, a black man in a postmodernist Mao suit, who proclaimed that he had discovered
a racist and nefarious subliminal message in Clinton’s ad – the emergency implied was in his view a
prowler or thief trying to break into the house, and, given, the southern state where the ad was being
shown, that thief or prowler could only be a black man! It was a salto mortale of the worst kind,
buttressed by the kind of impressionistic deconstructionism pioneered by the late Jacques Derrida.
Patterson’s charges were absurd, and he was exposing himself as an opportunist and charlatan. This
amazing outburst was answered by Princeton historian Sean Wilentz, who was emerging as one of
the most incisive critics of the Obama campaign’s duplicitous hypocrisy on the race issue. Wilentz
commented: ‘Reading Orlando Patterson’s op-ed in the New York Times, “The Red Phone in Black
and White,” is a depressing experience. Not only does the piece scurrilously accuse Hillary
Clinton’s campaign of cutting an ad that borrows from the filmmaker D.W. Griffith’s glorification
of the Ku Klux Klan. Not only is this attack based on a Clinton advertisement about national
security, not domestic policy (let alone race), that required a singularly tortured and biased “close
reading” by Patterson to reach its conclusions. What is truly depressing is that the essay fits what
has become a troubling and familiar pattern by the Obama campaign and its fervent supporters to
inject racial politics on the eve of yet another Democratic primary in a Southern state, in this case
Mississippi, where African-American voters are expected to vote in large numbers. […] In Texas,
Ohio, and Rhode Island on March 4, as earlier in New Hampshire, the Obama campaign did not
achieve the knock-out blow it expected and predicted. Indeed, just before those primaries and since,
Obama’s camp started to receive serious criticism and scrutiny for the first time, over the
candidate’s connections to indicted Chicago fixer Tony Rezko, and over the amateurish and
revealing actions of senior advisers Austan Goolsbee, Susan Rice, and Samantha Power. The
campaign has turned to double-talk and to stonewalling the press. And once again, it has lashed out
by playing racial politics while accusing the Clinton campaign of playing the very same game.
Interpreting the Clinton 3 A.M. phone ad on preparedness and national security as a hidden appeal
to white racism takes a remarkable bit of bad faith on the part of Professor Patterson. But the bad
faith is not restricted to him alone. Earlier in the campaign, in speeches to black audiences, Obama
mouthed lines generally believed to come from Malcolm X about how African-Americans were
being “bamboozled” and “hoodwinked” by white oppressors and Uncle Toms – except that the lines
were not actually Malcolm’s but were scripted for Denzel Washington playing Malcolm X in Spike
Lee’s movie. Now, in Mississippi, Obama is talking about blacks being bamboozled and
hoodwinked again. Then, after Obama conceded that Clinton had nothing to do with the ridiculous
posting on the disreputable Drudge Report of a picture of Obama in ceremonial Somali dress –
supposedly an appeal to racial and religious fears – he now is telling the voters of Mississippi that
in fact she was responsible for the photo’s appearance, and that she did it in order to scare people –
a charge he well knows to be untrue. In the televised debate in Ohio on February 26, Obama said
that “I take Senator Clinton at her word that she knew nothing about the photo. So I think that’s
something that we can set aside.” But on March 10 in Jackson, Mississippi, he declared, “When in
the midst of a campaign you decide to throw the kitchen sink at your opponent because you’re
behind, and your campaign starts leaking photographs of me when I’m traveling overseas wearing
the native clothes of those folks to make people afraid ... that’s not real change” The flip-flopping
IX: Obama’s Triumph of the Will: The 2008 Primaries 319
is bad enough, even if the press corps does not always report it. But the cynical race politics by
Obama and his passionate followers, is toxic, not just for this campaign but for American political
life.’ (Sean Wilentz, “Hold On--’3 A.M.’ Wasn’t Racist — Obama supporters cry wolf on race
again,” New Republic online, posted March 11, 2008)
CRAIG CRAWFORD: ANTI-CLINTON MEDIA BIAS
“BORDERS ON MENTAL ILLNESS”
Another commentator who was capable of seeing through the Obama racist smokescreen was
Craig Crawford, a veteran political operative and journalist who generally knew what he was
talking about. He made the following remarks one morning on MSNBC Obamavision in response to
the moronic anti-Clinton spurious spinning by Joe Scarborough and Mika Brzezinski:
CRAWFORD: You know, I have sat down here in Florida for the last month. And I have
watched the coverage, and I really think the evidence-free bias against the Clintons in the media
borders on mental illness. I mean, I think when Dr. Phil gets done with Britney [Spears], he
ought to go to Washington and stage an intervention at the National Press Club. I mean, we’ve
gotten into a situation where if you try to be fair to the Clintons, if you try to be objective, if
you try to say, “Well, where’s the evidence of racism in the Clinton campaign?” you’re accused
of being a naïve shill for the Clintons. I mean, I think if somebody came out today and said that
Bill Clinton — if the town drunk in Columbia [South Carolina] came out and said, “Bill Clinton
last night was poisoning the drinking water in Obama precincts,” the media would say, “Ah,
there goes Clinton again. You can’t trust him.” I really think it’s a problem. You know what?
You guys make him stronger with this bashing. This actually is what makes the Clintons
stronger.
Crawford was right in recalling that Bill Clinton’s greatest gift during the 1990s was his ability
to position himself in the center, making his opponents seem like extremists and haters. It was in
this way that Clinton was able to defeat the Gingrich budget coup attempt of 1995 and later the
impeachment coup of 1999. Would this same method finally defeat Obama?
SHELBY STEELE: OBAMA NEGLECTED TO BECOME HIMSELF
The black conservative Shelby Steele has pointed out the tremendous internal stresses and
strains to which Obama is subject as he increasingly masks his own views and professes opinions
which are calculated to appeal to large groups of white voters. Steele classes Obama as a bargainer
who survives by making deals with the white power structure, but who avoids open challenges to
oppression. This makes Obama different from types like Jesse Jackson and Al Sharpton, who
operate by constantly challenging the moral justifications of the white minority; these latter are seen
as far more threatening. It is not a very profound analysis, but it does offer some useful insights.
Steele writes: ‘No matter his ultimate political fate, there is already enough pathos in Barack Obama
to make him a cautionary tale. His public persona thrives on a manipulation of whites (bargaining),
and his private sense of racial identity demands both self-betrayal and duplicity. His is the story of a
man who flew so high, yet neglected to become himself.”170 Steele observes that Obama has
embraced what he calls a black identity: “There is a price to be paid even for fellow-traveling with a
racial identity as politicized and demanding as today’s black identity. This identity wants to take
over a greater proportion of the self than other racial identities do. It wants to have its collective
truth-its defining ideas of grievance and protest-become personal truth.... These are the identity
pressures that Barack Obama lives within. He is vulnerable to them because he has hungered for a
320 Barack H. Obama: The Unauthorized Biography
transparent black identity much of his life. He needs to ‘be black.’ And this hunger—no matter how
understandable it may be—means that he is not in a position to reject the political liberalism
inherent in his racial identity. For Obama liberalism is blackness.”171 But Steele has failed to
historicize the “black identity” he is talking about. Obama’s version of the black identity is the post-
1965 black identity as it has been manufactured by foundation-funded intellectuals and social
movements under the reign of affirmative action and multiculturalism, which have failed to solve
the problems of the black inner-city ghetto. The reason this synthetic black identity is so destructive
and consumes so much of the self is that it has been designed to be self-destructive and selfdefeating
by the foundation mind-benders. The contradictions related to the foundation-funded
black identity continue to explode into public view around the demonic figure of Reverend Wright:
‘…nothing could be more dangerous to Mr. Obama’s political aspirations than the revelation that
he, the son of a white woman, sat Sunday after Sunday — for 20 years — in an Afrocentric, black
nationalist church in which his own mother, not to mention other whites, could never feel
comfortable. His pastor, Rev. Jeremiah Wright, is a challenger who goes far past Al Sharpton and
Jesse Jackson in his anti-American outrage (“God damn America”). How does one “transcend” race
in this church? The fact is that Barack Obama has fellow-traveled with a hate-filled, anti-American
black nationalism all his adult life, failing to stand and challenge an ideology that would have no
place for his own mother. And what portent of presidential judgment is it to have exposed his two
daughters for their entire lives to what is, at the very least, a subtext of anti-white vitriol? What
could he have been thinking? Of course he wasn’t thinking. He was driven by insecurity, by a need
to “be black” despite his biracial background. And so fellow-traveling with a little race hatred
seemed a small price to pay for a more secure racial identity. And anyway, wasn’t this hatred more
rhetorical than real? But now the floodlight of a presidential campaign has trained on this usually
hidden corner of contemporary black life: a mindless indulgence in a rhetorical anti-Americanism as
a way of bonding and of asserting one’s blackness. Yet Jeremiah Wright, splashed across America’s
television screens, has shown us that there is no real difference between rhetorical hatred and real
hatred. No matter his ultimate political fate, there is already enough pathos in Barack Obama to
make him a cautionary tale. His public persona thrives on a manipulation of whites (bargaining),
and his private sense of racial identity demands both self-betrayal and duplicity….’ (Shelby Steele,
“The Obama Bargain,’ Wall Street Journal, March 18, 2008) In early July, Jesse Jackson noted
correctly that Obama was talking more and more about personal responsibility for the black family
and the black community, and less and less about the need for government intervention to fight
poverty and exclusion. Jackson was right to say that this amounted to talking down to the black
community. The answer, however, was that the entire foundation race-based divide-and-conquer
approach had to be junked, and replaced with class-based, color-blind New Deal programs for jobs,
housing, education and health care that attacked poverty as an empirically measurable phenomenon
among all groups in the US population, rather than attempting to deal with accumulated grievances,
where the black overclass would always demand the lion’s share of the available benefits. To tell
people of any color that they have to use self-reliance and family values in the midst of a world
economic depression caused by Wall Streets $1 quadrillion derivatives bubble, with dollar
hyperinflation, banking panic, systemic breakdown, the death agony of the US dollar as a reserve
currency, and chain-reaction bankruptcies ripping through the landscape – that is sheer genocidal
madness. It was time for New Deal measures for economic recovery and the general welfare, and
those were necessarily color-blind measures to help the poor of all races, creeds, and national
origins. This was the very outcome that Obama had been deployed by the Trilateral financiers to
prevent, so Jesse Jackson was on to something.
IX: Obama’s Triumph of the Will: The 2008 Primaries 321
OBAMA CAMPAIGN: WE NEED MORE WHITE PEOPLE
Obama’s campaign was relentlessly obsessed with race, in a number of directions. The following
account from Gateway Pundit deals with a campaign event at Carnegie Mellon University near
Pittsburgh on April 2, 2008. Michelle Obama’s handlers noticed that the television framing of the
speakers’ platform was going to show too many non-white faces. They therefore proceeded in a
blatant and ham-handed way to expel an Asian woman from the shot, while moving in a white face.
‘So just as Teresa Heinz Kerry, the woman who supports the lifestyle of the man whole sold the
Democrats down the river four years ago, was about to introduce the woman who took more than 40
years to be “proud of America,” suddenly……. gasp!… suddenly…….somebody noticed
something: While the crowd was indeed diverse, some students at the event questioned the practices
of Mrs. Obama’s event coordinators, who handpicked the crowd sitting behind Mrs. Obama. The
Tartan’s correspondents observed one event coordinator say to another, “Get me more white
people, we need more white people.” To an Asian girl sitting in the back row, one coordinator said,
“We’re moving you, sorry. It’s going to look so pretty, though.” “I didn’t know they would say,
‘We need a white person here,’” said attendee and senior psychology major Shayna Watson, who
sat in the crowd behind Mrs. Obama. “I understood they would want a show of diversity, but to pick
up people and to reseat them, I didn’t know it would be so outright.”’ (Gateway Pundit, “Giving
Hope a Comeback,” April 2, 2008) It looked rather like the old politics.
OBAMA WEAKENED IN THE COURSE OF THE PRIMARIES
In the wake of the Texas-Ohio-Rhode Island results, the Clinton campaign began to argue more
in detail that the public’s honeymoon with Obama had now passed its apex, and that his campaign
was beginning to ebb. Their statistics were based on the inherently unreliable exit polls, but might
still have indicated the beginnings of a sea-change. Clinton’s people claimed that “…just a few
weeks ago, Barack Obama won 68% of men in Virginia, 67% in Wisconsin and 62% in Maryland.
He won 60% of Virginia women and 55% of Maryland women. He won 62% of independents in
Maryland, 64% in Wisconsin and 69% in Virginia. Obama won 59% of Democrats in Maryland,
53% in Wisconsin and 62% in Virginia. And among Republicans, Obama won 72% in both Virginia
and Wisconsin. But now Obama’s support has dropped among all these groups. In Mississippi, he
won only 25% of Republicans and barely half of independents. In Ohio, he won only 48% of men,
41% of women and 42% of Democrats. In Texas, he won only 49% of independents and 46% of
Democrats. And in Rhode Island, Obama won just 33% of women and 37% of Democrats. Why are
so many voters turning away from Barack Obama in state after state? In the last few weeks,
questions have arisen about Obama’s readiness to be president. In Virginia, 56% of Democratic
primary voters said Obama was most qualified to be commander-in-chief. That number fell to 37%
in Ohio, 35% in Rhode Island and 39% in Texas. So the late deciders - those making up their minds
in the last days before the election - have been shifting to Hillary Clinton. Among those who made
their decision in the last three days, Obama won 55% in Virginia and 53% in Wisconsin, but only
43% in Mississippi, 40% in Ohio, 39% in Texas and 37% in Rhode Island.” (Clinton Campaign,
“Keystone Test: Obama Losing Ground,” March 12, 2008)
WAS OBAMA’S CAUCUS SUPERIORITY BASED ON HOOLIGAN DISRUPTION?
For weeks it had been assumed that Obama’s superiority and caucus states had been based on the
obvious advantage he held among rich elitists, affluent suburbanites, left liberal ideologues, and
Obama groupies, fanatics, and personality cultists — namely that all these groups were much more
322 Barack H. Obama: The Unauthorized Biography
likely to spend two or three hours going to a party caucus and hobnobbing with their peers then
were the low-wage hourly workers, housewives, and other working people who were far more
likely to support Senator Clinton. But was there another dimension beyond this? Had the Obama
people power coup developed a playbook of tactics to disrupt and subvert the caucuses? One
reported commented: ‘I have obtained a copy of a memo written by a Clinton campaign volunteer in
Washington state intended only for other Clinton volunteers in subsequent caucus states
(specifically for Texas campaign volunteers). It warns them of “caucus disruption strategies” by
supporters of Sen. Barack Obama. The memo was written by a University of North Carolina
professor emerita of anthropology who served as a volunteer Clinton precinct committee officer in
the Washington state caucuses last month. It warned other volunteer organizers about so-called
“strategies” alleged to have been observed by herself and by Clinton volunteers in Iowa and
Nevada: … Individuals arriving all at once in large groups can disrupt the caucus by making it
difficult to keep track of sign-in sheets, among other things…Other behaviors that can make it
difficult for the caucus to run smoothly are deliberate disruptions with things like chanting, sign
waving, dancing or singing. The Precinct Chair (or Caucus Chair) will need to insist on order.
Individuals may arrive who are not registered to vote in a particular precinct with the story that
‘they just moved there.’ Some places where this has been observed, the person really didn’t fit the
picture of somebody who had ‘just moved into’ the precinct. They were allowed to register to vote
and to caucus….Supporters for a particular candidate, such as Senator Clinton, have arrived at
caucus sites early to decorate and organize and been told that ‘the building was locked.’ When they
are finally allowed into the building they see that signs for other candidates had already been
posted. Bottom line: know who you are dealing with in terms of the caucus coordinator ... This will
usually be some volunteer for the local Democratic Party.” (Bonnie Erbe, “Democratic caucus
disruptions,” Scripps Howard News Service, March 12, 2008)
There was also this eyewitness account from Pacific John of El Paso, Texas: ‘In one example of
fraud that I witnessed, one of my precinct captains, an elderly Hispanic woman, called me to report
that BHO supporters had illegally seized control of the convention. During our series of phone calls,
Mrs. “A.” reported that the Obama people took the convention materials and did not have a legal
election of officers. Like nearly all of El Paso, BHO people would have lost such an election in this
majority-Hillary, Hispanic, mostly elderly precinct convention. The Obama people ordered Mrs. A.
to sit across the room during the delegate calculation, and excluded Hillary supporters from the
process. Mrs. A. overheard an Obama supporter call in a false delegate count to Austin. In a 13
delegate precinct where Obama should have won approximately 4 delegates, the Obama supporters
attempted to award 19 delegates to Obama. This was not innocent. During my attempts at cell
phone diplomacy, the Obama “chair” hung up on me, and refused to talk to the ethical Obama
organizer I was paired with at another precinct convention. As with all major attempts at fraud that
we identified, this delegate count was rectified in private at the county TDP headquarters, according
to TDP rules, but there were no public charges or sanctions. It is my opinion that people should be
in jail, but there is not a mechanism for this sort of prosecution, certainly not within TDP rules.
Although I have only volunteered in one state, virtually every Clinton staffer I have talked to has
similar stories from other caucus states. While the Hillary field campaign operates and feels very
much like typical Democratic campaigns, the Obama campaign is something new to Democratic
politics. From my perspective, it looks like it has copied the worst attributes of Republican
campaigns, but with unprecedented zeal.’172
IX: Obama’s Triumph of the Will: The 2008 Primaries 323
GENOCIDAL AUSTERITY FOR THE PLANET AND THE THIRD WORLD
The reality of a future Obama regime as an exercise in brutal austerity and draconian sacrifice
for an already exhausted US population is carefully hidden by the swooning media whores in this
country, but the intent is gross enough to be perceived from far away. Russian commentators, well
aware that Brzezinski runs Obama, have called attention to the Polish revanchist’s demands for a
further lowering of the US standard of living in order to increase the attractiveness of the US social
model to the rest of the world. In short, Brzezinski wants austerity for US blue collar workers and
poor people of all colors in order to enhance the efficacy of his imperialist war plans A smart
Russian author writing under the name of “Maksim Kalashnikov” observes: ‘In his most recent
book, entitled Second Chance: Three Presidents and the Crisis of American Superpower, Mr.
Brzezinski is trying to inspire his nation for a strategic mobilization, using arguments that curiously
recall old Soviet experience. It is more remarkable that speaking of disappointment of the
international audience in the American way of life, Mr. Brzezinski concentrated on the moral aspect
of the US development. To his view, the Americans have sunk into over-consumption, luxury, and
hedonism. As soon as the Americans encountered domestic economic problems, their example
became increasingly unattractive. The author correctly reminds us that the crisis of the Soviet Union
started with the loss of attractiveness of its model. Brzezinski emphasizes that the continuing efforts
to transplant democracy on a different soil degenerate into connivance to weakness of partners, and
multiply to lack of knowledge of relevant societies. Meanwhile, the universal image of an American
is associated with arrogant over-consumption, luxurious entertainment, along with indifference
towards environment and exploitation of natural resources. To make a plausible example,
Brzezinski proposes the audience to imagine a world in which every Chinese or Indian consumes as
much as an ordinary American, even in the conditions of economic recession. “Our standards of
consumption are going to get into a conflict with more and more intolerant egalitarian aspirations”,
warns Brzezinski. Therefore, to his view, the United States has to be “socially attractive” – which
requires broad national accord vis-à-vis one of the major flaws of the American social model.’
(“Maksim Kalashnikov, “Brzezinski Discovered America,” April 3, 2008)
The last wholly-owned Trilateral puppet, Jimmy Carter, was of course thoroughly committed to
as much austerity as the political traffic would bear. But even Carter had moments of conscience
and reticence, scruples, and qualms when confronted with the enormity of the sacrifices the
Trilaterals wanted to bail out their corrupt and bankrupt system. Carter was hampered among other
things by his residual allegiance to Christianity under the Trilateral overlay. But Carter had not been
indoctrinated for very long compared with Obama. Obama’s attraction to the Trilateral financiers is
precisely that he is the son of the Ford Foundation anthropologist Ann Dunham, a woman who
flirted with Marxism and was anti-American for all the wrong reasons, and that he is a disciple of
the Cone-Hopkins-Wright synthetic religion of race hatred. Under his suave and cultured veneer,
Obama is boiling with resentments and hatred against the American working class, at whose hands
he imagines that he has received all manner of slights and humiliations. Obama’s basic tendency if
he ever gets to the White House will be to take advantage of an unparalleled opportunity to flay the
American people alive and leave them nothing but their eyes to weep with in a way that Bush, for
all his malevolence, never dreamed of doing. And while Bush had to hide his own looting of the
American people, Obama will loudly proclaim his own austerity plan, trumpeting it as the essence
of social justice, as the answer to imperialism, colonialism, slavery, racism, and pollution – except
that the proceeds will go into the pockets of David Rockefeller, George Soros, and the other finance
oligarchs who own Obama.
324 Barack H. Obama: The Unauthorized Biography
THE PROCEEDS GO TO ROCKEFELLER, SOROS, RUBIN, ROHATYN
One way that Obama could show that he is better than Bush and better than McCain when it
comes to imposing crushing austerity on the American population is his ability to dress up cuts in
the living standard in the camouflage of leftist and humanitarian verbiage. A fiendish variant of this
demagogy is Obama’s plan to help the third world. In reality, the sums of money cited here will go
to bail out the bankrupt banks and investment houses of Rockefeller, Soros, Rubin, and Rohatyn.
But left liberals will support these measures, especially because they involve further sacrifices for
blue collar workers. Obama’s bill is called the Global Poverty Act, ‘… and could result in the
imposition of a $845 billion global tax on the United States. The bill, which has the support of many
liberal religious groups, makes levels of U.S. foreign aid spending subservient to the dictates of the
United Nations. The U.N.’s “Millennium Project,” says that the U.N. plan to force the U.S. to pay
0.7 percent of its GNP in increased foreign aid spending would add $65 billion a year to what the
U.S. already spends. Over a 13-year period, from 2002, when the U.N.’s Financing for
Development conference was held, to the target year of 2015, when the U.S. is expected to meet the
“Millennium Development Goals,” this amounts to $845 billion. And the only way to raise that kind
of money is through a global tax, preferably on carbon-emitting fossil fuels. Here’s an abstract of
the proposed legislation: “To require the President to develop and implement a comprehensive
strategy to further the United States foreign policy objective of promoting the reduction of global
poverty, the elimination of extreme global poverty, and the achievement of the [U.N.] Millennium
Development Goal of reducing by one-half the proportion of people worldwide, between 1990 and
2015, who live on less than $1 per day.” Here’s how Senator Obama’s website frames the bill:
“With billions of people living on just dollars a day around the world, global poverty remains one of
the greatest challenges and tragedies the international community faces,” said Senator Obama. “It
must be a priority of American foreign policy to commit to eliminating extreme poverty and
ensuring every child has food, shelter, and clean drinking water. As we strive to rebuild America’s
standing in the world, this important bill will demonstrate our promise and commitment to those in
the developing world. Our commitment to the global economy must extend beyond trade
agreements that are more about increasing corporate profits than about helping workers and small
farmers everywhere.”’ 173 The key to getting the United States and the rest of the world out of the
present Bush economic depression is to gear up American factories for a campaign of exporting
high technology capital goods to the developing countries, especially in the critical areas of
infrastructure and nuclear energy production (Atoms for Peace). That would be a real economic
recovery program. But Obama is talking about nothing of the kind: he is talking about extorting
taxpayer dollars by citing the very real fact that 40,000 people die every day in the developing
countries of malnutrition and starvation, and then cynically giving the money to his bankrupt Wall
Street backers to prop up their rotten and doomed system.
This capability of Obama to impose sacrifice and austerity qualitatively worse than Carter
depends on the fact that the force of hatred is far stronger in Obama, the foundation-funded anti-
American racist and crypto-Weatherman, than it ever was in Carter, who appears benign by
comparison. Even the cynical Spengler is aghast at the hatred of the American people which can be
detected in Obama: ‘“Evil will oft evil mars”, J. R. Tolkien wrote. It is conceivable that Barack
Obama, if elected, will destroy himself before he destroys the country. Hatred is a toxic diet even
for someone with as strong a stomach as Obama. As he recalled in his 1995 autobiography, Dreams
from My Father, Obama idealized the Kenyan economist who had married and dumped his mother,
and was saddened to learn that Barack Hussein Obama, Sr, was a sullen, drunken polygamist. The
elder Obama became a senior official of the government of Kenya after earning a PhD at Harvard.
IX: Obama’s Triumph of the Will: The 2008 Primaries 325
He was an abusive drunk and philanderer whose temper soured his career.’ (Spengler, Asia Times,
Feb. 26, 2008) Obama also has a powerful demagogic weapon to turn against the American people
as he seeks to ram killer austerity down their throats: this is the global warming hope is, assiduously
cultivated over some two decades by the oligarchical Malthusian profiteer and parasite Al Gore.
The ultimate source for Obama’s future austerity programs is doubtless Prince Charles, the ego
ideal and master of Obama’s backer Gore. Prince Charles comes from the British royal family,
which supported Mussolini in the 1920s and Hitler in the 1930s. After World War II, they turned to
green fascism in the form of extreme Darwinian-Malthusian zero growth, and now to global
warming as the basis for their genocide policy against the third world. As Prince Charles recently
stated: “We will end up seeing more drought and starvation on a grand scale. Weather patterns will
become even more terrifying and there will be less and less rainfall,” he said. “We are asking for
something pretty dreadful unless we really understand the issues now and [the] urgency of them.”
The neofascist Prince claimed that the rainforests, which provide the “air conditioning system for
the entire planet”, releasing water vapour and absorbing carbon, were being lost to poor farmers
desperate to make a living. Charles raved that every year, 20 million hectares of forest – equivalent
to the area of England, Wales and Scotland – were destroyed and called for a “gigantic partnership”
of governments, businesses and consumers to slow it down. This is just the kind of PPP or publicprivate
partnership which represents the preferred expression for the fascist corporate state in the
English-speaking world. “What we have got to do is try to ensure that these forests are more
valuable alive than dead. At the moment, there is more value in them being dead,” Charles
estimated that the cost would be about £15 billion a year towards which he offered to pay nothing,
but rather attempted to con his listeners by defining this as an insurance policy for the whole world.
“That is roughly just under one per cent of all the insurance premiums paid in the world in any one
year. It is an insurance premium to ensure the world has some rainfall and reasonable weather
patterns. It is a good deal.” A good deal for parasites and genocidalists, one might observe. (Andrew
Pierce, “Prince Charles: Eighteen months to stop climate change disaster,” Daily Telegraph, May
18, 2008) Prince Charles is clearly counting on Obama to break the back of the remaining industrial
powers during the first year of his presidential term; this would inevitably be followed by social
chaos and mass starvation.
In an article entitled “Global warming hysteria serves as excuse for world government,” Daniel
Taylor outlines how the exploitation of the natural phenomenon of “global warming” was a pet
project of the Club of Rome and the CFR. “In a report titled ‘The First Global Revolution’ (1991)
published by the Club of Rome, an oligarchical think tank, we find the following statement: “In
searching for a new enemy to unite us, we came up with the idea that pollution, the threat of global
warming, water shortages, famine and the like would fit the bill.... All these dangers are caused by
human intervention... The real enemy, then, is humanity itself.”174 With Bush, the enemy image
(Feindbild) was concocted on the basis of the 9/11 myth. With Obama, the enemy image is
humanity in general, based on the insane hoax of overpopulation, the limits of growth, and of
carbon dioxide as a pollutant. The essence of fascist economics is the imposition of a statesponsored
compulsory cartel for the purpose of reducing employment and cutting production,
outside of which no economic activity is permitted. Back during the Carter years, the Trilateralists
concluded that the way to impose the fascist corporate state in the United States is to do it under the
cover of ecological and environmentalist explanations. The Al Gore “cap and trade” swindle
predicated on global warming is the chosen means to smuggle the fascist corporate state in through
the back door under the cover of controlling the emissions of so-called greenhouse gases. Cap and
trade represents Gore’s method of creating a new financial bubble after the catastrophic collapse of
326 Barack H. Obama: The Unauthorized Biography
the current worldwide asset bubble. Those who do not join the compulsory cartel by entering the
market for carbon offsets will be shut down by the Green Corps Gestapo.
This approach is now the basis of an emerging pan-oligarchical consensus among the US-UK
financiers. ‘…attendees at the recent Trilateral meeting raised the specter of climate change as a
tool to force through tax hikes. Calling on the United States government to adopt a “carbon
monoxide control policy,” former CIA boss and long term champion of creating a domestic
intelligence agency to spy on Americans John Deutch, argued that America should impose a $1-
pergallon increase in the gasoline tax under the pretext of fighting pollution. During the secretive
Trilateral Commission group meeting in March 2007, elitists gathered to formulate policy on how
best they could exploit global warming fear-mongering to ratchet up taxes and control over how
westerners live their lives. At the confab, European Chairman of the Trilateral Commission,
Bilderberger and chairman of British Petroleum Peter Sutherland, gave a speech to his cohorts in
which he issued a “Universal battle cry arose for the world to address “global warming” with a
single voice.” Echoing this sentiment was General Lord Guthrie, director of N.M. Rothschild &
Sons, member of the House of Lords and former chief of the Defense Staff in London, who urged
the Trilateral power-brokers to “Address the global climate crisis with a single voice, and impose
rules that apply worldwide.’175 So far, China, Russia, and India have refused to accept economic
strangulation and the shutdown of their economic development plans by the global warming
charlatans. Instead, 50-60 countries around the world are demanding a rapid shift to nuclear energy,
and the International Atomic Energy Agency has advanced a workable plan for 1,400 new nuclear
reactors to guarantee the future of humanity. One of Obama’s first tasks will be to attempt to
sabotage these efforts in favor of an endless stagnation and neo-colonial underdevelopment. Any
country which accepts the Gore cap and trade insanity is committing moral and economic suicide,
and will not survive. Ever the hypocrite, Obama is oblivious to all this: he has just bought a
Chrysler with a big 5.7-liter engine from them, probably with a sweetheart discount from the
Cerberus hedge fund which is now demolishing Chrysler.
CAMOUFLAGE FOR OBAMA’S SCHACHTIAN ECONOMICS
Obama’s economic handlers, advisers, and controllers were assigned to him from the ranks of
the University of Chicago monetarist school, the home of the infamous hyper-austerity economics
which reached its fullest flowering when the bloody-handed military dictator of Chile Agusto
Pinochet, who had been installed in a violent coup by Kissinger, called in Milton Friedman to
superintend the “liberal reforms” need to crush the working class of Chile, roll back a century of
social and economic gains by the labor movement, and drastically reduce the standard of living in
order to enhance the looting rate enjoyed by US-UK multinational corporations. Naturally, it would
be something of an embarrassment to the Perfect Master if he were exposed as following in the
footsteps of Pinochet and Thatcher in his economic policy, even though it is exactly that which his
controllers intend him to do. One short-term palliative is to pretend that Obama’s top adviser,
Austan Goolsbee of the University of Chicago free market, free trade, neoliberal looting temple is
not really a full-fledged member of the Chicago School – he is just a fellow who happens to teach at
the University of Chicago. Obviously, this threadbare subterfuge will not be very effective. What is
therefore required is to concoct a more ambitious plan for smokescreen and camouflage, inevitably
in the form of yet another “third way” between authentic FDR New Deal economics (which the
monetarists fear so much that they prefer to apply to it the very misleading label of Keynesianism)
and the Friedman-von Hayek monetarist looting theory. This operation emerged in the late spring of
2008 in the form of the Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions about
IX: Obama’s Triumph of the Will: The 2008 Primaries 327
Health, Wealth, and Happiness (New Haven CN: Yale University Press, 2008). As Art Laffer once
remarked, “You want to prove that Milton Friedman is a fascist? It’s easy – quote him.”
DON’T NOODGE ME, BRO’
The cynical gambit here is that Obama represents a third way capable of transcending the New
Deal and monetarist clash, and that this third way is not the same as the deeply flawed third way
that had been embraced by Bill Clinton in 1993 after his lecture from Greenspan on how bad things
really were – a lecture which submerged Clinton’s populist instincts under a toxic tide of Wall
Street pro-globalization ideology. The new buzz word is paternalistic libertarianism, meaning in
practice the Friedmanite anti-state, pro-monopoly, pro-cartel (“pro-market”) vision, but now
seasoned with a heady dose of coercion, which masquerades under the guise of a helpful “nudge.” If
we switch into Yiddish, we can see that both Thaler and Sunstein indeed qualify as full-fledged
nudges or noodges. In good Yiddish, nudzh or noodge works as substantive meaning one who
persistently pesters, annoys, or complains, a transitive verb meaning to annoy persistently or pester,
and even as an intransitive verb meaning to complain or carp persistently. The etymology goes back
to the Yiddish nudyen, to pester, bore, from Polish nudzi.’176 Soon we are likely to hear calls to
Obama saying “Don’t noodge me, bro’” – because of the candidate’s propensity to complain and
blame his failures on the American people.
Obama’s economic policies can be classified as neo-liberal tending towards Schachtian – going
back to Hjalmar Schacht, Hitler’s first Finance Minister, a figure widely recognized by his
contemporaries as the chief German asset of the House of Morgan. What Thaler and Sunstein have
come up with is a not so clever pastiche based on the fake argument that Obama is “a
behavioralist—the term economists use to describe those who subscribe to the tenets of behavioral
economics, an increasingly popular discipline that seeks to marry the insights of psychology to the
rigor of economics.” As soon as we hear the term behaviorism applied to human affairs, it is time to
run for our lives. Behaviorism is the bankrupt, discredited, and sinister complex of crude and cruel
doctrines associated with the names of John B. Watson and B. F. Skinner. Skinner was the inventor
of the Skinner box, a torture chamber into which little white rats were placed so they could receive
alternating electrical shocks and pellets of food and candy in order to shape their behavior according
Skinner’s notion of operant behavior modification. Another example is Pavlov teaching dogs to
salivate when they hear a gong. These methods have long been applied to human affairs, with one
of the most infamous examples being Jeremy Bentham, one of the founders of modern British
intelligence and an architect of the worst Jacobin excesses of the French revolution. Bentham
designed a prison called the Panoptikon in which behaviorist methods were used to maximize the
exploitation of prisoners. Therefore, if you want to get a good image of yourself and your family
under a future Obama regime, imagine yourself in the position of that wretched little white rat in a
Skinner box, working and scampering and scurrying about hectically and desperately to avoid
excruciating electric shocks and to earn a little pellet of food. That is the core idea of behaviorist
economics, once the advertising copy has been stripped away. This is your future under the politics
of hope and change.
As a political matter, Obama’s acolytes are well aware that Clinton evolved well into New Deal
territory during her campaign, and these are the ideas that Obama is assigned to crush: as a recent
review notes, ‘Hillary Clinton, after initially equivocating, has emerged as the would-be heir to
FDR and John Maynard Keynes. In addition to imposing a ninety-day moratorium on foreclosures
and a five-year freeze on certain adjustable mortgage rates, she would have the federal government
buy up an undetermined number of troubled home loans, enabling lenders to convert them to more
328 Barack H. Obama: The Unauthorized Biography
affordable deals and putting a floor under the housing market. Clinton would also allow bankruptcy
judges to reduce the value of mortgages, a proposal the banking industry vigorously opposes, and
she has criticized McCain as the reincarnation of Herbert Hoover….’ (John Cassidy, “Economics:
Which Way for Obama?” New York Review of Books, · June 12, 2008)
Obama is a creature of the catastrophic Great U-Turn under Carter, and of the Reaganite Age of
Monetarist decline which followed, and his handlers are determined to go further in this bankrupt
direction: ‘Should Obama win the nomination, political considerations may well force upon him a
more interventionist position, but his first inclination is to seek a path between big government and
laissez-faire, a trait that reflects his age—he was born in 1961—and the intellectual milieu he
emerged from. Before entering the Illinois state Senate, he spent ten years teaching constitutional
law at the University of Chicago, where respect for the free market is a cherished tradition. His
senior economic adviser, Austan Goolsbee, is a former colleague of his at Chicago and an expert on
the economics of high-tech industries. Goolsbee is not a member of the “Chicago School” of Milton
Friedman and Gary Becker, but he is not well-known as a critic of American capitalism either. As
recently as March 2007, he published an article in The New York Times pointing out the virtues of
subprime mortgages. “The three decades from 1970 to 2000 witnessed an incredible flowering of
new types of home loans,” Goolsbee wrote. “These innovations mainly served to give people power
to make their own decisions about housing, and they ended up being quite sensible with their
newfound access to capital.”’ Too bad if you die of exposure after undergoing foreclosure,
Goolsbee’s doctrines will not doubt offer a world of solace and comfort.
Among the more recent precedents for behaviorist economics, our reviewer notes these:
‘Although its intellectual roots go back more than thirty years, to the pioneering work of two Israeli
psychologists, Amos Tversky and Daniel Kahneman, behavioral economics took off only about ten
years ago, and many of its leading lights, among them David Laibson and Andrei Shleifer, of
Harvard; Matt Rabin, of Berkeley; and Colin Camerer, of Caltech, are still in their thirties or forties.
One of the reasons this approach has proved so popular is that it appears to provide a center ground
between the Friedmanites and the Keynesians, whose intellectual jousting dominated economics for
most of the twentieth century.’ Now we have a new attempt to put lipstick on the Friedmanite pig.
A central concept of this new school of economic kookery and obscurantism is the concept of the
nudge, a gentle tap from the regime to push the individual into the direction desired by the finance
oligarchs and their political puppets like Obama. Since the goal of the entire exercise is to increase
the looting rate and austerity index at the expense of working families, the nudge will have to
evolve in a more and more coercive direction. It will go from a nudge to a shove to an elbow in the
ribs to a cattle prod to a whip to a truncheon, and then to a bayonet, before turning into a machine
gun. Our reviewer continues: ‘The central tenet of the Chicago School is that markets, once
established and left alone, will resolve most of society’s economic problems, including,
presumably, the mortgage crisis. Keynesians—old-school Keynesians, anyway—take the view that
markets, financial markets especially, often fail to work as advertised, and that this failure can be
self-reinforcing rather than self-correcting. In some ways, the behavioralists stand with the
Keynesians. Markets sometimes go badly awry, they agree, especially when people have to make
complicated choices, such as what type of mortgage to take out. But whereas the Keynesians argue
that vigorous regulation and the prohibition of certain activities such as excessive borrowing are
often necessary, behavioralists tend to be more hopeful about redeeming free enterprise. With a
gentle nudge, they argue, even some very poorly performing markets—and the people who inhabit
them—can be made to work pretty well.’ (John Cassidy, “Economics: Which Way for Obama?”
New York Review of Books, June 12, 2008)
IX: Obama’s Triumph of the Will: The 2008 Primaries 329
As if by magic, the Trilateral hand which guides Obama’s fortunes has arranged for a new book
which can serve as a fig leaf for his odious and reactionary economic program: ‘In a fortuitous
accident of timing, Sunstein and his friend Richard Thaler have just published a book that makes the
behavioralist case in non-technical language: Nudge: Improving Decisions About Health, Wealth,
and Happiness. On the face of it, finding two more suitable coauthors would be difficult. Sunstein is
a one-man think tank and a prolific writer—by my count, this is his eighth book in as many years.
Thaler, who, like Goolsbee, teaches at Chicago’s Graduate School of Business, is one of the
founders of behavioral economics. During the 1980s, he began publishing a series of columns in the
Journal of Economic Perspectives about economic phenomena that defied the accepted wisdom of
the subject, which depended heavily on the twin assumptions of individual rationality and market
efficiency.’ (John Cassidy, “Economics: Which Way for Obama?” New York Review of Books, ·
June 12, 2008)
The entire package has to be dressed up in a libertarian mantle, to add an extra layer of
camouflage protection and to imbue it with crossover appeal to the numerous drifting stragglers
from the Ron Paul campaign who are going to have to go somewhere when their current Pied Piper
of the Austrian School is finally defeated at the Republican Convention: ‘In defense of Thaler and
Sunstein, their emphasis is on public policy. Yet the program they outline seems unduly restrictive.
Not content to be behavioralists, they are also libertarians, and they endorse something they call
“libertarian paternalism.” They write: “Libertarian paternalism is a relatively weak, soft, and nonintrusive
type of paternalism because choices are not blocked, fenced off, or significantly burdened.
If people want to smoke cigarettes, to eat a lot of candy, to choose an unsuitable health care plan, or
to fail to save for retirement, libertarian paternalists will not force them to do otherwise—or even
make things hard for them. Still, the approach we recommend does count as paternalistic, because
private and public choice architects are not merely trying to track or to implement people’s
anticipated choices. Rather, they are self-consciously attempting to move people in directions that
will make their lives better. They nudge.” A nudge, as we will use the term, is any aspect of the
choice architecture that alters people’s behavior in a predictable way without forbidding any options
or significantly changing their economic incentives. To count as a mere nudge, the intervention
must be easy and cheap to avoid. Nudges are not mandates. Putting the fruit at eye level counts as a
nudge. Banning junk food does not.’ Alas! It is a slippery slope, especially when the bankers are
calling the shots, as they will be under Obama. The conclusion reached by Thaler and Sunstein is
this: “The twentieth century was pervaded by a great deal of artificial talk about the possibility of a
“Third Way.” We are hopeful that libertarian paternalism offers a real Third Way—one that can
break through some of the least tractable debates in contemporary democracies.”’ (John Cassidy,
“Economics: Which Way for Obama?” New York Review of Books, · June 12, 2008) Rather than a
third way, this is the same old monetarist blind alley in drag – and, under conditions of the Bush
depression, it is a blind alley that leads off a cliff.
YOUTHFUL ENERGY AND LOFTY IDEALS: THE DRAFT AND FORCED LABOR
Obama has issued a “Call to Serve,” announcing his intent to impose some kind of peacetime
national service; in a major policy address at Cornell College in Mt. Vernon, Iowa. Obama said: ‘I
am going to ask you to play your part; ask you to stand up; ask you to put your foot firmly into the
current of history. I am asking you to change history’s course. And if I have the fortune to be your
President, decades from now – when the memory of this or that policy has faded, and when the
words that we will speak in the next few years are long forgotten – I hope you remember this as a
moment when your own story and the American story came together, and history bent once more in
330 Barack H. Obama: The Unauthorized Biography
the direction of justice.” At the event, Senator Obama was introduced and endorsed by former U.S.
Senator Harris Wofford (D-PA), former Associate Director of the Peace Corps and former Special
Assistant to the President for Civil Rights during the Kennedy Administration. Wofford was
instrumental in the formation of the Peace Corps, played a key role in crafting and passing the
legislation that led to the creation of AmeriCorps and Senator, and currently serves as an advisor to
ServeNext.’ Senator Obama’s plan would …would: expand AmeriCorps from its current 75,000
slots to 250,000 slots, enabling the program to establish five new Corps that address some of
America’s most pressing challenges: Classroom Corps, Health Corps, Clean Energy Corps,
Veterans Corps, and Homeland Security Corps; . engage retiring Americans in service on a large
scale by expanding and improving Senior Corps, VISTA and other programs that connect
individuals over the age of 55 to volunteer opportunities; double the size of the Peace Corps from
7,800 volunteers to 16,000 by its 50th anniversary in 2011 and work to partner volunteers with
people from other nations; establish an America’s Voice Initiative to recruit and train Americans
that are fluent speakers of local languages to bolster our public diplomacy efforts abroad; and create
a national online network, modeled on Craigslist, to connect volunteers to service and donation
opportunities.’177 All of these formations could easily acquire paramilitary overtones, with obvious
implications for postmodern fascist developments. The Homeland Security Corps was an especially
sinister plan that deserved relentless scrutiny and wife exposure.
OBAMA’S FREIWILLIGER ARBEITSDIENST
Not content with this Obama also demanded measures accomplish the following: ‘establish a
goal of having middle and high-schoolers contribute at least 50 hours a week to community service,
and reach that goal through national guidelines for service-learning and additional resources for
schools to develop successful programs; Connect disadvantaged youth to service opportunities and
a pathway to success through the creation of Green Job Corps and the expansion of Youth Build
from 8,000 slots today to 50,000 slots over the next eight years; Create a new American
Opportunity Tax Credit to ensure that the first $4,000 of a college education is completely free for
Americans willing to complete 100 hours of public service a year; Promote College Serve-Study by
immediately increasing the percentage of Federal Work-Study Program funding that goes to
community service jobs from 7 percent to 25 percent, and helping colleges and universities reach a
goal of 50 percent of serve-study over time; Expand the capacity of the nonprofit sector by
establishing a Social Investment Fund Network to provide R&D capital to encourage innovation,
find out what works, and expand successful programs to scale across the country; Create a Social
Entrepreneurship Agency to enable nonprofits to build capacity through improved collaborations
with government. (“Obama to Issue Call to Serve, Vow to Make National Service Important Cause
of His Presidency,” World socialist web site, December 5th, 2007) In his speech on national service
on July 2, 2008 at the University of Colorado, Obama promised that as president he would “set a
goal for all American middle and high school students to perform 50 hours of service a year, and for
all college students to perform 100 hours of service a year.” Underneath the edifying service
verbiage was the clear intent to prepare a form of compulsory service for the benefit of the bankrupt
Wall Street financiers, which might then kick over into outright forced labor through the use of food
control and other expedients as the depression worsened. Obama’s youthful dupes do not know it,
but there is a future of involuntary servitude waiting for them, be it armed with a rifle or a shovel.
Here, their fervent idealism would be ground into powder in the service of Wall Street greed.
IX: Obama’s Triumph of the Will: The 2008 Primaries 331
THE MOST SCURRILOUS CANDIDATE EVER: OBAMA’S SEXUAL INNUENDO
From a CNN report we learn: Barack Obama appeared to have a bit of an awkward ‘moment on
the campaign trail in South Bend, Indiana. From the pool report: “[Obama] posed for report pictures
with the staff when he apparently felt his phone start to vibrate in his pocket on his right thigh –
against which one woman was closely pressed. Later, as two cafe waitresses and owner Brenda
Wilson squeezed next to him for a photograph, Obama suddenly turned to one woman. “That’s my
phone buzzing there,” he said. “I don’t want you to think I’m getting fresh or anything.”’ (CNN,
April 10, 2008) On May 8, 2008, CNN aired a segment which was later posted with the caption/title
“Obama in Jeans.” This segment showed Obama lounging in blue jeans in the front of his campaign
plane while talking on his cell phone. Readers are invited to judge for themselves whether the
comments appended to this photo are correct. Obama clearly has a very scurrilous idea of
presidential decorum. Was Obama attempting to prove that he did not share an anatomical
deficiency widely attributed to Hitler? An Obama White House would rival the court of Nero or,
better yet, Heliogabalus, for its sexual depravity and licentiousness.178
“HOLD ON A SECOND, SWEETIE” — OBAMA’S INCURABLE MISOGYNY
Obama’s contempt for women is constantly expressed. Another example was his dismissal of a
serious policy question about jobs in the auto industry from a woman reporter working for a major
Detroit television station while the Perfect Master was mugging his way through an automobile
plant. ‘The moment came at a campaign stop in Detroit, when Peggy Agar, a reporter at ABC’s
Detroit affiliate WXYZ-TV, asked Obama this question: “Senator, how are you going to help the
American autoworkers?” “Hold on a second, sweetie. We’ll hold a press avail,” replied Obama,
referring to a structured question and answer session with the media. Hours later, Obama left Agar a
voicemail, apologizing for not answering her question and for calling her “sweetie.” “That’s a bad
habit of mine,” Obama said in the message. “I do it sometimes with all kinds of people. I mean no
disrespect and so I am duly chastened on that front.” It apparently is a habit. In an earlier campaign
stop, Obama said to a woman, “Sweetie, if I start with a picture I will never get out of here.” And
then: “Sweetie if I start doing autographs I just won’t be … I am really late.” (Dan Harris,
“Obama’s ‘Sweetie’: Spontaneous or Sexist?” ABC News, May 16, 2008)
Obama’s patronizing, condescending approach was also in evidence during a visit to Tama
Manufacturing near Allentown, Pennsylvania, where he flirted with and flattered women who make
less than poverty wages. According to Huffington Post: ‘Obama lavished compliments on
dancewear manufacturer Marisa Cerveris, who gave him a black and pink leotard for [Obama’s
daughters] Malia and Sasha, explaining she was once in the New York City ballet. “You look like
you might be a dancer,” Obama told her, later adding: “You’re big time.” “You’re gorgeous,” he
told Cerveris after glancing at one of her old ballet photos. “I was,” she replied. “You still are,” he
countered, asking the crowd, “Isn’t she beautiful?” and answering his own question: “Absolutely.”
The average unionized worker at Tama makes about $18,000 a year, lower than poverty level wages
for a family of four according to government standards. Tama workers make $10.50 an hour, and
must contribute $50 a month toward their health care. Obama praised Tama Manufacturing as a
success story saying, “I’m glad to see we still have a good company here with a good owner looking
after his workers.” Recently, these same workers had gone on strike for 15 weeks.
332 Barack H. Obama: The Unauthorized Biography
OBAMA FEARS ISSUES OF HOMOSEXUALITY AND BISEXUALITY
Questions of homosexuality and bisexuality, as already noted, are obviously fraught with a great
deal of attention and peril in Obama’s case. In late October 2007, Obama became embroiled in a
controversy because he accepted the support of Donnie McClurkin, the superstar black gospel
singer, who is a former homosexual who argues the thesis that homosexuality is a choice, a view
which many homosexuals regard as heresy. McClurkin appeared together with Obama at a gospel
concert in Columbia, South Carolina. ‘“Don’t call me a bigot or anti-gay when I have suffered the
same feelings,” said McClurkin. “God delivered me from homosexuality,” he added. He then told
the audience to believe the Bible over the blogs: “God is the only way.” Obama was forced to
backpedal furiously, issuing a statement saying that he strongly disagrees with Mr. McClurkin’s
views and that he has tried to address what he called the homophobia among some black voters. As
a result, some of Obama’s events were picketed in protest by small groups of gay and lesbian
militants.’ (Katharine Q. Seelye, Obama’s Gospel Concert Tour, New York Times, October 29,
2007)
Later, before the Pennsylvania primary, Obama was damaged by a public dispute with the
leading gay publication in Philadelphia because he refused to grant an interview, something that
many black press organs have also complained about. The Philadelphia Gay News attacked Obama
for his consistent refusal to speak to gay media outlets. In a pre-election issue, the paper featured a
front-page interview with Hillary Clinton and a large blank space under a photo of Barack Obama,
with a banner headline reading, “Clinton Talks, Obama Balks.” The paper’s accompanying editorial
commented: “At this point in the Democratic presidential campaign, we’re able to view the
candidates by their actions. And we have found that Sen. Barack Obama would rather talk at the
LGBT community than with them....” (Queerty) All of this left the question of why Obama seemed
so blocked and uncomfortable when it came to interacting with media which represent a
considerable number of Democratic primary voters. Based on the Larry Sinclair revelations and the
Reverend Manning “Trinity of Hell” tape, Obama may be concerned that he will be outed as a
closet homosexual or bisexual.
The important Pennsylvania primary was held on April 22. It had been preceded by 6 weeks of
intensive campaigning, and had allowed Obama to bring to bear the full range of advantages
inherent in his well-heeled Soros-powered pluto-candidacy. Obama outspent Clinton by margins
that were variously estimated as two to one, three to one, or four to one (Pat Buchanan on MSNBC),
with much of this concentrated in the area of television advertising. Obama’s television advertising
blitz probably crossed into the area of diminishing returns and of active annoyance and backlash
against his condescending and hectoring tone. Obama was defeated by 10 percentage points, 55 to
45. It was a humiliating and ominous defeat. The postmodern fascist had broken his sword against
the Clinton lines.
OBAMA GIVES HILLARY THE FINGER
In a campaign appearance the next day, Obama manifestly engaged in an obscene gesture – the
digitus infamis – directed personally against Mrs. Clinton. He also brushed off his shoulders to
show his contempt for Clinton’s criticisms. Among the media, the most explicit discussion was
provided by O’Reilly on the evening of April 21, 2008, although there had been some previous
light-headed badinage on MSNBC. Laluchasigue of noquarterusa.net called attention to the fact that
Obama was using coded references to communicate a racist message to his followers in a way that
IX: Obama’s Triumph of the Will: The 2008 Primaries 333
many other voters would not understand. Laluchasigue pointed out that the key to interpreting
Obama’s antics over these days were the following lyrics:
‘[Chorus: Jay-Z]
If you feelin’ like a pimp n***a, go and brush your shoulders off
Ladies is pimps too, go and brush your shoulders off
N****z is crazy baby, don’t forget that boy told you
Get, that, dirt off your shoulder.
Laluchasigue went on to elaborate his thesis: ‘Now, get this Obamabot’s reaction to the gesture:
“Dude, I nearly swooned — SWOONED, I tell you — when I saw that. That’s one of my fave Jay-
Z joints of all time. HUGE SWIRLING VORTEX OF LOVE. I could not pink-fuzzy-heart Barack
one iota more.” Violet Socks posted a diary about that “swooner” over at the terrific new
blog…Laluchasigue continued: ‘Obama’s gesture prompted a mash-up video that made the Jay-
Z/Obama connection explicit. Ari Melber, the other Obamabot named Ari at The Nation, posted the
video on The Nation’s website, noting, “Obama really is a Jay-Z fan, too. When asked which hip
hop artists he likes in a recent interview, he said, ‘lately I’ve been listening to a lot of Jay-Z — this
new American Gangster album.’” Spencer Ackerman, another young white male media Obamaton,
called Obama’s gesture “perhaps the coolest subliminal cultural reference in the history of
American politics.” So what is the hype about? What did Jay-Z actually say that captivated Barack
Obama? Here is the hook and first verse to the new theme song of Obama ‘08:
[Chorus: Jay-Z]
If you feelin’ like a pimp n***a, go and brush your shoulders off
Ladies is pimps too, go and brush your shoulders off
N****z is crazy baby, don’t forget that boy told you
Get, that, dirt off your shoulder
[Verse One]
I probably owe it to y’all, probably to be locked by the force
Tryin to hustle some things, that go with the Porsche
Feelin no remorse, feelin like my hand was forced
Middle finger to the law, n***a grippin ma balls
Stab the ladies they love me, from the bleachers they screamin
All the ballers is bouncin, they like the way I be leanin
All the rappers be hatin, off the track that I’m makin
But all the hustlers they love it just to see one of us make it
Came from the bottom the bottom, to the Top of the Pops
N***a London, Japan and I’m straight off the block
Like a running back, get it man, I’m straight off the block
I can run it back n***a cause I’m straight with the Roc.’
Laluchasigue continued: ‘Obama hasn’t flipped a “middle finga to the law” but to Hillary instead
(his godfather Tony Rezko and possible financial angel Nadmi Auchi were the ones flicking off the
law). He got his clock cleaned in a debate about his closest associates, his domestic policy proposals
and national security credentials, but after a quick, not-so-subliminal reference to Jay-Hova,
Obama’s back to “feelin’ like a pimp.” (Laluchasigue, ‘Obama Invokes Jay-Z “Stab the
Ladies…Middle Finga To The Law”, noquarterus.net, April 18, 2008)
334 Barack H. Obama: The Unauthorized Biography
The decadent forces of radical chic like Mo Dowd were also fully aware of the scurrilous and
obscene references that were built into Obama’s contemptible posturing: ‘It had to be the first time
in history that a presidential candidate had a hip-hop moment. Barack Obama, who says he listens
to Jay-Z along with his “old school guy” favorites like Earth, Wind & Fire and the Temptations,
alluded to the rapper’s 2003 hit “Dirt Off Your Shoulder” on Thursday to sweep away concerns
about his pugnacity. After conceding that the Philly debate was tough, he brushed the imaginary lint
of Hillary, George and Charlie from his shoulders, in a wordless reference to Jay-Z’s lyrics in his
anthem about not letting anyone crimp your ride as you cruise from the bottom to the top: “Got
some, dirt on my shoulder, could you brush it off for me.”’ (Maureen Dowd, “Brush It Off,” New
York Times, April 20, 2008) These decadent circles knew what they were getting. And they liked it.
With Obama, the institution of the presidency was destined to sink into a sewer of degradation
comparable to the era of the British Hellfire Clubs or the more depraved Roman emperors.
OBAMA STONEWALLS THE MEDIA
The clouds gathered ever more densely over Obama’s head. Reverend Wright, Bill Ayers,
Bittergate – small wonder that he stopped taking questions from his own traveling press corps, who
had generally been exemplary in their docility. In Blue Bell, Pennsylvania on April 21, ‘reporters
and photographers slightly trampled a Sept. 11 memorial garden to get into position to photograph
Obama after the event, and to try to ask him a few questions. Obama has not taken questions from
reporters traveling with him for 10 days. He gave his supporters some advice about the cameras at
the start of his event. “Just ignore them,” he said. “Pretend they’re not there.”’ (John McCormick,
“Mellow, Outdoor Afternoon with Obama,” Chicago Tribune, The Swamp, April 21, 2008) A
photograph turned up in which the Perfect Master was depicted making the classic coarse gesture
not to Sen. Clinton, but to the traveling press corps: The caption read: ‘Here’s your Barack Obama,
all alone on this giant luxury jet plane, reading his newspapers and perhaps flipping the bird to
Hillary, the airplane, and especially the political journalists who are again pretending that Hillary
Clinton can “win” the nomination, when she doesn’t have enough votes or delegates to actually do
that. Also, taped to the cabin ceiling ... a blood-stained towel?’ [AP Photo] (Wonkette, April 23,
2008)
ELITISM AND OLIGARCHICAL THINKING: OBAMA’S ACHILLES HEEL
The main objection to Obama remained that he was an elitist, an oligarch by training and
ideology, and also in terms of the narrow interests he proposed to serve. This was especially evident
in states like Ohio, Pennsylvania and Indiana, and later in West Virginia and Kentucky. A
Pennsylvania critic observed: “Obama is black by heritage but also a product of liberal elitism,
which appears to drive his thinking: Poor kid from single-parent home gets access to the best
schools, the best opportunities, and is groomed for greatness…. his thinking hovers on liberal elite.
That is why his comment in San Francisco about embittered Middle America was so revealing
about whom and what he is. Yet because of race, his political veneer was not scratched. In ideology,
is he different from Mike Dukakis, John Kerry, Al Gore or George McGovern? Probably not. He
just looks really cool saying the kind of things once said by those four men who lost the presidency
for the Democrats. And why did they lose? In large part, because of a lack of connection with
bread-and-butter Democrats. Love him or hate him, give Bill Clinton his due: He fought for the
presidency against all odds, from a small white Southern town; when he won, he delivered without
ever embracing liberal elitism. That is part of the price Hillary Clinton is paying in this primary:
The party’s liberal-elite side resents Bill’s performance… Compare this with two modern presidents
IX: Obama’s Triumph of the Will: The 2008 Primaries 335
who are widely remembered and admired: William Jefferson Clinton and Ronald Wilson Reagan.
Neither came from or had access to the elite system, though at times they brushed against it; when
push came to shove, they rejected it for their own survival. Both deeply wanted people to like them
because of their upbringings — both came from poor families in small-town America with abusive,
alcoholic fathers….If the candidate who emerges from this primary season echoes the liberal elitism
of McGovern, Dukakis, Gore and Kerry, then Democrats should start bracing for a losing year, one
they should have easily won.” (Salena Zito, “Elite Democrats Lose,” Pittsburgh Tribune-Review,
April 20, 2008)
OBAMA AS ADULATION ADDICT
As one British journalist noted, ‘Obama personally was an adulation addict: he needed the
adoration of the mob as his emotional fuel: In the last, say, three weeks, Obama hasn’t put forward a
single new proposal. He hasn’t, at least on any evidence that I’ve seen, tweaked his stump speech
much. He’s been static and stale and … he hasn’t been looking like he’s having fun doing this. That
can be deadly, and voters can smell it. A campaign can’t be static. It has to sense new dynamics and
paradigms as they arise and roll with them. While it shouldn’t depart from its basic message, it
should undertake little reinventions of the candidate along the way to show that the candidate is on
top of what’s going on out there.’ (Michael Tomasky, London Guardian, April 25, 2008) The
addiction to mob adulation is historically one of the most ominous possible symptoms for the
survival of a democracy. In this regard, Obama was on cold turkey for most of the second half of
the primary season, a fact which underscored his weakness as a candidate: ‘After the end of
February, it was a very long time before Obama WON any victories in primary elections. In the
interim, the Bill Ayers case and a second round of the Jeremiah Wright scandal exploded into public
view, thoroughly discrediting the Trilateral candidate. Obama had now settled into a familiar
pattern: he was able to win the votes of affluent suburbanites, feckless college students, and the
black community. He had very little appeal to white voters in general, trade union households,
women, retirees, Catholic voters, Jewish voters, Asian voters, Hispanic voters, and to that group of
swing voters known as the Reagan Democrats. The only question that remained was whether
Obama’s losing coalition would look more on the Electoral College map like McGovern in 1972,
Carter in 1980, Mondale in 1984, Dukakis in 1988, Gore in 2000, or Kerry in 2004. There was little
doubt that Obama was a sure loser in any normal election. Obama’s gamble was obviously enough
that his friends in the Department of Justice and the FBI would be able to deliver scandals powerful
enough to destroy Senator McCain at some opportune time in the fall. In the meantime, the attitude
of the hacks and elitists at the Democratic National Committee was a mystery to many: why did
they insist on nominating Obama, when he was so obviously a pathetically weak candidate with no
hope of winning the presidency in a contested election? Superficial observers said that this was
because the party insiders really were multicultural and politically correct, and that they therefore
did not want to offend the black community by rejecting its once-in-a-lifetime champion. More
seasoned commentators knew very well that the Democratic National Committee did not give a
damn about the black community one way or the other, and that the hysterical support for Obama
was simply due to the fact that he was the candidate demanded by the Wall Street financial
oligarchs for purposes of saving the entire Anglo American imperialist system. This was the real
reason, and not any concern about black sensibilities.
336 Barack H. Obama: The Unauthorized Biography
CALIFORNIA AND MASSACHUSETTS VULNERABLE TO GOP WITH OBAMA?
As the primaries rolled on, it became painfully obvious that even traditional Democratic states
could easily fall to the Republicans if Obama were in fact the candidate. The shocking list of states
where this condition obtained included such bulwarks as California, and such swing states as
Florida. Even Massachusetts, one of the most reliable Democratic of all the states, turned into a
battleground in case of an Obama nomination, presumably due to widespread voter disaffection
with the failed governor Deval Patrick, who notoriously spouted the same messianic-utopian
rhetoric which was Obama’s stock in trade. Massachusetts voters were saying in effect that one
Trilateral stooge in a generation was all that they could stomach. The veteran electoral analyst
Michael Barone summed up Obama’s plight in a commentary issued at the end of April: “…Clinton
seems to run stronger than Obama in the industrial (or formerly industrial) belt, running west from
New Jersey through Pennsylvania and Ohio to Michigan and Missouri. Obama’s weakness among
white working-class voters in the primaries here suggests he is poorly positioned to win votes he
will need to carry these states in November. This is not a minor problem — we’re talking about 84
electoral votes. Obama has also fared poorly among Latino and Jewish voters in every primary held
so far. This is of consequence most notably in Florida, which has 27 electoral votes. In 2000, Al
Gore won 67 percent of the vote in Broward County and 62 percent in Palm Beach County — both
have large Jewish populations. In this year’s Florida primary, Obama lost those counties to Clinton
by 57 percent to 33 percent and 61 percent to 27 percent. No Democrat can carry Florida without
big margins in Broward and Palm Beach. Obama’s weakness among Latinos and Jews could
conceivably put California’s 55 electoral votes in play. Los Angeles County delivered an 831,000
vote plurality for John Kerry in 2004. Most of that plurality came from areas with large numbers of
Latinos and Jews…. And his discomfort, evident in the Pennsylvania debate, when he is greeted
with anything but adulation does not augur well for his ability to stand firm and show a sense of
command in the face of the stringent criticism he is bound to receive as the Democratic nominee.
(Michael Barone, “Popular Vote Gives Clinton an Edge,” realclearpolitics.com, April 26, 2008)
THE RUBE GOLDBERG-BYZANTINE NIGHTMARE OF THE MCGOVERNFRASER-
DUKAKIS-JACKSON RULES
To understand the rules of the Democratic Party for choosing delegates, you need to imagine the
cartoonist Rube Goldberg transported into the flowing robes of a Byzantine Emperor of the tenth
century. It would take such a strange hybrid to come up with the present procedures for delegate
selection, which have become one of the main reasons why the Democratic candidate almost always
loses. Governor Ed Rendell told the discredited Chris Matthews on April 22 that the Democratic
Party delegate rules were “screwed up,” and that a straight tabulation of the popular vote would be
the most democratic criterion for winning. What then were these delegate selection rules upon
which Obama was relying as he sought to game the system? According to one attempted
explanation, “For its first 150 years, the Democratic Party selected its presidential nominee in a
proverbial smoke-filled room, with delegates picked by party bosses. The system began to change
in the 1940s and 1950s, when a handful of states including New Hampshire established primaries to
give voters a say in the selection of delegates.” As a result of the 1968 defeat, a reform commission
was set up under the leadership of George McGovern and UAW leader Douglas Fraser. In 1968,
Vice President Hubert Humphrey had won the Democratic nomination over the elitist antiwar
candidate Eugene McCarthy without winning any primaries. The next year, party leaders named
Senator George McGovern of South Dakota to head a panel to overhaul the delegate selection
process. The McGovern reforms, by abolishing the tradition of giving party leaders seats at the
IX: Obama’s Triumph of the Will: The 2008 Primaries 337
convention, sharply reduced the number of senators and congressmen who served as delegates.
These officeholders were less inclined to support the party’s standard-bearer when they had played
no role in the convention. There were also far fewer trade union leaders as delegates, with
correspondingly more environmentalists, sexual orientation activists, and minority militants. The
Daley machine of Illinois had simply ignored the McGovern recommendations. A floor fight over
the seating of the Illinois delegation ensued, with Mayor Richard J. Daley of Chicago clashing with
Jesse Jackson, leader of the reform slate. Daley was ousted and Jackson was seated. McGovern then
used the new system he had helped to design in order to seize the 1972 nomination, resulting in his
catastrophic defeat. McGovern won Massachusetts and the District of Columbia in one of the
biggest defeats in US history. Between 1972 and 1988 there were a series of commissions that were
supposed to reform the rules; a 1973 commission chaired by City Councilor Barbara Mikulski of
Baltimore scaled back some of the affirmative action provisions in McGovern’s rules and explicitly
prohibited winner-take-all primaries. Another commission in 1978 turned down the idea of
superdelegates. In June 1988, representatives of Dukakis and Jesse Jackson reworked the rules for
picking a Democratic Party nominee, creating an elaborate framework for selecting delegates based
on proportion of votes in states and congressional districts, with an additional role played by party
elders in the form of superdelegates. By 1980, the proportion of Democratic senators who served as
delegates had declined to 14 percent, down from 68 percent in 1960. Elected officials were unhappy
because they were obliged to run against their own voters and constituents for seats at the
convention. Therefore, there was support for the introduction of superdelegates, meaning party
veterans and elected officials. The one legitimate purpose served by this innovation was to have
some experienced people on the floor of the convention who could say no to a new hysteria of the
type that had propelled the obviously doomed George McGovern to the nomination in 1972. But
Obama and Axelrod had seen that the entire mechanism by 2008 was ripe for the most cynical
gaming. The Electoral College had been designed to give one candidate a convincing and
significant majority of the electoral votes, by ruling out proportional representation and instituting a
winner take all system.
The modern Democratic Party system, motivated by politically correct and multicultural
postmodern criteria did just the opposite: it tended to prevent the emergence of a winner based on
the Electoral College mega states fairly early in the game. The Democratic party rules were
therefore completely dysfunctional, and they had become a major factor in the breakdown of the
entire US political system during the year 2008. These rules were a insane, and the fact was widely
recognized. “This is the nightmare” that all the commissions sought to avoid, said consultant Bill
Carrick, who was part of the 1982 reform panel, in 2008. It was bad enough that the nomination was
in the hands of the party’s 795 “superdelegates,” who constitute party insiders. Even worse was the
fact that these superdelegates seemed to lack the elementary instinct for survival that would have
impelled them to give Clinton the nomination based on her superior ability to win the White House.
Again, obedience to Wall Street, and not any notion of solidarity with the black community, was the
main factor involved. In 1980, Senator Edward M. Kennedy of Massachusetts ran against President
Jimmy Carter in the primaries. Kennedy organized a series of rules challenges against Carter at that
year’s chaotic convention in New York City, triggering another bout of Democratic soul-searching.
“There was a palpable sense that this rules fight was really taking the party down,” said the party
hack Elaine Kamarck, a Carter backer in 1980. “People felt, if only there had been more elected
officials on the floor of the convention, maybe they could have short-circuited this.” There was
much dithering, leading to the creation of another commission chaired by James Hunt, the governor
of North Carolina, which recommended rolling back some of the more extravagant “reforms.” But it
was the Hunt commission that made Democratic members of Congress into automatic delegates, the
338 Barack H. Obama: The Unauthorized Biography
superdelegates of today. In 1984, Jesse Jackson complained that the rules had been stacked against
him by organized labor and Democrats aligned with Kennedy and former vice president Walter
Mondale. In the 1988 election, Jackson claimed that in Pennsylvania, Illinois, New Jersey, and other
states that awarded delegates on a winner-take-all basis within each congressional district, he had
been robbed of his share of the delegates. “We raised hell about the unfairness of the system that
was in play,” said Steve Cobble, Jackson’s delegate director. The rotten compromise of 1988,
extorted by Jackson without regard to the viability of future nominees, mandated proportional
representation as the only method for states to apportion their delegates. When the Hunt
Commission created the superdelegates in 1982, they constituted about 15 percent of all delegates;
since then, they have grown to include some big city mayors, former DNC chairmen, plus former
Democratic presidents and vice presidents. Superdelegates now number 795 and constitute 20
percent of the total. The McGovern reforms “have been watered down significantly by this superdelegate
stuff,” said one Democratic official. “Any time you have that number of delegates that are
not elected by the people, it’s wrong. It’s just wrong.” The obvious problem is that, under the
proportional representation rule imposed in 1988, it becomes mathematically difficult for a winner
to emerge from the primaries. “The unintended consequence has been to make it harder to get a
consensus as to who the nominee should be,” said another official, who supports a return to some
winner-take-all primaries to hasten the process. “The same people who complain about Electoral
College strong-arming can’t very well have a de facto Electoral College,” Jackson said. “That
would be suicidal.” (Alan Wirzbicki, “Changes have left uncertainty: ‘80s rules reform skews
Democrats’ nominee process,” Boston Globe, February 17, 2008)
The Democratic party rules to delegate selection are currently in blatant contradiction to the
rules of the November election. In the Democratic primaries, there is proportional representation;
in the Electoral College it is winner take all with a few minor exceptions. In the November
election, everything is decided by voting through secret ballot; in the Democratic Party, there are
caucuses where loudmouth Malthusian elitists and affluent suburban ideologues can intimidate
blue-collar working people, elderly women, and other core constituencies, sometimes browbeating
them into supporting candidates they do not want, and are sure not to vote for in November. There
are many reports of abuses by the Obamakins in this direction. In Texas this year, Mrs. Clinton
won the popular vote convincingly, but still ended up with fewer delegates because the Obama
lemming legions were able and willing to stay through the lengthy evening caucuses, thus giving
Obama more delegates — surely a scandal for the Democratic Party. . In the Electoral College, the
number of votes each state has is in rough proportion to its population, although smaller states fare
slightly better because they start off with a minimum of three electoral votes. In the Democratic
Party, by contrast, small states and states that are likely to go Republican get a special bonus of
delegates compared to vital, indispensable Democratic states like Michigan, Ohio, and
Pennsylvania. Finally, in the Electoral College it is more or less one-person one-vote; not so in the
Democratic Party, where the Jesse Jackson reforms make sure that an inner-city black vote is worth
much more in terms of electing delegates than a white, blue-collar, rural vote.
THE DEMOCRATIC RULES: “CRAZY”
The inherent absurdity of this entire system for a political party whose announced goal was not
to follow orders from Wall Street, nor to celebrate the ethereal virtues of multiculturalism and
political correctness, but was rather supposed to have to do with winning elections, was pointed out
by Steve and Cokie Roberts, a team of seasoned observers of the Washington scene. They correctly
noted: “Yes, the Clinton camp made strategic blunders that allowed Obama to score heavily in
IX: Obama’s Triumph of the Will: The 2008 Primaries 339
Republican states where few Democrats vote. But the real culprit is the party’s stupid, selfdestructive
nominating system, which has two major flaws. Since Feb. 19, seven states have voted.
Clinton has won four — Pennsylvania, Texas, Ohio and Rhode Island —building up a popular-vote
margin of 483,000. Yet her total gain in delegates was exactly five. In Texas, she won by more than
100,000 votes, but because of that state’s ridiculous rules, she actually came out five delegates
behind. How can that outcome possibly be fair? How can it possibly benefit the party? Wait, it gets
worse. Obama built up sizable margins in small states that Clinton was foolish enough to concede.
His delegate advantage in Idaho, Kansas and Louisiana — three states that will never vote
Democratic — was a total of 38. By contrast, Clinton handily won three large swing states —
Pennsylvania, New Jersey and Ohio. And yet, because of party rules, her combined marginal gain
amounted to 28 delegates. How can it make sense for Idaho, Kansas and Louisiana to have a bigger
impact on choosing the Democratic nominee than Pennsylvania, New Jersey and Ohio? Add in the
exclusion of Florida and Michigan, two crucial states that favor Clinton, and there’s only one word
for the Democrats’ system: crazy. And Republicans are gleeful.” (Cokie and Steve Roberts:
“Democrats will have to overcome their own system,” May 6, 2008) Only by junking these rules
could the Democrats hope to make a permanent comeback in the party realignment process.
OBAMA AS A BURDEN FOR CANDIDATES DOWN THE TICKET
The North Carolina Republican Party released a television ad attacking Beth Perdue and Richard
Moore, two Democratic gubernatorial candidates in that state, because they had both endorsed
Obama, who was now labeled as “too extreme for North Carolina” with documentation featuring
the Wright “God damn America” rant. It was an ominous sign to Democratic superdelegates that
running on the same ticket with the now-tarnished Perfect Master might be highly detrimental to
their chances of winning an election. As a result of Obama’s reckless reliance on his left CIA, left
wing intelligence community network from Chicago, it was now evident that Democratic Party
candidates at all levels would go into the November election carrying an immense burden of public
opprobrium, suspicion, and resentment. The components of this burden had names: they were
Jeremiah Wright, Bill Ayers, Bernardine Dohrn, the rest of Obama’s gaggle of Weatherman
terrorist cronies, Antoin Rezko, Auchi, Richard Daley, Rod Blagojevich, and many more. The
burden included Obama’ s Bittergate slurs against the lifestyle of blue-collar working class voters,
the hissing venom of Michelle Obama’s self-centered and self-righteous fascistoid tirades, plus a
whole series of gaffes in which Obama appeared to be babbling in delirium as soon as he was
separated from his beloved Teleprompter and had to speak off the cuff. Even more ominous was
the fact that the Obama burden was likely soon to include that Michelle Obama “hate Whitey” tape,
which was reportedly being used by Karl Rove in private screenings to extract substantial
contributions from Republican moneybags and fatcats for Rove’s 527 groups. Most critical of all, it
was the scandal complex that centered around the names of Donald Young and Larry Sinclair which
had the obvious potentiality to bring Obama down even more rapidly than New York Governor
Eliot Spitzer had been destroyed.
More eloquent than any polls in mid-summer 2008 was the growing list of Democratic Party
elected officials who had taken the unusual step of openly and publicly telling Obama that they
were not interested in the vice presidency. The first was Governor Ted Strickland of Ohio, who
presided over the classic battleground state which had decided the 2004 election. Then there was
Mark Warner of Virginia, a popular former governor who could have given Obama some faint hope
of taking Virginia out of the GOP column. Warner wanted to keep running for senator. Another
categorical denial came in from Marine General James Jones, the former NATO commander, who
340 Barack H. Obama: The Unauthorized Biography
would have given Obama a shred of military credibility. Governor Ed Rendell of Pennsylvania, who
had an impressive machine, said that he was no good at being second banana and therefore would
have to beg off the veep spot. Then came Senator James Webb of Virginia, a strange militarist
ideologue who was wrapped up in his pugnacious Scots-Irish identity trip, and also had a soft spot
for the Confederate States of America. Senator Jack Reid of Rhode Island also opted out. Even
former Senator Bill Bradley made a public statement rejecting a run for veep. All of these open
rejections were very ominous indeed, since each was a powerful vote of no confidence in the
viability of the Messiah at the polls.179
THE NORTH CAROLINA DEBATE THAT NEVER WAS
AND OBAMA’S WIMP FACTOR
A Democratic presidential debate had been scheduled for North Carolina, this time moderated by
Katie Couric of CBS. The Perfect Master had gone into contortions to avoid a format in which he
was now – after his Philadelphia debacle — manifestly a failure, to say nothing of his fear of new
questions about his hate-mongering and terrorist personal associations. Lanny Davis suspected that
DNC chair Howard Dean had connived with the Obamakins to get the North Carolina Democratic
Party to call off the debate, which had become a serious embarrassment to Obama and Axelrod.
Davis demanded that, if Howard Dean had indeed intervened to get Obama off the debate hook, he
should resign his chairmanship on the grounds that he had violated the neutrality and impartiality to
which the DNC leader is formally pledged. If Obama and Axelrod did not in fact fear a debate, they
could easily prove it by offering to show up. How could Obama continue as a viable candidate if he
were afraid of his opponents? Would he run from McCain as well? How could such a political
coward command voter support? Larry Johnson obtained an internal document of the North
Carolina Democratic Party which attempted to motivate the cancellation of the debate by arguing
that “While there was great interest in the debate, there were also growing concerns about what
another debate would do to party unity…” Larry Johnson then offered an “Uppity Translation:
There are growing concerns that any more hard or revealing questions might not be so good for
Baby Jesus Obama.” (Noquarterusa.net, April 23, 2008) By May, Obama had virtually stopped
campaigning. He skipped West Virginia, Kentucky, and Puerto Rico, which had very different
demographics, but in which Clinton beat Obama 2:1 each time. Clinton even won South Dakota;
Obama could only manage Oregon and Montana.
HO HO AND THE WAR HO
In 2000 and 2004, Democratic activists had demanded that every vote be counted. Now Obama
and his friend Ho Ho (as Howard Dean was known in Vermont), both defenders of the politically
correct-elitist-neomalthusian status quo that had caused so many defeats, were demanding that
Florida and Michigan, two indispensable megastates, not be counted. For any professional pol who
wanted to win an election, it was sheer madness. But many careers and reputations had come to
depend on the Democratic Party as a multicultural, politically correct crazy quilt of racial identity
groups, and sexual preference lobbies, with elitist, radical environmentalist, anti-working class, and
neo-Luddite components generally retaining the upper hand. This chaotic congeries, of course,
corresponded to the multiple fault lines along which the Ford Foundation, its satellite foundations,
and its domestic counterinsurgency apparatus (which had produced Obama) sought to split, divide,
slice, and dice the old FDR New Deal Coalition so it could not threaten Wall Street again. It
mattered not to Dean, Brazile, Pelosi, Reid, Kennedy and so many others that the politically correctmulticultural
rainbow coalition model for the party was an incurable, incorrigible loser. The
IX: Obama’s Triumph of the Will: The 2008 Primaries 341
rainbow model had led to the rout of the union movement, the collapse of living standards over four
decades, and to the impotence and isolation of the party. But the Pelosi faction had lashed
themselves to the carcass of multiculturalism, and they would rather lose an infinity of presidential
elections rather than lose their personal status and power, no matter what the terrible consequences
to the American people.
OBAMA AS THE NEW MCGOVERN:
EGGHEADS AND BLACKS ARE NOT ENOUGH
After Obama’s staggering defeats in Ohio and Pennsylvania, even some of the more clear-eyed
acolytes of his campaign began to fear for the result in November. What caught their eye was the
eerie resemblance between the outlines of Obama’s coalition as he became weaker and weaker in
April and May, and the 1972 McGovern voter base. That distant debacle was clearly in danger of
being repeated if Obama got the nomination. John Judis had co-authored a book about what he saw
on as the emerging Democratic majority, but Judis was now alarmed. He wrote an article which
caused a furor among the more faithful Kool-Aid addicts at The Nation, who began directing their
vituperation and infective against their hapless left liberal colleague. Judis found that ‘…Obama’s
weaknesses as a general election candidate grow more apparent with each successive primary. I
visited Pennsylvania during this time, and could feel the growing disillusionment with Obama. …
Obama cut into Clinton’s advantage, but couldn’t erase it. Even though he campaigned extensively
among white working class Pennsylvanians, he still couldn’t crack this constituency. He lost every
white working class county in the state. He lost greater Pittsburgh area by 61 to 39 percent. He did
poorly among Catholics – losing them 71 to 29 percent. A Democrat can’t win Pennsylvania in the
fall without these voters. And those who didn’t vote in the primary but will vote in the general
election are likely to be even less amenable to Obama. But Obama also lost ground among the
upscale white professionals that had helped him win states like Wisconsin, Maryland, and Virginia.
For instance, Obama won my own Montgomery County, Maryland by 55 to 43 percent but he lost
suburban Philadelphia’s very similar Montgomery County by 51 to 49 percent to Clinton. He lost
upscale arty Bucks County by 62 to 38 percent. …the electoral premise of Obama’s campaign – that
he can attract middle class Republicans and Independents--is being undermined. Indeed, if you look
at Obama’s vote in Pennsylvania, you begin to see the outlines of the old George McGovern
coalition that haunted the Democrats during the ‘70s and ‘80s, led by college students and
minorities. In Pennsylvania, Obama did best in college towns (60 to 40 percent in Penn State’s
Centre County) and in heavily black areas like Philadelphia. Its ideology is very liberal. Whereas in
the first primaries and caucuses, Obama benefited from being seen as middle-of-the-road or even
conservative, he is now receiving his strongest support from voters who see themselves as “very
liberal.” In Pennsylvania, he defeated Clinton among “very liberal” voters by 55 to 45 percent, but
lost “somewhat conservative” voters by 53 to 47 percent and moderates by 60 to 40 percent. In
Wisconsin and Virginia, by contrast, he had done best against Clinton among voters who saw
themselves as moderate or somewhat conservative. Obama even seems to be acquiring the religious
profile of the old McGovern coalition. In the early primaries and caucuses, Obama did very well
among the observant. In Maryland, he defeated Clinton among those who attended religious
services weekly by 61 to 31 percent. By contrast, in Pennsylvania, he lost to Clinton among these
voters by 58 to 42 percent and did best among voters who never attend religious services, winning
them by 56 to 44 percent. There is nothing wrong with winning over voters who are very liberal and
who never attend religious services; but if they begin to become Obama’s most fervent base of
support, he will have trouble (to say the least) in November. The primaries, unfortunately, are not
342 Barack H. Obama: The Unauthorized Biography
going to get any easier for Obama. While he should win easily in North Carolina, where he benefits
from a large African-American vote and support in the state’s college communities, he is going to
have trouble in Indiana, Kentucky, and West Virginia, where he will once again be faced by a large
white working class vote. He can still win the nomination and lose these primaries. Pennsylvania
was the last big delegate prize. But if Obama doesn’t find a way now to speak to these voters, he is
going to have trouble winning that large swath of states from Pennsylvania through Missouri in
which a Democrat must do well to gain the presidency. That remains Obama challenge in the month
to come.’ (John B. Judis, “The Next McGovern? — Obama may still get the nomination, but his
loss tonight deals a harsh blow to his electability arguments,” The New Republic, April 23, 2008)
Judis was flayed and vilified by the true believers among the lemming legions who saw this essay as
an act of unspeakable lèse majesté.
A right-wing commentator stressed that Obama was showing signs of mental disintegration even
as his vote totals deteriorated, and that there was always the possibility that he might be quickly
taken down by a scandal of the Spitzer type. ‘Hillary won just enough to show that it is ludicrous to
oust a 10-point winner at this late junction, but not quite the blow-out that might cause a stampede
to her in the next few states. The Democrats are tottering at the edge of the abyss. They are about to
nominate someone who cannot win, despite vastly out-spending his opponent, any of the key large
states — CA, NJ, NY, OH, PENN, TX, etc. — that will determine the fall election. And yet not to
nominate him will cause the sort of implosion they saw in 1968 or the sort of mess we saw in
November 2000. Hillary won’t quit, since she knows that Obama, when pressure mounts, is starting
to show a weird sort of petulance, and drops the “new politics” for snideness. And at any given
second, a Rev. Wright outburst, an Ayers reappearance, another Michelle ‘never been proud’
moment, or another condescending Obamism can cause him to nose dive and become even more
snappy.’ (Victor Davis Hanson, “The Second Coming of McGovern,” National Review.com, April
22, 2008)
OBAMA: ALWAYS THE RACE CARD
Professor Sean Wilentz elaborated on his penetrating diagnosis that the most basic technique of
the Obama campaign was to accuse any critic or opponent of being a racist, all the while denying
that any race card was being played at all by Obama. As the skein of Obama’s defeats lengthened,
the media whores at the Washington Post and other financier controlled press organs began putting
out the line that the problem was not with Obama, but rather with the American people, who were
now being exposed as unreconstructed racists. Here again, we see the logic of the Carter malaise
speech, which is the eternal template for every Trilateral puppet politician: when you get into
trouble because of your own incompetence, treachery, and stupidity, turn the tables as fast as you
can and blame the American people. Wilentz wrote: ‘In fact, all of the evidence demonstrates that
white racism has not been a principal or even secondary motivation in any of this year’s Democratic
primaries. Every poll shows that economics, health care, and national security are the leading issues
for white working class voters - and for Latino working class voters as well. These constituencies
have cast positive ballots for Hillary Clinton not because she is white, but because they regard her
as better on these issues. Obama’s campaign and its passionate supporters refuse to acknowledge
that these voters consider him weaker — and that Clinton’s positions, different from his, as well as
her experience actually attract support. Instead they impute racism to working class Democrats who,
the polls also show, happen to be liberal on every leading issue. The effort to taint anyone who does
not support Obama as motivated by racism has now become a major factor in alienating core
Democrats from Obama’s campaign. Out with the Democratic Party of Jefferson, Jackson, F.D.R.,
IX: Obama’s Triumph of the Will: The 2008 Primaries 343
Truman, Kennedy and Johnson, and in with the bright, shiny party of Obama - or what the formally
“undeclared” Donna Brazile, a member of the Democratic National Committee and of the party’s
rules committee, has hailed as a “new Democratic coalition” swelled by affluent white leftists and
liberals, college students, and African-Americans.’ (Sean Wilentz, “Barack Obama and the
Unmaking of the Democratic Party,” Huffington Post, May 23, 2008)
It was a slow motion tragedy unfolding before the eyes of the public: the bosses of the
Democratic Party, because they were controlled by the Wall Street financial elite who demanded
Obama and nothing but Obama, were throwing elementary political prudence out the window to
nominate a candidate who was doomed to defeat under all normal circumstances. At the same time,
the Obama fanatics attempted to motivate their hysterical persistence with the idea that the old
voting blocs were irrelevant, because the Perfect Master was going to bring in hordes of new voters.
‘This year’s primary results show no sign that Obama will reverse this trend should he win the
nomination. In West Virginia and Kentucky, as well as Ohio and Pennsylvania, blue collar white
voters sent him down to defeat by overwhelming margins. A recent Gallup poll report has argued
that claims about Obama’s weaknesses among white voters and blue collar voters have been
exaggerated - yet its indisputable figures showed Obama running four percentage points below
Kerry’s anemic support among whites four years ago. Given that Obama’s vote in the primaries,
apart from African-Americans, has generally come from affluent white suburbs and university
towns, the Gallup figures presage a Democratic disaster among working-class white voters in
November should Obama be the nominee. Yet Obama’s handlers profess indifference - and, at
times, even pride — about these trends. Asked about the white working-class vote following
Obama’s ten-point loss in Pennsylvania, chief campaign strategist David Axelrod confidently told
an National Public Radio interviewer that, after all, “the white working class has gone to the
Republican nominee for many elections going back even to the Clinton years” and that Obama’s
winning strength lay in his ability to offset that trend and “attract independent voters... younger
voters” and “expand the Democratic base.”’ (Sean Wilentz, “Barack Obama and the Unmaking of
the Democratic Party,” Huffington Post, May 23, 2008) It is clear that the attempted radical deemphasis
of blue-collar workers and the white working class in general reflects the characteristic
class hatreds of Obama’s base of support among affluent suburbanites and Malthusian fanatics.
What Axelrod says here also reflects the doctrine which Bill Ayers, Bernardine Dorn, and the rest
of the Weathermen had been professing for four decades, and that is that the white working class is
the enemy and has to be destroyed.
OBAMA: CANDIDATE OF ELITIST CLASS HATRED
AGAINST WHITE WORKERS
As Wilentz points out, the notion that Obama is going to bring in masses of new voters is a
utopian fiction concocted by spin doctors like Axelrod and his ilk: ‘Apart from its basic inaccuracy
about Clinton’s blue-collar support in 1992 and 1996, Axelrod’s statement was a virtual reprise of
the Democratic doomed strategy from the 1972 McGovern campaign that the party revamped in
1988. The main difference between now and then is the openness of the condescension with which
many of Obama’s supporters - and, apparently, the candidate himself - hold the crude “low
information” types whom they believe dominate the white working class. The sympathetic media
coverage of Obama’s efforts to explain away his remarks in San Francisco about “bitter,”
economically-strapped voters who, clinging to their guns, religion, and racism, misdirect their rage
and do not see the light, only reinforced his campaign’s dismissive attitude. Obama’s efforts at
rectification were reluctant and half-hearted at best - and he undercut them completely a few days
344 Barack H. Obama: The Unauthorized Biography
later when he referred derisively, on the stump in Indiana, to a sudden “political flare-up because I
said something that everybody knows is true.” Culturally as well as politically, Obama’s dismissal
of white working people represents a sea-change in the Democrats’ basic identity as the
workingman’s party - one that has been coming since the late 1960s, when large portions of the Left
began regarding white workers as hopeless and hateful reactionaries. Faced with the revolt of the
“Reagan Democrats” - whose politics they interpreted in the narrowest of racial terms - “new
politics” Democrats dreamed of a coalition built around an alliance of right-thinking affluent
liberals and downtrodden minorities, especially African-Americans. It all came to nothing. But after
Bill Clinton failed to consolidate a new version of the old Democratic coalition in the 1990s, the
dreaming began again - first, with disastrous results, in the schismatic Ralph Nader campaign of
2000 and now (with the support of vehement ex-Naderites including Barbara Ehrenreich and Cornel
West) in the Obama campaign. (Sean Wilentz, “Barack Obama and the Unmaking of the
Democratic Party,” Huffington Post, May 23, 2008)
OBAMA BETRAYS THE FORGOTTEN AMERICANS
Wilentz correctly concludes that the Democratic Party is about to cast its fate to the winds in a
way which has obviously tragic implications for the party’s working-class base, many of whom
need the urgent help of a president who is actually sympathetic to their plight and inclined to do is
something about the Bush economy and the related accumulative wreckage of the Bush era.
Wilentz sums up: ‘Obama must assume that the demographics of American politics have changed
dramatically in recent years so that the electorate as a whole is little more than a larger version of
the combined Democratic primary constituencies of Oregon and South Carolina. In any event,
Obama had shown no ability thus far to attract the one constituency that has always spelled the
difference between victory and defeat for the Democratic Party. The party must now decide whether
to go along with Obama and renounce its own heritage — and tempt the political fates.’ (Sean
Wilentz, “Barack Obama and the Unmaking of the Democratic Party,” Huffington Post, May 23,
2008)
The crackpot notion that Obama can somehow win the Electoral College without blue-collar
workers, the white working class, and the Reagan Democrats even spawned a totally new school of
pseudo-sociology. The premise here was that the United States was now a totally parasitical
country with no working-class worth mentioning that was left over. It is of course true that
productive jobs in the United States have been wiped out since the Carter Volcker era at an
unprecedented rate, but it is at the same time a total illusion to think that the Democratic Party can
mean without the support of its traditional working-class base; the defeats of the effete patricians
Gore and Kerry proved just the opposite, in contrast to the victories of Clinton, who did have some
considerable populist appeal. A certain Chris Bowers indulged in a lengthy hallucination about a
utopian world having very little relation to present day reality. Gary Hart in 1984 had claimed that
he would win thanks to the new social ascendancy of the yuppies or young urban professionals.
During the 1990s, a class of affluent young housewives known as soccer moms were supposed to
provide the key demographic for getting elected. After 9/11, these soccer moms became security
moms. Generally speaking, the more elaborate the demographic theory, the smaller the real chance
of the candidate to get elected. This rule of thumb points to big trouble for Obama, since his
signature demographic theory is one of the most arcane to come along in many moons. Obama, you
must realize, is being touted as the candidate of a new, glamorous, and dynamic population group
known as the “creative class.”
IX: Obama’s Triumph of the Will: The 2008 Primaries 345
OBAMA’S CHIMERA OF THE “CREATIVE CLASS”
Bowers writes that
…unless Obama somewhat surprisingly does not become the next President of the United
States, the Democratic Party will experience its first changing of the guard since the late 1980’s.
What differences will be in store? Here are the three major changes I expect:
1. Cultural Shift: Out with Bubbas, up with Creatives: There should be a major cultural shift in
the party, where the southern Dems and Liebercrat elite will be largely replaced by rising
creative class types. Obama has all the markers of a creative class background, from his
community organizing, to his Unitarianism, to being an academic, to living in Hyde Park to
shopping at Whole Foods and drinking PBR. These will be the type of people running the
Democratic Party now, and it will be a big cultural shift from the white working class focus of
earlier decades. Given the demographics of the blogosphere, in all likelihood, this is a
socioeconomic and cultural demographic into which you fit. Culturally, the Democratic Party
will feel pretty normal to netroots types. It will consistently send out cultural signals designed to
appeal primarily to the creative class instead of rich donors and the white working class.
2. Policy Shift: Out with the DLC, up with technocratic wonks. My sense of Obama and his
policy team is overwhelmingly one of technocratic, generally less overtly ideological
professional policy types. We should see a shift from the more corporate and triangulating
policy focus of the Democratic Party in the 1990’s, and see it replaced by whatever centrist,
technocratic policies are the wonkish flavor of the month. It will all be very oriented toward
think-tank and academic types, and be reminiscent of policy making in the 1950s, 1960s and
1970s. A sort of “technocratic liberalism” that will be less infuriating than DLC style
governance, but still not overtly leftist.
3. Coalition reorganization: Out with party silos, in with squishy goo-goos. In addition to a
shift in culture and policy focus, I also expect a different approach to coalition building. A longstanding
Democrats approach of transactional politics with different issue and demographic
silos in the party shift toward an emphasis on good government (goo goo) approaches. We will
see lots of emphasis on non-partisanship, ethics reform, election reform instead of on, say,
placating labor unions, environment groups, and the LGBT community by throwing each of
these groups a policy bone or two. Now, the focus will be on broad, squishy fixes that are
designed to appeal to several groups at once.’ (Chris Bowers, Changing of the Guard, open left,
May 8, 2008)
This is the eternal delirium of the crisis-crazed petit bourgeois, who imagines himself or herself
to represent pure and undifferentiated humanity free from all parochial interests, and cannot
imagine that there are billions of people in the world who do not see things in the same way. The
source for this idiocy is a successful and trendy academic huckster by the name of Richard Florida,
the author of Cities and the Creative Class and The Rise of the Creative Class. Here is how Florida
advertises himself on his own website: ‘Just as William Whyte’s 1956 classic The Organization
Man showed how the organizational ethos of that age permeated every aspect of life, Florida
describes a society in which the creative ethos is increasingly dominant. Millions of us are
beginning to work and live much as creative types like artists and scientists always have. Our values
and tastes, our personal relationships, our choices of where to live, and even our sense and use of
time are changing. Leading this transformation are the 40 million Americans – over a third of our
national workforce – who create for a living. This “creative class” is found in a variety of fields,
346 Barack H. Obama: The Unauthorized Biography
from engineering to theater, biotech to education, architecture to small business. Their choices have
already had a huge economic impact. In the future, they will determine how the workplace is
organized, what companies will prosper or go bankrupt, and even which cities will thrive or wither.’
Another creative class pseudo-sociologist is the pretentious and oligarchical journalist of the
New York Times David Brooks, the author of Bobos in Paradise, where the “bobos” or bourgeois
bohemians — that is to say, bourgeois in income and Bohemian in lifestyle, correspond to Florida’s
creative class. These studies actually reflect nothing more than the decline of productive
employment in the United States which has now been going on for 30 years, since the massive
deindustrialization under Trilateral Paul Adolph Volcker, Jimmy Carter’s appointee to head the
Federal Reserve. The United States is widely acknowledged to be falling farther and farther behind
the world standard when it comes to hard scientists and engineers, and this is the creative class
which will be decisive in the 21st century. The United States has fewer and fewer industrial
workers, and fewer and fewer indigenous Ph.D.’s in science. Florida’s analysis has lost some of its
glow since the collapse of the dot com bubble in 2001. The group that he was originally talking
about was made up of fast-talking dot.com stockjobbers, a class that might be better termed as
parasitical subjectivists rather than creative.
As one right-wing commentator points out, the apex of Florida’s creative class sociological
analysis took place in a rare interval of world history when the laws of economics seemed to have
been momentarily suspended — during the lunatic excesses of the 1999-2000 dot com bubble. Its
time has already passed. He argues that ‘Neither the professor nor his most ardent adherents seem
worried that the Internet generation formed its eccentric capitalist culture during a speculative
bubble, when billions of dollars of free-flowing investment capital gave workers and their bosses
the freedom to ignore basic economic concerns, and that now, with that money vanished and many
companies defunct, a focus on such old-economy ideas as profits and tax rates has re-emerged.
Moreover, as Florida’s ideas reach beyond urban-planning types and New Age liberal politicians,
they are at some point likely to find resistance from the hard-core urban Left, composed
increasingly of social-services activists and representatives of public-employee and service-industry
unions, who demand ever more government spending for social programs, not art and culture.
Indeed, the professor’s relentless argument that governments should help furnish bobo-friendly
amenities ultimately comes to sound like a new form of class warfare: old-economy workers have
no place in his utopian dreams. But a far more serious—indeed, fatal—objection to Florida’s
theories is that the economics behind them don’t work. Although Florida’s book bristles with charts
and statistics showing how he constructed his various indexes and where cities rank on them, the
professor, incredibly, doesn’t provide any data demonstrating that his creative cities actually have
vibrant economies that perform well over time. A look at even the simplest economic indicators, in
fact, shows that, far from being economic powerhouses, many of Florida’s favored cities are chronic
underperformers. Exhibit A is the most fundamental economic measure, job growth. The
professor’s creative index—a composite of his other indexes—lists San Francisco, Austin, Houston,
and San Diego among the top ten. His bottom ten include New Orleans, Las Vegas, Memphis, and
Oklahoma City, which he says are “stuck in paradigms of old economic development” and are
losing their “economic dynamism” to his winners. So you’d expect his winners to be big job
producers. Yet since 1993, cities that score the best on Florida’s analysis have actually grown no
faster than the overall U.S. jobs economy, increasing their employment base by only slightly more
than 17 percent. Florida’s indexes, in fact, are such poor predictors of economic performance that
his top cities haven’t even outperformed his bottom ones. Led by big percentage gains in Las Vegas
(the fastest-growing local economy in the nation) as well as in Oklahoma City and Memphis,
IX: Obama’s Triumph of the Will: The 2008 Primaries 347
Florida’s ten least creative cities turn out to be jobs powerhouses, adding more than 19 percent to
their job totals since 1993—faster growth even than the national economy. […] Florida’s ten most
creative mid-sized cities are even less impressive economic engines. Since 1993, these cities, which
include such underperformers as Albany, New York, and Dayton, Ohio, have increased their job
totals by about 16 percent—less than the national average.’ (Steven Malangan, “The Curse of the
Creative Class,” City Journal, Winter 2004)
ITALIAN FASCISM AND THE CREATIVE CLASS, 1919-1922
In reality, the situation is far worse. The drooling acolytes of Obama automatically assume that
the presence of artists, writers, movie makers, and other people who claim to be creative is a
guarantee that a social movement is progressive and destined to win. Here once again, a look
backwards at the early years of Italian fascism shows how foolish this attitude really is. The early
years of Italian fascism between 1919 in 1922 saw the participation in the new fascist movement of
a whole series of writers and artists, most of whom were far more gifted than the gaggle of
pretentious no talents who are huddling around Obama. Some of these belonged to the movement or
artistic school known as the futurists. To the surprise of many modern left liberals, it turns out that
these artistically talented futurists were also rabid warmongers, determined to get Italy into World
War I, and then determined to support an aggressive imperialistic foreign policy. The founder of the
futurist movement was Filippo Tommaso Marinetti, who wrote in his 1909 Futurist Manifesto, “We
want to glorify war - the only cure for the world - militarism, patriotism, the destructive gesture of
the anarchists, the beautiful ideas which kill, and contempt for woman. We want to demolish
museums and libraries, fight morality, feminism and all opportunist and utilitarian cowardice.” The
fascist futurists Marinetti, Carlo Carrà, Gino Severini, Corrado Cagli, Dante Baldelli, Luigi
Russolo, Ardengo Soffici, and Giacomo Balla were the leading painters of Italy at that time.
Umberto Boccioni the chief sculptor of the group, was also an international celebrity. The architect
Antonio Sant’Elia was another fascist futurist. The futurists glorified danger, war, and the machine
age, attacked academies, museums, and other establishment bastions, and spoke out in favor of
fascism.
Even more important for the development of Italian fascism was Gabriele D’Annunzio, who was
by all odds the most famous and influential Italian novelist and poet of the age. D’Annunzio was a
disciple of Nietzsche who belonged to the decadent school of late 19th century literature.
D’Annunzio character of Andrea Sperelli in his novel Il piacere (The Child of Pleasure) evokes a
typical human type of decadent late 19th century European society. Sperelli could certainly teach
Obama’s most decadent followers a thing or two. D’Annunzio agitated for Italy to enter World War
I, and dropped leaflets on the enemy during a daring Italian air raid on Vienna. Later, he became
the leader or Duce of the fascist forces who seized the city of Fiume, in Istria, along the border with
the newly emerging nation of Yugoslavia. Here D’Annunzio developed most of the ceremonies and
rituals which came to characterize the fascist political liturgy, including the Roman salute, the
balcony speech, the chanting of slogans, and other fascist paraphernalia. Even after Mussolini had
emerged as the principal fascist leader, he was always aware that D’Annunzio represented a very
formidable rival who might have been able to oust him under certain circumstances. Given these
fascist precedents, we need to keep our enthusiasm for the new creative class very much under
control. Self-styled creativity is no guarantee of morality, or even of real creativity.
One might be willing to accept the suicide of the post-1968 multicultural, politically correct,
Malthusian, and neo-Luddite Democratic Party, which had proven to be such so useless for social
change or even for defending what had been won under the New Deal. But then what? ‘Obama’s
348 Barack H. Obama: The Unauthorized Biography
campaign has been very clever in carving out a strategy to amass Democratic delegate votes, but its
momentum is in some ways a Potemkin construction—built largely on victories in states that no
Democrat will win in November—that will fall apart under Republican pressure. And then where
will we be?’ (Adolph Reed Jr., “Obama No,” The Progressive, May 17, 2008)180 That was the view
of many honest Democrats.
HYSTERIA OF THE FINANCE OLIGARCHS FOR OBAMA
But the house organ of the New York financier elite saw things differently. The New York Times
now editorialized against Clinton in an outburst of wild hysteria which reflected all the desperation
of a bankrupt and discredited ruling elite who were now peering into the abyss of defeat and default
everywhere they turned: ‘It is getting to be time for the superdelegates to do what the Democrats
had in mind when they created superdelegates: settle a bloody race that cannot be won at the ballot
box. Mrs. Clinton once had a big lead among the party elders, but has been steadily losing it, in
large part because of her negative campaign. If she is ever to have a hope of persuading these most
loyal of Democrats to come back to her side, let alone win over the larger body of voters, she has to
call off the dogs.’ (“The Low Road to Victory,” New York Times, April 23, 2008) Over at the
Washington Post, supposedly serious columnists were raving in favor of Obama like adolescent
girls once did for Elvis or for the Beatles. One sample of this psychotic prose: ‘The presumptive
Democratic presidential nominee is far from perfect. But he has demonstrated the most mysterious
and precious gift in politics, which is grace under pressure. […] What’s compelling about Obama is
that fusion of grace and ambition. He’s playing for the highest stakes, but he makes it look easy.
That cool, graceful quality evokes John F. Kennedy and the Rat Pack — all these sleek, handsome
men in silk suits and skinny ties who never break character, never miss a beat.’ (David Ignatius,
“Mr. Cool’s Intensity,” Washington Post, May 11, 2008)
OLBERMANN DEMANDS VIOLENCE AGAINST SEN. CLINTON
Over at MSNBC, the Brzezinski Network, Obamakin media whores Keith Olbermann and
Howard Fineman of Newsweek showed their contempt for democracy and representative
government by demanding that the superdelegates immediately abort and override any remaining
primaries and proceed to the coronation of the divine Barry. Fineman demanded that “grownups”
come forward “like a referee in a fight” to separate the contenders. These, Fineman opined, would
be “the super-super-super delegates” – exalted oligarchs indeed. Olbermann emphatically nodded
assent, saying that the need was for heavies powerful enough to take Mrs. Clinton into a room “and
only he comes out.” Here was another blatant document of elitism parading itself in a psychotic
public tantrum. A threat of violence to a presidential candidate was also implied. Maybe it was time
for the Secret Service to visit Olbermann. In any case, it was time for the old sports junkie to get the
sack. James Poniewozik, the media critic of Time Magazine, registered the degeneracy of this Keith
Olbermann, who had now advanced to the position of chief resident yelping media hound of
MSNBC, otherwise known as Obamavision. Olbermann had re-invented himself based on the usual
two points, opposition to Bush and opposition to the Iraq war. Olbermann launched a tirade at
Clinton after she made a garbled remark about the Robert Kennedy assassination in relation to the
unusual length of the 2008 primary and the media hysteria calling on her to drop out. Poniewozik
commented acutely: “Even if we concede his argument--that Clinton was at best callously and at
worst intentionally suggesting she should stay in the race because Obama might be killed--every
time he turns up the volume to 11 like this lately, he sounds like just another of the cable gasbags he
IX: Obama’s Triumph of the Will: The 2008 Primaries 349
used to be a corrective to.” (James Poniewozik, “Keith Olbermann Blows Last Remaining Gasket,”
Time, May 27, 2008)
Former SDS leader and foundation fellow traveler Tom Hayden worried that Obama was too
weak on the issues, and was losing out to Hillary for that basic reason: “...Obama’s basic problem is
that he relies on stylistic differences rather than substantive ones, because he believes he cannot
attack Clinton on policy grounds and still maintain his centrist orientation. She senses that, is
therefore neutralizing the policy differences, and taking the offensive to demolish his character
claims. Between two candidates with personal baggage, she figures the voters will ultimately vote
for experience.” (Huffington Post, April 23, 2008) But there were very important policy differences
between Clinton and Obama, and these explained the way the Democratic Party was dividing.
Clinton was for a freeze on foreclosures and on interest rate resets on adjustable rate mortgages;
Obama wanted to let the “market” work. Clinton had crossed into explicit New Deal territory by
proposing the re-creation of the Home Loan Ownership Corporation, an FDR creation. Clinton
commented: “During the Depression, President Franklin D. Roosevelt and Congress dealt with huge
impending foreclosures by creating the Home Owners’ Loan Corporation (HOLC. Now, a small but
growing group of academics and public figures, including Senator Christopher J. Dodd, Democrat
of Connecticut, is calling for the federal government to bring back something like the HOLC. Count
me in.”181 Obama’s man Goolsbee sniffed that one had to respect the “market,” instead. Clinton was
for universal health care; Wall Street crowed that Obama was the only Democrat who opposed it.
Clinton wanted to apply the New Deal method by lifting the 18¢ per gallon federal gasoline tax, and
shifting the resulting tax burden to a windfall profits tax on the oil cartel to keep the Highway
Construction Fund replenished and maintain jobs on the front. Obama cited a myriad of reactionary
pro-Wall Street economic charlatans to assert that this was pandering; he lost the Indiana primary as
a direct result. Clinton, having learned something during the campaign, wanted to re-open NAFTA
and other free trade sellouts. Obama gave lip service to this idea, but sent Goolsbee to reassure the
Canadians that this was pure electioneering demagogy. Clinton was for a robust manned space
program, one of the indispensable science drivers for any future recovery; Obama wanted to wipe
out the manned space program by shifting the funds into education – a cheap and transparent antiscience
ploy. Obama’s advisors, especially the pudgy-faced Jason Furman and his sidekick Jeffrey
Liebman, wanted to begin privatizing Social Security to please Robert Rubin of bankrupt Citibank;
Clinton was having none of this. Even more important, as time went on, Obama moved towards the
Wall Street financier line on all major issues, while Clinton moved in the New Deal direction. It
was a clear choice.
CLINTON IN NEW DEAL TERRITORY
In economic policy, Michelle Obama’s veiled references to broken souls and a future of sacrifice
and the presence of ultra-right Friedmanite Chicago school ideologues like Austan Goolsbee make
clear that an Obama presidency will be one of savage austerity, economic sacrifice, and a lowering
of the standard of living for the already exhausted and depleted US population. There will be
onerous global warming taxes to please Al Gore, global solidarity taxes for third world subversion,
and much more. The proceeds will flow to Wall Street. Corporate state entities of the type
demanded by Rubin, Soros, Rohatyn and Rudman will be set up to exploit the infrastructure crisis
to create new financial bubbles. Obama is likely to cause more immiseration that Carter, who still
holds the post-Hoover record in this sad department. Civil war in the US is a distinct possibility.
Sen. Clinton, by contrast, benefited by being betrayed and scorned by the worst Wall Street
predators (Rockefeller, Soros), the worst media whores, and the worst Democratic Party elitists. She
350 Barack H. Obama: The Unauthorized Biography
would be beholden in the White House to none of them, but rather to blue collar workers. She had
evolved in the direction of the Franklin D. Roosevelt New Deal on a number of issues. Most
important, Hillary and Bill Clinton offered the greatest potential in sight for escaping the status of
puppet of the banking establishment which has been the tendency for post-1944 presidents.
Together, they might even hope to approximate a new FDR presidency. Sen. Clinton’s considerable
fighting qualities were our best bet in this regard; she had already stopped the Obama coup several
times, when weaker figures like Edwards ran away.
REVEREND WRIGHT: OBAMA JUST ANOTHER POLITICIAN
Obama’s marplot spiritual guru was not about to hop in his Porsche, drive home to his $1.6
mansion, start enjoying his $10 million line of credit, and taste the many joys of leisured and
affluent victimhood. On the last weekend of April 2008, Reverend Wright went on the offensive to
assert the validity of his personal school of racist provocations. He was interviewed by Bill Moyers,
LBJ’s former flack and salesman for the Vietnam war, and now the dean of the foundation-funded
media whores in public television. Here Wright suggested that Obama was simply a prevaricating
“politician” who responded like a politician, trimming and fibbing according to the needs of the
moment. It was not a good ad for Obama’s pretentious claim to float above the vulgar political fray.
Then there was a stop in Dallas, where Wright revealed that he had been crucified by being denied
the honorary degrees and triumphant lecture appearances which he clearly felt were his due. Then it
was on to the NAACP dinner in Detroit, where the Jeremiad proffered his view that the media were
unfairly stressing that the candidate was “Barack HUSSEIN Obama, Barack HUSSEIN Obama,
Barack HUSSEIN Obama.” At the National Press Club in Washington on the morning of April 28,
Wright was in the full exultance of the manic phase. He basked in attention of hundreds of reporters
of thirty television cameras. He repeatedly identified the black church with his own inflated ego, an
act of gross historical injustice to the majority of black traditionalist churches who wanted nothing
to do with the cursing and hating of his own style, nor with the synthetic religion that was black
liberation theology.
What finally did Wright want? Above all, he wanted attention, since he was a megalomaniac in
no way inferior to Obama. What else did he want? As it turned out, he wanted an apology for
slavery and racism. All this sound and fury for mere words, a mere piece of paper expressing
sorrow for the wrongs of the past. It showed that Wright was not capable of formulating demands
that might be meaningful for the lives of the real victims of today, the majority of the black
population who remained trapped in the poverty of the inner city ghetto. The black majority, the
black underclass, needed something far more meaningful than a mere apology that would leave
them exactly where they were. They needed housing, jobs, health care, education, urban mass
transit, a ban on foreclosures, measures to control the gas price, and a whole series of other
improvements in the material conditions of their lives. The resources needed for those
improvements would be measured in the trillions of dollars. But what of that? In March 2008 alone,
Bernanke had pumped almost half a trillion into the banking system to deal with the Bear Stearns
debacle. The same money pumped into American cities would create a new world. A few of those
injections, properly invested, would go far towards lifting the Other America out of poverty and
despair. The beneficiaries would be inner city blacks, to be sure. But they would also be poor whites
in Appalachia, the high plains, and the rest of rural America. They would be Latino migrant farm
workers. They would be super-exploited Vietnamese, Koreans, and other Asians. And that would be
a united front of the American people against Wall Street. This, of course, was the eventuality that
the Ford Foundation and other sponsors of black liberation theology were paying good money to
IX: Obama’s Triumph of the Will: The 2008 Primaries 351
sabotage and abort. So Wright used his hour of fame to demand essentially nothing for the most
disadvantaged part of the black community – just like his friend Farrakhan, who had ruined the
success of the Million Man March by giving a raving speech about numerology and occult
freemasonic symbolism instead of laying out a fighting program to rebuild America for all the
people.
Down the road was even more trouble, since Wright was now promising a book to be published
in October 2008, on the eve of the general election. And if there was to be a book, there would also
be a book tour, with innumerable press conferences and press availabilities, and unending
opportunities for Wright to embarrass and sabotage Obama, if he were still in the race at that point.
As soon as the primaries were over, Obama quit Trinity United once and for all. But after 20 years,
it was much too late to neutralize the issue. Obama was clearly a candidate with so many demolition
charges built in that Democrats now had to jettison this fatal baggage before he dragged them down.
TONGUE-TIED: OBAMA’S CATASTROPHIC
PRESS CONFERENCE OF APRIL 29, 2008
April was indeed the cruelest month for Obama. What followed was one of the most bizarre
press conferences in recent American history. This time there was no teleprompter, and for this the
Perfect Master paid a terrible price. No longer was his head thrown back in haughty superiority.
Now his eyes were downcast, his speech halting, his demeanor grim and saturnine, with streaks of
anger. Never had the Perfect Master stuttered, stammered, paused, halted, hiccupped, and gurgled
so much as on this fateful occasion. He said “uuh” a great deal. He drew out the word “and” until it
seemed to have two syllables. Never had the great balcony orator been so tongue-tied. A good index
of the disintegration of Obama’s troubled personality might have been the “y’know index.” As long
as he had read off teleprompters, he had been fluent. As long as he stuck to the pre-masticated
utopian platitudes and messianic clichés of his stock stump speech as written by the Grub Street
scrivener Favreau, he had been reasonably proficient. But now, when he had to extemporize under
fire, and above all to exercise some sort of self-reflexive and self-critical judgment, the words
would not come. Obama was now the waffle candidate, and he proved it by waffling on the Wright
issue. Even with hell gaping below his candidacy, he could not bring himself to break definitively
with the racist provocateur. He was still a member of Wright’s church, and he would not quit that
church unless and until he had conferred with Reverend Otis Moss III, the Ford Foundation scholar
who was now the pastor. Even when Obama’s political survival was at stake, he was a wimp who
could not be decisive.
OBAMA – APOSTATE MOSLEM OR MAHDI ?
Many Obama backers tried to create the impression that Obama’s Moslem name would
automatically win him the good will of a billion Moslems around the world. But this may represent
a misconception on the part of handlers like Brzezinski, who is notorious for knowing virtually
nothing of the Islamic world and of many of the parts of the world that he tries so hard to
manipulate and destroy. Would Obama be able to give US imperialism a face lift and a new lease on
life among the Moslems? A veteran neocon warned against the ‘argument that Mr. Obama’s
election would raise America’s esteem in Africa — indeed, he already arouses much enthusiasm in
his father’s native Kenya and to a degree elsewhere on the continent. But it is a mistake to conflate
his African identity with his Muslim heritage. Senator Obama is half African by birth and Africans
can understandably identify with him. In Islam, however, there is no such thing as a half-Muslim.
352 Barack H. Obama: The Unauthorized Biography
Like all monotheistic religions, Islam is an exclusive faith. As the son of the Muslim father, Senator
Obama was born a Muslim under Muslim law as it is universally understood. It makes no difference
that, as Senator Obama has written, his father said he renounced his religion. Likewise, under
Muslim law based on the Koran his mother’s Christian background is irrelevant. […] His
conversion, however, was a crime in Muslim eyes; it is “irtidad” or “ridda,” usually translated from
the Arabic as “apostasy,” but with connotations of rebellion and treason. Indeed, it is the worst of
all crimes that a Muslim can commit, worse than murder (which the victim’s family may choose to
forgive). With few exceptions, the jurists of all Sunni and Shiite schools prescribe execution for all
adults who leave the faith not under duress; the recommended punishment is beheading at the hands
of a cleric, although in recent years there have been both stonings and hangings. (Some may point to
cases in which lesser punishments were ordered — as with some Egyptian intellectuals who have
been punished for writings that were construed as apostasy — but those were really instances of
supposed heresy, not explicitly declared apostasy as in Senator Obama’s case.) It is true that the
criminal codes in most Muslim countries do not mandate execution for apostasy (although a law
doing exactly that is pending before Iran’s Parliament and in two Malaysian states). But as a
practical matter, in very few Islamic countries do the governments have sufficient authority to resist
demands for the punishment of apostates at the hands of religious authorities. For example, in Iran
in 1994 the intervention of Pope John Paul II and others won a Christian convert a last-minute
reprieve, but the man was abducted and killed shortly after his release. Likewise, in 2006 in
Afghanistan, a Christian convert had to be declared insane to prevent his execution, and he was still
forced to flee to Italy. Because no government is likely to allow the prosecution of a President
Obama — not even those of Iran and Saudi Arabia, the only two countries where Islamic religious
courts dominate over secular law — another provision of Muslim law is perhaps more relevant: it
prohibits punishment for any Muslim who kills any apostate, and effectively prohibits interference
with such a killing.’ (Edward N. Luttwak, “President Apostate?” New York Times, May 12, 2008)
DONALD YOUNG: MURDER IN WRIGHT’S CATHEDRAL
A dangerous scandal looming over Obama was the murder of Donald Young, the gay
choirmaster in Wright’s and Obama’s church, whose bullet-riddled body was found last Christmas
morning. The Globe of May 19, 2008 quoted the opinion of a Chicago private detective that Young
was murdered to keep him quiet about Obama, meaning the candidate’s notorious homosexual
activities. These latter are attested to by Larry Sinclair of Minnesota, who has a federal civil suit
pending in which he alleges that he had two gay sex encounters with Obama in 1999, with Obama
indulging in crack cocaine. Sinclair also alleges that Donald Young tried to sound him out about
matters related to Obama before Young was murdered. This first echelon also includes Reverend
James David Manning’s “Trinity of Hell” tape, which names Obama and Wright as closet
homosexuals, a charge repeated by Manning on the Hannity radio program. Was Obama Wright’s
catamite? Murder in the cathedral, gay sex, and crack cocaine now loomed over Obama’s arrogant
claim of victory.
THE OBAMA BODY COUNT
There were other mysterious deaths related to Trinity United and the surrounding area. Two
other young black men that attended the same church—Larry Bland and Nate Spencer—also died
within 40 days of each other, beginning in November 2007. Nate Spencer was a member of the
TUCC Sanctuary Choir; his funeral was held on Monday January 7, 2008. All three were openly
homosexual. Larry Sinclair stated in sworn affidavits that Obama is a closet bisexual with whom he
IX: Obama’s Triumph of the Will: The 2008 Primaries 353
had sexual and drug-related encounters in November 1999. Sinclair also claimed that Obama was
personally acquainted Donald Young and that choir director Donald had contacted him shortly
before being murdered from multiple gunshot wounds on December 23, 2007. These killings are
receiving a number of different reactions. Mike Parker, reporting for CBS in Chicago, wrote,
“Activists fear gay African-Americans are being targeted for murder,” while Marc Loveless of the
Coalition for Justice and Respect queries, “Are we under attack? Is this a serial killer?” An even
more sinister aspect of this case is being investigated. Sinclair has stated in an affidavit to the
Chicago Police Department, Donald Young had informed him that he and Barack Obama were
“intimate” with each other. Sinclair revealed in a January 18, 2008, YouTube video that on two
separate occasions in November 1999, he engaged in sexual acts with Obama, and that Obama
smoked crack cocaine—once in a limousine and the other time at a hotel in Gurnee, Ill. Sinclair has
also raised the important question of why Donald Young, whom he had never met, would initiate
these calls using cell phone numbers which Sinclair had given to the Obama campaign, at a time
when Sinclair had not yet gone public with any part of his story and was therefore not a public
figure. A private investigator connected to the Chicago Police Department told the Globe, “Donald
Young was silenced because of something he knew about Obama. Donald was in a position where
he heard a lot of things and saw a lot of things concerning Barack.” … The unavoidable fact was
that three gay black men had died, two by violence, within a span of 40 days among the members of
Jeremiah Wright’s Trinity United Church of Christ, which at the time was the object of consuming
media attention. 182
MICHELLE OBAMA, RACIST; ILYAS ACHMADOV, ENVOY OF TERRORISTS
Another echelon of scandal was the Michelle Obama racist tirade against white America,
reportedly employing extreme language. Still another echelon involved contacts of the Obama
campaign to certain foreign organizations, including terrorist groups like the Chechen rebels. A
mere hint was the case of Robert Malley, who was forced out because he was meeting with Hamas.
Malley was working for the International Crisis Group, which is funded by Soros and features
Brzezinski on its board. Far more explosive are Brzezinski’s lobbying activities for Ilyas
Achmadov, the resident US envoy of the top Chechen terrorist gang, which specializes in massacres
of women and children in hospitals and schools, with a body count in the thousands. Achmadov is
now living in Washington DC with an upscale apartment, a posh office, a secretary, a travel budget,
and a public relations budget, all generously paid for by US taxpayers – an arrangement obtained
for him by Brzezinski. Moscow wants Achmadov extradited to stand trial as a mass murderer and
terrorist, but Brzezinski is protecting him.
SECURING A SUCCESSFUL PARTY REALIGNMENT
This year of 2008 was a rare historical turning point, a watershed party re-alignment election in
the series 1828 (Jackson), 1860 (Lincoln), 1896 (McKinley over Bryan), 1932 (FDR and the New
Deal), and 1968 (the Nixon southern strategy). A new stable progressive coalition for the next four
decades needed to be forged, and only Clinton had shown the ability to permanently incorporate
Latinos, Asians, Reagan Democrats, women, retirees, union households, Jewish voters, and other
key groups which will be critical for dominating the Electoral College until about 2050. Obama was
betting on a congeries of groups and a crazy quilt of oddly assorted states to make it. Clinton’s
underlying appeal to black voters would return once the smoke had cleared. Clinton’s duty was
therefore to act to save the country from national catastrophe under Obama and his controllers,
whatever it took.
354 Barack H. Obama: The Unauthorized Biography
OBAMA BETS EVERYTHING ON GEORGIA AND VIRGINIA
By July, Obama’s hopes for winning at the ballot box (as distinct from by means of scandals
orchestrated by the FBI) came down to this: ‘Obama’s entire claim to redrawing the political map is
based on his perceived ability to win in Southern states precisely because of African-American
voters. … Hillary’s claim that she alone was capable of winning large swing states that Democrats
must win, such as Ohio and Pennsylvania, went unnoticed and unheeded by Dean, Pelosi and
others. However, this is a severe and dangerous gamble. As we pointed out a few weeks back, the
Obama campaign seems to know that Ohio and Florida are going to be a stretch, so they are looking
for alternate paths to 270, which means they are relying heavily on the Southern states, especially
Virginia and Georgia. They also discuss the Rocky Mountain states of Nevada, New Mexico and
Colorado, but frankly, even if he wins those three, and Michigan, Pennsylvania and New Hampshire
(all three of which will be highly competitive), if he loses Ohio and Florida, he will lose the election
267-271 (this count includes all the states Kerry won). In short, if Obama loses Ohio and Florida,
the three Rocky Mountain states and Georgia and Virginia become must win states. As Senator
Obama will still lose the general election with the three Rocky Mountain states if he fails to swing
Georgia and Virginia, these two states are of particular interest. […] Mr. Obama can write off
Georgia and North Carolina for the same reasons that Mississippi is beyond his reach — although
the math in those two states is slightly less daunting…. But while Obama is throwing millions of
dollars at states that have not gone to Democrats since 1964 (Virginia), and 1992 (Georgia and
Bill), he’ll be opening the door even wider for Republicans in actual swing states. Mike DuHaime,
political director of the Republican National Committee, doesn’t argue with Obama’s fund-raising
advantage. But he disputes the notion that Obama can afford to keep throwing money at long shots
once the campaign really heats up in the fall, and he contends that Obama’s defense of vulnerable
states like New Jersey, Pennsylvania and Ohio will be much more expensive. “It would take a major
swing to swing these [Southern] states,” says DuHaime. “I don’t fault them for trying to expand the
map, but we have better opportunities in other states that are just as big, if not bigger —
Pennsylvania, Ohio, for example.”’183 Democrats should also note that what is being aimed at here
is not a permanent and durable Democratic majority capable of rebuilding the country, but rather an
odd bloc of states built around the personality cult of Obama. Even if Obama got to the White
House, if the next Democratic nominee after Obama were not also Obama, there would be no
strategy left. As usual, Obama was building a personality cult, not a permanent and reliable voting
bloc with a coherent pattern based on identifiable voter groups. There would be no FDR coalition,
but just a flash in the pan.
OBAMA HAS NEVER WON A CONTESTED ELECTION
The 2008 presidential election represents the second time that Obama has ever run in a truly
contested election. In his 1996 state senate race, he threw all his opponents off the Democratic
primary ballot, which was tantamount to election. In 2000, Obama made a bid for election to the US
House of Representatives, but in this case he had an actual opponent, the incumbent Democrat
Representative Bobby Rush. In this contest, Obama was resoundingly thrashed. In his 2004 US
Senate race in Illinois, his Democratic primary opponent and his Republican general election
opponent were conveniently destroyed by scandals piloted by his friends at the reactionary Chicago
Tribune. In the end, his Republican general election opponent was a carpetbagger and buffoon,
Allan Keyes from Maryland. One wonders why the Democratic Party would ever consider betting
its fortunes in a once in four decades party realignment election on a candidate who has never won a
contested election.
IX: Obama’s Triumph of the Will: The 2008 Primaries 355
OBAMA IS WATERGATE-BAIT
In early May, Harold Ickes of the Clinton campaign had talked about an October surprise. This
could have meant a number of things, since Obama was indeed a scandal-rich contender, and one of
the prominent possibilities was the notorious Michelle Obama “Hate Whitey” tape, an apoplectic
outburst of racist rage by the Messiah’s consort, full of violent and obscene invective against the
white race, white American, and other objects of Michelle’s fascistoid rage cathexis. There was an
uneasy awareness, even among the most fanatical Obama acolytes, that there were more scandals
lurking in the Perfect Master’s closet: ‘The Clinton campaign has made it clear that Senator Clinton
remains in the race because anything can happen. That generally has been taken to mean that a
scandal could erupt that would cause the Obama campaign to implode. Some Reverend Wright on
steroids might burst into public view. Keep in mind what happened to Eliot Spitzer.’ (Bob Herbert,
New York Times, May 27, 2008)
RESULT: A LONG HOT SUMMER OF SCANDAL DOSSIERS
Karl Rove increasingly resembled the Japanese Admiral Nagumo at Midway, who dithered and
hesitated when he should have been launching his attack waves at the earliest possible moment. As
a result, he was caught flat-footed with his planes warming up on deck when the main US dive
bomber attack materialized; four Japanese carriers were sunk and the war was as good as lost. Karl
Rove seemed to think that he could hold the Michelle Obama “Hate Whitey” tape in reserve until
mid-October, using it in the next few months to harvest huge quantities of GOP cash to stoke the
fires of his 527 empire. Karl might be more interested in getting his hands on that cash than in
anything else. But he was risking watching McCain get the Spitzer treatment and be swept away in
72 hours. The summer 2008 battle of the scandal dossiers was like thermonuclear war: the greatest
advantage was to be gained by a successful first strike, after which the retaliatory riposte would be
weak and disorganized. The new motto for the holders of the scandal dossiers should be” “Use ‘em
or lose ‘em.” Whatever scandal dossiers you attempt to hold in reserve are likely to be useless, since
your own candidate can be taken down in a day or two, and once such an attack has started it will be
almost impossible to stop it or even disrupt it. Once McCain had the GOP nomination, he was wide
open to scandal attack. The wiser course for the GOP oppo research brigade was to recognize that
Obama was the FBI-CIA intelligence community candidate, and that he was the one slated to enjoy
a scandal-assisted quest for the White House as his opponents were destroyed – or, for that matter,
liquidated. It was far better to destroy Obama before he attained the Democratic nomination, thus
making Hillary the candidate. Hillary was herself more or less impervious to scandals, having
thrived in the crucible of Whitewatergate and Monicagate, but she was not going to get the same
kind of help from the FBI that Obama was sure to have. McCain’s best chance was, ironically and
in contrast to the usual rules, to unload everything preemptively on Obama in June and July, and
then mobilize for a more or less fair fight with Hillary in September and October. If Karl Rove and
company did not do this, it could only mean that they were blinded by greed and not that much
concerned about McCain’s fate, after all.
THE LIKELY CATASTROPHE OF AN OBAMA PRESIDENCY
May of 2008 saw the death of Hamilton Jordan, who had been Jimmy Carter’s top crony from
the Georgia mafia and White House Chief of Staff. David Broder, one of the top ideological
watchdogs of the financier establishment, took this occasion to refer back to interviews that Jordan
had given to historians soon after the end of the disastrous Carter administration. Jordan’s main
356 Barack H. Obama: The Unauthorized Biography
point had been that the Carter coup inside the Democratic Party had only been possible in the first
place because of an extraordinarily high degree of chaos and disorganization among the Democrats
after eight years of Nixon and Ford. Broder noted: ‘The main theme of Jordan’s interview was this
intriguing observation: “Only because of the fragmentation that had taken place” in the Democratic
Party and its allied groups was Carter able to be nominated and elected in 1976. But that same
fragmentation made the challenge of governing so difficult that he was almost doomed to fail. What
Jordan meant was this: In the two previous elections, the Democratic Party was riven by strife over
the Vietnam War, social policy and civil rights. It was bitterly divided by the nomination of Hubert
Humphrey over Eugene McCarthy in 1968, and of George McGovern over Humphrey and others in
1972. In 1974, after Watergate ended the Republican revival, the old-guard Democrats suddenly
confronted an influx of reform-minded new faces in Congress. But once Carter was in the White
House, the liberals who controlled Congress quickly took his measure. They put their obligations to
their constituencies and interest groups ahead of any loyalty to him. He never had a “honeymoon,”
and by his third year his presidency had unraveled, not because of Republican obduracy but because
of his inability to lead his fellow Democrats. gained his first and most important win in Iowa with
37.6 percent of the votes, while Hillary Clinton and John Edwards split almost 60 percent evenly.
Both Carter and Obama lost several late primaries but held on to the delegate lead they had staked
out earlier. This is the cautionary tale Obama and his brain trust could find in Jordan’s interview.
Obama, too, has profited from fragmentation in the Democratic Party that has allowed a long shot,
once again, to capture its greatest prize. But if he is elected, he will have to solve the problems of
fragmentation that doomed Jimmy Carter.’ (David Broder, Washington Post, May 29, 2008)
Naturally, Broder did not mention the real basis of in-depth comparison between Carter and
Obama, which is that both are puppets of the Trilateral Commission and of Zbigniew Brzezinski
personally. Nevertheless, this point is well taken, and has already been discussed by me in the
companion volume to this study, Obama — The Postmodern Coup: the Making of a Manchurian
Candidate, where I developed a detailed comparison between the Carter regime and the likely
outlines of a future Obama rule. By running as a blank slate, and by promising to be all things to all
people, Obama at will necessarily face a moment of shocked recognition when the majority of his
followers be allies that they have been hoodwinked by his sanctimonious utopian platitudes and
vapid messianic rhetoric. That moment is likely to come less than 12 months into Obama’s term in
office. But since the political, economic, and military crisis of the United States today is so much
more severe than it was three decades ago we cannot assume that the penalty for letting Obama into
the White House will be comparable to what it was under Reagan and Bush, bad as those presidents
were. Rather, the perspective under Obama would have to be a catastrophic combination of
hyperinflationary economic depression and breakdown crisis, accompanied by extreme forms of
foreign military adventure likely to end in crushing defeat, with the United States internal political
situation rapidly degenerating in the direction of possible civil war, somewhat along the lines of the
breakdown of public order in the Roman Empire during the 50 year crisis of the third century A.D.
RALPH NADER: OBAMA EXPLOITS WHITE GUILT
There was an immediate necessity for critical voices to start attacking Obama from his left, since
that was his greatest vulnerability. Here was an area where Ralph Nader could perhaps provide an
important public service. Nader shared his views about Obama with the Rocky Mountain News:
Q: Do you see Barack Obama as qualitatively different than Al Gore or any other Democrats.
He talks about taking on lobbyists, not taking money directly from lobbyists ... People portray
IX: Obama’s Triumph of the Will: The 2008 Primaries 357
him as being different. Do you see him as being any better than Al Gore or any of the other
Democrats that you’ve opposed over the years?
Nader: No. I mean, he’s deceiving people. He takes, he takes ... In this very building he would
take money from corporate lawyers who are not registered lobbyists but whose desks are across
the aisle from corporate lawyers who are registered lobbyists in the same law firm. That has
been reported more than once in the mainstream press ... Six out of seven industries, as of a
month ago, have given more money to Obama than they have to McCain, only the
transportation industry is more equal opportunity corruption. Look at the health care industry. It
has poured money into his campaign. The securities industry, the defense industry. No. There’s
only one thing different about Barack Obama when it comes to being a Democratic presidential
candidate. He’s half African-American. Whether that will make any difference, I don’t know. I
haven’t heard him have a strong crackdown on economic exploitation in the ghettos. Payday
loans, predatory lending, asbestos, lead. What’s keeping him from doing that? Is it because he
wants to talk white? He doesn’t want to appear like Jesse Jackson? We’ll see all that play out in
the next few months and if he gets elected afterwards. I think his main problem is that he
censors himself. He knows exactly who has power, who has too much, who has too little, what
needs to be done right down to the community level. But he has bought the advice that if you
want to win the election, you better take it easy on the corporate abuses and do X, Y, Z. When I
hear that I say, Oh, I see. So he’s doing all this to win the election, and then he’ll be different.
Well let’s see if it worked. Did it work for Mondale? Did it work for Dukakis? Did it work for
Clinton? Yes, but only because of Perot? Did it work for Gore? Did it work for Kerry ... ?
Q: Do you think he’s trying to, what was your term, ‘talk white?’
NADER: Of course. I mean, first of all, the number one thing that a black American politician
aspiring to the presidency should be is to candidly describe the plight of the poor, especially in
the inner cities and the rural areas, and have a very detailed platform about how the poor are
going to be defended by the law, is going to be protected by the law, and is going to be liberated
by the law. Haven’t heard a thing. I mean, the amount of economic exploitation in the ghettos is
shocking. You’d think he’d propose a task force to at least study it. I mean, these people are
eroded every day. The kids, bodies are asbestos and lead, municipal services discriminate
against them because it’s the poor area, including fire and police protection and building code
enforcement. And then the lenders, the loan sharks get at them, and the dirty food ends up in the
ghettos, like the contaminated meat. It’s a dumping ground for shoddy merchandise. You don’t
see many credit unions there. You don’t see many libraries there. You don’t see many health
clinics there. This is, we’re talking 40-50 million Americans who are predominantly African-
Americans and Latinos. Anybody see that kind of campaigning? Have you seen him campaign
in real poor areas of the city very frequently? No, he doesn’t campaign there.
Q: What do you think the purpose of that is?
NADER: He wants to show that he is not a threatening, a political threatening, another
politically-threatening African-American politician. He wants to appeal to white guilt. You
appeal to white guilt not by coming on as a black is beautiful, black is powerful. Basically he’s
coming on as someone who is not going to threaten the white power structure, whether it’s
corporate or whether it’s simply oligarchic. And they love it. Whites just eat it up.184
The Obama cultists howled, but Nader’s points were well taken as far as they went. Libertarian
presidential candidate Bob Barr attacked Obama for his cowardly capitulation on the renewal of the
totalitarian FISA law. Barr promised that he would not betray his supporters in the same way that
Obama had. It was a miserable time to be a Democrat.
358 Barack H. Obama: The Unauthorized Biography
FREE LARRY SINCLAIR, OBAMA’S POLITICAL PRISONER
On June 18, 2008, Larry Sinclair appeared at the National Press Club in Washington DC to
officially deliver his bill of indictment against Obama. Incredibly, he was arrested just after he
concluded the press conference. Sinclair was taken into custody by DC police and US Marshals in
the Square Bar off the Holeman Lounge, where he had spoken to the media. From Wednesday to
Monday, Larry Sinclair was held in the DC Jail, the victim of a Gestapo-style enemies’ list
operation that went beyond Nixon, carried out just three blocks from the White House. Sinclair had
come to the National Press Club to detail his charges that the self-proclaimed Democratic
presidential nominee Barack Hussein Obama had indulged in two homosexual encounters complete
with crack cocaine in early November 1999, that Obama was complicit in the December 2007
assassination of Donald Young, the gay choirmaster of Jeremiah Wright’s Trinity United Church of
Christ, and that Obama’s resident perception monger, David Axelrod, had paid the pornographic
website Whitehouse.com $750,000 to organize a campaign of character assassination against
Sinclair, culminating in a faked polygraph test. At the close of the press conference, Sinclair was
arrested inside the press club by US Marshals and DC police, apparently based on an old Delaware
warrant. The Whitehouse.com owner, Dan Parisi, abortively called off his own scheduled press
conference in another room of the Press Club once it was known that Sinclair had been arrested.
GESTAPO TACTICS IN THE NATIONAL PRESS CLUB,
THE TEMPLE OF THE FIRST AMENDMENT
Where were the civil libertarians? Where were the paladins of the ACLU? Where were the
outcry and the indignation? Was no one concerned about threats to lynch a gay man for political
reasons in the heart of the nation’s capital? Where were the left liberals who had been ostensibly so
concerned about civil rights and civil liberties from Nixon to Bush-Cheney? Perhaps they were
sleeping, or perhaps they had drunk the Obama Kool-Aid and had become morally insane. Or
perhaps they were so obsessed with the reform of the FISA law and the danger that Bush might be
listening in to their telephone calls that they did not notice when a prominent critic of a presidential
candidate who is infamously a darling of the establishment media was actually arrested, taken into
custody and led away, the target of Gestapo tactics in the National Press Club, the sanctum
sanctorum of freedom of speech, freedom of the press, and the First Amendment generally. Surely
the weak sisters who had joined Obama’s fifth column were morally insane when they joke about
how Barky’s Myrmidons were able to arrest Sinclair. If the First Amendment does not apply to
speech which is not popular with the establishment and the mob, then the First Amendment does not
exist at all, for anybody. Any journalist or writer should be able to see that they themselves may be
next, now that the US Marshals are serving as the “Fight the Smears” enforcement arm of the
Obama campaign. Selective and vindictive prosecution, anyone?
The mere fact that Larry Sinclair had been able to hold such a successful press conference was
already a serious defeat for the corrupt and brutal Obama machine. Sinclair had appeared in the
Holeman Lounge before more than a hundred journalists, with 10 cameras set up on tripods in the
back of the room. The number of handheld cameras, camcorders, and tape recorders was beyond
counting. The press conference was dignified, businesslike, factual. There was no screaming, no
disruption, no threats or insults. Every journalist who wanted to ask a question was given ample
opportunity to do so, and about three dozen questions were asked. Reasonable follow-ups were
allowed. There were journalists from Britain, from Germany, from India, from China. Most of the
questions represented honest attempts to pin down the facts of what was being alleged.
IX: Obama’s Triumph of the Will: The 2008 Primaries 359
Sinclair’s honesty compared favorably to that of most politicians today. He started his
presentation with a detailed admission of his criminal record, jail time served, his pending court
motion to dismiss an old Colorado warrant, and a statement that his troubles with the law date back
more than 20 years to 1980-1986. In the question-and-answer segment, Sinclair gave a straight
answer to every question he was asked. He did not dodge questions, he did not prevaricate, he did
not refuse to answer questions, and he did not bungle his answers. Sinclair has made serious
mistakes in life, as he readily conceded. But Sinclair is not a candidate, not a person who has to be
evaluated by the public and then accepted or rejected. Sinclair came forward as a witness with a
series of allegations to make and a story to tell. It was up to public opinion and most emphatically
the news media to evaluate those allegations and those facts, including through the efforts of
enterprising investigative journalists anxious to make a name for themselves by finding out the truth
about what is potentially the biggest political scandal of the century. Obama, after all, is the
candidate of whom we know little and who needs urgently to be evaluated. The issue posed is not
what you think about Larry Sinclair. The overriding issue is the presidency in a time of military
defeat, institutional crisis, and economic breakdown.
HOMOPHOBIC DEATH THREATS AGAINST SINCLAIR
Obama’s lemming legions, and especially his notorious mercenary squadristi of the Internet, had
done everything possible to sabotage and disrupt Sinclair’s press conference. One Obama backer
had issued a categorical death threat against Sinclair in terms that made it abundantly clear that a
homophobic hate murder might be in the offing. The FBI and the District of Columbia police had
shown zero interest in offering Sinclair protection against a possible hit by one of Obama’s fanatics.
Once it is accepted that police agencies can intervene in political campaigns, it is possible to a rest
or detain almost anyone if the interest is great enough. If nothing can be found at this level, there
are always old parking tickets and library fines that can be ginned up. Any political candidate who
has had dealings with the Federal Elections Commission can be hauled in on some minor technical
violation. The precedent established by the arrest of Sinclair at the National Press Club was
exceedingly ominous for the public life of this country. The irony was that repression was being
carried out not to help the Republicans, but rather under ultra-left cover, to help the radical
subversive Obama.
Since the warrant used as the pretext to arrest Sinclair came from Delaware, attention naturally
turned to Senator Joe Biden, the incorrigible blowhard and defeated presidential candidate who is
now known to be angling for the post of vice president or Secretary of State in a future Obama
regime. We also note that Biden’s son, the nepotist Beau Biden, the current Attorney General of
Delaware, issued the warrant. As the cops would say, the Biden machine, anxious to ingratiate
themselves with Obama, had the means, motive, and opportunity to arrange this outrageous arrest.
For those gullible enough to believe that civil liberties might improve under an Obama regime, this
ought to provide a reality shock. Do not assume that civil liberties will get better under Obama; the
evidence is now that they will get worse. Obama’s National Press Club caper is as blatant as
anything seen under Bush – and Barky is not even in the White House.
At the end of his detailed indictment of Obama, Sinclair demanded information on four points.
The first involves Obama as phone records for November 3, 1999 through November 8, 1999 — the
time frame of the two alleged encounters between Obama and Sinclair, mediated, Sinclair said, by
Paramjit Multani of Five Star Limo at O’Hare Airport. The second involves Obama’s phone
records for September 2007 — December 23, 2007, when Sinclair was receiving probing phone
calls from Donald Young about how much Sinclair had revealed concerning Obama — calls that
360 Barack H. Obama: The Unauthorized Biography
ended when Young was found dead from multiple gunshot wounds just before Christmas 2007.
Sinclair’s third demand for clarification touches communications from Obama, Axelrod, and
campaign manager David Plouffe to Whitehouse.com in January and February 2008. Sinclair’s
fourth point regards possible payments by Obama, Obama’s campaign, Axelrod, Plouffe, and
Axelrod’s AKP Message and Media to Whitehouse.com in that same time frame of January-
February 2008.
OBAMA MUST ANSWER, NOT EVADE
It was up to Obama to answer these charges. It was imperative that this be done promptly,
without further delay, before the Democratic Convention. No responsible citizen wants a president
who can be blackmailed and thus turned into a puppet because he is hiding secrets about bisexual
activities, crack cocaine, political murder, and character assassination campaigns. It was also up to
the great news organizations, including ABC, CBS, NBC, The New York Times, and the
Washington Post, to carry out their responsibility to the public. These news organizations could not
play the role of kept courtesans of those in political power. As Sinclair pointed out, he had told his
story and had thus done everything he could. It was up to the great media concerns to locate and
interview the limo driver Paramjit Multani, to investigate the relevant telephone records, and above
all to question Obama himself about this very serious matter. It was not the role of the corporate
media to sit back and sniff about whether Sinclair had conclusively proven his own case to their
satisfaction or not; the proving or disproving is the responsibility of the media, and let them make
damn sure that they get it right.
By today’s journalistic standards, Sinclair’s allegations were extraordinarily substantive already,
especially when compared with some other major scandal allegations heard during the primaries.
Sinclair had filed a federal civil suit against Obama and Axelrod, complete with sworn affidavits
and court papers. This meant that he was willingly risking rule 11 penalties for filing a frivolous
lawsuit. He had also made statements to the Chicago police about his contacts with murder victim
Donald Young. These steps represented a very high degree of public commitment by Sinclair to the
truth of what he is saying. Compare this to the shoddy standards of the New York Times which, on
February 21, 2008 published and prominently displayed on its front page an innuendo about a
supposed sex affair between Senator McCain and a certain Vicki Iseman, a Washington lobbyist.
Not one single solitary named source was cited to support this innuendo. Or, take the case of Vanity
Fair magazine, the house organ of decadent left liberalism, which included a slander piece against
President Clinton entitled “The Comeback Id” by Todd Purdum in its July 2008 issue. Here again,
there was not one single named source who was willing to have his or her name publicly associated
with Purdum’s sleazy allegations. It was painfully obvious that there is one set of journalistic
standards for the Perfect Master Obama, and another and much laxer set for the competition. This
was intolerable.
NO SECRETS FOR THOSE WHO WANT TO ACCESS THE NUCLEAR BUTTON
It is fair to say that the idea of a private sphere for US presidential candidates about which the
general public is not entitled to know anything became obsolete at the same time that
intercontinental ballistic missiles with nuclear warheads became available around 1960 to 1965.
Since then, every presidential candidate has in effect appeared before the public asking to get his or
her hands on the thermonuclear button that can start World War III. At this point, the notion of a
private sphere for presidential candidates becomes wholly untenable. In this day and age, we have
IX: Obama’s Triumph of the Will: The 2008 Primaries 361
the right to know everything but everything about presidential nominees who are asking for our
votes. We have a right to know their full personal histories, with no exceptions, no omissions, and
no withheld documents. We have a right to know if they are HIV-positive and whether they ever
registered for the draft. We want to know if they have received electroshock, psychopharmaca, and
whether they have been treated by a psychiatrist. We have a right to see their birth certificate, their
college transcript, their senior thesis if they wrote one, their law school transcript, their passport,
papers from earlier times in public office, and all other relevant documents. We have a right to
know about their mother, their father, their sister, their brother, their Aunt Tilly, their best friends at
all stages of life, their boyfriends, their girlfriends, their pets, their backers, their sponsors, their
gurus, their controllers, and their associates of every kind. We want to know what religions they
have professed or not professed. More than a right to know these things, we have an imperative duty
to find them out. For they are asking to get their hands on the thermonuclear button, the misuse of
which can unleash a thermonuclear fireball that will not respect any aspect of the privacy of
ourselves and our family. Naturally, candidates are free to make their own choices in life just like
everybody else: they can choose their religion, their personal associations, their forms of recreation,
and all the rest in any way that they like. But none of this — absolutely nothing — can be claimed
as a secret off limits to the attention of the public. All of it must be thoroughly investigated, aired,
and published when the presidency is at stake. An Air Force crewman at a missile silo in the
Dakotas goes through a background check which leaves scant room for privacy. We must demand
nothing less from presidential candidates.
OBAMA’S COGNITIVE IMPAIRMENT AND ALLEGED COCAINE USE
Larry Sinclair alleges that Obama has indulged in crack cocaine. Those familiar with the public
literature about the current tenant of the White House know very well that there are many
indications that his extraordinarily low level of performance may derive from cognitive impairment
brought on by habitual cocaine use. How many more coke fiends in the White House are
compatible with the further national survival of the United States? Ronald Reagan notoriously
suffered from cognitive impairment and constantly made his remarks off index cards which he kept
hidden in his hands. Those index cards were a low-tech version of the glass plates of the
Teleprompter upon which Obama relies. As soon as he cannot read his words off those glass plates,
Obama begins to stutter, to stammer and babble, to hem and to haw, repeatedly losing his syntax
and constantly interjecting “um” and “you know.” What if Obama’s cocaine use really did not stop
in 1981, as he suggests in his memoir, and continued all the way to late 1999 at the very least, as
Larry Sinclair has alleged? That might suggest that Obama suffers from greater cognitive
impairment than Bush, as Obama’s incredible series of gaffes at the end of the primaries also
indicates. Larry Sinclair stressed during his press conference that he has been a gay man all his life,
and that he regarded the crack cocaine issue as the central one, at least until the time of the Donald
Young murder. During the press conference, Sinclair announced that he was willing to make his
own personal medical records, including mental health records, available to responsible
representatives of accredited news organizations, at their own expense. That means that Sinclair is
much more forthcoming about his medical history than Obama, who has withheld his medical
records and offered a single meaningless page of advertising copy signed by his personal physician.
And remember that Sinclair was not running for any office, while Obama wants to be president. In
the meantime, Larry Sinclair was still the target of frame-up operations, threats, and harassment.
What kind of a presidential campaign would we have when critics of the most radical subversive to
ever get this close to the presidency have to worry about a knock on the door in the middle of the
362 Barack H. Obama: The Unauthorized Biography
night? There was a rising demand that the Obama campaign drop their enemies’ list operation
against Larry Sinclair, release him from jail at once, and halt their vendetta against him.
SIGNS OF OBAMA’S MENTAL DISINTEGRATION: THE GAFFES
The right-wing commentator Michelle Malkin called attention to Obama’s unprecedented string
of public gaffes: for Malkin, Obama was ‘a perpetual gaffe machine. Let us count the ways, large
and small, that his tongue has betrayed him throughout the campaign: Last May, he claimed that
Kansas tornadoes killed a whopping 10,000 people: “In case you missed it, this week, there was a
tragedy in Kansas. Ten thousand people died — an entire town destroyed.” The actual death toll:
12. Earlier this month in Oregon, he redrew the map of the United States: “Over the last 15 months,
we’ve traveled to every corner of the United States. I’ve now been in 57 states? I think one left to
go.” Last week, in front of a roaring Sioux Falls, South Dakota audience, Obama exulted: “Thank
you Sioux City…I said it wrong. I’ve been in Iowa for too long. I’m sorry.” Explaining last week
why he was trailing Hillary Clinton in Kentucky, Obama again botched basic geography: “Sen.
Clinton, I think, is much better known, coming from a nearby state of Arkansas. So it’s not
surprising that she would have an advantage in some of those states in the middle.” On what map is
Arkansas closer to Kentucky than Illinois? Obama has as much trouble with numbers as he has with
maps. Last March, on the anniversary of the Bloody Sunday march in Selma, Alabama, he claimed
his parents united as a direct result of the civil rights movement: “There was something stirring
across the country because of what happened in Selma, Alabama, because some folks are willing to
march across a bridge. So they got together and Barack Obama Jr. was born.” Obama was born in
1961. The Selma march took place in 1965. His spokesman, Bill Burton, later explained that Obama
was “speaking metaphorically about the civil rights movement as a whole.”
Earlier this month in Cape Girardeau, Missouri, Obama showed off his knowledge of the war in
Afghanistan by honing in on a lack of translators: “We only have a certain number of them and if
they are all in Iraq, then it’s harder for us to use them in Afghanistan.” The real reason it’s “harder
for us to use them” in Afghanistan: Iraqis speak Arabic or Kurdish. The Afghanis speak Pashto,
Farsi, or other non-Arabic languages. Over the weekend in Oregon, Obama pleaded ignorance of
the decades-old, multi-billion-dollar massive Hanford nuclear waste clean-up: “Here’s something
that you will rarely hear from a politician, and that is that I’m not familiar with the Hanford,
uuuuhh, site, so I don’t know exactly what’s going on there. (Applause.) Now, having said that, I
promise you I’ll learn about it by the time I leave here on the ride back to the airport.” I assume on
that ride, a staffer reminded him that he’s voted on at least one defense authorization bill that
addressed the “costs, schedules, and technical issues” dealing with the nation’s most contaminated
nuclear waste site.’185 Obama first said Iran was a tiny country that did not pose a threat, then that it
was not a threat a few days later – a very ominous and light-headed performance.
When Obama was in Sunrise, Florida, he thought he was in Sunshine, Florida: “How’s it going,
Sunshine? Thank you. Thank you. Thank you. Thank you everybody. It’s good to be in Sunshine!”
Obama declared on taking the stage this afternoon for a rally at the BankAtlantic Arena in Broward
County, Fla., just west of Ft. Lauderdale.186 On Memorial Day 2008, Obama intoned: “As our
nation honors its unbroken line of fallen heroes — and I see many of them in the audience here
today — our sense of patriotism is particularly strong. (New Mexico, Memorial Day 2008) Obama
also boasted that his grandmother’s brother, Charlie Payne, helped liberate a Buchenwald sub-camp
in April 1945 as part of the 89th Infantry Division. But it was the Soviet Red Army that freed the
inmates of Auschwitz.187 None of this made any impact on the swooners of the controlled corporate
media. Arch-oligarch David Broder, for example, continued to write hogwash like this about
IX: Obama’s Triumph of the Will: The 2008 Primaries 363
Barky’s “innocents abroad” world blitz: “…as millions of Americans who watched the primary
campaign learned, Obama is invariably articulate. There would be no verbal gaffes.”188 Invariably
articulate? No gaffes? Obama’s Teleprompter dependency and gaffes, like Carter’s infamous
“fuzziness,” had already emerged as a major campaign issue. Without the glass plates of the
Teleprompter, Obama hemmed and hawed, or virtually babbled in delirium. What planet was
Broder living on? This column posed the question of mental impairment not just for Obama, but for
Broder as well.
OBAMA’S MENTAL DEBILITY:
IMPLICATIONS OF NEW MARIJUANA RESEARCH
By a happy coincidence, new evidence of the relation between marijuana use and mental
impairment came to light late in the primary season. Given Obama’s confession of heavy marijuana
use, these considerations are highly relevant to his qualifications for the presidency: ‘Long-term
heavy use of marijuana may cause two important brain structures to shrink, Australian researchers
[have found]. Brain scans showed the hippocampus and amygdala were smaller in men who were
heavy marijuana users compared to nonusers, the researchers said. The men had smoked at least
five marijuana cigarettes daily for on average 20 years. The hippocampus regulates memory and
emotion, while the amygdala plays a critical role in fear and aggression. The study, published in the
American Medical Association’s journal Archives of General Psychiatry, also found the heavy
cannabis users earned lower scores than the nonusers in a verbal learning task — trying to recall a
list of 15 words. The marijuana users were more likely to exhibit mild signs of psychotic disorders,
but not enough to be formally diagnosed with any such disorder, the researchers said. “These
findings challenge the widespread perception of cannabis as having limited or no harmful effects on
(the) brain and behavior,” said Murat Yucel of ORYGEN Research Centre and the University of
Melbourne, who led the study.’ (Will Dunham, “Heavy marijuana use shrinks brain parts: study,”
AP, June 2, 2008) Reporters who get to question Obama should ask him how his hippocampus and
amygdale are doing these days. Not well, we fear.
THE ROLL CALL OF THE STATES DECIDES THE NOMINEE – NOT DEAN
It was unthinkable that any responsible political leader would be willing to see Obama receive
the nomination while the sword of Damocles of further scandals hung over his head. Larry
Sinclair’s videotape had been on the Internet since mid-January, and it had at various times been the
object of discussion on something approaching a million websites. The issues are Obama’s crack
cocaine use, his bisexuality, his possible involvement in the Donald Young assassination, and the
allegations of character assassination and harassment against Sinclair funded by the Obama
campaign. There was also the matter of the Michelle Obama “hate whitey” tape. Karl Rove knew
all about each one of these points, and there was no way to deter Karl Rove and his cohorts. So,
although it might have incomprehensible to Obama’s drooling acolytes, the interest of the
Democratic Party was best served by thorough airing of these allegations to before the roll call of
the states is held on August 27, 2008 — and this was exactly what Sinclair had been trying to do
since mid-January. If Sinclair had been a GOP deployment, he would simply have waited for
September or October to come forward.
There were of course those who lamented and regretted that it was necessary to dredge up the
sordid details of a figure like Obama. They suggested that it was better to use political campaigns
to talk about issues. This might sound plausible, but it is totally wrong, and the fault rests with
364 Barack H. Obama: The Unauthorized Biography
Obama. First, Obama does not campaign on issues in any systematic way. He presents himself as
the Perfect Master, the Anointed One, the Savior, the Messiah, the Mahdi. His hysterical followers
are obsessed, not with a political program or a set of issues, but with the personality cult of Obama.
This means that any attempt to engage Obama on the issues is by definition an impotent and selfdefeating
tactic. The only useful objections that can be made to Obama are ad hominem
biographical revelations designed to show that he is not so anointed after all, and that his ability to
walk on water has been overestimated. Then there is also the matter of Obama’s notorious duplicity
and flip-flops even where he does have specific positions on certain issues. First Obama wanted a
fixed schedule for getting out of Iraq, but Samantha Power revealed that this was not the case at all.
Barky said he wanted a different kind of foreign policy, and then he pandered to AIPAC, probably
lying through his teeth in the process. First Obama wanted to help the lower income brackets, but
now he is talking about cutting the corporate income tax. Obama attacked free trade in Ohio and
Pennsylvania, even as his top economic controller, Austan Goolsbee of the Friedmanite Chicago
School reassured the Canadians that this was just election posturing; now Obama told Fortune
magazine that he likes free trade and is devoted to “free markets.”189 First Obama was going to be
tough on FISA; now he went going along with the Democratic congressional leaders as they attempt
to appease Bush. Obama had built his career on ethics in government and reducing the role of
political contributions; now he turned his back on the only meager legislative achievements by
becoming the first presidential candidate in modern times to repudiate matching funds in the general
election. Most dramatic was Obama’s about face on Iraq, where he was now signaling an openended
commitment. On all these points, to attempt a substantive debate with Obama is a fool’s
errand. The only way to pin Barky down was through pointed reference to crucial facts in his own
background, biography, and associations which cannot be changed or swept under the rug. Any
other approach was deliberate impotence and capitulation.
DEAN-BRAZILE MINORITY COUP SPLITS DEMOCRATS
On May 31, 2008 the Rules Committee of the Democratic National Committee took a giant step
on the road to political suicide. Their decision to cut in half the voting strength of the Florida and
Michigan delegations effectively disenfranchised the voters of these two vital and indispensable
states, and reduced them to second-class citizenship. Even the infamous three-fifths compromise
embodied in the US Constitution of 1787 treated a slave better than the Democratic National
Committee was treating the voters of Florida and Michigan. Without these two states, any
Democratic ticket was doomed to defeat in the November election. The Democratic Party does not
exist for the primary purpose of obeying its own rules; it exists for the purpose of winning elections,
and the goal of such winning is that the interests of the people may be served and defended. This
basic truth of equity had now been trampled on by the Dean-Brazile-Obama Wall Street puppets.
Howard Dean, Donna Brazile, and their retainers argued that they owe it to black voters and to
fervent youthful idealists to make sure that Obama gets the nomination. In reality, the Democratic
National Committee has proven over and over again that it does not care a damn about black voters,
nor about young voters either. Dean and Brazile get their orders from Wall Street bankers like
Rockefeller and Soros and their associated think tanks, and it is these Wall Street interests that are
demanding Obama be nominated to carry out a program of draconian domestic economic austerity
and a final confrontation with Russia and China, as prescribed by the Brzezinski Plan. By their
actions, Dean, Brazile, and the Obama campaign had already split the Democratic Party. It is they
who had to assume the historical responsibility for the impending scission. If you exclude half of
IX: Obama’s Triumph of the Will: The 2008 Primaries 365
Michigan and half of Florida, you have already split the party, and this is what the Obama camp had
done.
Obama’s candidacy was already beset by at least five distinct orders of scandal. First was the
fact that he was the product of a nest of racist foundation-funded provocateurs associated with
Reverend Wright’s Trinity United Church of Christ, with the renegade theolib priest Father Pfleger
being merely the latest in the series of these racist hate mongers to come to the attention of the
public. Second was the fact that Obama was a product of a nest of Weatherman terrorists, including
Obama’s close friends Bill Ayers and Bernardine Dohrn, who have sponsored his career at a
number of critical points. Third is the fact that Obama was sunk up to his eyeballs in a cesspool of
corruption and graft associated with the Daley-Blagojevich Cook County Democratic machine and
ongoing criminal conspiracy known as the Illinois bipartisan Combine, which features the
Levantine gangsters Antoin Rezko, Nadhi Auchi, and former Iraqi Electricity Minister Aiham
Alsammarae. Fourth was a complex of scandals involving murder, cocaine, and illicit sex,
associated with the names of Larry Sinclair and of Donald Young, the gay choirmaster of Wright’s
church who was found murdered last Christmas morning. Fifth were the relations between the
Obama campaign and terrorist patsy groups in the Middle East. The relations of Robert Malley
with Hamas have already led Obama to dump Malley. The next phase may well involve the
sponsorship in Washington of Ilyas Achmadov, the envoy of the murderous Chechen terrorist
organization, by Obama’s top controller and guru, Zbigniew Brzezinski. These five echelons of
scandal meant that Obama was out of the question as a viable candidate of the Democratic Party.
According to a Rasmussen poll, about one third of Democrats and one half of Clinton supporters
wanted Senator Clinton to be on the November ballot without regard to what the Democratic bosses
might decree. These results were gathered in a situation when this option was totally taboo for the
controlled corporate media. With some elementary mass political education, these numbers would
rise considerably overnight. What was needed was the certain trumpet.190
FISA BETRAYAL WAS PREDICTABLE – WATCH THE HANDLERS
Some were surprised when Obama betrayed the pathetic faith of his duped supporters and broke
his solemn promise to filibuster the new FISA law if it contained automatic immunity for telecom
companies who had broken the law at the urging of the Bush-Cheney police state operators. There
should have been no surprise: on this issue as on others, it is generally enough to look at who
Obama’s handlers and controllers are to see how he will come down in the end. In this case, the top
issue controller was John Brennan, who had told National Journal: “I do believe strongly that
[telecoms] should be granted that immunity,” former CIA official John Brennan told National
Journal reporter Shane Harris in the interview. “They were told to [cooperate] by the appropriate
authorities that were operating in a legal context.” Before leaving government to join the private
sector, Brennan had been the head of the National Counterterrorism Center (NCTC), a joint office
operated by the CIA, FBI and other government agencies. At the time Brennan said this, his
remarks were in direct conflict with the line that Barky was still spouting on the stump. In a serious
campaign, Brennan would have been fired for bucking the party line. But within a few weeks, the
stump speeches were forgotten and the orders from the handlers and controllers, in this case
Brennan, prevailed. (Justin Rood, ABC News) We can use this method to repeat the firm prediction
that Obama will attempt to privatize Social Security, based on the past track record of advisers like
Jason Furman, Jeffrey Liebman, and Austan Goolsbee in that regard. Another case was that of the
infamous genocide procuress Samantha Power, who had blurted out before Ohio that Obama’s
stump remarks on the timetable for Iraqi pullout were meaningless hot air, and that Obama would in
366 Barack H. Obama: The Unauthorized Biography
effect do whatever he wanted about Iraq. Samantha Power’s remarks came true in early July,
releasing a shock wave that might doom the Obama candidacy in its entirety. There was also
NAFTA: Obama said he was critical, but Austan Goolsbee told Canadian officials that Barky was a
free trader, and Goolsbee had been right, as Obama’s Fortune interview showed.
OBAMA’S SHIFT TOWARDS ENDLESS WAR IN IRAQ
On July 3, Barack Obama revealed once and for all that he is an imposter and a con artist. From
the very beginning, the foundation of Obama’s campaign and his claim to possess superior strategic
and moral judgment had been his claim to oppose Bush’s Iraq war. In a North Dakota campaign
event, Obama declared that he would consult with the generals and “refine his position” on the Iraq
war. The Washington Post headlined: “Obama May Consider Slowing Iraq Withdrawal.” But the
real message was clear: Obama was moving rapidly away from his earlier 11-month or 16-month
timetables for withdrawal and towards full support for endless war, endless bloodbath, and endless
bankruptcy in Iraq. Samantha Power had confessed Obama’s doubletalk on Iraq months ago. The
handwriting was now on the wall: Obama would soon go to Iraq, meet with General Petraeus, and
then announce his Baghdad road conversion to a policy of open-ended military occupation,
oblivious to the immense human costs. Soon there would be no difference at all between Obama
and McCain on the Iraq war, and the Democratic Party would have missed yet another historic
opportunity to help the American people end Bush’s and Cheney’s failed criminal adventure.
McCain gloated that Obama’s flip-flop proved he had no principles, only opportunism and
expediency, and that his much-touted soaring words meant precisely nothing. Democrats now had
their last chance to reflect: did they really want to give their nomination to a little-known newcomer
who had posed as a peace advocate, and had now unmasked as a warmonger and candidate for
Bush’s third term?
OBAMA’S BETRAYAL OF DEMOCRATS ON FISA, NAFTA,
CAMPAIGN FINANCE, THE DEATH PENALTY AND MUCH MORE
From the instant that he felt that the Democratic nomination was in his hands, Obama moved
relentlessly to the right in a breathtaking, stunning exhibition of cynicism and duplicity. Everything
he was supposed to stand for was thrown overboard, and Obama’s contempt for his own voters was
now center stage. Obama had promised to stop Bush’s assault on the Constitution and civil liberties,
and end illegal wiretapping. Now, Obama voted for the rotten compromise on the FISA bill,
including immunity for the telecoms – something he had vowed to filibuster. Obama had promised
clean government and less corruption, but he broke his promise by opting out of public financing
for his fall campaign, junking the cause of political reform he had claimed to champion. In Ohio and
Pennsylvania, Obama posed as a critic of free trade sellouts like NAFTA, CAFTA, and WTO, but
he now told Fortune magazine that he was a great friend of free trade. Obama now openly
supported the death penalty, more of Bush’s faith-based boondoggles, and the “merit pay” assault
on teachers. He wanted to cut the corporate income tax, and opposed attempts to curb hand gun
violence. His current team of economic advisers guaranteed that he would eventually come out for
the partial privatization of Social Security camouflaged as “entitlement reform.” In short, Obama
intended to betray not just his own basic commitments, but the historical foundations of the
Democratic Party going back to Franklin D. Roosevelt. All that remained to complete this panorama
of betrayal was the choice of a Vice President: it was clear that Obama would reject Senator
Clinton, the greatest primary vote getter in the history of the Democratic Party, and the candidate
IX: Obama’s Triumph of the Will: The 2008 Primaries 367
who had won the popular vote in 2008. Instead, he was likely to choose a Republican – a
Bloomberg, a Hagel, or a Lugar, putting a Republican just a heartbeat away from the presidency.
SLIPPERY, FLIP-FLOPPING WARMONGER
OBAMA NOT A VIABLE CANDIDATE
If Obama imitated McCain on so many issues, the November election would come down to a
choice between two individuals, and a shifty, slippery, flip-flopping Obama will not fare well
against the war hero McCain and his carefully cultivated reputation as a straight shooter. McCain
would point out that voters cannot trust the flip-flopper Obama, and on that McCain would be right.
Fortunately, Obama has tipped his hand and dropped the mask too soon: there was no Democratic
nominee until the Roll Call of the States on August 27, 2008 in Denver.
PUMA DEMOCRATS MOBILIZE AGAINST OBAMA
During June 2008, the Democratic Party split. There emerged a coherent movement of
opposition to Obama and to the postmodern fascism he represented. These were the PUMA
Democrats, who first emerged on May 31 when Soros’ man Howard Dean had cut the Florida and
Michigan delegations in half on the basis of his Wall Street doubletalk. PUMAs were suddenly all
over cable television threatening to vote for McCain, but it was clear that what they really wanted
was to prod Senator Clinton to come back into the race. They said they were not calling for some
futile and self-defeating gesture, but rather pointing to the path that lead to victory in November.
The preconditions for a Clinton resurgence were an open convention not subject to the totalitarian
control of discredited and hated figures like Dean, Brazile, and the other machine bosses and hacks.
Then, there had to be the chance to vote through a formal Roll Call of the States, the centerpiece of
every American convention since time immemorial. But Dean and Brazile were already attempting
to cancel the Roll Call of the States, and orchestrate a convention of mindless Obama hoopla,
preventing even platform debate. Obama was demanding that he give his acceptance speech in the
Denver ball park, and was trying to schedule a speech before the Brandenburg Gate in Berlin on his
upcoming trip to Germany so he could posture as the new Kennedy.
175 PATRIOTS COULD STOP OBAMA ON THE FIRST BALLOT
IN AN OPEN CONVENTION
At this point, the fate of the United States appeared to depend on a minimum of 175 delegates to
the Denver convention willing to exercise their mature political judgment in the service of their
country, and turn away from Obama to support Senator Clinton. By most accounts, Obama had
about 2229.5 delegate votes, with 1766.5 pledged delegates and 463 superdelegates. Clinton had
1896.5 delegate votes, with 1639.5 pledged and 257 super delegates. Shift just 350 delegates from
Obama to Clinton, and Obama’s power grab would grind to a halt. After that, there would be the
opportunity to deliberate and choose a competent candidate. Lexington and Concord were started by
a few dozen farmers. Did the Democratic Party still have 175 patriots with the courage to take a
stand? By July 2008, the PUMAs held the key to the situation.
New motivation for these efforts came from the polls, which suggested at the end of July 2008
that Obama remained a likely loser for the Democrats in a contested election against McCain. A
USA Today/Gallup poll of likely voters showed McCain now ahead 49%-45%. Adam Nagourney of
the New York Times posed the question of “Where’s the Bounce” for Obama: ‘It is a question that
368 Barack H. Obama: The Unauthorized Biography
has hovered over Senator Barack Obama even as he has passed milestone after milestone in his race
for the White House: Why is he not doing better? …”They’ve known John McCain for years,” Bill
McInturff, a pollster for Mr. McCain, said of survey participants. “But people say in focus groups,
‘Who the heck is Barack Obama? Had you heard of him before six months ago?’ And he’s 46 years
old. He’s somebody nobody knows about.” … Mr. McCain is “running ahead of where he should be
based on the environment,” Mr. McInturff said. … Even Mr. Obama’s advisers say they are uneasy
about his difficulty so far in breaking the 50 percent barrier — a reminder, in poll after poll, that
there many Americans who are not yet ready to cast their lot with him, and may never be.’191
Nagourney was widely vituperated by Obama’s nutroots Myrmidons. Taylor Marsh, by now firmly
in the Obama camp, commented: ‘See, for those who haven’t been paying attention, American
voters don’t cheer for the champ or the smarty pants who seems full of himself, no matter how right,
no matter how good the policies he’s pushing. The do-gooder who can do no wrong. See Gore
2000, or Kerry.’192 There was still time for Democrats to dump Obama.
CHAPTER X: OBAMA: A LOOMING WORLD TRAGEDY
Brzezinski is “someone I have learned an immense amount from,” and “one of our most
outstanding scholars and thinkers”. – Obama, 2007.
“I’m not opposed to all wars.” – Obama, 2002
“Where did you get a public opinion that we should fully disarm and then, according to some
theoreticians, such as Brzezinski, divide our territory into three or four states? If there is such a
public opinion, I would disagree with it.” –Russian President Vladimir Putin, June 4, 2007.
My book Obama - The Postmodern Coup: The Making of a Manchurian Candidate grew out of
the realization on the weekend between the Iowa caucus and the New Hampshire primary that the
Obama bandwagon was not a normal political campaign, but rather an application of the methods of
the neo-imperialist and neo-liberal people power coup/color revolution (as we had seen them in
Ukraine, Georgia, Lebanon, etc.) brought home to the United States. It was a postmodern coup
under the cover of an election. A little digging showed that Obama’s handlers and controllers –
Zbigniew Brzezinski, Mark Brzezinski, Joseph Nye, Austan Goolsbee – represent the core of the
Trilateral Commission-Bilderberger group, closely associated with the Rockefeller interests. Some
of these people, especially Zbig and Paul Volcker, are the handlers who directed the catastrophic
Carter Trilateral presidency thirty years ago.
LAKE AND DAALDER:
THE CONCERT OF OLIGARCHIES TO RULE THE WORLD
Another Obama handler and controller is Anthony Lake, a veteran Democratic Party foreign
policy hack. Lake was Clinton’s first NSC Director starting back in 1993, and he did not last long.
One of Clinton’s very good initial ideas was to appoint a US Special Ambassador to do something
about ending the brutal British occupation of Northern Ireland. This had indeed been one of
Clinton’s popular promises on the campaign trail. Once they were in the White House, Lake told
Clinton that such an envoy would be seen by the lordly British as an affront, since their line was
that Northern Ireland was purely an internal affair of the United Kingdom. Therefore, Lake argued
successfully, the special US envoy was out of the question, and the whole idea had to be dropped.
Clinton caved in. In 1993, it was the ultra-imperialist British who were doing the human rights
violations, so any intervention was unthinkable. Today, Brzezinski & Co. are eager to launch a
whole series of interventions and invasions under left cover, human rights cover, and humanitarian
cover against targets like Sudan, Burma, and China, including via Tibet. Under these conditions,
Lake the Snake, as he was known by his opponents in the Clinton NSC, has become a true
powerhouse of fervor for humanitarian interventions, utterly unlike the cautious fellow we saw back
in 1993.
A May 19, 2008 op-ed by Washington Post deputy editorial page editor Jackson Diehl touted the
efforts of Obama handlers Anthony Lake and Ivo Daalder to establish a “Concert of Democracies,”
to sanction military invasions of countries in Africa and Asia, generally using left, human rights
cover. The “Concert of Democracies” hearkens back to the Castelreagh-Canning system of British
imperial domination of Europe after the Napoleonic Wars. At that time, any state which threw off
the oppressive yoke of the Quadruple Alliance could become the target of counter-revolutionary
intervention by the British and their continental junior partners, headed by Prince Metternich of the
Austrian Empire. Revolutionary states were deemed rogue states, in today’s parlance, and they were
370 Barack H. Obama: The Unauthorized Biography
considered fair game for outside invasion. Such a system was naturally unworkable and dissolved in
revolutionary chaos in 1848 – a chaos fomented by the British themselves in many cases. A similar
idea was put forward in 1938 under the rubric of the “League of Democracies” as advocated by the
US Anglophile financier Clarence Streit, who was Felix Rohatyn’s father in law. There was also the
Community of Democracies, a gaggle of US-UK satellites created under Clinton by Madeline
Albright and Morton Halperin, Soros’ man in Washington. But now, in 2008, the long-standing
Anglo-American world domination was reaching the end of the line. Hence the desperation of
crackpot plans like those embraced by Lake the Snake. Experience shows that, if Obama’s handlers
demand it, Barky will do it sooner or later.
Lake and his sidekick Ivo Daalder, also an Obama controller, have been working closely of late
with the head of the neocon wing of the US ruling class, George P. Shultz, the man who picked
Bush, picked Cheney, picked the neocon Vulcans, and then went on to pick Arnold Schwarzenegger
to be Governor of California. The convergence between the center-left imperialists like Lake and
the neocons like Shultz is the practical content of the “bi-partisanship” that Obama is always
babbling about. This convergence is based on the very sober estimate that the Anglo-American
empire is in a heap of trouble, and that further open divisions in the ruling class could well open the
way to a popular movement for real reform. Therefore, the two wings of the ruling class, the Shultz-
Rupert Murdoch-Warren Buffet neocons and the James Baker-Robert Rubin-Soros-Rohatyn wing
have an urgent need to come together, to crush domestic opposition, and finally to take down the
real centers of opposition, Moscow and Beijing.
THE SLAUGHTER PLAN
Daalder and Lake serve as honorary co-chairs of the Princeton Project on National Security,
which came out, in the fall of 2006, for an Anglo-American-led Concert of Democracies to carry
out preventive and preemptive wars of regime change around the world, outside the United Nations
Charter.193 Daalder, a fellow at the Brookings Institution, has collaborated top neocon Robert Kagan
(an informal advisor to John McCain) to promote the aggressive interventionism inherent in this
lunatic plan for a Concert of Democracies. The Princeton Project on National Security proposal for
a Concert of Democracies was included in the project’s final report by G. John Ikenberry and
Woodrow Wilson School Anne-Marie Slaughter (nomen est omen, her name is her program), who is
billed as a likely recipient of a plum job in a future Obama regime. (Imagine the headlines: Obama
Proposes New World Order Based on Slaughter Plan!”) The Slaughter Plan may have confidential
protocols that represent the detailed program for an Obama regime, in the same way that the 1980s
Project of the Council on Foreign Relations represented the script for the Carter administration.194
THE “ROGUE BLOC” – RUSSIA AND CHINA
The Concert of Democracies scheme was discussed by Ivo Daalder and James Lindsay, who
argued in an article in The American Interest that it could encompass up to 60 nations, including 28
of the 30 largest economies. Bush the elder and Bush the younger carried out their imperialist
adventures using what they called coalitions of the willing – ad hoc groups of states which could be
cajoled, bribed, threatened, or coerced into joining in, usually with token contingents, on the side of
the US-UK imperialist enforcers. These coalitions of the willing were often mocked as the
coalitions of the shilling, since the majority were indeed shills for the Anglo-Americans. Daalder
and Lake can see that they will never ram their adventurous plans through the United Nations,
where the Shanghai Cooperation Organization powers – Russia and China – are ready to bar their
X: Obama: A Looming World Tragedy 371
way with crossed vetoes. At the same time, the old neocon idea of the US, UK, and Israel at war
with the rest of the world until the end of time simply will not work, because these powers are far
too defeated, discredited, isolated, and bankrupt. Accordingly, the new idea is to institutionalize the
coalition of the willing in permanent form, splitting the world into a US-UK “democratic” bloc,
which will face off against a “rogue” bloc centered on Russia and China. The precondition to
forming this bloc would be an unprecedented level of gullibility and servility on the part of Europe,
Japan, and other parts of the planet. Lake, a kind of mini-Brzezinski, has motivated this new version
of the Holy Alliance as follows: “One thing is clear,” he wrote in the American Interest. “Crises in
Iran, North Korea, Iraq and Darfur, not to mention the pressing need for more efficient
peacekeeping operations, the rising temperatures of our seas and multiple other transnational
threats, demonstrate not only the limits of American unilateral power but also the inability of
international institutions designed in the middle of the 20th century to cope with the problems of the
21st.” As Jackson Diehl comments, “… a post-Cold War and post-George Bush United States will
not have the capacity or the legitimacy to unilaterally take on global crises. But working through the
United Nations, as Bush himself tried to do for the past several years, is more often than not a recipe
for paralysis, because of the resistance of non-democratic states. Take the past few months: China,
helped by Russia, has stopped the Security Council from discussing a humanitarian intervention to
rescue the 1.5 million Burmese endangered by the criminal neglect of their government following a
cyclone. Strong sanctions against Iran for its refusal to freeze its nuclear program have been
blocked by Russia. An attempted U.N. intervention in Darfur is failing, largely because of Chinese
and Russian refusal to authorize stronger measures against the government of Sudan. Whether
Obama or McCain, the next president will take office knowing that he inherits the messes in Darfur,
Burma and Iran and also that new crises will erupt during his term. If he is unable to respond — if
he, like Bush, ends up watching as tens or hundreds of thousands of people die in a weak or failed
state while China and Russia block U.N. action — he will be harshly judged. That’s why McCain
has smartly begun to talk about his League of Democracies and promised early action to create it. If
Obama is wise, he will make Daalder’s Concert of Democracies part of his own campaign.”
(Jackson Diehl, “A ‘League’ by Other Names,” Washington Post, May 19, 2008) And if Brzezinski
finds this institutional camouflage useful for his apocalyptic confrontation with Russia, China, and
their allies, we can be very sure that puppet Obama will comply.
Another prominent foreign policy adviser of the Obama campaign was the abrasive Susan Rice,
who had been the Assistant Secretary of State for Africa during the Clinton Administration. Before
she drank the Kool-Aid for Obama, Taylor Marsh recalled that ‘along with [Anthony] Lake, Dr.
Susan Rice is one of the people responsible for the disastrous policy towards Rwanda in the 1990s,
for which Bill Clinton deservedly took so much heat and eventually apologized. As for Power, she
obviously is simply unprofessional.’ Rice attracted attention for her clumsy gaffe during the
controversy about Clinton’s Texas ad suggesting that Obama was not prepared to react to a 3 a.m.
telephone call to the White House announcing a strategic emergency. Rice countered that charge by
arguing in effect that both candidates were equally unqualified: “Clinton hasn’t had to answer the
phone at 3 o’clock in the morning and yet she attacked Barack Obama for not being ready. They’re
both not ready to have that 3 a.m. phone call.” This performance caused Rice to be nominated by a
least one blog for the dubious honor of being named the ‘worst foreign-policy spokesperson ever.”
(March 6, 2008)
372 Barack H. Obama: The Unauthorized Biography
OBAMA THE APPEASER: FOR ONCE, BUSH WAS RIGHT
In late May, President George Bush gave an address to the Israeli Knesset on the occasion of the
60th anniversary of Israel’s independence. We must leave aside the appalling historical mockery of
Bush appearing in that place, given that his grandfather Prescott Bush had been one of the principal
backers and financiers of the Nazi party and must thus be counted as one of the indispensable
supporters of Hitler’s seizure of power in January 1933. Those who wish to dig deeper into this
background are invited to consult my book, George Bush: The Unauthorized Biography (1992),
where the full story of Prescott Bush’s support for National Socialism is detailed. In the course of
his Knesset address, Bush remarked:
Some seem to believe that we should negotiate with the terrorists and radicals, as if some
ingenious argument will persuade them they have been wrong all along. We have heard this
foolish delusion before. As Nazi tanks crossed into Poland in 1939, an American senator
declared: “Lord, if I could only have talked to Hitler, all this might have been avoided.” We
have an obligation to call this what it is — the false comfort of appeasement, which has been
repeatedly discredited by history. (Applause.)
(http://www.whitehouse.gov/news/releases/2008/05/20080515-1.html)
Obama’ handlers, eager to pick a fight with Bush, chose to interpret this remark as aimed
specifically against them — hardly a clever move given the obvious liabilities of a young whelp of a
senator who notoriously would not know the difference between a rocket propelled grenade and a
bong. Even picking a quarrel with Bush was something that Obama had to do in a cowardly and
tentative way, initiating the polemics with a carefully worded written statement which accused Bush
of launching a “false attack” on the Perfect Master. In the course of several polemical exchanges
with Senator McCain, Obama prevaricated, muddied the waters, and shifted his own position
several times on this issue.
Apart from these verbal pyrotechnics, it must be recognized that Bush for once was quite
correct, although for reasons which he himself could never have fathomed. The foreign policy
which Brzezinski and Obama intend to carry out in regard to countries like Syria and Iran is indeed
a carbon copy of the so-called appeasement policy followed by British Prime Minister Sir Neville
Chamberlain, most notably at the Munich conference of September 1938, where much of
Czechoslovakia was awarded to Hitler without any direct consultation of the government in Prague.
THE BRITISH APPEASEMENT POLICY
MEANT ACTIVE SUPPORT FOR HITLER
In order to get to the heart of the matter we need to get rid of the term appeasement which is a
very weak euphemism invented by British historians to put their own countries leaders in a
somewhat better light. The essence of what is called appeasement was a policy of active support for
Hitler and the national Socialist regime on the part of the Baldwin and Chamberlain governments of
Britain during the 1930s. This support was comprehensive, and included financial assistance to the
Nazis by the Bank of England under Lord Montague Norman, the Anglo German naval agreement
of 1935, which scrapped the arms limitations imposed on Germany by the Treaty of Versailles and
gave German rearmament the official British stamp of approval, plus British approval of the
remilitarization of the Rhineland, support for the unification of Germany with Austria, active
support for Hitler’s grab of Czechoslovakia, and a de facto hands-off policy when it came to Nazi
aggression against Poland. The only condition suggested by the British for all this support was this
X: Obama: A Looming World Tragedy 373
that Hitler should direct his aggressive intentions eastward in the direction of the Union of Soviet
Socialist Republics. The essence of this British policy was to play Hitler against Stalin by
encouraging Hitler to go east, and to hope to get rid of both of them that way, thereby guaranteeing
the British Empire in another century or more of world domination. There was a parallel British
policy of appeasement towards Japan, with the goal of embroiling Japan and the United States in the
Pacific war for the greater glory of London. The British aristocracy was hysterically convinced that
Hitler was a one-way gun who could only fire into the sunrise, never into the sunset. Naturally, this
policy was sheer lunacy, and was destined to blow up in the faces of the British sooner rather than
later. The center of this policy was notoriously the Astor family and their social circles, known as
the Cliveden Set, which was the immediate social milieu inhabited by Sir Neville Chamberlain.
Cliveden was a country house frequented on weekends not only by the Prime Minister, but also by
Lord Astor and Lady Astor’s guests, who included Lord Lothian, Lord Brand, Lord Halifax, the
future foreign Secretary, and many more.195 This is the faction referred to by Carroll Quigley as the
Milner group, and they were closely allied to other aristocrats like the Duke of Hamilton, the
nobleman whom Rudolf Hess was seeking to visit when he parachuted into Britain a few weeks
before the Nazi attack on the Soviets.
All of this is amply documented for those willing to take a look. Carroll Quigley of Georgetown,
Bill Clinton’s history professor, wrote that the Astor group in question …was known in those days
as the Round Table Group, and later came to be called, somewhat inaccurately, the Cliveden Set,
after the country estate of Lord and Lady Astor. It included Lord Milner, Leopold Amery, and
Edward Grigg (Lord Altrincham), as well as Lord Lothian, Smuts, Lord Astor, Lord Brand (brother
in law of Lady Astor and managing director of Lazard Brothers, the international bankers), Lionel
Curtis, Geoffrey Dawson (editor of The Times), and their associates. The group wielded great
influence because it controlled the Rhodes Trust, the Beit Trust, The Times of London, The
Observer,. the influential and highly anonymous quarterly review known as The Round Table
(founded in 1910 with money supplied by Sir Abe Bailey and the Rhodes Trust, and with Lothian as
editor), and it dominated the Royal Institute of International Affairs, called ‘Chatham House” (of
which Sir Abe Bailey and the Astors were the chief financial supporters, while Lionel Curtis was
the actual founder), the Carnegie United Kingdom Trust, and All Souls College, Oxford.”196
The Daily Express published a picture of Lady Astor’s Cliveden estate under the headline “Mr.
Chamberlain spent the week-end here — and why.” The article began ominously by noting that
“France has her ‘Cagoulards,’ the hooded men who are supposed to be plotting a Fascist uprising
there. And England has her ‘Cliveden Set,’ who are supposed to be plotting a Fascist regime here.
Brrrrr!” wrote the Daily Express, which went on to dismiss the whole story as “a first-rate bogey.”
(Daily Express, March 28, 1938)
Cockburn loved to mock the Cliveden group as the “cagloulords” — Astor, Astor, Lothian,
Londonderry, Brand, and Halifax. Cockburn’s original thesis was that the Astor group viewed
Hitler as a “one-way gun” — one which, they hoped, would only fire east towards Moscow. The
infamy of Cliveden soon reached the United States. Hedley Donovan informed the readers of the
Washington Post, under the headline “Empire’s New Leaders Friendly to Fascism,” that “the
energetic Lady Astor occupies a position of great influence in Britain’s councils.” Donovan told his
readers to prepare to read soon in their morning newspapers a news item like the following: “The
British government has given its blessing to Hitler’s impending annexation of German-speaking
Czechoslovakia, it was learned here from a source close to Cliveden.” (Washington Post, April 3,
1938) The Minneapolis Journal noted that “the Tory press have been shouting for years to let Hitler
have his own way for central Europe and Russia. (April 3, 1938) The Philadelphia Record
374 Barack H. Obama: The Unauthorized Biography
described the Cliveden set as having been in existence in its current form for about 20 months, with
a policy including an Anglo-German, bargain, British recognition of Franco’s Spain, the final
dismantling of the collective security features of the League of Nations, and a round of new loans to
Germany from bankers — perhaps Brand — who are themselves Cliveden habitués. “The prodictator
attitude of this clique,” this article pointed out, “is the real reason that Prime Minister
Neville Chamberlain refuses to tell Parliament and the world at what point England will fight.”
(Philadelphia Record, April 4, 1938) The New York Times article on Cliveden was headlined,
“Friends of Hitler Strong in Britain,” and noted that Chamberlain, more at ease with the pro-
German element, had spent Easter with Lord Londonderry, an outspoken pro-German and an
important official of the Conservative Party. (The wealthy elitist Lord Londonderry was about to
publish his book Ourselves and Germany, a plea for Anglo-German rapprochement.). The author,
Ferdinand Kuhn Jr., noted “British aristocracy by its very nature is more hostile to communism than
to fascism. When men like Londonderry or Viscount Rothermere or Lord Astor have political
nightmares the ogre of their imagination is Russia, not Germany. Menace to their wealth, their
social position, as they see, it, is the creed of communism, and, in their minds, whatever endangers
themselves endangers England.” But what of the demagogue Hitler? Kuhn felt that “it is not
difficult to see why so many British aristocrats today sympathize with Hitler. They may not approve
particularly of his persecution of Catholics or Jews, but they do regard him as a St. George who
killed the dragon of communism in Germany and prevented Russia from spreading her creed to
Western Europe.” (New York Times, April 17, 1938)
Lord Halifax of the Cliveden set met with Hitler, and offered cooperation against the USSR.
According to a German Foreign Ministry memo on the Hitler-Halifax talks later published by the
Soviets (although denied by the British), Halifax stated that Britain regarded Hitler as the chief
bulwark against communism in Europe. He hinted that the UK was seeking a four-power
combination of Britain, France, Germany, and Italy against Moscow. The Germans further
understood from Halifax that Britain was ready to sacrifice Austria, Czechoslovakia, and Poland to
the German sphere of influence if this could be done without war into which the Conservative
Cabinet might become embroiled. 197The British Communist house organ, the Daily Worker,
revealed the guest book for this meeting of “the pro-Fascist clique that directs the policy of the
Chamberlain government,” naming the Astors, Lothian, Tom Jones, Neville Chamberlain, Sir
Thomas Inskip, Cadogan, Lady Wilson, and Mrs. Tate, the MP from Frome. The Daily Worker was
especially intrigued by the presence of Lady Ravensdale, the sister-in-law of Sir Oswald Mosely of
the British Union of Fascists. The communist organ alleged that Lady Ravensdale’s presence had
been reported by early editions of Monday’s Evening Standard, but suppressed in later editions. The
Daily Worker further alleged that Cliveden was planning peace-time conscription or forced labor,
citing Lord Lothian’s comments to The Times of March 14 in favor of “universal national service.”
(Daily Worker, March 30, 1938)’198 Compare this to Obama’s extremely extensive program of
national service discussed above. The British historian A.J.P. Taylor wrote obliquely about the
Munich sellout of September 1938, where Czechoslovakia was sacrificed to the British
appeasement policy: ‘The settlement at Munich was a triumph for British policy, which had worked
precisely to this end; not a triumph for Hitler, who had started with no such clear intention. Nor was
it merely a triumph for selfish or cynical British statesmen, indifferent to the fate of far-off peoples
or calculating that Hitler might be launched into war against Soviet Russia.199
But one year after Munich came the Molotov-Ribbentrop or Hitler-Stalin Pact, which meant that
the British policy had blown up in the faces of Lady Astor and her crew. Hitler now had a free hand
to turn west to crush France and the Low Countries, leading to the British debacle at Dunkirk. This
X: Obama: A Looming World Tragedy 375
event also marks the great watershed in Brzezinski’s personal life, since with the occupation of
Poland by the Nazis and the Soviets his diplomat father, who had been posted to Canada, no longer
had a country to represent. The Brzezinski family gravitated into the social world of the eastern
European puppet governments in exile set up by the British. It is the twisted mentality of these
revanchist aristocratic and British agent circles which lives on in Zbigniew and his clan, including
Mark, Ian, Mika, and Matthew Brzezinski today, and which fuels their fanatical hatred of Russia.
Josef Korbel, the father of former Secretary of State Madeleine Albright and the mentor of Condi
Rice, belonged to these same anti-Russian circles. For various reasons, Brzezinski blames these
events on Stalin, although he must have some idea of the grave responsibility of the Astor-
Chamberlain group.
The Italian historian Gaetano Salvemini concluded that the reverses suffered later on by the
British ‘were the logical consequences of a basic assumption, i.e. that Hitler, after swallowing
Austria and Czechoslovakia, would go and meet his doom in Eastern Europe. If one ignores that
assumption, British foreign policy after 1934 becomes a succession of absurd muddles. If one bears
it in mind, the policies of the British Tories become clear and consistent.’ Salvemini offered this
verdict on the bungling geopoliticians of the British leadership: “…on the Conservative
Government of Britain falls the responsibility of giving Hitler rope with the idea that he would hang
himself. By throwing Central Europe piecemeal to the wolves they thought they were heading Hitler
off eastwards to meet his doom in Russia: two birds killed with one stone.200 The American
historian Frederick Schumann concurred, pointing to the British desire to wipe out the Soviet
leadership, which resembles the anti-Russian and anti-Chinese plans of the Brzezinski group: “The
destruction of the Soviet counter-elite was a constant object of the [British] oligarchy after
1917…The USSR must be isolated. The ties between France and her eastern allies must be broken.
France must be immobilized, for any French involvement in the clash to come would, for
geographical reasons, entail British involvement — which was precisely what was to be avoided.
The immobilization of France required the strengthening of Italy and Germany to a point at which
Paris could not challenge them. Hence remilitarization of the Rhineland, threats to French
communications in the Mediterranean, and Fascist victory in Spain were all useful devices to
supplement British efforts to keep France neutral….In the end the Fascist Triplice [Germany, Italy,
and Spain] must attack the USSR….This program could never be openly acknowledged by Tory
officialdom because the masses whom the oligarchy ruled (and even some members of the
oligarchy itself) had unfortunately been conditioned to respond favorably to such shibboleths as
‘indivisible peace,’ collective security,’ and “League of Nations.’201 More recent leftist historians
have come to a similar conclusion: ‘The alternative argument presented here is that those in the
[British] ruling group before May 10, 1940 were bloody-minded protectors of privilege whose
fixation with destroying communists and communism led them to make common cause with
fascists. They were not honest, idiotic patriots; they were liars and traitors who would sacrifice
human lives in their defense of property and privilege….Blame for the tragedy of World War II,
including the Holocaust, must rest partly with Stanley Baldwin, Neville Chamberlain, Lord Halifax,
and their close associates, who, far from being naïve appeasers anxious to avoid wars in Europe,
were visceral anti-communists who single-mindedly pursued an alliance with Hitler.’202 Future
historians writing from the rubble of a post-World War III world will doubtless issue some similar
indictment of Brzezinski and company for his contorted, contradictory, crackpot scheme to isolate
China, and then play China (and Iran) against Russia and get rid of all of them that way, procuring
another century of US-UK world domination.
376 Barack H. Obama: The Unauthorized Biography
BRZEZINSKI’S WORLD STRATEGY TO SAVE THE EMPIRE
The mental life of Zbigniew Brzezinski, the obsessive revanchist and anti-Russian fanatic who
runs so many aspects of the Obama campaign, seems frozen in the amber of 1939. That was the
year when this British plan was blown up by the signing of the Hitler Stalin pact, leading to the
destruction of Poland and to the Brzezinski family’s being marooned in Canada, thus visiting
Zbigniew on the United States a few years later. Zbigniew today is determined to use an Obama
regime to create a worldwide geopolitical constellation capable of crushing Russia, China, and any
other states supporting the Shanghai Cooperation Organization, the main pole of resistance to
Anglo-American imperialism in today’s world. For this purpose, Zbigniew has been busily
provoking crises in Eastern Europe, designed to pit the European Union against Moscow. These
include the independence of the Serbian province of Kosovo, under the control of an organization
known as the KLA, notorious for its involvment in gun running, drug running, terrorism, and slave
trading. The independence of Kosovo was designed principally as an affront and provocation to
Moscow, and this is also true of Brzezinski’s plan for a Polish missile crisis to be occasioned by the
installation of alleged US anti-ballistic missiles on the territory of Poland. Many other provocations
against Moscow are in the offing but this is only the beginning.
The first main task assigned to Obama is to kick the Chinese out of Africa, where the Chinese
have been assiduously courting African states with offers of economic cooperation deals based on
parity and equality of economic advantage. These deals have excited the rage of the International
Monetary Fund and the World Bank, whose monopoly has thus been broken; but for Brzezinski the
stakes are much higher. Brzezinski’s design is to deprive the Chinese of all the oil, natural gas,
strategic minerals, and strategic raw materials which they are presently purchasing in Africa. The
chosen method is the destabilization and destruction of most African states as a means to forcing the
Chinese out. Much of this will be done under the new US African command or Africom, which is
about to be created in Ethiopia. Under the Brzezinski policy, Africa will become increasingly a
battleground between China and the United States and the result is likely to be a continent in
flames, with the levels of genocide against the sub-Saharan populations reaching unprecedented
levels. As part of this design the CIA’s gaggle of terrorist patsies known as Al Qaeda has surfaced
in Algeria (one of the largest oil producers), Tunisia, and Morocco. The Mugabe government in
Zimbabwe is being massively destabilized. Obamas own Luo tribe has become a vehicle for the
destabilization of Kenya, previously one of the most stable African states, with the option of
exporting civil war to other nearby countries where the Luo are also found. Obama’s Luo cousin,
the demagogue Omega, is implicated in terrorism and ethnic cleansing, but is supported by the State
Department anyway. The three largest sub-Saharan African states, Sudan, Nigeria, and South
Africa, are all targeted for comprehensive destabilization and Balkanization of their territory into
impotent, squabbling petty states incapable of resisting the demands of any multinational oil
company. The US, the British, and the Israelis have all been destabilizing Sudan for decades, but
today the resulting humanitarian crisis in Darfur province is used by London and Washington as a
possible pretext for humanitarian invasion. Naturally, the real goal of such an attack on Sudan
would have nothing to do with the situation of Darfur province, and everything to do with cutting
off the 7% of China’s oil which now comes from Sudan. Left-wing CIA assets are already
spreading the line that Chinese economic development in Sudan is committing “ethnocide” by
destroying the alleged culture of impoverished villages, which are yearning for a way out of the
inferno of the world oil crisis and the world food crisis. Indeed, an attack on Sudan unleashed by
Obama would immediately enjoy the active support of many elements of today’s so-called peace
movement.
X: Obama: A Looming World Tragedy 377
SHANGHAI COOPERATION ORGANIZATION TARGETED
Brzezinski’s plan to strip China of all of her allies and sources for oil, minerals, and strategic
raw materials is not limited to Africa but is to be carried out worldwide. Another country targeted
using the same logic is Burma, whose government is allied with Beijing. Gene Sharp and the Albert
Einstein Institute would like to use Burma as a staging ground for future destabilization attempts
against mainland China itself, using the abundant stocks of fanatical Buddhist monks as cannon
fodder. Indeed, this is what they are already doing in Tibet, where the insurrection against Chinese
rule has been fomented by the left CIA and its foundations grouped around the national endowment
for democracy. Venezuela is another target because it might make a deal with China. The neocon
response is to bomb or invade Venezuela, but Brzezinski knows that the US is much too weak,
isolated, and bankrupt to try that. He prefers to play Colombia against Venezuela, exploiting
President Chavez’s ill-advised support for the FARC rebels, the darlings of Richard Grasso, the
former head of the New York Stock Exchange. By playing Colombia against Venezuela, both can
be destroyed at scant cost to the US, and the oil to China effectively cut off.
Once China had been completely isolated and stripped of allies and economic partners, and also
deprived of any foreign sources of oil, vital raw materials, and other strategic commodities, the final
stage of Brzezinski’s program would go into action. This final stage would be accompanied by
vigorous attempts to weaken and destabilize the government in Beijing, attempts which are slated to
begin in the summer of 2008 under the cover of the Summer Olympic Games. Brzezinski’s
endgame would be something resembling a de facto trade blockade of China, with Brzezinski
prodding the Chinese to solve their oil shortage by invading Russia and eastern Siberia to seize the
oil wells and mines which are located there in a country very sparsely populated by Russians. In
other words, the goal of all of Obama’s edifying and mellifluous peace rhetoric is nothing less than
a cynical and deliberate unleashing of the Third World war, most likely fought out with
thermonuclear weapons in the vast spaces of Siberia and Mongolia. Brzezinski imagines that by
playing China against Russia in this way, he will be able to secure another century or more of Anglo
American imperial world domination. This is the familiar refrain we already heard from Sir Neville
Chamberlain, and here again the result will be the same: the plan is destined to blow up in
Brzezinski’s face, not least because the Russian and Chinese elites are already thoroughly informed
of every particular, and have said so in the Russian case.
BRZEZINSKI WANTS TO PLAY IRAN AGAINST RUSSIA
So how does the question of appeasing Iran (and/or Syria) fit into the Brzezinski plan of which
Obama is the steward? The answer has been blatantly evident since the final report of the Baker
Hamilton Iraq study group was delivered at the end of 2006. That is the organism that
recommended that the US urgently negotiate with Iran and Syria, lifting the absurd diplomatic
embargo imposed by the fanatical neocons of the Bush regime. As James Baker openly and
cynically pointed out at the time, he had successfully recruited Syria to be a member of the US-led
coalition of the willing against Iraq in the first Gulf War of 1991. Baker’s message was clear
enough: I got you Syria then, and I could get you Syria now if given half a chance. Iran, by
implication, was also susceptible to being “gotten.” But gotten for what? Let us imagine a
hypothetical conversation between President Achmadinejad of Iran and the US team of Brzezinski
and Obama. The reader must imagine that Obama is seated on Brzezinski’s lap in the guise of the
ventriloquist’s dummy in the posture made famous by such past practitioners as Edgar Bergen and
Charlie McCarthy, or Paul Winchell and Jerry Mahoney. It is therefore Brzezinski who is speaking,
378 Barack H. Obama: The Unauthorized Biography
even though the words seemed to come out of Obama’ mouth. The reader must also imagine a tone
of voice used to convey the American offer which is reminiscent of Jack Nicholson as the US
president negotiating with the Martian leader in the cinema classic, Mars Attacks.
Obama/Brzezinski would speak to the Iranians thus: “Why should we be enemies and
adversaries? Why can’t we be friends and cooperate and work together? Between the two of us,
we could totally dominate the entire Middle East, and nobody could do anything here without our
permission — not the Russians, not the Chinese, not the Indians, not the Pakistanis, not the
Egyptians. Just think of it: the United States and Iran working together! Imagine the potential!
What do we need to do for you to make it possible? What do we need to give you? Just for openers,
we can free up those frozen assets that we have been holding in our banks for the past 30 years —
they now add up to hundreds of billions of dollars. We need to have comprehensive diplomatic
relations, a cultural exchange program, maybe a mutual nonaggression pact if that is what you
would like. Of course we’d take you off that silly old terrorist list! Of course we can make sure that
Hezbollah gets what they are entitled to in Lebanon! Of course we can make a whole series of
other concessions to your various friends and proxies! But let’s get to the really big issues. You
want to have nuclear weapons. We can’t approve that in public but we are willing to guarantee you
right here and right now that we will give you a wink and a nod. If you run into problems along the
way, we can help you solve your bottlenecks with the right kind of technology when you need it.
Come to think of it, we could deliver a small stock of bombs if that is what you would like. Just like
Iran-contra, but better! We have a new missile that we call the Brzezinski special — you fire it off
from anywhere in the world and it flies straight to Moscow! We’d be glad to give you some of those
right now! You just have to remember that your hereditary enemy has never been the Americans,
but the Russians! Think how badly they behaved when they occupied the northern part of your
country during World War II — that was really messy! We’ve never done anything like that, and we
don’t want to! We just want to be friends and make sure that you’re strong enough to stand up
against the real threats and all of those come from Moscow. By the way Mr. President, we see that
your popularity has been a little anemic lately. But surely you know that the biggest resentment
harbored by the Iranian people is their resentment against the Russians. Your Iranians hate those
Russians much more than they hate the US and the British! So any time you pick a quarrel with
Moscow you can count on pleasing a big majority of your own base! And we can help you to do it.
Think of how bad those Russians treated you lately on that Bushehr reactor. They charged you too
much in the first place, and then they withheld the parts, blackmailed you, and all the rest — a real
humiliation! We would certainly never do that! So what else would you need? How about a nice
new naval fleet in the Caspian Sea so you can sail right up to the ports of southern Russia and spit
in their eye! With nuclear missiles, of course! Think of all the dandy incidents you could stage that
way, poking at that Russian bear with your big Iranian pitchfork! That way you can stop them from
stealing your Caspian oil! And if they ever fight back, don’t worry — we’ll be here to back you up!
And then there are those Chinese! Why do you want to sell so much oil to them? Pretty soon you’ll
be selling them so much that they will have you in their pocket, and you wouldn’t want that, would
you? You’re better off dealing with us, even if it is for dollars. We want you to know that we are
honest in the worst way!”
Thus the siren song of Brzezinski, intent on playing the Islamic fundamentalists of Iran against
the Russians in the same way that he once played the Islamic fundamentalists of Afghanistan
against the Soviet Union, destroying the latter and its entire world system of alliances. The line
towards Syria would be similar, and would sound something like this: “We are natural allies! We
need to be friends! All we need to do is to remove a few little irritants and everything will be hunkyX:
Obama: A Looming World Tragedy 379
dory! Take for example that nasty little naval base that the Russians have on your Mediterranean
coast in that little place called Tartus. All you need to do is take them out of there! Then not paying
you anything like what that place is worth! Give us that base and we’ll pay you triple what the
Russians are giving you! We can even get the Israelis to give you back the Golan heights if you’re
willing to play ball with us! All you need to do is recognize that the Russians have always been the
problem and always will be, and the quicker we get them out of the Middle East completely, the
better off everybody will be! The same thing goes for those damn Chinese! And look how the North
Koreans bungled everything they promised to do for you! Let’s go back to those good old days
when Henry Kissinger could say, ‘God may punish me for it, but I still have a soft spot in my heart
for Hafez Assad.’”
ISRAEL DEMOTED: FROM STRATEGIC HUB TO EXPENDABLE ASSET
Much of this is anything but fanciful, and has already been approximated by Trilateral
Commission spokesmen in public statements. At about this time, former President Jimmy Carter,
Obama’s predecessor on the path of Trilateral puppetry, revealed that in his opinion the Israelis had
about 150 nuclear weapons. Everyone had long known that the Israelis had three times as many as
this, but Carter went on to ask: “What happens if, in three years time, Iran has a nuclear weapon,”
Mr Carter asked. “I’m not sure that is going to happen, but if it does, what do we do? They are
rational people like all of us in this room. Do they want to commit suicide? I would guess not. So
what we have to do is talk with them now and say to them we want to be their friends. The United
States must let Iran know that we want to give them fuel and everything they need for a nonmilitary
nuclear programme. Twenty-five years ago we cut off trading with Iran. We’ve got to
resume trading to show Iran we are friends.” (Independent, May 26, 2008) Again, quite independent
of how much of the strategy Carter personally understands, Brzezinski’s goal is not a peaceful
settlement of the Middle East, but rather the mobilization of Middle East countries against Russia
and China in the framework of the apocalyptic global showdown which he is planning to execute
under the aegis of an Obama presidency.
Soon after the appeasement flap began, Brzezinski accused members of the American Jewish
establishment of “McCarthyism” in their attitude towards critics of Israel. He called the pro-Israel
lobby “too powerful” and accused American supporters of Israel of being too ready to use the slur
of “anti-Semitism” against critics of Israel. He stated that AIPAC, the American-Israel Public
Affairs Committee has “consistently opposed a two-state solution and a lot of members of Congress
have been intimidated and I don’t think that is healthy.” Brzezinski went on to say: “It’s not unique
to the Jewish community — but there is a McCarthyite tendency among some people in the Jewish
community. They operate not by arguing but by slandering, vilifying, demonizing. They very
promptly wheel out anti-Semitism. There is an element of paranoia in this inclination to view any
serious attempt at a compromised peace as somehow directed against Israel.” Reports noted that
Obama has paid tribute to the aging Polish revanchist as “someone I have learned an immense
amount from”, and “one of our most outstanding scholars and thinkers”. Alan Dershowitz of
Harvard Law School and others had already called on Obama to dump Brzezinski as a campaign
adviser, although of course in reality Zbig had hired Barky, and not the other way around. Zbig had
earlier antagonized the Israeli lobby through his support for the work of Stephen Walt and John
Mearsheimer. This entire incident came shortly after the Obama campaign had dumped Robert
Malley and Samantha Power, two thuggish foreign policy operatives with a history of clashing with
the Israeli regime. Obama campaign co-chairman and top military adviser Merrill “Bomb Now, Die
Later” McPeak complained about the influence of American Jews in the foreign policy debate,
380 Barack H. Obama: The Unauthorized Biography
commenting that the problem was not centered in the State Department or the White House, but
rather among the Jewish voters of “New York City. Miami. We have a large vote — vote, here in
favor of Israel. And no politician wants to run against it.” McPeak also claims that a combination of
Jews and Christian Zionists are manipulating U.S. policy in Iraq in dangerous and radical ways:
“Let’s say that one of your abiding concerns is the security of Israel as opposed to a purely
American self-interest, then it would make sense to build a dozen or so bases in Iraq. Let’s say you
are a born-again Christian and you think that Armageddon and the rapture are about to happen any
minute and what you want to do is retrace steps you think are laid out in Revelations, then it makes
sense. So there are a number of scenarios here that could lead you in this direction. This is
radical....” (Ed Lasky, ‘Obama Advisor Accuses Jews of “McCarthyism,” American Thinker.’)
Maybe, but then again, Brzezinski is crazier than any neocon.
Many of the criticisms leveled by the Obama camp against the Israelis and their US supporters
are unquestionably true, but this does not make them any less opportunistic. The main objection
against Israeli right-wing extremists of the Netanyahu type is that they are implacably opposed to a
general peace settlement for the Middle East, and in this they agree completely with Brzezinski and
Obama, who want to use the Middle East as a staging area for confrontation and possible war with
Russia and China. The Israelis have acquired quite a few enemies for themselves by their brutal
and arrogant behavior during the Bush regime era, but it is always a mistake to let one’s outlook be
distorted by hatred, and one senses that much of the anti-Israeli rhetoric is of this type. It helps to
have some understanding for the subjective predicament of the Israelis themselves. Under Bush,
Israel was the unquestioned strategic center of the world, with many exertions of the United States
devoted to eliminating present adversaries and future challenges for the Israeli regime. With
Brzezinski, by contrast, the Israelis are finding themselves radically demoted from the status of
linchpin of the world to that of just another expendable pawn in the Polish revanchist’s apocalyptic
confrontation with Moscow and Beijing. In this, the Israelis are far from alone: Europe, Africa, the
Middle East as a whole, and the United States itself are all seen by Brzezinski as expendable pawns
in this apocalyptic struggle with the two capitals of the Shanghai Cooperation Organization. It is
simply a fact that the Iran which Brzezinski is intent on building up and then launching against
Moscow may well surprise the old revanchist by striking out in completely unexpected directions,
and Israel could very well be one of them. The Israelis therefore have every right to object
vehemently to the new US imperialist line that takes so little account of their survival. Even worse,
it is clear that Brzezinski regards Israel, with its 500 to 600 nuclear weapons, and relevant delivery
systems, as a possible trump card to be played against the Russians. Naturally, in such a
confrontation Israel’s lack of geographic depths when measured against the immensity of the
Eurasian superpower could well lead to the annihilation of the Israelis. All in all, the new
hegemony of Brzezinski over US foreign policy spells nothing but trouble for the Israelis and for
the rest of the Middle East.
We must however add that the Israelis need to steer clear of leaders like Netanyahu, and rather
embrace the outlines of the Yossi Beilin -Yasser Abed Rabbo Geneva Accords of November 2003,
which call for two independent, sovereign and inviolable states, quite possibly separated by cordons
of foreign troops, with the demolition of all Israeli settlements in the occupied territories, and the
strict abrogation of any Palestinian right to return into the future Israel. Both of these measures
need to include substantial compensation for the people involved. What needs to be added to this
plan is the idea of a regional Marshall plan for the economic developments and postwar
reconstruction of the entire Middle East, including not just Israel and Palestine, but also such
devastated areas as Lebanon, Iraq, and Sudan, and the redressing of the pernicious effects of many
X: Obama: A Looming World Tragedy 381
years of economic sanctions against Iran and other regional nations. If American Jewish voters can
understand this lesson, they can play a critical role in defeating the colossal and reckless
adventurism of which Obama is the bearer.
In the midst of the appeasement flap, Zbigniew Brzezinski teamed up with his former NSC
assistant William Odom to present the public cloak for the new Iranian policy in the form of a
Washington Post op-ed. Compare this boilerplate to the real content of the Brzezinski plan as
outlined above, and you will come to the unavoidable conclusion that Brzezinski is truly an
accomplished liar, far more skillful in the arts of mendacity than a whole brigade of neocons,
despite their claims to be the world champions of exoteric falsehood. Brzezinski and Odom write:
‘Current U.S. policy toward the regime in Tehran will almost certainly result in an Iran with nuclear
weapons. The seemingly clever combination of the use of “sticks” and “carrots,” including the
frequent official hints of an American military option “remaining on the table,” simply intensifies
Iran’s desire to have its own nuclear arsenal. Alas, such a heavy-handed “sticks” and “carrots”
policy may work with donkeys but not with serious countries. The United States would have a
better chance of success if the White House abandoned its threats of military action and its calls for
regime change. A successful approach to Iran has to accommodate its security interests and ours.
Neither a U.S. air attack on Iranian nuclear facilities nor a less effective Israeli one could do more
than merely set back Iran’s nuclear program. In either case, the United States would be held
accountable and would have to pay the price resulting from likely Iranian reactions. These would
almost certainly involve destabilizing the Middle East, as well as Afghanistan, and serious efforts to
disrupt the flow of oil, at the very least generating a massive increase in its already high cost. The
turmoil in the Middle East resulting from a preemptive attack on Iran would hurt America and
eventually Israel, too. Given Iran’s stated goals — a nuclear power capability but not nuclear
weapons, as well as an alleged desire to discuss broader U.S.-Iranian security issues — a realistic
policy would exploit this opening to see what it might yield. The United States could indicate that it
is prepared to negotiate, either on the basis of no preconditions by either side (though retaining the
right to terminate the negotiations if Iran remains unyielding but begins to enrich its uranium
beyond levels allowed by the Non-Proliferation Treaty); or to negotiate on the basis of an Iranian
willingness to suspend enrichment in return for simultaneous U.S. suspension of major economic
and financial sanctions. Such a broader and more flexible approach would increase the prospects of
an international arrangement being devised to accommodate Iran’s desire for an autonomous
nuclear energy program while minimizing the possibility that it could be rapidly transformed into a
nuclear weapons program. Moreover, there is no credible reason to assume that the traditional
policy of strategic deterrence, which worked so well in U.S. relations with the Soviet Union and
with China and which has helped to stabilize India-Pakistan hostility, would not work in the case of
Iran. The widely propagated notion of a suicidal Iran detonating its very first nuclear weapon
against Israel is more the product of paranoia or demagogy than of serious strategic calculus. It
cannot be the basis for U.S. policy, and it should not be for Israel’s, either. An additional longerrange
benefit of such a dramatically different diplomatic approach is that it could help bring
Iran back into its traditional role of strategic cooperation with the United States in stabilizing
the Gulf region. Eventually, Iran could even return to its long-standing and geopolitically natural
pre-1979 policy of cooperative relations with Israel. One should note also in this connection Iranian
hostility toward al-Qaeda, lately intensified by al-Qaeda’s Web-based campaign urging a U.S.-
Iranian war, which could both weaken what al-Qaeda views as Iran’s apostate Shiite regime and
bog America down in a prolonged regional conflict. Last but not least, consider that American
sanctions have been deliberately obstructing Iran’s efforts to increase its oil and natural gas outputs.
That has contributed to the rising cost of energy. An eventual American-Iranian accommodation
382 Barack H. Obama: The Unauthorized Biography
would significantly increase the flow of Iranian energy to the world market. Americans doubtless
would prefer to pay less for filling their gas tanks than having to pay much more to finance a wider
conflict in the Persian Gulf.’ (Zbigniew Brzezinski and William Odom, “A Sensible Path on Iran,”
Washington Post, May 27, 2008, emphasis added) Shortly after this was published, Odom died.
GENERAL WILLIAM ODOM, ZBIG’S NSC ASSISTANT AND OBAMA BACKER
A word about Brzezinski’s co-author in the case of this article may be in order. Zbigniew
Brzezinski wrote in his memoir, Power and Principle, that he had been a sponsor of the career of
William Odom starting more than three decades ago. Here is Zbig wrote: “… I wanted on the NSC
staff some individuals who shared my broad strategic perspectives, and who could undertake the
needed review of our military doctrine, of our basic assumptions about global power, and thus help
to define new longer-range goals for the United States. Given the centrality of this undertaking, it
was important that the staffers involved share some of my basic assumptions and be congenial to
me personally. With this thought in mind, I recruited Colonel William Odom, who later became a
general while on the NSC staff, from the US military Academy at West Point. I knew him from an
earlier association with me at the research Institute on International Change at Columbia, I
respected his views on Soviet military affairs and strategy, and I considered him to be an innovative
strategic thinker.” (Power and Principle 75) Odom was a ghoulish technocrat of thermonuclear war
who later was promoted to be the head of the National Security Agency, the center for electronic
espionage. Like many other profoundly reactionary imperialist thinkers, Odom was able to reinvent
himself and refurbish himself for a the new Obama era of left cover world strategy à la Carter by the
simple expedient of declaring himself opposed to the Iraq war as it has been carried out, and to
George Bush personally — both very safe, low risk bets in today’s Washington. Predictably,
however, Odom became the darling of the left liberal antiwar set who swoon when they think of the
respectability to be gained by the fact that General Odom shares some of their most obvious
opinions.
BRZEZINSKI TRILATERALS PURGE THE US AIR FORCE
On June 6, 2008 the Trilateral faction flexed its muscles, ousting the top civilian and military
personnel of the US Air Force, who were too close to the neocons to be trusted to carry out
Brzezinski’s orders in the new phase. This extraordinary simultaneous ouster of the Secretary of the
Air Force and the Air Force chief of staff, followed by the naming of Trilateral Commissioner and
Carter administration veteran James Rodney Schlesinger to purge USAF generals and colonels,
dramatically documented the fact that power in Washington DC was no long in the hands of the
Bush-Cheney-neocon clique, but had passed to the Brzezinski-Trilateral faction.
PRINCIPALS’ COMMITTEE RULES WASHINGTON; BUSH-CHENEY OUT
Defense Secretary Robert Gates announced the firing of Air Force Secretary Michael W. Wynne
and Air Force Chief of Staff Gen. T. Michael Moseley, citing the failure of the Air Force to
maintain the security of strategic nuclear forces, as shown in the infamous rogue B-52 incident of
late August 2007, when a B-52 intercontinental strategic bomber with six nuclear armed cruise
missiles, hijacked by the Cheney clique, flew from North Dakota to Louisiana totally outside of the
purview of the USAF command control and communications systems. Gates, we recall, had been
Brzezinski’s office boy at the NSC between 1977 and 1979.Gates also mentioned that four hightech
electrical nosecone fuses for Minuteman nuclear warheads were sent to Taiwan in place of
X: Obama: A Looming World Tragedy 383
helicopter batteries, along with other failures. Gates was a leading member of the Principals’
Committee, an interagency group which now ran the US government from day to day with scant
reference to the discredited outgoing lame ducks Bush and Cheney, who stayed on mainly as
figureheads. The Principals’ Committee had been in charge of the US government since no later
than early May, around the time of the Indiana and North Carolina primaries, when the controlled
corporate media began trumpeting that Obama was the winner of the Democratic nomination. The
Principals’ Committee was made up of Pentagon boss Gates, Secretary of State Rice, NSC director
Hadley, Joint Chiefs of Staff head Admiral Mullen, and intelligence czar McConnell, along with a
few others. Treasury Secretary Paulson of Goldman Sachs is also probably onboard. Attorney
General Michael Mukasey appears to be cooperating as well, as does a majority of the justices on
the Supreme Court. These figures are now marching to the tune of Trilateral Commission bigwigs
like Zbigniew Brzezinski, Joseph Nye, and the Rockefeller family. These are the same forces who
own and control the Wall Street Manchurian candidate Obama. It is notable that the high-profile
purge of the USAF came less than 48 hours after Obama had unilaterally proclaimed himself the
Democratic presidential nominee. The Principals’ Committee rules in the name of a panoligarchical
consensus.
The rogue B-52 flew with six nuclear cruise missiles from Minot AFB North Dakota to
Barksdale AFB Louisiana on August 30, 2007. Source reports published by Wayne Madsen suggest
that the B-52 was stopped by patriotic low-level USAF personnel. As the issue of whether to allow
the plane to fly on to the Middle East went up the chain of command and expanded to involve the
intelligence agencies, it transpired that the majority of the government and the establishment did not
want the plane to attack targets in the Middle East. The scandal of the rogue B-52 broke on
September 5, 2007, and a stand-down and nuclear census of the entire USAF soon followed.
According to all indications, the B-52 was under the extra-legal control of the Cheney faction,
which evidently planned to fly it to the Middle East and quite possibly use one or more of the
nuclear cruise missiles in an attack on Iran and/or Syria, probably in cooperation or coordination
with the Israeli air attack on Syria which occurred on September 6, 2007. The fact that the B-52 was
blocked may have represented the last gasp of the Bush-Cheney-neocon faction, and the beginning
of the hegemony of a different and far more dangerous group, namely the Brzezinski-Trilateral
faction.
The Gates purge indicates that the new Trilateral masters of Washington DC do not trust the
USAF generals who are so deeply compromised with the Bush-Cheney-neocon faction. The USAF
was up to its neck in 9/11, and then in the rogue B-52 affair. The Trilaterals are accordingly driving
out the old rogues, and replacing them with new rogue generals of their own, who are loyal to the
insane Trilateral agenda. Brzezinski does not want nuclear weapons wasted on Iran, which he
intends to turn into an expendable puppet or kamikaze pawn in his apocalyptic showdown with
Russian and China. This is what Obama’s appeasement of Iran actually aims at: Iran as a US asset
to be played against Russia and China. Brzezinski wants to be in control of those nukes, since he
may soon need them for use against Russia and China. Those who might celebrate the defeat of the
Bush-Cheney-neocon group must rather face the fact that the US had just jumped out of the frying
pan of conventional invasions and into the fire of looming thermonuclear confrontations among the
great powers. This is the real nature of the change for which Obama is the public symbol. Obama’s
foreign policy will be dictated in every respect by Trilateral co-founder Brzezinski. Obama is now
supported and surrounded by Trilateral members David Rockefeller, Jay Rockefeller, Joseph Nye,
Paul Adolph Volcker, Jimmy Carter, and many more. With James “Rodney the Robot” Schlesinger
now helping to purge the Pentagon, including its associated intelligence agencies, the Trilateral grip
384 Barack H. Obama: The Unauthorized Biography
on Washington DC is tightening. Obama’s choice of a vice president, it was announced, would be
dictated by long-time Trilateral stalwart Jim Johnson, a former aide to Trilateral operative Vice
President Walter Mondale.
The last time the Principals’ Committee or its equivalent was this powerful was back in 1999,
when President Clinton had been forced to mortgage and sacrifice most of his constitutional powers
in exchange for votes in the Senate to avoid being removed from office. At that time, the
Principals’ Committee had been composed of Vice President Gore, Secretary of State Albright,
Defense Secretary Cohen, General Shelton of the Joint Chiefs of Staff, and top bureaucrat Richard
Clarke, with help from Bill Richardson and Richard Holbrook, among others. At that time, the
main project which the Principals’ Committee was promoting was the bombing of Serbia, which
was seen as a means for humiliating the Russian government of Boris Yeltsin and promoting the
further disintegration of Russia, in conformity with what we know today as the Brzezinski plan.
Russian Prime Minister Primakov was flying across the Atlantic with a very high probability of
arriving at a negotiated solution when the despicable Al Gore gave the order to begin the bombing
of Serbia, causing Primakov to turn back over mid-ocean, and return to Moscow. At a later point,
the scoundrel General Wesley Clark joined forces with British Prime Minister Tony Blair in order
to secure a NATO invasion of Serbia by land forces, a move which would have led to extravagant
casualties on the NATO side in the course of destroying that country. By this time, fortunately,
Clinton had recouped enough of his powers to be able to block the move, which coincided with the
Washington conference held to mark the 50th anniversary of the NATO pact. This time around, the
task of the Principals’ Committee was clearly the winding down of the Iraq war, and the ratcheting
up of operations against Sudan, Zimbabwe, Burma, Venezuela, and ultimately against China and
Russia.
The rogue B-52 incident was forecast by me in an essay entitled “Cheney Determined to Strike
in US with WMD This Summer,” issued on July 21, 2007, and widely distributed in July-August
2007 on the internet and in print form in the Rock Creek Free Press in Washington, as well as in
other papers. This was followed by the Kennebunkport Warning, which was posted online in the
evening of August 26, 2007, less than 72 hours before the rogue B-52 nuclear missiles were loaded.
By September 3, the Kennebunkport Warning was posted on 110,000 web sites worldwide. The
precision and timeliness of this warning represent an unprecedented intelligence achievement. But
since October-December 2007, the danger of a US attack on Iran has steadily declined.
Brzezinski’s hit list is much more ambitious, and includes Sudan, Pakistan, Burma, and China,
all stepping stones to the final reckoning with Moscow. The main possibility of an attack on Iran in
the present situation comes from disgruntled Israeli factions like the one around Netanyahu who are
aghast that they are being demoted from their previous role as the hub of US strategy to the status of
just another expendable pawn in Brzezinski’s lunatic plan for confrontation with Beijing and
Moscow. The Israelis are horrified by Obama, just as everyone in the world should be. The winning
faction of the US-UK establishment does not want the attack on Iran, and the Israelis would be
foolhardy to try it on their own. The threats today from former IDF chief and Israeli Transport
Minister Shaul Mofaz, about an Israeli solo attack on Iran because of the failure of economic
sanctions to stop nuclear development, indicate deep discontent, but the guess here is that they are a
bluff. We will soon find out: if the Israelis do not strike Iran in the next few weeks, they will have
lost their chance, as the Trilaterals continue to consolidate their power.
X: Obama: A Looming World Tragedy 385
THE BRZEZINSKI PLAN FOR RUSSIA
Groaning under the weight of two lost wars, the terminal crisis of the US dollar, banking panic,
and hyperinflation, the US ruling elite is attempting to unify itself around Obama for a breathtaking
reversal of their entire strategic and ideological field. The intent is to largely jettison the post-9/11
enemy image of Islamic terrorism and the focus on the Middle East, and to shift target to Russia,
China, and their allies in a vast global showdown or planetary end game for which Obama is
supposed to be the figurehead.
As outlined by the cold warrior and Russia-hater Brzezinski, the first phase is to eject the
Chinese from Africa, cutting off their access to oil and raw materials, and thus sabotaging their
current rapid industrial development. All of Africa is rapidly becoming a battlefield of the US
against the Chinese, and Obama is the ideal front man for this. Chinese allies like Sudan, and also
Pakistan and Burma, are all being targeted as part of this plan. With Iran and Syria, the effort will
not be to attack them, but to turn them against Russia and China. This Brzezinski design is why
Obama says he wants to negotiate with Iran, but bomb Pakistan.
China is being weakened and destabilized by the Tibetan insurrection and other operations, and
Zbig would like to stage a large-scale incident under the cover of the summer Olympics. In the final
stage, Zbig thinks he can drive the oil-starved Chinese in on Russia’s provinces of eastern Siberia,
where there is much oil and few Russians. Obama is thus the bearer of a plan for Sino-Russian
World War III that far surpasses the insanity of the neocons. Since Russia and China are both well
aware of the Brzezinski plan, this entire lunatic project is sure to blow up in our faces, with
cataclysmic results. The Iraq war will seem a tea party by comparison. The main grounds for
aggression in the new phase will be humanitarian and human rights claims, not terrorism, so as to
maximize left cover.
OBAMA’S ATTACK ON PAKISTAN
An example of the heightened aggressiveness that could be expected under the Brzezinski plan
was the question of unilateral US bombing of Pakistan. Not a few observers spent the first half of
2008 worrying about an imminent attack on Iran. The reality was that the growing power of the
Brzezinski faction in Washington made such an attack less and less likely, at least as far as the
United States and the United Kingdom were concerned. But these same observers were largely
blind to a program of systematic aggression being carried out by the United States and the British
against Pakistan, a country that was almost 3 times larger than Iran, and became equipped with
nuclear weapons and medium-range ballistic missiles to deliver them. Every gust of wind in the
Persian Gulf was considered a harbinger of Armageddon, but the constant bombing raids in the
northwest regions of Pakistan were considered a matter of scant importance.
The irony was that the bombing attacks on Pakistan had been demanded by none other than
Obama. Speaking indeed the July 2007 Democratic candidates’ debate held in Chicago, in a
colloquy with Senator Christopher Dodd of Connecticut, Obama had stated: ‘And, Chris,
respectfully — and you and I are close friends — but the fact is you obviously didn’t read my
speech. Because what I said was that we have to refocus, get out of Iraq, make certain that we are
helping Pakistan deal with the problem of al Qaeda in the hills between Afghanistan and Pakistan.
But, Chris, if we have actionable intelligence on al Qaeda operatives, including bin Laden, and
President Musharraf cannot act, then we should. Now, I think that’s just common sense. I don’t
know about you, but for us to authorize — (cheers, applause) — (inaudible) --.’203
386 Barack H. Obama: The Unauthorized Biography
Senator Clinton had disagreed with this reckless and unilateral approach: ‘“You can think big,
but remember, you shouldn’t always say everything you think if you’re running for president,
because it has consequences around the world,” Senator Clinton had retorted. Dodd had joined
Clinton in criticizing Obama. Dodd said Obama’s stance could undermine Pakistani President
Pervez Musharraf, the country’s military ruler, who has been a U.S. ally in the fight against al
Qaeda. “While General Musharraf is no Thomas Jefferson, he may be the only thing that stands
between us and having an Islamic fundamentalist state in that country,” Dodd said. “So while I
would like to see him change, the reality is, if we lose him, then what we face is an alternative that
could be a lot worse for our country.”204
Dodd added: ‘I think it’s highly responsible — or irresponsible for people who are running for
the presidency and seek that office to suggest we may be willing unilaterally to invade a nation here
who we’re trying to get to be more cooperative with us in Afghanistan and elsewhere. So my views
— and I say this respectfully to my friend from Illinois here — I think it was wrong to say what he
did in that matter. I think it’s important for us to be very careful about the language we use, make it
clear that if this United States is going to build the relationships around the world, we’re going to
have to do so with allies, in some cases allies that we may not particularly like.’205 Senator McCain
had criticized Obama for making such a reckless and incendiary proposal. President Bush himself
stated that he intended to work closely with President Musharraf in regard to all operations
conducted by the United States on Pakistani territory.
JAKE TAPPER: OBAMA MORE AGGRESSIVE THAN BUSH
Since the tenant of the White House had ruled out the unilateral bombing of Pakistan which
Obama had demanded, the matter appeared to be closed. Jake Tapper of ABC News found it
striking that Obama, who was posing as the peace candidate for Iraq, should be so aggressive in
regard to Pakistan. Tapper showed that Obama was raising the issue on the campaign trail, quoting
him. ‘“I understand that President Musharraf has his own challenges,” Obama said, “but let me
make this clear. There are terrorists holed up in those mountains who murdered 3,000 Americans.
They are plotting to strike again. It was a terrible mistake to fail to act when we had a chance to take
out an al Qaeda leadership meeting in 2005. If we have actionable intelligence about high-value
terrorist targets and President Musharraf won’t act, we will.” There it was again: unilateral US
bombing of a sovereign state that had nuclear weapons. Tapper commented: ‘In many ways, the
speech is counterintuitive; Obama, one of the more liberal candidates in the race, is proposing a
geopolitical posture that is more aggressive than that of President Bush.’ (Jake Tapper, ‘Presidential
Candidate Pushes Aggressive Stance Toward Pakistan,’ ABC News, August 1, 2007)206 In other
words, when it came to Pakistan, Obama was a bigger warmonger than any Republican or Democrat
in sight, including Bush and McCain, to say nothing of Clinton.
Astoundingly, the power of Brzezinski in Washington grew so rapidly that Obama was destined
to prevail, imposing his policy instead of the announced intentions of the man who kept calling
himself the president of the United States. Late in March 2008, a press account revealed that the US
had indeed gone over to unilaterally bombing northwest Pakistan: ‘The United States has escalated
its unilateral strikes against al-Qaeda members and fighters operating in Pakistan’s tribal areas,
partly because of anxieties that Pakistan’s new leaders will insist on scaling back military
operations in that country, according to U.S. officials. “We have always said that as for strikes, that
is for Pakistani forces to do and for the Pakistani government to decide. . . . We do not envision a
situation in which foreigners will enter Pakistan and chase targets,” said Farhatullah Babar, a top
spokesman for the Pakistan People’s Party, whose leader, Yousaf Raza Gillani, is the new prime
X: Obama: A Looming World Tragedy 387
minister. “This war on terror is our war.” But Kamran Bokhari, a Pakistani who directs Middle East
analysis for Strategic Forecasting, a private intelligence group in Washington, said the new
government will almost certainly take a harder line against such strikes. “These . . . are very
unpopular, not because people support al-Qaeda, but because they feel Pakistan has no
sovereignty,” he said. The latest Predator strike, on March 16, killed about 20 in Shahnawaz Kot; a
Feb. 28 strike killed 12 foreign militants in the village of Kaloosha; and a Jan. 29 strike killed 13
people, including senior al-Qaeda commander Abu Laith al-Libi, in North Waziristan.’ (Robin
Wright and Joby Warrick, “US Steps Up Unilateral Strikes in Pakistan,” Washington Post, March
27, 2008)207
Soon it became clear that this was a systematic US bombing campaign and represented a scandal
as big in its own way as the Nixon-Kissinger secret bombing of Cambodia back in the early 1970s.
This is no hyperbole; we must simply remember that a nuclear power, and not some banana
republic, is being attacked! Soon it became clear that the US bombing campaign was being
conducted with wild and reckless abandon, and that members of Pakistani paramilitary formations
were getting killed: ‘Pakistan is condemning a U.S. air strike which allegedly killed 11 Pakistani
paramilitaries as a “completely unprovoked and cowardly act.” U.S.-led forces killed Pakistani
troops in an air strike along the volatile Afghan border that Pakistan’s army condemned on
Wednesday as “completely unprovoked and cowardly.” U.S. officials confirmed that three aircraft
launched about a dozen bombs following a clash between Taliban militants and Afghan and U.S.-
led coalition forces late Tuesday. Pakistan says the strikes killed 11 of its paramilitary troops. The
Pakistani army said the air strike hit a post of the paramilitary Frontier Corps in the Mohmand tribal
region …. It launched a strong protest and reserved “the right to protect our citizens and soldiers
against aggression,” the military said in a statement. The statement said the clash “had hit at the
very basis of cooperation” between the allies in the war on terror.’208 The Pakistani government was
now the one elected in the elections conducted after the death of Benazir Bhutto in December 2007.
This was supposedly the regime the US had wanted to install, but Brzezinski was doing everything
possible to humiliate, mortified, and thoroughly antagonize the new government in Islamabad. The
Frontier Post of Pakistan reported: ‘On June 10, 2008 US - led coalition forces along the Afghan
border launched an air strike on a Frontier Corps Sheikh Baba border post in the mountainous Gora
Prai region in Mohmand Agency. 11 Pakistani paramilitary troops including one major, 10 civilians
killed and several injured. The incident took place inside Pakistan, near the border with
Afghanistan. Pentagon confirmed that coordinated artillery and air strikes were carried out. On Jun
11 2008, Prime Minister Gilani condemned the deaths, telling parliament: “We will take a stand for
the sake of this country’s sovereignty, for the sake of its dignity and self-respect”. He further
revealed that “We do not allow our territory to be used. We completely condemn this, and will take
it up through the foreign office.”’ (“NATO’s Senseless Aggressiveness in FATA,” Frontier Post)209
By early July 2008, the US was making preparations tom escalate: US commandos are reportedly
poised to launch raids against al-Qa’ida and Taliban targets in Pakistan as Washington moves an
aircraft carrier into the Arabian Sea. The redeployment of the Abraham Lincoln and its escort
vessels from the Gulf yesterday came after US military intelligence officials recorded an increase in
the number of foreign fighters travelling to Pakistan’s tribal areas to join with militants.’210
What was Brzezinski doing? He was obviously using a pretext of bin Laden, Al Qaeda, and the
Taliban in order to destroy the central government of Pakistan, and promote civil war,
Balkanization, partitioning, and subdivision in that country. The goal was evidently the division of
Pakistan into three or four or five petty states, including such areas as Sind, Pushtunistan,
Baluchistan, and so forth. This operation had nothing whatsoever to do with bin Laden, Al Qaeda,
388 Barack H. Obama: The Unauthorized Biography
the Taliban, or the “global war on terror,” but had everything to do with the fact that Pakistan was a
traditional Chinese ally and economic and trading partner. Pakistan had to be destroyed as part of
the Brzezinski strategy to strip China of all of her allies, and promote the isolation and encirclement
of the Middle Kingdom. By this time, northwest Pakistan was one of the very few parts of the
world where the US continued to rely on the bin Laden-Al Qaeda myth to justify its policy.
Elsewhere, considerations of humanitarian intervention and human rights were on the front burner.
GOP: LAME DUCK BUSH REDUCED TO CHILD’S PLAY
In the late spring and early summer of 2008, a series of events further underlined the degree to
which Bush, Cheney, and the neocons had indeed lost power to Brzezinski and company. Bush and
Cheney appeared to have about as much power as the White House janitor or the groundskeeper at
the Naval Observatory. Bush and Cheney were variously described as finished, washed up, lame
ducks, figureheads, and kaput. Some Republicans were becoming concerned that Bush had lapsed
into a figurehead-lame-duck status, and impotence and passivity so extreme that they might become
a negative factor for McCain in the upcoming election. One columnist noted: ‘Some of President
Bush’s allies tell the Political Bulletin they are embarrassed and angry that the White House seems
to be wasting Bush’s time on frivolous events when much of the country is suffering through
economic hard times. “Look at the schedule for Monday,” says an outside Bush adviser. “A highlight
of his day was witnessing a tee ball game. ... He is being reduced to child’s play.” The adviser says
Bush also signed a supplemental appropriations bill for the wars in Iraq and Afghanistan on
Monday, but he adds that it didn’t get much coverage and that the tee ball game set the wrong tone.
There is growing concern among Bush allies that the Democrats will effectively portray the
President and GOP candidate John McCain as out of touch. Some GOP insiders now predict that the
Republicans will lose at least five seats in the Senate and 15 to 20 in the House, and it could get
worse if gasoline prices continue to soar and the public remains in a disgruntled mood.’211
THE NORTH KOREA DEAL: CHENEY VANQUISHED, APOPLECTIC
A leading symptom of this loss of power by Bush and Cheney was the announcement by
Secretary of State Rice, another member of the Principals’ Committee, that a deal had been reached
with North Korea (the DPRK) concerning the termination of the North Korean nuclear weapons
program, in exchange for which the United States had pledged to remove North Korea from the
State Department list of terrorist states. The remaining neocons were apoplectic to the point of
foaming at the mouth. The British press revealed that the diehard Cheney had fought tooth and nail
to block this deal, but had been vanquished by Rice — and thus by the superior power of the
Principals’ Committee, in our view: ‘Vice President Dick Cheney fought furiously to block efforts
by Secretary of State Condoleezza Rice to strike a controversial US compromise deal with North
Korea over the communist state’s nuclear program… Mr Cheney was so angry about the decision to
remove North Korea from the terrorism blacklist and lift some sanctions that he abruptly curtailed a
meeting with visiting US foreign experts when asked about it in the White House last week,
according to the New York Times “I’m not going to be the one to announce this decision. You need
to address your interest in this to the State Department,” he reportedly said before leaving the room.
“The exchanges between Cheney’s office and Rice’s people at State got very testy. But ultimately
Condi had the President’s ear and persuaded him that his legacy would be stronger if they reached a
deal with Pyongyang,” said a Pentagon adviser who was briefed on the battle.’ Top neocon John
Bolton was beside himself with rage, and saw this deal with the DPRK as a harbinger of the neocon
Götterdämmerung: ‘“It’s shameful,” said John Bolton, Bush’s former U.S. ambassador to the
X: Obama: A Looming World Tragedy 389
United Nations. “This represents the final collapse of Bush’s foreign policy.” (CBS-AP, June 26,
2008) the mood of his fellow neocon Richard Perle was equally apocalyptic: ‘“Usually the word
‘meltdown’ applies to a nuclear reactor. In this case it applies to Bush administration diplomacy
which once aimed to halt the North Korean program and has now become an abject failure,”
Richard Perle, chairman of the Pentagon defense policy board in the run-up to the 2003 Iraq
invasion, told the Telegraph.’ (Daily Telegraph, June 28, 2008)
At the same time, a pattern of intense diplomatic activity had emerged across the Middle East,
even as the Israeli politician Shaul Mofaz was threatening Iran with an inevitable nuclear attack if it
were to persevere in its alleged attempts to procure nuclear bombs. The Israelis were known to be
negotiating with Syria in a series of talks mediated by the Turkish government. The Israelis were
also making deals with Hamas and Hezbollah, something that was formally speaking a violation of
the strict Bush doctrine in this regard. Remarkably, the top levels of the US government issued
some unusual warnings to the Israelis, telling them to back off from any plan to strike at Iran:
“President Bush and the top U.S. military commander warned Israel... against bombing Iran,
suggesting the U.S. doesn’t want to get involved in a third war. “This is a very unstable part of the
world and I don’t need it to be more unstable,” Adm. Mike Mullen, the Joint Chiefs chairman [and
leading member of the ruling Principals’ Committee], said at a briefing. Bush said, “I have made it
clear to all parties [including Israel] that the first option is diplomacy,” in getting Iran to stop
enriching uranium that could be used for a nuclear weapon. The warnings came after the disclosure
that Israel had conducted air operations over the Mediterranean that could simulate a strike on
Iran.’212
In addition to these public warnings, there were also reports of private messages telling the
Israelis to back off. One was delivered by Joint Chiefs Chairman Admiral Mullen of the Principals’
Committee: ‘The US did not give the green light for an Israeli attack on Iran, Prof. Anthony H.
Cordesman, a former Pentagon official and currently the top defense analyst at the ABC TV
network, said…. Cordesman was speaking during a meeting with Israeli defense analysts held by
the Institute of National Security Studies. He said IDF Chief of General Staff Lt.-Gen. Gabi
Ashkenazi was notified of the United States’ stance regarding Iran by Admiral Michael Mullen, the
top uniformed US military officer, during Mullen’s visit here at the end of June. The US has opted
at this point to stick to the diplomatic track in its efforts to keep Iran from going nuclear, and has
made clear to Israel that it shouldn’t attack Iran without White House approval, Cordesman said. He
added that the current US policy is likely to remain unchanged at least until the next US president is
sworn in. Israeli officials confirmed that Cordesman’s statements indeed reflected the current tone
of US policy.’213
There were also indications that Iran was being offered the possibility of continuing to enrich
uranium at the level of its present capacity to do so, while opening a negotiation with Solana of the
European Union. This was welcomed by the Iran Foreign Minister Mottaki, and was widely
regarded as the prelude to a deal or modus vivendi between the US under Brzezinski and the
Iranians: “Iran agreed …to enter into talks with the European Union about its nuclear program
before the end of the month, Iranian state-run media said. The EU, which recently placed sanctions
on Iran, has offered a package of political, economic and security incentives to Iran if it halts
uranium enrichment. Iran’s top nuclear negotiator, Saeed Jalili, called EU foreign policy chief
Javier Solana to tell him the response to that offer was coming, according to Iran’s Islamic Republic
News Agency, and Solana’s office characterized Jalili’s tone as friendly and positive. The EU has
proposed suspending further sanctions if Iran takes a six-week break from installing or
manufacturing any more centrifuges that enrich uranium. Iran would be allowed to continue to run
390 Barack H. Obama: The Unauthorized Biography
the more than 3,000 centrifuges it already has but could not manufacture more (“Iran ready to
discuss EU’s nuclear offer,” CNN, July 4, 2008)214 In the midst of these negotiations, Iran launched
a number of medium and short range ballistic missiles. The neocons tried to beat the drum, but the
response of Secretary Gates of the Principals’ Committee was as low-key and placid as could be
imagined: ‘The United States is no closer to confrontation with Iran after Tehran test-fired missiles
it says could reach Israel and U.S. assets in the Middle East, Defense Secretary Robert Gates said
Wednesday. Asked if the United States was any closer to confrontation, Gates told reporters: “No, I
don’t think so.” Gates also said it was “highly unlikely” that Russian air defense missiles would be
in Iranian hands soon. An improved air defense system would make a strike on Iran more difficult.’
(Reuters: “Pentagon chief: US no closer to Iran confrontation,” July 9, 2008)215 Gates also
mentioned the terrible consequences which any hostilities with Iran would have. The following day,
there were press reports that the US was allowing the Israelis to use Iraqi airspace to ready an attack
on Iran. These reports were quickly denied by the Pentagon. An Israeli attack could not be ruled
out, but there was no doubt that the US and the British were strongly opposed to the idea, which
would undercut Brzezinski’s entire plan of turning Iran against the Russians.
On July 11, 2008, it was reported that Treasury Secretary Paulson had convinced Bush that the
administration policy of hostility to Fanny Mae and Freddie Mac, the twin mortgage lenders whose
debts amounted to some $5.3 trillion, was risking a systemic crisis of the US banking system – a
financial Armageddon. Paulson reportedly told Bush that if he insisted on driving Freddie and
Fannie into liquidation, he would be Hooverized in very short order, long before he left office. At
this point, wheels were set into motion and the Federal Reserve that Freddie and Fannie might get
access to the discount window of the US central bank. This story is highly relevant here because it
shows the degree to which the members of the Principals Committee are now running the
government and telling Bush what to do on most the major issues. A few weeks later, Paulson also
forced Bush to drop his threat to veto a bill to bail out the giant mortgage lenders, a measure
stridently demanded by Wall Street. It is clear that Brzezinski and his fellow oligarchs intend to
maintain and consolidate the current preeminence of the Principals’ Committee under a possible
future Obama administration, and also if McCain becomes president, although that variant is much
less promising for their hopes of giving US imperialism a hyper-demagogic facelift.
NEOCONS DISPLACED BY TRILATERALS, 2006-2008
The erosion of neocon power had proceeded apace, starting around the time of the 2006 US
congressional elections. Around that time, British intelligence began signaling the urgent necessity
of shifting target towards Russia by staging two bombastic intelligence circuses in the form of the
Politkovskaya murder and the Litvinenko affair, both of which were immediately blamed on
Russian President Putin. The British also stepped up their subversion efforts inside the Russian
Federation under the cover of cultural exchanges conduited through the Foreign Office front
organization, the British Council. As a result of the new Democratic majority in the Congress, the
discredited neocon faction leader Rumsfeld was forced out and replaced by Robert Gates, a
Sovietologist who had served as the Russophobe Zbigniew Brzezinski’s office boy at the National
Security Council during 1977, 1978, and 1979. Gates had also been active in Brzezinski’s mujahedin
operations against the Soviets, operations which had been given birth to the CIA Arab Legion, Al
Qaeda. At the end of 2006, the report of the Iraq study group, also known as the Baker-Hamilton
commission, signaled a change in oligarchical policy and with it the beginning of the end of the
neocon dominance in Washington. The Iraq study group recommended that there be no US attack
on Iran, and that negotiations with Syria and Iran be begun immediately. James Baker, a former
X: Obama: A Looming World Tragedy 391
secretary of state under Bush the Elder, stated explicitly that he had procured Syria as an ally for the
United States during the first Gulf War, and that he could do so again. Neocon press organs screamed
that Baker and Hamilton were “surrender monkeys,” but the handwriting was now on the wall. The
middle of the year saw the fall of the crypto-neocon Tony Blair, a creature of Rupert Murdoch and
the last of the major European leaders who had cooperated with Bush and the neocons to unleash
the Iraq war in the first place. The last serious attempt of the neocon faction to launch war with Iran
probably occurred at the end of August and the beginning of September 2007, when rogue forces
allied with Cheney in effect hijacked a B-52 intercontinental strategic bomber carrying six nuclear
armed cruise missiles, and flew it from North Dakota to Louisiana. One or more of these missiles
was probably destined to join in the Israeli attack on Syria which occurred on September 6. The
fact that this B-52 was not allowed to proceed, and that a consensus against letting it leaves the
United States rapidly emerged in the higher levels of the oligarchy, probably represented the last
gasp of the US - UK neocons as far as starting a wider war was concerned. Bush’s outbursts in
October and November about World War III were partly directed against Putin, and partly
expressed his frustration that no strategic attacks on Iran were likely. This overall impression was
solidified in December 2007 with the issuance of the National Intelligence Estimate on Iran, which
concluded that there was no longer any active Iranian program to build nuclear bombs.
In 2008, attention was already shifting to such classic Brzezinski gambits as Kosovo
independence and the emerging Polish missile crisis, along with the Tibet insurrection, threats to
attack Sudan, and a clear desire to use a humanitarian emergency in Burma as a pretext for a
humanitarian invasion and regime change using the story that the Burmese junta was not an
efficient distributor of relief supplies. During these same months, the US Supreme Court was
handing down the majority opinions striking down the Bush-Cheney military commissions plan for
alleged terrorist captives, and then asserting the right of habeas corpus for the prisoners being held
in the US exclave of Guantánamo Bay Cuba. Once again, the neocons howled in their impotence.
Then came the deal to de-list North Korea as a terrorist state, followed by increasing indications of
an imminent deal with Iran, even as the attacks on Pakistan escalated and that country teetered on
the brink of civil war and partition. The years had not been kind to the neocons: Scooter Libby had
been convicted, and only escaped prison through Bush’s highly controversial pardon. Lord Conrad
Black, arguably an even bigger neocon then Libby, was now actually serving a multi-year prison
sentence in a US federal penitentiary for embezzling money from his companies. Lord Black had
been one of the major funders of the American Enterprise Institute, where no less a personage than
Lynn Cheney, as well as Richard Perle and Michael Ledeen, had been employed. As for Ledeen,
his problems might only be beginning: a report from the Senate Intelligence Committee alleged that
Ledeen and his old Iran-Contra friend Ghorbanifar had conspired to manipulate US intelligence
during the run-up to the Iraq war. This report had no doubt received much personal attention from
the Committee Chairman, who was none other than Senator John D. Rockefeller IV, of the
Trilateral-Rockefeller faction which also included Brzezinski. These were some of the steps by
which the Trilaterals had ousted the neocons from their previous positions of power, had neutralized
Bush and Cheney, and had generally introduced a demagogic left turn in the entire posture of Anglo
American foreign policy, propaganda, and intelligence operations. Now, all they needed was a
figurehead to become the spokesman for this deceptive and cynical left turn — and this was
obviously the role assigned to Obama.
If the American people could imagine no conflict worse than the Iraq war, they were obviously
suffering from a severe poverty of imagination. Zbigniew Brzezinski’s imagination was richer than
that. He could and did imagine a drive to break up both Russia and China, reducing both to a
392 Barack H. Obama: The Unauthorized Biography
congeries of warlords and petty states, all absolutely impotent to resist the Anglo-Americans. That
would give London and Washington another century of world domination. Brzezinski would always
claim that his intention was to accomplish all this using proxies, surrogates, and pawns, and without
embroiling the US in war with Russia and China. His approach had all the defects of the old
Cliveden set of the 1930s, who were convinced that they could build up Hitler, turn him east, play
him against Stalin, and destroy both Germany and the USSR in the process. Unfortunately, they had
been too clever by half, and their plan had blown up in their faces when Hitler turned west before
going east.
That had been World War II. Now, it was clear that Brzezinski’s fantastic strategy was also
destined to blow up in his face, and in all our faces. An Obama regime was therefore a probable
one-way ticket to thermonuclear war, an outcome several orders of magnitude worse than anything
the neocons had ever plotted. Brzezinski and his friends were more aggressive, more adventurous,
more intelligent, and more insane than the neocons. The American people, if they succumbed to
Obama, were about to leap out of the frying pan and into the fire.
BRZEZINSKI WARNS OF WORLD WAR IV UNDER MCCAIN
Perhaps responding to criticisms like the ones developed here, Brzezinski has attempted to
refurbish his image as a relative dove. He has warned about the temptation to try to win militarily in
Afghanistan, which is the trap he himself used to destroy the USSR. Brzezinski means to say that
the point of waging war in Afghanistan is not the permanent occupation and subduing of
Afghanistan, but rather using the Afghan war to destroy Pakistan, along with Afghanistan itself.
Above all, Brzezinski wants to avoid being exposed as the most dangerous warmonger of them all,
stating: “Well, if McCain is president and if his Secretary of State is Joe Lieberman and his
Secretary of Defense is [Rudolph] Giuliani, we will be moving towards the World War IV that they
have been both favoring and predicting,” he said, calling that an “appalling concept” (and adding
that by their lights, the Cold War counted as World War III). “So it depends on who are the
principal officers. If it’s [Richard] Armitage, or if it were to be Brent Scowcroft, I think it would be
very different.” Asked who he would like to see in a potential Obama cabinet, Brzezinski said: “I
think [Sen. Chuck] Hagel. I would like to see a bipartisan cabinet. I think we need one very badly
— and we did well in the Cold War when we had one. I would say Hagel and [Sen. Dick] Lugar
would be very good Republicans [for Obama].” He also cited Sen. Joe Biden as a potential
Secretary of State, in which case it would also be possible to “keep [Secretary of Defense Bob]
Gates in the job for a few months.” Brzezinski said such a cabinet would be an important step in
redressing the increased partisanship of foreign affairs in recent years, adding: “I think there is a
tendency, because of the very complexity of the issues, for solutions to become polarized and more
extreme. ... Republicans move toward neocon-ish formulas, and Democrats [follow] idealistically
escapist formulas. In either case you don’t end up with the necessary mix of idealism and
realism.”216 In other words, we need a united oligarchy in order to guarantee another century of
empire. It is the neocon project of world domination, in a form that is more clever and more insane
at the same time.
CHAPTER XI: OBAMA AS SOCIAL FASCIST
“…the oscillations among the responses could intensify in such a way as to threaten to destroy
both ideals and institutions…. This situation could lead to a two-phase dialectic involving
intensified efforts to reform government, followed by intensified frustration when those efforts
produce not progress in a liberal-democratic direction, but obstacles to meeting perceived
functional needs. The weakening of government in an effort to reform it could lead eventually to
strong demands for the replacement of the weakened and ineffective institutions by more
authoritarian structures more effectively designed to meet historical needs. Given the perversity
of reform, moralistic extremism in the pursuit of liberal democracy could generate a strong tide
toward authoritarian efficiency.” Samuel Huntington, 1981
“If it will take fascism, we’ll have to have fascism.” Weatherman Ted Gold, 1969
The argument that Obama would be another Pétain-like Carter, offering his noble qualities only
to be overwhelmed by ignoble reality, is the deepest fear about him, or at least the one that most
resonates with me. – James Fallows, Atlantic Monthly, September 2008
Much of the American public will object to this book’s thesis that Barack Hussein Obama must
be considered as a postmodern fascist, or as a neo-fascist, a fascist lite or simply as a fascist. Leftliberals
will predictably be the most vehement in their rejection of this theme, since it is they who
have embraced the New Messiah with the greatest willful blindness and hysteria, refusing to listen
to any reasoned arguments to the contrary. How can Obama be a fascist when he has cultivated a
pose of being the true anti-war candidate – apart from such trifles as his demand that Pakistanis be
slaughtered with reckless abandon in their own country without notification to their government.
How can he be a fascist when he is some kind of leftist, and when he poses as an insurgent?
Rightists will object that Obama is really a Moslem. Other rightists will claim that he is a Marxist or
crypto-communist. Many ordinary people will tend towards the view that he is just another
American pragmatist like the rest of us, but with views that are somewhat extreme and radical on a
range of subjects – making Obama someone to vote against perhaps, but not a fascist. In order to
clarify this issue, we need to go back and look at what fascism was. To make matters simpler, we
will concentrate on the Italian fascists, partly since it was they who invented fascism, and partly
since we can conduct a calmer analysis if we do not make Hitler and the Nazis the prime examples
– although we will mention them from time to time to illustrate what we are saying about fascism in
general.
Obama’s signature mass rallies are perhaps the factor that first alerted some right-wing
journalists to the nature of the Obama pseudo-movement. For many, this awareness began to
emerge in February 2008, when the Obama postmodern coup was already well underway, despite
temporary reverses. David Brooks, for example, wrote: “The afflicted had already been through the
phases of Obama-mania — fainting at rallies, weeping over their touch screens while watching
Obama videos, spending hours making folk crafts featuring Michelle Obama’s face. These patients
had experienced intense surges of hope-amine, the brain chemical that fuels euphoric sensations of
historic change and personal salvation. But they found that as the weeks went on, they needed more
and purer hope-injections just to preserve the rush. They wound up craving more hope than even the
Hope Pope could provide, and they began experiencing brooding moments of suboptimal
hopefulness. Anxious posts began to appear on the Yes We Can! Facebook pages. A sense of ennui
began to creep through the nation’s Ian McEwan-centered book clubs. Up until now The Chosen
One’s speeches had seemed to them less like stretches of words and more like soul sensations that
394 Barack H. Obama: The Unauthorized Biography
transcended time and space. But those in the grips of Obama Comedown Syndrome began to
wonder if His stuff actually made sense. For example, His Hopeness tells rallies that we are the
change we have been waiting for, but if we are the change we have been waiting for then why have
we been waiting since we’ve been here all along?” (David Brooks, New York Times, February 19,
2008)
The other aspect of the Obama lemming legions which has attracted the attention of some
commentators is a specious rage with which they turn on those who do not share their fanatical
devotion to the Perfect Master. Professor Paul Krugman is surely one of the more intelligent of
these critics when he writes: “Why, then, is there so much venom out there? I won’t try for fake
evenhandedness here: most of the venom I see is coming from supporters of Mr. Obama, who want
their hero or nobody. I’m not the first to point out that the Obama campaign seems dangerously
close to becoming a cult of personality. We’ve already had that from the Bush administration —
remember Operation Flight Suit? We really don’t want to go there again.” (Paul Krugman, New
York Times, February 11, 2008)
Obama’s general demeanor and rhetorical style has been compared to that of Mussolini, the first
fascist to seize power in a major country. David Plotz of Slate.com was shocked by the mob rule
overtones of the Obama agitation: ‘The deputy editor of a major online magazine spent time in a
weekly podcast explaining how the style of Senator Barack Obama shares much in common with
the speech of fascist dictators like Benito Mussolini. “That’s slightly fascistic,” David Plotz, the
deputy editor at Slate.com said in the magazine’s weekly podcast when one of his fellow editors
brought up Obama’s style. “That’s a very, like, let’s rally the nation. I don’t want to be rallied.”
After his fellow Slate editors lightly gibed him for his statement, he continued the point: “My
brother who is an academic wrote this wonderful book about crowds, and crowd theory. And one of
the sort of lessons that he’s always imparted to me is just that crowds are terrifying. Crowds are
horrifying for the most part because they have a will of their own, and they act independently of
rationality. And I think that Obama relies hugely on that. That’s not to say, I don’t, I still support
him, but I don’t like that fascistic, I like him not for the fascistic elements of his candidacy, which I
think are profound.”’ (Michael Roston, “Slate editor calls Obama speech style ‘fascistic,’“
(Rawstory, February 4, 2008) An untenable position, we note in passing, since fascism, once
identified, must surely be opposed.
DIALECTIC OF HOPE AND DESPAIR IN FASCISM
FROM MUSSOLINI TO OBAMA
One of the most reliable indications of Obama’s fascist ideology can be found in his obsessive
preoccupation with the theme of “hope.” One of the staples of fascist demagogy from Mussolini to
Hitler, and especially in the latter, is a constant attempt to mobilize the latent and conscious despair
of the target audiences into a form of frenzied activism or flight forward in the service of the Fascist
party and the fascist cause. One of the favorite themes of National Socialist propaganda was the
idea that Hitler represented the last hope of the despairing masses after the torments of World War
I, the great hyperinflation of 1923, and the great deflationary depression starting in 1929. This
theme was used in some of the NSDAP’s most effective posters. In Obama’s case, his ability to
appeal to the despair of his followers is significantly enhanced by his own existentialist background,
as indicated by his interest during his college years in the existentialist-terrorist works of Frantz
Fanon. As has already been mentioned, a thoroughgoing existentialist is in grave danger of sliding
into fascism under the impact of a social crisis including military defeat and acute economic
XI: Obama as Social Fascist 395
depression, as was seen in the case of the leading European existentialist, Martin Heidegger, who
became an active Nazi propagandist. Every day, existentialists and other radical irrationalist
subjectivists who have been supporting Obama are sliding towards fascism like passengers
careening down the steeply sloping decks of the Titanic in its last throes.
Once again it is Georg Lukacs who, pre-eminently among the historians of European
philosophy, has pointed to the intimate interface between radical existentialism and fascism.
Lukacs writes: ‘no matter how distorted the presentation may be because of the solipsism of the
phenomenological method, we are dealing with a social fact: the internal situation of the bourgeois
individual (especially the intellectual) in the crumbling world of monopoly capital, faced by the
perspective of annihilation. Heidegger’s despair thus has a dual character: on the one side the
implacable exposure of the inner nothingness of the individual in the crisis period of imperialism;
on the other hand — because the social causes of this nothingness are fetishized away as timeless
factors having nothing to do with the social situation — the resulting feelings can very easily kick
over into a despairing reactionary activity. It is surely no coincidence that Hitler’s agitation
continuously appealed to despair. Of course, this mainly addressed the economic-social situation of
the working masses. In the case of the intelligentsia, this mood of nothingness and despair, whose
subjective validity constitutes the starting point for Heidegger’s philosophy, and which he elevates
to the conceptual level, transfigures into philosophy and canonizes as ‘authentic,” represents the
most fertile soil for the effectiveness of Hitler’s mass agitation.’ (Lukacs 441)
Existentialism, reinforced by the postmodern consensus in the Anglo-American academic world
frequented by Obama, represents a perfect culture medium for the postmodern fascist mentality.
The general nature of this dynamic was already clear many decades ago: “Agnostic irrationalism…
has as its final result a passionate rejection of objective truth of the same type that we see in Hitler
with other motives and with other justifications. In the interface between existentialist irrationalism
and the fascist world outlook we are not dealing with individual epistemological findings…but
rather with a general intellectual atmosphere of radical doubt about the possibility of objective
knowledge, about the value of reason and understanding, and with a blind belief in intuition-based,
irrational ‘revelations’ that contradict reason and understanding. We are dealing with an atmosphere
of hysterical-superstitious gullibility, in which the obscurantism of a struggle against objective
truths, against understanding and reason, is presented as the last word of modern science and of the
most ‘progressive’ epistemology.” (Lukacs 633) These considerations should help make clear why
he Obama personally finds the postmodern fascist outlook to be congenial and coherent with his
general attitude towards life. As has already been shown, Michelle Obama represents an even more
militant version of this same fundamental worldview.
A DISTANT MIRROR: THE PEACE FASCISM OF SIR OSWALD MOSELEY
One large difficulty in evaluating Obama as a postmodern fascist comes from the present-day
tendency to identify fascism almost totally with militarism and military aggression. Obama has
called successfully for the bombing of northern Pakistan, although most of his followers seem to be
unable to comprehend his role in this regard. Of course, fascist movements, once they were well
established and consolidated, did tend overwhelmingly towards military aggression. But this does
not tell us anything about what these movements looked like in their earliest phases, before they had
taken power and before they were in a position to start military adventures. There is also the
problem of fascist movements in countries like Great Britain and France, who had been among the
winners of World War I. These fascist movements did not take power, but might have done so
396 Barack H. Obama: The Unauthorized Biography
under slightly different circumstances. In order to evaluate the Obama phenomenon of 2008, we
must realize that overt jingoistic militarism is not necessary for fascism to arise.
Many assume that all fascists must necessarily be first and foremost aggressive warmongers, but
this is not necessarily the case. As one scholar has noted, “most fascist parties in stable, prosperous
western European countries with mature colonial empires preached a kind of ‘peace fascism,’
unlike their counterparts in central and eastern Europe.”217 Stanley G. Payne, A History of Fascism,
1914-1945 [Madison, Wisconsin: The University of Wisconsin Press, 1995], 298 Stanley G. Payne
elaborates on the question of fascism and militaristic aggression as follows: “Fascism is usually said
to have been expansionist and imperialist by definition, but this is not clear from a reading of
diverse fascist programs. Most were indeed imperialist, but all types of political movements and
systems have produced imperialist policies, while several fascist movements had little interest in or
even rejected new imperial ambitions. Those which appeared in satisfied national or imperialist
states were generally defensive rather than aggressive. All, however, sought a new order in foreign
affairs, a new relationship or set of alliances with respect to contemporary states and forces, and a
new status for their nations in Europe and the world. Some were frankly oriented towards war,
while others merely prized military values but projected no plans for aggression abroad. The latter
sometimes sought a place of cultural hegemony or other nonmilitary forms of leadership.” (Payne
11) If we insert soft power and subversion after cultural hegemony, we may be close to
understanding the postmodern fascist ideology of a possible Obama regime.
Examples of “peace fascism” included the French Parti Populaire Français, originally a protofascist
formation which emerged from the defeat of the mass strike upsurge of June 1936, the
biggest strike wave in France before 1968. The PPF grew in reaction to the socialist-communist
popular front regime of Léon Blum, which soon disappointed its own left-wing followers. This PPF
received “considerable financial backing from big business interests, which sought to encourage a
popular nationalist and anti-communist force. The chef or leader was Jacques Doriot, a former
communist. “The new state envisaged by the PPF was to be ‘popular’ and authoritarian but
decentralized, honoring the family, the community, and the region, with the latter being strongly
emphasized.” The PPF had its own approach to reforming broken souls: “PPF propagandists did
encourage an activist and vitalist philosophy and the creation of an homme nouveau (new man), and
the movement drew the support of some accomplished fascistic intellectuals like Pierre Drieu
LaRochelle.” (Payne 298) The PPF shows that it is possible to be fascist and anti-war at the same
time: “…though the PPF preached vitalism and activism, together with the military virtues, it was –
like all the French nationalist groups from the fascists of Bucard to the most conservative – a ‘peace
party’ that discouraged talk of war and sought no particular territorial aggrandizement for France.”
(Payne 298)
To see what fascism looked like in the English speaking world during the 1930s, we have the
case of Sir Oswald Mosley and his British Union of Fascists, which was formed in 1932 and was
banned by the government when the Second World War began in 1939. British fascism was not
explicitly pro-war: “Like other fascist movements in satisfied imperial powers, the BUF never
preached war and expansion, but peace and prosperity. Mosley was obsessed with overcoming
social, economic, and cultural decadence, and he believed that only the disciplined nationalism and
new cultural dynamism of a fascism on the Italian model could achieve it.” Also like Obama, the
BUF embraced corporatist solutions for the world economic crisis of the Great Depression: “The
BUF was one of the most thoroughly programmatic of all fascist movements, with elaborate
corporatist economic proposals. Its thrust was decidedly modernist, paying serious attention to
economic theory and concepts of ‘scientific production,’ while also espousing equal pay for women.
XI: Obama as Social Fascist 397
The BUF also preached vitalism and the Shavian superman [i.e., the superman concept of the
playwright and essayist George Bernard Shaw], while stressing Britain’s civilizing and imperial
mission in the world ‘to rescue great nations from decadence, and march together towards a higher
and nobler order of civilization.’” (Payne 305) Strip away this imperial rhetoric and replace it with
Obama’s Afrocentric multicultural relativism, and the similarities are striking.
PALINGENESIS: THE FASCIST QUEST FOR UTOPIA
Fascism has been described by some writers as being “palingenetic,” meaning that it represents
an attempt to launch a rebirth of the national spirit, culture, and society. (Payne 5) Fascism
generally proposes to do this through a form of cultural populism which rejects ideology, rejects
parliamentary methods, and claims to merge the interests of different social and economic classes
under the heading of national unity. It was always concerned with promoting and fostering mass
mobilization for national goals.
In 2003, Dr. Lawrence Brit listed “Fourteen Defining Characteristics of Fascism,” with the
implication that they established that the Bush administration was a fascist regime. This list has
been widely read and reproduced on the internet. Brit’s characteristics of fascism include powerful
and continuing nationalism; disdain for the recognition of human rights; identification of
enemies/scapegoats as a unifying cause; supremacy of the military; rampant sexism; controlled
mass media; obsession with national security; religion and government intertwined; corporate
power protected; labor power suppressed; disdain for intellectuals and the arts; obsession with crime
and punishment; rampant corruption and cronyism; and fraudulent elections. This list captures some
aspects of a consolidated and established fascist society, but it misses others totally or even turns
them on their head. Take for example the supremacy of the military: Hitler’s entire dictatorship
contradicts the ideas that professional military people should direct wars: supreme power was kept
in Hitler’s own hands, to the point that the German Army tried to assassinate him, and he retaliated
by liquidating many of the most famous commanders, including Rommel. Key traditionalist
members of the German General Staff like Halder were ousted or forced to kow-tow to Nazi hacks
and yes-men like Keitel and Zeitzler. Or again: disdain for intellectuals and the arts would hardly
apply to Italian fascism, which was founded in part by leading writers, sculptors, architects, and
artists like D’Annunzio and Marinetti. Other characteristics listed by Brit would apply to many
kinds of dictatorships and authoritarian governments, and not just fascist ones.218
CONFUSION ABOUT FASCIST MASS MOVEMENTS
An attempt to obscure the real nature of fascism as an anti-establishment, anti-parliamentary
mass movement came from the former CIA employee Ray McGovern. McGovern was one of those
left-liberal personalities who had stubbornly refused to go beyond the CIA’s blowback theory of
9/11 to examine the more realistic alternative explanations of the MIHOP school.219 In the March-
April 2008, McGovern authored an article entitled “History’s Lessons: Creeping Fascism – Lessons
from the Past.” (consortiumnews.com) Here McGovern presented the question of fascism solely and
exclusively as a problem of top-down police state measures, with no reference whatsoever to
historical fascism as a mass movement of idealistic students, goons, and guttersnipes backed by
financiers and operating under anti-politician and anti-establishment cover. Fascism for McGovern
was a matter of Bush’s violation of the FISA wiretap law and similar top-down measures.
Interestingly, McGovern cited the late, notorious, British agent of German nationality, Sebastian
Haffner. Haffner had written about the National Socialist seizure of power in 1933, criticizing the
398 Barack H. Obama: The Unauthorized Biography
“sheepish submissiveness” and the “cowardly treachery” of the labor-based Social Democratic
Party. Haffner found that “it is in the final analysis only that betrayal [by the Social Democrats] that
explains the almost inexplicable fact that a great nation, which cannot have consisted entirely of
cowards, fell into ignominy without a fight.” But it is very easy for modern-day left liberals with
CIA connections to fault the German labor politicians of 75 years ago. Haffner did not mention that
his British paymasters had thrown their support to Hitler, as in the case of Lady Astor and her
Cliveden Set. What can we say of Howard Dean, Pelosi, Jay Rockefeller, Ted Kennedy, and the
other rotten Democratic politicians who have rushed to support postmodern fascism in the form of
the Obama campaign long before any seizure of power? The modern American politicians do not
fare well in this comparison.
THE MASS MOVEMENT IS CRITICAL FOR THE ADVENT OF FASCISM
A more basic objection to Brit’s entire approach is that this method might be some use for a
dreamer or time traveler who suddenly woke up or landed in a given society and wanted to know if
that society were fascist. But that is not our problem. In practice, the only way to enter a fascist
society is through the successful activity of a fascist mass movement, and it is here that the
characteristics listed by Brit not only fail utterly, but actually become dangerously misleading. The
only way real fascism has ever been created is through an irrationalist, demagogic, antiparliamentary
mass movement or reasonable facsimile thereof, stressing togetherness and the
negation of class struggle and partisan haggling. Such movements have seen heavy representation
of fervently idealistic young students, unemployed workers, artists and intellectuals, disgruntled
veterans and crazed petty bourgeois (like bankrupt stock brokers, real estate agents, and salesmen).
Many of the first fascists have generally been leftists, or political neophytes with little ideological
coloration. Brit’s total omission of any mention of the fascist mass movement makes his list a factor
of confusion and disorientation among many left liberals and libertarians today, who continue in
many cases to imagine that fascism is a purely top-down phenomenon, when in reality it is the
grass-roots and protest movement aspects of fascism which constitute its essence and make it so
menacing. Brit may be describing Italy in 1938, when the regime had become consolidated and
fossilized, but he is not saying anything worthwhile about Italy in 1919-1922, when fascism was
clawing its way to power in society. He may have some insights into Germany in 1938, but not
Germany in 1929-1933, when fascism was struggling to seize power.
Once again, there is simply no comparison between just another bourgeois regime, no matter
how bellicose, no matter how corrupt, no matter how oppressive, and the leap into the abyss of
fascism. Payne distinguishes among fascists (the German Nazi party and the Italian National Fascist
Party), the radical right (Hugenburg, Chancellor von Papen, and the Stahlhelm organization in
Germany, and the Italian Nationalist Association in Italy), and the conservative right (President
Hindenburg and Chancellors Brüning and von Schleicher in Germany, and Prime Ministers Sonino
and Salandra in Italy). Payne attempts to describe the resulting confusion in the following terms:
“Comparative analysis of fascist-type movements has been rendered more complex, and often more
confused, by a common tendency to identify these movements with more conservative and rightist
forms of authoritarian nationalism in the interwar period and after. The fascist movements
represented the most extreme expression of modern European nationalism, yet they were not
synonymous with all authoritarian nationalist groups. The latter were pluriform and highly diverse,
and in their typology they extended well beyond or fell well short of fascism, diverging from it in
fundamental ways. The confusion between fascist movements in particular and authoritarian
nationalist groups in general stems from the fact that the heyday of fascism coincided with a general
XI: Obama as Social Fascist 399
era of political authoritarianism that on the eve of World War II had in one form or another seized
control of the political institutions of most European countries. It would be grossly inaccurate to
argue that this process proceeded independent of fascism, but neither was it merely synonymous
with fascism.” (Payne 14-15) In other words, top-down dictatorship and fascist seizure of power by
a grass roots radical movement of street fighters are emphatically not the same thing and should not
be confused. Although Brit’s list was valuable is prodding many people to think about fascism in
relation to current US reality, we must stress here that any notion that the Bush regime already
represented fascism would be dangerously wrong. Bush has no mass movement and will never have
one. Imagine Bush attempting a Mussolini balcony speech to an oceanic crowd of millions of
screaming fanatics. It has not happened and will not happen. With Obama, by contrast, the mob
oration is the very essence of his agitation. His supporters are not asked to endorse a program of
government; they are required to surrender themselves to the will of the Perfect Master, and they are
rushing to do it by the millions.
OBAMA FULFULLS THE FASCIST MINIMUM
In 1992, the Italian writer Emilio Gentile formulated a list of 10 detailed points in an attempt to
arrive at an orientative definition of fascism.220 He was working towards a minimum common
denominator of fascist movements across Europe and the world. Let us use these points as a kind of
scorecard to evaluate to what degree Obama and his movement can be fairly classified as fascist.
1. “A mass movement with a multi-class membership in which prevail, among the leaders and
militants, the middle sectors, in large part in new to political activity, organized as a party
militia, that bases its identity not on social hierarchy or class origin, but on the sense of
comradeship, believes itself invested with a mission of national regeneration, considers
itself in a state of war against political adversaries and aims at conquering a monopoly of
political power by using terror, parliamentary tactics, and deals with leading groups, to
create a new regime that destroys parliamentary democracy.”
The Obama movement aims at seizing the presidency and does not speak of a total
seizure of power, but Obama hints at pervasive control of individual life, including the cars
people drive, the food people eat, and the setting of the thermostats in their homes. It is
generally understood that the motivation for these totalitarian interventions will be based on
the Malthusian demagogy of the Al Gore global warming-climate change fraud. As for a
state of war and violence against political adversaries, there has been little violence so far,
but the venom and inflammatory rhetoric directed against political adversaries, especially
Senator Clinton, represent an extraordinary phenomenon in American politics. Al Gore’s
Green Army and Obama’s own Green Corps and grandiose plans for volunteer
organizations substantially fulfill the party militia requirement.
2. “An ‘anti-ideological’ and pragmatic ideology that proclaims itself anti-materialist, antiindividualist,
anti-liberal, anti-democratic, anti-Marxist, is populist and anti-capitalist in
tendency, expresses itself aesthetically, more than theoretically, by means of a new political
style and by myths, rites, and symbols as a lay religion designed to acculturate, socialize,
and integrate the faith of the masses with the goal of creating a ‘new man.’“
Obama is certainly anti-democratic, since he wants to ignore the primary elections in
Michigan and in Florida. He is anti-materialist, as seen in his own and Michelle Obama’s
veiled calls for austerity and sacrifice. Michelle also refers to the need for people to
transform themselves as individuals under an Obama presidency, which raises the question
400 Barack H. Obama: The Unauthorized Biography
of the new man. Anti-Marxism is not a central issue for Obama’s followers, but Obama has
been thoroughly exposed to Marxist ideology and certainly does resolutely reject any
politics of class defense, class conflict, or class-based organization. The new political
liturgy of the Obama Nuremberg rally campaign style has attracted wide attention.
3. “A culture founded on mystical thought and the tragic and activist sense of life conceived as
the manifestation of the will to power, on the myth of youth as artificer of history, and on
the exaltation of the militarization of politics as the model of life and collective activity.”
The feckless and callow youth fanatics who fill the ranks of Obama’s lemming legions
have been widely discussed. Their mystical outlook is that of New Age, Age of Aquarius,
etc., as purveyed by a thousand petty hucksters from Oprah Winfrey to a whole phalanx of
swamis. The militarization aspect is present in the Al Gore Green Army proposal as well as
in Obama’s own Green Corps, and it can be expected that these features will be further
accentuated as the economic crisis deepens.
4. “A totalitarian conception of the primacy of politics, conceived as an integrating experience
to carry out the fusion of the individual and the masses in the organic and mystical unity of
the nation as an ethnic and moral community, adopting measures of discrimination and
persecution against those considered to be outside this community, either as enemies of the
regime or members of races considered inferior or otherwise dangerous for the integrity of
the nation.”
Obama operates within the totally relativistic concept of multiculturalism which has
been favored by the US ruling elite as a counterinsurgency strategy over the last four
decades, as we have shown. But relativistic multiculturalism is already distorted within
Obama’s own thinking by the aggressive and militant Afrocentrism and Black liberation
theology purveyed by his mentors, including the foundation-funded racist provocateur
Jeremiah Wright and his co-thinkers. So far, Obama has been deeply associated with
spokesman for white collective guilt and the need reparations to be paid to the black
community alone because of slavery and discrimination in the past, which amounts to
discrimination or persecution against other ethnic groups. At least two factors, however,
suggest that this may be destined to change. One is the indifference or hostility to Obama
exhibited by Hispanic and Asian voters, which may point to conflicts ahead. Obama is of
course a creature of the Trilateral Commission, where one of the leading planners is Samuel
Huntington, Brzezinski’s subaltern in the Carter National Security Council. In Huntington’s
infamous tome, The Clash of Civilizations, he argued that Latin America, precisely because
it was thoroughly Spanish and Catholic, could not be considered as a part of Western
civilization, but had to be viewed as a separate Latino-Hispanic entity all its own. This
thesis is so wildly absurd and ridiculous from a historical point of view that Huntington’s
evil intent could not have been more obvious. Huntington’s 2004 book Who Are We?
developed this same crackpot racist theory further, arguing that the greatest threat to the
future of the United States came from Latin American and especially Mexican immigrants.
Huntington thus appears to be thinking in terms of a divide-and-conquer strategy to
maintain financier rule in the United States under conditions of aggravated depression
breakdown crisis in which nativism will play a decisive role: this would allow the white and
black population to be played off against the rapidly growing Hispanic component. Obama,
needless to say, is already well-positioned to lead such an anti-Hispanic and anti-Asian
XI: Obama as Social Fascist 401
backlash. Senator Clinton, by contrast, enjoys broad support among Hispanics and Asians
and would not be suitable for the strategy Huntington appears to have in mind.
5. “A civil ethic founded on total dedication to the national community, on discipline, virility,
comradeship, and the warrior spirit.”
The element of communitarianism and comradeship in of Obama’s rhetoric has been
widely noted and is very strong, even though the militaristic and warrior elements have
been relatively muted. More regimentation, however, can be expected as the notions of the
Gore Green Army/Green Corps began to take hold under depression conditions. In addition,
we should bear in mind the precedents for “peace fascism” in countries like France and
Great Britain.
6. “A single state party that has the task of providing for the armed defense of the regime,
selecting its directing cadres, and organizing the masses within the state in a process of
permanent mobilization of emotion and faith.”
So far Obama has not talked about a one-party state. However, one of the most
powerful components in the intelligence community coalition that is backing Obama is
indeed National Endowment for Democracy, which represents a fusion of the Democratic
Party and the Republican Party, and can to that extent be regarded as the harbinger for a de
facto one-party state. In addition, if Obama were to seize the White House thanks in all
probability to a series of scandals conveniently timed to destroy his Republican opponent in
the general election, the likely simultaneous heavy Republican losses in the Congress might
produce a situation where a decimated Republican minority would be unable to block or
delay legislation, provided that the Obama at White House and the Democratic
Congressional leadership concurred. Such a situation, although perhaps temporary (barring
the declaration of martial law by Obama under some pretext), would already begin to
approximate the workings of a one-party state in practice.
7. “A police apparatus that prevents, controls, and represses dissidents and opposition, even by
using organized terror.”
Obama’s successful Senate campaign in Illinois in 2004 was based entirely on the timely
intervention of domestic police state forces to eliminate his Democratic primary opponent,
Marson Blair Hull, and then his Republican general election opponent, Jack Ryan. In 2008,
the FBI carried out a sensational Gestapo operation against Governor Eliot Spitzer of New
York State, who was a leading opponent of the Wall Street finance oligarchs and their
abuses, and was also a Democratic Party super delegate pledged to support Mrs. Clinton.
Senator Ted Stevens of Alaska had been under investigation for a long time, but his
indictment in late July 2008 was timed perfectly to signal that the ruling class wanted the
Republicans out and Barky and Pelosi in power. Another instance is the strange death of
Deborah Palfrey, the so-called DC Madam, which was immediately classified as a suicide
with the help of the dubious Dan Moldea, who claimed that the death was a suicide. The
attack on Kwame Kilpatrick, the black mayor of Detroit, may fit into a pattern of FBI
operations designed to intimidate black elected officials in the framework of the infamous
Frühmenschen program. Some observers concluded that some Democratic superdelegates
were being blackmailed by the FBI to secure their support for Obama, the darling of the
winning faction of the intelligence community. It is widely believed that these secret police
interventions are coordinated with Obama’s backers for the purpose of effectively
402 Barack H. Obama: The Unauthorized Biography
terrorizing his political opponents. Obama critic Larry Sinclair was arrested at the close of
his June 18, 2008 National Press Club appearance on the basis of a politically motivated
warrant signed by Beau Biden, the Attorney General of Delaware. This was an enemies’ list
operation that went beyond anything Richard Nixon had attempted as a candidate. There are
also some signs that Obama may be preparing an attempt to purge and police the internet
for thought crime against the Perfect Master. On June 8, 2008, the New York Times wrote
that Obama’s retainers had declared war on freedom of speech on the internet: “One area in
particular where Mr. Obama is adding muscle is a team that is tasked with tracking down
rumors and erroneous statements circulated on the Internet. The growth of the Internet,
which has been a fabulous asset for helping to build the Obama community, is also a place
where erroneous e-mails live,” said Anita Dunn, a senior campaign adviser. “That’s a
challenge I don’t think previous campaigns have had to deal with to the extent that the
Obama campaign has.” The Obama campaign is already reputed to have deployed an army
of between 500 and 1500 internet trolls to spread slander and defamation of Obama’s critics
on the internet, countering revelations about the mystery candidate Obama with cascades of
obscene abuse and threats. These trolls have generated spamming charges as a means of
shutting down anti-Obama blogs. Many of these pro-Obama mercenary bloggers are said to
reside in Gaza, where they are organized to work at coolie wages by Obama’s friends in the
Hamas regime there. Others are said to operate out of Bangalore, India, and other third
world internet sweatshops. The many ungrammatical postings by pro-Obama scribblers
who are obviously not native speakers of American English strongly suggest that these
reports are accurate.
8. “A political system organized by a hierarchy of functions named from the top and crowned
by the figure of the ‘leader,’ invested with a sacred charisma, who commands, directs, and
coordinates the activities of the party and the regime.”
From the time he came on the scene, Obama has always been presented as the Messiah,
the Savior, the anointed one, and the Perfect Master, The One most emphatically endowed
with sacred charisma. The highly centralized and hierarchical qualities of the Obama
campaign have generally not been visible to the public, but they have been dominant behind
the scenes, where the political hack Axelrod has acted as a brutal and unscrupulous
enforcer, reportedly threatening whistleblowers like Larry Sinclair, shutting down websites
and My Space pages which the campaign could not control, and ejecting persons attending
Obama rallies if they departed from the strict Obama party line.
9. “A corporate organization of the economy that suppresses trade union liberty, broadens the
sphere of state intervention, and seeks to achieve, by principles of technocracy and
solidarity, the collaboration of the ‘productive sectors’ under the control of the regime, to
achieve its goals of power, yet preserving private property and class divisions.”
During Obama’s career as a foundation-funded poverty pimp, he sought to organize
ghetto victims into corporatist community development corporations under the pretext of
creating a few jobs, but really for the purpose of neutralizing their antiestablishment
political potential. He now proposes to do this on a national scale. In the current phrase,
the Obama campaign has embraced corporatism in the form the Rohatyn-Rudman National
Infrastructure Reinvestment Bank, an idea which descends from Hjalmar Schacht, Hitler’s
finance Minister. At the same time, Obama makes clear his rejection of the New Deal by
pledging to be more respectful of “the market” than Senator Clinton.
XI: Obama as Social Fascist 403
10. “A foreign policy inspired by the theme of national power and greatness, with the goal of
imperialist expansion.” (Payne 5-6, n. 6)
One of Obama’s favorite themes is that the international prestige and power of the
United States have sharply declined because of the reckless and incompetent policies of the
Bush administration. Obama explicitly proposes to restore the world standing of the United
States, including through such initiatives as the indiscriminate bombing of certain parts of
Pakistan without the permission of the Musharraf government, allegedly in order to pursue
the mythical Osama bin Laden. These are thinly veiled proposals to administer a cosmetic,
public-relations facelift to the widely discredited forces of Anglo-American imperialism,
and to give them a new lease on life on the world scene.
Other characteristics of fascist movements which have received wide attention include the
“espousal of an idealistic, vitalist and voluntaristic philosophy, normally involving the attempt to
realize a new, modern, self-determined, and secular culture.” This corresponds closely to the “Yes
we can!” and “Si se puede” chants which are indispensable components of the typical Obama rally.
As we can see, Obama may not completely fulfill each and every point in this highly articulated
definition of a common basis of fascist movements during the time between the two world wars of
the last century. Nevertheless, Obama does fulfill a very large proportion of these criteria, more so
than any politician seen in the United States in the last half-century. Obama’s relation to fascism is
much too close for comfort, especially when we take into account the numerous areas where
Obama’s agitation presents proto-fascist precursor forms, seed crystals, and signs pointing towards
imminent fascist developments in the near future. We must also recall that the fascism required by
the crisis ridden Anglo-American imperialism of the early 21st century will necessarily diverge in
certain critical areas from the fascism that was appropriate for the needs of the Italian or German
finance oligarchs of the inter war period.
It is also important to recall that Italian fascism, especially in its earlier phases, was relatively
free of race theory and anti-Semitism. For Mussolini, the main vehicle for fascist activity was the
totalitarian state, and not any concept of race. Later, when Mussolini became an ally of Hitler,
elements of the Nazi approach to race were incorporated into Italian laws and political life. In other
words, the notion of fascism without significant elements of anti-Semitism (at least initially) would
not represent in any way a radical departure from the main historical models and prototypes of
fascism.
All fascist movements were set apart from other political formations by the tremendous stress
they placed on the liturgical, symbolic, and aesthetic elements of politics. As Payne writes, “The
novel atmosphere of fascist meetings struck many observers during the 1920s and 1930s. All mass
movements employ symbols and various emotive effects, and it might be difficult to establish that
the symbolic structure of fascist meetings was entirely different from that of other revolutionary
groups. What seemed clearly distinct, however, was the great emphasis on meetings, marches,
visual symbols, and ceremonial or liturgical rituals, given a centrality and function in fascist activity
which went beyond that found in the left revolutionary movements. The goal was to envelop the
participant in a mystique and community of ritual that appealed to the aesthetic and the spiritual
sense as well as the political. This has aptly been called a theatrical politics, but it went beyond
mere spectacle towards the creation of a normative aesthetics… More than any other new force of
the early 20th century, fascism responded to the contemporary era as above all a ‘visual age’ to be
dominated by a visual culture.” (Payne 12-13) Lukacs noted that a hallmark of fascism was the
aesthetization of politics, which he proposed to counter with a politicization of aesthetics.
404 Barack H. Obama: The Unauthorized Biography
FASCISM AS HATRED OF WOMEN
Given the Obama campaign’s systematic vilification of Senator Clinton, Chelsea Clinton,
Geraldine Ferraro, and many others as women, it is interesting and significant to find that contempt
for women was a common characteristic of fascist movements. As Payne writes, “Another
fundamental characteristic was extreme insistence on what is now termed male chauvinism and the
tendency to exaggerate the masculine principle in almost every aspect of activity.” This aspect of
fascism has been termed “radical misogyny or flight from the feminine, manifesting itself in a
pathological fear of being engulfed by anything in external reality associated with softness, with
dissolution, or the uncontrollable.” In Payne’s view, “No other kind of movement expressed such
complete horror at the slightest suggestion of androgyny.” Part of the problem was perhaps bit more
than a few of the German fascist leaders were themselves closet homosexuals, as in the case of
Ernst Röhm, the leader of the SA Brown Shirts, and one of Hitler’s most formidable rivals for
leadership of the National Socialist movement. Obama has been widely accused of the Internet of
being a secret bisexual. His attempt at bowling before the Pennsylvania primary called forth such
epithets as prissy, dainty, effete, and languid from media observers, with the Wonkette blog asking,
“If he bowls like a fag, does that mean he is one?”
FASCISM AS YOUTH CULT
The Obama campaign has been described by commentators as a youth movement, although there
appears to be some question about how accurate this is. If this is true, it is yet another strong
similarity between Obama and the earlier fascists. Payne writes: “Fascist exaltation of the youth
was unique, however, in that it not only made a special appeal to them but also exalted youth over
all other generations, without exception, and to a greater degree than any other force based itself on
generational conflict. This no doubt stemmed in part from the lateness of fascism and the
identification of the established forces, including much of the left, with leaders and members from
the older, pre-war generation. It also stemmed in part from the organic concept of the nation and of
youth as its new life force, and from the predominance of youth in struggle and militarization.”
(Payne 13-14)
Even though fascist ideology was populist, the visible leadership structure of fascist movements
was overwhelmingly elitist, to say nothing of the bankers and financiers who provided the
indispensable cash support for these demagogic political formations. As Payne notes, many
sociologists have pointed out that “nearly all parties and movements depend on elites and leadership
but some recognize the fact more explicitly and carry it to greater lengths. The most unique feature
of fascism in this regard was the way in which it combined populism and elitism. The appeal to the
entire people and nation, together with the attempts to incorporate the masses in both the structure
and myth, was accompanied by a strong formal emphasis on the role and function of an elite, which
was held to be both uniquely fascist and indispensable to any achievement.” (Payne 14)
Today in the United States it is stubbornly assumed that fascism must always be an extreme
right-wing movement, but this is far from an accurate description of the genesis of fascism. Italian
fascism was the prototype for all other fascism, and was extremely influential internationally, and
Italian fascism was initially much more of a left wing phenomenon than a right-wing one. The
important fact to remember is that Italian leftists had played a very important role in efforts to have
Italy intervene in World War I on the side of the British and French, and this made left wing
nationalism a potent and aggressive force after the war had ended.
XI: Obama as Social Fascist 405
Benito Mussolini, in some ways the inventor of fascism and the first fascist dictator, was
anything but a typical right-wing reactionary. He was born in 1883 in the Romagna, an area of Italy
which was noted for its radical, left-wing and anti-Roman Catholic politics. His parents admired the
Mexican leader, Benito Juarez, for whom they named their son. Mussolini was an elementary
school teacher and a leading member of the Italian Socialist Party (PSI). He worked as a newspaper
editor in the city of Trieste, which at that time was part of the Austrian Empire; he was expelled by
the Austrians because of his militant Italian nationalist viewpoint. He was part of the self-styled
revolutionary and anti-reformist leadership group which took control over the PSI in 1912. At this
time he and his associates received the enthusiastic endorsement of no less a personage than the
Russian revolutionary leader V. I. Lenin, who shared Mussolini’s dislike for parliamentary
methods. Mussolini became the editor of the PSI daily newspaper, Avanti! Mussolini broke with the
PSI official line of anti-militarism and non-interventionism after the start of World War I; in mid-
November 1914, he launched his own newspaper, called Il Popolo d’Italia, with money from the
British, the French, and from the arms manufacturers and other pro-war business interests. This new
daily paper campaigned incessantly for Italy to enter the war on the side of Britain and France. In
May 1915, Mussolini helped to organize the Radiant May (maggio radioso), a series of
demonstrations in Rome designed among other things to attempt to discredit former Prime Minister
Giolitti, the main moderate conservative nationalist, and to intimidate the parliament into declaring
war, which soon occurred.
MUSSOLINI FOUNDS ITALIAN FASCISM, MILAN, MARCH 23, 1919
The foundation of the first Italian fascist organization is widely agreed to have occurred in
Piazza San Sepolcro in Milan on March 23, 1919 with the creation of a new revolutionary
nationalist movement called the Fasci Italiani di Combattimento (very roughly, Italian fighting
groups) at a meeting attended by some 200 persons. The majority of those present were either
leftists or former leftists who had gone over to more nationalistic agitation. The participants in this
landmark meeting would largely be drawn from four distinct groups. The first were revolutionary
syndicalists and national syndicalists, people we might today call extremely aggressive trade union
militants with anarchist, antistate (or “libertarian”) and anti-politician overtones. There were a
number of former members of the Italian Socialist Party who had left that party in order to support
Italian entry into World War I. Among these was Mussolini himself. A third important group were
the Futurists, who were members and political supporters of an important school of visual arts and
literature, sometimes also called the cubo-futurists. We can think of these people as avant-garde
painters, writers, and composers; the most famous of them was Marinetti. A fourth and final group
were the arditi, veterans of the special forces commando units of the Italian Army during World
War I. Many of them still wore their distinctive black uniforms, and this launched the idea of
fascism as black-shirts, giving rise to the notion of fascism as a shirt movement with each national
group favoring shirts of a special color. The majority of the participants were between 20 and 40
years of age, and the largest single professional group represented were the writers and journalists –
quite possibly the media whores of the day. The creative class, as we can see, turned out in force to
help found fascism. Mussolini described this new group as an “anti-party,” and criticized
customary political methods as rigid and sterile. The program of this new group has been described
as “basically leftist, sometimes revolutionary,” and is a far cry from what organized fascism later
advocated. It was in any case a program explicitly presented in support of Italian imperialism. At
this early phase, Mussolini was primarily concerned with recruiting large numbers politically naïve
young people from the widest possible area of the left and the center. “The Fasci were in fact
neither fish nor fowl, nationalist but leftist….” (Payne 89 ff.)
406 Barack H. Obama: The Unauthorized Biography
D’ANNUNZIO’S FASCIST PILOT PROJECT IN FIUME, 1919-1920
If Mussolini was gaining the support of Marinetti, the most famous Italian painter, the most
famous Italian poet, the decadent Gabriele D’Annunzio, was creating his own separate pilot project
for fascism. D’Annunzio, joined by several thousand disgruntled war veterans and fervently
idealistic students, seized control of the city of Fiume on the Adriatic Sea near Italy’s eastern
border, where he functioned as the ruler of a quasi-independent city state for some 15 months.
D’Annunzio’s constitution for Fiume took the form “a relatively democratic structure of
corporatism” which strove to be three things — “corporatist, nationalist, and nominally
democratic.” (Payne 92-93) It was under these partially leftist auspices that D’Annunzio elaborated
much of what was to become a typical fascist aesthetic: “…D’Annunzio succeeded in creating a
new style of political liturgy made up of elaborate uniforms, special ceremonies, and chants, with
speeches from the balcony of city hall to massed audiences in the form of a dialogue with the
leader. In other key contributions to what soon became ‘fascist style,’ D’Annunzio and his
followers adopted the black shirts of the arditi as their uniform, employed the Romans salute of
raising the right arm, developed mass rallies, brought out the hymn Giovinezza (Youth), organized
their armed militia precisely into units, and developed a series of special chants and symbols.”
(Payne 92)
The marked left wing tendencies of Italian fascism began to disappear towards the end of 1920
and the beginning of 1921, but some of these elements persisted well into the late summer of 1921.
As late as May 1921, Mussolini “was still thinking of the possibility that the movement would
crystallize in a possible ‘Fascist Labor Party’ or ‘National Labor Party.’ On May 22 he announced
that the republicanism of the Fasci must be accentuated and raised the possibility of a new
agreement with the Socialists — assuming they would shed their internationalism and class
revolutionism…. Mussolini… still could not imagine taking a categorically anti-leftist position.”
Mussolini had to jettison his “lingering leftist loyalties” before he could create the National Fascist
Party (PNF) in November 1921. (Payne 99-101) it was only in the early 1922 that Mussolini
announced that “il mondo va a destra” – the world is turning right, while parliamentary democracy
and socialism were in decline. The 20th century, Mussolini argued, would be an aristocratic
century dominated by new elites — notions which are not alien to Obama’s elitist and anti-blue
collar supporters today.
One more phase of Il Duce’s career deserves attention, and that is the final phase. Mussolini was
ousted as dictator of Italy in July 1943, and was imprisoned on a mountain in southern Italy called
the Gran Sasso d’Italia. He was rescued by Otto Skorzeny and his SS commandos and taken behind
the German lines. Here Mussolini created a German-controlled puppet state in northern Italy which
called itself the Italian Social Republic (RSI). This regime turned out to be much more radical than
anything the Duce had tried during his 20-year dictatorship in Rome. The RSI, also known as the
Salò republic after the small town which was its nominal capital, introduced corporatist selfmanagement
by workers acting through assemblies and councils. The old National Fascist Party
(PNF) was re-baptized as the Revolutionary Fascist Party. According to one commentator, “This
represented Mussolini’s revenge against the bourgeoisie and the rightist elite whom he believed had
thwarted fascism.” Ernst Nolte, one of the leading theoreticians of fascism, felt that Mussolini had
remained in many ways a Marxist as long as he lived: “The finalità [goal] of Marxism continued to
live in him, even if he was not aware of it.” (Payne 413) In sum, it can hardly be denied that leftism
and fascism cannot be seen as polar opposites or incompatible impulses, but must rather be regarded
as inextricably intertwined. The implications for the Obama phenomenon are obvious and ominous.
XI: Obama as Social Fascist 407
Today’s Obama campaign may be considered as a vaguely left of center force to shore up US
imperialism and restore the lost prestige and power of the United States in the world. Obama, it
must be repeated, has successfully imposed the current US government policy of indiscriminate
bombing and killing of Pakistanis in the North West areas of that country. Obama’s demand for a
unilateral bombing of Pakistan makes him unquestionably the most aggressive warmonger in the
2007-2008 Democratic field, and also makes him a more extreme warmonger than Bush. Many
Obama supporters seem happy with imperialist efforts intervene in the internal affairs of Pakistan
for the purpose of overthrowing the Musharraf regime. Many Obama supporters are urgently
calling for the bombing Sudan for reasons connected with the situation in Darfur. Many of them
also support the Brzezinski plan of kicking the Chinese out of Africa. The rationale for this among
Obama’s supporters is their idea that the Chinese are carrying ethnocide or cultural genocide by
building the railroad and road infrastructure which Africa has always lacked. Needless to say, there
are also large numbers of Obama supporters who are demanding a US confrontation with the
People’s Republic of China in support of the demands of the Dalai Lama, a feudal monster and a
spokesman for one of the most hideously parasitical landlord classes to be found anywhere in the
world today. The Obama lemmings do not like the war in Iraq, but on Pakistan, Darfur, and Tibet
many Obama supporters are much more aggressive than Bush-Cheney. Once we recognize that the
Obama movement is in fact a vaguely left of center mobilization in support of a new set of
aggressive imperialist adventures, its similarity to the early phases of Mussolini’s fascism becomes
more evident.
FALLOWS: OBAMA IS LIKE MARSHAL PÉTAIN AND JIMMY CARTER
James Fallows of the Atlantic Monthly, a Carter White House veteran who may have helped with
the malaise speech of July, 1979, and a keeper of the Obama flame, has published a remarkably
frank assessment of the Perfect Master, in which Fallows confesses that he sees Obama as similar in
many ways to Marshal Pétain of France, the leader of Vichy France, the Nazi puppet state in
southern France between 1940 and 1943. Pétain escaped execution as a Nazi collaborator (the Prime
Minister of Vichy, Pierre Laval, was in fact shot for treason) primarily because he was aged and had
been the hero of Verdun in World War I. Pétain was a puppet, a defeatist, and a pessimist, and his
Vichy regime is one of the variants which are generally used to make generalizations about fascism.
This makes it all the more notable that Fallows sees common ground among Pétain, Carter, and
Obama. Fallows writes: ‘I am very sensitive to the perils of this approach because the man I worked
for, Jimmy Carter, was elected in large part as a national savior—a good, religious, “never lie to
you” president to fill the moral void created by Richard Nixon, Watergate, and Vietnam. Charles
Peters, of The Washington Monthly, once compared Carter to the figurehead leader of Vichy France,
Marshal Pétain. Each man, in this view, offered to save the nation through his own personal
qualities. In Carter’s case, those turned out to be no match for the disasters of the late ’70s. For
instance: in the spring of 1980, as Carter ran for reelection, the prime interest rate was 20 percent.
The argument that Obama would be another Pétain-like Carter, offering his noble qualities only to
be overwhelmed by ignoble reality, is the deepest fear about him, or at least the one that most
resonates with me. The greatest hope is that before his brief time in the U.S. Senate, he absorbed
more practical skills and sensibilities than Carter did in Georgia. Michael Janeway, who as dean of
the Medill Journalism School at Northwestern knew the Chicago establishment figures who
nurtured Obama’s rise in the 1990s, speaks of “the Chicago way”—“getting all the parties together
and taking responsibility for finding a solution.” Under the Chicago way, the fact that Obama’s
most important speeches are short on eight-point action plans is a strength rather than a weakness:
it’s a sign that serious business will be done.’221 Of course, the “Chicago way” in reality is nothing
408 Barack H. Obama: The Unauthorized Biography
but the method of the Illinois Combine, an ongoing criminal organization of racketeers who are also
elected officials. As for the alleged noble qualities of Pétain and Obama, it is hard to see what they
might be.
THE OBAMA PROJECT AND IMPERIAL DECLINE: A ROMAN PARALLEL
Contemporary American opinion seems to regard the prospect of a member of a minority group
assuming state power as president as a totally unmixed blessing. But a glance at the history of
prominent world empires suggests that this turn to minority rule may be fraught with many dangers,
and may indeed represent a symptom of Imperial decline, especially when the aspiring candidate
has no significant reform agenda, but rather intends to increase the virulence of the self-destructive
tendencies already present in the system. The general pattern is that when the core imperial ethnic
group begins to lose vitality and to veer into decadence and lethargy, the expedient of bringing in
foreign adventurers as imperial bureaucrats is tried, quite often with very unsatisfactory results.
Sometimes the ethnic group which dominates the imperial oligarchy (i.e., the senatorial class) is
also so discredited that it needs to hide behind the mask of some other ethnicity. The Chinese
Empire had a very long history of absorbing foreign conquerors, and the details of this are far too
complex to be even mentioned here, but it is true that the last Chinese dynasty, the Manchu, was
founded by a peripheral minority people who were not identical with the mainline Han Chinese.
The Ottoman Turkish empire always had a tendency to give key administrative jobs to Greeks,
Venetians, and Armenians, but there is some indication that this tendency increased as the empire
declined.
The British Empire paid a great deal of attention to the Copts, Greeks, Armenians, and Jews of
the Ottoman Empire, since it sought to mobilize these ethnic minorities against the Ottoman Central
Government. The Copts, for example, were a favorite choice of the British when it came to
appointing the governments of their Egyptian protectorate, as we can see in the case of the Boutros-
Ghali family. In the last half-century of the British Empire, some of the same ethnic groups began
to take over important administrative functions in the court, the foreign office, and the city of
London, and we are doubtless on firm ground in a surfing that this increased ethnic diversity did
nothing to slow the collapse of the empire. The Prussian ruling class of the German Empire was
more interested in cultural uniformity and less willing to tolerate ethnic diversity than most imperial
ruling classes, and therefore the coming of a ruler in 1933 who was Austrian and not Prussian or
even German (based on the map of the time) was a radical departure, and it was of course followed
are the most catastrophic results. We have already noted that when the foreign policy of the
Russian Empire began to be managed by people like Pozzo di Borgo, Nesselrode, and Kapodistrias,
who were not Russians, but a Corsican, a German, and a Venetian Greek, that empire was in serious
decline. Therefore, the fatuous and superficial optimism of many US observers about the notion of a
president for the first time from the Afro-American minority group may be completely unjustified.
THE BANKRUPTCY OF COLLECTIVE GUILT
St. Thomas Aquinas was on the right track when he declared that no guilt can attach to any
person for the actions of others not under his or her control. After 1945, it became fashionable to
argue in some quarters to argue that there was a German collective guilt for the crimes of the Hitler
regime – meaning that the German housewife or factory worker somehow just as responsible for the
Nazi crimes as bankers like Schacht and Thyssen, or politicians like von Papen. It is necessary
vigorously to reject any notion of German collective guilt (Sippenhaft or Kollektivschuld) for
XI: Obama as Social Fascist 409
National Socialism. People are responsible for their own actions, and not for the actions of others.
The theory of German collective guilt is a deliberate mystification, first of all because it places
helpless little people on the same level of responsibility with powerful individuals who could have
and should have influenced the course of events in another way. German collective guilt also masks
the responsibility of important foreigners. Americans like Prescott Bush and John Foster Dulles
were important backers of Hitler’s seizure of power in January 1933. The most active support for
Hitler came from Lady Astor, and their Cliveden Set, where we find Lord Brand, Lord Lothian,
Lord Halifax, and Sir Neville Chamberlain. Another key British backer of Hitler was Lord Montagu
Norman, the Governor of the Bank of England, who made possible the financial stabilization of the
Nazi regime during its first months in power. Henry Deterding, the boss of Royal Dutch Shell, was
another prominent backer of National Socialism. German collective guilt is therefore a cover story
for the main culprits.
By the same token, we must formally and categorically reject any idea of the collective guilt of
the American people. The crimes of the Bush regime, for example, are the crimes of the Bush
regime. They are the crimes of the individuals who actually carried them out, and not of the
American people as a whole, who actually voted twice to defeat Bush, but were overruled by a very
effective vote fraud machine, with the help of the same controlled corporate media who are
swooning for Barky today. The American people who are alive today are not responsible for
slavery, or other crimes and abuses of the nineteenth century. The slave system was maintained by a
three-cornered cooperation among southern planter oligarchs, New York City bankers and cotton
brokers, and City of London interests. This is who was responsible for slavery, and not some
poverty-stricken southern sharecropper or northern “mudsill,” as they used to be called. Individuals
have free will, and they are responsible for what they do and do not do, but they are not responsible
for the actions of others, and certainly not for actions carried out long before they were born.
Anyone who attempts to impose a theory of collective guilt on the American people is fabricating a
big lie, very likely with the goal of provoking some irrational backlash of ill-considered reaction,
quite possibly in the form of some subsequent phase of fascism. Those who preach collective guilt
are, in short, provocateurs.
A DISTANT MIRROR FOR OBAMA: SEPTIMIUS SEVERUS, ROMAN EMPEROR
A distant mirror for these questions may well be provided by the history of the Roman empire.222
The reign of the Emperor Commodus (180–192 AD), who was the son of the famous Stoic Marcus
Aurelius and who survived one assassination attempt before succumbing to another, brought the
Antonine dynasty to an end, and marked the transition from a period of stagnation and slow decline
into a time of more acute crisis. The murder of Commodus is associated with the end of the Pax
Romani, or “Roman Peace,” and the onset of the long decline of the Roman Empire. The end of
Commodus began the Year of the Five Emperors in 193, when there were five contenders for title
of Roman Emperor. The five were the City Prefect Pertinax, Didius Julianus, Pescennius Niger in
Syria, Clodius Albinus in Britain, and Septimius Severus in Pannonia.
Septimius Severus was by most accounts a dark-skinned native of Libya in North Africa; some
Afrocentric historians have identified him and celebrated him as the first black emperor of Rome.
But being black or nearly black did not prevent him from representing a catastrophic turning point
in Roman history. Septimius Severus had allied himself with a prominent Syrian family by his
marriage to Julia Domna. In the same way, Obama’s marriage to Michelle allied him with the Daley
machine, her family business. Septimius Severus may not have been the only dark-skinned
contender at this point, as suggested by the name of his rival Pescennius Niger, since “niger” means
410 Barack H. Obama: The Unauthorized Biography
black or dark, and he is described as a “black man” in some translations of the contemporary writer
Cassius Dio. But there are others who say that this was just a nickname, and that Pescennius Niger
was not African. After disposing of all of his rivals, Septimius Severus assumed power and founded
a dynasty that would extend through increasingly troubled times to include himself (193–211), his
notoriously cruel and vindictive son Caracalla (211–217), Macrinus (217–218), the monster
Elagabalus or Heliogabalus (218–222), and Alexander Severus (222–235).
SEPTIMIUS’ LARGER ARMY AND PAY HIKES START
THE GREAT ROMAN HYPERINFLATION
Because of his status as an outsider and a general, Septimius Severus decided to lean on the
praetorian guard in the Roman army, while freezing out many representatives of the Roman Senate,
where the leading oligarchs assembled. In order to win the loyalty of the Army, he substantially
increased the rates of pay, creating a very serious budget deficit that was the main cause
contributing to the beginning of hyperinflation. The hyperinflation which was launched by
Septimius Severus kept going for 300 years, and was one of the biggest causes of the final collapse
of the Roman empire and of western civilization itself. He also substituted equestrian officers for
senators in key administrative positions. Not surprisingly, Septimius Severus’ relations with the
Senate were very poor, and to compensate for this he had to appeal to the city mob as well as to the
army, which cost even more money. Septimius Severus also abolished the local regular standing
jury courts, which dated back to Republican times. He was also an energetic persecutor of
Christians and Jews.
Obama for his part has promised to increase the size of the United States Armed Forces by about
100,000 troops — a very sinister and hugely expensive detail which many of his fawning left-liberal
acolytes are incapable of comprehending. There are, however, widespread reports of grave
discontent and deep suspicion on the part of top generals and admirals towards the parvenu Obama.
How might Obama attempt to secure support from the Pentagon, or at least stave off a mutiny or a
military counter-coup? One way would clearly be to imitate Septimius Severus and radically raise
military pay rates, benefits, and bonuses in the form of a thinly disguised bribe for the officer class.
The record of the dynasty founded by Septimius Severus suggests that once a bidding war of this
type has begun it is almost impossible to stop, and often ends with tremendous political instability
as the monetary demands of the praetorian class become greater and greater, notwithstanding the
evident economic crisis of the empire.
CARACALLA’S POLITICAL REPRESSION
For our analytical purposes here, it will be convenient to compare Obama to the three most
important figures of the Septimius Severus dynasty, namely Septimius Severus himself, his son
Caracalla, and the notorious Heliogabalus. When Septimius Severus died, there was a violent
succession fight which ended when Caracalla succeeded in killing his brother Geta. Caracalla was
noted for lavish bribes to the praetorians, and also for his legendary cruelty, which was expressed in
the form of numerous assassinations of his real or imagined enemies and rivals. Michelle Obama
may find her own distant mirror among the strong-willed and ambitious women of the Severan
dynasty, beginning with Septimius Severus’s wife Julia Domna, who schemed and plotted to help
her husband become Emperor. Among the other influential women of this disastrous dynasty we
find Julia Maesa, sister of Julia Domna, and Maesa’s two daughters, Julia Soaemias, mother of the
XI: Obama as Social Fascist 411
monster Heliogabalus, and Julia Avita Mamaea, mother of Alexander Severus. It was in fact this
feminine cabal that secured the throne for Heliogabalus in 218.
HELIOGABALUS: TEENAGE EMPEROR AND MONSTER
Heliogabalus provides lasting proof that the participation of young people in politics is not
necessarily a good thing, since he was only about 15 years old when he seized the Imperial throne,
and racked up his entire record of monstrous slaughters and perversions before he was liquidated
somewhat short of the age of 20. Heliogabalus ranks with Nero and Caligula as one of the greatest
monsters to rule Rome. According to some reports, he suffocated the guests at one of his dinner
parties by releasing masses of rose petals on them from above. He married one of the vestal virgins,
a very serious violation of Roman tradition and law. Like Nero, he also married one of his own
male lovers. He is said to have prostituted himself inside his own Imperial Palace. One of
Heliogabalus’ obsessions was his quest to obtain a sex change operation so that, like Tiresias, he
could also experience life as a woman. Heliogabalus has often been characterized by modern writers
as transgender, most likely transsexual. The parallels to Obama’s reported homosexuality and
bisexuality are evident. With Heliogabalus devoting so much time and energy to these lascivious
activities, the administration of the empire fell into the hands of his grandmother and mother (Julia
Soamias). Late in his reign, Heliogabalus replaced Jupiter, the central figure of the Roman
pantheon, with a new Oriental god, Deus Sol Invictus, whose original name, Elagabalus or El-
Gabal, happened to be identical with the Emperor’s own assumed name. Heliogabalus forced the
Roman notables to comply with these changes, meaning that by praying to the new god they would
be praying to the Emperor at the same time. Julia Maesa in particular was aware that the outrageous
behavior of Heliogabalus was likely to trigger a rebellion, and could easily lead to the loss of power
by the family as a whole. She therefore organized a conspiracy which led to the assassination of
Heliogabalus and the installation of Alexander Severus, the last of the dynasty, in 222. Alexander
won some successes against the Persian Empire in the East, but his increasing inability to control
the money-hungry army led eventually to its mutiny and his assassination in 235. Heliogabalus’
religious edicts were reversed and the statue of El-Gabal, which Heliogabalus had erected for public
worship, was removed from Rome. Women were barred from ever attending meetings of the
Senate. The extreme sanction of damnatio memoriae—erasing and expunging a person from all
public records—was decreed upon Heliogabalus.
THE BREAKDOWN CRISIS OF THE THIRD CENTURY, 235-284 AD
The death of Alexander Severus began a period of about half a century which can be considered
the first collapse of the Roman Empire. This period is known as the crisis of the third century,
extending from 235-284 AD. It is also called the period of the “military anarchy.” During this time,
as a direct consequence of the abuses and failures of the Septimius Severus dynasty, the Empire
underwent military, political and economic crises and began to collapse. The leading factors in this
collapse were a constant series of barbarian invasions by Germanic tribes coming out of Central
Asia, a civil war inside the empire, and the galloping hyperinflation which had been triggered by
Septimius Severus’ increase in the size and pay scales of the Army. The crisis of the third century
was marked by acute political instability, with about 25 Emperors seizing and losing power, usually
by assassination, in a period of 50 years. Many of these emperors were lower-class adventurers,
and a number were quite exotic, such as the Emperor Philip the Arab. The western provinces of the
empire broke away to form an ephemeral empire of Gaul, while the Eastern provinces created an
equally unstable empire of Palmyra.
412 Barack H. Obama: The Unauthorized Biography
At the same time, a series of barbarian invasions by Carpians, Goths, Vandals, and Alamanni
occurred, supplemented by attacks from the Sassanid Persians in the east. The strength of the
empire was undermined by the runaway hyperinflation caused by many years of debasing the
coinage. This had started earlier under the Severan emperors who enlarged the army by one quarter
and doubled the base pay. As each new upstart barracks Emperor took power, they had to loot the
treasury and the merchant class to quickly raise the money needed to pay the expected “accession
bonus” to the troops, and this was often accomplished by clipping coins and minting new coinage
with more copper and lead. The easiest way to do so was by simply cutting the silver in coins and
adding less valuable metals. This total crisis of the empire is often thought of as marking the
transition between classical Greco-Roman civilization and late antiquity, or the beginning of the
dark ages. A relative stabilization of the empire was reached about 284 with the coming of
Diocletian, but then in such a way that guaranteed the final collapse a couple of centuries later.
The reforms of Diocletian boiled down to preserving a semblance of imperial power based on a
zero-growth totalitarian military autocracy that was doomed to an eventual collapse. One of the
main problems was that during the crisis of the third century, lawlessness, piracy, and brigandage
had expanded to such a scale that the Roman roads and the sea lanes of mare nostrum (the
Mediterranean) were no longer safe for merchants to travel, while the currency crisis made any
system of payments unstable and chaotic. Trade inside the empire had suffered a collapse from
which it would never recover. This led to tendencies towards local self-sufficiency, giving rise over
time to the manorial system, accompanied by the dominance of the feudal aristocracy who ruled
over a population of proto-serfs who had given up most of their liberty in exchange for food and
protection. In late Roman times these serfs became a half-free class of citizens known as coloni.
Even though a semblance of political unity was restored under Diocletian, dozens of important
cities in the western part of the empire had been largely destroyed, and their populations forced to
flee. Most of these cities would never recover for centuries to come. The atmosphere of general
insecurity is reflected by the city walls that had to be put up to defend important commercial
centers, including Rome itself.
ULPIAN: WHAT PLEASES THE PRINCE HAS THE FORCE OF LAW
For a sampling of the political mentality of these times, we can turn to the Roman jurist
Domitius Ulpianus (died 228), known as Ulpian. Ulpian was appointed by Septimius Severus to the
Council of State, and under Caracalla was master of the requests (magister libellorum). He was
driven out of office by Heliogabalus but brought back by Alexander, whom he served as chief
adviser. He was killed by the soldiers in 208 AD when he tried to crack down on some of the
abusive privileges enjoyed by the praetorian guard. Some of Ulpian’s sayings are simply edifying
propaganda of the hope and change variety such as his one-liner “Law is the art of the good and the
fair.” (Jus est ars boni et aequi.) Much more to the point is another saying which expresses the
spirit of every totalitarian regime down to the present day: “The sovereign is not bound by the
laws.” (Princeps legibus solutus est.) Bush believes that, and his fellow megalomaniac Obama
probably will lodge a similar claim. Another of Ulpian’s sayings captures some of the spirit of the
20th century dictators: “What pleases the prince has the force of law.” (Quo principi placuit legis
habet vigorem.)
All of these developments can be thought of as a result of the institutional and economic
processes which had been set in motion by the dynasty founded by Septimius Severus. If this phase
of Roman history can provide any insight into our own time, we may be facing a process of
XI: Obama as Social Fascist 413
galloping hyperinflation, the breakdown of internal order, institutional dissolution, military defeat
abroad, civil war, and social chaos under a possible Obama regime.
A WEATHERMAN IN THE WHITE HOUSE?
Character is destiny. Biography is destiny. We have no crystal ball to predict the detailed
evolution of a future Obama regime; we have nothing but the certainty that it will be a disaster.
Obama is drawn to his terrorist friends Ayers and Dohrn not just because he needs their money,
their network support, and their access to foundation funding. Obama is close to Ayers and Dohrn
because he genuinely finds them congenial, not just at the level of small talk and parenting, but
rather at the level of the deepest psychological affinities and philosophical commitments which a
person like Obama is capable of. The terrorist Weathermen, during their heroic or terrorist phase,
were the most concentrated expression of the class hatred for American working people on the part
of the financier elites and their dupes and retainers in affluent suburbia. The Weatherman outlook
had passed far beyond the cynical hypocrisy of a Nixon to attain a cynical nihilism that was fascist
in every way. Ayers and Dohrn expressed this hatred with their bombs, with their praise of Manson,
with their fork salutes. Ward Churchill, another Weatherman who figures in the lives of Ayers and
Dohrn, expressed the same hatred with his desire for the annihilation of the United States from the
planet. James Cone, the teacher of Wright, acted out this hatred with his fervent prayer for a god
who would kill white people. All of these figures are the provocateurs and ideologues of a dying
imperialism in the process of transforming itself into a death cult. This is the outlook which Barack
Hussein Obama, with his background in Rousseauvian anthropology, diluted Marxism, Nietzschean
protofascism, postmodernist rejection of reality, and Fanon’s existentialist worship of violence,
finds in himself. This is why he can so successfully read from the Teleprompter the fascist rantings
composed by his Goebbels detachment, Axelrod and Favreau. This is why Obama talks like a
fascist and is a fascist in the tradition of the young Mussolini, and why, with the help of Trilateral-
Bilderberger media, money, and networks, he has already gone far towards assembling a fascist
mass movement (or reasonable media facsimile thereof) around himself.
So, if we want to know his real program of government, we need to go back to the last
Weatherman war council in Michigan, before the townhouse blew up and before they all went into
clandestine safe houses. We need to recall the speech by Ted Gold, the leader of the Mad Dog
faction, who had only a few months left before he would blow himself into eternity in his
Greenwich Village bomb factory. As we have noted, Gold said in 1969 that the Weatherman
program was that “an agency of the people of the world” would be set up to run the U.S. economy
and society after the defeat of U.S. imperialism abroad. Today that would be an agency directed by
people like Soros, the Rockefellers, and the other Wall Street financial parasites. They would say
that the savage austerity, the declining standards of living, the growing immiseration, the
strangulation of production, are all in the name of solidarity and aid for the developing countries.
They would probably add something about global warming, climate change, the polar bears, and the
ice caps at the North Pole to explain to people why their starving children have no health care.
But Gold’s perspective, it will be remembered, was too much even for some of those attending
that last Weatherman debate more than forty years ago.
“Well,” replied Gold, “If it will take fascism, we’ll have to have fascism.”
This, we submit, is the best guide we have to Obama’s intentions. His best friends in life have
been Weatherman terrorists, genuine murderers, practitioners of purgative violence in the tradition
of Nietzsche’s blond beast. Or else they have been professional paid haters kept in business by the
414 Barack H. Obama: The Unauthorized Biography
foundations. Obama’s campaign logo, the blue oval like a portal with stripes on the ground appears
as a hybrid of the Weatherman rainbow and lightning bolt tattooed on Ayers’ back and the lightning
bolt in a circle which was the symbol of Sir Oswald Mosely’s British Union of Fascists back in the
1930s. Obama’s foreign policy will be the apocalyptic showdown with Russian and China
demanded by his chief controller, Zbigniew Brzezinski. His economic policy will be to flay the
American people alive with drastic economic austerity. Those who think that nothing could be
worse than Bush will have to concede that when it comes to pure evil, the Trilateral Commission
has a lot more imagination than they do.
The infinity of obstacles, delays, defeats, and reverses which Obama has already had to face
suggest that, outside of the decadent and degenerate elites who look to Wall Street, the media, and
academia for leadership, ordinary American working people are still anti-fascist. There are still vast
untapped anti-fascist resources which can brought to bear to ward off Obama’s monstrous project.
But now a seizure of power by the Obama postmodern fascist coup is imminent. It is time for
persons of good will to mobilize.
APPENDICES
APPENDIX I: PRESS STATEMENT OF LARRY SINCLAIR,
NATIONAL PRESS CLUB, WASHINGTON DC, JUNE 18, 2008
Good afternoon, my name is Larry Sinclair and I am a former recreational drug user and
trafficker, a convicted felon for crimes of forgery, bad checks and theft by check. I am also an
American who loves this country and I cannot stay silent regarding Barack Obama knowing what I
know.
Today I will discharge my obligation as a citizen to witness this knowledge to you and raise
questions for others to investigate and consider. I am going to briefly describe my background, my
experience with Senator Obama in 1999, what appears to me to be a coordinated effort to discredit
me and finally a list of questions. After this brief statement, I will take and try to answer any
reasonable questions. Background
I am 46 years old and I currently reside in Duluth, MN. I am a US Citizen, and I have made
mistakes in my lifetime. I have been convicted and served prison sentences for writing bad checks,
forging checks, using stolen credit card numbers in Arizona, Florida and Colorado. These event’s
occurred over twenty (20) years ago between 1980 thru 1986. After going public on the internet
with these claims against Senator Obama earlier this year, I became aware of a warrant out of
Florida from 1986 which I have resolved and it has now been dismissed. I also have an active
“Colorado Only” warrant for alleged “Theft and Forgery”. I am not ignoring this warrant but am
addressing it with the Court in Colorado as well as with the DA’s office. I have a pending motion to
dismiss this warrant which I am waiting to have calendared by the Colorado Court.
I have lived and worked under three different names. My birth name is Lawrence W. Sinclair.
Later on, I had my name legally changed first to La-Rye A. Silvas, and then La-Rye Vizcarra Avila.
The last two were legal name changes granted by the court in Penal County Superior Court,
Florence Arizona. I legally returned to my birth name in the Fremont County District court, Canon
City, Colorado in 1997. Obama Incident
I flew out of Colorado Springs, Colorado to Chicago on November 2, 1999, arriving in O’Hare
early in the morning of November 3, 1999. I went to the Chicago area to attend the graduation of
my god son (my best friend’s son) from basic training from the Great Lakes Navy Training Center.
I made reservations at the Comfort Inn and Suites in Gurnee, IL based on location to the Navy
Training center. On November 5, 1999, I hired the services of Five Star Limo. I had hired them for
both November 5 and November 6. On November 6, 1999, I asked the limo driver – whose name I
now reveal for the first time – Paramjit Multani, if he knew anyone who would like to socialize and
show me Chicago. Paramjit Multani understood that I was not looking for someone who knew
Chicago and would enjoy socializing. Paramjit Multani said he knew someone who was a friend of
his.
On November 6, 1999 after picking me up at the Hotel in Gurnee– and this is significant –
Paramjit Multani used his cellphone to make a call. That call was made to then-Illinois State
Senator Barack Obama to set up an introduction between me and Senator Obama. Upon arriving at
the bar and exiting the Limo, Senator Obama was standing next to Paramjit Multani and I was
416 Barack H. Obama: The Unauthorized Biography
introduced to Senator Obama. Later that evening at a bar which I believe was called Alibis, I
mention I could use a line or two to wake up. Senator Obama asked me if I was referring to “coke”
and after stating I was, Obama stated he could purchase cocaine for me and then made a telephone
call – and this too is significant — from his cellphone to a presently unknown individual during
which Senator Obama arranged the cocaine purchase.
Senator Obama and I then departed the bar in my limousine and proceeded to an unknown
location where Senator Obama exited the limousine with two hundred fifty dollars ($250) I had
given him and returned a short while later with an “eightball” of cocaine which he gave to me. I did
ingest a couple of lines of cocaine, and shortly thereafter Senator Obama produced a glass cylinder
pipe and packet of crack cocaine from his pants pocket and Obama smoked the crack cocaine. I
performed fellatio on Senator Obama in the limousine during the time Senator Obama was smoking
crack cocaine, after which I had the driver take me to the my hotel, The Comfort Suits, Gurnee,
Illinois.
The following day, November 7, 1999, Senator Obama appeared at my hotel room where we
again ingested cocaine and I again performed fellatio on Senator Obama. Significantly, both the
driver’s telephone call to Senator Obama and his call to the drug dealer should appear on the
driver’s and Senator Obama’s cellphone billing statements. Fall 2007
In September 2007 I contacted the Presidential Campaign of Barack H. Obama, to request solely
that Senator Obama publicly correct his stated drug use record to reflect his use of crack cocaine
with me in November 1999. When I made that first contact I left with the Presidential Campaign of
Senator Barack H. Obama a telephone number for the campaign to return my call. The first number
I provided was a Texas cell phone number. From the period of Labor day weekend 2007 through
November 18, 2007 I did rovide a total of four (4) different call back numbers to the Obama
campaign, as I had moved and had changed the numbers to reflect locally my place of residence at
the time. In late September to early October 2007, I received a call from a male who identified
himself as a “Mr. Young” stating he was calling in regards to calls I had made to the Obama
campaign. This first call was in fact an attempt by “Mr. Young” to obtained from me the identities
of anyone I had contacted concerning my 1999 allegations against Senator Obama. This first called
shocked me in that this “Mr. Young” asked me why I had not asked Senator Obama to disclose the
sexual encounters I had with Mr. Obama in 1999. I was shocked as I had never mentioned to the
campaign or anyone working for the campaign any sexual encounters as my call was prompted by
drug allegations only. The call ended with “Mr. Young” stating I would hear from someone in a few
days.
In mid to late October 2007, I received a second call from this “Mr. Young” at which time I
clearly became aware that this individual was personally involved with Senator Obama rather than
just an employee of his campaign. The tone of the conversation had a sexual nature. “Mr. Young”
did not once advise me how he obtained my phone number which by this time had now changed to
a Delaware number.
In late October 2007, I received a text message from the gentleman identified as “Mr. Young” in
which he stated he was intimately involved with Senator Obama and that Obama was discussing
with him and his pastor how to publicly acknowledge Senator Obama’s drug use in 1999 and that
Obama wanted to be sure I had not discussed the sexual encounters or drug incidents with any
media at that time.
Appendices 417
In mid to late November 2007, in another text message from “Mr. Young” , he advised me that
Senator Obama will publicly correct his statement as to he last time he used drugs and I did not
need to concern myself with publicly disclosing it myself. The last contact I had with “Mr. Young”
was in early December 2007 when he made it clear to me that Senator Obama had no intentions of
publicly acknowledging his 1999 use of crack cocaine and that “Mr. Young” was in fact doing
nothing more than milking information from me for Senator Obama’s use.
I later learned that a Donald Young was the choir director of Reverend Wright’s Trinity United
Church of Christ – Obama’s now-former church — and was openly a homosexual. I also learned
that he was murdered on December 23, 2007. I have cooperated with the Chicago Police
Department in this matter by providing them the telephone numbers I was using during the fall of
2007 and I release them now publically in the hope that someone may be able to connect the dots
between these telephone numbers and Mr. Young. Those numbers are: 954-758-1105, 956-758-
1885, 956-758-8002, 02-685-7175; 612-466-1043.
In what I now realize was a naive and un-counseled decision, I posted in January 2008 a video
on YouTube.com where I related the above information regarding my liaisons with Senator Obama
in 1999. The response was overwhelming and I quickly became the recipient of what in hindsight
appears to have been a coordinated attack on my character with ever increasing falsehoods
circulating on the internet.
In response I agreed to take a polygraph test from Whitehouse.com. The results of that test have
been partially revealed to the end of labeling me a liar and taken as gospel by all. I would like to
make the following comments about that polygraph test. First, I have been subsequently advised
that Whitehouse.com was a website dedicated to anti-Clinton pornography until earlier this year.
Second, I have now come to understand that lie detectors are junk science at best which is why
courts of law refuse to use them. Third, a review of the results by George W. Maschke, Ph.D. of
AntiPolygraph.org raises serious questions about the legitimacy of the examination. Indeed,
overlooked by almost everyone is that hitehouse.com’s own examiner, Dr. Gordon Barland,
observed that on the drug question regarding Senator Obama that the computerized score found that
there was less than a 1% probability of deception by me. That’s about as high a passing score as one
can possibly attain.
Finally, in February 2008 I was told anonymously that Dan Parisi of Whitehouse.com received
$750,000 from the Obama campaign through AKR Media to organize an effort to publically
discredit me. When I confronted Dan Parisi with this allegation, he did not deny it but instead
withdrew the second exonerating polygraph report of Dr. Gordon Barland, failed to post the video
of my polygraph as he and Whitehouse.com promised they would do, and even removed posts from
their web site altogether, claiming that they had “had enough of the attacks by Sinclair’s supporters
and Sinclair himself.”
The polygraph results - as misrepresented – were immediately seized upon by the blogger
community and I became the subject of vicious lies about me. I was forced to file a lawsuit in an
attempt to stop those lies about me that have been circulating. That lawsuit sought to obtain the
proof of what I was saying about my contact with Senator Obama through subpoenas for the
identities of the anonymous bloggers so they could be linked to the Obama campaign and relevant
records of the cellphone companies to prove the truth of my allegations. To date, though the lawsuit
418 Barack H. Obama: The Unauthorized Biography
is now over ninety days old, Judge Kennedy has refused to permit the suit to move forward so this
evidence may be obtained. Conclusion
In sum, you can discredit my story and then make your decision on who should be the next
President of the United States. The burden is now off me as I have told my story without the
distortions that have been intentionally heaped on me in what my lawyer tells me is an ad hominem
attack – shoot the messenger so you don’t have to hear the message he is bringing. I am now done.
It is for others to find the corroborating evidence of my story by locating the limousine driver –
Jagir P. Multani – and the telephone numbers related to Donald Young and/or Senator Obama. I
leave you with these questions that I have asked of Senator Obama but which he – who wants to be
the next President of the United States – has refused to answer:
1. Why won’t Senator Obama provide his cellphone numbers and telephone records for all his
personal and official cell phones held by him for the time period of November 3, 1999 thru
November 8, 1999, when we met?
2. Why won’t Senator Obama provide his cellphone numbers and telephone records for all his
personal and official cell phones held by Senator Obama or September 2007 – December 23, 2008,
the murder of Donald Young?
3. Why won’t Senator Obama provide all email communication both personal and campaign
related to and/or from AKP Message & Media from January 18, 2008 through February 29, 2008
for Senator Obama, David Axelrod and David Plouffe?
4. Why won’t Senator Obama provide proof of all payments made from AKP Message & Media,
Obama for America, David Axelrod, David Plouffe, and Senator Obama’s accounts for the period
of January 18, 2008 through February 29, 2008?
On my website – larrysinclair.org – you will find the documents that I have referred to in this
statement. A copy of the home page for that website is attached. Thank you for your time and
attention this afternoon and I will now take any questions.
- E n d -
APPENDIX II. PRESS RELEASE OF PHILIP J. BERG,
PHILADELPHIA, AUGUST 21, 2008
Philip J. Berg, Esq. Files Federal Lawsuit Requesting Obama Be Removed as a Candidate as he
does not meet the Qualifications for President
Suit filed 08/21/08, No. 08-cv-4083
(Lafayette Hill, Pennsylvania – 08/21/08) - Philip J. Berg, Esquire, [Berg is a former Deputy
Attorney General of Pennsylvania; former candidate for Governor and U.S. Senate in Democratic
Primaries; former Chair of the Democratic Party in Montgomery County; former member of
Democratic State Committee; an attorney with offices in Montgomery County, PA and an active
practice in Philadelphia, PA], filed a lawsuit in Federal Court today, Berg vs. Obama, Civil Action
Appendices 419
No. 08-cv-4083, seeking a Declaratory Judgment and an Injunction that Obama does not meet the
qualifications to be President of the United States. Berg filed this suit for the best interests of the
Democratic Party and the citizens of the United States. “Eighteen million Democratic Primary
voters donated money, volunteered their time and energy, worked very hard and then not only
supported Senator Clinton, but voted for her and often recruited other supporters as well. All the
efforts of supporters of legitimate citizens were for nothing because this man lied and cheated his
way into a fraudulent candidacy and cheated legitimately eligible natural born citizens from
competing in a fair process and the supporters of their citizen choice for the nomination.
Philip J. Berg, Esquire stated in his lawsuit that Senator Obama:
1. Is not a natural-born citizen; and/or
2. Lost his citizenship when he was adopted in Indonesia; and/or
3. Has dual loyalties because of his citizenship with Kenya and Indonesia.
Berg stated: “I filed this action at this time to avoid the obvious problems that will occur when
the Republican Party raises these issues after Obama is nominated.
There have been numerous questions raised about Obama’s background with no satisfactory
answers. The questions that I have addressed include, but are not limited to:
1. Where was Obama born? Hawaii; an island off of Hawaii; Kenya; Canada; or ?
2. Was he a citizen of Kenya, Indonesia and/or Canada?
3. What was the early childhood of Obama in Hawaii; in Kenya; in Indonesia when he was
adopted; and later, back to Hawaii?
4. An explanation as to the various names utilized by Obama that include: Barack Hussein
Obama; Barry Soetoro; Barry Obama; Barack Dunham; and Barry Dunham.
5. Illinois Bar Application – Obama fails to acknowledge use of names other than Barack
Hussein Obama, a blatant lie.
420 Barack H. Obama: The Unauthorized Biography
If Obama can prove U.S. citizenship, we still have the issue of muti-citizenship with
responsibilities owed to and allegance to other countries.
Berg continued:
Voters donated money, goods and services to elect a nominee and were defrauded by Senator
Obama's lies and obfuscations. He clearly shows a conscience of guilt by his actions in using the
forged birth certificate and the lies he's told to cover his loss of citizenship. We believe he does
know, supported this belief by his actions in hiding his secret, in that he failed to regain his
citizenship and used documents to further his position as a natural born citizen. We would also
show he proclaims himself a Constitutional scholar and lecturer, but did not learn he had no
eligibility to become President except by means of lying, obfuscations and deceptions. His very acts
proves he knew he was no longer a natural born citizen. We believe he knew he was defrauding the
country or else why use the forged birth certificate of his half sister?
Americans lost money, goods and services donated in their support of a candidate who
supposedly was a natural born citizen simply because the DNC officers and party leaders looked the
other way and did not demand credentials to answer the questions and prove whether or not Senator
Obama was a legitimately natural born citizen, even in light of recent information that has surfaced
on websites on the Internet suggesting Senator Obama may not be eligible to become President and
questioning his status of multiple citizenships and questionable loyalties! If the DNC officers and.or
leaders had performed one ounce of due diligence we would not find ourselves in this emergency
predicament, one week away from making a person the nominee who has lost their citizenship as a
child and failed to even perform the basic steps of regaining citizenship through an oath of
allegiance at age eighteen [18] as prescribed by Constitutional laws!
The injunctive relief must be granted because failing to do so, this inaction defrauds everyone
who voted in the Democratic Primary for a nominee that is a fair representation of the voters.
Failure to grant injunctive relief would allow a corrupted, fraudulent nomination process to
continue. It not only allows, but promotes an overwhelming degree of disrespect and creates such a
lack of confidence in voters of the primary process itself, so that it would cement a prevailing belief
that no potential candidate has to obey the laws of this country, respect our election process, follow
the Constitution, or even suffer any consequence for lying and defrauding voters to get onto the
ballot when they have no chance of serving if they fraudulently manage to get elected! It is unfair to
Appendices 421
the country for candidates of either party to become the nominee when there is any question of their
ability to serve if elected.
All judges are lawyers and held to a higher standard of practice than a regular lawyer. It is this
Judicial standard that demands injunctive relief prayed for here. This relief is predicated upon one
of the most basic premises of practicing law which states no lawyer can allow themselves to be used
in furthering a criminal enterprise. And by that gauge alone, failing to give injunctive relief to the
18 million supporters of the other candidate, a true natural born citizen eligible to serve if elected,
this court must not allow itself to be used to further the criminal and fraudulent acts to continue and
be rewarded by becoming the Democratic Nominee. Failure to give the injunctive relief prayed for
will insure that a corrupted Presidential election process will only guarantee a show of unfair
preference of one group of people over another group by not demanding the same rules be applied
to all groups equally and fairly, especially in light of the fact that both candidates are each
considered a minority.
Philip J. Berg, Esquire
555 Andorra Glen Court, Suite 12
Lafayette Hill, PA 19444-2531
APPENDIX III: ON THE ASSASSINATION OF BILL GWATNEY,
ARKANSAS STATE DEMOCRATIC CHAIRMAN
IS THE DEATH OF THE ARKANSAS DEMOCRATIC PARTY CHAIRMAN
PART OF AN OBAMA BODY COUNT?
By Webster G. Tarpley
Washington DC, Aug. 13 -- This afternoon, Arkansas Democratic Party Chairman Bill Gwatney
fell victim to what was evidently a political assassination. Gwatney was a major ally of Hillary and
Bill Clinton, and was a leader of the strongly pro-Clinton Arkansas delegation to the upcoming
Denver Democratic National Convention. Some had expected Gwatney to lead anti-Obama floor
operations at the upcoming Denver convention.
Gwatney's Arkansas delegation was known to be a hotbed of anti-Obama sentiment, and was
reportedly ready to walk out of the Denver convention if Senator Clinton were not to be treated
fairly by the pro-Obama Howard Dean-Donna Brazile DNC leadership.
Observers in Washington are now asking whether the assassination of Gwatney can be read as
attempted intimidation of the anti-Obama forces which are now gaining strength before the Denver
convention.
422 Barack H. Obama: The Unauthorized Biography
Is the death of Bill Gwatney part of an Obama body count, which already includes the names of
Donald Young (the murdered gay choirmaster of Rev. Wright's church) and possibly others?
[These suspicions solidified a few days later, when Congresswoman Stephanie Tubbs Jones of
Ohio, one of Senator Clinton’s most prominent black supporters, collapsed and died while driving
her car. Her death was ruled the result of an aneurism. But this did nothing to quell suspicions that
arose when two of the most important floor leaders of the Clinton forces died just days before the
Denver convention, where the Obama clique was known to fear rebellion, protests, and walkouts by
disenfranchised and bullied Clinton delegates.]
APPENDIX IV: MOTORMOUTH JOE BIDEN: WARMONGER, WORDMONGER,
AND POLITICAL HIT MAN
By Webster G. Tarpley
Washington DC, August 28, 2008 – The vice presidential candidate chosen to run with Obama is
Senator Joe Biden of Delaware, a discredited, sleazy, and shopworn political hack -- and therefore
an anti-climax for all the callow and feckless youth who got the word via text message at 3am in the
morning. The ability of the Trilateral-Bilderberg machine which controls Obama to put up a person
like Biden already reflects the further degradation of US political life over the past 9-12 months,
largely as a result of Obama’s own demagogic, no-issues, personality cult agitation.
A year ago, there was wide agreement in the US middle class that Bush and Cheney should be
impeached, that the police state be rolled back, and that the Iraq war should be ended as soon as
physically possible. Thanks largely to the advent of the vapid and messianic Obama, these issues
have now been thoroughly deflated. Biden is himself an incurable warmonger who voted for the
Iraq war and blathered ceaselessly in favor of Bush’s aggressive adventure to all who would listen.
Naming Biden is a brutal insult to the antiwar majority of the Democratic Party, and Obama is
obviously hoping that the Iraq war issue is dead, so nobody will care. Last year, Obama promised
that he would work against the mentality that produced Iraq; if anyone incarnates that mentality, it
is Biden. Biden is an incurable imperialist and an eager advocate of the discredited Bush-Cheney
“war on terror.” He even tried to use one of the Democratic debates last year to whip up hysteria in
favor of attacking Sudan over the Darfur issue, and with some success. “I went there. I sat in the
borders. I went in those camps. They're going to have thousands and thousands and thousands of
people die. We've got to stop talking and act,” Biden postured in Manchester New Hampshire on
June 3, 2007 in an apparent call for bombing Sudan, a coup in Khartoum, or an invasion. Incredibly,
the crowd applauded wildly.
Biden remains convinced that it is up to the United States to dictate the form of government and
economic system of virtually every country in the world. His specialty is blatant interference in the
internal affairs of sovereign states, with left-cover of soft power issues like human rights and
humanitarian concerns furnishing his favorite pretexts. Biden has learned nothing from the Iraq
debacle except that Iraq was not the right victim; more appropriate victims and more effective
methods will have to be found, argues Biden. The real lesson of Iraq (and Lebanon 2006) is that
US-British imperialism and world domination are finished historically, but this is lost on Biden.
Biden is the author of the odious plan to balkanize, partition, and subdivide Iraq into three zones:
a Kurdish state designed to carve up Iran, Syria and Turkey as well as Iraq; a landlocked and oilpoor
Sunni desert entity; and an oil-rich Shiastan in the south that might absorb the Arabistan or
Achwaz province of Iran is a later breakup scenario for Iran. Biden’s plan is a continuation of the
Appendices 423
Bernard Lewis plan to break up the existing states of the Middle East in a way destined to create a
mosaic of pseudo-independent, squabbling mini-states or micro-states. This approach places Biden
squarely behind the Zbigniew Brzezinski “dignity” doctrine of breaking up the existing nation states
of the world in favor of a crazy quilt of micro-states based on ethnic and religious parochialism and
particularism; not one of these micro-states could stand up to Exxon-Mobil or JP Morgan Chase.
BIDEN IS MORALLY INSANE ON GEORGIA
Biden’s ample track record as an agent provocateur against Russia goes back more than a decade
to the time he mobilized his mouth to help demonize Milosevic of Serbia as part of the Albright-
Holbrooke-Wesley Clark anti-Russian campaign of those years, which ended with the NATO
bombing of Serbia, an act of unprecedented historical vandalism. In the past week, warmonger
Biden has rushed to the side of the latest tin pot mini-Mussolini of the Brzezinski-Soros faction, the
infamous war criminal and gangster Mikhail Saakashvili of Georgia. “I left the country convinced
that Russia's invasion of Georgia may be the one of the most significant events to occur in Europe
since the end of communism,” raved Biden on his return, documenting his own moral insanity by
siding with the aggressor. “The claims of Georgian atrocities that provided the pretext for Russia's
invasion are rapidly being disproved by international observers, and the continuing presence of
Russian forces in the country has severe implications for the broader region,” added the Orwellian
senator.
BIDEN: $1 BILLION FOR MADMAN SAAKASHVILI
In presenting Biden, Barky reveled in Biden’s “tough message” for Russia; we are sure Putin is
trembling. Biden wants to prop up the madman Saakashvili with $1 billion of the US taxpayers’
money, a gesture which is every bit as obscene as the worst Bush-Cheney excesses. $1 billion
would get us on the road to fully funding a program like WIC (high-protein foods for expectant
mothers) or Head Start, but this thought does not occur to Biden when he is trying to provoke
Russia. We can see the cruel elitism of a financier-controlled Obama regime taking place before our
eyes.
Obama and Biden resemble each other closely, Both are insufferable windbags besotted with
their own rhetorical verbiage. Biden’s celebrated gaffes will provide comic relief, as long as they do
not gaffe us into World War III, which is always a distinct possibility. Obama and Biden are
addicted to the sound of their own voices, and this may turn out to be the fatal flaw that sinks them
when the voters get sick of the endless parade of speeches. Obama and Biden are in danger of
drowning in their own endless blabber. Each one has more than a touch of megalomania, which
prevents them from seeing their limits. Biden’s middle name is Robinette, which is close to the term
for a faucet tap in French. Biden has never been able to find the tap to turn off his own mouth.
BARKY AND BIDEN: BOTH ON THE TAKE FROM THE REZKO-CARI GANG
By now the whole world knows the story of Tony Rezko, the Chicago racketeer and gangster
who has been Barky’s political godfather for almost twenty years. Rezko, now a convicted felon
awaiting sentencing in October, is an integral part of the bipartisan criminal enterprise known as the
Illinois Combine, one of the filthiest cesspools of graft and corruption in the United States. It
transpires that Joe Biden has a political godfather of his own who closely linked to Rezko, and who
has also become a convicted felon by pleading guilty in the Operation Board Games investigation
by the Chicago US Attorney’s office. This is Joseph Cari Jr., described by the Washington Times of
424 Barack H. Obama: The Unauthorized Biography
August 28, 2008 as a “former national finance chairman for the Democratic National Committee
and a longtime supporter and political adviser to Mr. Biden.” Cari had extorted an $850,000
kickback from JER Inc., a Virginia investment firm that wanted to manage $850 million of
retirement funds belonging to Illinois teachers. This shakedown took place under a pension fund
setup which State Senator Obama had helped to put into place when he was in Springfield under the
cover of giving minority firms more representation. Cari has given some $200,000 to Democratic
candidates over the years, including $4,000 directly to Biden, with whom hen is closely linked. So
the basis of this year’s Democratic ticket is the colossal graft of the Illinois Combiner and its looting
operations known under the heading of Operation Board Games. Is Biden, like Barky, subject to
indictment at any time, and thus guaranteed to follow the orders of the banking establishment? The
safe bet was that he is indeed.
TWO PLAGIARISTS ON THE DEMOCRATIC TICKET
Obama and Biden are both plagiarists; words are their stock in trade, and even the words are
fake. It emerged this spring that Obama was spouting verbatim the canned speeches of Governor
Deval Patrick of Massachusetts, his fellow clone from the Trilateral stable. Biden is a picaresque
paladin of plagiarism. His 1988 presidential campaign was aborted when he was found to have
stolen paragraphs of a speech by the Labour Party leader, Neil Kinnock. He had also embroidered
his campaign biography. Biden had also been guilty of plagiarism at the Syracuse University law
school which he attended, but he had somehow talked his way out of those charges.
BIDEN A CREATURE OF THE WORST CREDIT CARD GOUGERS
Biden represents Delaware in the US Senate. Delaware is not a state, but a giant post box for
Dupont, General Motors, and many of the giant corporations and Wall Street firms. The state
politics of Delaware are dictated down to the most minute detail by the bankers and their corporate
lackeys, since everything depends on keeping a pro-oligarchical political climate in the state. Biden
personally is a tool of MBNA, a credit card issuer that was recently absorbed by the Bank of
America, which presumably now also owns Biden. Biden got at least $215,000 from MBNA over
the past decade. MBNA is notoriously one of the biggest predatory lenders and interest rate gougers
in the entire usurious world of credit cards, and Biden’s services to them are precisely in this area:
Biden was a big supporter of the 2005 bankruptcy law which makes it much harder for working
families to escape debt bondage and debt slavery – just what the looters at MBNA ordered. Biden
has also boasted that he wrote the ban on assault weapons, a measure that is sure to cause problems
among the bitter clingers of Appalachia who are concerned about gun ownership.
Obama has voted for the rotten compromise on FISA illegal wiretaps ordered by Bush that
grants retroactive immunity to the telecoms. Biden is also an enthusiastic police state totalitarian. In
1995, after the Oklahoma City false flag bombing, Biden submitted an oppressive police state bill,
in many ways a precursor of Bush’s infamous Patriot Act. “I drafted a terrorism bill after the
Oklahoma City bombing,” boasts Biden. “And the bill John Ashcroft sent up was my bill.” Biden’s
only regret is that he was not able to undermine political freedom as much as he wanted to.
Obama’s drooling acolytes have argued all summer that to name Senator Clinton to the ticket
would negate Barky’s profile of youth, change, hope, and so forth. Clinton has been a national
figure for almost twenty years, but she has been dumped in favor of Biden, who has been in the US
Senate for about 36 years and is about as stale and hackneyed as a political figure could be. The
difference is that Biden’s track recor5d established him as an obedient servant of the Wall Street
Appendices 425
banks that have their post box headquarters in his state; the Clintons, by contrast, represent the
closest thing we have to political combination not wholly owned by Wall Street and capable of
saying no to the bankers when they demand austerity and aggression, as they are assuredly doing
now. Rockefeller and Soros do not want Sen. Clinton in the presidential succession under any
circumstances, and this is an important positive qualification for the New York senator.
BEAU BIDEN, THE CORRUPT ATTORNEY GENERAL OF DELAWARE
Joe Biden’s son is Beau Biden, the current attorney general of Delaware. Beau is involved in one
of the dirtiest enemies’ list operations in recent memory against Larry Sinclair, who has come
forward with explosive charges of gay sex and crack cocaine use in 1999 on the part of Obama.
When Sinclair came to the National Press Club in Washington on June 18 to make his case, he was
arrested on a trumped-up warrant issued by Beau Biden. Sinclair is being threatened with a long jail
term, essentially because he has spoken out against Obama. It was a clear bid to do a favor for
Barky and get Joe Biden on the ticket in the veep slot. That has now occurred – on the basis of a
police state operation against an outspoken political opponent which goes beyond Nixon or Bush-
Cheney, since Obama is not yet president and may well never be.
The Biden announcement was thoroughly botched and bungled by Axelrod, Plouffe, and
Favreau. The text message gimmick is drawn straight from the Kiev Orange revolution of 2004 and
the Tiflis Roses revolution of 2003, the models for Obama’s attempt to seize power. The
proceedings were a carnival of gaffes and Freudian slips, all ignored by Obama’s loyal brigade of
media whores. According to Barky, Joe Biden would help enact “a new energy policy to freeze
ourselves from our dependence on foreign oil” – a chilling prospect.
“BARACK AMERICA” AND OTHER FREUDIAN SLIPS
Barky made another revealing Freudian slip: “the next President… the next Vice President – Joe
Biden.” Does Barky know that Biden will act as his resident in-house controller? Biden, evidently
mindful that he will have to sell the radical subversive Obama as a wholesome product of the
heartland, returned the gaffe by calling the presumptive nominee “Barack America” or “Barack
American.” Perhaps he was trying to imitate the old Subliminal Man of Saturday Night Live, but
was too slow.
Behind Barky’s Freudian slip is the fact that Biden will evidently run foreign policy for the
clueless Obama in much the same way that Brzezinski ran foreign policy above and behind Carter,
or that Cheney has run foreign policy above and behind Bush. Obama is so ignorant and cognitively
impaired that he could hardly understand the instructions that bankers’ spokesmen like Brzezinski
and Soros will be shouting to him on the phone. This is where an experienced hack like Biden is
needed. The media, in a transparent attempt to portray an apostolic succession for Biden, are still
feeding the illusion that Biden was chosen by Caroline Kennedy. In reality, the choice was probably
made by Trilateral-Bilderberg operative Jim Johnson, who was forced to retreat from his announced
role as The Vetter by revelations about a sweetheart mortgage, but probably just kept going behind
the scenes.
The Obama campaign has repeated ad nauseam its mantra that McCain is running for Bush’s
third term. McCain has answered that Obama is running for Jimmy Carter’s second term. The reality
may be that Joe Biden is running for Dick Cheney’s third term as the resident controller of a lazy
and shallow puppet president – Obama, the Manchurian candidate of the Trilateral Commission.
NOTES
1 See http://www.duboisweb.org/greatbarrington.html
2 Berg is a former deputy Attorney General of Pennsylvania, former candidate for Pennsylvania governor and
US senator in the Democragtic primaries, former Democratic county chairman for Montgomery County, PA,
and former Democratic State Commiteeman for Pennsylvania. A summary of Berg’s highly persuasive
arguments are included in the appendix to this book.
3 Ruth Ndesandjo, originally Ruth Nidesand, was born in U.S. in the late 1940s, and became the third known
wife of Barack Obama Senior. Ruth works today as a private Kindergarten director in Kenya. Ruth's two sons
by Barack Obama Senior are Mark and David; she has another son named Joseph Ndesandjo (born around
1980) from a subsequent marriage to a Tanzanian. David died young. Mark Ndesandjo has resided since 2002
in Shenzhen, China, where he runs an Internet company called WorldNexus.
4 Jerome Corsi points out (Obama Nation, p. 218) that Stanley Armour Dunham’s mother, Ruth Armour
Dunham, committed suicide in 1926 when she was 26 years of age after having been abandoned by her
husband. It was Stanley who discovered the body of his own mother. Corsi notes that David Axelrod’s father
also took his own life, and suggests that Obama Senior drank and drove himself to death.
5 Michelle Obama blurted out on July 10, 2008 in regard to Obama’s mother Ann that she had been “very
young and very single when she had him.” http://www.huffingtonpost.com/2008/07/10/michelle-obama-talksabou_
n_111975.html
6 Even Obama’s birth is shrouded in mystery. The alleged birth certificate exhibited by Obama on his
campaign web site lacks the raised seal which is indispensable to demonstrate authenticity. This leaves open
such issues as: was Obama born in the US? Is he in fact a stateless person? The blogger Texas Darlin
propounds the following questions for Obama: ‘Where did Ann Dunham live while she was pregnant with
Barack, especially the 6 months from Feb. to Aug. 1961? Reportedly her parents were embarrassed and upset
about her pregnancy. Obama Sr. was reportedly living in a dorm at the time. Where did Ann deliver Barack?
His “birth certificate” doesn’t say, and I guess he’s lost the original? (Although, it’s very interesting to note
that Obama provides details of his birth weight in Dreams from My Father — where did that info come
from?) Wikipedia and other sources say that Barack was born at Kapiolani Medical Center in Honolulu, but
are there any records of this? Why does Barack’s “certification of birth” say “Date Filed” at the bottom, when
the other Honolulu birth certificate on the same form that we found says “Date Accepted”? Is it possible that
Barack was born someplace outside Honolulu, perhaps someplace outside the country (maybe someplace
closer than Kenya), and that Ann applied for a “late arrival” birth certificate after-the-fact, which the State of
Hawaii apparently allows under certain circumstances? Is it possible that leftist/Marxist foreign friends of
Ann’s at the Univ. of Hawaii referred her to a location outside the US to complete her pregnancy and deliver
her baby? Did Ann drop out of the University when she was pregnant? If so, for how long? Does the fact that
Ann was a minor when Barack was conceived relate to these events? What was the legal age for getting
married in Hawaii in 1961? Who was with Ann at the time she delivered Barack? Parents, Obama Sr., or
both? Why did Ann travel to Mercer Island with her newborn, and did Obama Sr. or her mother accompany
her? Why hasn’t the Obama campaign made Ann’s mother (and Barack’s grandmother), Madelyn Dunham
(now 84), available? Don’t presidential candidates at least minimally introduce immediate relatives to the
general public? It seems that Obama is treating his grandmother like a big mystery. Why did Barack Obama
make a big to-do about, and act as CO-SPONSOR for, legislation in early 08 that was introduced by his
supporter Claire McCaskill resolving questions about McCain’s eligibility to be President? Is it true that
Obama favored a law that would allow any citizen born outside the US to be eligible for POTUS? Why did
McCaskill, rather than a Republican, introduce this legislation?’ (Texas Darlin,
http://noquarterusa.net/blog/2008/06/23/obama-birth-mystery-cont/#more-3196) Texas Darlin later published
an essay by “Judah Benjamin” which argued that ‘Barack Obama was adopted by Lolo Soetoro, his
Indonesian step-father, and “Barry Soetoro” acquired Indonesian citizenship as a result of that adoption AND
Notes 427
that he (Soetoro/Obama) may STILL hold Indonesian citizenship today.
(http://noquarterusa.net/blog/2008/07/30/the-paper-trail-obamas-indonesian-background/#more-3881)
7 See also Reverend James David Manning, “The Trinity of Hell,” May 10, 2008,
https://www.youtube.com/watch?v=ejTmistHFw0.
8 http://theobamafile.com/ObamaReligion.htm
9 http://theobamafile.com/ObamaReligion.htm
10 http://laotze.blogspot.com/2007/01/tracking-down-obama-in-indonesia-part-3.html
11 http://larrysinclair0926.wordpress.com/2008/04/25/chicago-pd-meet-to-be-scheduled-more-high-pricelawyers-
diggcom-served/#comments
12 Fanon citations are from The Wretched of the Earth, chapter VI, conclusion, transl. Dominic Tweedie.
13 Reasononline, September 5, 2008, http://www.reason.com/news/show/128461.html.
14 http://www.nytimes.com/2008/07/07/us/politics/07community.html?pagewanted=1&_r=1&hp
15 John Judis has noted that by the time Obama was ready to quit his foundation-funded community organizer
job to advance to the higher levels of counter-insurgency, he had become well aware of the futility,
hopelessness, and despair which are the typical product of the hyper-parochial, anti-political, and antiauthoritarian
or anti-leadership Alinskyite model of divide and conquer politics. At a conference of
Alinskyite operatives held at Harvard in October 1987, Obama told fellow operative Jerry Kellman that he
was bailing out in favor of a law degree, a career, a family, and financial stability. Obama appears to have
used the race issue to cover his retreat: he spoke of the fact that some Alinksyite micro-projects had turned to
anti-black racism. One of these was the Save Our Neighborhoods/Save Our Cities (SON/SOC, created in
early 1984) counterinsurgency project, which accused real estate brokers of block-busting previously white
blue-collar ethnic neighborhoods to promote an influx of super-exploited blacks. Obama pretended to be
shocked by the racist outbursts that came out of the SON/SOC, and obviously found this a welcome pretext
for departing for the Harvard boutique. In reality, racism of some kind is very frequently a product of the
Alinsky particularist-parochialist micro-organizing method. As Judis points out, one of Alinsky’s original
projects, the Back of the Yards Neighborhood Council, had supported the racist populist George Wallace
during the 1960s. This kind of fragmentation along racial and localist lines is exactly what the financiers who
fund these projects desire and are willing to pay for. The SON/SOC case is merely the reductio ad absurdum
of bankruptcy and counter-productive nature of the entire Alinsky method. According to Judis, Obama
summed up his views in an article published in the now defunct magazine Illinois Issues; the article would
eventually appear in an the anthology edited by Peg Knoepfle and entitled After Alinsky: Community
Organizing in Illinois (Springfield, IL: Sangamon State University, 1990), online at
http://www.edwoj.com/Alinsky/AlinskyObamaChapter1990.htm and
http://civic.uis.edu/Alinsky/AlinskyHomePage.htm. Judis, perhaps because he is now himself funded by the
Carnegie Endowment, cannot see that the goal of the whole Alinsky exercise is to keep subject populations
impotent in the face of the institutions controlled by international finance capital. The alternative to the dead
end of Alinsky methods is a broad national coalition or united front of the main components of working
people and their allies, such as the FDR coalition or the convergence of the student movement, the peace
movement, the black movement, and the labor movement that Martin Luther King was trying to promote at
the time of his assassination. Judis does point out the MLK was strongly opposed by Alinsky, showing the
latter’s conscious role as a wrecker and saboteur. See John Judis, “The Creation Myth: What Barack Obama
Won’t Tell You About his Community Organizing Past,” New Republic, September 10, 2008.
16 http://spot.acorn.net/jfkplace/09/fp.back_issues/16th_Issue/vs2.html
17 http://www.aliciapatterson.org/APF1303/Jacoby/Jacoby.html
18 http://falsani.blogspot.com/2008/04/barack-Obama-2004-god-factor-interview.html.
19 The line is supposedly borrowed from Malcolm X after the Kennedy assassination; Kennedy was
assassinated by the CIA operations directorate, as Joan Mellen has shown in her Farewell to Justice. Malcolm
X’s remark was therefore a piece of arrant stupidity and gullibility.
428 Barack H. Obama: The Unauthorized Biography
20 See Webster Griffin Tarpley, 9/11 Synthetic Terror: Made in USA (Joshua Tree CA: Progressive press,
2005ff.).
21 Hyde Park Herald, September 19, 2008, cited by Ryan Lizza, “Making It,” New Yorker, July 21, 2008,
emphasis added.
22 Incredibly enough, historian Herbert Parmet wrote of Richard Nixon that “It would do a great injustice to
deny [Nixon’s] intellectual and spiritual commitment to racial equality.” As Michael Lind comments, “In fact,
Nixon’s purpose in reviving and implementing the Philadelphia Plan was to split the Democratic coalition by
pitting white labor against the black civil rights movement.” See Lind, Up From Conservatism (New York:
The Free Press, 1996), p. 192.
23 See my Obama: The Postmodern Coup (2008).
24 According to a recent Washington Post account, ‘A few years ago, executives at the prestigious University
of Chicago Medical Center were concerned that an increasing number of patients were arriving at their
emergency room with what the executives considered to be non-urgent complaints. The visits were costly to
the hospital, and many of the patients, coming from the surrounding South Side neighborhood, were poor and
uninsured. Michelle Obama, an executive at the medical center, launched an innovative program to steer the
patients to existing neighborhood clinics to deal with their health needs. That effort, in time, inspired a
broader program the hospital now calls its Urban Health Initiative. To ensure community support, Michelle
Obama and others in late 2006 recommended that the hospital hire the firm of David Axelrod, who a few
months later became the chief strategist for Barack Obama’s presidential campaign. … Axelrod’s firm warned
hospital executives in its May 2007 presentation that, although many people welcomed the initiative, primarycare
doctors opposed it as a break with the center’s commitment to the community. Opinion research showed
that a small but passionate group of people already considered the hospital to be elitist, arrogant and lacking
in “cultural empathy” for the surrounding economically depressed South Side neighborhood, according to a
draft report obtained by The Washington Post. Some doctors in focus groups dismissed local health clinics as
“wholly inadequate.” Quentin Young, a local physician whose five-doctor medical office lists Barack Obama
among its patients, said that in past decades the South Side often viewed the institution as a “citadel of
exclusion,” more interested in research than the well-being of its neighbors. …The hospital told state
regulators it spent $10 million on charity care for the poor in fiscal 2007 -- 1.3 percent of its total hospital
expenses, according to an analysis performed for The Washington Post by the bipartisan, nonprofit Center for
Tax and Budget Accountability. That is below the 2.1 percent average for nonprofit hospitals in Cook County.
As a nonprofit, the University of Chicago Medical Center receives annual tax breaks worth nearly five times
as much as it spends on charity care, the analysis found. Still, Quentin Young, the South Side physician,
described the medical center’s level of charity spending as “ludicrous.” Young, known in Chicago for having
been the Rev. Martin Luther King Jr.’s personal physician, is chairman of the Health and Medicine Policy
Research Group, a Chicago-based nonprofit that advocates health-care reform. Young considered himself an
ally of Barack Obama while he was a state legislator. “That’s shameful,” Young said of the percentages.
“They are arguably, if not defrauding, then at least taking advantage of a public subsidy. We would like to see
them give more than the minimum. The need is there.” [A] hospital report quotes Michelle Obama as saying,
“The world is seeping in, and our salvation will be the success of our partners” at local clinics…. Edward
Novak, president of Chicago’s Sacred Heart Hospital, declined to discuss the center’s initiative in particular
but dismissed as “bull” attempts to justify such programs as good for patients. “What they’re really saying is,
‘Don’t use our emergency room because it will cost us money, and we don’t want the public-aid population,’
“ Novak said. An April 2007 draft report from the medical center’s polling firm, Peter D. Hart Research
Associates, said focus groups suggested that “enough latent suspicion toward the hospital and university as
elitist exists to ensure that a political attack against the Urban Health Initiative as deceptive and self-serving
would find fertile ground.” While most of those surveyed expressed favorable views of the center and its
program, critics complained of arrogance and a lack of empathy, the report said. “More than a few staff
members -- particularly medical staff -- express strongly worded concern or disappointment with UCMC in its
commitment to the community,” the report said. … “This new health initiative is not really about helping the
Notes 429
residents of the South Side of Chicago. It is simply a way for the University of Chicago Medical Center to
save money and reduce costs by serving fewer poor people without health insurance.” “I’ve had some
complaints from my constituents,” said Alderman Toni Preckwinkle, a former teacher who represents
Chicago’s 4th Ward and who will be an Obama delegate at the Democratic National Convention. “It’s hard to
know whether this is motivated by the interests of the patients or by the financial interests of the medical
center.”… Jeffrey Schaider, chairman of emergency medicine at nearby John H. Stroger Jr. Hospital of Cook
County, also is skeptical. Schaider said his emergency room welcomes all patients, whether or not their
maladies ultimately prove urgent. Lower-income workers also often find it difficult to visit clinics, which
have limited hours, he said.’ (Joe Stephens, “Obama Camp Has Many Ties to Wife’s Employer,” Washington
Post, August 22, 2008)
25 Washington Post, August 12, 2007.
26 http://www.politico.com/news/stories/0208/8642.html
27 http://www.politico.com/news/stories/0208/8642.html
28 http://article.nationalreview.com/?q=MmEyN2RkNzcwYzgyZDY2MDBiY2U5MjJlZGMwNDM2ODg=
29 Concerning Michelle’s extensive foundation connections, Stanley Kurtz of the National Review writes:
‘Michelle… had been executive director of Public Allies Chicago since 1991. Public Allies Chicago currently
partners with the Asset-Based Community Development Institute at Northwestern University, led by noted
community organizers John McKnight and Jody Kretzman. Michelle and Barack both have close links to
Public Allies, to the Asset-Based Community Development Institute, to McKnight and to Kretzman. The
Asset-Based Community Development Institute and its leaders are closely tied to the Gamaliel Foundation.
Barack himself worked directly with the co-founder and Executive Director of the Gamaliel Foundation,
Gregory Galluzzo…. the Gamaliel Foundation is guided by an extreme, anti-American ideology, much like
Revered Wright’s. In other words, Both Michelle and Barack Obama were part of a tightly knit network of
Gamaliel Foundation organizers, and the guiding ideology of Gamaliel is deeply radical and anti-American.’
(Stanley Kurtz, National Review Online, “The Corner,” August 22, 2008) As for Barky, he was a founding
member of the board of directors of Public Allies in 1992, resigning before Michelle became the founding
executive director of Public Allies Chicago in early 1993…. Obama also served on the board of directors of
the Chicago Lawyers’ Committee for Civil Rights Under Law, the Center for Neighborhood Technology, and
the Lugenia Burns Hope Center, which dealt with 1,100 people thrown off welfare. He also served on the
board of directors of the Chicago Lawyers’ Committee for Civil Rights Under Law, the Center for
Neighborhood Technology, and the Lugenia Burns Hope Center. The Lugenia Burns Hope Center, another
povertician operation, specialized in moving former welfare recipients to low-wage jobs after Aid to Mothers
With Dependent Children, a part of the FDR Social Security Act of 1935, had been abolished by Clinton. The
Lugenia Burns is a foundation-funded operation evidently tasked with preventing a broad-based political
rebellion against the abolition of Social Security; the Lugenia Burns has received grants from the W.K.
Kellogg Foundation and other foundations controlled by the ruling elite.
30 http://www.opednews.com/author/author58.html
31 ‘On October 1, 2006, Mayor Richard Daley appointed Martin Nesbitt as Chairperson of the Chicago
Housing Authority succeeding Sharon Gist Gilliam. Gist Gilliam assumed the role of interim CEO upon the
resignation of Terry Peterson on Sept. 30, 2006. Mr. Nesbitt was appointed as a Commissioner of the
Authority on July 9, 2003. He served as Vice Chairperson of the Board since January 17, 2006. Mr. Nesbitt is
president of PRG Parking Management, also known as the Parking Spot, and manages the strategic and
operating services of the off-airport parking facilities. Mr. Nesbitt is also vice president of the Pritzker Realty
Group, L.P. where he procures new real estate investment opportunities, retail investments and developments
for the Pritzker Group.’ http://www.thecha.org/aboutus/martin_nesbitt.html
32 Ben Smith, “Ax On Ayers,” Politico, February 26, 2008.
33 http://dyn.politico.com/printstory.cfm?uuid=3FC289D8-3048-5C12-009AD5180C22FF0B
34 http://kimallen.sheepdogdesign.net/cinnamon/2007/06/thomas-g-ayers-1915-2007.html
430 Barack H. Obama: The Unauthorized Biography
35 Ayers and Oughton had founded the Jesse James Gang out of the University of Michigan SDS chapter, with
the help of a suspected agent provocateur named Jim Mellen. ‘Bill and Diana… became more active in the
Ann Arbor chapter of Students for a Democratic Society (SDS). Ayers had been a member of the SDS radical
education project for several years at a time when SDS was still a loosely-organized group of students who
believed in experimental schools and community projects as vehicles for change. In June, 1968, they attended
an SDS convention in East Lansing where a sharp split was emerging between the Progressive Labor Party
(PL) and the cultural revolutionaries who naturally attracted Bill and Diana. … After the convention Diana
and Bill spent part of the summer in Chicago working in the SDS national office where they had intense
political discussion with Mike Klonsky, an SDS national officer, and Bernardine Dohrn, a later leader of the
Weathermen. Diana and Bill became convinced that direct action rather than education and peaceful reform
were the way to change society. Diana was deeply affected by the demonstrations at the Democratic Party
convention that August and what she and the SDS and eventually the Walker Commission felt was a “police
riot.” At the peak of the violence, she called her sister, Carol, in Chicago for $150 to help bail Tom Hayden,
one of the founders of SDS in 1962, out of jail. A day or two later she called again and said she and Bill were
leaving the city because “it’s getting too rough.” It was also during that summer that Bill and Diana turned
full-scale toward the cultural revolution. They developed a taste for “acid” rock at ear-shattering volume.
They cut off their hair and began to wear hippy headbands and wire-rimmed glasses. They took LSD,
sometimes with another couple. On one occasion one of the group ran out into the street naked but was
coaxed back inside before the police came. They returned to Ann Arbor that fall in an activist mood. At the
first meeting of the Ann Arbor SDS on Sept. 24, 1968, a sharp division in the group was apparent. Diana and
Bill along with some 40 other radicals banded together against the moderates and formed a faction which they
called “The Jesse James Gang.” The gang declared themselves revolutionary gangsters. They held peaceful
methods of reform in contempt. They urged direct action instead of talk, individual violent confrontations
instead of big peace marches. Contained in their still half-formed ideas about the role of America in the world
and white radicals in America, was the germ of the Weatherman analysis which would later call for violence.
The gang disrupted SDS meetings and made vicious personal attacks on their opponents. The meetings
frequently degenerated into brawls. The gang shouted and heckled and even threw eggs and tomatoes at
moderate speakers. They often let it be known that their opponents were running the risk of physical beatings.
Bill Ayers, Diana at his side, spoke against the failure of education to change people and described the gang
as “the arms of liberation inside the monster.” “We are tired of tiptoeing up to society and asking for reform.
We’re ready to kick it,” he told one opponent. The behind-the-scenes leader of the Jesse James Gang was a
mysterious, 31-year-old man named Jim Mellen who appeared out of nowhere in Ann Arbor that Fall. No one
knew where he had gone to school or why he had come to the University of Michigan. Although he was the
major intellectual force behind the gang, Mellen carefully avoided any position of formal authority. A rumor
began circulating among his critics that Mellen was an agent provocateur sent by the Central
Intelligence Agency to destroy SDS and the radical movement in Michigan. Ten months later, after
helping to write the Weatherman manifesto and playing a part in the June, 1969, SDS convention which
destroyed the organization, Mellen faded from the Ann Arbor radical scene as mysteriously as he had arrived.
Within a period of a few weeks the Jesse James Gang triumphed within the SDS chapter at Ann Arbor. Early
in October, 1968, the moderates decided they had had enough and walked out to form their own group.
Through psychological warfare and vague threats of violence, the gang had captured the single most
important SDS chapter in Michigan, which automatically gave them a powerful voice in the national
organization. … Ayers rose to a position of strength with the gang because of his ability to dominate groups
through a combination of charm and the volume of his voice. Handsome and brash, he was a notorious lady’s
man who did not hide his promiscuity from Diana. Diana told friends that although she was hurt by Bill’s
infidelity, it made her redouble her efforts to be a true revolutionary. Stung by frequent jibes that she could
afford to be one because her daddy was rich, Diana struggled to make her own mark in the movement.
(Lucinda Franks and Thomas Powers, “Story of Diana--The Making of a Terrorist--III--Angry, She Returns to
US,” United Press International 1970, emphasis added)
Notes 431
36 Kathy Boudin was born in 1943 to a Jewish family with a long left-wing history, and was raised in
Greenwich Village, New York City. Her great-uncle was Louis Boudonovitch Boudin, a Marxist theorist. She
was the niece of I.F. Stone, the leftist Washington reporter and critic of Plato. Her father, attorney Leonard
Boudin, had represented such controversial clients as Fidel Castro, Paul Robeson, and Daniel Ellsberg of the
RAND Corporation. Leonard Boudin was an active member of the National Lawyers Guild. Kathy’s older
brother, Michael Boudin, joined the establishment law firm of Covington and Burling, where Dean Acheson
and William P. Bundy had been partners. Michael Boudin is currently the Chief Judge of the United States
Court of Appeals for the First Circuit in Boston. Kathy Boudin was convicted of one count of felony murder
and armed robbery, and was sentenced to twenty years to life under a plea bargain for her role in the 1981
Brinks Robbery near New York City in which the Weathermen killed two policemen and an armed guard.
Boudin was released in September 2003 amid the protests of the families of her victims. (Wikipedia)
37 Cited as Carter and the PIT.
38 Abby Rockefeller, the sister of David, Nelson, John D. III, Laurance, and Winthrop, reportedly joined SDS
for a time in the early 1960s. (Carter and the PIT, 25) In the winter of 2007, there were isolated signs of an
ongoing salon frequented by SDS nostalgics and members of the extended Rockefeller family in Cambridge,
Massachusetts.
39 After the Days of Rage, federal indictments were handed down against most of the publicly identified
Weathermen. As a result, the project moved into an “underground” phase characterized by heavy drug use,
institutionalization of polymorphous perversion (“sexual liberation”), and intensive use of attack group
methods of self-brainwashing (Maoist “criticism and self-criticism”), all staged in the “programmed paranoia”
of a police round-up threatened at any minute. The Spring 1970 escalation of the war in Cambodia provided
the pretext for Weatherman controllers to escalate the group’s activities to terrorist bombings: the University
of Washington ROTC building, the New York police headquarters, the Washington DC capitol building, etc.
(Carter and the PIT, 121) These are the people that Obama finds congenial.
40 Bob Black, “Up Sand Creek Without A Paddle,” http://www.pirateballerina.com/images/bobblack.html,
also posted at Discoverthenetworks.org,
http://www.discoverthenetworks.org/Articles/Up%20Sand%20Creek%20Without%20a%20Paddle2.html.
Some internet sources attempt to attack the reliability of Bob Black, but he is taken seriously by Sherrie
Gosset, the associate editor of the neocon site Accuracy in Media, who reports: ‘American anarchist Bob
Black also skewered Churchill’s credibility in a detailed essay, “Up Sand Creek Without a Paddle.” He assails
Churchill’s “bigoted and bogus” ‘scholarship’, and asks how this “hustler” has been able to pass off his
“racist fantasies as scholarship” and gain tenure at UC. He has no PhD and reportedly can’t get published in
even the most mediocre academic journals, so he sticks with leftist or racialist nationalist periodicals.
Churchill “gets flown all over the country to address audiences of white leftists who pay him to guilt-trip
them. How sweet the pain!” writes Black. Professor Brown explains that “In Indian activist circles, prestige
and legitimacy often accrue to those who most successfully express an oppositional identity.” Which reminds
us, the University of Colorado media relations people did not return our phone call yet asking whether it’s
true the university investigated Churchill’s Indian identity claims ten years ago. He’s a “New Left/New Age
ersatz Indian,” who might have a dream catcher hanging over his bed, but is just a “well-funded pale face”
who is a “Red racist” but not a “red man” Black says. Indeed, this ‘injun of profit’ has parlayed his “Indianness”
into a gig raking in close to $100,000 working for the same evil capitalist American government he
condemned 9/11 victims for supporting.’ (See Sherrie Gosset, “Churchill: Ward of the State,”
campusreportonline.net, February 15, 2005)
41 http://carcopy.blogspot.com/2005/02/denver-post-january-18-1987.html
42 http://www.satyamag.com/apr04/churchill.html
43 “Prof: ‘I Want US Off the Planet.’ Embattled Terror-Condoning Academic Says He Wants America ‘Out of
Existence,’” World Net Daily, February 7, 2005.
44 Another Weatherman who is sometimes left out of the list of leading members is Bo Burlingham. The
neocon web site Militant Islam Monitor.org cites ‘an excerpt from the proceedings of the House Judiciary
432 Barack H. Obama: The Unauthorized Biography
Committee, on 22 September, 1976, in which Congressman Larry McDonald (D-GA) is giving this rundown
of the TNI [Trans National Institute]: Robert “Bo” Burlingham, a prominent functionary of IPS’s Cambridge
[Massachusetts] subsidiary, was indicted in a bombing conspiracy in 1972, but charges were dropped when
his Weathermen co-defendants could not be apprehended. Burlingham said in 1974: “I don’t think an
equitable, fair, free democratic world order is going to happen any other way than through violence.”’ See
http://www.militantislammonitor.org/article/id/2296. Burlingham may have hosted Obama’s friend
Bernardine Dohrn during her trip to Europe to meet the deserters’ movement, which was heavily penetrated
by the CIA, in 1968; see http://laroucheplanet.info/pmwiki/pmwiki.php?n=Library.UnityNow3.
45 Ayers and Dohrn are also close to other Democratic Party bigwigs besides Obama. They are friends of
Senator Patrick Leahy of Vermont, the head of the Senate Judiciary Committee. As Larry Johnson reports,
‘…actor and activist Peter Coyote talking on the 1996 Democratic Convention in Chicago on his website
mentions a couple of times about having to inform his wife “Martha that I’m dragging her to the apartment of
old friends, ex-Weathermen, Bernardine Dohrn and Bill Ayers, hosting a party for Senator Leahy. Perhaps
Edward Said will be there. I urge her to come by promising that the event will push the edges of the envelope
of her centrist politics.”’ Edward Said was a member of the Bertrand Russell Peace Foundation networks of
British intelligence, serviced by the late Italian left socialist Lelio Basso, Ken Coates, and the Yugoslav
dissident Vladimir Dedijier, with all of whom Said appeared at a conference in Linz, Austria, in September
1972. http://noquarterusa.net/blog/2008/05/29/ayers-Obama-philanthropy-corruption-what-big-media-refusesto-
disclose-about-Obamas-checkered-past-in-chicago-machine-politics/
46 http://www.schwarzreport.org/Newsletters/1970/february1,70.htm
47 According to U.S. Labor Party, Carter and the Party of International Terrorism (New York, 1976),
Bernardine Dohrn attended the University of Chicago Law School and graduated in 1965; here she worked
together with Dean Edward H. Levi, who later became Attorney General for Ford in March 1975. The USLP
writers regard Levi as a Rockefeller family operative who was involved with Marcus Raskin and the Black P.
Stone street gang of Chicago. From 1967-1970, Dohrn worked for the National Lawyers Guild, a group which
had been accused by J. Edgar Hoover of the FBI of being a communist front in the 1950s and may well have
been implicated in cold war intelligence activities. At the same time, Dohrn was then involved with the
American Deserters Committee, a group that was active in the US and Europe” (Carter and the PIT, 120)
48 http://www.schwarzreport.org/Newsletters/1970/february1,70.htm.
49 http://www.schwarzreport.org/Newsletters/1970/february1,70.htm
50 http://rezkowatch.blogspot.com/2008/06/repost-obamas-ultra-leftist-backers.html
51 http://weblogs.baltimoresun.com/news/politics/blog/2008/02/clinton_campaign_obama_must_an.html
52 http://www.markrudd.com/historical-writing/the-death-of-sds/
53 As of 2008, the board of the Woods Fund is listed as: Laura S. Washington, Board Chair, Ida B. Wells-
Barnett University Professor and Fellow of the DePaul Humanities Center; Jesus G. Garcia, Vice Chair,
Executive Director, Little Village Community Development Corporation; William C. Ayers, Distinguished
Professor of Education, University of Illinois at Chicago.
54 http://billayers.wordpress.com/category/articles/
55 http://www.city-journal.org/2008/eon0423ss.html
56 http://globallabor.blogspot.com/2008/04/who-sent-obama.html
57 http://pundita.blogspot.com/2008/05/william-ayers-plan-to-turn-americas_20.html
58 In mid-August 2008, the University of Illinois attempted to prevent researchers from gaining access to the
archives of the Annenberg Chicago Challenge, which constituted some 70 linear feet of documents now
housed at the Richard J. Daley Library at the Chicago Circle Campus. This is also where the Weatherman
terrorist bomber Bill Ayers enjoys the fruits of his tenured professorship. After this high-handed outrage by a
public institution became known, President White of the University of Illinois was bombarded by emails of
protest demanding that the papers be made available. The University of Illinois announced as this book is
going to press that the papers would be opened to the public on August 26, 2008. We hope to include this
material in future editions of this book. The papers are likely to show that Ayers and Obama were no mere
Notes 433
acquaintances, but rather constituted a mutual admiration and career assistance society, spending hundreds of
hours together in meetings and collaborating in innumerable ways. (Stanley Kurtz, “Chicago Annenberg
Challenge Shutdown? A cover-up in the making?” National Review Online, August 18, 2008).
59 http://globallabor.blogspot.com/2008/05/does-obama-support-reparations.html
60 Honolulu Star-Bulletin, July 28, 2008, http://starbulletin.com/2008/07/28/news/story05.html
61 http://www.newsmax.com/limbaugh/Trinity_Church_Obama/2008/06/03/101086.html
62 http://noquarterusa.net/blog/2008/05/23/the-monster-in-the-room-does-obama-support-reparations/
63 http://noquarterusa.net/blog/2008/05/23/the-monster-in-the-room-does-obama-support-reparations/
64 http://www.huffingtonpost.com/mayhill-fowler/Obama-no-surprise-that-ha_b_96188.html
65 http://en.wikipedia.org/wiki/Richard_Hofstadter
66 http://en.wikipedia.org/wiki/Emile_Durkheim
67 http://www.hydeparkhistory.org/herald/1313HiddenHistory.pdf
68 http://archive.rockefeller.edu/publications/conferences/saunier.pdf, emphasis added.
69 http://www.globalpolicy.org/nations/launder/regions/2002/0201elf.htm
70 Another of Obama’s super-rich Middle East friends is a certain Khalid al Mansour, who has served as
moneybags for Barky. Former Manhattan Borough President Percy Sutton has reported: ‘“I was introduced to
him by a friend who was raising money for him and the friends name was Dr. Khalid al Mansour from Texas.
He is the principle adviser to one of the world’s richest men. He told me about Obama. He wrote to me about
him and his introduction was ‘there is a young man that has applied to Harvard and I know that you have a
few friends left there because you used to go up there to speak, would you please write a letter in support of
him?’…I wrote a letter in support of him to my friends at Harvard saying to them I thought there was a genius
that was going to be available and I sure hoped they would treat him kindly.” Dr. Khalid Abdullah Tario Al-
Mansour is an advisor to Heads of State and business leaders in Africa, Asia, the Middle East and North
America. He has been actively involved in structuring investments and joint ventures worldwide for over 35
years. Dr. Al-Mansour was also responsible for the Africa investment activities of Kingdom Holdings, Saudi
Prince Al-Waleed bin Talal’s investment company. During his career, Dr. Al-Mansour has been a guest
lecturer at Harvard University, Bombay University, Columbia University, UCLA, University of Kenya,
London School of Economics and the University of Ghana.’ This profile is redolent of intelligence
community connections. See Texasdarlin, September 1, 2008.
71 Jerome Corsi, Obama Nation (New York: Simon and Shuster, 2008), p. 173.
72 (http://www.bloomberg.com/apps/news?pid=20601070&sid=aMzI3I6BAo_U&refer=politics)
74 http://noquarterusa.net/blog/2008/06/27/recently-unsealed-documents-reveal-Obama-deeply-embroiled-inrezko-
case/#more-3276
75 http://www.taylormarsh.com/archives_view.php?id=27939
76 ‘Ever since the Obama camp announced Patti Solis-Doyle would be joining their team as the Chief of Staff
for the yet-to-be-chosen Vice Presidential candidate, I’ve been wondering if she was always a part of their
team. After all, Taylor Marsh informs us, and others confirm that Solis-Doyle has a 20 year relationship with
David Axelrod, Obama’s puppet master. Further, over at No Quarter, Larry Johnson reveals that Solis-Doyle
used to work for Richard Daley and her brother is a Chicago alderman. Clearly, the Solis-Doyle, Axelrod ties
run deep. In addition, Steve Clemons, over at the Washington Note reported back in March: “Patti Solis
Doyle allegedly bred a lot of ill will inside the campaign among staffers. Many Clinton aides talked about
how she had a wall erected between herself and the rest of the campaign staff in Iowa. Others who had been
around for Hillary Clinton’s Senate campaign talked about how Patti Solis Doyle had shut down the campaign
office for two full days in order to watch the collected DVD set of “Grey’s Anatomy.” I’m not kidding. On
top of those clear failures, she also horribly mismanaged the Clinton campaign financially. One Clinton
backer said what everyone was thinking: “Who can blame Obama for rewarding Patti? He would never be the
nominee without her,” one person who has worked for both Clintons and remains close to them said. The
question isn’t whether she helped him, it’s whether she did it knowingly. Had Hillary won Iowa, the outcome
would probably be very different today. Patti Solis-Doyle was ultimately the architect of Hillary’s Iowa defeat
434 Barack H. Obama: The Unauthorized Biography
(Obama and Edward’s tactics excluded). In my estimation, Patti Solis-Doyle was a mole.’
(http://donedems.com/2008/06/17/patti-solis-doyle-obama-mole/)
77 John Fund, “Obama Should Come Clean on Ayers, Rezko, and the Iraqi Billionaire,” Wall Street Journal,
August 30, 2008, http://online.wsj.com/article/SB122005063234084813.html?mod=rss_opinion_main)
78 Washington Times, February 29, 2008; http://www.gertzfile.com/gertzfile/ring022908.html, accessed Sept.
9, 2008.
79 Andrew Walden, “Iraqi Billionaire Threatens Reporters Investigating Rezko Affair,” Accuracy in Media,
August 24, 2008.
80 See http://www.gop.com/Print/?Guid=21066cde-d75a-48c9-a05c-69f32e30015a&pg=news
81 (http://www.bloomberg.com/apps/news?pid=20601070&sid=aMzI3I6BAo_U&refer=politics)
82 Obama hired fellow Harvard Law alumnus and election law expert Thomas Johnson to challenge the
nominating petitions of the four other candidates, thus getting them thrown off the ballot.
83 (John Kass, “In the spirit of the great Second City, I give you a new musical “Obama’s Lot,” Chicago
Tribune, January 30, 2008)
84 http://dyn.politico.com/printstory.cfm?uuid=3FC289D8-3048-5C12-009AD5180C22FF0B
85 Ayers also got some great reviews over the years from the Chicago leftist chronicler Studs Terkel. Terkel
commented that this book showed that “William Ayers is as sensitive and gifted a chronicler as he is a
teacher. His odyssey - for it is far more than just a tour - through the juvenile court is Dickensian in its tragic,
maddening detail and dimension; and yet it is strangely hopeful.” For Ayers’ Teaching Towards Freedom
Terkel wrote: “William Ayers is as sensitive and gifted a chronicler as he is a teacher.” For Fugitive Days, it
was “A memoir that is, in effect, a deeply moving elegy to all those young dreamers who tried to live decently
in an indecent world. Ayers provides a tribute to those better angels of ourselves.” This insane delirium goes
to show that Studs went soft on terrorism in his old age.
86 The reality of this speech is the object of much skepticism: “Obama’s ad on anti-war speech is staged. The
speech was given at an anti-war rally on Oct. 2, 2002…..Jessie Jackson was the main speaker. Obama’s
speech went mainly unnoticed. He had not yet announced his run for the Senate, although now he claims he
risked his political career. Of course we know that there was NO risk in running against Alan Keyes, all
Obama had to do was breathe. Gonyea says…..”In an age of YouTube there is no video of the speech and
only a snippet of audio. The Obama campaign has reenacted the speech in a campaign ad they are now
running.” If there is no video available it would seem the entire Obama anti-war speech on which he is basing
his Ad campaign may be faked. In fact the entire speech could be distorted.”
http://noquarterusa.net/blog/2008/03/26/the-fake-iraq-war-speech-more-creative-embellishments/
87 But compare the report of former Chicago Tribune journalist Bill Glauber, who covered the October 2,
2002 rally and reports there were only 1,000 people, mostly older sixties radical types. The main speaker was
not Obama, but Jessie Jackson. Glauber vaguely remembers hearing Obama, but did not mention him in the
article he wrote that day. “I’m the guy who didn’t quote Barack Obama,” says Glauber.
http://www.npr.org/templates/story/story.php?storyId=88988093
88 http://en.wikipedia.org/wiki/James_Crown
89 http://noquarterusa.net/blog/2008/07/02/chicago-billionaire-industrialist-on-board-of-Obamas-mortgageprovider/#
more-3393
90 http://noquarterusa.net/blog/2008/02/20/machinists-union-tells-it-like-it-is/
91 Feb 01, 2008 (Chicago Tribune - McClatchy-Tribune Information Services via COMTEX), “Obama’s
fundraising, rhetoric collide: Union says senator did little to save jobs.”
92 http://noquarterusa.net/blog/2008/07/05/obamas-acorn/#more-3429
93 http://www.zmag.org/content/showarticle.cfm?ItemID=13491
94 http://www.blackagendareport.com/index.php?option=com_content&task=view&id=529&Itemid=1
95http://www.blackagendareport.com/index.php?option=com_content&task=view&id=529&Itemid=1
96 http://en.wikipedia.org/wiki/Blair_Hull#_note-fast#_note-fast
97 http://jta.org/cgi-bin/iowa/breaking/107170.html
Notes 435
98 http://www.claremont.org/publications/pubid.339/pub_detail.asp
99 http://en.wikipedia.org/wiki/Blair_Hull
100 Ben Wallace-Wells, “Obama’s Narrator,” New York Times April 1, 2007.
101 http://en.wikipedia.org/wiki/Jack_Ryan_%282004_U.S._Senate_candidate%29
102 http://en.wikipedia.org/wiki/Jack_Ryan_%28Senate_candidate%29#_note-nyt1#_note-nyt1
103 http://www.thesmokinggun.com/archive/0622041ryans1.html
104 http://www.dailypress.com/chi-0406220247jun22,0,6933700,full.story
105 http://en.wikipedia.org/wiki/Jack_Ryan_%28Senate_candidate%29#_note-nyt1#_note-nyt1
106 http://en.wikipedia.org/wiki/United_States_Senate_career_of_Barack_Obama
107 ‘In 2004, a national environmentalist entity created and managed by the Rockefeller family endorsed
Barack Obama, then an Illinois state senator with little national reputation, in his race against other Democrats
in his Democratic primary race for United States senator. The League for Conservation Voters announced
they would “launch a new TV spot, titled ‘Rising Star,’” which would run regularly “through Election Day in
the Chicago media market. The League’s press release boasted that the promotion was expensive: “the ad buy
is a significant, six-figure purchase.” In the 2003-2004 campaign season (according to the Center for Public
Integrity), the League also paid $297,867 to the political consulting firm of David Axelrod, which was
managing Obama’s campaign. Axelrod and his firm AKP Message and Media shaped Obama’s political
image and today manage the Obama Presidential campaign top-down. The League of Conservation Voters
was founded by Laurance S. Rockefeller and his close associates. Among the current directors of the League
are Larry Rockefeller, son of Laurance (who died the year of the Obama Senate campaign); Wade Greene,
counselor to the Rockefeller family; Donald K. Ross, strategist for the Rockefeller family’s environ mental
and foundation activities; and Theodore Roosevelt, IV, partner of Felix Rohatyn at Lehman Brothers.
Roosevelt is the League’s honorary chairman and a longtime leader of the group. The League of Conservation
Voters works in tandem with the Partnership for New York City, in setting the agenda for New York City
Mayor Michael Bloomberg. The Partnership was founded by Laurance’s brother David Rockefeller. League
of Conservation Voters’ national board member Marcia Bystryn, who is executive director of the New York
State branch of the League, is also president of “Plan NYC-2030, Mayor Michael Bloomberg’s planning
initiative. (http://www.larouchepac.com/news/2008/04/23/rockefellers-mid-wifed-birth-obamamania.html)
108 http://en.wikipedia.org/wiki/Barack_Obama
109 http://www.salon.com/opinion/conason/2007/12/21/right_and_Obama/
110 (http://www.freedomsenemies.com/_Obama/ObamaAfrica.htm)
111 http://eakenya.org/newsevents/article.htm?id=8
112 (http://www.freedomsenemies.com/_Obama/ObamaAfrica.htm)
113 (http://www.therudenews.com/archives/416)
114 http://www.nytimes.com/2007/03/07/us/politics/07Obama.html?pagewanted=print
115 http://www.counterpunch.org/gonzalez02292008.html
116
117 http://dealbook.blogs.nytimes.com/2007/01/27/george-soros-backs-Obama-but-hedges-his-bets/
118 http://sweetness-light.com/archive/shocker-sorosmoveon-endorse-b-hussein-Obama
119
120 http://www.washingtonpost.com/wp-dyn/content/article/2008/04/10/AR2008041004045_pf.html
121 http://www.g2mil.com/Bradley.htm
122 http://www.globalsecurity.org/org/news/2003/030906-stryker01.htm
123 http://www.foxnews.com/wires/2007May13/0,4670,IraqStrykersStruggle,00.html
124 http://www.washingtonpost.com/wp-dyn/content/article/2008/04/10/AR2008041004045_pf.html
125 http://transcripts.cnn.com/TRANSCRIPTS/0703/04/le.02.html
126 See William Strauss and Neil Howe, Generations: The History of America’s Future, 1584 to 2069. (New
York: Perennial, 1992).
127 http://www.rollingstone.com/politics/story/19106551/a_new_hope
436 Barack H. Obama: The Unauthorized Biography
128 http://blogs.wsj.com/economics/2008/01/31/volcker-i-endorse-Obama/
129 http://www.timesfreepress.com/news/2008/jun/04/tennessee-carter-endorses-Obama-others-superdelega/
130 http://thehill.com/leading-the-news/sen.-rockefeller-endorses-Obama-2008-02-29.html
131 Mel Levine was a U.S. congressman, 1983-93. He is currently a partner in the law firm of Gibson, Dunne
and Krutcher. For some years he served as co-president of Builders for Peace, which sought to assist the
Middle East peace process. He represents yet another figure close to the left wing of the US intelligence
community.
132 http://www.observer.com/2008/Brzezinski-power-shouldnt-have-resigned
133 http://www.zmag.org/znet/viewArticle/15558
134
135 http://www.washingtonpost.com/wp-dyn/content/article/2008/07/09/AR2008070901933.html
136 http://noquarterusa.net/blog/2008/06/26/breaking-news-Obama-bombs/
137 http://thehill.com/campaign-2008/Obama-could-raise-100-million-in-june-fundraisers-say-2008-06-
09.html
138 http://paeditorsblog.blogspot.com/2008_03_16_archive.html
139 http://www.rabble.ca/babble/ultimatebb.cgi?ubb=get_topic&f=39&t=000113&p=
140 Glenn Greenwald, http://noquarterusa.net/blog/2008/06/27/keith-olbermanns-bo-problem/#more-3290
141 http://www.freerepublic.com/focus/f-news/1972093/posts
142 http://www.miamiherald.com/campaign08/v-print/story/405156.html
143 The right-wing commentator who posted these remarks added, ‘I mean, at this rate, why not run on the
campaign slogan, “Immanentize the Eschaton”? (Jim Geraghty, March 5, 2008) We will return to this
question shortly.
144 http://www.miamiherald.com/campaign08/v-print/story/405156.html
145 http://www.politicalaffairs.net/article/articleview/927/1/32/
146 http://www.politicalaffairs.net/article/articleview/927/1/32/
147 http://www.cla.wayne.edu/polisci/kdk/Comparative/SOURCES/fascism.htm
148 http://www.discriminations.us/2007/07/framing_redux_redux.html
149 http://www.hippy.com/php/article-333.html
150 http://www.cnn.com/2008/POLITICS/04/28/wright.transcript/
151 ‘At the NAACP meeting, Wright proudly propounded the racist contention that blacks have inherently
different “learning styles,” correctly citing as authority for this view Janice Hale of Wayne State University.’
Wright ‘praised the work of Geneva Smitherman of Michigan State University, who has called for the
selective incorporation of Ebonics into the curriculum in order to validate the black experience. Wright gave
another shout-out to the late Asa Hilliard of Georgia State University, who told us, Wright said, “how to fix
the schools.” Like Hale, Hilliard argued that disrupting the classroom through “impulsive interrupting and
loud talking” is inherently black.”’ (Heather MacDonald, ‘Poisonous “Authenticity” — Jeremiah Wright
draws on a long line of Afrocentric charlatans,’ City Journal, 29 April 2008)
152 http://www.cnn.com/2008/POLITICS/04/28/wright.transcript/
153“Race, Genes and Justice: A Call to Reform the Presentation of Forensic DNA Evidence in Criminal
Trials,” Prof. Jonathan Kahn,
http://works.bepress.com/cgi/viewcontent.cgi?article=1000&context=jonathan_kahn
154 I Corinthians Ch. 13 (KJV).
155 http://www.newsmax.com/morris/mccain_obama_polls/2008/07/27/116718.html
156 http://www.huffingtonpost.com/erica-jong/patriarchy1000-hillary_b_86408.html
157 http://video1.washingtontimes.com/debose/2008/03/Obama_troubles_hillary_boon.html
158 http://www.foxnews.com/story/0%2C2933%2C312153%2C00.html
159 http://obamaprincetonthesis.wordpress.com/
160 http://www.mytowntalks.com/politics/michelle-Obama-whitey-transcript.php
Notes 437
161 http://noquarterusa.net/blog/2008/06/01/breaking-news-on-whitey-tape-from-fox-news-a-tv-network-hasthe-
tape/
162 From Hill Buzz; http://noquarterusa.net/blog/2008/06/04/breaking-news-from-hillbuzz/
163 http://noquarterusa.net/blog/2008/06/02/thread-2-booman-blows-the-Obama-disinformation-campaign/
164 http://hughhewitt.townhall.com/blog/default.aspx?mode=post&g=4468b2c5-a5aa-468d-8944-
56a8108cc31a&trackbacks=true#commentAnchor
165 http://www.politico.com/blogs/bensmith/0608/Obama_denies_a_rumor_and_questions_the_question.html;
noquarterusa.net
166 http://noquarterusa.net/blog/2008/06/05/barack-punts-on-denial-of-michelle-tape/
167 http://theobamafile.com/ObamaCampaign.htm
168 See Tarpley et al., Obama -The Postmodern Coup: The Making of a Manchurian Candidate (Joshua Tree
CA: Progressive Press, 2008).
169 (New York: Basic Books, 2007), pp. 198-199.
170 http://online.wsj.com/public/article_print/SB120579535818243439.html
171 http://en.wikipedia.org/wiki/Shelby_Steele
172 http://noquarterusa.net/blog/2008/05/04/texas-caucus-fraud/
173 http://www.wnd.com/index.php?fa=PAGE.view&pageId=56405
174 http://www.infowars.com/articles/nwo/globalists_love_global_warming.htm
175 http://www.infowars.com/articles/nwo/globalists_love_global_warming.htm
176 The American Heritage Dictionary of the English Language: Fourth Edition, 2000.
177 http://graniteidealism.com/2007/12/05/obama-to-issue-call-to-serve-vow-to-make-national-serviceimportant-
cause-of-his-presidency/
178 https://www.youtube.com/watch?v=wJsdHoAy4aM
179 There was one candidate for the vice-presidential nomination who was not shy about pleading his own
cause: this was the rapper Ludacris, with whom Obama had discussed the welfare of American youth in
Chicago in late November 2007. In late July 2008, Ludacris launched his bid with this lyric:
I’m back on it like I just signed my record deal
Yeah the best is here, the Bentley Coup paint is dripping wet, it got sex appeal
Never should have hated
You never should’ve doubted him
With a slot in the president’s iPod Obama shattered ‘em
Said I handled his biz and I’m one of his favorite rappers
Well give Luda a special pardon if I’m ever in the slammer
Better yet put him in office, make me your vice president
Hillary hated on you, so that bitch is irrelevant
Jesse talking slick and apologizing for what?
If you said it then you meant it how you want it have a gut!
And all you other politicians trying to hate on my man,
watch us win a majority vote in every state on my man
You can’t stop what’s bout to happen, we bout to make history
The first black president is destined and it’s meant to be
The threats ain’t fazing us, the nooses or the jokes
So get off your ass, black people, it’s time to get out and vote!
Paint the White House black and I’m sure that’s got ‘em terrified
McCain don’t belong in any chair unless he’s paralyzed
Yeah I said it cause Bush is mentally handicapped
Ball up all of his speeches and I throw ‘em like candy wrap
438 Barack H. Obama: The Unauthorized Biography
‘cause what you talking I hear nothing even relevant
and you the worst of all 43 presidents
Get out and vote or the end will be near
The world is ready for change because Obama is here!
‘cause Obama is here
The world is ready for change because Obama is here!
Obama’s campaign attempted to distance itself from Obama’s friend Ludacris by issuing a statement,
while Barky himself said nothing. Experienced observers were watching for a statement beginning, “This is
not the Ludacris I knew.”
(http://www.swamppolitics.com/news/politics/blog/2008/07/obama_ludacris_bff.html)
180 http://www.progressive.org/?q=mag_reed0508&disqus_reply=488404#comment-488404
181 http://latimesblogs.latimes.com/laland/2008/02/the-bailout-ban.html
182 The wall of silence in the national media was all the more grotesque since the Chicago media had not been
able to ignore the three deaths: ‘CHICAGO (CBS) ― Activists fear gay African-Americans are being targeted
for murder. Two openly gay men were killed recently on the South Side, as CBS 2’s Mike Parker reports.
African-American gay and lesbian groups are talking about the murders of two openly gay Black men in the
past month. On November 17, 24-year-old Larry Bland was shot to death in his Englewood home. Bland, a
security guard at Northwestern Hospital was shot more than once after struggling with a man who had entered
the house through an unlocked basement door. Then on December 23, 47-year-old Donald Young, the choir
director at Trinity United Church of Christ, was shot multiple times in his South Side apartment. His
roommate found his body. “We’re calling on the police department to let the community know what’s going
on,” said Marc Loveless of the Coalition for Justice and Respect. “Are we under attack? Is this a serial
killer?” Chicago Police Department Acting Sept. Dana Starks said, “I understand the concerns of any group,
any community when it comes to homicide. As of right now, I cannot say whether there is a connection.” The
media services director of the church where Donald Young taught and led the choir, said, “Young did live an
openly gay lifestyle; that was his choice.” But she went on to call the Loveless statement, “self-serving.” She
also said the police are doing everything they can. The brother of victim Larry Bland says if the murder was a
hate crime, he would not be surprised. “Englewood? Come on. That’s why a lot of gay guys won’t come out,
because they fear for something like this to happen,” said Bland’s brother, Lynn. Starks says that “at this
time” there is no evidence the murders were hate crimes. But he told CBS 2, the investigations are still
underway.(Mike Parker, “African-American Gay Community Scared Over Deaths,” CBS2 Chicago, Dec 27,
2007)
183 “Margins of Error: Obama’s Shrinking Map,“
http://noquarterusa.net/blog/2008/07/08/obama%e2%80%99s-flawed-race-strategy-why-the-black-votewon%
e2%80%99t-be-enough/
184 http://www.rockymountainnews.com/news/2008/jun/25/partial-transcript-ralph-naders-comments/
185 http://michellemalkin.com/2008/05/21/barack-obama-gaffe-machine/
186 http://www.theamericanmind.com/2008/05/24/too-much-sunshine-or-was-that-sunrise/
187 http://www.wnd.com/index.php?pageId=65449
188 http://www.washingtonpost.com/wp-dyn/content/article/2008/07/23/AR2008072302903.html
189 http://money.cnn.com/2008/06/18/magazines/fortune/easton_obama.fortune/index.htm?
postversion=2008061810
190 Clinton needed to say something like this: “I represent a clear majority of the Democratic Party primary
voters. This majority must rule, and will rule, despite what a discredited gaggle of unelected and
unaccountable party bosses and machine hacks may decree. The infamy and moral insanity of today’s
meeting of the Rules Committee shows that the Democratic National Committee has been seized by an
illegitimate insurgent group intent on carrying out a coup d’état. The Democratic National Committee has
Notes 439
been hijacked by Wall Street interests whose unspoken agenda is alien to the needs of the American people. I
call on Democrats to fight back. This is your party, and not the party of Howard Dean. My campaign is the
real Democratic Party. I call on my supporters to seize control of the party apparatus in every state, and to
make sure that my name will be on the ballot in November, so as to guarantee the American people the choice
of at least one candidate who is actually qualified to be president in this crisis. In the midst of war and
economic depression, we cannot permit another failed presidency on the part of yet another feckless and
incompetent demagogue who has come out of nowhere to contravene the clear will of the voters in his quest
for the highest office. Our national survival is once again at stake. Democrats, rally to me! Because of who I
am and because of the grave responsibilities which I face, I call upon you to support me, whatever may
happen. The Democratic Party is not the plaything of wealthy elitists. We are the New Deal Democrats, the
party of Franklin D. Roosevelt and John F. Kennedy, and with your help we will secure the future.” Perhaps
one day she will deliver a speech like this.
191 http://www.nytimes.com/2008/07/28/us/politics/28webnagourney.
html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1217283784-twg0i3ZZqdSzDNW4Zh4KMw
192 http://www.taylormarsh.com/archives_view.php?id=28116
193 The website of this entity presents it in the following terms: ‘At a moment of critical global transitions, the
Woodrow Wilson School of Public and International Affairs at Princeton University, with support from the
Ford Foundation, the Hewlett Foundation, and a generous gift from Mr. David Rubenstein, has launched a
multi-year, bipartisan initiative to develop a sustainable and effective national security strategy for the United
States of America. Under the stewardship of honorary co-chairs George Shultz and Anthony Lake, the
Princeton Project brings together leading thinkers on national security from government, academe, business,
and the non-profit sector to analyze key issues and develop innovative responses to a range of national
security threats.’ (http://www.princeton.edu/~ppns/)
194 See my Obama – The Postmodern Coup for a discussion of the massive CFR 1980s Project.
195 See Webster G. Tarpley, “Lady Astor, Cliveden, and British Critics of Appeasement, 1936-1940,” (2001).
196 Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (New York: Macmillan, 1966),
581.
197 Carroll Quigley, The Anglo-American Establishment (New York: Books in Focus, 1981), 275.
198In January, The Times had asked: “Why should it be necessary to recoil from the system of ‘Labor Service’
[Arbeitsdienst] instituted in Germany, merely because in that country it is immediately precedent in time and
openly preparatory to compulsory service in the Army?” (Daily Worker, June 6, 1938)
199A.J.P. Taylor, The Origins of the Second World War (New York: Athenaeum, 1983), 189. Taylor claims
that “every newspaper in the country applauded the Munich settlement with the exception of Reynolds’
News.” (Taylor 1983, xxvii).
200Gaetano Salvemini, Prelude to World II (London: Victor Gollancz, 1953), 509, 510.
201Frederick L. Schuman, Europe on the Eve: The Crises of Diplomacy, 1933-39 (New York: Knopf, 1939),
335-6.
202 Clement Leibovitz and Alvin Finkel, In Our Time: The Chamberlain-Hitler Collusion (New York:
Monthly Review, 1998), 21-2, 32.
203 http://www.cfr.org/publication/14004/democratic_debate_transcript_chicago.html
204 http://www.cnn.com/2007/POLITICS/08/07/Obama.pakistan/index.html
205 http://www.cfr.org/publication/14004/democratic_debate_transcript_chicago.html
206 http://abcnews.go.com/Politics/Story?id=3434573&page=1
207 http://www.washingtonpost.com/wpdyn/
content/article/2008/03/27/AR2008032700007_2.html?sid=ST2008032700935
208 http://www.outsidethebeltway.com/archives/2008/06/us_airstrikes_kill_pakistani_troops/
209 http://www.thefrontierpost.com/News.aspx?ncat=ar&nid=194&ad=16-06-2008
210 http://www.theaustralian.news.com.au/story/0,25197,24000236-2703,00.html
211 http://www.usnews.com/usnews/politics/bulletin/bulletin_080703.htm
440 Barack H. Obama: The Unauthorized Biography
212 http://www.nydailynews.com/news/us_world/2008/07/02/2008-07-
02_dont_bomb_iran_bush_warns_israel-1.html
213 http://www.jpost.com/servlet/Satellite?cid=1215330891157&pagename
=JPost%2FJPArticle%2FShowFull
214 http://edition.cnn.com/2008/WORLD/meast/07/04/iran.threat/index.html
215 http://wiredispatch.com/news/?id=245597
216 http://www.huffingtonpost.com/2008/07/25/Brzezinski-warns-against_n_114999.html
217 Stanley G. Payne, A History of Fascism, 1914-1945 (Madison, Wisconsin: The University of Wisconsin
Press, 1995), 298.
218 Equally useless and misleading are the 10 steps to close down an open society offered by the left liberal
gatekeeper and feminist Naomi Wolf in her recent book End of America: Letter of Warning to a Young
Patriot. Wolf, who once advised Al Gore on earth tones, has served on the board of the Woodhull Institute.
Here she totally ignores the central issue, which is the indispensable role of the fascist mass movement as a
way of making society impose fascism on itself. Here there are no storm troopers in the street, no march on
Rome; everything is top down. Wolf’s steps all assume that fascism (identified with Bush) is already in
power. Her ten steps: “1. Invoke a terrifying internal and external enemy; 2. Create a gulag; 3. Develop a thug
caste; 4. Set up an internal surveillance system; 5. Harass citizens’ groups; 6. Engage in arbitrary detention
and release; 7. Target key individuals; 8. Control the press; 9. Dissent equals treason; 10. Suspend the rule of
law.” The stubborn refusal to address the fascist mass movement, which contains fervently idealistic students,
militant workers, and veterans as well as goons, blinds left liberals of this type to the way that fascism really
emerges. Wolf also still believes that the Reichstag was not arson by the Nazis, and her faith in the official
9/11 myth is still 100%.
219 See my 9/11 Synthetic Terror.
220 Emilio Gentile is Professor of Political Science at the University of Rome La Sapienza and Principal
Lecturer in History at the Rome Campus. He is a historian of fascism, best known for his interpretation of
fascism as a “political religion.” He is the author of several books, including The Sacralization of Politics in
Fascist Italy (Harvard University Press), The Struggle for Modernity: Nationalism, Futurism, and Fascism
(Praeger), The Origins of Fascist Ideology, 1918-1925 (Enigma), and Storia del partito fascista, 1919-1922:
movimento e milizia (Laterza).
221 http://www.theatlantic.com/doc/200809/fallows-debates/6
222 For the following account, see Anthony Birley, Septimius Severus (London: Routledge, 1999), Tenney
Frank, An Economic History of Rome (Baltimore: Johns Hopkins Press, 1927). And Sir Paul Harvey, The
Oxford Companion to Classical Literature (New York: Oxford University Press, 1984).

 

 

The Trilateral Commission was formed in 1973 by private citizens of Western Europe, Japan and North America to foster closer cooperationamong these three regions on common problems. It seeks to improve publicunderstanding of such problems, to support proposals for handling them jointly, and to nurture habits and practices of working together amongthese regions.” 2 Further, Trialogue and other official writings made clear their stated goal of creating a “New International Economic Order.” President George H.W. Bush later talked openly about creating a “New World Order”, which has sincebecome a synonymous phrase.This paper attempts to tell the rest of the story, according to official andunofficial Commission sources and other available documents.The Trilateral Commission was founded by the persistent maneuvering of David Rockefeller and Zbigniew Brzezinski. Rockefeller was

chairman of theultra-powerful Chase Manhattan Bank, a director of many major multinationalcorporations and "endowment funds" and had long been a central figure in theCouncil on Foreign Relations (CFR). Brzezinski, a brilliant prognosticator of one-world idealism, was a professor at Columbia University and the author of several books that have served as "policy guidelines" for the TrilateralCommission. Brzezinski served as the Commission's first executive directorfrom its inception in 1973 until late 1976 when he was appointed by President Jimmy Carter as Assistant to the President for National Security Affairs.The initial Commission membership was approximately three hundred, withroughly one hundred each from Europe, Japan and North America. Membershipwas also roughly divided between academics, politicians and corporatemagnates; these included international bankers, leaders of prominent laborunions and corporate directors of media giants.The word commission was puzzling since it is usually associated withinstrumentalities set up by governments. It seemed out of place with a so-calledprivate group unless we could determine that it really was an arm of agovernment - an unseen government, different from the visible government inWashington. European and Japanese involvement indicated a world governmentrather than a national government. We hoped that the concept of a sub-rosaworld government was just wishful thinking on the part of the TrilateralCommissioners. The facts, however, lined up quite pessimistically.If the Council on Foreign Relations could be said to be a spawning ground forthe concepts of one-world idealism, then the Trilateral Commission was the

"task force" assembled to assault the beachheads. Already the Commission hadplaced its members in the top posts the U.S. had to offer.President James Earl Carter , thecountry politician who promised, "I willnever lie to you," was chosen to join theCommission by Brzezinski in 1973. Itwas Brzezinski , in fact, who firstidentified Carter as presidential timber,and subsequently educated him ineconomics, foreign policy, and the ins-and-outs of world politics. Upon Carter's election, Brzezinski was appointed assistant to the president fornational security matters. Commonly, he was called the head of the NationalSecurity Council because he answered only to the president - some said Brzezinski held the second most powerful position in the U.S. Carter's running mate, Walter Mondale , was also a member of theCommission. (If you are trying to calculate the odds of three virtually unknownmen, out of over sixty Commissioners from the U.S., capturing the three mostpowerful positions in the land, don't bother. Your calculations will bemeaningless.)On January 7, 1977 Time Magazine , whose editor-in-chief, Hedley Donovan was a powerful Trilateral, named President Carter "Man of the Year." Thesixteen-page article in that issue not only failed to mention Carter's connectionwith the Commission but also stated the following: “As he searched for Cabinet appointees, Carter seemed at times hesitant and frustrated disconcertingly out of character. His lack of ties to Washington and the Party Establishment - qualities that helped raise him to the White House -carry potential dangers. He does not know the Federal Government or the pressures it creates. He does not really know the politicians whom he will need to help him run the country.” 3 Is this portrait of Carter as a political innocent simply inaccurate or is itdeliberately misleading? By December 25, 1976 - two weeks before the Time article appeared - Carter had already chosen his cabinet. Three of his cabinetmembers – Cyrus Vance , Michael Blumenthal , and Harold

Brown - wereTrilateral Commissioners; and the other non-Commission members were notunsympathetic to Commission objectives and operations. In addition, Carter had appointed another fourteen Trilateral Commissioners to top governmentposts, including:

o

C. Fred Bergsten (Under Secretary of Treasury) o

James Schlesinger (Secretary of Energy) o

Elliot Richardson (Delegate to Law of the Sea) o

Leonard Woodcock (Chief envoy to China) o

Andrew Young (Ambassador to the United Nations)As of 25 December 1976, therefore, there were nineteen Trilaterals, including Carter and Mondale , holding tremendous political power. These presidentialappointees represented almost one-third of the Trilateral Commission membersfrom the United States. The odds of that happening “by chance” are beyondcalculation!Nevertheless, was there even the slightest evidence to indicate anything otherthan collusion? Hardly! Zbigniew Brzezinski spelled out the qualifications of a1976 presidential winner in 1973: “The Democratic candidate in 1976 will have to emphasize work, the family,religion and, increasingly, patriotism...The new conservatism will clearly not go back to laissez faire. It will be a philosophical conservatism. It will be a kind of conservative statism or managerism. There will be conservative values but a reliance on a great deal of co-determination between state and thecorporations.” 4 On 23 May 1976 journalist Leslie H. Gelb wrote in the not-so-conservative NewYork Times, "( Brzezinski ) was the first guy in the Community to pay attentionto Carter , to take him seriously. He spent time with Carter , talked to him, senthim books and articles, educated him." 5

Richard Gardner (also of ColumbiaUniversity) joined into the "educational" task, and as Gelb noted, between thetwo of them they had Carter virtually to themselves. Gelb continued: "Whilethe Community as a whole was looking elsewhere, to Senators Kennedy and Mondale ...it paid off. Brzezinski , with Gardner , is now the leading man on Carter's foreign policy task force." 6 Although Richard Gardner was of considerable academic influence, it shouldbe clear that Brzezinski was the "guiding light" of foreign policy in the Carter administration. Along with Commissioner Vance and a host of otherCommissioners in the State Department, Brzezinski had more than continuedthe policies of befriending our enemies and alienating our friends. Since early1977 we had witnessed a massive push to attain "normalized" relations withCommunist China, Cuba, the USSR, Eastern European nations, Ang

Conversely, we had withdrawn at least some support from Nationalist China,South Africa, Zimbabwe (formerly Rhodesia), etc. It was not just a trend - itwas an epidemic. Thus, if it could be said that Brzezinski had, at least in part,contributed to current U.S. foreign and domestic policy, then we should brieflyanalyze exactly what he was espousing. Needed: A More Just and Equitable World Order The Trilateral Commission held their annual plenary meeting in Tokyo, Japan,in January 1977. Carter and Brzezinski obviously could not attend as theywere still in the process of reorganizing the White House. They did, however,address personal letters to the meeting, which were reprinted in Trialogue, theofficial magazine of the Commission :

“It gives me special pleasure to send greetings to all of you gathering for theTrilateral Commission meeting in Tokyo. I have warm memories of our meetingin Tokyo some eighteen months ago, and am sorry I cannot be with you now.“My active service on the Commission since its inception in 1973 has been asplendid experience for me, and it provided me with excellent opportunities tocome to know leaders in our three regions.“As I emphasized in my campaign, a strong partnership among us is of thegreatest importance. We share economic, political and security concerns that make it logical we should seek ever-increasing cooperation and understanding. And this cooperation is essential not only for our three regions, but in the globalsearch for a more just and equitable world order (emphasis added). I hope tosee you on the occasion of your next meeting in Washington, and I look forward to receiving reports on your work in Tokyo.“Jimmy Carter” 7

Brzezinski's letter, in a similar vein, follows: “The Trilateral Commission has meant a great deal to me over the last few years. It has been the stimulus for intellectual creativity and a source of personal satisfaction. I have formed close ties with new friends and colleaguesin all three regions, ties which I value highly and which I am sure will continue.

“I remain convinced that, on the larger architectural issues of today,collaboration among our regions is of the utmost necessity. This collaborationmust be dedicated to the fashioning of a more just and equitable world order (emphasis added). This will require a prolonged process, but I think we canlook forward with confidence and take some pride in the contribution which theCommission is making.“Zbigniew Brzezinski” 8 The key phrase in both letters was " more just and equitable world order ." Didthis emphasis indicate that something was wrong with our present world order,that is, with national structures? Yes, according to Brzezinski, and since thepresent "framework" was inadequate to handle world problems, it must be doneaway with and supplanted with a world government.In September 1974 Brzezinski was asked in an interview by the Braziliannewspaper Vega. "How would you define this new world order?" Brzezinski answered: “When I speak of the present international system I am referring to relations inspecific fields, most of all among the Atlantic countries; commercial, military,mutual security relations, involving the international monetary fund, NATO etc.We need to change the international system for a global system in which new,active and creative forces recently developed - should be integrated. Thissystem needs to include Japan. Brazil, the oil producing countries, and even theUSSR, to the extent which the Soviet Union is willing to participate in a globalsystem.” 9 When asked if Congress would have an expanded or diminished role in the newsystem, Brzezinski declared "...the reality of our times is that a modern societysuch as the U.S. needs a central coordinating and renovating organ whichcannot be made up of six hundred people." 10 Brzezinski developed background for the need for a new system in his book Between Two Ages: America's Role in the Technetronic Era (1969). He wrotethat mankind has moved through three great stages of evolution, and was in themiddle of the fourth and final stage. The first stage he described as "religious,"combining a heavenly "universalism provided by the acceptance of the idea thatman's destiny is essentially in God's hands" with an earthly "narrowness derivedfrom massive ignorance, illiteracy, and a vision confined to the immediateenvironment."

The second stage was nationalism, stressing Christian equality before the law,which "marked another giant step in the progressive redefinition of man's natureand place in our world." The third stage was Marxism, which, said Brzezinski, "represents a further vital and creative stage in the maturing of man's universalvision." The fourth and final stage was Brzezinski's Technetronic Era, or theideal of rational humanism on a global scale - the result of American-Communist evolutionary transformations. 11 In considering our structure of governance, Brzezinski stated: “Tension is unavoidable as man strives to assimilate the new into the framework of the old. For a time the established framework resilientlyintegrates the new by adapting it in a more familiar shape. But at some point the old framework becomes overloaded. The newer input can no longer beredefined into traditional forms, and eventually it asserts itself with compelling force. Today, though, the old framework of international politics - with their spheres of influence, military alliances between nation-states, the fiction of Sovereignty , doctrinal conflicts arising from nineteenth century crises - isclearly no longer compatible with reality.” 12 One of the most important "frameworks" in the world, and especially toAmericans, was the United States Constitution. It was this document thatoutlined the most prosperous nation in the history of the world. Was oursovereignty really "fiction"? Was the U.S. vision no longer compatible withreality? Brzezinski further stated: “The approaching two-hundredth anniversary of the Declaration of Independence could justify the call for a national constitutional convention toreexamine the nation's formal institutional framework. Either 1976 or 1989 -the two- hundredth an anniversary of the Constitution - could serve as asuitable target date culminating a national dialogue on the relevance of existingarrangements... Realism, however, forces us to recognize that the necessary political innovation will not come from direct constitutional reform, desirableas that would be. The needed change is more likely to develop incrementallyand less overtly...in keeping with the American tradition of blurring distinctionsbetween public and private institution.” 13 In Brzezinski's Technetronic Era then, the "nation-state as a fundamental unitof man's organized life has ceased to be the principal creative force:International banks and multinational corporations are acting and planning interms that are far in advance of the political concepts of the nation-state." 14

American public who is paying the price, suffering the consequences, but notunderstanding the true nature of the situation.This nature however, was not unknown or unknowable. SenatorBarry Goldwater (R-AZ) issued a clear and precise warning inhis 1979 book, With No Apologies: “The Trilateral Commission is international and is intended tobe the vehicle for multinational consolidation of the commercial and bankinginterests by seizing control of the political government of the United States. TheTrilateral Commission represents a skillful, coordinated effort to seize controland consolidate the four centers of power – political, monetary, intellectual and ecclesiastical.” 16 Unfortunately, few heard and even fewer understood. Follow the Money, Follow the Power What was the economic nature of the driving force within the TrilateralCommission? It was the giant multinational corporations - those with Trilateralrepresentation - which consistently benefited from Trilateral policy and actions.Polished academics such as Brzezinski, Gardner, Allison, McCracken,Henry Owen etc., served only to give "philosophical" justification to theexploitation of the world.Don't underestimate their power or the distance they had already come by 1976.Their economic base was already established. Giants like Coca-Cola, IBM,CBS, Caterpillar Tractor,Bank of America, Chase Manhattan Bank, Deere &Company, Exxon, and others virtually dwarf whatever remains of Americanbusinesses. The market value of IBM's stock alone, for instance, was greaterthan the value of all the stocks on the American Stock Exchange. ChaseManhattan Bank had some fifty thousand branches or correspondent banksthroughout the world. What reached our eyes and ears was highly regulated byCBS, the New York Times, Time magazine, etc.The most important thing of all is to remember that the political coup de gracepreceded the economic coup de grace. The domination of the Executive Branchof the U.S. government provided all the necessary political leverage needed toskew U.S. and global economic policies to their own benefit.

By 1977, the Trilateral Commission had notably become expert at using crises(and creating them in some instances) to manage countries toward the NewWorld Order; yet, they found menacing backlashes from those very crises.In the end, the biggest crisis of all was that of the American way of life.Americans never counted on such powerful and influential groups working against the Constitution and freedom, either inadvertently or purposefully, andeven now, the principles that helped to build this great country are all butreduced to the sound of meaningless babblings. Trilateral Entrenchment: 1980-2007 From left: Peter Sutherland , Sadako Ogata , Zbigniew Brzezinski,

Paul Volcker , DavidRockefeller . (25th Anniversary, New York,Dec. 1, 1998. Source: Trilateral Commission)It would have been damaging enough if theTrilateral domination of the Carter administrationwas merely a one-time anomaly; but it was not!Subsequent presidential elections brought George H.W. Bush (under Reagan), William Jefferson Clinton , Albert Gore and Richard Cheney (under G. W.Bush) to power.Thus, every Administration since Carter has had top-level TrilateralCommission representation through the President or Vice-president, or both!It is important to note that Trilateral domination has transcended politicalparties: they dominated both the Republican and Democrat parties with equalaplomb.In addition, the Administration before Carter was very friendly and useful toTrilateral doctrine as well: President Gerald Ford took the reins after PresidentRichard Nixon resigned, and then appointed Nelson Rockefeller as his VicePresident. Neither Ford nor Rockefeller were members of the TrilateralCommission, but Nelson was David Rockefeller’s brother and that saysenough. According to Nelson Rockefeller’s memoirs, he originally introducedthen-governor Jimmy Carter to David and Brzezinski.

How has the Trilateral Commission effected their goal of creating a New WorldOrder or a New International Economic Order? They seated their own membersat the top of the institutions of global trade, global banking and foreign policy.For instance, theWorld Bank is one of the most critical mechanisms in theengine of globalization. 17 Since the founding of the Trilateral Commission in1973, there have been only seven World Bank presidents, all of whom wereappointed by the President. Of these seven, six were pulled from the ranks of the Trilateral Commission! o

Robert McNamara (1968-1981) o

A.W. Clausen (1981-1986) o

Barber Conable (1986-1991) o

Lewis Preston (1991-1995) o

James Wolfenson (1995-2005) o

Paul Wolfowitz (2005-2007) o

Robert Zoellick (2007-present)Another good evidence of domination is the position of U.S. TradeRepresentative (USTR), which is critically involved in negotiating the manyinternational trade treaties and agreements that have been necessary to create theNew International Economic Order. Since 1977, there have been ten USTR’sappointed by the President. Eight have been members of the TrilateralCommission! o

Robert S. Strauss (1977-1979) o

Reubin O'D. Askew (1979-1981) o

William E. Brock III ( 1981-1985) o

Clayton K. Yeutter (1985-1989) o

Carla A. Hills (1989-1993) o

Mickey Kantor (1993-1997) o

Charlene Barshefsky (1997-2001) o

Robert Zoellick ( 2001-2005) o

Rob Portman (2005-2006)

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Publicity is pure salt to the giant slug of Bilderberg. So I suggest next year weturn up with a few more tubs. If the mainstream press refuses to give propercoverage to this massive annual event, then interested citizens will have to: apeople's media. Find the biggest lens you can and join us for Bilderberg 2010.No idea where it's going to be, but there's usually a few days' notice.We'll have a barbecue selling bilderburgers (with extra lies), and we will set upour own press centre near the cordon. Get some lanyards. Email me [email protected] and we'll start prepping.Meanwhile, petition newspapers to send a correspondent. Petition your MP toask a question in parliament. This happened a few days ago in Holland. Citingan article by Paul Joseph Watson on prisonplanet.com, a Dutch MP asked inparliament about the involvement of the prime minister, the minister forEuropean affairs and Queen Beatrix, asking them to make public any items thatwere on the agenda, and whether the ratification of the Lisbon treaty wasdiscussed.I've got a couple of questions I would like to ask Peter Mandelson, mainly aboutthe freedom of the press and what he thinks about a Guardian journalist beingdetained, shoved and intimidated by the Greek state police on his behalf.Mandelson's office has confirmed his attendance at this year's meeting: "Yes,Lord Mandelson attended Bilberberg. He found it a valuable conference."

Oh, good. Maybe he stole a bathrobe. Peter has been a busy baron these last fewdays: all that beach volleyball and global strategising, then straight back toaddress the Google Zeitgeist conference on Monday, where he talked about "theneed for regulation" of the internet. "There are worries about the impact of theinternet on our society," he said. I bet he is worried; but not half as worried as Iam about "the need for regulation".But these worries are small potatoes compared with the biggest concernBilderberg 09 has given me. My experience over the last several days in Greecehas granted me a single, diamond-hard opinion. Meaning I now have two: thatJohn McEnroe is the greatest sportsman of all time; and that we must fight,fight, fight, now – right now, this second, with every cubic inch of our souls – tostop identity cards.I can tell you right now that the argument "If I've done nothing wrong, whywould I worry about showing who I am?" is hogwash. Worse than that, it'shorse hockey. It's all about the power to ask, the obligation to show, the justification of one's existence, the power of the asker over the subservience of the asked. (Did you know that most Greek police don't wear a number? This isan obligation that goes one way.)I have learned this from the random searches, detentions, angry security goonproddings and thumped police desks without number that I've had to suffer onaccount of Bilderberg: I have spent the week living in a nightmare possiblefuture and many different terrible pasts. I have had the very tiniest glimpse intoa world of spot checks and unchecked security powers. And it has left meshaken. It has left me, literally, bruised.I can tell you this from personal experience: the onus upon the individual tocarry with them some external proof of their identity is transformative of his orher status as a human being. The identity card turns you from a free citizen intoa suspect. It is a spanner with which to beat the individual around the head. It isthe end of everything. And how much easier to put all that information inside amicrochip so you don't have to carry around that pesky card all the time. Howmuch more efficient!Listen. I don't care if you don't love liberty. For the love of yourself: fightidentity cards. Don't let them happen. STOP IDENTITY CARDS. Stop identitycards. And while you're about it: stop identity cards. And that's all I have to say,you will be delighted to know, about Bilderberg 2009. Oh, except for a giantword of thanks to everyone who has written supportive or interested commentson these blogposts (let's meet up for a proper debrief!) And one little correction:for the record, Kenneth Clarke's office has said he was "in his constituency" at

the weekend, not at the Astir Palace doing sambuca shots with the CEO of Airbus. Just in case he remembers differently when asked again. Investigative Author, Daniel Estulin Exposes BilderbergGroup Plans International best-selling investigative author Daniel Estulin has received from his sources the 73-page Bilderberg Group meeting wrap-up for participants.

that there exist big risks to a recovery still reeling from financial turmoil, making it verydifficult to assess developments.the banks themselves don’t know the answer to when (the bottom will be hit).(Vocus / PRWEB) May 22, 2009 — International best-selling investigativeauthorDaniel Estulinhas received from his sources the 73-page BilderbergGroup meeting wrap-up for participants. In the report no one is identified byname, only as an American or European, or by a description of the speaker’sposition, i.e. member of the IMF. There appears to be some disagreement aboutwho was in attendance at this year’s secretive conclave held at a 5-star resort inGreece. According to sources in Greece and the Bilderberg Netherlands“office,” US Treasury Secretary Timothy Geithner and US General DavidPetraeus were at this year’s gathering. Both men have denied this, according toa conversation held with a Washington, DC reporter, who stated that Mr.Geithner was attending a private function and General Petraeus was at CentralCommand.Using a purported participant list, a “smear”campaign has seemingly been launched againstEstulin. On a French “left-wing” website(www.bellaciao.org/fr/

), and then posted in Englishon a populist forum in the US(http://forum.prisonplanet.com

), it is claimed thatEstulin was a known participant in this year’sconference. “Hardly,” said Estulin, who laughed atthe prospect, saying that the Group has tried manythings to keep him from reporting on its activities, buthad never asked him to attend. E

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I think in the economic realm, the parallel would be the OECD, which is a club of advanced industrialized states. And it's going to be a long time before either India orChina are considered advanced enough to join. And until now, the OECD wasconsidered not only the rich man's club, but also the club of states that basically ran theeconomic sphere of the world. And I'm not sure that's going to be the case anymore.ROSE: Interesting. So with the rise of China and India as extraordinarily powerful andliberalizing lesser-developed states or developing states, you will break the link betweeneconomic power and development in some sense that you've had.DREZNER: Right. Well, I mean, it's because China and India are so large -- and this isactually the thing I touched on in the book that's coming out, which is what's fascinatingabout China and India -- and this is really going to be a first -- that China and India interms of their overall economic size in terms of GDP are going to get to the U.S. level or,you know, get to great-power status long before their per capita incomes reach anythingapproximating middle-income status. And that's the fundamentally interesting thing.They're going to have states that, you know, in terms of aggregate economic size are aspowerful or approaching the U.S. size, and yet their preferences are going to bedramatically different because they're just still going to be fundamentally poor countries.ROSE: That's very interesting, especially because when you think about it in historicalterms, they won't be economically undeveloped in historic -- compared to where previousgreat powers were when they became great powers, but in the contemporary context, theywill.DREZNER: (Inaudible word) -- terms, yeah. I mean they won't be as rich. And look, Imean, one area where this is clearly going to come up is going to be in global warming,which is the extent to which China and India are going to be asked to adopt measures toreduce greenhouse gas emissions. I mean, even if the U.S. -- if the U.S. ever changes itsposition, the position is going to be, "Well, China and India need to change too." Andtheir response is going to be, "Well, why did the U.S. and the other advanced states get afree pass for the previous century?" And it's going to be an interesting debate.ROSE: Let me ask one last question if we don't have any from the floor, which is, peoplehave talked about this often in terms of U.S. power and U.S. hegemony, and there's beena sense, as you say in the piece, that power is a zero-sum game, so that India and China'srise are coming at the expense of Europe's position and so forth. But one interestingquestion is, will that come at the expense of the U.S. position? Or will the U.S. be able,by tweaking the membership of the club in various of these institutions, be able to sort of not so much divide and conquer as, by manipulating its role as the chief arbiter of whogets in and who has what kind of thing and who gets its favor and its alliance, will theU.S. role necessarily diminish and U.S. power necessarily fall back towards the middle asthese new ones rise?

DREZNER: I mean, that's a possibility, there's no question about that. I mean, youknow, it's easy to point to the decline of Europe, but this might potentially lead to at leastsome relative decline i the United States.I'm a little more optimistic about the U.S., just because first of all, the demographicprofile of the United States is much healthier than Europe in terms of sort of, you know,birth rates and the extent to which you've got an active labor force supporting a retiring --supporting pensioners. That's one thing. And the second reason is that our fundamentaladvantage is that our labor markets are much more flexible and also we're more receptiveto immigration.So as a result, I mean, the U.S. might -- you know, it's not going to ever grow again at 10percent a year, you know, the growth rates that you see in India and China. That said,because it's starting from a larger base, it doesn't necessarily have to, and because of itstechnological lead. It's going to be a longer -- it's going to be a couple decades, I think,before you need to talk about whether or not the U.S. is going to actually be eclipsed byany of these countries.And the other fact is -- and this is important -- is that although China and India are rising,you know, there are a lot of reasons why they might -- both states might encounterserious amounts of political instability along the way, whereas the U.S. political system,even in the polarizing era we are now, is considered much more stable.ROSE: So it's less the rise of multilateralism or the decline of the U.S. as it is the U.S.changing its dance partners or increasing the size of its harem.DREZNER: Yeah, I would say it's more expanding the option -- expanding its dancepartner options. You know, as I said in the piece, it's not that -- the United States needsthe European Union, needs the EU members because on a whole variety of issues weactually agree more with Europe than we agree with other countries. But there are otherissues, particularly on economic growth, where we're much more simpatico with Chinaand India than we are with the European Union. So this -- if this is done well, if this isdone adroitly, the U.S. can sort of pick and choose who its great power allies will begiven the issue at hand.QUESTIONER: So Robin being joined by Bat Girl.DREZNER: Yeah, there you go.ROSE: And on that note, do we have anymore questions from the floor?OPERATOR: A question comes from Garrett Mitchell from the Mitchell Report.QUESTIONER: Hi, Dr. Drezner?DREZNER: Yes.

QUESTIONER: First of all, I want to say that I think the piece is excellent, and Ireally appreciate this conversation. I want to ask a couple of questions about thiscalculus or potential calculus. Let me just start with a simple one and add acouple to it.If -- I'm interested if you took the sort of current line-up of players and said, allright, everybody on this side of the line is for the concept that some sort of reformor restructuring of these current institutions needs to take place to recognize thatthe world order in 2006 is different from the one in 1946. And all those who areeither, you know, against that or reluctant to do that stand on the other side.I'm interested -- it's sort of like shirts and skins. I'm interested to know, youknow, in addition to us and obviously China and India and presumably Brazil, etcetera, who else is on the side that favors the reform and reorganization in themanner that you talk about? And who are the powers that are against it?A related question is, I was struck by something you said near the end of yourarticle when you said developing countries on the periphery of the globaleconomy can be expected to back Europe in resisting U.S.-led reform efforts, andthat struck me as slightly counterintuitive. And I wonder if you could just say alittle bit more about that and explain that.And then, I guess, the third question that it leads to for me is: If you were sittingdown with the national security team of the next administration, whichever --wherever that comes from, and you were laying this out, what do you think someof the strategic steps that you'd be recommending to them might look like to movein the direction of this reform and reorganization?DREZNER: Okay. Very good questions. I think I can answer your first two in oneswoop, which is who -- you know, who is on what side, the shirts and skins.I mean, to some extent I would argue it corresponds just down to brute interest; whichcountries are growing at very, very high rates and which countries are not? You know,the U.S. and China and India, and to a lesser extent Brazil and South Africa and SouthKorea -- you know, countries that are foreseen as -- perceived as being on the rise,particularly economically, would fall under that one category.And then, on the other hand, you've got countries in the developing world that are notgrowing by nearly as fast a rate, namely in Africa and Latin America. These countriesalso have relatively long standing colonial ties or ex-colonial ties with members of theEuropean Union. So it's not shocking that you'd see, you know, a similar kind of alliancebetween those two groups, which is why I argued that -- when I said countries onperiphery, I was primarily referring to Africa on this. Those states have very low growthrates on the whole, you know, with the exception of South Africa and Botsw

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What must be remembered is that this is not some lunatic- fringe group...theseare members of one of the most powerful private organizations in the world: thepeople who determine and control American economic, social, political, andmilitary policy. Members' influence and control extends to "leaders in academia,public service, business, and the media," according to the CFR 1993 "AnnualReport."Their founding they describe as: "American Participants in the Paris PeaceConference decided that it was time for more private Americans to becomefamiliar with the increasing responsibilities and obligations of the UnitedStates...there was a need for an organization able to provide for the continuousstudy of U.S. foreign police for the BENEFIT OF ITS MEMBERS (emphasismine) and a wider audience of interested Americans."They sponsor hundreds of programs, where members "exchange views withAmerican and foreign officials and policy experts... discuss foreign policyissues...consider international issues of concern to the business community"(Corporate business), and "...affiliated groups of community leaders throughoutthe United states...meet with decision makers."The CFR states that it is "host to many views, advocate of none," and it "has noaffiliation with the U.S. government." No, no affiliation at all, if you don'tcount: "A Council member was elected president of the United States...Dozensof other Council colleagues were called to serve in cabinet and sub-cabinetpositions," as they describe it in "Foreign Afairs," along with many members of Congress, the Supreme Court, the Joint Chiefs, the Federal Reserve, and manyother Federal bureaucrats.They are not AFFILIATED with government, they ARE the government, ineffect.One re-occurring view was stated in the 50th anniversary issue of "ForeignAffairs," the official publication of the CFR. In an article by Kingman Brewster,Jr. entitled "Reflections on Our National Purpose." Our purpose should be,according to him, to do away with our nationality, to "take some risks in orderto invite others to pool their sovereignty with ours..."These "risks" include disarming to the point where we would be helpless againstthe "peace-keeping" forces of a global UN government. We should happilysurrender our sovereignty to the world government in the interests of the "worldcommunity."

Today we have the spectacle of Spc. 4 Michael New, a U.S. soldier in Germanywho refuses to wear the uniform of the UN, facing an "administrativedischarge." He states rightly that he swore an oath to defend the U.S.Constitution, not the United Nations. Many other Americans have taken thatsame oath, such as myself, and believe it is our sworn duty still to defend theConstitution, since an oath sworn before God must be fulfilled. (Why else do weswear to tell the truth in our courts, or when taking public office?) Is it a crimethese days to actually BELIEVE in God and the oath that was taken?Meanwhile, others who attempt to destroy the Constitution and our sovereigntyare given honors and position...At least they are not hypocrites...only supremelyarrogant."In short, the 'house of world order' will have to be built from the bottom uprather than from the top down...An end run around national sovereignty, erodingit piece by piece, will accomplish much more than the old fashioned assault..."in the opinion of Richard N. Gardner, former deputy assistant Secretary of Statein "Foreign Affairs," April 1974.James Warburg, son of CFR founder Paul Warburg, and a member of FDR's"brain trust," testified before the Senate Foreign Relations Committee onFebruary 17, 1950, "We shall have world government whether or not you likeit--by conquest or consent."Is this an AMERICAN speaking, or a dangerous lunatic? Who is this "We" whothreatens to CONQUER us?They are a group that actually has the power to do it, and is doing it every day,bit by bit.CFR Members in the mass media, education, and entertainment push theirpropaganda of "humanism" and world brotherhood. We should all live in peaceunder a world government, and forget about such selfish things as nationalitiesand patriotism. We can solve our own problems. We don't need God [God doesnot exist -Ed.], or morals, or values: it's all relative, anyway, right?...Because if we actually had some moral character and values, we might be able to discernthat these people are actually EVIL.The Bible says that the LOVE of money is the root of all evil (1 Tim. 6:10).These people are evil because they love money and power, and greed drives

them to do anything to achieve their goals. They have lost all morality andconscience, and believe such concepts, as well as our Constitution, "outdated".THAT is insanity--to have more wealth than can be spent, and still it is neverenough. They have to control governments, start wars, conspire to rule theworld; least [lest -Ed.] the "common people" wake up to how they have gainedtheir wealth, take it away from them, and demand that they pay the price fortheir crimes.That is why they constantly pit us one against the other, with "Diversity,"Affirmative Action, and other programs,...black against white, men againstwomen, rural against urban, ranchers against environmentalists, and on andon...least [lest -Ed.] we look in their direction.We The People are held to a much higher standard. If we threaten the Presidentor a public official, we are charged with a crime...yet the One-World-Gang canthreaten the Constitution and the liberties of We The People, the sovereignrulers of this nation, and nothing is said or done.Perhaps they do not fear what Man can do to them... they believe they havearranged everything, and their power and wealth will prevail in this world.However, those among them who have sworn an oath before God to uphold anddefend the Constitution: the President, members of Congress, and the military;may find one day that they do indeed have something to fear.Colonel House, the fallen angel, still has relatives controlling the CFR. KarenElliot House is Chairman of the Membership Committee, and a member of theNominating Committee, along with Jeane Kirkpatrick. David Rockefeller isnow "Honorary Chairman of the Board", after serving as Chairman 1970-1985;and "Director Emeritus," after serving as a Director 1949-1985. Peter G.Peterson is Chairman, Admiral B. R. Inman is Vice Chairman, while ThomasFoley and Jeane Kirkpatrick are Directors serving on the Executive Committee.These "private citizens" have access to government officials and policy makersas often as they wish, yet the results of their meetings can only be given to othergovernment officials, corporate officers, or law partners. Participants areforbidden to transmit an attributed statement to any public medium, such asnewspapers or TV, where there is "risk that it will promptly be widely circulatedor published," as the "Annual Report" puts

Schröder-Rockefeller Company, the 1936 alliance between the Schröder Bank and theRockefeller heirs.The Rockefeller influence also remains preeminent in the monetary field. SinceNovember, 1910, when Senator Nelson Aldrich chaired the secret conference at JekylIsland which gave us the Federal Reserve Act, the Rockefellers have kept us within thesphere of the London Connection. During the Carter Administration, David Rockefellergenerously sent his personal assistant, Paul Volcker, to Washington to head the FederalReserve Board . Reagan finally replaced him in 1987 with Alan Greenspan, a partner of J.P. Morgan Company. Their influence on our banking system has remained constantthrough many financial coups on their part, one of the most profitable being theconfiscation of privately owned gold from American citizens by Roosevelt's edict. Ourcitizens had to turn over their gold to the privately owned Federal Reserve System. TheConstitution permits confiscation for purposes of eminent domain, but prohibitsconfiscation for private gain. The gold's new owners then had the gold revalued from$20 an ounce to $35, giving them an enormous profit.In reviewing the all-pervasive influence of the Rockefellers and their foreign controllers,the Rothschilds, in every aspect of American life, the citizen must ask himself, "What canbe done?'' Right can prevail only when the citizen actively seeks justice . Justice canprevail only when each citizen realizes that it is his God-given duty to mete out justice.History has documented all of the crimes of the usurpers of our Constitution. We havelearned the painful lesson that the Rockefeller monopolists exercise their evil poweralmost solely through federal and state agents. At this writing, former Congressman RonPaul is running for the Presidency of the United States on an eminently sensible andpractical campaign - abolish the Federal Reserve System - abolish the FBI - abolish theInternal Revenue Service - and abolish the CIA. It has been known for years that 90% of the Federal Bureau of Investigation, ostensibly set up to ``fight crime'' has been to harassand isolate political dissidents.The criminal syndicalists are now looting the American nation of one trillion dollars eachyear, of which about one-third, more than three hundred billion dollars per year,represents the profitable depredations of the Drug Trust and its medical subsidiaries .Before a sustained effort to combat these depredations can be mounted, Americans mustmake every effort to regain their health. As Ezra Pound demanded in one of his famousradio broadcasts, ``Health, dammit !'' America became the greatest and most productivenation in the world because we had the healthiest citizens in the world. When theRockefeller Syndicate began its takeover of our medical profession in 1910, our citizenswent into a sharp decline. Today, we suffer from a host of debilitating ailments, bothmental and physical, nearly all of which can be traced directly to the operations of thechemical and drug monopoly and which pose the greatest threat to our continuedexistence as a nation. Unite now to restore our national health - the result will be therestoration of our national pride, the resumption of our role as the inventors andproducers of the modern world, and the custodian of the world's hopes and dreams of liberty and freedom.

Gyeorgos C. Haton's Suggested Reading List Brzezinski, Zbigniew - "Between Two Ages: America's Role in The Technotronic Era"New York: The Viking Press, 1970Collier, Peter and David Horowitz. "The Rockefellers: An American Dynasty" NewYork: New American Library, 1976Domhoff, G. William. "The Powers That Be: Process of Ruling Class Domination inAmerica" New York: Vintage Books, 1978Shoup, Laurence H. and Minter, William. "Imperial Brain Trust: The Council on ForeignRelations and United States Policy" New York: Monthly Review Press, 1977Sklar, Holly "Trilateralism: The Trilateral Commission and Elite Planning for WorldManagement" Boston: South End Press, 1980Josephson, Matthew "The Robber Barons: The Great American Capitalists" Orlando,Florida: Harcourt Brace Jovanovich, 1962Lundberg, Ferdinand "The Rockefeller Syndrome" New Jersey: Lyle Stuart Inc, 1975Patman, Wright "Chain Banking: Stockholder and Loan Links of 200 Largest MemberBanks" Washington, D.C. U.S. Government Printing Office, 1963Josephson, Emmanuel M. "The Federal Reserve Conspiracy and The Rockefellers: TheirGold Corner" New York: Chedney Press, 1968Lundberg, Ferdinand "The Rich and The Super Rich" New Jersey: Lyle Stuart, 1968Roth, Cecil "The Magnificent Rothschilds" Robert Hale Co, 1939Rothschild de Guy "The Whims of Fortune", New York: Random House, 1985Morton, Frederic "The Rothschilds" Curtis Publishing Co., 1961Sutton, Antony "The War On Gold" 76 Press, California 1977Sutton, Antony "Wall Street and the Rise of Hitler" 76 Press, California 1976Sutton, Antony "Trilaterals over Washington" Scottsdale, Arizona : The AugustCorporation, 1979Kitson, Arthur "The Bankers Conspiracy" 1933

Goldman, Steinberg et al., "Dope Inc." New York: New Benjamin Franklin HousePublishing Company, N.Y. 1978Bach, G.L. "Federal Reserve Policy Making" New York: Knapf 1950Larson, Martin A. "The Federal Reserve and Our Manipulated Dollar" Old Greenwich,Conn Devin Adair Co., 1975E.M. House "Phillip Dru, Administrator" New York: B.W. Huebsch 1912Smith, Howden D. Arthur "Men Who Run America" New York: Bobbs Merril 1935Hapgood, David "The Screwing of the Average Man" New York: Doubleday & Co.,1974Josephson, Emanuel M. "The Truth About The Rockefellers: Public Enemy No. 1;Studies in Criminal Psychopathy" New York: Chedney Press, 1964Manning, Thomas G. "The Standard Oil Company: The Rise of a National Monopoly"New York: Holt, Rinehart and Winston, 1962Stern, Phillip M. "The Rape of The Taxpayer" New York: Random House 1973Tarbell, Ida "The History of the Standard Oil Company" (The masterwork on the originalcompany). 2 vols. New York: MacMillan, 1905Shoup, Laurence "The Carter Presidency and Beyond: Power and Politics in the 1980s"Palo Alto, California: Ramparts Press, 1979Ball, George W., ed. "Global Companies: The Political Economy of World Business"Englewood Cliffs, N.J. Prentice-Hall, 1975Who's Who in America 1890-1983 A.N. Marquis Co.The Great Soviet Encyclopaedia, MacMillan, London, 1973Warburg, Paul "The Federal Reserve System" New York: MacMillan, 1930Winkler K. John "Morgan the Magnificent" New York: Vanguard, 1930Rockester, Anna "Rulers of America, A Study of Finance Capital" New York:International Publishers, 1936Standard and Poor's Register of Directors 1928-1983Senate Committee Hearings on Federal Reserve Act, 1

 

 
FAS Note: This December 1992 document is the penultimate draft of the Senate Foreign Relations Committee report on the BCCI Affair. After it was released by the Committee, Sen. Hank Brown, reportedly acting at the behest of Henry Kissinger, pressed for the deletion of a few passages, particularly in Chapter 20 on "BCCI and Kissinger Associates." As a result, the final hardcopy version of the report, as published by the Government Printing Office, differs slightly from the Committee's softcopy version presented below.--Steven Aftergood

and Thierry Meyssan article  and go to Alfred Hartmann  Banque de Commerce et Placements and Collateral Damage 9/11  and The Red Symphony(text) and Le Cercle


The BCCI Affair

A Report to the Committee on Foreign Relations
United States Senate
by
Senator John Kerry and Senator Hank Brown
December 1992
102d Congress 2d Session Senate Print 102-140

 

 
THE BCCI AFFAIR

EXECUTIVE SUMMARY 1. BCCI CONSTITUTED INTERNATIONAL FINANCIAL CRIME ON A MASSIVE AND GLOBAL SCALE.

BCCI's unique criminal structure -- an elaborate corporate spider-web with BCCI's founder, Agha Hasan Abedi and his assistant, Swaleh Naqvi, in the middle -- was an essential component of its spectacular growth, and a guarantee of its eventual collapse. The structure was conceived by Abedi and managed by Naqvi for the specific purpose of evading regulation or control by governments. It functioned to frustrate the full understanding of BCCI's operations by anyone.

Unlike any ordinary bank, BCCI was from its earliest days made up of multiplying layers of entities, related to one another through an impenetrable series of holding companies, affiliates, subsidiaries, banks-within-banks, insider dealings and nominee relationships. By fracturing corporate structure, record keeping, regulatory review, and audits, the complex BCCI family of entities created by Abedi was able to evade ordinary legal restrictions on the movement of capital and goods as a matter of daily practice and routine. In creating BCCI as a vehicle fundamentally free of government control, Abedi developed in BCCI an ideal mechanism for facilitating illicit activity by others, including such activity by officials of many of the governments whose laws BCCI was breaking.

BCCI's criminality included fraud by BCCI and BCCI customers involving billions of dollars; money laundering in Europe, Africa, Asia, and the Americas; BCCI's bribery of officials in most of those locations; support of terrorism, arms trafficking, and the sale of nuclear technologies; management of prostitution; the commission and facilitation of income tax evasion, smuggling, and illegal immigration; illicit purchases of banks and real estate; and a panoply of financial crimes limited only by the imagination of its officers and customers.

Among BCCI's principal mechanisms for committing crimes were its use of shell corporations and bank confidentiality and secrecy havens; layering of its corporate structure; its use of front-men and nominees, guarantees and buy-back arrangements; back-to-back financial documentation among BCCI controlled entities, kick-backs and bribes, the intimidation of witnesses, and the retention of well-placed insiders to discourage governmental action.

2. BCCI SYSTEMATICALLY BRIBED WORLD LEADERS AND POLITICAL FIGURES THROUGHOUT THE WORLD.

BCCI's systematically relied on relationships with, and as necessary, payments to, prominent political figures in most of the 73 countries in which BCCI operated. BCCI records and testimony from former BCCI officials together document BCCI's systematic securing of Central Bank deposits of Third World countries; its provision of favors to political figures; and its reliance on those figures to provide BCCI itself with favors in times of need.

These relationships were systematically turned to BCCI's use to generate cash needed to prop up its books. BCCI would obtain an important figure's agreement to give BCCI deposits from a country's Central Bank, exclusive handling of a country's use of U.S. commodity credits, preferential treatment on the processing of money coming in and out of the country where monetary controls were in place, the right to own a bank, secretly if necessary, in countries where foreign banks were not legal, or other questionable means of securing assets or profits. In return, BCCI would pay bribes to the figure, or otherwise give him other things he wanted in a simple quid-pro-quo.

The result was that BCCI had relationships that ranged from the questionable, to the improper, to the fully corrupt with officials from countries all over the world, including Argentina, Bangladesh, Botswana, Brazil, Cameroon, China, Colombia, the Congo, Ghana, Guatemala, the Ivory Coast, India, Jamaica, Kuwait, Lebanon, Mauritius, Morocco, Nigeria, Pakistan, Panama, Peru, Saudi Arabia, Senegal, Sri Lanka, Sudan, Suriname, Tunisia, the United Arab Emirates, the United States, Zambia, and Zimbabwe.

3. BCCI DEVELOPED A STRATEGY TO INFILTRATE THE U.S. BANKING SYSTEM, WHICH IT SUCCESSFULLY IMPLEMENTED, DESPITE REGULATORY BARRIERS THAT WERE DESIGNED TO KEEP IT OUT.

In 1977, BCCI developed a plan to infiltrate the U.S. market through secretly purchasing U.S. banks while opening branch offices of BCCI throughout the U.S., and eventually merging the institutions. BCCI had significant difficulties implementing this strategy due to regulatory barriers in the United States designed to insure accountability. Despite these barriers, which delayed BCCI's entry, BCCI was ultimately successful in acquiring four banks, operating in seven states and the District of Colombia, with no jurisdiction successfully preventing BCCI from infiltrating it.

The techniques used by BCCI in the United States had been previously perfected by BCCI, and were used in BCCI's acquisitions of banks in a number of Third World countries and in Europe. These included purchasing banks through nominees, and arranging to have its activities shielded by prestigious lawyers, accountants, and public relations firms on the one hand, and politically-well connected agents on the other. These techniques were essential to BCCI's success in the United States, because without them, BCCI would have been stopped by regulators from gaining an interest in any U.S. bank. As it was, regulatory suspicion towards BCCI required the bank to deceive regulators in collusion with nominees including the heads of state of several foreign emirates, key political and intelligence figures from the Middle East, and entities controlled by the most important bank and banker in the Middle East.

Equally important to BCCI's successful secret acquisitions of U.S. banks in the face of regulatory suspicion was its aggressive use of a series of prominent Americans, beginning with Bert Lance, and continuing with former Defense Secretary Clark Clifford, former U.S. Senator Stuart Symington, well-connected former federal bank regulators, and former and current local, state and federal legislators. Wittingly or not, these individuals provided essential assistance to BCCI through lending their names and their reputations to BCCI at critical moments. Thus, it was not merely BCCI's deceptions that permitted it to infiltrate the United States and its banking system. Also essential were BCCI's use of political influence peddling and the revolving door in Washington.

4. THE JUSTICE DEPARTMENT MISHANDLED ITS INVESTIGATION AND PROSECUTION OF BCCI, AND ITS RELATIONSHIPS WITH OTHER GOVERNMENT AGENCIES CONCERNING BCCI.

Federal prosecutors in Tampa handling the 1988 drug money laundering indictment of BCCI failed to recognize the importance of information they received concerning BCCI's other crimes, including its apparent secret ownership of First American. As a result, they failed adequately to investigate these allegations themselves, or to refer this portion of the case to the FBI and other agencies at the Justice Department who could have properly investigated the additional information.

The Justice Department, along with the U.S. Customs Service and Treasury Departments, failed to provide adequate support and assistance to investigators and prosecutors working on the case against BCCI in 1988 and 1989, contributing to conditions that ultimately caused the chief undercover agent who handled the sting against BCCI to quit Customs entirely.

The January 1990 plea agreement between BCCI and the U.S. Attorney in Tampa kept BCCI alive, and had the effect of discouraging BCCI's officials from telling the U.S. what they knew about BCCI's larger criminality, including its ownership of First American and other U.S. banks.

The Justice Department essentially stopped investigating BCCI following the plea agreement, until press accounts, Federal Reserve action, and the New York District Attorney's investigation in New York forced them into action in mid-1991.

Justice Department personnel in Washington lobbied state regulators to keep BCCI open after the January 1990 plea agreement, following lobbying of them by former Justice Department personnel now representing BCCI.

Relations between main Justice in Washington and the U.S. Attorney for Miami, Dexter Lehtinen, broke down on BCCI-related prosecutions, and key actions on BCCI-related cases in Miami were, as a result, delayed for months during 1991.

Justice Department personnel in Washington, Miami, and Tampa actively obstructed and impeded Congressional attempts to investigate BCCI in 1990, and this practice continued to some extent until William P. Barr became Attorney General in late October, 1991.

Justice Department personnel in Washington, Miami and Tampa obstructed and impeded attempts by New York District Attorney Robert Morgenthau to obtain critical information concerning BCCI in 1989, 1990, and 1991, and in one case, a federal prosecutor lied to Morgenthau's office concerning the existence of such material. Important failures of cooperation continued to take place until William P. Barr became Attorney General in late October, 1991.

Cooperation by the Justice Department with the Federal Reserve was very limited until after BCCI's global closure on July 5, 1991.

Some public statements by the Justice Department concerning its handling of matters pertaining to BCCI were more cleverly crafted than true.

5. NEW YORK DISTRICT ATTORNEY MORGENTHAU NOT ONLY BROKE THE CASE ON BCCI, BUT INDIRECTLY BROUGHT ABOUT BCCI'S GLOBAL CLOSURE.

Acting on information provided him by the Subcommittee, New York District Attorney Robert Morgenthau began an investigation in 1989 of BCCI which materially contributed to the chain of events that resulted in BCCI's closure.

Questions asked by the District Attorney intensified the review of BCCI's activities by its auditors, Price Waterhouse, in England, and gave life to a moribund Federal Reserve investigation of BCCI's secret ownership of First American.

The District Attorney's criminal investigation was critical to stopping an intended reorganization of BCCI worked out through an agreement among the Bank of England, the government of Abu Dhabi, BCCI's auditors, Price Waterhouse, and BCCI itself, in which the nature and extent of BCCI's criminality would be suppressed, while Abu Dhabi would commit its financial resources to keep the bank going during a restructuring. By the late spring of 1991, the key obstacle to a successful restructuring of BCCI bankrolled up Abu Dhabi was the possibility that the District Attorney of New York would indict. Such an indictment would have inevitably caused a swift and thoroughly justified an international run on BCCI by depositors all over the world. Instead, it was a substantial factor in the decision of the Bank of England to take the information it had received from Price Waterhouse and rely on it to close BCCI.

6. BCCI'S ACCOUNTANTS FAILED TO PROTECT BCCI'S INNOCENT DEPOSITORS AND CREDITORS FROM THE CONSEQUENCES OF POOR PRACTICES AT THE BANK OF WHICH THE AUDITORS WERE AWARE FOR YEARS.

BCCI's decision to divide its operations between two auditors, neither of whom had the right to audit all BCCI operations, was a significant mechanism by which BCCI was able to hide its frauds during its early years. For more than a decade, neither of BCCI's auditors objected to this practice.

BCCI provided loans and financial benefits to some of its auditors, whose acceptance of these benefits creates an appearance of impropriety, based on the possibility that such benefits could in theory affect the independent judgment of the auditors involved. These benefits included loans to two Price Waterhouse partnerships in the Caribbean. In addition, there are serious questions concerning the acceptance of payments and possibly housing from BCCI or its affiliates by Price Waterhouse partners in the Grand Caymans, and possible acceptance of sexual favors provided by BCCI officials to certain persons affiliated with the firm.

Regardless of BCCI's attempts to hide its frauds from its outside auditors, there were numerous warning bells visible to the auditors from the early years of the bank's activities, and BCCI's auditors could have and should have done more to respond to them.

By the end of 1987, given Price Waterhouse (UK)'s knowledge about the inadequacies of BCCI's records, it had ample reason to recognize that there could be no adequate basis for certifying that it had examined BCCI's books and records and that its picture of those records were indeed a "true and fair view" of BCCI's financial state of affairs.

The certifications by BCCI's auditors that its picture of BCCI's books were "true and fair" from December 31, 1987 forward, had the consequence of assisting BCCI in misleading depositors, regulators, investigators, and other financial institutions as to BCCI's true financial condition.

Prior to 1990, Price Waterhouse (UK) knew of gross irregularities in BCCI's handling of loans to CCAH/First American and was told of violations of U.S. banking laws by BCCI and its borrowers in connection with CCAH/First American, and failed to advise the partners of its U.S. affiliate or any U.S. regulator.

There is no evidence that Price Waterhouse (UK) has to this day notified Price Waterhouse (US) of the extent of the problems it found at BCCI, or of BCCI's secret ownership of CCAH/First American. Given the lack of information provided Price Waterhouse (US) by its United Kingdom affiliate, the U.S. firm performed its auditing of BCCI's U.S. branches in a manner that was professional and diligent, albeit unilluminating concerning BCCI's true activities in the United States.

Price Waterhouse's certification of BCCI's books and records in April, 1990 was explicitly conditioned by Price Waterhouse (UK) on the proposition that Abu Dhabi would bail BCCI out of its financial losses, and that the Bank of England, Abu Dhabi and BCCI would work with the auditors to restructure the bank and avoid its collapse. Price Waterhouse would not have made the certification but for the assurances it received from the Bank of England that its continued certification of BCCI's books was appropriate, and indeed, necessary for the bank's survival.

The April 1990 agreement among Price Waterhouse (UK), Abu Dhabi, BCCI, and the Bank of England described above, resulted in Price Waterhouse (UK) certifying the financial picture presented in its audit of BCCI as "true and fair," with a single footnote material to the huge losses still to be dealt with, failed adequately to describe their serious nature. As a consequence, the certification was materially misleading to anyone who relied on it ignorant of the facts then mutually known to BCCI, Abu Dhabi, Price Waterhouse and the Bank of England.

The decision by Abu Dhabi, Price Waterhouse (UK), BCCI and the Bank of England to reorganize BCCI over the duration of 1990 and 1991, rather than to advise the public of what they knew, caused substantial injury to innocent depositors and customers of BCCI who continued to do business with an institution which each of the above parties knew had engaged in fraud.

From at least April, 1990 through November, 1990, the Government of Abu Dhabi had knowledge of BCCI's criminality and frauds which it apparently withheld from BCCI's outside auditors, contributing to the delay in the ultimate closure of the bank, and causing further injury to the bank's innocent depositors and customers.

7. THE CIA DEVELOPED IMPORTANT INFORMATION ON BCCI, AND INADVERTENTLY FAILED TO PROVIDE IT TO THOSE WHO COULD USE IT.

THE CIA AND FORMER CIA OFFICIALS HAD A FAR WIDER RANGE OF CONTACTS AND LINKS TO BCCI AND BCCI SHAREHOLDERS, OFFICERS, AND CUSTOMERS, THAN HAS BEEN ACKNOWLEDGED BY THE CIA.

By early 1985, the CIA knew more about BCCI's goals and intentions concerning the U.S. banking system than anyone else in government, and provided that information to the U.S. Treasury and the Office of the Comptroller of the Currency, neither of whom had the responsibility for regulating the First American Bank that BCCI had taken over. The CIA failed to provide the critical information it had gathered to the correct users of the information -- the Federal Reserve and the Justice Department.

After the CIA knew that BCCI was as an institution a fundamentally corrupt criminal enterprise, it continued to use both BCCI and First American, BCCI's secretly held U.S. subsidiary, for CIA operations.

While the reporting concerning BCCI by the CIA was in some respects impressive -- especially in its assembling of the essentials of BCCI's criminality, its secret purchase of First American by 1985, and its extensive involvement in money laundering -- there were also remarkable gaps in the CIA's reported knowledge about BCCI.

Former CIA officials, including former CIA director Richard Helms and the late William Casey; former and current foreign intelligence officials, including Kamal Adham and Abdul Raouf Khalil; and principal foreign agents of the U.S., such as Adnan Khashoggi and Manucher Ghorbanifar, float in and out of BCCI at critical times in its history, and participate simultaneously in the making of key episodes in U.S. foreign policy, ranging from the Camp David peace talks to the arming of Iran as part of the Iran/Contra affair. Yet the CIA has continued to maintain that it has no information regarding any involvement of these people, raising questions about the quality of intelligence the CIA is receiving generally, or its candor with the Subcommittee. The CIA's professions of total ignorance about their respective roles in BCCI are out of character with the Agency's early knowledge of many critical aspects of the bank's operations, structure, personnel, and history.

The errors made by the CIA in connection with its handling of BCCI were complicated by its handling of this Congressional investigation. Initial information that was provided by the CIA was untrue; later information that was provided was incomplete; and the Agency resisted providing a "full" account about its knowledge of BCCI until almost a year after the initial requests for the information. These experiences suggest caution in concluding that the information provided to date is full and complete. The relationships among former CIA personnel and BCCI front men and nominees, including Kamal Adham, Abdul Khalil, and Mohammed Irvani, requires further investigation.

8. THE FLAWED DECISIONS MADE BY REGULATORS IN THE US WHICH ALLOWED BCCI TO SECRETLY ACQUIRE US BANKS WERE CAUSED IN PART BY GAPS IN THE REGULATORY PROCESS AND IN PART BY BCCI'S USE OF WELL-CONNECTED LAWYERS TO HELP THEM THROUGH THE PROCESS.

When the Federal Reserve approved the take over of Financial General Bankshares by CCAH in 1981, it had substantial circumstantial evidence before it to suggest that BCCI was behind the bank's purchase. The Federal Reserve chose not to act on that evidence because of the specific representations that were made to it by CCAH's shareholders and lawyers, that BCCI was neither financing nor directing the take over. These representations were untrue and the Federal Reserve would not have approved the CCAH application but for the false statements made to it.

In approving the CCAH application, the Federal Reserve relied upon representations from the Central Intelligence Agency, State Department, and other U.S. agencies that they had no objections to or concerns about the Middle Eastern shareholders who were purporting to purchase shares in the bank. The Federal Reserve also relied upon the reputation for integrity of BCCI's lawyers, especially that of former Secretary of Defense Clark Clifford and former Federal Reserve counsel Baldwin Tuttle. Assurances provided the Federal Reserve by the CIA and State Department, and by both attorneys, had a material impact on the Federal Reserve's willingness to approve the CCAH application despite its concerns about BCCI's possible involvement.

In 1981, the Office of the Comptroller of the Currency had additional information, from reports concerning BCCI's role in the Bank of America and the National Bank of Georgia, concerning BCCI's possible use of nominee arrangements and alter egos to purchase banks on its behalf in the United States, which it failed to pass on to the Federal Reserve. This failure was inadvertent, not intentional.

In approving the CCAH application, the Federal Reserve permitted BCCI and its attorneys to carve out a seeming loophole in the commitment that BCCI not be involved in financing or controlling CCAH's activities. This loophole permitted BCCI to act as an investment advisor and information conduit to CCAH's shareholders. The Federal Reserve's decision to accept this arrangement allowed BCCI and its attorneys and agents to use these permitted activities as a cover for the true nature of BCCI's ownership of CCAH and the First American Banks.

After approving the CCAH application in 1981, the Federal Reserve received few indicators about BCCI's possible improper involvement in CCAH/First American. However, at several critical junctures, especially the purchase by First American of the National Bank of Georgia from Ghaith Pharaon in 1986, there were obvious warnings signs that could have been investigated and which were not, until late 1990.

As a foreign bank whose branches were chartered by state banking authorities, BCCI largely escaped the Federal Reserve's scrutiny regarding its criminal activities in the United States unrelated to its interest in CCAH/First American. This gap in regulatory oversight has since been closed by the passage of the Foreign Bank Supervision Enhancement Act of 1991.

The U.S. Treasury Department failed to provide the Federal Reserve with information it received concerning BCCI's ownership of First American in 1985 and 1986 from the CIA. However, IRS agents did provide important information to the Federal Reserve on this issue in early 1989, which the Federal Reserve failed adequately to investigate at the time.

The FDIC approved Ghaith Pharaon's purchase of the Independence Bank in 1985 knowing him to be a shareholder of BCCI and knowing that he was placing a senior BCCI officer in charge of the bank, and failed to confer with the Federal Reserve or the OCC regarding their previous experiences with Pharaon and BCCI.

Once the Federal Reserve commenced a formal investigation of BCCI and First American on January 3, 1991, its investigation of BCCI and First American was aggressive and diligent. Its decisions to force BCCI out of the United States and to divest itself of First American were prompt. The charges it brought against the parties involved with BCCI in violating federal banking standards were fully justified by the record. Its investigations have over the past year contributed substantially to public understanding to date of what took place.

Even after the Federal Reserve understood the nature and scope of BCCI's frauds, it did not seek to have BCCI closed globally. This position was in some measure the consequence of the Federal Reserve's need to secure the cooperation of BCCI's majority shareholders, the government and royal family of Abu Dhabi, in providing some $190 million to prop up First American Bank and prevent an embarrassing collapse. However, Federal Reserve investigators did actively work in the spring of 1991 to have BCCI's top management removed.

In investigating BCCI, the Federal Reserve's efforts were hampered by examples of lack of cooperation by foreign governments, including most significantly the Serious Fraud Office in the United Kingdom and, since the closure of BCCI on July 5, 1991, the government of Abu Dhabi.

U.S. regulatory handling of the U.S. banks secretly owned by BCCI was hampered by lack of coordination among the regulators, which included the Federal Reserve, the FDIC, and the OCC, highlighting the need for further integration of these separate banking regulatory agencies on supervision and enforcement.

9. THE BANK OF ENGLAND'S REGULATION OF BCCI WAS WHOLLY INADEQUATE TO PROTECT BCCI'S DEPOSITORS AND CREDITORS, AND THE BANK OF ENGLAND WITHHELD INFORMATION ABOUT BCCI'S FRAUDS FROM PUBLIC KNOWLEDGE FOR FIFTEEN MONTHS BEFORE CLOSING THE BANK.

The Bank of England had deep concerns about BCCI from the late 1970s on, and undertook several steps to slow BCCI's expansion in the United Kingdom.

In 1988 and 1989, the Bank of England learned of BCCI's involvement in the financing of terrorism and in drug money laundering, and undertook additional, but limited supervision of BCCI in response to receiving this information.

In the spring of 1990, Price Waterhouse advised the Bank of England that there were substantial loan losses at BCCI, numerous poor banking practices, and evidence of fraud, which together had created a massive hole in BCCI's books. The Bank of England's response to the information was not to close BCCI down, but to find ways to prop up BCCI and prevent its collapse. This meant, among other things, keeping secret the very serious nature of BCCI's problems from its creditors and one million depositors.

In April, 1990, the Bank of England reached an agreement with BCCI, Abu Dhabi, and Price Waterhouse to keep BCCI from collapsing. Under the agreement, Abu Dhabi agreed to guarantee BCCI's losses and Price Waterhouse agreed to certify BCCI's books. As a consequence, innocent depositors and creditors who did business with BCCI following that date were deceived into believing that BCCI's financial problems were not as serious as each of these parties already knew them to be.

From April, 1990, the Bank of England relied on British bank secrecy and confidentiality laws to reduce the risk of BCCI's collapse if word of its improprieties leaked out. As a consequence, innocent depositors and creditors who did business with BCCI following that date were denied vital information, in the possession of the regulators, auditors, officers, and shareholders of BCCI, that could have protected them against their losses.

In order to prevent risk to its restructuring plan for BCCI and a possible run on BCCI, the Bank of England withheld important information from the Federal Reserve in the spring of 1990 about the size and scope of BCCI's lending on CCAH/First American shares, despite the Federal Reserve's requests for such information. This action by the Bank of England delayed the opening of a full investigation by the Federal Reserve for approximately eight months.

Despite its knowledge of some of BCCI's past frauds, and its own understanding that consolidation into a single entity is essential for regulating a bank, in late 1990 and early 1991 the Bank of England tentatively agreed with BCCI and its Abu Dhabi owners to permit BCCI to restructure as three "separate" institutions, based in London, Abu Dhabi and Hong Kong. This tentative decision demonstrated extraordinarily poor judgment on the part of the Bank of England. This decision was reversed abruptly when the Bank of England suddenly decided to close BCCI instead in late June, 1991.

The decision by the Bank of England in April 1990 to permit BCCI to move its headquarters, officers, and records out of British jurisdiction to Abu Dhabi has had profound negative consequences for investigations of BCCI around the world. As a result of this decision, essential records and witnesses regarding what took place were removed from the control of the British government, and placed under the control of the government of Abu Dhabi, which has to date withheld them from criminal investigators in the U.S. and U.K. This decision constituted a costly, and likely irretrievable, error on the part of the Bank of England.

10. CLARK CLIFFORD AND ROBERT ALTMAN PARTICIPATED IN IMPROPRIETIES WITH BCCI IN THE UNITED STATES.

Regardless of whether Clifford and Altman were deceived by BCCI in some respects, both men participated in some BCCI's deceptions in the United States.

Beginning in late 1977, Clifford and Altman assisted BCCI in purchasing a U.S. bank, Financial General Bankshares, with the participation of nominees, and understood BCCI's central involvement in directing and controlling the transaction.

In the years that followed, they made business decisions regarding acquisitions for First American that were motivated by BCCI's goals, rather than by the business needs of First American itself; and represented as their own to regulators decisions that had been made by Abedi and BCCI on fundamental matters concerning First American, including the purchase by First American of the National Bank of Georgia and First American's decision to purchase branches in New York City.

Clifford and Altman concealed their own financing of shares of First American by BCCI from First American's other directors and from U.S. regulators, withheld critical information that they possessed from regulators in an effort to keep the truth about BCCI's ownership of First American secret, and deceived regulators and the Congress concerning their own knowledge of and personal involvement in BCCI's illegalities in the United States.

11. ABU DHABI'S INVOLVEMENT IN BCCI'S AFFAIRS WAS FAR MORE CENTRAL THAN IT HAS ACKNOWLEDGED, INVOLVING IN SOME CASES NOMINEE RELATIONS AND NO-RISK TRANSACTIONS THAT ABU DHABI IS TODAY COVERING-UP THROUGH HIDING WITNESSES AND DOCUMENTS FROM U.S. INVESTIGATORS.

Members of Abu Dhabi's ruling family appear to have contributed no more than $500,000 to BCCI's capitalization prior to April 1990, despite being the record owner of almost one-quarter of the bank's total shares. An unknown but substantial percentage of the shares acquired by Abu Dhabi overall in BCCI appear to have been acquired on a risk-free basis -- either with guaranteed rates of return, buy-back arrangements, or both.

The interest held in BCCI by the Abu Dhabi ruling family, like the interests held by the rulers of the three other gulf sheikdoms in the United Arab Emirates who owned shares of BCCI, materially aided and abetted Abedi and BCCI in projecting the illusion that BCCI was backed by, and capitalized by, Abu Dhabi's wealth. Investments made in BCCI by the Abu Dhabi Investment Authority appear to have been genuine, although possibly guaranteed by BCCI with buy-back or other no-risk arrangements.

Shares in Financial General Bankshares held by members of the Abu Dhabi royal family in late 1977 and early 1978 appear to have been nominee arrangements, adopted by Abu Dhabi as a convenience to BCCI and Abedi, under arrangements in which Abu Dhabi was to be without risk, and BCCI was to guarantee the purchase through a commitment to buy-back the stock at an agreed upon price.

Abu Dhabi's representative to BCCI's board of directors, Ghanim al Mazrui, received unorthodox financial benefits from BCCI in no-risk stock deals which may have compromised his ability to exercise independent judgment concerning BCCI's actions; confirmed at least one fraudulent transaction involving Abu Dhabi; and engaged in other improprieties pertaining to BCCI; but remains today in place at the apex of Abu Dhabi's committee designated to respond to BCCI's collapse.

In April, 1990, Abu Dhabi was told in detail about BCCI's fraud by top BCCI officials, and failed to advise BCCI's external auditors of what it had learned. Between April, 1990 and November, 1990, Abu Dhabi and BCCI together kept some information concerning BCCI's frauds hidden from the auditors.

From April, 1990 through July 5, 1991, Abu Dhabi tried to save BCCI through a massive restructuring. As part of the restructuring process, Abu Dhabi agreed to take responsibility for BCCI's losses, Price Waterhouse agreed to certify BCCI's books for another year, and Abu Dhabi, Price Waterhouse, the Bank of England, and BCCI agreed to keep all information concerning BCCI's frauds and other problems secret from BCCI's one million depositors, as well as from U.S. regulators and law enforcement, to prevent a run on the bank.

After the Federal Reserve was advised by the New York District Attorney of possible nominee arrangements involving BCCI and First American, Abu Dhabi, in an apparent effort to gain the Federal Reserve's acquiescence in BCCI's proposed restructuring, provided limited cooperation to the Federal Reserve, including access to selected documents. The cooperation did not extend to permitting the Federal Reserve open access to all BCCI documents, or substantive communication with key BCCI officials held in Abu Dhabi, such as BCCI's former president, Swaleh Naqvi. That access ended with the closure of BCCI July 5, 1991.

From November, 1990 through the present, Abu Dhabi has failed to provide documents and witnesses to U.S. law enforcement authorities and to the Congress, despite repeated commitments to do so. Instead, it has actively prevented U.S. investigators from having access to vital information necessary to investigate BCCI's global wrongdoing.

The proposed agreement between Abu Dhabi and BCCI's liquidators to settle their claims against one another contains provisions which could have the consequence of permitting Abu Dhabi to cover up any wrongdoing it may have had in connection with BCCI.

There is some evidence that the Sheikh Zayed may have had a political agenda in agreeing to the involvement of members of the Abu Dhabi royal family and its investment authority in purchasing shares of Financial General Bankshares, then of CCAH/First American. This evidence is offset, in part, by testimony that Abu Dhabi share purchases in the U.S. bank were done at Abedi's request and did not represent an actual investment by Abu Dhabi until much later.

12. BCCI MADE EXTENSIVE USE OF THE REVOLVING DOOR AND POLITICAL INFLUENCE PEDDLING IN THE UNITED STATES TO ACCOMPLISH ITS GOALS.

BCCI's political connections in Washington had a material impact on its ability to accomplish its goals in the United States. In hiring lawyers, lobbyists and public relations firms in the United States to help it deal with its problems vis a vis the government, BCCI pursued a strategy that it had practiced successfully around the world: the hiring of former government officials.

BCCI's and its shareholders' cadre of professional help in Washington D.C. included, at various times, a former Secretary of Defense (Clark Clifford), former Senators and Congressmen (John Culver, Mike Barnes), former federal prosecutors (Larry Wechsler, Raymond Banoun, and Larry Barcella, a former State Department Official (William Rogers), a former White House aide (Ed Rogers), a current Presidential campaign deputy director (James Lake), and former Federal Reserve Attorneys (Baldwin Tuttle, Jerry Hawke, and Michael Bradfield). In addition, BCCI solicited the help of Henry Kissinger, who chose not to do business with BCCI but made a referral of BCCI to his own lawyers.

At several key points in BCCI's activities in the U.S., the political influence and personal contacts of those it hired had an impact in helping BCCI accomplish its goals, including in connection with the 1981 CCAH acquisition of FGB and the handling and aftermath of BCCI's plea agreement in Tampa in 1990.

The political connections of BCCI's U.S. lawyers and lobbyists were critical to impeding Congressional and law enforcement investigations from 1988 through 1991, through a variety of techniques that included impugning the motives and integrity of investigators and journalists, withholding subpoenaed documents, and lobbying on capital hill to protect BCCI's reputation and discourage efforts to close the bank down in the United States.

13. BCCI'S PUBLIC RELATIONS FIRM SMEARED PEOPLE WHO WERE TELLING THE TRUTH AS PART OF ITS WORK FOR BCCI.

When Hill and Knowlton accepted BCCI's account in October, 1988, its partners knew of BCCI's reputation as a "sleazy" bank, but took the account anyway. In 1988 and 1989, Hill and Knowlton assisted BCCI with an aggressive public relations campaign designed to demonstrate that BCCI was not a criminal enterprise, and to put the best face possible on the Tampa drug money laundering indictments. In so doing, it disseminated materials unjustifiably and unfairly discrediting persons and publications who were telling the truth about BCCI's criminality.

Important information provided by Hill and Knowlton to Capitol Hill and provided by First American to regulators concerning the relationship between BCCI and First American in April, 1990 was false. The misleading material represented the position of BCCI, First American, Clifford and Altman concerning the relationship, and was contrary to the truth known by BCCI, Clifford and Altman.

Hill and Knowlton's representation of BCCI was within the norms and standards of the public relations industry, but raises larger questions as to the relationship of those norms and standards to the public interest.

14. BCCI ACTIVELY SOLICITED THE FRIENDSHIPS OF MAJOR U.S. POLITICAL FIGURES, AND MADE PAYMENTS TO THESE POLITICAL FIGURES, WHICH IN SOME CASES MAY HAVE BEEN IMPROPER.

Beginning with Bert Lance in 1977, whose debts BCCI paid off with a $3.5 million loan, BCCI, BCCI nominees, and top officials of BCCI systematically developed friendships and relationships with important U.S political figures. While those which are publicly known include former president Jimmy Carter, Jesse Jackson, and Andrew Young, the Subcommittee has received information suggesting that BCCI's network extended to other U.S. political figures. The payments made by BCCI to Andrew Young while he was a public official were at best unusual, and by all appearances, improper.

15. BCCI'S COMMODITIES AFFILIATE, CAPCOM, ENGAGED IN BILLIONS OF DOLLARS OF LARGELY ANONYMOUS TRADING IN THE US WHICH INCLUDED A VERY SUBSTANTIAL LEVEL OF MONEY LAUNDERING, WHILE CAPCOM SIMULTANEOUSLY DEVELOPED SIGNIFICANT TIES TO IMPORTANT U.S. TELECOMMUNICATIONS INDUSTRY EXECUTIVES AND FOREIGN INTELLIGENCE FIGURES.

BCCI's commodities affiliate, Capcom, based in Chicago, London and Cairo, was principally staffed by former BCCI bankers, capitalized by BCCI and BCCI customers, and owned by BCCI, BCCI shareholders, and front-men. Capcom employed many of the same practices as BCCI, especially the use of nominees and front companies to disguise ownership and the movement of money. Four U.S. citizens -- none of whom had any experience or expertise in the commodities markets -- played important and varied roles as Capcom front men in the United States.

While investigation information concerning Capcom is incomplete, its activities appear to have included misappropriation of BCCI assets; the laundering of billions of dollars from the Middle East to the US and other parts of the world; and the siphoning of assets from BCCI to create a safe haven for them outside of the official BCCI empire.

Capcom's majority shareholders, Kamal Adham and A.R. Khalil, were both former senior Saudi government officials and successively acted as Saudi Arabia's principal liaisons to the Central Intelligence Agency during the 1970's and 1980's.

Its U.S. front men included Robert Magness, the CEO of the largest U.S. cable telecommunications company, TCI; a vice-President of TCI, Larry Romrell; and two other Americans, Kerry Fox and Robert Powell, with long-standing business interests in the Middle East. Magness, Romrell and Fox received loans from BCCI for real estate ventures in the U.S., and Magness and Romrell discussed numerous business ventures between BCCI and TCI, some of which involved the possible purchase of U.S. telecommunications stock and substantial lending by BCCI.

Commodities regulators with the responsibility for investigating Capcom showed little interest in conducting a thorough investigation of its activities, and in 1989 allowed Capcom to avoid such an investigation through agreeing to cease doing business in the United States.

The Subcommittee could not determine whether BCCI, Capcom, or their shareholders or agents actually acquired equity interests in the U.S. cable industry and believes further investigation of matters pertaining to Capcom is essential.

16. INVESTIGATIONS OF BCCI TO DATE REMAIN INCOMPLETE, AND MANY LEADS CANNOT BE FOLLOWED UP, AS THE RESULT OF DOCUMENTS BEING WITHHELD FROM US INVESTIGATORS BY THE BRITISH GOVERNMENT, AND DOCUMENTS AND WITNESSES BEING WITHHELD FROM US INVESTIGATORS BY THE GOVERNMENT OF ABU DHABI.

Many of the specific criminal transactions engaged in by BCCI's customers remain hidden from investigation as the result of bank secrecy laws in many jurisdictions, British national security laws, and the holding of key witnesses and documents by the Government of Abu Dhabi. Documents pertaining to BCCI's use to finance terrorism, to assist the builders of a Pakistani nuclear bomb, to finance Iranian arms deals, and related matters have been sealed in the United Kingdom by British intelligence and remain unavailable to U.S. investigators. Many other basic matters pertaining to BCCI's criminality, including any list that may exist of BCCI's political payoffs and bribes, remain sequestered in Abu Dhabi and unavailable to U.S. investigators.

Many investigative leads remain to be explored, but cannot be answered with devoting substantial additional sources that to date no agency of government has been in a position to provide.

Unanswered questions include, but are not limited to, the relationship between BCCI and the Banco Nazionale del Lavoro; the alleged relationship between the late CIA director William Casey and BCCI; the extent of BCCI's involvement in Pakistan's nuclear program; BCCI's manipulation of commodities and securities markets in Europe and Canada; BCCI's activities in India, including its relationship with the business empire of the Hinduja family; BCCI's relationships with convicted Iraqi arms dealer Sarkis Sarkenalian, Syrian drug trafficker, terrorist, and arms trafficker Monzer Al-Kassar, and other major arms dealers; the use of BCCI by central figures in the alleged "October Surprise," BCCI's activities with the Central Bank of Syria and with the Foreign Trade Mission of the Soviet Union in London; its involvement with foreign intelligence agencies; the financial dealingst of BCCI directors with Charles Keating and several Keating affiliates and front-companies, including the possibility that BCCI related entities may have laundered funds for Keating to move them outside the United States; BCCI's financing of commodities and other business dealings of international criminal financier Marc Rich; the nature, extent and meaning of the ownership of other major U.S. financial institutions by Middle Eastern political figures; the nature, extent, and meaning of real estate and financial investments in the United States by major shareholders of BCCI; the sale of BCCI affiliate Banque de Commerce et Placement in Geneva, to the Cukorova Group of Turkey, which owned an entity involved in the BNL Iraqi arms sales, among others.

The withholding of documents and witnesses from U.S. investigators by the Government of Abu Dhabi threatens vital U.S. foreign policy, anti-narcotics and money laundering, and law enforcement interests, and should not be tolerated.

SUMMARY OF LEGISLATIVE RECOMMENDATIONS 1. THE SUBCOMMITTEE RECOMMENDS THAT THE UNITED STATES DEVELOP A MORE AGGRESSIVE AND COORDINATED APPROACH TO INTERNATIONAL FINANCIAL CRIME, AND TO MOVE FURTHER AGAINST FOREIGN PRIVACY AND CONFIDENTIAL LAWS THAT PROTECT CRIMINALS.

2. THE SUBCOMMITTEE RECOMMENDS THAT THE JUSTICE DEPARTMENT RECONSIDER THE POLICIES AND PRACTICES THAT LED TO ITS INEFFECTIVENESS IN INVESTIGATING AND PROSECUTING BCCI, AND IMPAIRED ITS ABILITY TO COOPERATE WITH OTHER INVESTIGATIONS OF BCCI BEING CONDUCTED BY THE FEDERAL RESERVE, NEW YORK DISTRICT ATTORNEY, AND THE SENATE.

3. THE SUBCOMMITTEE RECOMMENDS THAT THE CENTRAL INTELLIGENCE AGENCY AND STATE DEPARTMENT UPGRADE THE TRACKING OF FOREIGN FINANCIAL INSTITUTIONS AND ACTIVITIES, AND THE DISSEMINATION OF INFORMATION CONCERNING SUCH INSTITUTIONS.

4. THE SUBCOMMITTEE RECOMMENDS THAT THE CONGRESS CONSIDER WHETHER ADDITIONAL OVERSIGHT MECHANISMS ARE NECESSARY TO ENSURE THE CIA'S ACCOUNTABILITY ON THE PROVISION OF INFORMATION.

5. THE SUBCOMMITTEE RECOMMENDS THAT FEDERAL AGENCIES IMPOSE NEW REQUIREMENTS ON FOREIGN AUDITORS TO PROTECT U.S. INTERESTS IN ANY CASE IN WHICH ANY SUCH AGENCY IS RELYING ON AN AUDIT CERTIFIED BY A FOREIGN AUDITOR. AT MINIMUM, THIS SHOULD REQUIRE FOREIGN AUDITORS WHOSE CERTIFICATIONS ARE USED BY INSTITUTIONS DOING BUSINESS IN THE U.S. AGREE TO SUBMIT THEMSELVES TO U.S. LAWS.

6. THE SUBCOMMITTEE RECOMMENDS THAT THE PRESIDENT AND THE SECRETARY OF STATE ADVISE THE GOVERNMENT OF ABU DHABI THAT ITS WITHHOLDING OF DOCUMENTS AND WITNESSES PERTAINING TO BCCI FROM U.S. FEDERAL LAW ENFORCEMENT INVESTIGATORS, THE FEDERAL RESERVE, THE NEW YORK DISTRICT ATTORNEY AND THE CONGRESS THREATENS VITAL U.S. INTERESTS AND WILL NOT BE TOLERATED.

7. FURTHER ATTENTION NEEDS TO BE GIVEN TO THE PROBLEM OF THE REVOLVING DOOR IN WASHINGTON, AND THE IMPACT ON THE REGULATORY PROCESS AND ON LAW ENFORCEMENT OF POLITICAL INFLUENCE IN WASHINGTON. THE SUBCOMMITTEE RECOMMENDS THE CONSIDERATION OF LEGISLATING A FEDERAL STATUTORY CODE OF CONDUCT FOR ATTORNEYS WHO PRACTICE BEFORE FEDERAL AGENCIES.

8. THE SELF-REGULATION OF THE U.S COMMODITIES MARKETS BY THE COMMODITIES FUTURES TRADING COMMISSION, THE CHICAGO BOARD OF TRADE, AND THE CHICAGO MERCANTILE EXCHANGE IS INADEQUATE TO PROTECT THOSE MARKETS AGAINST MONEY LAUNDERING INVOLVING TRADES

FROM ABROAD. THE SUBCOMMITTEE RECOMMENDS THAT THE EXCHANGES MAKE MONEY LAUNDERING ILLEGAL, AND DEMAND THAT THIS REQUIREMENT BE ACCEPTED BY FOREIGN COMMODITIES EXCHANGES WITH WHOM THEY DO BUSINESS, AS A CONDITION OF ACCESS TO US EXCHANGES.

9. THE SUBCOMMITTEE RECOMMENDS THAT FURTHER STEPS BE TAKEN TO INSURE ADEQUATE ACCOUNTABILITY OF FOREIGN FINANCIAL INSTITUTIONS DOING BUSINESS IN THE UNITED STATES, INCLUDING REQUIRING FOREIGN BANKS FORM SEPARATELY CAPITALIZED HOLDING COMPANIES IN THE UNITED STATES AS A CONDITION OF LICENSE AND THE CONSIDERATION BY THE FEDERAL RESERVE OF ESTABLISHMENT A MINIMUM STANDARD FOR CONSOLIDATED REGULATION THAT EXCLUDES BANK REGULATORY HAVENS.

10. THE SUBCOMMITTEE RECOMMENDS THAT FOREIGN INVESTORS WHO PURCHASE SUBSTANTIAL SHARES OF U.S. BUSINESSES BE REQUIRED TO APPEAR PERSONALLY IN THE UNITED STATES AS INSURANCE THAT THE FOREIGN INVESTOR IS NOT ACTING AS A NOMINEE FOR SOMEONE ELSE.

11. TURF WARS CONTINUE TO SEVERELY DAMAGE THE ABILITY OF LAW-ENFORCEMENT AGENCIES IN THE UNITED STATES TO DO THEIR JOB. THE SUBCOMMITTEE RECOMMENDS THE ESTABLISHMENT OF A COMMITTEE OF LAW ENFORCEMENT OFFICIALS WHOSE JOB IT IS TO CONDUCT OVERSIGHT OF, PREVENT, AND RESPOND TO FAILURES OF COOPERATION IN LAW ENFORCEMENT.

12. THE SUBCOMMITTEE RECOMMENDS THAT A STATUTORY MECHANISM FOR THE RECEIPT BY CONGRESS OF FOREIGN FINANCIAL INFORMATION BE ESTABLISHED.

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Introduction and Summary of Investigation BCCI cannot be taken as an isolated example of a rogue bank, but a case study of the vulnerability of the world to international crime on a global scope that is beyond the current ability of governments to control. Its multi-billion dollar collapse is merely the latest in a series of international financial scandals that have bedeviled international banking this century. Its techniques and its associations with government officials, intelligence agencies, and arms traffickers, were neither new nor unique.

For example, as far back as the 1920's, the International Match Corp bilked shareholders and lenders out of some $500 million through switching company assets and liabilities among a series of shell entities, creating fictional assets when existing ones were adequate, and through transferring funds from the United States offshore. All the while, its chairman, Ivan Kreuger, maintained friendships with numerous world leaders including then U.S. President Herbert Hoover, in a manner reminiscent of BCCI's founder Agha Hasan Abedi's relationships wit President Carter a half a century later.

During the 1960's, the Channel Islands off the coast of England became the host to a series of post-off box banks, including the infamous Bank of Sark, whose facilities including a room over a pub, a desk and a telephone. That headquarters proved adequate to enable the swindlers who established the bank to use it to sell some $100 million in fraudulent checks and letters of credit on the phantom bank before their criminality was discovered.

In the same period, Bernie Cornfeld, chairman of the Investors Overseas Service (IOS), which sold "The Fund of Funds," and fugitive financier Robert Vesco, siphoned off hundreds of millions of dollars from investors in the mutual fund that at its height had $3 billion in assets under its management. In doing so, it moved funds held at Credit Suisse to a small bank which IOS itself owned based in Luxembourg, from which the funds disappeared. Again, this technique anticipated the methods used by BCCI to shift assets from legitimate institutions to its own, and then to engage in wire transfers sufficient to make them impossible to track.

Similar techniques were used by Italian financier Michele Sindona in connection with his management of Banco Ambrosiano in Italy; and by former CIA agent Michael Hand in the drug money laundering Nugan Hand Bank in Australia during the late 1970's and early 1980's. The latter institution had numerous ties to U.S. intelligence and military personnel which have never been explained.

Thus, the rise and fall of BCCI is not an isolated phenomenon, but a recurrent problem that has grown along with the growth in the international financial community itself. Given the extraordinary magnitude of international financial transactions -- which amount to some $4 trillion per day moving through the New York clearance system alone -- the opportunities for fraud are huge, the rewards great, and the systems put in place to protect against them, far from adequate, as this report demonstrates in some detail.

The scope and variety of BCCI's criminality, and the issues raised by that criminality, are immense, and beyond the scope of any single investigation or report. This report, the product of some four years of investigation by the Subcommittee, while extensive, can merely provide a basic guideline to the fundamental facts and issued raised by the BCCI affair.

The Subcommittee investigation of BCCI began in February, 1988, early in the second year of a two-year investigation of the relationship between drug trafficking to U.S. foreign policy and law enforcement that had been authorized by the full Committee. During a hearing on General Noriega's drug trafficking and money laundering, BCCI was identified as facilitating Noriega's criminal activity. In March, 1988, the Foreign Relations Committee authorized the issuance of subpoenas to BCCI and those at the bank involved in handling Noriega's assets, and the accounts of others in Panama and Colombia. Service of those subpoenas was delayed, at the request of the Justice Department and U.S. Customs Service, due to concern that its service could interfere with an ongoing sting operation of BCCI in Tampa, Operation C-Chase. By the time the Subcommittee secured the permission of federal authorities to move forward with service of the subpoena, in late July 1988, the Subcommittee had completed the public hearings in connection with its investigative mandate, and was proceeding to complete its final report, with no further investigative efforts planned.

However, service of the subpoena set into motion a series of contacts during the late summer and early fall involving the Subcommittee, BCCI officials, and BCCI's attorneys, including Clark Clifford and Robert Altman. During those contacts, BCCI officials advised Subcommittee counsel Jack Blum that in their view, BCCI and its attorneys were obstructing the Subcommittee's efforts to investigate the bank. The Subcommittee conducted a deposition of one key BCCI official, Amjad Awan, shortly before his arrest in the Customs' sting, and deposed a second, former BCCI officer following the sting, during the final days of the authorization given the Subcommittee by the Foreign Relations Committee. Thus, as the two-year investigation of the Subcommittee authorized by the Foreign Relations Committee ended, investigating BCCI remained a major piece of unfinished Subcommittee business.

In the spring of 1989, Senator Kerry, chairman of the Subcommittee, authorized Blum as he was leaving the Subcommittee, to provide the information he had developed to the Justice Department. After the Justice Department, in Blum's view, had failed to follow up on the information provided, he took the same information to New York District Attorney Robert Morgenthau, who shortly commenced his investigation of BCCI, based in substantial part on the leads provided him by Blum and the Subcommittee.

In the meantime, Senator Kerry asked two members of his personal staff to continue the investigation from within his personal office until such time as further authorization might be granted from the Foreign Relations Committee, or another Committee of formal jurisdiction for a committee investigation.

During 1989 and 1990, staff in Senator Kerry's office had numerous contacts with BCCI's attorneys, certain BCCI customers, and, in a truncated fashion, with BCCI officials, in an attempt to determine whether allegations concerning BCCI's secret ownership of First American Bankshares were correct, and as part of an effort to identify the extent and nature of BCCI's support of drug money laundering.

In January, 1990, when the Justice Department entered into a plea agreement with BCCI, Senator Kerry criticized the plea agreement for permitting BCCI to avoid trial, and the $14 million fine as insufficient punishment for an institution which had a corporate policy of laundering drug money. At the same time, the Subcommittee published a report on drug money laundering which focused in part on further questions concerning BCCI, including BCCI's alleged secret ownership of First American.

During the spring and summer of 1990, the Senator Kerry's staff conducted further investigative efforts concerning BCCI, met with BCCI's and First American's attorneys on several occasions attempting to obtain BCCI documents. In July, 1990, Senator Kerry, in his capacity as chairman of the Subcommittee, scheduled hearings on BCCI which were postponed after BCCI's attorneys and the Justice Department advised staff that each of the requested witnesses, including BCCI attorney and First American President Robert Altman, would decline the Subcommittee's request to testify.

After efforts to obtain authorization for the investigation within the Banking Committee failed, Senator Kerry decided in early 1991 to formalize the personal staff investigation within the Subcommittee and to seek formal authorization for an investigation from the Foreign Relations Committee, which was granted on May 23, 1991, without dissent. Together with this authorization, the Foreign Relations Committee authorized the issuance of a subpoena to BCCI for records pertaining to its dealings with foreign officials of a number of countries, arms dealers, and focusing on its secret ownership of U.S. financial institutions. At this time, Senator Kerry was joined in further investigative efforts by his ranking member, Senator Brown.

While the Foreign Relations Committee provided consistent support for the Subcommittee's efforts through 1991 and 1992, staffing resources for the investigation remained limited, amounting to two attorneys, with no budget for travel. The lack of resources particularly hampered efforts to investigate matters pertaining to BCCI's activities outside the United States.

Authority for subpoenas and writs were granted by the Committee to the Subcommittee on May 23, 1991, November 27, 1991, February 29, 1992, June 4, 1992. In all, the Subcommittee conducted thirteen days of public hearings, on August 1, 2, 8, October 18, 22, 23, 24, 25, and November 21, 1991; February 19, March 18, May 14, and July 30, 1992; one day of closed hearings, on October 31, 1991 and staffed an additional day of hearings in the Senate Banking Subcommittee on Consumer and Regulatory Affairs on May 23, 1991.

Both by subpoena and by request, documents were received from many institutions, agencies and individuals, including BCCI itself; many of BCCI's attorneys and law firms; many former BCCI officials; representatives of BCCI's creditors and depositors; Price Waterhouse, BCCI's accountants; Clark Clifford and Robert Altman; the First American Bank; the Federal Reserve, Office of Thrift Supervision, Resolution Trust Corporation, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Majority Shareholders of BCCI (Abu Dhabi), the Central Intelligence Agency, the U.S. Customs Service, the State Department; the Department of Agriculture; former federal prosecutors and investigators; and many others.

In addition, the Subcommittee has been vitally assisted by certain BCCI insiders who, while still working at BCCI during the period of its operation, became sufficiently angered and disgusted by what they had observed that they contacted the Subcommittee and agreed to provide the Subcommittee with information on an ongoing basis. These insiders helped the Subcommittee to document improprieties involving BCCI's attorneys, senior officers, and shareholders, as well as, certain failures to act on information by federal law enforcement.

Many matters remain to be investigated, and these are outlined in the Executive Summary and in the final chapter on conclusions and legislative recommendations.

What is absolutely clear is that the United States needs to exercise far more leadership in helping develop a system for monitoring and regulating the movement of funds across international borders to replace the current, inadequate, patchwork system that BCCI, with all of its faults, so aptly took advantage of to defraud over one million depositors and thousands of creditors from countries all over the world.

Equally important is for the United States to give renewed attention to the difficulty of monitoring the actual circumstances and intentions, of foreign investors seeking to acquire U.S. institutions. As the BCCI case demonstrates, such investments pose special difficulties for both investigation and prosecution should something go wrong.

Finally, influence peddling, the revolving door, and the willingness of well-placed and prominent people in Washington to provide services to whoever wants in the door and is willing to pay ones fees is a phenomenon that poses very substantial dangers for our system of government. As the BCCI case suggests, higher standards of conduct by the private sector in Washington that lives alongside of government is an essential part of making it possible for government to work. The lack of those standards was a significant factor in BCCI's success in committing crimes, and the government's failures in doing anything them.

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THE ORIGIN AND EARLY YEARS OF BCCI BCCI's conception, growth, collapse, and criminality are inextricably linked with the personality of its founder, Agha Hasan Abedi, who in turn was a product of the unique conditions of Muslim India in the final period of British rule prior to partition, and the first years after partition.

These were years of fundamental change in the region, involving the creation of an entire new ruling class in both Hindu and Moslem India to replace the departing British foreign service. While the period created special opportunities for a newly-emerging professional class in both countries, Abedi and many of the others who later became prominent in Pakistani banking made up a special class. In India, they had grown up as members of a minority, of ineradicably lower status than similarly educated Hindus, despite their university educations. Following partition, these Indian Moslems migrated northward to the new Muslim state of Pakistan, but remained forever regarded as outsiders by the natives. Accordingly, as they settled in the newly-developing cities, such as Karachi and Lahore, they formed a clannish class of Muslim professionals who kept themselves apart from other Pakistanis.

Abedi himself was especially suited to succeed in the post-colonial environment, given his family's experience in northern Indian in Mahmudabad, where his father had served the Rajah. At the Rajah's court, Abedi was exposed to great wealth, and to the concept that access to it could be had for anyone who managed to make himself indispensable to the person who controlled such wealth. Abedi also learned that the previously immutable laws of the British colonial power could be changed, at whim, by the new Indian and Pakistani rulers that followed, and that as often as not, legal obstacles to any goal could be eliminated if they interfered with the plans of a sufficiently important political figure. These were lessons which Abedi applied throughout his career as a banker, and at the core of BCCI's unique history.

A history of BCCI, prepared in 1982 by Khusro Karamat Elley, a key figure in BCCI's secret management of First American, provides a rosy, public-relations view of Abedi's career to the founding of BCCI a decade earlier.

The story begins in the early forties, when the Habib family of India set up a Bank in Bombay, India. They started hiring young graduates as trainee officers and among the first was a young and warm hearted individual named Agha Hasan Abedi. In 1947, when Pakistan was formed, the Habibs [as Moslems] moved their bank to Pakistan.

The Habibs ran the bank like a family business. All decisions were centralized with family members and working hours were long and hard. Agha Hasan Abedi rose very rapidly but soon found the atmosphere to be too restrictive for the great number of ideas welling up inside him. In 1958 he left Habib Bank and was able to get together Investors to form a new bank to be known as United Bank. The Central Bank in Pakistan gave the license and was quite happy with Mr. Abedi's statements that he wanted to make this the largest bank in Pakistan. They however did find it disturbing when he described to them in great detail how high the salaries of the employees of this bank would be, what would be the quality of the offices and the extent of the mechanization that he would go into. Within ten years, United Bank became the second largest bank in Pakistan and all that Mr. Abedi envisioned, relating to the facilities, the staff, and relating to the high quality of appearance of the offices, and to the modern outlook of the Bank, had been achieved. Additionally, the Bank had opened branches overseas in quite a few countries including the Middle East. The Bank was already poised to become the largest bank in Pakistan but political conditions were making it apparent to Mr. Abedi that Pakistan could probably not form the basis for an operation of the size which he and his team were capable of.(1)

This internal BCCI history focuses on key elements of BCCI's operation already present in the Habib and United Banks: a close knit family structure for management, high salaries and benefits to motivate employees, unusually luxurious offices for the purpose of impressing customers, aggressive expansion, beginning with the Middle East, and Abedi's refusal to live within the constraints of governments.

Press accounts of Abedi's life from the 1970's and 1980's typically note Abedi's wish for his success to be seen as a Pakistani version of a Horatio Alger story: success in the material world as being merely the logical reward for piety, hard work, sobriety, discipline, and loyalty. Internal BCCI documents make clear Abedi's ability to motivate his employees to work exceptionally hard. Yet in this, Abedi approach was little different from other successful super-salesmen. What distinguished Abedi's method as a banker was his focused attention on cultivating individuals of wealth, deemed "high net worths," at BCCI, and those who controlled wealth, such as Pakistani government officials.(2)

Abedi's Charisma By all accounts -- ranging from statements made by Bert Lance to Jimmy Carter to the Pakistani bankers who went to work for him at BCCI -- Agha Hasan Abedi was a man of extraordinary personal charisma. That charisma was the glue which held BCCI together. Its absence following Abedi's stroke in early 1989, which led to Carter arranging an emergency heart transplant for him, had a substantial impact on BCCI's ability to survive the drug money laundering indictments in Tampa and the banks subsequent misfortunes.

According to former BCCI chief financial officer Massihur Rahman, who worked alongside Abedi for nearly two decades, Abedi was a man whose personality dominated all those around him, who could simultaneously turn great personal powers to good and to evil.

I remember looking into his eyes and seeing God and the Devil balanced equally in them. He was already an older man when he began BCCI, and he was determined to not to waste time in taking his vision and turning it into something very big.(3)

Abedi asked the total devotion of everyone around him. Should one of his employees decide to abandon an Abedi project, he took it personally, as if it reflected badly on Abedi himself, and would focus every attention in an effort to persuade the employee to change his mind.

For example, when BCCI officer Abdur Sakhia received two offers from other banks and decided to leave BCCI, Abedi refused to accept the situation:

I said I have to leave. They said you can do what you want, but please stay we wont let you go. I said, Mr. Abedi you are making things very difficult. I have two offers, one from Citicorp and one from BOP Canada. He started crying. It was absolutely heartbreaking. We used to sit in 15,000 square feet of open space. Mr. Abedi is at the head of the room and he started crying. We are people from the East, we are not trained to handle things like that. I said Mr. Abedi, my fate is in your hands, you can do with me what you like.(4)

Abedi As Pakistani Political Paymaster Abedi's earliest successes were largely the result of his having recognized the importance in Pakistan of providing payoffs or other under-the-table services to Pakistani officials, especially the leadership of any current governing party. For example, when the United Bank was formed in 1959, Abedi appointed as chairman of its board I. I. Chundrigar, the former Prime Minister of Pakistan, who was a close confidante of Pakistani's then current prime minister, Ayub Khan. Abedi maintained close ties to Khan's government, later hiring General Khan's minister of information to become the "publisher" of a BCCI promotional magazine, "South."(5) When the Pakistani military government was replaced following the debacle that resulted in the severance of East Pakistan into Bangladesh, Abedi became just as cozy with Pakistani "socialist" Ali Bhutto, Khan's ideological opposite. When Bhutto was overthrown in 1978 in a military coup, Abedi swiftly changed allegiances again to Bhutto's successor, Islamic "puritan" General Zia.(6) Zia later executed Bhutto for financial crimes, in which Abedi, among others, was clearly involved, while forming close ties to Abedi, on whose financial skills he increasingly relied.

Abedi's personal involvement in Bhutto's "crimes" was described officially in a White Paper issued by the Government of Pakistan in July, 1978 on "The Conduct of the General Elections in March 1977." In a section analyzing the illegal funding of campaign activities for the PPP, the party of Bhutto, the White Paper describes how "the other large source of funds was the money brought in by Agha Hasan Abdi [sic]" amounting to "two or three crores of rupees." A later reference to Abedi in the White Paper describes his "travels . . . loaded as he used to be with bagfuls of money."(7)

Abedi also sought out key pillars of the Pakistani private sector, securing the Saigol family as a key client of Abedi's in three successive banks -- Habib, United, and then BCCI. The Saigol group was one of the major industrial and trade groups in Pakistan by the mid-1950's, with its initial fortune made in textiles, and as close to "old wealth" as existed at the time within Pakistan's commercial class. Abedi first secured the Saigol account while at Habib, and took the account with him when he left to form United Bank, making the Saigol's United's principal shareholders. At the time, some in Pakistani's commercial community wondered how Abedi had managed to take the important Saigol relationship from the Habib Bank. Thirty years later, Price Waterhouse was to detail the reason -- Abedi's willingness to reschedule millions in loans to the Saigols whenever they found it inconvenient to repay them.(8)

Through these and similar relationships, Abedi built the United Bank into the second largest bank in Pakistan, complete with a protocol department responsible for taking care of the personal needs of VIPs. As founder, president and Chairman of United, Abedi was already a great success in Pakistani terms. But Abedi himself felt this was insufficient to meet his ambitions. And so Abedi increasingly began to focus on "high net worth individuals" outside Pakistan to liberate him from the inherent limitations of being nothing more than a very big fish in a Pakistan which Abedi viewed as too small to accommodate his vision.

Impact of Nationalization By the early 1970's, there was an ongoing tension between Abedi's ambition to move beyond Pakistan, and that of the Pakistani government to keep Pakistani institutions generally and Abedi's bank specifically under its control. From the time he took power, Pakistani Prime Minister Ali Bhutto, typifying the socialist cast of much of the former colonial world in this period, was threatening to nationalize the banks, as he already had nationalized other sectors. Accordingly, Abedi began moving forward with the initial steps to form BCCI as a Pakistani-managed bank outside of Pakistan. When Bhutto in turn learned about Abedi's attempt to circumvent his new socialist order, he not only went ahead with plans for nationalizing the United Bank, but promptly placed Abedi under house arrest.(9)

While under house arrest, Abedi further developed his scheme for his new institution. Unlike United Bank, it would operate in a manner to defy the ability of the Pakistani government, or any other, to impede any objective it might seek. It would be the first global, international, and indeed, trans-national bank, and something more: a charity, a foundation, a shipping empire, an insurer, a brokerage firm, a commodities exchange, a publishing house, a world-class hospital for the rich, a real estate empire, an employee cooperative, an Islamic investment bank, and a Third World powerhouse.(10)

As a politicized, post-colonial Pakistani, Abedi frequently articulated the goal of achieving equality of status with the financial institutions of the former colonial powers. During the colonial period, millions of Indian and Pakistani expatriates had fanned out across British possessions to become the commercial class in many of them. But they had not yet developed their own financial institutions, and had still to rely on European financial institutions to do business, institutions whose attitude towards them ranged from ignorance to neglect to contempt. A bank of their own would treat them better, be able to do far more to help them, and make itself great at the same time.

As Abedi explained while under house arrest to Massihur Rahman, who later became his chief financial officer at BCCI:

Up to that stage in the early 1970's there were mostly national banks and savings banks. The few banks which are international are indeed the colonial banks from Britain, France, Germany, and lately from America. So they were normally not international, they were really national banks, big national banks of countries which were international in network only. So he felt that if a genuinely global bank would be started bridging all the Third World countries and also bridging the first world, there would be a unique banking structure which could be very, very useful socially and also very profitable.(11)

The nationalization of Pakistani banking which provided the impetus for BCCI also insured that BCCI would retain the Saigol relationship, as a substantial portion of their businesses were also nationalized by Bhutto in 1972. Nationalization also provided other Pakistani businessmen with powerful motivation to find a bank that could not be controlled by the Pakistani government. The most important of these proved to be the Gokal brothers, Pakistanis who became in the 1970's, through BCCI lending, owners of the largest shipping empire in the world, with a business that ultimately included commodity trading, general trading, manufacturing, financial services, and real estate.(12) In addition to freeing them from the threat of Pakistani appropriation, BCCI provided both the Saigols and the Gokals one key service from BCCI that no other bank could provide -- the freedom to defer repayment of past loans and to borrow new money at will. Moreover, both clients received a special privilege similar to that afforded BCCI's own officers: when something went wrong and they lost money, BCCI would help them cover it up. This was a matter not just of loyalty to ones intimate business associates -- it was also a matter of sound business practice, as recognizing losses on the loans would have hurt BCCI's balance sheets.(13)

Critical Elements of BCCI's Creation Abedi needed five things to create BCCI. First, a bank secrecy and confidentiality haven, which he found first in Luxembourg, and then in Grand Caymans. Second, a source of capital, $2.5 million, which Abedi ultimately obtained from Bank of America, supplemented by another $500,000 from Sheikh Zayed of Abu Dhabi. Third, a source of initial assets, $100 million, of which at least half were provided as deposits by Sheikh Zayed. Fourth, a group of like-minded Pakistanis to operate the bank. These were now widely available as a result of Bhutto's nationalization of their banks. Lastly, credibility in the international community, through a relationship with an established Western financial institution which would provide prestige to BCCI, but not interfere with its unique approach to banking. This too was provided by Bank of America during BCCI's formative years.(14)

The most critical of these five elements was the relationship between BCCI and Abu Dhabi.

Abedi and Sheikh Zayed of Abu Dhabi Abu Dhabi is the largest and wealthiest member of the United Arab Emirates, an oil-rich federation of sheikhdoms with a combined population of under 1.5 million, bordering on Saudi Arabia and Oman, with one of the world's highest standards of living as a result of oil wealth. Like all of the Gulf sheikdoms, Abu Dhabi is unusual among modern states in that its ruler, and the ruling family, owns all the land and natural resources of the country in fee simple absolute, with no distinctions being made among the wealth of the ruler, his family, and the nation itself. As lawyers for Abu Dhabi have described it:

By tradition and historical background of the Trucial States, the ruler of an Emirate owns all of the land of his State. However, he allots land to his subjects individually for their use. Similarly, all the natural resources of the States are also regarded as the personal property of the ruler and his heirs who enjoy complete authority to utilize them as they consdier fit.(15)

As early as 1967 Abedi's high net worth customers included the ruler of Abu Dhabi, Sheikh Zayed bin Sultan Al Nahayan, and his family. The illiterate Sheikh, a formerly impoverished desert Bedouin, was the recently installed head of a newly wealthy oil state who owed his power to a British coup against his brother in 1966. The brother had been deposed for having been unwilling to spend Abu Dhabi oil revenues for any purpose, including easing conditions for members of the British foreign service posted there.

After installing Sheikh Zayed, British officialdom had failed to pay attention to his desire to be taken seriously as an important world political leader. By contrast, Abedi viewed Sheikh Zayed to be a potentially important resource. By one account, the relationship began when Abedi made the decision to fly to Abu Dhabi in 1966 to solicit the right of the United Bank to take deposits from the thousands of Pakistani workers assisting in its modernization. Travelling with one assistant and bringing an oriental rug as a gesture of goodwill, Abedi secured Sheikh Zayed's permission for the United Bank to open a branch in Abu Dhabi.(16) By a second account, Abedi beat out the Habib Bank for taking care of arrangements for Sheikh Zayed's first bustard hunting and falconry vacation in Pakistan, personally waiting patiently outside the Pakistani government guest house while the Sheikh napped, and securing the right to handle the Sheikh's logistics when he awoke.(17)

By 1967, what had begun with Abedi handling the Sheikh's falconry and bustard-hunting trips in Pakistan, and the finances of Pakistani workers in Abu Dhabi, wound up with Abedi running the Sheikh's financial life. As far as Pakistani bankers observing the relationship were concerned, Abedi coordinated everything for Sheikh Zayed, from the building of the Sheikh's palaces in Pakistan, the furnishing of his villas in Morocco and Spain, his medical appointments, to the digging of wells for his homes in the desert.(18) As BCCI officer Abdur Sakhia put it,

Digging a well or two was a minor cost of doing business. Abedi's philosophy was to appeal to every sector. If you were religious people he would help you pray.(19)

From the point of view of BCCI, Sheikh Zayed and his family were ill-equipped to handle the demands of the modern world, and in the early days, dependent on Abedi and Abedi's bank for their every need. Even in the late 1970's, Sheikh Zayed, whose personal tastes were quite simple, would on trips abroad routinely write checks for $100,000 or $200,000 at a time for members of his retinue to spend as they liked, written on the back of a matchbook or a piece of toilet paper. This practice continued until BCCI officers provided the Sheikh with a gold checkbook and insisted that drafts be written on it.(20) As Akbar Bilgrami described his experiences with Zayed:

He would pray or listen to the news. He had a court jester-type person who made him laugh and told him poetry. He was a simple man, simple but shrewd. On a trip to spain which lasted two weeks, his retinue spent $20 million, but he only spend $400 on himself the entire trip for two dogs whose price he negotiated down from $1,000.

He was a simple man who did not spend a lot of money on himself. It is part of Arab culture. The Sheikh is a sort of farther figure. It is hard for him to say no to people, especially because he knows that everybody knows that he has the money. He would carry about a briefcase filled with expensive watches, Cartiers, Rolexes.(21)

Among BCCI officers it was believed that the United Arab Emirates itself owed its creation to Abedi, who came up with the idea as a means of reducing instability among the gulf emirates and increasing the stature of Sheikh Zayed.(22) As Sakhia recalled:

Abedi created the UAE. He planted the idea of the UAE as a federation to Sheikh Zayed. These people had no standing anywhere in the world. They were smugglers and tribesmen. When Sheik Zayed would come for months in Pakistan, not even a policeman would give him any attention. Yet two months after meeting Abedi, Sheikh Zayed finally gets a state visit to Islamabad and meets the President of Pakistan which then became the first country to give him any status. The first embassy of UAE was opened in Pakistan and the second in London, and both were staffed by Abedi's appointments.(23)

In time, Sheikh Zayed would unburden himself to Abedi, and tell Abedi that he felt ignored by westerners, a sentiment he later repeated to Bert Lance, as Lance recalled to Senate investigators, and in testimony on October 24, 1991.

I remember a long conversation I had with Sheikh Zayed at his palace outside of Islamabad. There were three of us there: Bert Lance, Abedi, and Sheikh Zayed. The Sheikh was unhappy that the US hadn't paid any attention to him. The US Ambassador hadn't focused on him. . . He was being reated in a manner that really wasn't befitting the strategic importance or the fiscal importance of the UAE. [Zayed was] concerned about the discrimination as it related to the UAE vis-a-vis other Arab countries . . . receiving more attention and more concern than the UAE was.(24)

It is absolutely clear from BCCI documents that Abedi's relationship with the Sheikh of Abu Dhabi and the Al Nahayan family was the foundation of the establishment of the bank without which BCCI never could have come into existence. Throughout the first critical decade of BCCI's eighteen year existence, as much as 50% of BCCI's overall assets were from Abu Dhabi and the Al Nayhan family, who were earning about $750 million a year in oil revenues in the early 1970's, an amount that rose to nearly $10 billion a year by the end of the decade. Until the formation of a separate affiliate, the Bank of Credit and Commerce Emirates (BCCE), BCCI functioned as the official bank for the Gulf emirates, and handled a substantial portion of Abu Dhabi's oil revenues. And yet from the beginning, there was an oddity about this central relationship: at no time while Abedi was in charge of BCCI did Abu Dhabi hold more than a small share of BCCI's recorded shares. Abu Dhabi appears not to have capitalized BCCI, but instead to have insisted on guaranteed rates of return for the use of its money.

As Akbar Bilgrami, who handled Sheikh Zayed's personal finances in the late 1970's at BCCI, has described it, BCCI provided Zayed with great benefits for what appeared at the time to be very little risk. Zayed deposited substantial funds, amounting to billions of dollars, in BCCI, receiving a guaranteed rate of return on these deposits -- sometimes as high as 1.5 percent over LIBOR, a standard European funds rate. In return for a relationship that was costing him little and indeed, making him profits, Sheikh Zayed received the prestige and benefits of having people all over the world believe it was his bank, without his own funds being at risk.(25) Thus, rather than being a major investor in fact in BCCI, in the early years, Abu Dhabi only agreed to place extremely large sums of money as deposits at the bank, which BCCI used in lieu of capital.

An eyewitness to BCCI's creation described Abedi's elation after Sheikh Zayed agreed to back his new bank in a scene that took place in late 1972, in the late evening, in the living room of a Pakistani banker in Abu Dhabi. Abedi addressed the Pakistanis present in the following terms:

It is truly the grace of God that the prayers of all the U.B.L. [United Bank of Pakistan] employees who had to flee Bangladesh and who had been kept on the U.B.L. payroll by us, have been provided a source of livelihood by God. The Sheikhs have been kind enough to give me their trust and support the new bank that we are creating for these employees.(26)

Abedi used the expression "rizq," or "providence" to describe the deal he had consummated with Sheikh Zayed. But there would have been a number of compelling reasons for Sheikh Zayed to respond to Abedi's offer. Sheikh Zayed was financially unsophisticated and in need of assistance from someone he could trust to handle his finances in a manner that would meet his personal, cultural and political needs. These included the need for secrecy as to the location and size of his wealth, given the political instability within the region; the need to adhere to Islamic law, through structuring transactions so that they could be profitable and safe without the payment of interest in violation of that law. There was, moreover, no one within Abu Dhabi who the Sheikh could trust to provide the adequate secrecy. Indeed, apart from Abedi, Sheikh Zayed may well have known no one inside or outside Abu Dhabi with the apparent sophistication to handle finances of the magnitude that were being generated by the petrodollars. In any case, Abedi had already been attending to all of the Sheikh's personal needs in Pakistan for five years, thereby demonstrating his ability to make the relationship worry-free for the Sheikh.

Abol Helmy, an Iranian BCCI officer, described the relationship as a logical outgrowth of the post-colonial period in the Third World:

The British ruled India, Pakistan, and the Arab countries. Traditionally, the Indians and then the Pakistanis because of the Moslem thread that linked them became the civil servants for the British working in the Gulf. It was a continuation of the policies of the Empire.(27)

As a result of the Abedi-Zayed agreement, Abedi now had essentially unlimited resources to create BCCI. He could now act simultaneously as manager of billions of Sheikh Zayed's personal wealth, as banker to the United Arab Emirates of which Sheikh Zayed was chief of state, and as chairman of a new bank that had guaranteed assets of hundreds of millions of dollars from its inception.(28) Moreover, Sheikh Zayed was accustomed to the use of nominees, as nominee purchases were frequently employed whenever he wished to buy anything to avoid the price increasing if the Sheikh's name had been mentioned as part of the negotiations.(29)

One consequence of this arrangement, however, was that Abedi's success was overly dependent on his relationship with Abu Dhabi and its assets. He was managing the Sheikh's resources, he had use of them, and if he did not meet the Sheikh's needs, he could lose everything. Recognizing this dependence, Abedi made it a practice to insure that BCCI would provide whatever the Sheikh required, whenever the Sheikh or his family wanted it. As BCCI records demonstrate, payments, often characterized as loans, were made to members of the Abu Dhabi royal family on an as-needed basis by BCCI, without any regard as to whether these same resources were also being committed elsewhere. With Abedi relying on the Sheikh's resources to finance his rapid expansion, BCCI's finances quickly became so intermingled with the finances of Abu Dhabi that it was difficult even for BCCI insiders to determine where one left off and the other began.

BCCI's Protocol Department By all accounts, Abedi flattered Zayed, and to ensure that no detail of his needs would be neglected, established a large protocol department, first at the United Bank and later at BCCI.

The most detailed account of the protocol department's activities provided publicly to date has been that of Nazir Chinoy, who as a branch manager of BCCI in Pakistan had substantial direct contact with the head of BCCI's protocol department, Sani Ahmad, and had first-hand knowledge of the protocol department's finances.

According to Chinoy, upon his arrival at BCCI-Pakistan in 1978, the protocol department employed about 120 people, whose job was "to establish and further the rapport with the sheiks of and ruling families of Dubai and Abu Dhabi." The protocol department was financed by BCCI, and had nothing to do directly with the bank. Instead, it was handled as an adjunct to special activities of Abedi, managed by Ahmad under Abedi's direction, and housed in Karachi in a separate building opposite Mr. Abedi's house.(30) From 1978 through 1982, the period Chinoy was at BCCI-Pakistan, the protocol department principally functioned as the administrative wing of the Abu Dhabi royal family for their foreign travel.

The rulers and their families would come very frequently. Ninety-percent of the time, the guests were from Abu Dhabi and Dubai; occasionally, Oman, and the other emirates. They would come for shooting at the Game Reserves. There was one particular cashier called Ibrahim. Sani would call me and tell me to make Ibrahim available. He would take 5 million in huge notes of rupees. At that time about $400,000. In Pakistan that is a hell of a lot of cash money. It would be carried out in steel trunks. We would be given money from the rulers account in Abu Dhabi in US Dollars.(31)

As of 1978, the expenses of the protocol department were about 300,000 rupees a month -- about $600,000 a year, rising to $2.5 million a year by the early 1980's, and as much as $10 million a year at the height of BCCI's success. The protocol department was not responsible for financing its own operations. Its expenses were instead paid by the Pakistani branch of BCCI each month after it received a statement from BCCI protocol chief Sani Ahmad describing his expenditures. These expenditures were always paid by the BCCI branch, even though often, the bankers were unable to determine the nature of the expenses or the reasons for the expenditures.

According to Chinoy:

Sani would tell me that I need one million rupees today and we would give him the moneys and the branch would pay the money. What it was paid for we would have no idea I did not want to get involved in this either and he would report to Mr. Abedi and I would tell Abedi what money had been given to Sani Ahmed. Abedi would never initial or sign [any of the documents], but he looked at and approved everything.(32)

Each hunting trip's expenses would amount to several million dollars, requiring a special exemption from the State Bank of Pakistan to permit the funds to be debited from BCCI's protocol department. This exemption was granted by the State Bank after arguments by Abedi that Pakistan needed to maintain BCCI's relationship with Abu Dhabi as a means of improving its overall balance of payments.(33)

By the late 1970s, BCCI's protocol department handled all affairs for the 18-20 palaces BCCI maintained for the ruler of Abu Dhabi in Pakistan, all under the direct control of Sani Ahmed. In return, money was sent each month from BCCI Abu Dhabi to Pakistan to pay for the gardeners, telephones, and maintenance of houses.

The protocol department also established a special relationship with Pakistani Customs airport authorities so that members of Arab royal families would receive VIP treatment that avoided the usual delays associated with entering Pakistan.

Along with the construction of palaces and vacation homes, BCCI handled private matters for the visiting Al-Nahayans, including the procurement of Pakistani prostitutes for the male members of the family. These were typically teenage girls, known as "singing and dancing girls," and selected, outfitted and trained by a woman named Begim Hashari Rahim, who later was promoted to the official position of Interior Decorator to the Royal Family of Abu Dhabi.(34)

As head of the protocol department before becoming head of BCCI's Washington, D.C. representative office, Sani Ahmad had a unique role at BCCI and special relationship with Abedi. He was treated with deference by other BCCI officers, who did not consider him to be a banker, but a fixer. As Chinoy recalled:

Sani was the trusted man for things no one else was supposed to know. We were the technocrats. Sani Ahmed would handle the things we wouldn't, like get girls. If anyone paid anyone any money [as a bribe], Sani would have been the one to do it.(35)

Bank of America Ironically, although Abedi now had a large source of assets for BCCI, the Sheikh of Abu Dhabi could not provide him with credibility in the west. Abedi's first choice for a prestigious western partner, American Express, insisted on having a major say in BCCI's management, which Abedi would not tolerate.(36) Abedi's search for a more compliant partner brought him to Bank of America, which in 1972 was one of the most aggressive of U.S. international banks, with a presence in Iran already and in Pakistan. For BCCI, a relationship with Bank of America would provide recognition in the west and access to the Bank of America's global network for correspondent banking. For the Bank of America, BCCI provided a potentially lucrative entry to Arab oil wealth, at a tiny capitalization cost of just $2.5 million.(37) Following what Abedi referred to as "an historic lunch" in San Francisco, Bank of America agreed to provide the money and to be a passive partner in BCCI, permitting Abedi to run the operation as he pleased.(38) As Abedi told a British magazine, Euromoney, in the summer of 1978:

Bank of America agreed to become a shareholder, but we made it a condition that we would establish the management style.(39)

With only $3 million in total capital, Abedi kept BCCI's initial overhead down through promising the central Pakistani recruits to his team that they were members of a family, employed for life, whose future prosperity was being built collectively. He made the founder group shareholders of BCCI and put them to work in a tiny office in Abu Dhabi sharing what Massihur Rahman later described as "mess-type flats."(40) Working conditions in Abu Dhabi, and at BCCI in the early days, were extremely primitive, but more easily accepted by the Pakistani bankers than they would be by western ones.(41)

Simultaneously, Abedi relied upon senior Bank of America officials to sit on BCCI's board of directors, to recruit additional bankers for BCCI, and to approve all major loans by the bank. Among the key figures retained by Abedi as directors from Bank of America were Yves Lamarche, who had previously managed Bank of America operations in the Middle East, J.D. Van Oenen, a European Bank of America official, and P.C. Twitchen, formerly, Vice President of Bank of America. Another prominent Bank of America figure, Roy Carlson, who was based in Iran, later became President of National Bank of Georgia at a time when it became secretly owned by BCCI.

Ownership of BCCI Although Abu Dhabi had a key interest in BCCI from its creation, in accord with Abu Dhabi's failure to provide the initial funds for capitalization, BCCI's early stock recordations did not show Abu Dhabi as the actual owner of the bank. A snapshot of BCCI shares from Bank of America files as of September 30, 1977 described BCCI's majority owner as ICIC, at 50.1 percent; its most important minority owner as Bank of America, at 30 percent; and its largest Arab owner as Majid Al-Futaim of Dubai in the United Arab Emirates at just 4 percent, with the members of the family of Abu Dhabi owning just 3.4 percent all told.(42)

This list indicated that the Pakistanis actually owned BCCI at a time when to the outside world, the bank was ostensibly owned by oil-rich Middle Eastern Arabs, including the ruling families of Bahrain, Sharjah, Dubai, Saudi Arabia, and Iran, as well as that of Abu Dhabi.(43)

That picture was complicated still further, however, by the fact that ICIC was not the owner of record of any of its shares of BCCI on the share register of BCCI in Luxembourg. Instead, several of the shareholders on the register were acting as nominees for BCCI, according to the Bank of America records. Moreover, some of the subsidiaries owned by BCCI also relied on nominees, and by the late 1970's, ICIC was the record controller of as much of 70 percent of BCCI all told.(44) Yet even at the time, BCCI officers were told by Abedi that ICIC really owned only about 30 percent of BCCI.(45)

A further difficulty in interpreting the issue of ownership was that ICIC continuously was borrowing very substantial amounts from BCCI with inadequate documentation, with the result that for all practical purposes, BCCI was repeatedly buying itself, and using various nominees along the way to hide this fact.

Looking to BCCI's capitalization was of little help in determining its ownership, either. Apart from the tiny, real capital of $2.5 million placed in BCCI by the Bank of America, and an additional $500,000 acknowledged by Abu Dhabi, there remains no evidence of other substantial cash infusions in the bank in the early years, suggesting that from the beginning, Abedi and Sheikh Zayed had agreed to provide BCCI only the assets of Sheikh Zayed as a depositor, rather than his capital as an investor. This pattern, in which Abedi asked for little in the way of cash on the line from potential "investors," would be repeated in other cases, except that often, a shareholder would contribute merely the prestige of his name and aura of wealth, rather than deposits or any actual financial contribution.

The Early Use of Front-Men As a privately held company, BCCI was obliged to no one to provide detailed information about shareholders. BCCI made it a practice never to reveal exactly who owned how much of the bank. However, in direct contradiction to BCCI's obsessive secrecy about the actual facts of its ownership, Abedi heavily publicized the fact that most of the most important royal families of the oil-rich states of the Middle East were "shareholders" from the first in BCCI, and therefore were ostensibly backing the bank with their fabulous petrowealth.

What the outside world did not know is that in every case -- with the possible exception of Zayed's and Abu Dhabi's acknowledged holdings in BCCI -- these backers had been provided hold harmless agreements by BCCI, providing them guarantees against loss, and that the interest in BCCI held by these royal families had been essentially provided to them by Abedi as a "gift," accompanied by generous terms on lending and other BCCI services.

Just as BCCI's board of directors would later contemptuously be referred to as "RAF," for "rent-a-face," by BCCI insiders, Abedi had essentially rented the names of many of the Arab world's most prominent oil-rich monarchs. Instead of the public image of their backing BCCI with their money, BCCI was paying them for the illusion that they were behind the bank.

BCCI's glossy promotional materials were characteristically

misleading on the issue of its initial capitalization. In describing its history in a mid-1980's Group Profile made available to the public, BCCI wrote:

The BCC Group was originally conceived as an international banking organization backed by Middle Eastern investors to provide commercial banking services world-wide . . . Its initial paid up capital of $2.5 million wa subscribed by Bank of America (25% later increased to 30%) and the balance by investors from the Middle East (emphasis added).(46)

The deliberate vagueness of the phrase "the balance" underscores the lack of any substantial additional initial capital in BCCI beyond that provided by Bank of America. The $500,000 investment acknowledged by Abu Dhabi to the Subcommittee for the first time on May 14, 1992 would have been considered surprisingly tiny had it been revealed in 1972.

Some hint of how Abedi approached the capitalization problem is found in Abedi's motivational rhetoric, in which he constantly talked of BCCI as something that could be created out of pure willpower. "Western Banks concentrate on the visible, whereas we stress the invisible," Abedi told a British journalist in 1978.(47) Such a statement could be taken as many did take it, as mystical gobbledygook. But it well described Abedi's technique for building a banking empire -- building something out of nothing by relying on something invisible but powerful: images of wealth. These images, from BCCI's fancy buildings to the photographs of Abedi posing with its fabulously wealthy Middle Eastern "shareholders," provided as much power for Abedi as the real money would have done, so long as everyone believed it was there. It was far easier to ask a Middle Eastern potentate for his name than for his money, and as far as Abedi was concerned, the results were the same.

Although ICIC "owned" 70 percent of BCCI in 1980 upon Bank of America's withdrawal, ICIC mysteriously became a minority owner of BCCI by the end of the decade. As of December 31, 1989, ICIC held less than 11 percent of BCCI, with Abu Dhabi becoming the principal shareholder, holding over 35 percent, including shares owned by various members of the Al-Nahyan family and the Abu Dhabi investment authority.(48)

Yet the actual picture as to BCCI's ownership even then remains clouded. Several of the larger shareholders registered at that date, including Wabel Pharaon with 11.55 percent, Mohammed Hammoud, with 3.44 percent, Abdul Raouf Khalil, the Saudi government's intelligence liaison to the United States and other foreign governments, with 3.08 percent, and Kamal Adham, Khalil's predecessor as Saudi intelligence chief, with 2.94 percent, were acting as BCCI's nominees for ownership of its own shares, through guarantees that prevented them from being at risk. Moreover, Price Waterhouse could at the time find no evidence of the bank's actual contact with Khalil, its supposed "shareholder," for a number of years, although there were numerous transactions in his name undertaken in that period.(49)

A year later, following the disclosure of massive losses at BCCI as a result of Price Waterhouse reports to the Board of Directors, the Abu Dhabi royal family had took full legal title of BCCI, increasing its share to over 78 percent of all BCCI shares, with the new shares obtained entirely from those formerly held by the nominees.(50)

Given the many mysteries about BCCI's shareholding from its creation and the fact that critical records remain missing, it remains difficult to determine retrospectively whether or not Abu Dhabi had the ability at all times to do what it ultimately did in 1990 -- obtain direct and complete formal control of the majority of BCCI shares.

BCCI's Rapid Expansion Throughout the 1970's, BCCI expanded rapidly, with Abedi adding new corporate members to the BCCI family by the month. Initially, BCCI was incorporated in one location only, Luxembourg. Two years later, a holding company was created, BCCI Holdings, with the bank underneath it BCC S.A., split into two parts, BCCI S.A., with head offices in Luxembourg, and BCCI Overseas, with head offices in Grand Cayman. Luxembourg was used mostly for BCCI's European and Middle East locations, and the Grand Caymans mostly for Third World Countries.(51)

This structure was intentionally further complicated by the establishment of a series of additional entities, used as "parallel banks" by BCCI as needed for financial manipulations. These parallel entities included the Kuwait International Finance Company (KIFCO), in which BCCI ostensibly had only a minority interest; a Swiss bank, Bank de Commerce et Placements SA (BCP), in which BCCI also ostensibly had only a minority interest; the National Bank of Oman, again with BCCI formally holding only a minority interest; a 100% owned finance subsidiary, Credit & Finance Corporation Ltd,; and the series of entities based in the Grand Caymans and collectively known as "ICIC," which became the principal "bank within a bank" at BCCI. In the cases in which BCCI's official interest was minority, its apparent lack of control was the consequence of local regulations prohibiting a foreign bank from owning a majority share. Each time, BCCI found ways to evade the regulations through the use of front-men or nominees, and wound up being able to direct the operations of these institutions as if they were wholly-owned subsidiaries.

BCCI's aggressive drive for expansion was necessitated by a financial strategy that pursued asset growth, rather than profitability, as the key to success. This approach was a necessity because of the underlying lack of working capital and BCCI's high-start up costs. The idea was that through rapid growth, BCCI would eventually fill the holes in its capital through commissions on its frenzy of activity. In the meantime, growth could disguise temporary operating losses through creative bookkeeping. In fact, the growth did not end the losses, but exacerbated the underlying capital problem, because BCCI needed to increase its retained capital in order to show an adequate cushion for its billions in new assets. The solution to this problem, like all others, for Abedi, was relentless growth.

To implement this approach, BCCI officers were directed to focus their attention on individuals and entities who controlled large sums of cash: people like central bank officials, heads of state, "high net worth individuals," and black marketeers, and offer them terms significantly better than the terms offered by competing banks, or services, such as kick-backs and freedom from documentation, that the competition was unwilling to provide. As a marketing document from BCCI in the United States, prepared during the mid-1980's, advises BCCI officers, they should vigilantly look for "client relationships which are considered special for . . . reasons such as confidentiality, high sensitivity, requirement of special attention and service, large size deposit, business or profit, complexity of business, etc.," which would receive specialized attention from BCCI higher-ups.(52)

BCCI's trans-national character continued to be a critical ingredient of its marketing. As BCCI historian K.K. Elley noted in 1982, BCCI because "serves no country of individual. . . No customer need fear that their assets will be frozen because their country is having a difference with the country of BCCI's origin."(53)

Fueled in part by infusions of petrodollar deposits from Gulf State rulers during the hey-day of the OPEC years, BCCI's early growth was exponential, especially in the United Arab Emirates, the Sultanate of Oman, Yemen, and Bahrain, as the following profile of the first five-years of BCCI's performance demonstrates.

Year # Branches # Countries Assets Growth

1973 19 5 $200 m --

1974 27 7 610 m 204%

1975 64 13 1.2 b 98%

1976 108 21 1.6 b 37%

1977 146 43 2.2 b 33%

After consolidating its position in the Middle East, BCCI identified Africa as the next area for growth. A number of African countries possessed many of the traits that BCCI had learned to exploit in the Middle East -- autocratic rulers who controlled much of the wealth of their nations, primitive working conditions for bankers which discouraged westerners, and non-western attitudes towards the payment of gratuities as a cost of doing business.

African expansion began in Egypt, Sudan, Mauritius and Seychelles, and extended by 1979 into Kenya, Swaziland, Liberia, Nigeria and Sierra Leone. Typically, BCCI operated in these countries in a corrupt environment marked by cash bribes, kickbacks to senior central bank officials of the nation involved, and special arrangements with the heads of state.(54) As a consequence of its willingness to do things that most westerns banks were not, BCCI soon became the largest foreign bank operating in Africa.

The third phase of BCCI's growth targeted Asia, and included the acquisition of the Hong Kong Metropolitan bank from the Swiss Bank Corporation. This branch of BCCI later became the vehicle for handling very large transactions by the Chinese government, whose business Abedi secured through a mixture of public charitable activities and private kick-backs.(55) Simultaneously, BCCI decided to expand into the Americas, opening offices in Canada, branches in the United States, and in Venezuela, Columbia, Panama, and Jamaica. By the mid-1980s, BCCI's empire extended to banks or branches in 73 countries, and assets totalling about $22 billion.

BCCI's amazing rate of growth continued in good years and bad, without regard to macro-economic conditions. For example, in Hong Kong during the 1983-1984 period, BCCI prospered while other foreign banks were forced to retrench because of economic downturn. This phenomenon was repeated in the United Arab Emirates during a slump that began around 1983 because of the fall in oil prices; and in Nigeria in the late 1980's -- a time when other foreign banks withdrew from operations there. As BCCI officer Nazir Chinoy later explained, in the case of Nigeria, at least, this result was because BCCI was willing to bribe officials and assist them in handling their payments in a manner that the competition, hemmed in by auditors and lawyers, could not meet.(56)

Abedi's Mysticism As Component of BCCI Strategy While engaging in corporate legerdemain as a means for hiding what he was doing, Abedi developed a peculiar mystic philosophy for BCCI, which was shared with BCCI's recruits in annual means as part of motivating them to give their "all" to BCCI's expansion. Many of BCCI's more senior officials viewed Abedi's philosophical musings as boring and unintelligible material which had to be endured.(57) At annual meetings of BCCI officials, Abedi would often speak about his philosophy for hours at a time. However, Abedi's stature at BCCI was such that no one ever challenged him, and instead, younger officers seeking to rise in the ranks would parrot Abedi's philosophy and describe how it had changed their lives.(58)

Abedi's philosophy was an often obscure mix of Islamic mysticism focusing on the links between the individual, the family, and the universe; and self-help sales motivational pitches. For example, in describing BCCI's decentralized and obscurantist structure in philosophical terms, Abedi wrote:

Our restructuring and reorganization has its own meaning that emerges out of our own needs, our own purpose and our quality and quantity of human resource that we from time to time become. We accept the truth that each one of us is different and like every human being each one of us is inadequate, but unlike others we genuinely accept each other and we have a tremendous urge and desire to constantly move towards adequacy. . . [T]he quality of relationships . . . is the essence of an organization. It is the shining truth. It is the truth that every individual member of the family must unveil in his feelings -- in his psyche. It must spark like a brilliant star in his heart.(59)

Abedi described the key functions of BCCI's support centers to BCCI officers under their jurisdiction as "keep their energy flow," and "becoming an agent of change," including "extricating the Managers and the staff from the malady of containment and psychological lethargy and inertia wherever it has set in."(60)

In an earlier management meeting in New York in 1983, on memo paper featuring a sepia-toned highlight of the hand of God touching the hand of Adam in Michelangelo's Creation from the Sistine Chapel, Abedi explained that BCCI's spiritual aspect was much more important to its success than its material aspects.

We must learn to "feel" that BCCI is this Power and not merely a group of branches, a set of facts and figures. Since, BCC is a power, a spirit, a Desire - it is all encompassing and enfolding - it relates itself to cosmic power and wisdom, which is the will of God. . . . OUR MAJOR FUNCTION: To have a desire, Improve its volume and quality, Make others have such a Desire, Merge this in the pool of corporate Desire, Make the purpose of this Desire our major purpose, Make it BCC identity.(61)

Abedi then asked the key pertinent question: "IS BCC A DESIRE, OR IS BCC A BANK?"(62)

While on one level these philosophic discussions appear far removed from the practical elements of banking, in fact there was an important link between the philosophy and BCCI's strategy of asset growth. The philosophy, obscure as it was, described the importance of relentless, ceaseless activity as a means of growth, and of the need to remove "obstacles" to the growth, regardless of the source. Junior officers were encouraged to keep things moving and not to worry much about rules. Senior managers were advised to encourage junior officers to experiment, and to help them circumvent even the rather relaxed procedures that applied to doing business at BCCI. As Abedi told forty-five of his managers in 1985:

If our colleagues who represent young energy and young hope do not live up to our standards in the task they perform, how do we deal with them? Our response could either encourage them to flow and in time enable them to come closer to the desired standards or may stifle and discourage them early on in their careers, thereby diminishing any chance of them improving and performance towards excellence. Do not nip the flower in the bud. . . give them room to breathe. (63)

Under Abedi's guidance, BCCI officers learned that they would be rewarded for any technique that allowed them to acquire customers and assets, and would not be punished by the bank even for engaging in unorthodox or illegal banking practices. In the words of BCCI official Akbar Bilgrami:

Abedi had a saying to younger employees, that if a banker cannot make money for himself, he cannot make money for the bank. It was an invitation to enrich yourself, that I never felt comfortable with.(64)

When a BCCI banker was caught by local regulations, he would not be punished, but simply transferred from the location or from BCCI to another entity controlled by the bank, often with a bonus payment.(65) By contrast, if an officer refused to facilitate an obviously illegal transaction, BCCI's senior officials would simply go around him, and his career would suffer accordingly.(66)

Abedi made use of mysticism as a motivational technique even on the most mundane of banking matters. When BCCI developed Travellers Cheques in 1986 as a new product, Abedi convened a conference of BCCI employees to announce that these cheques were "a profitful instrument of relationship." Abedi announced that "travellers cheques add a new dimension to my personality. They are a means of making a profit and at the same time a means of fulfilling my aspirations. There is great happiness in selling the largest possible volume of travellers cheques."(67)

Compartmentalization As a technique for insuring security and control, Abedi adopted a strategy taken from intelligence operations. He compartmentalized information about BCCI. Compartmentalization insured that even within the bank, officers in one operation would have little to no information about the nature of the activities of an officer in another area. Not only was information about BCCI's activities closely held, but even senior officials were discouraged by Abedi from asking questions. As Massihur Rahman testified:

I was very uncomfortable because in [previous bank jobs], I could go across the board and go to any division and see any of the operation. But here I could see these Chinese walls were getting very, very watertight and we were always taught about humility and ego and anything that was slightly out of context was considered just an ego trip.(68)

Instead of having vice presidencies, the bank had 50 senior executives and 198 managers, with only two people considered to be higher up than all others: Abedi and his chief assistant, Swaleh Naqvi. As Rahman described it:

There was Mr. Abedi at the very top, there was Mr. Naqvi who was like a chief operating officer, who converted . . . Mr. Abedi's ideas and things into practical shapes. And then there was a big gap between these two and the other executives who were all called general managers. All of us were called general managers. . . You couldn't be senior to anybody else, you're all the same pay, the same benefits.(69)

Consequence of BCCI Structure and Philosophy on Audits Abedi's unique approach to banking had the effect of removing most checks and balances on BCCI. Other senior officers did not have a complete picture of BCCI's operations. The board of directors learned little beyond what Abedi and Naqvi told them. And outsiders, including BCCI's auditors, could be easily manipulated.

This manipulation was facilitated by Abedi's decision to divide its annual audits between two of the then "Big Eight" accounting firms -- Ernst & Whinney and Price Waterhouse, with Ernst & Whinney taking responsibility over only the holding company and BCCI Luxembourg, and Price Waterhouse taking responsibility over only BCCI Overseas in the Grand Cayman, a state of affairs which ended with Ernst & Whinney's withdrawal in 1986, and Price Waterhouse gaining responsibility for a consolidated audit of all BCCI activities in 1987. Even then, however, Price Waterhouse was not in the position to review BCCI's overall picture due to the exclusion from its audit work of a number of BCCI affiliates, some secretly owned, including ICIC, KIFCO, and BCP. Moreover, as late as 1990, key documents involving guarantees against loss by BCCI to principal shareholders, held in the Grand Caymans and in Abu Dhabi, do not appear to have been made available to auditors.

Obstacles In the United Kingdom Some of the same factors that made BCCI's growth possible also inhibited it from further expansion. Its rapid expansion had prompted intense speculation in the United Kingdom, which was interfering with BCCI's ability to obtain a full banking license from the Bank of England, as Abedi implicitly acknowledged in a 1978 interview.

The Bank of England probably hasn't given permission because of the atmosphere surrounding the BCCI and the propaganda that has been spread about us. . . It is not only the Bank of England that is against us, but the Club.(70)

The hostility to BCCI in the United Kingdom, which was the headquarters for BCCI's operations, was all too reminiscent to Abedi of the conditions that had lead to the demise of the United Bank in Pakistan. Abedi needed to move outside the reach of the United Kingdom. An obvious solution was to find a new home for BCCI in the United States.

Unfortunately, the relationship with Bank of America had become an obstacle to such a move for BCCI. Rather than see BCCI expand into its home base, Bank of America was increasingly uncomfortable with its partner. Despite its initial agreement to let BCCI be BCCI, Abedi's original U.S. partner, Bank of America, had found itself bewildered by many BCCI practices from the beginning. An internal "family history" of BCCI, written as a case study by one of BCCI's key officers in the United States, Khusro Karamat Elley on October 27, 1982, provides a sanitized version, from BCCI's point of view, of what went wrong between BCCI and Bank of America:

The Bank of America found on their hands an affiliate which had already become one of their largest and in which they had no management control. They were also being required to contribute every year to the increase of capital in order to maintain their portion of the shareholding. Perhaps most importantly they had also arrived at the conclusion that the Middle East had become far too important not to have a direct presence.(71)

In fact, by 1976, Bank of America had already stopped contributing to new infusions of capital for BCCI, reducing its share from 30 percent to 24 percent. By the spring of 1976, extensive discussions within Bank of America about BCCI's unusual practices had resulted in a series of memos being created and circulated among senior officials at the bank. Two of these memoranda, introduced as exhibits in the 1978 litigation over the FGB takeover, make explicit the profound disquiet at Bank of America over BCCI's handling of its Arab clients and its management style.

The first memo, written May 10, 1976 from Bank of America Executive Vice President Alvin C. Rice to Scudden Hersman, Jr., a senior vice president, noted the concerns that some in Bank of America had expressed about BCCI's unusual attention to meeting the personal needs of leading political figures, especially in the Middle East, but stated that no bookkeeping entries demonstrating abuses had been found. Rice warned, however, that the overall relationship between Bank of America and BCCI was a difficult one:

We are just not operating on the basis of mutual trust and cooperation that make the whole effort and exercise worthwhile. Substantial profits usually have a way of curing problems but this case is an exception. If we can't make some major breakthroughs in the near future, we will have to consider alternatives such as divestiture.(72)

In the second memo, written following a meeting between Rice and Abedi, Rice described how he and Abedi had discussed the problem of BCCI officials withholding information from Bank of America officials. Abedi attributed this to cultural differences:

According to Abedi, frank criticism "American style" is something Pakistanis are not accustomed to. Criticism is taken as a personal affront and for this reason, sometimes BCCI officers have not wanted to disclose fully operating procedures that they knew would not meet BofA's quality standards.(73)

Later, Rice would tell journalists that the fundamental problem he encountered with BCCI was that BCCI thought nothing of bribery, and believed that even obstacles with regulators could be fixed through "baksheesh."(74)

These concerns simmered for another year at Bank of America. But by the fall of 1977, disapproving questions from an auditor from the U.S. Comptroller of the Currency in London responsible for reviewing Bank of America's overseas holdings, intensified Bank of America's concerns. These concerns had already been acknowledged privately in other Bank of America internal memoranda about BCCI: its overly-cozy relationship with its shareholders, its practice of providing shareholders with unusual banking services, Bank of America's inability to penetrate BCCI's banking practices, and BCCI's hostility to Bank of America inquiries about those practices.

By February, 1978 the OCC auditor had concluded that Bank of America was substantially at risk from BCCI.(75) But by then, divestiture of BCCI by Bank of America was in the interests of both banks. BCCI needed to sever its relationship with Bank of America to provide itself with additional options in connection with its ongoing attempt to buy Financial General Bankshares. Bank of America needed to reduce what might soon become an actual liability on its books. Accordingly, Bank of America had begun to implement a rapid divestment agreement with BCCI through the purchase of the Bank of America shares by BCCI's bank-within-a-bank, ICIC, described by the Bank of America in a January 30, 1978 press release merely as "one of the other major BCCI shareholders." In announcing the sale of its stake in BCCI, Bank of America emphasized that "the close co-operation that has developed between the two banks will be maintained."(76) Over the following decade, Bank of America would in fact maintain correspondent banking relationships with BCCI, continually seek additional business from BCCI, collude in at least one of BCCI's purchases of foreign banks through nominees in South America, and earn a great deal of money from the relationship until BCCI's closure.(77)

1. "Growth of International Banking: Case Study of Bank of Credit and Commerce Intl, Khruso Karamat Elley, October 27, 1982, Senate Document 385.

2. See e.g. "The Mysteries Behind Abedi's Bank," Euromoney July 1978; S. Hrg. 102-350 Pt. 3, pp. 305-310; "The man who adds a touch of mysticism to banking," Financial Times, May 17, 1978; S. Hrg. 102-350 Pt. 3, pp. 303-304.

3. Staff interview, Rahman, August 7, 1991.

4. Staff interview, Sakhia, October 7, 1991.

5. Testimony of Rahman, S. Hrg. 102-350 Pt. 1, p. 540.

6. Former BCCI Pakistan branch chief Nazir Chinoy provided detailed information about the Zia-Abedi relationship in a series of interviews with Senate staff from March 9-16, 1992; see also check to General Zia from BCCI-UAE, May 25, 1985, S. Hrg. 102-350, Pt. 2 p. 511.

7. White Paper on the General Elections, Government of Pakistan, July 1978, S. Hrg. 102-350, Pt. 3, pp. 314-317.

8. See Price Waterhouse reports to BCCI on "Problem Loans," February 14, 1990, in S. Hrg. 103-350, Pt. 1, pp. 359-360 and BCCI Task Force Report on Saigols, id, pp. 437-438.

9. Massihur Rahman, S. Hrg. 102-350, Part One, p. 489.

10. Id.

11. Id. at 490-491.

12. BCCI Task Force Report on Selected International Loans, S. Hrg. 102-350, Pt. 1 p. 417, testimony of Rahman, Id. pp. 532-533.

13. Id at 455-456.

14. See testimony of Rahman, S. Hrg. 102-350, Pt. 1, pp. 489-491; Financial Times, May 17, 1978, "The man who adds mysticism to banking," S. Hrg. 102-350, Pt. 3, pp. 303-304; "The mysteries behind Abedi's bank, Euromoney, July 1978.

15. Letter from Baldwin Tuttle to Lloyd W. Nostian, Jr., Federal Reserve Richmond, November 5, 1980.

16. "BCCI Founder: These Things Happen," Najam Sethi, Wall Street Journal, July 29, 1991.

17. See e.g. Bankrupt, The BCCI Fraud, Kochan & Whittington, p. 23.

18. Staff interviews with Massihur Rahman, August 7, 1991; Abdur Sakhia, October 9, 1991; Nazir Chinoy, March 9-16, 1991.

19. Id.

20. Akbar Bilgrami, Staff interview, July 13, 1992.

21. Staff interview, Bilgrami, July 13, 1992.

22. Id.

23. Staff interview, Abdur Sakhia, October 7, 1991.

24. Staff interview, Lance, October, 1991; testimony of Lance, S. Hrg. 102-350 pp 20-21.

25. Bilgrami, staff interviews, July 13-14, 1992.

26. Transcribed verbatim statement of BCCI insider, April 8, 1991.

27. Staff interview, Abol Helmy, January 13, 1991.

28. Id.

29. Staff interview, Akbar Bilgrami, July 13, 1992.

30. Staff interviews, Chinoy, March 9-16, 1992.

31. Id.

32. Staff interviews, Chinoy, March 9-16, 1992.

33. Id.

34. Testimony, Nazir Chinoy, Subcommittee on Terrorism, Narcotics and International Operations, March 18, 1992, p. 26.

35. Id.

36. Euromoney July 1978, S. Hrg. 102-350 Pt. 3, pp. 305-310.

37. Growth of International Banking, Case Study of Bank of Credit and Commerce Intl, Khruso Karamat Elley, October 27, 1982; BCCI internal document, Senate investigation.

38. Id.

39. The Mysteries Behind Abedi's Bank, Euromoney, July 1978; S. Hrg. 103-350, Pt. 3, pp. 305-310.

40. Testimony of Rahman, S. Hrg. 102-350, Pt. 1, p. 491.

41. Growth of International Banking, Case Study of Bank of Credit and Commerce Intl, Khruso Karamat Elley, October 27, 1982; BCCI internal document, Senate investigation.

42. Exhibit I, OCC Report of Joseph Vaez to Robert Bench, February 15, 1978.

43. See e.g. Euromoney July 1978 chart, S. Hrg. 102-350, Pt. 3, p. 306.

44. Exhibit II, OCC Report of Joseph Vaez to Robert Bench, February 15, 1978.

45. Staff interview, Sakhia, October 7, 1991.

46. BCC Group Profile, undated, 1985.

47. Financial Times, May 17, 1978, S. Hrg. 102-350, Pt. 3, p. 303.

48. BCC Holdings (Luxembourg) S.A., List of Shareholders as On 15.10.1990, Senate Document 300.

49. BCCI documents from Abu Dhabi, Grand Caymans, Panama, showing Khalil transactions; Price Waterhouse, Report to Board of Directors of BCCI, February 18, 1989, S. Hrg. 102-350, Pt. 1, pp. ___.

50. BCCI Holdings (Luxembourg) S.A>, List of Shareholders as on 31.12.89, Senate Document 298.

51. Testimony of Rahman, S. Hrg. 102-350, Pt. 1 p. 491.

52. "Client Contact and Relationship Programme," BCCI internal document from Agha Hasan Abedi to U.S. employees, October 9, 1985, Senate document.

53. "Growth of International Banking: Case Study of Bank of Credit and Commerce Intl, Khruso Karamat Elley, October 27, 1982, Senate Document 385.

54. Staff interviews, Nazir Chinoy, March 9-16, 1992.

55. Confidential source, Senate investigation, March, 1991.

56. Staff interview, Chinoy, March 9-16, 1992.

57. Interview, Nazir Chinoy, March 9-16, 1992.

58. Staff interviews, various BCCI officers; various Senate BCCI documents.

59. "Context and Rationale," Statement of Agha Hasan Abedi to BCCI officials, undated, Senate BCCI Document 1269.

60. Id.

61. BCCI document, Summary of the Management Meeting, New York, 12.2.83 p. 7.

62. Id.

63. Note of Meeting with the President on 17.1.85 at 5pm, Senate BCCI document.

64. Bilgrami, staff interview, July 13, 1992.

65. Testimony of Rahman, S. Hrg. 102-350, Pt. 1, p. 513.

66. Staff interview, Chinoy, March 9-16, 1992; staff interview. Sakhia, October 7, 1991.

67. Abedi, BCCI International, internal publication of BCCI, May 1986, Number 35, p. 12.

68. Id. at 495.

69. Id. at 497.

70. Abedi, quoted in Euromoney, July 1978, in S. Hrg. 1

03-350 Pt. 3, p. 308.

71. Growth of International Banking, Case Study of Bank of Credit and Commerce Intl, Khruso Karamat Elley, October 27, 1982; BCCI internal document, Senate investigation.

72. Bank of America Memo, Rice to Mersman, May 10, 1976, Lamarche Dep Exhibit No 6, August 11, 1978, FGB litigation.

73. Bank of America Memorandum for the Files, May 26, 1976, Lamarche Deposition Exhibit 7, August 14, 1978, FGB Litigation.

74. London Telegraph Magazine, November 10, 1991, No Questions Asked, p. 12.

75. Office of Comptroller of the Currency Report of Joseph Vaez, February 15, 1978, memo to Robert R. Bench from J.E. Vaez, National Bank Examiner London regarding BCCI Holdings (Luxembourg).

76. Id.

77. Staff interviews, Sakhia, October 7, 1991; Chinoy, March 9-16, 1992.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

BCCI'S RELATIONSHIP WITH FOREIGN GOVERNMENTS CENTRAL BANKS, AND INTERNATIONAL ORGANIZATIONS Introduction

On July 5, 1991, when BCCI was closed, some one million small depositors in BCCI around the world lost their deposits.

In addition to these small depositors, there were other, larger depositors. Among those depositors were central banks, governmental organizations, government investment funds, and government officials, involving most of the countries in the world.

There is no way of knowing even now precisely who were among all those who lost money. BCCI made frequent use of "managers' ledgers" or numbered accounts for its most sensitive depositors, whose identities were typically kept secret from everyone other than their personal banker at BCCI. Given the anonymity, the secrecy, and the source of the income behind many of these deposits, some depositors, including governmental officials or agencies, have not necessarily been in a position to assert claims to the money they have lost.

However, some sense of the impact on governmental entities and global officialdom is provided by an account appearing in the French wire service Agence France Presse a few days after BCCI's global shut-down, concerning BCCI losses at its tiny branch in Korea, entitled "Angry Diplomats Urge Government To Release Their BCCI Assets":

A major row is erupting between the South Korean government and foreign diplomats whose deposits have been frozen by the suspension of the Seoul branch of the scandal-hit Bank of Credit and Commerce International (BCCI). Incensed diplomats from 33 countries met last Thursday at a European embassy here to coordinate strategy after a protest they filed with the central bank of Korea went unheeded, diplomats said. The diplomats said that 120 of their colleagues from 33 embassies have had part or all of their deposits frozen. In addition, the accounts of several embassies have been frozen, forcing some to cut back operations. . . The local branch of BCCI had strongly lobbied diplomats here to use the bank, offering interest rates slightly above average and putting a wide international network at their disposal, officials said. . . . The envoys said that among those countries [in Korea alone] whose embassies were in partial or deep trouble were [a number of] Latin American countries, Bangladesh, Belgium, Iran, Italy, Hungary, Liberia, Libya, Pakistan, the Philippines, Saudi Arabia, Spain, Switzerland, Thailand, Turkey, the United Arab Emirates and Yugoslavia . . . Peru and Argentina have suspended consular operations [entirely] because of lack of funds.(1) BCCI's offices in Korea were among the bank's smallest, containing just $92 million out of BCCI's total of $23 billion in assets. Yet small as the branch was, the impact of its closure on the foreign diplomatic corps in Seoul was devastating. This tiny branch of BCCI had, somehow, developed relationships with these embassies that neither domestic banks in Korea, nor any of the other foreign banks doing business in Korea had obtained.

The fact so many officials from so many countries banked at a single, obscure BCCI office provides an insight into the success of BCCI's overall strategy of targeting government officials everywhere to use its array of banking services.

In his July 29, 1992 indictment of BCCI's former heads, Agha Hasan Abedi and Swaleh Naqvi, and two of BCCI's front-men, Ghaith Pharaon and Faisal Saud Al Fulaij, New York District Attorney Robert Morgenthau alleged, in some detail, how BCCI systematically engaged in criminal activity with officials and prominent political figures from many countries to generate assets for BCCI's Ponzi scheme, both from the governments involved, and from innocent, legitimate depositors.

As the indictment alleges:

. . . members of the BCC Group, acting to further the conduct and affairs of the criminal enterprise, assisted various nations, including Pakistan, Senegal, Zambia and Nigeria, to evade fiscal restraints placed on them by such world institutions as the World Bank and the International Monetary Fund. . . . The BCC Group agreed to bribe employees, agents and fiduciaries entrusted with Third World money to place it at risk in the BCC Group, which was insolvent. Members of the enterprise sought to secure a preferential position for the BCC Group in various countries through the use of corrupt payments of monies and other benefits to powerful individuals and to make and cause to be made deposits of money with the BCC Group. Specifically, defendants Abedi and Naqvi plotted to deliver cash and other benefits to countries' finance ministers, head of countries' central banks and senior executives of international and regional organizations to obtain deposits. . .

Among the countries in which members of the BCC group made such corrupt payments for deposits and favorable treatment were the Congo, Nigeria, Morocco, Senegal, Tunisia, the Ivory Coast, Argentina and Peru. Among the institutions defrauded were the World Bank, the International Monetary Fund, the African Development Bank and the Economic Cooperation of West African States.(2)

Similarly, over the past four years, the Subcommittee has developed extensive documentary and testimonial evidence of BCCI's systematic reliance on relationships with, and as necessary, payments to, prominent political figures in most of the 73 countries in which BCCI operated. BCCI records and testimony from former BCCI officials together document BCCI's systematic securing of Central Bank deposits of Third World countries; its provision of favors to political figures; and its reliance on those figures to provide BCCI itself with favors in times of need.

As BCCI's former senior official for the Caribbean, Abdur Sakhia, testified:

BCCI's strategy globally had been to be very well-known, to make an impact in the marketplace, to have contacts or relationships . . . with all the people who matter. . . You name it, we would develop relationships with everyone of consequence . . . In the Caribbean, every major country I knew the heads of state, I knew the finance ministers, I knew the governors of the central bank. I knew heads of all the major banks in the area, the heads of foreign banks. I knew the people in various official agencies, like the Caribbean Development Bank, Inter-American Development Bank, Organization of American States. Everyone of consequence in this region I knew. . . .(3) These relationships were systematically turned to BCCI's use to generate cash needed to prop up its books. BCCI would obtain an important figure's agreement to give BCCI deposits from a country's Central Bank, exclusive handling of a country's use of U.S. commodity credits, preferential treatment on the processing of money coming in and out of the country where monetary controls were in place, the right to own a bank, secretly if necessary, in countries where foreign banks were not legal, or other questionable means of securing assets or profits. In return, BCCI would pay bribes to the figure, or otherwise give him other things he wanted in a simple quid-pro-quo. For example, BCCI would help an official move flight capital out of his country to a safe haven elsewhere, to launder funds skimmed by the official from an official bank account or official commercial transaction, create a foundation for a head of state to provide charitable services for his home village or province, take him on a shopping spree at a fancy London department store, or secure him sexual favors.

The result was that BCCI had relationships that ranged from the questionable, to the improper, to the fully corrupt with officials from countries all over the world, including but certainly not limited to Argentina, Bangladesh, Botswana, Brazil, Cameroon, China, Colombia, the Congo, Ghana, Guatemala, the Ivory Coast, India, Jamaica, Kuwait, Lebanon, Mauritius, Morocco, Nigeria, Pakistan, Panama, Peru, Saudi Arabia, Senegal, Sri Lanka, Sudan, Suriname, Tunisia, the United Arab Emirates, the United Kingdom, the United States, Zambia, and Zimbabwe.

Typically, these relationships were handled personally and in secrecy by BCCI's top two officials -- Abedi and Naqvi -- with the occasional assistance of trusted lieutenants. Accordingly, a full accounting of these relationships may not be possible. Sakhia told the Subcommittee that he believed there was a list of BCCI's payments to political figures somewhere at BCCI's headquarters in London, held closely by Abedi and Naqvi, that contained all the names. When BCCI's headquarters were moved to Abu Dhabi in the spring of 1990, the list, if it still existed, was likely moved there with BCCI's other records:

There was a world wide list of people who were in the payoff of BCCI. The family of Indira Gandhi. President [Ershad] of Bangladesh. General Zia of Pakistan. Many of the leaders of Africa. I went to a World Bank meeting in Seoul, Korea and [BCCI official] Alauddin Shaikh was handing out cash in the hall to the staff of the Central Bank of Nigeria . . . Abedi's philosophy was to appeal to every sector. If you were religious people he would help you pray. President Carter's main thing was charity, so he gave Carter charity. [Pakistani] President Zia's brother-in-law needed a job, he got a job. [Bangladeshi] President [Ershad]'s mistress needed a job, she got a job. You needed the admission of your son to a top college? Abedi would arrange it somehow.(4)

According to Sakhia, the form of the payoff varied with the needs of the customers, but the purpose was always the same -- "to buy influence."(5)

In addition to cash payments, which were kept secret, BCCI routinely gave presents to government officials around the world, a fact disclosed to auditors. As BCCI officer Nazir Chinoy explained:

The auditors will not object if the manager certifies that $50,000 was spent on entertainment on a particular day. They will accept it without bills. It is understood that Christmas presents, giving and taking are common. We tell them we are looking after our people, I have 50 people I want 50 shirts from Harrads for Christmas for my staff, or a Senator from some country telling you I want my people to be looked after. Then he says, when I come to power you take a favor from me. It is an accepted form of operation.(6) According to Chinoy, these presents would routinely involve gifts worth $5,000 or more if the official was sufficiently important. In the case of Manuel Noriega, for example, the antique oriental rug selected by BCCI and provided to him one year in his honor was worth substantially more.

In other cases, BCCI would make a form of payments to high ranking officials through one of its Foundations, which would create an annual "prize," and bestow it upon a person either whom BCCI wished to influence, or whose receipt the prize would provide BCCI needed legitimacy. For example, from 1980 to 1988, a BCCI foundation called The Third World Foundation bestowed an annial Third World Prize of $100,000 as follows:

1980. Dr. Paul Prebish, international development economist from Argentina. At the time, BCCI was seeking to enter Argentina through nominees. 1981. Dr. Julius Nyerere, President of Tanzania. The Prime Minister of India, Indira Gandhi, presented the prize. At the time, BCCI had alleged financial relationships with various persons associated with Gandhi and was seeking to expand in Tanzania.

1982. Zhao Ziyang, the Chinese premier. Again, BCCI was looking to, and soon thereafter was able to, become one of the first foreign banks to open offices in China.

1983. Professor Arvid Pardo, a UN diplomatic from Malta, whose prize was presented by Belisario Betancur, President of Colombia. In 1983, BCCI purchased a bank in Colombia through nominees.

1984. Willy Brandt, former German chancellor, with UN Secretary General Javier Perez de Cuellar giving his approval.

1985. Nelson and Winnie Mandela.

1986. Musician Bob Geldorf, for his work in raising funds for the hungry in Ethiopia.

1987. The International Planned Parenthood Federation of India, presented by Jose Sarney, President of Brazil. In this very period, BCCI was seeking to strengthen its ties to President Sarney, and had just purchased a bank in Brazil through nominees which included close associates of Sarney.

1988. Gro Harlem Brundtland, the Norweigian Prime Minister, presented by Robert Mugabe, Prime Minister of Zimbabwe. Mugabe had according to many BCCI officials received cash payments from BCCI in previous years.(7)

The Subcommittee has not obtained internal BCCI documents describing its global strategy for bribery, or any list of payments made to officials. However, the Subcommittee does have a collection of documents and testimony which outline individual cases of bribery, payoffs, or financial benefits provided by BCCI to officials in particular countries. Thus, the case histories set forth below are illustrative, rather than comprehensive, and do not necessarily represent the worst examples of the practice, but merely the ones the Subcommittee has been best able to document.

Deposits From Foreign Governments A baseline for assessing BCCI's principal relationships with foreign governments is to review the deposits it received from Central Banks. At one level, the choice of BCCI as a depository for a Central Bank of a Third World country might seem logical. BCCI had marketed itself as the Third World bank, devoted to providing the best possible services to the Third World. However, every central banker also knew that BCCI, as a bank not based in any one country, had no lender of last resort, and no consolidated audit.

Thus, deposits in BCCI were potentially a very substantial risk for any Central Bank. If BCCI failed, the Central Bank funds would not be protected, but would be treated like the funds of any other depositor. Despite these obvious risks to placing funds with BCCI, dozens of countries placed their reserves with the bank, in some cases, at very substantial, and imprudent, levels.

BCCI document repositories in the United States, unfortunately only contain records pertaining to such deposits in BCCI-Miami, and thus, these represent only a fraction of the total. For example, a number the countries that had deposits at BCCI in the United States would also maintain deposits -- usually larger ones -- at BCCI in Panama, where they would be more protected from creditors.

Typical deposits at BCCI-Miami by central banks and governmental organizations, usually in certificates of deposit, are listed below:

Organization Amount Date

 

Andean Reserve Fund $15,884,000 July 31, 1988

Central Bank of Aruba 6,000,000 July 31, 1988

Central Bank of Barbados 5,000,000 May 31, 1985

Central Bank of Belize 12,000,000 July 31, 1988

Central Bank of Bolivia 14,414,000 July 31, 1988

Banco de la Rep de Colombia 3,050,346 Aug 4, 1986

Central Bank of Curacao 25,000,000 July 31, 1988

Eastern Caribbean Bank 2,000,000 March 28, 1985

Caribbean Development Bank 3,025,786 June 28, 1985

Bank of China 15,000,000 Dec 31, 1985

Fed. Cafeterios Colombia 10,000,000 July 31, 1985

Banco de Guatemala 3,000,000 July 31, 1988

Bank of Jamaica 13,700,000 July 31, 1986

Jamaica Petroleum/PETROJAM 7,137,437 Jan 31, 1986

Banco Nacional de Panama UNKNOWN Dec 31, 1984

Central Bank of Paraguay 5,000,000 Oct 10, 1989

Central Bank of Suriname UNKNOWN Nov 3, 1986

Central Bank St. Kitt 8,500,000 July 31, 1988

Central Bank Trinidad 5,000,000 Oct 31, 1984

Venezuela Investment Fund 24,000,000 July 31, 1988

Additional central banks had developed relationships with BCCI, but had their accounts shifted by BCCI from its offices in Miami to the National Bank of Georgia in Atlanta. These included Costa Rica, El Salvador, and Honduras, whose "territory" was given by BCCI to its secretly-held subsidiary in Georgia.(8)

It is not possible from BCCI's records in the U.S. to determine even the neighborhood of the degree to which the other Central Banks were depositing funds in BCCI as a whole. For example, the Central Bank of Peru, which did not deposit any funds in BCCI-Miami and therefore is absent from the above extensive list, placed Central Bank deposits at BCCI-Panama that rose to a level of $270 million dollars in June, 1987 -- nearly 30 percent of the total cash reserves of the Government of Peru.

Thus, what is significant, simply, is the large number of central banks and government organizations -- twenty in all -- who were willing to place what was substantial uninsured deposits with BCCI's Miami branch alone, at a time when BCCI was known to have no lender of last resort behind it, and no one to insure a country's repayment should BCCI default.

An appendix to a September 30, 1988 Price Waterhouse Report to BCCI's Audit Committee shows a substantial number of additional governmental entities from other countries making deposits at BCCI as of that date, as follows:

Organization Location Amount

China Civil Eng &

Construction Corporation UAE $11,414,000

Hong Kong 34,400,000

International Fund for

Agricultural Development Luxembourg 17,200,000

OPEC United Kingdom 60,000,000

Central Bank of Sri Lanka United Kingdom 15,070,000

Bangladesh Bank United Kingdom 25,340,000

Bank Foreign Trade

USSR United Kingdom 10,135,000

State Bank Pakistan United Kingdom 48,960,000

National Bank Hungary United Kingdom 15,000,000

Arab Bank for Natl

Development in Africa United Kingdom 42,569,000

Central Bank Syria United Kingdom 21,855,000

Bank of Zambia France 10,920,000

Bank Milli Afghan United Kingdom 20,000,000

Perhaps especially worthy of note from the above list are the Soviet Union's foreign trade account at BCCI, the account for the State Bank of Hungary, and the account for the Central Bank of Syria. In each case, the Subcommittee knows essentially nothing about the underlying nature of the relationship between BCCI and these governments, other than the fact that British sources have contended that BCCI in the United Kingdom was used by numerous intelligence agencies, including most of the major intelligence agencies of the world.(9)

Loans to Foreign Governments and Government Banks As a consequence of BCCI's collapse, determining what governments were credited by BCCI as receiving loans is a far easier matter than determining who, in the past, placed funds with BCCI. A consolidated loan report for BCCI dating from March 31, 1991, shows numerous governmental organizations credited as receiving very substantial lending from BCCI as follows:

Abu Dhabi Finance Department $35,704,000

Abu Dhabi National Food Stuff Co 21,749,000

Banca Nazional del Lavaro 13,737,000

Botswana Railways 9,400,000

Botswana Telecommunications 2,600,000

Cameroon Ministry of Finance 29,172,000

China International Water & Elec 42,268,000

China National Complete Plant Exp 32,606,000

China Road & Bridge Eng. Co. 20,641,000

China State Construction Group 32,450,000

State of Gabon 7,771,000

Bank of Jamaica 33,895,000

Central Bank of Nigeria 226,060,000

Sultanate of Oman 14,444,000

Petrojam (Jamaica Petroleum) 45,420,000

Government of Seychelles 22,957,000

Bank of Sudan 53,987,000

Republic of Zimbabwe 17,063,000(10)

Price Waterhouse reports 18 months earlier had listed BCCI's exposure on lending to governments and Central Banks as follows:

Country Nature of Loans Exposure 9/30/89

(in millions)

Nigeria Government 216.9

Philippines Central Bank 30

Zambia Central Bank 24.6

Sudan Central Bank 19.9

Iraq Unspecified 11.8

Mexico Unspecified 7.3

Cuba Unspecified 2.3

Sierra Leone Unspecified 3.3

Ivory Coast Unspecified .8

Panama Unspecified .6(11)

Many normal banks have such exposures, and apart from the situation involving Nigeria and to some extent Sudan, the exposure faced by BCCI on its lending to governments was within reasonable commercial norms. However, beneath the veneer of normal practice, the underlying manner by which BCCI developed these relationships was anything but normal. As the case histories below demonstrate, in country after country, BCCI's relationships with officials were fundamentally corrupt.

Use of Nominees and Fronts Generally In the early 1980's, as part of BCCI's program of expansion in Latin America, BCCI decided that it was essential to expand banking operations in the Americas. Accordingly, a team of BCCI's acquisition experts, including Amir Lodhi and Abol Helmy, began meeting with Central Bankers and government officials in such places as Argentina, Brazil, Colombia, Peru and Venezuela to find suitable banks to purchase. In most of these countries, there were at the time restrictions on the ability of foreign banks to purchase local banks. Accordingly, Lodhi and Helmy were directed to identify prominent figures in each country who would agree to act as BCCI nominees in purchasing local institutions, under agreements where the nominees would not be at risk, while BCCI would secretly finance their purchases -- precisely as it had done in its purchase of First American Bankshares and the National Bank of Georgia in the United States.

While the financial details of each proposed transaction differed, the model for the transactions had been drawn up by BCCI years previously, and had been relied upon by BCCI in its secret purchase of First American. Helmy was provided with draft structures of these previous transactions, which he used as a guide in preparing fresh proposals for these Latin American countries. Ultimately, using this mechanism, BCCI was able to purchase banks in Argentina, Brazil, and Colombia; however, Helmy contended that in the case of Argentina, the laws changed prior to the purchase of the bank, and so the nominee arrangements that had been agreed upon were not needed.(12)

As BCCI's former head of its Latin American and Caribbean operations, Akbar Bilgrami explained:

Using a nominee was a typical way of going about things. Argentina, Brazil, Ghana, Colombia, Venezuela, Nigeria. All these places started out as nominee relationships. Some were cleaned up. But it was always preferable that there not be a nominee relationship. When we bought a bank or set up a subsidiary, we would often use the nominee relationship because the laws of the country wouldn't allow BCC to have majority control. For example, we used it briefly in Colombia until we received permission to have majority control for BCCI from the government.(13) In each case, various forms of payments for the individuals who facilitated the purchases of the banks were made by BCCI, including bribes to officials in many of the countries.

Money Laundering, Commodities Frauds and Skimming According to BCCI officers interviewed by the Subcommittee, there were consistent themes in BCCI's activities in the Third World, in terms of the kinds of services that government officials would be looking for from BCCI. First, to the extent the official controlled a source of government funds, the official typically wanted to be compensated in connection with his decision on where to place the funds. The solution to this problem was simple enough -- BCCI would pay a "commission" to the official involved. Second, to the extent the official controlled transactions involving government funds, the official might well want to be compensated on a fee basis, transaction by transaction. BCCI developed a number of techniques in response to this requirement, which typically involved one form or another of skimming the government funds that moved through the transaction, again with the revenues deposited in a safe place outside the official's country. Third, to the extent the official was in a position to generate substantial resources of his own through non-BCCI corruption, he often would want a safe and confidential place to hide his money. Again, BCCI would comply.

In each of these cases, BCCI would make use of applicable techniques for hiding and laundering cash: manager's ledgers or numbered accounts; phony loans to hide (and legitimize) real, but unclean deposits; circuitous routing of funds through bank secrecy havens like the Grand Caymans and Panama, and so on.

Pay-Offs to Avoid Prosecution Inevitably, BCCI's criminal practices as a bank would set off alarm bells in one or another of the nations in which it was operating. Because of BCCI's underlying financial fragility, any such problem could potentially mushroom. Accordingly, the bank made it a high priority to fix such cases through payoffs. Usually, this could be accomplished with existing relationships.

For example, in Nigeria, on the several occasions when BCCI's activities had been discovered by officials who had not been compromised, investigations were quelled by a top Nigerian religious and governmental official, Al Haji Ibrahim Dasuki, who was also president of BCCI's Nigerian bank.(14) This pattern was repeated all over the world. As Sakhia testified:

BCCI officers were indicted and jailed in other countries, like Sudan, Kenya, India, and in each case there was a terror in the bank that, you know, this has happened, that has happened. And somehow then some deal would be struck. People would be freed, BCCI would start doing business all over again.(15) This practice did not only take place in Third World countries. Notes taken by BCCI's lawyers in the United States at Patton, Boggs & Blow in Washington, D.C. refer to possible payments to French officials by BCCI in 1989 to solve a criminal legal matter that had developed for BCCI there. According to the U.S. lawyers involved, each of them was disturbed about the proposed bribe, and were trying to prevent it from happening.(16)

Thus, BCCI's system of payoffs was not by any means an occasional practice, but one that pervaded the institution from its creation, and continued through to its collapse.

CASE STUDIES ARGENTINA In Argentina, BCCI targeted and ultimately successfully purchased, the Finamerica Bank, a small Argentina financial institution that was at the time owned by FIAT and by the Banco de Italia. In December, 1984, through a local middle-man, Ricardo Gotelli, Fiat authorized the sale to BCCI.(17) Internal BCCI memoranda show that in the original structuring of the transaction, BCCI was intending to lend money to the current shareholders of the bank and have them pledge their shares back to BCCI in order to avoid having to notify the Central Bank, and receive its authorization for the purchase. Ultimately, however, this plan was found not to be necessary as a result of BCCI securing the Central Bank's permission for the transaction.(18)

The New York indictment of Abedi, Naqvi, Faisal al Fulaij and Ghaith Pharaon on July 29, 1992 succinctly sets forth why BCCI was able to abandon the nominee structure and directly, publicly purchase the Argentine bank:

The BCCI Group made corrupt payments to the President of the Central Bank of Argentina and a member of its Board of Directors. In or about 1983 and 1984, the BCC Group made and caused to be made a five hundred thousand dollar "political" contribution to the President and a member of the Board of Directors of the Central Bank of Argentina upon an agreement and understanding that it would influence the conduct of said President and Director in relation to the establishment of a bank of the BCC group in Argentina and in relation to the business of the BCC Group.(19)

At the same time BCCI decided to move into Argentina, so did its front-man, Ghaith Pharaon. According to published reports, Pharaon came to Argentina by way of Paraguay, where he had established a personal friendship with military strongman Alfredo Stroessner. Argentine press accounts quote Pharaon as stating he had visited Paraguay to assist in developing BCCI's relationships there, which culminated in the Central Bank of Paraguay placing some of its central bank deposits with BCCI.

The new BCCI bank quickly made one enormous set of loans to Pharaon -- for the construction of a luxury five-star hotel in downtown Buenos Aires -- the first such hotel in the city, including an 18-story tower, convention center, and shopping gallery, built on the grounds of a historic mansion.

According to a letter submitted to Argentine economic authorities by the Hotel Corporation of Argentina, most of the financing for Pharaon's hotel project -- $26.3 million in all -- was to come through selling Argentina Debt under the government's debt equity conversion program. In the letter, Pharaon was described as "a prominent international businessman who has investments in banks, insurance companies, real state [sic] development projects, and numerous other businesses worldwide."(20) During an application for Argentinean citizenship Pharaon made on June 16, 1988, he listed BCCI, CenTrust Bank in Florida, and Independence Bank in California as among his principal investments, and declared he had helped arrange BCCI's acquisition of FinAmerica -- renamed BCCI Argentina.(21)

BCCI's direct involvement in the debt-for-equity project was suspected by some Argentinean press at the time, given the lavishness of the project and questions about whether a hotel could possibly be profitable. However, BCCI's actual involvement was not proven until after BCCI's global closure on July 5, 1991. A week later, investigators in Buenos Aires reported that BCCI Argentina had been heavily involved in the construction of the Pharaon hotel, but that all accounts at the bank had been "cleared out a week before the central bank's move to revoke the license," leaving no depositors in the bank and no deposits. BCCI had financed the Buenos Aires hotel through buying Argentinean foreign debt at a huge discount and cashing it with the central bank, with the result that the Argentine central bank, in essence, financed the bulk of the hotel.(22)

In addition, the hotel project required legislative and regulatory action by various Argentine political figures. In mid-1989, Pharaon reached out to new-elected Argentine President Carlos Menem himself, through ties Pharaon had developed to Menem's former chief of staff, Alberto Kohan. A few months later, Pharaon was introduced to President Menem, and following a meeting with Pharaon, President Menem personally telephoned local officials in Buenos Aires to eliminate the red tape that had been delaying the construction of the BCCI-Pharaon hotel. The delays ended the following day.(23)

The intimate nature of the relationship between top Argentine officials, BCCI, and Pharaon was further demonstrated when Pharaon hired Argentine economist Gonzalez Fraga. On Pharoan's behalf, Fraga arranged the debt-equity swap to help finance the hotel, and then became the new president of the Central Bank under Menem. Fraga told journalists, "it's a pretty story that President Menem made me head of the Central Bank as a favor to Pharaon. But it wasn't that way."(24)

In practice, BCCI's Buenos Aires bank never developed much of the business anticipated for it. Ultimately, its principal activities were mainly to manage the financing of Pharaon's hotel venture and a jojoba planation also financed through an Argentine debt-equity swap involving BCCI.

In the meantime, Pharaon had unwittingly brought about official action against BCCI Argentina in April, 1991 as a result of testifying in a court case, unrelated to BCCI, that:

As much as BCCI, the First National Bank of Boston, the Credit Suisse and the National Bank of Greece -- all are equally lawbreakers.(25)

In response to this suggestion that all banks were laundering money, Argentina ordered BCCI to begin winding up its affairs in Argentina as of the end of 1991, and began a formal investigation of BCCI in Argentina. Little further happened until BCCI's global closure on July 5, 1991, which soon resulted in BCCI Argentina's closure as well. Argentine Federal Judge Maria Servini then combined the investigation into BCCI with another ongoing case implicating the former appointment's secretary of Argentine President Carlos Menem, and his sister-in-law, Amira Yoma, in an alleged international drug and money laundering network. However, little has been made public about the investigation since that time, and many of the key questions about BCCI's and Pharaon's relationships in Argentina remain unanswered.

BCCI and Argentine Arms Deals In response to the Foreign Relations Committee subpoena to BCCI, BCCI's liquidators produced documents concerning two proposed arms sales involving Argentina that had been maintained at BCCI's offices in Miami.

The first set of documents held at BCCI-Miami referred to the sale by the Argentine Air Force of what handwritten notes described as "22 units of Aircraft plus adequate space parts, including 6 spare engines at a price of $110,000,000.00," consisting of Mirage IIIC/B jets manufactured in France and "modified to Argentine Air Force requirements following years of combat experience."(26)

The prospectus included technical drawings of the Mirage jets and basic military specifications, with a commitment that the "AAF," or Argentine Air Force, would provide all technical documentation in support of the planes, ground support equipment, and, if the "customer country" wished, a full program of flight training in Argentina for customer country pilots. (27)

This proposal had never gone through the legal processes in Argentina required for such sales, and was a secret in Argentina until the Subcommittee released these documents. As former Argentine Defense Secretary Raul Alconada Sempe testified before the Subcommittee, the sales had never been authorized, and that if such a proposal had been made legally, it would have required notification to the Argentine parliament:

Sales without the Defense Minister knowing, from 1983 on, it was impossible, because it was only the Defense Ministry that authorized such sales. What does exist, and I think this is a general problem throughout all countries, is that there are countries that have arms, countries that need arms, and the famous middleman crop up. The brokers, the sales agents, and these are the people that try to match the buyer and the seller. . . . They just try to look for such a deal. This is what may have happened.(28) Following the conclusion of the hearing, investigators in Argentina determined that the sale appeared to be a proposal made unofficially by a general in the Argentine air force to various countries in the Middle East, including Iraq. BCCI had offered to act as a broker and possible financier for the proposed sale of the Mirage jets, which represented a substantial percentage of the total possessed by Argentina. However, the general involved had never been able to convince Argentine governmental figures that the transaction was in the interest of Argentina, and the proposal died.

Other BCCI documents describe BCCI's involvement in a possible sale of night vision equipment by Litton Electron Devices in Arizona to the Government of Argentina, guaranteed by an Argentine government bank, through a company owned by the Argentine government. It is not clear from the documents whether BCCI ultimately financed the night-vision equipment sales or not.

BANGLADESH When BCCI was closed globally on July 5, 1991, one of the nations that was worst hit was Bangladesh, which had deposits of $171 million at the time of its closure. Following the collapse, some 40,000 depositors threatened a hunger strike after losing their life savings, 500 depositors actually conducted a sit-down strike in the capitol's financial district, and another thirty depositors threatened to engage in self-immolation if the government did not find a way to restore some of their losses. One month later the Bangladeshi government promised to provide up to $1400 to each of the banks depositors, as a means of ending the highly-publicized strikes.

Thus, the impoverished government of one of the poorest countries in the world was forced, in essence, to raid its own treasury to alleviate the suffering of the small depositors to make up for millions stolen from Bangladesh by BCCI and former Bangladeshi government officials, including the man who had been president and dictator of Bangladesh throughout the 1980's, Mohammed Ershad. These schemes included massive tax evasion and an equally massive and illegal currency trafficking ring involving then-president Ershad, top aides, and President Ershad's mistress, which continued until Ershad was deposed in December, 1990.

According to various press accounts, supplemented by information from BCCI insiders provided the Subcommittee, President Ershad worked with his brother-in-law, former Bangladeshi diplomat A.G.M. Mohiuddin, to smuggle millions of dollars out of Bangladesh through BCCI into the United States. BCCI also hired various relatives of Ershad to work at BCCI branches in Hong Kong, Britain and Canada, and in return, Bangladesh hired one of BCCI's top officers to serve as Bangladesh's first ambassador to Brunei -- whose embassy functioned primarily as a sales office in Brunei for BCCI.(29)

The BCCI-Ershad connection was essential to the Bangladesh president because given his country's impoverishment, he had relatively limited opportunities outside of what BCCI could bring him to get rich. His salary was only $13,000 a year as president, but through making use of BCCI he was able to move millions of dollars of fund siphoned out of Bangladesh governmental accounts.

As BCCI officer Abdur Sakhia testified in response to a question about payments by BCCI to the leading political families of India, Pakistan and Bangladesh, including President Ershad:

The payoff [came] either in the form of cash, or hiring of their relatives, contribution to their favorite charities, payment of their medical bills. It took various shapes. So in some cases cash may have been given, in some cases their relatives were hired, in other cases their charities were funded, their projects were financed at favorable rates, loans at favorable rates. So it took different shapes and forms.(30) In the case of Bangladesh, the payoffs in fact came in almost every shape and form. By far the most detailed account of these payoffs was provided by the Los Angeles Times, which sent a reporter to Bangladesh to interview government officials, BCCI officers, and private business there about the relationship between BCCI and Bangladesh after BCCI's collapse. Its account has been generally corroborated by testimony to the Subcommittee from statements by BCCI officials, including Sakhia and Chinoy. As the Times found:

Here, in a land that perpetually ranks among the poorest of the world's poor, BCCI stretched the law to its limits to avoid paying desperately needed government taxes, to skirt national banking regulations and to remit as much profit as possible out of Bangladesh and into the bank's international web of corporations and subsidiaries.(31) The practices described in the Los Angeles Times article were typical of BCCI's practices in other countries. After the Central Bank of Bangladesh forbid BCCI from exporting profits in Bangladesh abroad -- the "flight capital" BCCI specialized in -- BCCI created the BCCI Foundation, a charitable trust based in Bangladesh, whose official purpose was to fund scholarships, rural health care centers and school libraries. Funding for the BCCI Foundation came from BCCI's banking operations in Bangladesh. Those profits became tax-free because they were given to the Foundation. And the foundation in turn gave funds not principally to the needy, but to a joint venture investment bank, called the Bank of Small Industries & Commerce or BASIC, staffed by BCCI officials, in which President Ershad and his top aides had a financial stake.(32)

Towards the end of Ershad's rule in Bangladesh, the scheme had become sufficiently transparent that it created outrage within the country. For example, the Foundation's most important scholarship program, to provide interest-free loans to talented college students, received about $10,500 in donations from the Foundation in 1990, in a year when the Foundation earned over $21,000 in interest alone.(33)

In the meantime, BCCI hired three of Ershad's close relatives, along twelve other sons and daughters of prime ministers, finance ministers, police chiefs, central bank governors and deputy governors.(34)

In late 1990, Ershad resigned under fire, and was tried for a variety of arms trafficking offenses in Bangladesh, and sentenced to a ten year prison term, while awaiting trial on additional corruption charges, including some pertaining to his relationship with BCCI. Following BCCI's collapse, the new government retained an investigative firm in New York in an attempt to trace what the new government contended as much as $520 million in funds misappropriated from the Bangladesh treasury by BCCI, Ershad, and his relatives. The investigators have alleged that Ershad moved millions of dollars through BCCI accounts in London and Hong Kong.(35)

Even disaster relief aid provided by foreign governments to Bangladesh to help victims of a devastating cyclone in 1990 wound up being deposited in BCCI and lost with the closure of the bank.(36)

Thus, BCCI, which promoted itself as a Third World Bank devoted to assisting the Third World in development, stole millions from Bangladesh, in concert with Bangladesh's ruling political family, in what one BCCI official was later to describe as "a perverse, reverse Robin Hood."(37)

BRAZIL By early 1986, BCCI had identified Brazil as a prime target for BCCI expansion. Latin American banker Brian Jensen, then an Alternate Executive Director of the International Monetary Fund, had been working closely with BCCI, on an unofficial basis in this period, to help BCCI obtain its relationship with Peru through payments to Peruvian central bankers. In addition to his work on BCCI's Peruvian activities, Jensen studied the Brazilian economy and Brazilian banking system for BCCI, and wrote Abedi a memorandum which Jensen faxed to BCCI from offices at the IMF in early 1986 describing his approach to Brazil:

The establishment of a banking concern in Brazil can become a priority. I feel I can be useful in identifying and putting together a concrete and well-balanced possibility for BCCI while at the same time protecting for a positive attitude from the local authorities to such initiative. . . A US $230 billion economy with an external trade component that exceeds 25 percent of GNP, Brazil offers the advantages of a large internal market of 135 million people and a rapidly growing export sector . . . Brazilian legislation . . . and long standing traditions or practices . . . exclude foreign banks from establishing branches or investing in domestic commercial banks at present. However, foreign equity participations of up to one-third of the common stock or half of non-voting shares are allowed in investment banks. These are specialized financial intermediaries authorized to issue certificates of deposits and other savings investments, as well as to extend loans to the private sector. . .(38)

Abedi told Jensen to talk with Brazilian bank officials to find a way to get around the regulations. The following month, Jensen sent a second memorandum from his IMF offices in Washington to BCCI:

Conscious of BCCI's interest in Brasil and according to our recent conversations in London. . . I have held discrete conversations (on a no-name basis) with central Bank authorities and existing banking groups (well know to me) as to the better possibilities and strategies. . . The route followed by most new investors in Brasilian banking in recent years has been to buy equity into existing groups, assuring in his manner an important presence in the market. All foreign investment has been in this fashion. The rationale has been to find a solid and reputable local group (ongoing concern) and acquire up to 30 percent. . .(39)

BCCI well-understood the concept. It did not mind holding a public minority interest in a Brazilian bank, so long as it had sufficient additional secret interests through nominees to insure that in reality the local bank was BCCI anyway. BCCI directed its acquisitions officer, Abol Helmy, who was already handling the Argentine FinAmerica purchase, to locate possible nominees for BCCI in Brazil.(40) Eventually, two were found -- Sergio da Costa and Carlos Leoni Siqueira, to be BCCI's nominees, each to hold on BCCI's behalf one-third of the bank, with the remaining investor, Jacque Eluf, to hold an additional one-third, which he himself would pay for, but which BCCI would guarantee against loss.

The nominees chosen by BCCI were extremely prominent members of BCCI's elite. Jacque Eluf, who it was guaranteeing against loss, was one of the wealthiest men in Brazil, owner of IAT Co., Brazil's largest exporter of industrial alcohol, with a net worth in 1986 of about $100 million. BCCI nominee Carlos Leoni Siqueria was one of Brazil's leading attorneys, on the board of directors of companies such as IBM Brazil and Grupo Gerda, Brazil's largest privately owned steel manufacturing company. BCCI Nominee Sergio da Costa was at the time the most senior member of the Brazilian diplomatic corps and a close associate of then Brazilian president Jose Sarney.(41)

Da Costa was available to BCCI because at the age of 67 after four decades of serving Brazil as its Ambassador to such significant postings as England, Canada, the United Nations, and the United States, he was retiring and anxious to make money. Da Costa had been brought to BCCI by BCCI shareholder and front-man Ghaith Pharaon, who in late April, 1986 had met with Da Costa in Miami to seek Da Costa's help in responding to the problems posed for BCCI in circumventing the Brazilian bank laws. A telex from Miami branch manager Abdur Sakhia to BCCI-London on May 6, 1986 described the meeting having ended positively for BCCI:

Ambassador Da Costa has promised Dr. Pharaon to assist the Bank in any way he can and he also had asked Mr. Ferreira [a prominent Brazilian businessman close to President Sarney] to use his association with the President of the Republic to assist BCC.(42) By September of 1986, da Costa had agreed to himself become a front-man for BCCI in Brazil. In return, BCCI agreed to pay him $150,000 a year, with no further responsibilities beyond being a front-man and using his influence to help BCCI with Brazilian authorities in Brasilia, the capital city.

Under the terms of the arrangement, da Costa agreed to be a director and shareholder, secretly acting as BCCI's nominee, of the bank BCCI was purchasing in Brazil, in a transaction structured by BCCI officer Abol Helmy.

Helmy drafted a memorandum, "Strictly Private and Confidential," regarding "Brazil," on September 2, 1986, under which da Costa and a second prominent Brazilian would each own 50 percent of a Brazilian company that would buy 12,622,500 voting ordinary shares in BCCI Brazil, pledge those shares to BCCI, give BCCI the right to vote its shares, and give BCCI the right to buy those shares. Da Costa would agree to serve on the three man board of directors as BCCI's front-man, to guarantee BCCI control of the bank. He would 'pay' $1,233,580 for his 'share' of BCCI Brazil's stock, and BCCI would reimburse him that amount in New York. The internal BCCI memorandum drafted by Helmy makes explicit the fact that these arrangements were designed to deceive Brazilian authorities:

It must be emphasized that the Brazilian economy and bureaucracy are highly sophisticated. As such any payments made by Brazilians must have the appropriate ORIGINATION OF FUNDS. That is, the Brazilian 'investors' must have the necessary net worth for Brazilian taxation authorities' purposes to support any investments made. . . Messrs. Da Costa and Leoni to ensure that the transaction is fully acceptable to the Central Bank and to ensure that there are no adverse public consequences will be purchasing their shares in cash. . .

Both Ambassador Da Costa and Mr. Leoni are reluctant to take loans from any bank to finance the transaction for Central Bank and public image purposes . . . I have negotiated, subject to BCC management approval, an interest free loan to the individuals concerned . . . to enable them to complete the transaction.(43) (emphasis in original)

The memorandum demonstrated that BCCI would provide da Costa and Leoni with $2,467,160 for the purchase of his stock in BCCI Brazil, every penny the stock would cost. In a staff interview, Helmy acknowledged that da Costa and Leoni were not at risk and that the transaction was a standard nominee arrangement by which BCCI circumvented local laws and that this approach had been used a numerous of times previously by BCCI. Helmy also said it was BCCI's understanding that da Costa and Leoni would take care of arrangements with Brazil's central bank and other Brazilian officials to make sure that they acquiesced in the transaction as structured.(44) Thus, in essence, Helmy at BCCI and da Costa, while still Brazil's Ambassador to the United States, had with other BCCI officials and other prominent Brazilians, created a plan by which they would together make possible BCCI's purchase of a bank in Brazil to circumvent Brazilian law.

BCCI officials were ecstatic at da Costa's participation in their plan for Brazil, and his agreement to be a Senior Advisor to BCCI. On October 28, 1986, while da Costa was still Brazil's Ambassador to the United States, the head of BCCI's Miami office, S. M. Shafi, sent him a congratulatory telex at the Embassy:

congratulations from myself and my colleagues on your joing [sic] our Brazilian project. We welcome you to the fold BCC family. I am very certain your experience, qualifications and contacts not only in Brazil but also internationally will go a long way in turning our subsidiary in Brazil into one of the most successful units of BCCI.(45) Da Costa signed a three-year consultancy agreement with BCCI on November 3, 1986, under which he committed to acting as "Director of [BCCI's] investment bank in Brazil," and a front-man for BCCI there.(46) Da Costa then followed through in participating in the plan developed by Helmy under which BCCI would secretly purchase a majority interest in BCCI Brazil through nominees. He received his 'loans,' from BCCI, and purchased his 'stock' in the Brazilian bank. BCCI duly reported its loans to him on its books in Panama, characterized as "International Loans," as if they were normal loans that BCCI anticipated would be repaid. By April 30, 1988, da Costa's 'loans,' from BCCI amounted to $1,563,723.85. In fact, da Costa did not pay interest or principal on the loans, which were shams to mask BCCI's ownership of the 'da Costa' shares of the bank.

Among themselves, BCCI officials were also pleased about another aspect of being connected to da Costa. As he entered his agreement with BCCI to circumvent Brazilian banking laws, he had told them that he was also joining Kissinger Associates. A full account of da Costa's and BCCI's relationship with Kissinger Associates is set forth separately.(47)

To penetrate the Brazilian market, BCCI had once again made pay-offs to some of the most prominent people in Brazil -- this time among others to the country's most senior and prestigious diplomats -- in order for them to participate with BCCI in circumventing the laws of their country.

CAMEROON BCCI developed a number of relationships with governmental entities in the impoverished Central African country of Cameroon, including the United Nation's account there and the U.S. embassy's account there. But the most critical relationship for BCCI in Cameroon was with the country's ministry of finance, which, after BCCI began making payments to its officials, agreed to borrow funds from BCCI on which BCCI charged Cameroon interest, and then to redeposit them in non-interest bearing accounts, benefiting no one other than BCCI and the bribed officials.(48)

At the same time, BCCI went into a joint venture with the government of Cameroon to finance BCCI's bank in Cameroon. The joint venture was successful for both BCCI, which held 60 percent of the banks shares, and for Kanga Zamb Jean, who was previously Cameroon's finance secretary and governor of a province of Cameroon before he became chairman and managing director of the bank. In that capacity, Jean was officially representing the interests of the Republic of Cameroon, which held a minority interest in the bank. In fact, Jean was also lining his own pockets.(49)

BCCI's relationships with Cameroon were flourishing by the time of BCCI's indictment in Tampa on drug money laundering. In 1988, Cameroon started directing oil export financing through BCCI, as a result of payments being made by BCCI to people in the finance department of the Cameroon national oil company. The payments were small, amounting to no more than $3,000 to $4,000 per person, but enough to secure BCCI what it needed in such a low-income country. In return for this small investment, BCCI benefitted a number of ways. As Nazir Chinoy, Paris regional manager in this period, explained:

The deposits from the purchasers of the oil are kept from 7-10 days in Paris. You can use that money to make a small profit there. But more important than the deposit was the exchange. The money is kept in Paris then is converted into French francs. There is an exchange profit to be made for BCC Paris as well as for BCC Cameroon.(50) BCCI Cameroon became a cash cow for BCCI, with deposits amounting to between 90 and 100 million pounds sterling. When BCCI was closed globally, Cameroon was caught with most of that money still deposited -- including a substantial amount of government funds -- amounting to about $90 million, which for Cameroon constituted a substantial loss.(51) Of those funds, approximately $63 million amounted to real deposits by Cameroon that had been discovered by BCCI's auditors, but never recorded by BCCI on the books. BCCI had kept the deposits off-the-books in order to use the cash to finance other BCCI operations elsewhere.(52) Later, BCCI's chief financial officer, Massihur Rahman, was to refer to the treatment of Cameroon's as unrecorded deposits at BCCI as "major fraud."(53)

COLOMBIA As Colombia was transformed during the 1980's from a country whose biggest cash crop was coffee, to one whose biggest cash crop was cocaine, BCCI decided to enter the Colombian market through buying Banco Mercantile, a troubled bank there.

It did so fully aware of the nature of most of the dollars that were being generated in Colombia. According to Abdur Sakhia, who was then on BCCI's top officials in the United States, BCCI's decision to acquire a Colombian bank was exceptionally controversial even within BCCI:

In December, around Christmas 1982, we had a meeting in Panama, and Mr. Akbar Bilgrami, who was indicted and convicted, and Mr. Amjad Awan, brought in a proposal of this bank in Colombia. We wanted to expand in Colombia in terms of a branch in Bogota which would do international business, but according to them the only way we could get an entry into Colombia would be to buy this bank. I was vehemently opposed to the acquisition, one, because the bank was doing very poorly . . . I said: What are we going to do with all of this? We do not know what people they are, what type of clients they are, what are they doing in Cartagena, Cali, Medellin? How are we going to control this.

I had been to Colombia twice before this meeting to our office. We used to have a representative office in Bogota. And every time they would take me from the airport escorted by an armed guard to my hotel. . . I said: How are we going to manage offices in remote arts of Colombia when you cannot walk in Bogota unescorted? I said: We don't know what types of clients they are, what type of business they have, what type of money they have; we shouldn't go into this acquisition.

Later on I learned that we would now divide the operation into Caribbean and U.S. on one side and Latin America on the other side. So Colombia, Panama, Peru were taken out of my jurisdiction.(54)

We knew that the money that we would be getting in Colombia would be drug money. We knew that all the dollar deposits we would be getting would be drug money.(55)

Thus, when Sakhia complained about the concept of expansion into Colombia at a time when Colombia had already become lawless as a result of the drug trade, BCCI's response was to take away his jurisdiction over BCCI operations pertaining to Colombia, as well as its drug-producing neighbor Peru, and its drug-money laundering neighbor, Panama.

Akbar Bilgrami, convicted of money laundering in the Tampa case, told the Subcommittee that he could not, for legal reasons, discuss in any detail his activities in Colombia. He was willing, however, to make some general statements about the flow of funds from BCCI Colombia to the United States.

First, it was true that BCCI, like other foreign banks based in Colombia, was moving dollars out of Colombia into FDIC-secured banks in the United States. According to Bilgrami, one of the key goals of many of his Colombian clients was to obtain federal insurance for their cash deposits. Accordingly, BCCI would take their funds, and immediately transfer the funds to accounts set up in their names in First American, which BCCI secretly controlled, and in National Bank of Georgia, which BCCI then separately secretly controlled. According to Bilgrami, most of this was typical flight capital:

You know, all flight capital is questionable money: Tax evasion, drugs money, arms transactions, pure political corruption. But we were small, only able to take in $100 million yearly. Other banks were taking in a billion each. So we were losing out on that business. Credit Suisse was repatriating $1 billion per year in flight capital from Colombia. Union Bank of Switzerland, another $1 billion. We only handled $100 million. But that amount did go from BCCI Colombia into the United States.(56) In Colombia, as in so many other nations, BCCI found that to stay in business, it had to pay bribes. Because the bank it had acquired was in such poor shape, and so near to collapse, the Colombian government had made no objections to BCCI's acquisition of it, and no payments by BCCI to officials were necessary. That changed, however, after BCCI bought the bank. According to Bilgrami:

Colombia was a unique situation. We never paid any illegal money to purchase the bank. But when we inherited the bank, we learned that it was a tradition to pay the treasurer of the bank commissions on the largest accounts. I asked Mr. Naqvi for clarification, you know, should we pay it? And he said to pay it in dollars so that it couldn't be traced to us. So we paid it, around $20,000 to $30,000 monthly.(57) CONGO BCCI's situation in the Congo was different from its situation in many other countries, in that the best known example of its criminality emanated from government cheating, rather than BCCI's.

Originally, BCCI had purchased government securities, at a discount, under an agreement by which the government promised to repay BCCI, and then the government had, after making some of the repayments, failed to follow through on the deal. Thus, BCCI's original wrongdoing was merely its creation of a mechanism for repayment through skimming off commodities transactions. However, BCCI then wound up paying bribes only after Congo officials failed to honor the deal worked out originally. In essence, BCCI made the payoffs to protect itself after it had been the victim of fraud by the Congo.

As Nazir Chinoy advised the Subcommittee, in August 1985, BCCI had worked out what looked like a profitable arrangement with the Government of the Congo by purchasing notes issued by the Congo in the range of $65 million to $67 million. These notes had been originally purchased by Mohsen Hujaj, a Lebanese contractor, with extensive contacts in the Congo. Hujaj accepted the notes from the Congo in payment for services he had performed after the government proved unable to pay under the terms of its contract with Hujaj. In a three-way deal, Hujaj got the government to acknowledge this indebtedness to BCCI and agree to certain repayments starting every three months.

A complex scheme was devised to insure that BCCI would be repaid on the notes without the government of the Congo having to acknowledge the payments or set aside funding for them. The Congo government placed 17 million in deposits in dollar terms in BCCI Paris, while BCCI was given the right to handle funds generated through the sale of oil and to take a charge off the proceeds of these sales. Under the terms of the deal, the oil sales were made from the Government of the Congo to a French company called ELF. ELF paid the money to an offshore account in a Swiss bank which had lent Congo $60 million. When the oil proceeds came in, the balance after paying for the oil would be sent to BCCI Paris, which got about $20 million of the proceeds and would use this for repayment on the notes. The arrangements worked well until January 1986, when suddenly the money stopped coming in from the Swiss bank.(58)

With some difficulty, BCCI learned from the Swiss bank that the government of the Congo had repaid the Swiss bank directly for its lending, and in the future they took payment directly for the oil from ELF, bypassing BCCI entirely. In response, BCCI turned once again to a tried and tested technique -- bribery. As Chinoy explained:

We had to make expensive presents to the finance minister to get much of our money out. We were still owed $40 million by 1987 and having difficulty with the Lebanese, Hujaj, who threatened to get me killed because we were holding $11 million of his deposits at BCCI which were pledged. We released $6 million and had to find other means of securing repayment on the rest.(59) In the meantime, French authorities, under the leadership of Jacques Chirac, had recognized the Congo's parlous financial condition, and convened a meeting of bankers in an attempt to restructure Congo's debt. Under the terms of the restructuring, BCCI, which was the second largest of all lenders to the Congo, would be forced to accept losses on its lending, which it did not wish to do. Accordingly, BCCI officials discussed what kind of payments could be made to the ministry of finance in the Congo to solve the problem:

Dildar Rizve [a senior BCCI official] said, if I can get to him, if he releases our funds, I'll set up a scholarship for him. I have a feeling it was $100,000 for his children. But in 1987 the finance minister was replaced and a new finance minister came in who was a younger and more honest man. The new chap wanted $5 million as a temporary overdraft to assist the President for his tribe. If we could get him that, they would pay us back within 5-10 days. I spoke to Naqvi [then BCCI's second highest ranking official] who said, go and do it. It was repaid and he was honest. He said, if you want money, lend me another $20 million. Congo had changed from socialism to joining the World Bank and becoming capitalist. He said I will see that your outstanding [loan]s are paid before we join the World Bank. The money was given. On June 29 1988, the new finance minister was in Paris and Security Pacific [which was lending the Congo new funds] paid us the full amount outstanding.(60) BCCI was one of only two out of 32 banks that was fully repaid on its lending. While the new finance minister was, in Chinoy's view, honest, to keep him that way, BCCI did make sure that he and the Governor of the Central Bank received presents from BCCI. According to Chinoy, "we gave him the expensive presents and that made the difference."(61)

JAMAICA Shortly after establishing offices in the United States, BCCI cornered the market for government funds and programs in Jamaica as the result of establishing a personal relationship with then-Prime Minister Edward Seaga. Ultimately, this relationship involved BCCI being involved in financing all of Jamaica's commodity imports from the United States under the U.S. Commodity Credit Corporation (CCC) program and handling essentially every foreign current account of Jamaican government agencies.

According to Abdur Sakhia, who brought in the Jamaican account, unlike BCCI's practice in so many other countries, its relationship with Jamaica was based on nothing more than reaping more benefits for having taken some additional risk.

Sakhia told the Subcommittee that the relationship began, in part, because he had known Mr. Seaga's family as a result of his children and Sakhia's children attending the same school in Toronto, Canada. Soon thereafter, Seaga invited Sakhia to Jamaica to find out if BCCI would lend Jamaica any money. Jamaica began to borrow from BCCI, and the borrowing continued until BCCI executives began to become concerned about whether or not BCCI would be repaid. Seaga began personally telephoning BCCI, and Sakhia personally, to beg for additional money for Jamaica.

They owed a lot of money to BCCI. Seaga told me, we need oil, we need seeds for planting, can we make an exception here? Finally he called me in desperation at home. He told me, there is an oil ship which is here in Kingston already, it is ready to unload the oil. If we don't unload it we will have a dark Christmas in Jamaica. Just give us and extra $4 million or $5 million and we will make it up to BCCI. I promise you personally.(62)

Sakhia decided to take the risk. When the crisis was over, Seaga insured that BCCI received essentially all Jamaica's foreign business. BCCI soon wound up with "practically every foreign currency account of Jamaican government agencies at BCCI," including lucrative concessions in which Jamaica selected BCCI as the bank to handle all of the U.S. government or international organization sponsored guarantee programs. As Sakhia told the Subcommittee:

By the mid-1980's, we handled every penny that came into or out of Jamaica in terms of foreign currency.(63)

We were bankers to the central bank, we were bankers to all official governmental organizations in Jamaica.(64)

Typically, BCCI would provide financing, usually for the import or export of products, which in turn would be guaranteed by the foreign or international organization. Jamaica provided BCCI a no-risk means of generating profits through international organizations and foreign governments, and BCCI in return loaned funds to Jamaica which other banks refused to provide, on the basis of the personal relationships involved, and BCCI's expectation that these relationships would in the long run guarantee its repayment.(65)

At the time of BCCI's collapse, Jamaica owed about $34 million to BCCI. Thus, Jamaica may well be one of the few nations to have actually benefitted from the unusual deal worked out between BCCI and its political leaders.(66)

NIGERIA BCCI's activities in Nigeria were so profoundly, overwhelmingly corrupt as to suggest a very significant level of corruption in Nigerian officialdom generally. Whereas BCCI's activities in most countries merely involved corrupting a few, key people, in Nigeria the corruption was systemic and endemic, and touched nearly every operation of the bank in Nigeria.

According to BCCI officers, this was not the consequence of BCCI applying its practices to Nigeria, but rather, BCCI adapting itself to the conditions already present in Nigeria. According to BCCI officers interviewed by the Subcommittee, few European or American businesses active in Nigeria would have been able to do business without making one or another form of pay-off to Nigerian officials during the 1980's, and, to the knowledge of some BCCI officials, several such corporations, including some well-known European and U.S. banks, did.

During the Subcommittee's original investigation of BCCI in 1988, corruption involving Nigerian officials was one of the earliest allegations of BCCI criminality made to staff. As former Subcommittee investigator Jack Blum testified:

There are extraordinarily close relationships at all levels of the Nigerian Government with BCCI. [During my intial investigation] I had been called . . . by the Nigerian Ambassador who had been asked to call by the President [of Nigeria] to say, what's happening here? What are you guys doing with respect to BCCI?(67) Several BCCI officials described BCCI having made cash payments to officials of the Nigerian central bank. As Abdur Sakhia testified:

During a meeting of the World Bank in Seoul, Korea -- I think it was in 1985 -- I saw one of the BCC officers with a lot of cash, handing it out to the staff of the central bank of Nigeria. This is what I saw personally being given to them.(68) The most detailed account of BCCI's activities in Nigeria came from Nazir Chinoy, convicted in the Tampa case of money laundering during the time he was BCCI's Francophone regional manager. Prior to moving to BCCI-Paris, Chinoy had been stationed by BCCI in Nigeria for the first half of the 1980's, where he saw first hand the pervasive corruption of the Nigerian banking system, and BCCI's solutions for dealing with it profitably.

At the time Chinoy arrived in Nigeria in December, 1980, he found that BCCI already had purchased a minority interest in a commercial bank in Nigeria -- owning just 40 percent of the Nigerian bank, with corrupt Nigerian officials insisting on controlling the remaining 60 percent. But even with only 40 percent, the Nigerian offices of BCCI were earning BCCI very significant profits. In fact, the profits were so large that BCCI feared the Nigerians might try to take remaining interest in the bank away from BCCI. Chinoy's job was to establish a second bank for BCCI in Nigeria to protect BCCI against the possible expropriation by the government of the first bank.(69)

BCCI was already being used for short-term commercial financing through letters of credit for the purchase and sale of goods by various Nigerian governmental entities. Moreover, some Nigerian officials were using BCCI in London and elsewhere to store cash they had earned through off-the-books deals while in the government. As Chinoy explained:

Nigerians were keeping large laundered funds generated by influential people who got contracts from international companies and commissions paid abroad. The money was kept abroad and not repatriated to Nigeria. BCCI was a good place to keep it.(70) The simplest means of generating funds for Nigerian officials was requiring a "commission" on each transaction. As Chinoy stated:

Commission means kick-back. The government approves a $300 million contract. A multinational corporation agrees with the government which has helped him, 10 percent gets kicked back. A company is established abroad or they nominate a cousin or someone who is paid 3 percent. It is known as a commission but it is actually a kickback.(71) Other mechanisms by which these funds were generated for Nigerian officials were through over invoicing of imports and under invoicing of exports. When over invoicing would take place, the government would pay more for goods than the actual market price. BCCI would disguise this through shell entities which would appear to any outsider as arms-length brokers, but which in fact were mere mechanisms by which money would be skimmed off from the government and deposited in BCCI, to be shared by BCCI and by the official responsible for handling the purchase. When under invoicing would take place, the reverse would happen. The government would ship greater commodities than were reflected on the government invoices; the additional commodity would be sold at the same time as that invoiced, and the additional funds generated would again be split by BCCI and the Nigerian official, who of course would have keep his profits outside his home country. As Chinoy explained it:

Essentially, BCCI was handling the financing of commodities through bribery. For example, BCCI loaned $250 million to Nigeria to be repaid within the next six months for oil exports. Nigeria would charge OPIC prices but would load ten percent more than the invoice. That way you are giving a 10 percent discount.(72) Business was so good that Chinoy's predecessor and superior at BCCI, Alauddin Shaikh, who was a senior official at the bank, decided to leave BCCI to form a partnership with a Nigerian, Razar Sareef, who had gained control of Nigerian oil exports. Shaikh has been implicated by numerous BCCI officials in making pay-offs not only in Nigeria, but in several other countries. His new venture was in any case a success. It wound up controlling the National Petroleum Corporation of Nigeria account for the United States, an account it continued to control at least as of 1991.(73)

Other techniques used by Nigerian officials with the connivance of BCCI were currency swaps involving government funds. Government funds were placed in an account at BCCI in London. BCCI would place the funds with Lloyds or another bank and swap it into different currencies or make stock investments with it. If there was a loss, Nigeria bore it. If there was a profit, the first 8 percent went to Nigeria, on anything additional, the money was split between Nigeria and the traders at BCCI.(74)

In addition to the skimming that was taking place of government funds, BCCI found itself in the position of being able to earn enormous fees from ordinary commercial transactions in Nigeria, because Nigerian officials insured that financial transactions undertaken by BCCI for its customers would be handled much more efficiently than similar transactions undertaken by any other foreign bank doing business in Nigeria. While other banks would have to wait days or weeks for their transactions to be processed by the relevant government ministries, BCCI, would have their transactions handled promptly. As Chinoy explained:

BCCI got big profits because early release of foreign exchange was the crux of any deal. BCCI was two to three times faster than Chase Manhattan or the Bank of America or any other joint venture. BCCI was faster than any Nigerian bank in getting foreign exchange out of the Central Bank. It had very good relations with Central Bank of Nigeria. Unless you were friendly with receptionist, it would lie in the tray and wouldn't go anywhere for days. BCCI used to look after the girl at the foreign exchange desk. When the BCCI clerk would hand in the foreign exchange she would do that first for processing its release. Release of foreign exchange was important. Clerks at every level were looked after by presents. We had an officer, Mr. Saddiqui, who used to go and spend at least 10 days a month in Nigeria. His specific job was to look after people at all levels. In addition, he had appointed one to two expatriates who did nothing but spend their time at Central Bank. I do not think that cash was actually paid, but presents were bought in large amounts, as much as 20-40 dresses, shirts, ties at a time brought in from London and given. Everybody was kept happy. so that there is no objection raised by a clerk that a document isn't filled in exactly correctly. Because BCCI was so good and there was a BCCI application where someone had forgot to cross a "t" or dot an "i" and they would get it rectified quickly. This is Nigeria.(75) The result was that BCCI began to develop almost a monopoly on handling import-export financing in Nigeria. As Chinoy explained:

For banks other than BCCI, sometimes it could take 90 days for your letter of credit to take. If some clerk is unhappy he says your documents are not in order and he throws it back and doesn't give a reason. In Nigeria it is very important to have contacts because it takes 14 days for a letter to reach you. BCCI would get its letters of credit three times faster than anyone else. They will get it through the Central Bank faster than other banks. Business increases due to this reputation.(76) According to Chinoy, the price-tag on some of the presents provided Nigerian bureaucrats was not small -- typically, they included such items as silver canteens, cutlery sets, tea sets, coffee sets, and $5,000 luxury watches and similar goods valued at a few thousand pounds, and given to Central Bank and other Nigerian officials.

Chinoy knew about the corruption of top Nigerian officials personally. During his residence in Nigeria, three Nigerians controlled the release of foreign exchange in Nigeria. One of the three, the country's comptroller of foreign exchange, was named Al Haji Balu:

Once when I was in marketing in 1985-1986, I saw a deposit from Balu of 280,000 Deutschmarks in a certificate of deposit in Frankfort. I knew what his salary in Nigeria was. This was at the time worth about $150,000 US, for deposit at BCCI Frankfort. He didn't have that kind of money from his government salary. It was obvious what was going on.(77) Another extremely prominent Nigerian political figure who was being paid bribes by BCCI was Al Haji Ibrahim Dasuki, chairman of BCC Nigeria up until 1990-1991, when he became the Sultan of Sokoto. BCCI audit records show a $1 million loan from BCCI to Dasuki which BCCI provided him to pay for his shares of BCCI-Nigeria. Dasuki repaid this favor -- although not this loan -- to BCCI in many ways. According to Chinoy:

Dasuki had fantastic contacts with the government. He was a politician and religious leader of great eminence, and in line then to be Sultan of Sokoto. He could help the bank and used to be paid. He was paid from Caymans as well as from Nigeria. He was paid in London by one of Mr. Naqvi's special assistants, Asad Matualah, now in custody in Abu Dhabi.(78) Chinoy explained that Dasuki was the one who would fix problems with other government officials for BCCI if anyone noticed that exchange laws were being broken or other problems arose. Dasuki was able to perform this role because of his position as a religious leader, making his support indispensable to other key Nigerian officials:

Dasuki came from the North where all presidents in Nigeria come from, and even the President has to go and pay homage to the Sultan of Sokoto. When he became Sultan all of the leaders would owe him a measure of deference. He took full advantage of that. Two to three times BCCI got into trouble and Dasuki would sort it out.(79)

Dasuki also acted as a local representative for BCCI, obtaining the right to import goods for Nigeria, and providing that right to a business associate affiliated with BCCI. The BCCI associate would then arrange for import of the commodity involved, such as rice. According to Chinoy:

It was like a license to make money. Rice was gold. Dummy companies were created on a per transaction basis and had no other life beyond that.(80) Dasuki had so much business activity, he was able to establish his nephew, Ibrahim Katuni, to a level where by the mid-1980's, every foreign country did business with him because he had access to every ministry and had cut deals with each of them.

Katuni would tell a foreign businessman, this is how you'll make $100,000, and I'll take 20 percent. He kept Dasuki happy and was hoping to become President of BCCI.(81)

BCCI found other ways of circumventing practices in Nigeria which frustrated other banks and prevented them functioning normally. As the indictment of BCCI officials in New York described it, BCCI's success in this area involved defrauding the Central Bank of Nigeria. Foreign exchange shortfalls in Nigeria had caused the government in about 1981 to impose restrictions on imports, requiring letters of credit used in connection with imports to be secured by 100 percent cash deposits in Nigerian banks. In turn, the banks were required to certify that the payment had been made to the Central Bank. As the transactions involved might take months to be completed, this would tie up the company's funds for substantial amounts of time, discouraging the import activity altogether. BCCI's way around the problem was to create phony loans for the importers and deposit the "proceeds" from the phony loans on BCCI's books in Nigeria, and then inform the Central Bank that the deposits had been made. Once the import transaction was over, the paperwork would be reversed. Through this technique, BCCI generated letter-of-credit business from importers who would not otherwise have been able to do business; earned commissions on opening the letters of credit; earned interest on the fictitious loans it granted; and realized exchange profits from converting currencies.(82)

BCCI also handled black market foreign exchange transactions for Nigerian officials for use in Nigerian elections. Because Nigeria has never developed credit cards, and Nigerians rarely use checks, essentially all transactions in Nigeria are in cash, with few record-keeping requirements adequate to monitor graft, which is endemic.(83) Most of the time, officials sell their cash in Nigerian currency and buy foreign exchange with it for purchasing goods abroad, or for maintaining deposits and homes abroad, typically in the United Kingdom. But sometimes the Nigerians found they needed Nigerian currency, especially during election time. According to Chinoy:

At elections, the officials need the money and sell the foreign exchange at black market price and that money is paid in Nigerian currency to them and they return the foreign exchange abroad. This method is employed by Nigerian politicians to obtain political money. It is commonplace throughout Africa.(84) As noted above, BCCI's Nigerian operations were among the bank's most profitable. This is understandable. In the case of BCCI and the Nigerian government, crime paid.

PAKISTAN Pakistan was the home of almost all of BCCI's top officials, including founder Agha Hasan Abedi. Long before BCCI itself was started by Abedi, he began the practice of making pay-offs to politicians as a mechanism for securing business and strengthening his banks.

For example, when Abedi formed the United Bank in 1959, he appointed as chairman of its board I. I. Chundrigar, the former Prime Minister of Pakistan, who was a close confidante of Pakistani's then current prime minister, Ayub Khan. Abedi maintained close ties to Khan's government, later hiring General Khan's minister of information to become the "publisher" of a BCCI promotional magazine, "South."(85)

When the Pakistani military government was replaced following the civil war that resulted in the severance of East Pakistan into Bangladesh, Abedi became just as cozy with Pakistani "socialist" Ali Bhutto, Khan's ideological opposite, making political payoffs on behalf of Bhutto during elections.(86) When Bhutto was overthrown in 1978 in a military coup, Abedi swiftly changed allegiances again to Bhutto's successor, Islamic "puritan" General Zia.(87) Zia later executed Bhutto for financial crimes, in which Abedi, among others, was clearly involved, while forming close ties to Abedi, on whose financial skills he increasingly relied.

The relationship was personal as well as professional. A sample BCCI payment to General Zia was obtained by the Subcommittee, showing BCCI's branch in the United Arab Emirates making a payment to Zia of 40 million Pakistani rupees -- several hundred thousand dollars -- on May 26, 1985.(88)

The BCCI-Pakistan relationship was important to both the bank and a succession of Pakistani governments. Although Abedi had been close to Bhutto, and formed a close relationship with the current President of Pakistan as well, it was General Zia was who in charge of Pakistan during most of BCCI's existence, and General Zia who did the most for BCCI. As Nazir Chinoy, who was based in Pakistan in the late 1970's and early 1980's, recalled:

Every time Mr. Abedi came, he always called on President Zia. President Zia did not meet Abedi during office hours, but in the night when Mr. Abedi would fly in, they would finish official dinners first and I would be sitting with Abedi and Abedi would leave for two to three hours and meet with Zia. It was the President Zia that he spoke to first before speaking to the finance minister. I think that Abedi used Zia and Zia used Abedi also for the gulf countries, when he wanted some assistance. It was a two way street.(89) The Pakistani government guaranteed BCCI's ability to push aside immigration and customs requirements for its distinguished Arab visitors on their holidays in Pakistan, and BCCI's ability to engage in profitable banking. In return, BCCI assisting Pakistan in violating monetary controls imposed on its government by international organizations. As Chinoy explained:

In 1979, Pakistan was very short of foreign exchange, and under pressure from the World Bank to devalue the rupee. The World Bank had placed credit ceilings. The total lendings by commercial banks were limited to a figure by the World Bank. For BCCI's lending, the figure given was $750,000 US. This was just not viable to maintain. We had large deposits and had large surplus funds. Mr. Abedi was very keen that these limits go up. The World Bank would increase the limits each quarter based on how much foreign exchange Pakistan was able to generate based on central bank records. If the dollar reserves of the country went up, the World Bank would allow larger lendings in rupees. I am not sure who was the brains behind it, Mr. Abedi or Naqvi but between the two of them they came up with the idea. $50 million would be placed with BCCI Pakistan through BCCI's Kuwaiti affiliate, KIFCO. BCCI transferred money to KIFCO. I have a feeling that KIFCO got the money from Caymans. In any case, Kifco placed the money with BCCI Karachi.(90) Thus, according to Chinoy, BCCI used an affiliate which was officially separate from BCCI, but secretly controlled by it and owned by it, to launder BCCI funds from one BCCI location to BCCI Pakistan, in order to make it seem as if BCCI Pakistan had generated an extra $50 million in legitimate deposits through this paper transaction. BCCI reported the extra $50 million to the Pakistan central bank, which in turn reported it to the World Bank to show the a $50 million increase in Pakistan's dollar reserves from abroad.(91)

A similar account of these transactions is described in the indictment of BCCI's top officials by the New York District Attorney on July 29, 1992. According to that indictment, the amount involved in all totalled $100 million.(92)

Zia died in a plane crash in mid-August, 1988, leaving a vacuum in relationships that BCCI very much regretted. Among BCCI officials, it was generally believed that if Zia had still been alive in October, 1988, he would have used his influence with the U.S. government to soften the handling of the case against BCCI in Tampa.(93)

With Zia gone, BCCI was not left without resources in Pakistan, however. The man who became President, Ishaq Khan, had served as chairman of the BCCI Foundation throughout the 1980's, and had close ties to Abedi.

The relationship between BCCI, the Pakistani government, and the BCCI Foundation had been deeply entangled from the start. As in the Bangladesh version of the BCCI Foundation, the Pakistani BCCI Foundation was created as a means of sheltering BCCI profits from taxation. In 1981, it received tax-free status while Ishaq Khan was Pakistan's minister of finance. In turn, the foundation received BCCI's profits from Pakistani operations, and then used some of those profits to finance projects the Pakistani government wanted and could not pay for itself. For example, BCCI provided $10 million in grants in the late 1980's to finance an officially "private" science and technology institute named for Pakistani President Ishaq Khan, whose director, A. Qadir Khan, has been closely associated with Pakistan's efforts to build a nuclear bomb. The institute is believed by some experts to be the headquarters for Pakistan's efforts to build an Islamic bomb. In the same period, other BCCI officials were assisting Pakistanis in purchasing nuclear technologies paid for by Pakistani-front companies through BCCI-Canada.(94)

The Foundation also made payments to somewhat less political entities, such as $3 million dollars for an "investment" in Attock Cement, a private cement company in Pakistan ostensibly owned by BCCI front-man Ghaith Pharaon, but in fact a front for BCCI itself. As BCCI officer Nazir Chinoy testified:

this foundation was set up . . . with the government of Pakistan nominating as the chairman, one or two trustees from the public and two or three from BCCI management . . . 90 percent of [BCCI Pakistan's] pre-tax profits being generated in rupees [were] given to the Foundation. It is a lot of money. . . .A charitable foundation is not subject to the same audit strict audit procedures or scrutiny by the central bank or the state bank of Pakistan. . . it becomes an opportunity to get employment. If you want to do somebody a favor, you could put him on the staff of the foundation and find a job for him.(95) Among other officials whose activities were financed by BCCI in Pakistan were Jam Sadiq Ali, the highest ranking official in the province of Sind -- where Karachi is located -- whose personal expenses were financed by BCCI for years of self-exile in London, and who defended BCCI and Abedi after its collapse.(96)

Yet another high-ranking Pakistani official placed on BCCI's payroll after his government service was Pakistan's former Ambassador to China, Sultan Khan, who was provided a job at BCCI at its representative office in Washington, D.C. There, according to BCCI records, Khan solicited business for BCCI and its secretly-held subsidiary, First American, from the Chinese Embassy and Chinese officials in the mid-1980's, sponsored occasional events on behalf of the Chinese to which he invited prominent Americans, and had lunch with foreign diplomats who controlled accounts whose business BCCI was interested in acquiring. By the late 1980's, Khan continued to go to BCCI's Washington representative office, but according to him had little to do there beyond reading the newspapers and picked up his paycheck until the office closed after BCCI's indictment in Tampa.(97)

According to BCCI's former head of Latin American and Caribbean operations, Akbar Bilgrami, such appointments of retired Pakistani officials were typical.

PANAMA Repatriating U.S. dollars from Latin America to the United States was an essential function of BCCI Panama from its inception. This was apparent to anyone who had contact with BCCI's Panama offices. As a Colombian marijuana trafficker and cooperating Justice Department witness told the Subcommittee:

Everyone who did business in the drug trade knew about BCCI. We all used it. It was very conveniently located at the airport when you came into Panama. Its officers were very attentive. And even if something went wrong, and your money was frozen at the request of the United States, BCCI would make sure you could get your money back.(98) As this trafficker explained, his accounts at BCCI had been frozen at the request of the United States as a result of an anti-drug operation it had mounted called Operation Pisces. After the funds were frozen, he went to Panama, where he was told by his lawyer that if he was willing to give up 10 percent of the full amount, BCCI would find a way to release his funds to him, while telling the U.S. government they were frozen. He agreed, and soon the lawyer produced a letter from the Attorney General of Panama -- who at the time was supposedly working closely with the United States on anti-drug efforts -- ordering the release of the funds.(99)

Cartel money-launderer Ramon Milian Rodriguez, who testified before the Subcommittee in February, 1988 concerning his knowledge of Noriega's involvement with drug trafficking and money laundering, wrote the Committee after BCCI's global closure to inform the Committee that he too banked at BCCI, and that a substantial portion of his remaining funds following his arrest and conviction in Tampa had remained at BCCI and was lost in its closure.(100)

Following BCCI's plea agreement with the U.S. Attorney in Tampa in January 1990 which required BCCI to cooperate with law enforcement in anti-money laundering activities, BCCI's own employees in Miami began to recommend that BCCI's attorneys refer to the Justice Department BCCI's overall operations in Panama, as well as Colombia, for possible further criminal investigation. When BCCI's attorneys refused to undertake this action, apparently out of concern that such a referral would wind up destroying the bank, these lower-level BCCI employees again asked the lawyers to criminally refer BCCI's Panama and Colombian operations to Justice. The lawyers again refused to do so.(101)

BCCI officials argued that in handling flight capital and dirty funds out of Panama, BCCI was little different from most other foreign banks which had decided to locate there.(102)

However, it was no accident that BCCI was the foreign bank that obtained the bank account of Panama dictator Manuel Antonio Noriega. Once again, BCCI systematically solicited relationships in Panama with top officials as the key to long-term profitability. While Noriega was in charge of Panamanian intelligence, G-2, under the government of General Torillos, Noriega had come to know Alauddin Shaikh, a BCCI official who frequently handled payoffs to government officials in a number of countries.

As Nazir Chinoy explained:

Originally Panama was set up by Alauddin Shaikh, Amjad Awan was his understudy only. Awan reported to Shaikh, not anyone else. Up until I was in London in 1985, Shaikh used to fly to Panama two to three trips a year to meet with General Noriega. The relationship was very close. General Noriega gave a copy of old hand-written Koran to Alauddin Shaikh.(103) When Noriega visited London, Shaikh provided him with dinners and entertainment, and soon thereafter, Noriega assisted BCCI in obtaining a license to open a bank in Panama. Shortly thereafter, Shaikh's assistant, Awan, who had met Noriega in London, was transferred by BCCI from London to Panama, where he made the acquisition of Noriega's account a priority.(104)

Awan pressed Noriega on numerous occasions to open an account at BCCI, and in early 1982, Noriega agreed, opening an account in the name of the Panamanian defense forces. Under his agreement with Awan, Noriega would have sole control over the funds, which would be maintained by BCCI in the United Kingdom in numbered accounts.(105)

During the first two years he held the account with BCCI, Noriega used his accounts at BCCI to make political payoffs in the course of elections, and for intelligence operations. For example, Noriega directed BCCI to payoff the mortgage of his hand-picked candidate for president of Panama, Nicholas Barletta. Later, this changed, and he used his accounts with BCCI as a personal account for himself and his family, who received credit cards from BCCI and began making extensive charges for shopping trips in Miami, New York, London, Paris, and at popular European resorts on the BCCI "Panamanian Defense Forces" account. At its height, Noriega maintained about $25 million in the account, mostly from cash deposits. The largest single deposit of currency into the accounts was approximately $4 million.(106)

Noriega introduced members of his business clique to BCCI, and encouraged BCCI to make loans to them, including businessman Enrique Pretelt and arms dealer and drug trafficker Cesar Rodriguez. BCCI provided them with lines of credit that were secured by Noriega's promise to Awan that he would make sure that the loans were made good. However, these loans were defaulted on. In the case of Rodriguez, when BCCI raised the issue with Noriega, Noriega advised the bank to look his estate and that he would have no further responsibility. Against Awan's wishes, BCCI chose to swallow the losses -- which amounted to $10 million in all -- rather than irritate Noriega by pushing forward with attempts at recovery.(107)

The closeness of the relationship between BCCI and Noriega extended to Noriega's wife and children as well, each of whom made use of BCCI accounts. Noriega handled the purchase of Noriega residences in the United Kingdom. And Noriega's daughter was even hired as an employee at BCCI-Miami, where the bank trained her in its own techniques for banking.(108)

Later, when Noriega was indicted in Miami in February 1988, he told BCCI to move his bank accounts at BCCI-London to another location, in an effort to hide them from U.S. authorities. Awan and other BCCI officials, including Swaleh Naqvi, then BCCI's Acting CEO, discussed Noriega's request and decided to move the funds to BCCI-Luxembourg as a means of keeping the funds concealed from detection by law enforcement in the United States and United Kingdom. The funds stayed in Luxembourg for the next four months.

In July, 1988, when BCCI learned that the Subcommittee had subpoenaed it for Noriega's records, Awan met with BCCI officials Naqvi, Dildar Rizvi, and S.M. Shafi to discuss whether Noriega's funds needed to be hidden still further. Noriega then called Awan and asked Awan to transfer the money out of BCCI entirely, to Panama's government bank, Banco Nacional de Panama, and immediately from there to a small European bank. Awan then met Ziauddin Akbar, BCCI's former head of Treasury operations, who in 1986 had left BCCI to become the head of Capcom, its commodities trading affiliate. Awan discussed Noriega's problems with Akbar, who offered to hold the $23 million in Noriega funds for BCCI in one of the trading accounts Capcom maintained for laundering money, a company sometimes referred to as Finley and sometimes as Findley. At BCCI's direction, Awan then travelled to Panama through a circuitous route designed to ensure that there would be no record of Awan's travel to Panama through the United States, and while in Panama, met with General and Mrs. Noriega. The Noriegas authorized BCCI to transfer their money to the Findley account at the Middle East Bank in London, and Akbar then moved the Noriega funds through Capcom to different entities, breaking up the trail by which Noriega's money could easily be traced by anyone.(109)

Thus, BCCI officials in the United States, Panama, the United Kingdom and Luxembourg colluded with one another to hide funds which they knew were the subject of a pending criminal action in the United States from law enforcement. They hid the funds through using the rather traditional mechanism in money laundering of layering -- moving the funds from entity to entity and from location to location until they could no longer be traced.

PERU Overview BCCI's method and scope of operations in Peru parallelled its functions in most, if not all, other countries. First, officers of the bank cultivated favorable relationships with powerful members of government and the private sector. Second, BCCI sought to do business in Peru with the hope of securing the high net worth depositors upon which its operations depended regardless of the source of the deposits. Finally, the bank conducted the full range of highly suspect or outright illegal activities that it conducted in other countries, including allegedly giving bribes and kickbacks, hiding money in numbered accounts, evading regulatory inspection, and laundering stolen government funds and drug profits.

Background Near the end of 1984, the government of Peru ceased making any payments on its national debt. The breach of its debt repayment obligations subjected Peru to two direct results over the next year. First, Peru became a bad risk to which very few, if any, banks or countries outside of Peru would extend loans and lines of credit. These loans and lines of credit were essential to financing trade between Peru and other nations because the external sources were Peru's only source of foreign currency. Second, those banks and countries to which Peru had already become indebted sought to collect the money that Peru owed them. The directors and managers of Peru's central bank -- the Banco Central de Reservas del Peru ("BCRP"), which managed all the funds of the government -- particularly feared attachment and seizure of Peruvian assets located in other countries.(110) In short, Peru was faced with a dilemma: On the one hand, its need to finance foreign trade compelled it to form a relationship with a bank outside the state. Yet Peru faced attachment and seizure of any funds placed outside of the protection of its own borders.

Thus, entering 1986, Peru was faced with two immediate needs as a result of its refusal to pay its debt obligations. First, it needed to form a relationship with a bank which would extend lines of credit in foreign currency in exchange for deposits of Peruvian currency. Second, insofar as Peru faced attachment and seizure of its assets by countries and banks to which it was indebted, it needed to form a relationship with a bank which could "hide"(111) Peruvian deposits from creditors. These two criteria -- "reciprocity" and "safety" -- formed the express agenda of the BCRP as it began to approach BCCI and other banks in mid-1986.(112)

Formation of the Relationship Just as in the United States, one of BCCI's very first actions lay in hiring a prestigious law firm. Jorge del Castillo, a member of the Peruvian House of Delegates, testified that, upon entering the country in 1984,

BCCI . . . asked for and got the legal advice of a very important law firm in Peru, . . . Arias & Davis & Associates, which is a very well known law firm.(113) Moreover, just as in the United States, the law firm hired was well-connected to the Peruvian government. Del Castillo testified that the partner at Arias & Davis's representing BCCI was:

. . . Dr. Sterling, . . . a person whom all of us respect and could not possibly be suspected of anything illegal, he is a member of Dr. Lunes Flores' party, and is the President of the Peruvian Senate. He is beyond reproach.(114) Thus, from its entry into Peru, BCCI sought to cultivate the patina of respectability that it had sought to cultivate since its creation.

In the meantime, BCCI began to promise Peru terms that it, alone among international banks, could meet. Peru would deposit its funds at BCCI-Panama, BCCI-Panama would hide those funds under Panama's strict bank confidentiality laws, and BCCI would then lend money to Peru at a rate of about 50 cents on the dollar, which Peru could use to purchase foreign goods.

This attractive offer was offset, in part, from the beginning, by Peru's legitimate concerns about BCCI as a bank. The central bankers of Peru understood that BCCI had no lender of last resort, and that their funds could disappear if something went wrong. These concerns were met, in part, through bribes by BCCI to at least two of the decision-makers at the central bank, who from there on would become staunch supporters of the BCCI relationship.(115)

Following the bribe payments, the BCRP entered into a formal banking relationship with BCCI on April 28, 1986. The BCRP and BCCI signed two documents, "General Business Agreement for the Handling of Numbered Account" and "Operative Covenant for Numbered Account." These two documents described the accounts to be provided to the BCRP. The deposits were to be in a numbered account, with BCCI to "keep absolute secrecy about [the BCRP's] identity." The accounts were to be kept in Panama, which maintained strict bank secrecy laws. In a letter dated the same day, a $60 million line of credit was extended to the BCRP. In exchange for the credit line, the BCRP promised to keep at least $200 million in its accounts.(116)

These agreements were advantageous to BCCI for three reasons. First, BCCI required that the BCRP deposit four times the amount that it was obligated to lend. Thus, as long as the relationship between the two lasted, BCCI would have $140 million to use for purposes other than its loan obligations to the BCRP. Loans are traditionally considered assets to a bank, and deposits, because they are due upon a customer's demand, are considered liabilities. Thus, the $140 million wouldn't be considered a traditional asset increasing the book value of the branch.(117) However, within the context of the transaction itself, the $200 million minimum requirement limited the BCRP's ability to withdraw the money at will and thus provided a near-certain $140 million for BCCI's use.

Second, the account agreements were advantageous to BCCI because they did not obligate BCCI to pay any interest on the BCRP deposits. This savings in interest would amount to millions in itself.(118) However, the letter of credit did obligate the BCRP to pay an interest rate on any amounts borrowed, as well as "[o]ther charges like Confirmation, Commitment, Negotiation, etc. . . . as per BCCI schedule of charges."(119)

The agreement between BCCI and the BCRP was advantageous to the BCRP in at least one way. Peruvian Central Bank official Ricardo Llaque testified that no other bank with which the BCRP had a relationship would provide a letter of credit as high as BCCI:

Senator Kerry[:] Did not other banks in Panama offer numbered accounts? Mr. Llaque[:] Yes, but not levels of credit which were very high . . . . It [the size of the line of credit] was one of the most important points in the decision of the board to accept the corresponding relationship . . . and since it was a revolving line of credit it meant that this was a benefit . . . at an amount much higher than what the nominal amount of the line of credit really was.(120)

Llaque was contending that the line of credit BCCI was advancing Peru was greater than that offered by any other bank. However, it was still substantially below the level of the amounts deposited by Peru. More importantly, since BCCI needed Peru's assets, and as an institution tended not to be concerned about the repayment schedule of loans, BCCI's needs and Peru's needs fit one another perfectly.

Relationship Between BCCI And Peruvian Elite As described above, in the course of obtaining the Central Bank account, BCCI officials paid bribes to the Central Bank officials handling the accounts.(121) The purpose of these bribes was to ensure that once the relationship was established and BCCI had agreed to lend funds against Peru's central bank assets, the Peruvians would have a personal stake in keeping Peru's assets at BCCI.

As the District Attorney of New York has alleged in his July 29, 1991 indictment of BCCI, and his indictment on July 29, 1992 of BCCI's top officials and front-men:

The BCC Group made corrupt payments to the President and the General Manager of the Central Bank of Peru. In or about 1985, the BCC Group made payments of money to the President and General Manager of the Central Bank of Peru upon an agreement and understanding that said President and General Manager would take deposits of hundreds of millions of dollars of Peruvian government reserves with banks of the BCC Group. Hundreds of millions of dollars of the Central Bank of Peru's funds were placed on deposit with banks of the BCC Group, and said payments to the President and General Manager of the Central Bank of Peru were calculated as a percentage of the amount on deposit.(122) Or, as BCCI's head of Latin American and Caribbean operations, Akbar Bilgrami put it:

We had to make payments into a Special Project Accounts. I was told that BCC's relationship with Peru arose because Mr. Brian Jensen joined the bank in 1986; he was an ex-Central Bank official. BCC's push in 1987-1988 was to get big chunks of deposits from Peru. You see, Peru was being cheap, not paying its foreign debt. BCC offered to keep Peru's money hidden: $320 million in Panama.(123) Or, in the more laconic conclusion of Abdur Sakhia, the head of BCCI's Miami office:

the relationship between Peru and BCCI was not kosher.(124) However, even with the payment of bribes, BCCI officials worried that the $250 million in assets could disappear from BCCI if the officials they had paid-off were to lose favor. Given the significant size of the lending BCCI had agreed to in return, they wanted assurances that in the view of BCCI, could only be had from Peru's president, Alan Garcia. Accordingly, after the relationship had been established, S. M. Shafi, head of BCCI's Latin American operations, went to Lima, Peru to meet with Garcia and receive such assurances. The meeting took place in mid-February, 1987, and Garcia promised BCCI that the funds would remain at BCCI. Following the meeting with Garcia, the Peruvian central bank raised its limit for deposits with BCCI by another $50 million.(125) Moreover, the BCRP agreed to "irrevocably and unconditionally" guarantee any loan provided by BCCI. That is, if a local bank or institution defaulted on a loan from the BCCI letter of credit, the BCRP promised to repay the loan. Moreover, the guarantee covered the entire $110 million dollars. In August, 1987, the BCRP received another $50 million increase, but it appears that no corresponding deposit was required.(126)

BCCI sought and had been granted permission from the government (as required by law) to open branches in Peru as early as 1984. Although BCCI never in fact opened branch offices in Peru, its actions in 1984 established a presence in the country which laid the groundwork for the deal eventually struck between BCCI and the BCRP in 1986. Llaque said, "It [BCCI] had sent its people to Peru, and when we began to look for new corresponding banks the bank was already there."(127)

However, it has been alleged that, when the BCRP began searching for corresponding banks in 1986, the relationship between BCCI and the government was already so strong that the BCRP did not even seek proposals from banks other than BCCI. Fernando Olivera, presiding officer of an committee formed by the Peruvian Parliament to investigate Peru's financial operations, testified before the Subcommittee on August 2, 1991. Olivera suggested but did not clearly state that his investigation had revealed that the BCCI proposal was the only proposal sought and entertained by the BCRP.(128) He also testified that the BCRP based its decision to invest in BCCI based solely on a three-page report regarding BCCI Holdings, S.A., in Luxembourg.

The documents do not provide a clear answer as to whether Llaque's explanation or Olivera's explanation was correct. For example, it is unclear how BCCI's mere presence in Peru would in itself be helpful in convincing the BCRP to make deposits with it. Even the placement of deposits in numbered accounts in Panama was not a service unique to BCCI; the BCRP held similar numbered accounts in Panama branches of four European banks other than BCCI as early as December, 1985, six months before its accounts with BCCI were opened.(129)

In opening the BCCI accounts, four BCCI executives held meetings with members of the BCRP.(130)

Over the next year and a half, while the BCRP's relationship with BCCI continued, several more meetings were held between members of the Peruvian government, BCCI executives, and foreign VIPs. On 12/18/86, Akbar Bilgrami came to Peru accompanied by Panamanian General Manuel Noriega. On 07/21/87, Alberto Calvo, an agent of BCCI, met with Daniel Carbonetto, Economic Advisor to Alan Garcia Perez, the President of Peru, who Calvo described to his superior at BCCI, S. M. Shafi, as the person "who the public opinion considers the most influential person in the decision-making process regarding economic policies." Carbonetto and Calvo discussed how the Peruvian government could obtain additional lines of credit through BCCI. They also described the risk of BCCI continuing to hold Peru's central bank reserves at BCCI-Panama, given "Panama's political situation."(131) Calvo concluded:

Mr. Carbonetto asked me to go with him to visit the President Mr. Alan Garcia, and to brief him about our conversation. I politely refused with the excuse that I was leaving for Chile. In reality I prefer to meet with the President after knowing what will be the policy of the Central Bank regarding the placement of it's reserves and after having a chance of receiving your instructions on this matter.

We agree to meet with the President of the Central Bank one week after he takes office and after that we will visit the President of the Republic.(132)

This meeting between Shafi and Alan Garcia appears to have occurred finally in October of 1987. A separate meeting involving Garcia, Manuel Noriega, and BCCI official Akbar Bilgrami, apparently took place December 18, 1986, according to Fernando Olivera, a Peruvian legislator who headed a commission reviewing the relationship in 1991, discussed below.

Illegal Activities There is a characteristic of BCCI's activities in Peru not present in other countries which should be emphasized at the outset. The BCRP's purpose in entering into a relationship with BCCI, if not illegal, was at least highly suspect. The BCRP -- a branch of the Peruvian government acting in this matter as government -- expressly intended to conceal its country's funds from legitimate creditors, because of its desire to avoid paying off its debts. Just as Manuel Noriega used BCCI with the intention of hiding funds which rightfully belonged to the Panamanian government, the BCRP used BCCI to conceal funds with were rightfully owed to private banks and other countries. The formal difference between Noriega's use of BCCI and the BCRP's lies in the fact that Noriega was acting as an individual using the bank to deceive his government, while the BCRP was acting as an arm of government using BCCI to deceive banks and other countries. In his testimony before the Subcommittee, deputy central banker Llaque used the euphemism of "safety" to describe the BCRP's purpose:

Senator Kerry[:] . . . [O]ne of the services that you were looking for was an ability to be able to hide the money from seizure, was it not? . . . Mr. Llaque[:] Yes. Perhaps "hide" is not the word . . . . We had at least two cases of embargoes of funds from the Central Bank in U.S. banks, and also an embargo of funds from commercial banks in the United States as well.(133)

It is apparent from the Subcommittee's review of testimony and documents that "hide" was exactly the word to describe the BCRP's intent in using BCCI. No witness or document disputed that the funds were due to legitimate creditors; not did any witness or document question the propriety of an outside nation seeking to attach funds.

The need for safety manifested itself in two requirements. First, the funds had to be kept in an account shielded from creditors. Thus, BCCI provided Peru with a numbered account which bore no connection with the Peruvian government on its face. Second, the account needed to be kept in a country with strict regulatory laws protecting disclosure of account owners. Thus, the account was opened not in Peru, but in Panama.(134)

End of BCCI Relationship With Peruvian Central Bank By mid-1987, despite the bribes paid by BCCI and its efforts to secure the support of President Garcia, officials at the Peruvian central bank were becoming increasingly uneasy about the bank's relationship with BCCI. The officials had learned about BCCI's massive commodities trading losses in London, which had in effect wiped out BCCI's capital. They also feared that the Noriega regime in Panama was potentially unstable, and that the United States might ultimately take action against it -- as it did just six months later in shutting down Panama's banks through refusing to accept dollars.

Accordingly, they asked the senior analyst of foreign banks at the Central Bank to provide the Central Bank with an analysis as to the safety and security of Peru's funds at BCCI. The analyst, Gonzalo Aramburu, was only too glad to provide the facts about BCCI -- it had no lender of last resort in case of a default in any of its operational units; over the previous two years BCCI had showed significant losses in operations in the options market; and BCCI "uses an unusual accounting system in that it does not make it possible to clearly identify the level of losses of the fiscal year, or the activity that led to them."(135) Accordingly, Aramburu recommended the Central Bank to take immediate action to protect itself by cutting back on the $270 million in was then maintaining in BCCI.(136)

Over the following month, Peru removed $70 million in deposits from BCCI. By the end of the year, it had removed over $150 million. The remaining funds were pulled at the end of January, 1988, as Panama fell into a crisis over accusations concerning Noriega's drug trafficking.

Peruvian Legislative Commission Following BCCI's indictment on drug money laundering charges in Tampa in October 1988, and growing international concern about BCCI during 1989 and 1990, a legislative commission was created in Peru to review a number of charges of Peruvian corruption, including issues pertaining to the Central Bank's decision to place the government funds at BCCI. The head of that commission, Fernando Olivera, a member of the Peruvian House of Deputies from an opposing political party to former President Alan Garcia, testified before the Subcommittee on August 2, 1991 about the meaning of BCCI's activities in Peru:

We think that the cause of this behavior and the decision to place Peru's international reserves in BCCI was corruption. And here we have a document of the Swiss Bank Corp. in Panama providing that BCCI oversees George Town Bank Corp Grand Cayman. From there, transfers were made to the Security Bank to the Swiss Bank in New York and transferred from there to an account in Panama of the Swiss Bank. These were the bribes for these officers [Lionel Figueroa and Hector Neyra of Peru's Central Bank]. . . . There are some other people under the Selva Negra and Terra Firma codes, and . . . we are convinced that there are other authorities higher up who intervened.(137) As another member of the Commission, Pedro Cateriano, testified before the Subcommittee:

In Peru the members of the [Central Bank] board of directors are political. They are named by the President and members of the board . . . That is why the function they carry out is not really technical. It is basically political.(138) The clear message of the legislative commission was that the Central Bank officials could not have been acting alone, and that other important Peruvian political figures, including former President Alan Garcia, were involved.

Another Peruvian legislator, Jorge Del Castillo, who requested to testify before the Subcommittee to defend President Garcia, stated that the Central Bank was independent of the President and autonomous in all respects with no relationship to the Peruvian executive branch. Del Castillo also provided documents to the Subcommittee consisting of an investigation on behalf of Garcia of alleged BCCI accounts maintained by Garcia that did not, in fact, exist. Del Castillo testified that this investigation disproved that allegations concerning Garcia's involvement in any bribes that may have been failed.(139)

BCCI officer Akbar Bilgrami, who, unlike the other witnesses is neither Peruvian nor affiliated with any Peruvian political party, told the Subcommittee that it was his understanding that Garcia had indeed provided assistance BCCI, but that he had not heard of specific payments being made to Garcia.

My main sources for information on payments in Peru were two BCCI officials, Amir Lodhi and S.M. Shafi. According to them, President Garcia approved that funds be placed in BCCI. Mr. Shafi told me that the BCC had to pay for the deposit, but we didn't know how much, or to whom the money went. This was handled by Mr. Saddiqui [one of BCCI's top officers in London]. Two Central Bank officials and Mr. Jensen were handling it in Peru. Mr. Shafi went to President Garcia as an insurance policy of getting the amounts. I heard that the money went into the hands of the Central Bank officials and Mr. Jensen. Mr. Shafi did not tell me that Mr. Garcia received money. He said that he went there to guarantee that the money would be placed in the account, as an insurance policy. Mr. Tariq Jan [another BCCI officer] also went with Mr. Shafi to the meeting with Garcia. I believe that Mr. Shafi went to see him to make sure that the relationship would occur. You know, it wouldn't be good for BCC to start down this road without the support of the country's president. I also think that Mr. Lodhi also met with Mr. Garcia, but that meeting was more general. The meeting with Shafi was just with regard to this relationship -- the money for the letters of credit. Lodhi's meeting with Garcia was about Latin America and third world causes, and so on.(140)

On September 22, 1992, the Attorney General of Peru announced that she would seek Garcia's extradition from Colombia after charging him with alleged irregularities for his role in depoisiting Peruvian resesrves in BCCI. The official, Blanca Nelida Colan, had "drawn up charges against Garcia for the possible existence of foreign bank accounts for his alleged participation in depositing $287 million in reserves" in BCCI.(141)

Conclusion There were more than enough reasons for BCCI and Peru's Central Bank for the two to development a relationship in 1986. Peru was seeking to hide its money from foreign creditors, as it began refusing to pay its foreign debt. BCCI was engaged, as always, in a quest for deposits to prop up finances which were in an especially rickety and fragile state in this period. BCCI, as usual, met with top officials in the country to secure and strengthen its relationship with the Central Bank, including President Garcia. Bribes allegedly were paid to two Peruvian central bankers. When BCCI finally collapsed, Peru escaped harm principally because its exposure had previously been so large and so imprudent, especially given both Panama and BCCI's shaky state by the beginning of 1988, that responsible officials in Peru had acted to end the relationship.

SENEGAL In Senegal, BCCI paid bribes to employees of the Foreign Exchange Department of the Central Bank, and provided them with gifts, to assure that BCCI received preferential treatment in the release of foreign exchange funds. This preferential treatment again placed BCCI in a favorable position in relationship to other banks for handling imports to Senegal, similar to that described in some detail above concerning BCCI's activities in Nigeria.

Additionally, BCCI helped the Central Bank of Senegal in defrauding the International Monetary Fund through falsifying deposits in Senegal to the IMF. At the time, Senegal was required by the IMF to maintain cash deposits of a certain level on reserve, and was unable to do so. On the critical reporting dates for the Central Bank, BCCI discounted a $5 million to $6 million promissory note to a Senegal corporation for two to three weeks, the corporation then placed the funds on deposit with the Central Bank of Senegal for that period, showing the IMF that Senegal was meeting its banking obligations, and when the IMF review was concluded, the transaction was reversed.(142)

SUDAN BCCI's situation in Sudan was similar to its situation in a number of African countries -- it assured its access to central bank funds through making payoffs to officials. As Akbar Bilgrami described it, this was a general practice which he personally participated in only once, by his superiors at BCCI London when he was a very junior officer of the bank:

In 1977, I was asked to go with the Senior Official of the Central Bank and given 100,000 pounds. I was told to buy him anything he wanted. I kept the receipts as we were buying items. This made the central bank official very nervous, the keeping of receipts. He said, 'Barclays doesn't keep receipts.' I brought the receipts back to my boss, who said 'What did you do that for?' and threw them away. We spent about 70,000 pounds that day.(143) ZAMBIA In Zambia, BCCI once again worked with government officials to defraud an international lending institution, in this case, the World Bank. In 1987, the World Bank required Zambia to reduce its borrowings by making a $35 million payment by December 31, 1987 from internal sources or savings. When Zambia could not come up with the funds, BCCI loaned $45 millon to Zambia, hiding the source of the funds so that they appeared to be from Zambia's own sources.(144) As a result, the World Bank granted a new $60 million loan to Zambia. As Nazir Chinoy explained the transaction:

The funds were given to Zambia by BCCI. The routing was that they were sent from BCC Paris to a Zambian commercial bank to London and from there, the World Bank was repaid. Two days later, Zambia was able to draw on the $60 million tranche from the World Bank. BCCI Paris was repaid from Copper exports. The terms for BCCI Paris were one percent front-end fees; one and a half percent over LIBOR [a standard European international banking rate].(145) According to Chinoy, BCCI was able to make money in several additional ways off the Zambian transaction. In addition to the transaction fees specified above, BCCI made money converting the payments it received in French francs on the copper exports to dollars. Moreover, BCCI was able to use the transaction to assist with internal bookkeeping problems, by sending 50 percent of the front end fee to BCCI-Grand Cayman in compensation for BCCI-Grand Cayman having issued a letter to BCCI Paris underwriting the risk in case Zambia defaulted. In this way, BCCI-Paris reduced its taxable income.

ZIMBABWE Several BCCI officials interviewed by the Subcommittee referred to bribes paid to Zimbabwe's prime minister, and the political chief opposition figure in Zimbabwe, by BCCI at the time it opened a joint venture with Zimbabwe. By the account of Nazir Chinoy:

I accompanied Mr. Abedi and Mr. Sheikh to the opening of a joint venture with Zimbabwe. I think to get permission for establishing a bank in Zimbabwe that money was paid to President Mugabe and to Nkomo. The basis I am making this statement was that when I went there with Mr. Sheikh I was acting as Mr. Abedi's personal assistant or secretary. Mr. Sheikh went off on his own to see Nkomo who was the chief opposition at that time, and then he went off to see President Mugabe, and when they talked they wanted me out of the room. Many of us were there for the opening. But only Alauddin Sheikh and [BCCI CEO] Abedi were left in the room with these two political figures. Otherwise I was accompanying him and acting with him. Mr. Sheikh carried a bag with him. At the time I had a suspicion that you don't get permission as a foreign bank so easily without a payment. Without favors, it wouldn't be so easy to get a bank that fast, especially given the opposition of the British banks who were already established there.(146)

By the account of Akbar Bilgrami:

We paid Mugabe and Nkomo. I was at the Parklane Branch. BCC was approached to look after the expenses of the delegates, which were paid. In addition, we paid 500,000 pounds from the Parklane Branch. Someone from Mr. Naqvi's office came to Parklane and picked up the money. I don't think than Ian Smith was getting paid by us. I think that the Rhodesian government was taking care of him. That was in 1980-1981.(147) By the account of Abdur Sakhia:

I drove one of my colleagues in London to a hotel, and he went with a briefcase and he came back without a briefcase, and I asked him: What happened to your briefcase? And he smiled at me and he said: This was for those people. I said: What, did you carry gold bars? He said: No, some cash. . . So this was prior to independence of Zimbabwe, when they were negotiating for independence. Some officials, some politicians from Zimbabwe were staying at a hotel in London.(148) AFRICAN DEVELOPMENT BANK BCCI official Nazir Chinoy provided a detailed account of corruption in the African Development Bank to the Subcommittee, which he referred to in a much more limited way in public testimony.

According to Chinoy, BCCI had a long relationship with African Development Bank, maintaining about $32 million in deposits in BCCI's Paris branch in the mid-1980's. When Chinoy arrived, he found the hard way that the African Development Bank was placing those funds on the basis of bribes being paid to the officials at the African Development Bank who controlled the placements.

Fifteen days after my appointment, we lost a deposit of $14.3 million. When this deposit was lost I was concerned. [Another BCCI official] rushed to me and asked me whether I had made the payment? I said, what are you talking about? She said, haven't you been briefed by London? I said, no. She said, have you failed to look after the Treasurer? We were giving them top of the market rates. So I said, no I haven't been briefed. I learned from [BCCI official] Zafir Iqbal that when my predecessor was here, he drew up his expense account and he took cash dollars in travellers checks to give to the man controlling the African Development Bank's accounts, his name was Ismael Emay. I asked how much? Either 1/32nd or 1/16th. $8,000 to $10,000 a year in all. I said, fine, will I be getting the money from Cayman? He said I don't know, you'll have to manage.(149)

Chinoy made a round of courtesy calls at the African Development Bank, meeting the president of the bank and the Treasurer. Chinoy stated that he told the Treasurer that he should look Chinoy up in Paris, that Chinoy did not know what his predecessor had failed to do, but if it hadn't been paid to the Treasurer, Chinoy would pay it. According to Chinoy:

We debited the account and started to pay him. $5000 back due. We opened an account for him and his wife in Monte Carlo. He would draw maybe a couple of thousand dollars as he wanted in expenses. The balance he would send to Monte Carlo. The account he opened later in 1986. The money came from BCCI Paris. We started building up a relationship. By the way, BCCI London had 10m in investment funds of African development bank, this was kept by Investment and finance section for investments in stocks and bonds and this was controlled by Iqbal Rizvi directly with African Development Bank. At this stage, there was rivalry between me and general manager. He wanted ADB under his wing and I wanted to push for Paris. I started building up a relationship but he wouldn't allow me to attend the ADB conference and he didn't take anyone from France in 1986 for meeting in Zimbabwe. Gradually, we started acting in parallel rather than in coordination. Deposits went up to $35 million, $45 million in dollar terms.(150) Chinoy and BCCI intensified their marketing campaign to the African Development Bank and became friendly with its president, eventually obtaining the bank's entire French franc account, amounting to 200 million or more francs -- some $35 million dollars. According to Chinoy:

We continued the payment to the Treasurer. But I told him no more than $50,000 a year. Which he made in 1987-88.(151) Conclusion The above account of corruption involving officials of fifteen countries outlines typical methods by which BCCI acquired and maintained accounts and relationships with governments and government officials around the world. While lengthy, it is by no means complete and the size of the iceberg below remains difficult to measure. The above account should be enough, however, to demonstrate the fundamentally corrupt nature of BCCI's relationships with the politically prominent, and its strategy of corrupting those in or with access to government, for its own purposes.

The pervasiveness of BCCI's corruption of officials in so many countries also raises larger questions about the persistence of corruption as a way of doing business generally, around the world. BCCI officials contend that its practices were typical of those engaged in by other banks, including U.S. banks, doing business in developing countries. For example, if true, this would suggest that international lending institutions financed by the U.S. taxpayers, such as the IMF and World Bank, are routinely being defrauded by collusion between the governments of those countries and unethical banks that see the opportunity to make profits through helping such governments defraud those institutions.

BCCI officials further suggested that U.S. and European businesses that are successful in many of the countries in which BCCI was doing business, especially in Africa, can be so only to the extent that they themselves meet local standards and participate in the endemic corruption. Such participation by U.S. entities is, of course, prohibited by the Foreign Corrupt Practices Act. The testimony in staff interviews by BCCI officials raises the question of whether violations of that act may be substantially greater in number has been recognized.

Finally, the information concerning BCCI's corruption of officials around the world illustrates the public policy interest to lift the veil of secrecy regarding financial information that still obtains in too many jurisdictions. Strong bank secrecy and confidential laws were essential to BCCI preventing the detection of its criminality and its corruption of public officials. In case after case, BCCI shifted funds to bank secrecy havens in order to protect its payoffs from exposure. Moreover, secrecy laws have to this day impeded the ability of the Subcommittee to detail numerous further cases of such corruption that clearly exist. For example, documents subpoenaed in the United States by the Senate, and in the possession and control of BCCI's liquidators in the United Kingdom, have been withheld from the Subcommittee by the British courts on the basis of British secrecy laws. Little progress can be made in combatting corruption so long as many jurisdictions continue to promote numbered accounts and secrecy to flight capital and dirty money. The United States needs to take a fundamentally more active and aggressive role in changing the attitudes of many foreign governments on this issue.

1. Agence France Presse, July 12, 1991.

2. Indictment, People v. Abedi, et. al, Supreme Court of the State of New York County of New York, July 29, 1992.

3. S. Hrg. 102-350 Pt. 2 pp. 507-508.

4. Staff interview, Sakhia, October 7, 1991.

5. S. Hrg. 102-350 Pt. 2 p. 515.

6. Staff interview, Chinoy, March 9, 1992.

7. See Bankrupt: The BCCI Fraud, Kochan and Whittingon, Gollancz, London 1991, pp. 61-62.

8. Sakhia, S. Hrg. 102-350 Pt. 2 p. 508.

9. See reference to November 5, 1986 letter in minutes of Evidence Taken Before House of Commons Treasury and Civil Service Committee, Banking Supervision and BCCI, February 5, 1992, Sec. 252.

10. BCCI -- Consolidated Report, EWP, Loans Over $7.5 million, March 31, 1991.

11. s. Hrg. 102-350 Pt. 1 p. 288.

12. Staff interview, Helmy, January 12, 1992.

13. Staff interview, Akbar Bilgrami, July 20-28, 1992.

14. Staff interview, Chinoy, March 9, 1992.

15. S. Hrg. 102-350 t. 2 p. 528.

16. See documents published in S. Hrg. 102-350 Pt. 6.

17. BCCI-FinAmerica-Gotelli documents, provided to Senate by BCCI liquidators, July, 1992.

18. Id.

19. People v. Abedi, Supreme Court of the State of New York, County of New York, July 29, 1992, p. 23.

20. Letter, to Dr. Juan Sommer, February 4, 1988.

21. See Los Angeles Times, May 8, 1991, "Encino Bank Ordered Sold."

22. UPI, July 30,1 991, "Argentine Central Bank revokes BCCI license."

23. Reuters, August 1, 1991, "Argentina Had No Funds in BCCI; Minister Angry at Media," Washington Post, August 24, 1991, "BCCI Trail in Argentina Remains Untraced."

24. Associated Press, August 1, 1991, "BCCI in Argentina -- Political Headaches, But Little Economic Impact."

25. Associated Press, July 31, 1991, "Court Probes Alleged Money Laundering by Foreign Banks."

26. S. Hrg. 102-350 Pt. 1 p. 127.

27. S. Hrg. 102-350 Pt. 1 p. 159.

28. S. Hrg. 102-350 Pt. 1 p. 243.

29. See e.g. Los Angeles Times, November 2, 1991, id.; Newsday, August 13, 1991, "Ex-Bangladesh Ruler Linked to BCCI;" Daily Telegraph, August 13, 1991, "Bank Linked to Missing Bangladesh Disaster Aid."

30. S. Hrg. 102-350 Pt. 2 p. 515.

31. Mark Fineman, Los Angeles Times, "BCCI Left its Mark on Bangladesh, November 2, 1991.

32. Id.

33. Los Angeles Times, id.

34. Id.

35. See Daily Telegraph, "BCCI Scandal: Bank Linked To Missing Bangladesh Disaster Aid," August 13, 1991.

36. See Agence France Presse, "Bangladesh Appeals to Canada to Unfreeze Some BCCI Accounts," July 26, 1991.

37. Mark Fineman, Los Angeles Times, "BCCI Left its Mark on Bangladesh, November 2, 1991.

38. Memorandum from Brian Jensen to Agha Hasan Abedi, January 30, 1986, Senate document 001546.

39. Banking Venture in Brasil - Aide Memoire, Jensen to Saddiki at BCCI-London, February 24, 1986, Senate document 001545.

40. Staff interview, Abol Helmy, January 12, 1992 and BCCI documents pertaining to Brazil, produced by BCCI liquidators and from BCCI document repository in Miami.

41. Id.

42. Memorandum/telex, Sakhia to Siddiki, May 6, 1986, Senate document.

43. BCCI internal memorandum, Helmy to Ameer Saddiki, September 2, 1986, Senate document 000653.

44. Staff interview, Abol Helmy, January 12, 1992.

45. Telex, Shafi to da Costa, October 28, 1986, BCCI Senate Document 000645.

46. BCCI Luxembourg Letter of Appointment, Ameer H. Siddiki to Ambassador Correa da Costa, October 28, 1986, Senate document.

47. Staff interview, Abdur Sakhia, October, 1991; see also BCCI telex concerning Da Costa, October 28, 1986, id..

48. Staff interview, Nazir Chinoy, March 9, 1992; see indictment, People v. Abedi, New York Supreme Court, July 29, 1992, p. 24.

49. Staff interviews, Chinoy, id. See also People v. Abedi, New York County, indictment, July 29, 1991, id. p. 23.

50. Staff interview, Chinoy, March 9, 1992.

51. See testimony of Alan Kreczko, Deputy Legal Advisor, Department of State, S. Hrg. 102-350 Pt. 3 pp. 575-578.

52. See Price Waterhouse Section 41 Report to the Bank of England, June 1991.

53. Commentary, Massihur Rahman, to Price Waterhouse Section 41 Report to the Bank of England, June 1991.

54. Sakhia testimony, S. Hrg. 102-350 Pt. 2 p. 526.

55. Staff interview, Sakhia, October 7, 1991.

56. Staff interviews, Bilgrami, July 20-28, 1992.

57. Staff interview, Bilgrami, July 20-28, 1992.

58. Staff interview, Chinoy, March 9, 1992.

59. Staff interview, Chinoy, March 9, 1992.

60. Staff interview, Chinoy, March 9, 1992.

61. Id.

62. Staff interview, Sakhia, October 7, 1991.

63. Staff interview, Sakhia, October 7, 1991.

64. Sakhia, S. Hrg. 102-350 Pt. 2 . 508.

65. Id.

66. Price Waterhouse audit report, December 31, 1990.

67. S. Hrg. 102-350 Pt. 1 p. 63.

68. S. Hrg. 102-350 Pt. 2 p. 515.

69. Staff interview, Nazir Chinoy, March 9, 1991, see also Chinoy testimony S. Hrg. 102-350 Pt. 4 p. 829.

70. Staff interview, March 9, 1991.

71. Staff interview, March 9, 1992.

72. Staff interview, Chinoy, March 9, 1992.

73. Id.

74. Id.

75. Staff interview, March 9, 1992.

76. Staff interview, Chinoy, March 9, 1992.

77. Staff interview, Chinoy, March 9, 1992.

78. Staff interview, Chinoy, March 9, 1992.

79. Staff interview, Chinoy, March 9, 1992.

80. Staff interview, Chinoy, id.

81. Staff interview, Chinoy, id.

82. People v. Abedi, July 29, 1992, New York County Supreme Court, p. 20-21.

83. Staff interview, Chinoy, id.

84. Chinoy staff interview, id.

85. Testimony of Rahman, S. Hrg. 102-350 Pt. 1, p. 540.

86. White Paper on the General Elections, Government of Pakistan, July 1978, S. Hrg. 102-350, Pt. 3, pp. 314-317.

87. Former BCCI Pakistan branch chief Nazir Chinoy provided detailed information about the Zia-Abedi relationship in a series of interviews with Senate staff from March 9-16, 1992; see also check to General Zia from BCCI-UAE, May 25, 1985, S. Hrg. 102-350, Pt. 2 p. 511.

88. S. Hrg. 102-350 Pt. 2 p. 510.

89. Staff interview, Chinoy, March 9, 1992.

90. Staff interview, Chinoy, March 9, 1992.

91. Chinoy testimony S. Hrg. 102-350 Pt. 4 pp. 368-369.

92. See People v. Abedi, New York Supreme Court, County of New York, July 29, 1992.

93. Staff interview, Sakhia, October 7, 1991.

94. S. Hrg. 102-350 Pt. 3 p. 599.

95. S. Hrg. 102-350 Pt. 4 pp. 392-393.

96. Los Angeles Times, August 9, 1991.

97. Staff interview, Sultan Khan, March, 1991.

98. Staff interview, Colombian marijuana trafficker and federal cooperating witness, September, 1989.

99. Id; the trafficker provided copies of the original letters to the Subcommittee in 1989, signed by the Attorney General of Panama.

100. Milian-Rodriguez letter to Senator Kerry, August, 1991.

101. Letters, Lino Linares, Miami branch, BCCI to Holland and Knight and to Raymond Banoun, July and August, 1990, and January 1991. Details on this interaction are set forth in the chapter on BCCI's lawyers.

102. Staff interviews, Akbar Bilgrami and Amjad Awan, July, 1992.

103. Staff interview, Chinoy, March 9, 1992.

104. Awan testimony, S. Hrg. 102-350 Pt. 6; see also Blum memorandum of Awan interview, Pt 1 pp. 17-22.

105. Id.

106. Id., see also Affidavit of Amjad Awan, Government Exhibit O, U.S. v. Noriega, Southern District of Florida.

107. Id.

108. Staff interviews, BCCI attorney Raymond Banoun, May-July 1990; see also Banoun notes produced to Subcommittee September 3, 1992.

109. Id.

110. An understanding of the nature and composition of the BCRP is important to the discussion which follows. Del Castillo testified that the Peruvian constitution designates the BCRP as "an autonomous body . . . not depend[ent] upon the executive branch." S. Hrg. 102-350 Pt. 1 p. 233. However, Cateriano testified that its directors are partisan politicians "named by the President and . . . by the Senate." at 199. Thus, the BCRP should not be considered an autonomous body free from political pressure or private influence.

111. S. Hrg. 102-350 Pt 1 p. 167.

112. S. Hrg. 102-350 Pt. 1 p. 166.

113. at 232.

114. S. Hrg. 102-350 Pt. 1 p. 232.

115. See People v. BCCI, New York Supreme Court, July 29, 1991.

116. Letter from A.M. Bilgrami and Ishtiaq Nasim to the BCRP, dated 28 April 1986 ("[T]his is to advise you that in consideration of your placing U.S. $200 [million] [sic] deposits with our Panama Office, we are placing at your disposal a line of [sic] credit for $ U.S. 60 [million]. It is our mutual understanding that you will continue to maintain equivalent sufficient balances in your Placement Account.").

117. Staff interview, Akbar Bilgrami, July 1992.

118. At an interest rate of 5% per year, for example, BCCI would save $7,200,000 per year in fees.

119. "Agreement on operational procedure between BCR and BCCI regarding utilization of credit line for US $60 millions by Peruvian local banks (PLBs)," dated May 30, 1986.

120. S. Hrg. 102-350 Pt. 1 p. 167.

121. Staff interviews, Akbar Bilgrami, July 20-28, 1992; see also indictments People vs. BCCI, July 29, 1991 and People vs. Abedi, July 29, 1992, brought by New York District Attorney.

122. People v. Abedi, et. al, New York County Supreme Court, July 29, 1992.

123. Staff interviews, Bilgrami, July 20-28, 1992.

124. Staff interview, Abdur Sakhia, October 9, 1991.

125. Staff interviews, Akbar Bilgrami, July 20-28, 1992; documents reprinted in S. Hrg. 102-350 pp. 202, 206-207.

126. S. Hrg. 102-350 Pt. 1 p. 165.

127. S. Hrg. 102-350 Pt. 1 p. 166.

128. 196-197. Compare the 8 July 1987 memorandum from Carlos Saito to Ana Ma. de Reategui (both of the BCRP) entitled "Evolution of BCRP deposits abroad" ("At the end of June 1986 work was already underway with seven banks" . . . . "The last bank with which correspondent relations were established was . . . BCCI.").

129. See the Evolution of BCRP deposits abroad, hearing book at 176.

130. S. Hrg. 102-350 PT. 1 p. 170.

131. S. Hrg. 102-350 Pt. 1 p. 206.

132. Id.

133. S. Hrg. 102-350 Pt. 1 p. 167.

134. See the Evolution of BCRP deposits abroad, at 175 ("[I]t was decided to open special accounts in the market in Panama, which have maximum security.").

135. S. Hrg. 102-350 Pt. 1 p. 173, "Central Reserve Bank of Peru, Memorandum to Juan Villanueva from Gonzalo Aramburu, August 7, 1987.

136. Id.

137. S. Hrg. 102-350 Pt. 1 p. 199.

138. Id.

139. S. Hrg. 102-350 Pt. 1 p. 233.

140. Staff interviews, Akbar Bilgrami, July 20-28, 1992.

141. Reuters, September 22, 1992, "Attorney General To Seek Extradition of Ex-President Garcia."

142. People v. Abedi, Supreme Court of the State of New York, County of New York, July 29, 1992.

143. Staff interview, Bilgrami, July 20-28, 1992; Bilgrami testimony, S. Hrg. 102-350 Pt. 6.

144. People v. Abedi, Supreme Court of the State of New York, County of New York, July 29, 1992, p. 18.

145. Staff interview, Chinoy, March 9, 1992.

146. Staff interview, Chinoy, March 9, 1992.

147. Staff interview, Bilgrami, July 20-28, 1992.

148. S. Hrg. 102-350 Pt. 2 p. 515.

149. Staff interview, Chinoy, March 9, 1992.

150. Chinoy, id.

151. Id.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

BCCI IN THE UNITED STATES

INITIAL ENTRY AND FGB AND NBG TAKEOVERS Introduction BCCI's entry into the United States was inevitable, given Abedi's desire to make BCCI into a global bank, and the size and importance of the United States financial and banking markets. Since BCCI was undercapitalized from its inception, its success required constant growth as a means of filling the ever-increasing hole created by its lack of capital and its operational losses. Securing a base in the United States was intended by Abedi from the beginning as a means of obtaining new opportunities for growth. The United States was one of the largest money havens for flight capital. It was also unique among banking systems in insuring deposits at a very substantial level for FDIC member banks. FDIC insurance made deposits in U.S. banks more secure than deposits anywhere else in the world. As a foreign bank, BCCI could not legally accept deposits from U.S. citizens, or itself become an FDIC member bank. But if BCCI could find a way to enter the FDIC system, it would be able to offer a whole new, and highly valued, service to its customers -- U.S. government guaranteed deposit insurance. Abedi decided that he would first acquire legitimate banks in the United States for BCCI, and then determine later how to merge BCCI into them.

BCCI's initial strategy for the United States was to infiltrate the U.S. banking system through purchasing beachhead banks in major banking centers, and then to expand the beachhead operations until BCCI had U.S. banking operations of sufficient size that they could ultimately merge with BCCI itself. Later, after state regulators in New York had proven resistent to BCCI, and BCCI had successfully acquired National Bank of Georgia and FGB/First American, this strategy was modified. BCCI expanded in the United States by opening BCCI branch offices in regions with significant populations from the Third World engaged in trans-national commercial activity, such as Miami, Houston, Los Angeles, San Francisco, New York, and Chicago. BCCI's intention was to use these branch offices to feed depositors and banking activity to NBG and First American, expanding BCCI's activities through pushing deposits into the federal deposit insurance system. BCCI then formed an additional beachhead institution in California in 1985 through a nominee. By then, Abedi had decided that he would work systematically to integrate the various U.S. banks BCCI now secretly owned, until the survivor was strong enough and large enough to in turn purchase BCCI.(1)

BCCI had significant difficulties implementing this strategy due to regulatory barriers in the United States designed to insure accountability. These barriers included:

** a strong bias against any bank, such as BCCI, which did not have a primary regulator with the responsibility for conducting oversight on a consolidated basis of the foreign bank.

** requirement for certified financial statements from would-be foreign shareholders seeking to acquire a U.S. target.

** reporting requirements in take-over attempts of federally chartered banks, subjecting any shareholders seeking to acquire a bank to the diverse disclosure rules of the Securities and Exchange Commission (SEC).

** prohibitions on the ability of a bank holding company, such as Bank of America of California, which still had a 28 percent interest in BCCI, from purchasing banks in other states, directly or indirectly.

** limitations against interstate banking and branching, which slowed the ability of BCCI's flag-ship U.S. bank, First American, to purchase the National Bank of Georgia, and prevented First American from integrating with any bank in California, such as the Independence Bank, as desired by BCCI.

However, while these barriers did delay BCCI's purchases of banks in the United States, and the integration of its U.S. empire, they failed to stop the purchases. In the end, BCCI was successful in acquiring four banks, operating in seven states and the District of Colombia, with no jurisdiction successfully preventing BCCI from infiltrating it. The techniques used by BCCI in the United States had been previously perfected by BCCI, and were used in BCCI's acquisitions of banks in a number of Third World countries and in Europe. These included purchasing banks through nominees, and arranging to have its activities shielded by prestigious lawyers, accountants, and public relations firms on the one hand, and politically-well connected agents on the other. These techniques were essential to BCCI's success in the United States, because without them, BCCI would have been stopped by regulators from gaining an interest in any U.S. bank. As it was, regulatory suspicion towards BCCI required the bank to deceive regulators in collusion with nominees including the heads of state of several foreign emirates, key political and intelligence figures from the Middle East, and entities controlled by the most important bank and banker in the Middle East.

Equally important to BCCI's successful secret acquisitions of U.S. banks in the face of regulatory suspicion was its aggressive use of a series of prominent Americans, beginning with Bert Lance, and continuing with former Defense Secretary Clark Clifford, former U.S. Senator Stuart Symington, well-connected former federal bank regulators, and former and current local, state and federal legislators. Wittingly or not, these individuals provided essential assistance to BCCI through lending their names and their reputations to BCCI at critical moments. Thus, it was not merely BCCI's deceptions that permitted it to infiltrate the United States and its banking system. Also essential were BCCI's use of political influence peddling and the revolving door in Washington.

Decision to Enter U.S. By 1976, it had become clear to both BCCI and its U.S. partner, Bank of America, that their relationship was causing problems for both parties and might not long survive. Moreover, BCCI's top officials, especially Abedi, had come to believe that entry into the U.S. market in a manner that BCCI could control was critical. Since its creation, BCCI had been a bank whose deposits and activities were denominated in dollars. Its settlements with other banks were carried out in dollars. There were numerous inconveniences associated with BCCI's inability to conduct business in the U.S. itself, and its forced reliance on western banks like Bank of America to act as its correspondent banks for all dealings with the U.S. Moreover, given the hostile attitude of regulators in the United Kingdom, BCCI had to make sure it was not fenced out of expansion in the industrialized countries. If the Bank of England ever acted against it, and BCCI had no alternative site in a major western financial center, it might be destroyed.(2) Additionally, the U.S. was home to numerous "high net worth" individuals from Third World countries, who could be induced to bank at BCCI. Unlike many countries, the U.S. had no restrictions on the movement of capital in and out of its borders, making it an attractive place to park BCCI's real financial assets. Finally, both Abedi and his key financial backer, Sheikh Zayed of Abu Dhabi, may have had political motives to strengthen their position in the U.S.

According to T. Bertram Lance, BCCI's initial partner in its most important acquisitions in the United States, both Sheikh Zayed and Abedi felt that BCCI could become a critical element in strengthening ties between the United States and their constituencies. As Lance described a meeting between him, Sheikh Zayed and Abedi in Islamabad, Pakistan in late 1977:

Abedi was concerned about the shifting tides towards the Soviets in Afghanistan, Iran, India and the Mideast. Both Abedi and Zayed each expressed their concerns about the Arab worlds lack of ties to the US. They wanted to do something about it.(3)

Friends of Lance told journalists at the time gaining access to President Carter and the White House was one of the explicit goals of doing business with Lance and one of the reasons the "Arabs" were interested in having Lance represent them and in buying his interest in the National Bank of Georgia.

An Atlanta source close to the negotiations says the Arabs see Lance as giving them access to the administration. Though a private citizen, Lance is a regular visitor at the White House and is the chairman of a $500-to-$1000-a-plate fund-raiser for President Carter scheduled for January in Atlanta.

"Under normal circumstances," says this source, "NBG would be the last bank anyone would be interested in. But the investors see this as an opportunity to do a favor for someone close to the President."(4)

Initial Attempts to Enter U.S. BCCI's initial attempt to obtain a bank in the United States was notably unsuccessful. Initially, BCCI decided it would begin with a small acquisition, that of the Chelsea Bank, a national bank with a state-chartered holding company in New York. In order to keep the transaction low-key, BCCI decided to proceed through a nominee, a member of the Gokal family, whose shipping empire could be characterized as much BCCI affiliate as BCCI customer. Unfortunately, the nominee chosen had few resources of his own, and was a transparent alter ego for BCCI, prompting the very regulatory scrutiny in New York that BCCI had sought to avoid. As recounted by former Comptroller of the Currency John Heimann:

My first supervisory contact with BCCI occurred when I was New York Banking Superintendent. New York law requires the Superintended to approve the change of control of a New York chartered bank. . . A young Pakistani national was the proposed purchaser. His uncertified financial statement showed total assets of $4.5 million, of which $3 million was in the form of a loan from his sister. His reported annual income for the prior year was, as I recall, approximately $34,000. Since he was not an experienced banker . . . and since BCCI was his primary banking relationship, he indicated that he would be relying upon that institution for advice and counsel.

Since he was relying upon BCCI to meet his qualifications of experience, we sought to determine what we could about that organization.(5)

Heimann determined that BCCI had no central regulator, which meant that there was no banking authority anywhere with the right to review and the responsibility to oversee all of BCCI's activities. BCCI also had divided its operations between two auditors, and thus had no consolidated financial report, so it was impossible for Heimann to be certain he could identify and understand BCCI's actual financial condition. According, Heimann put a hold on the application. BCCI identified a second bank in New York, and a second nominee, and made a second application, with the same result. Finally, Abedi decided to approach Heimann directly.

On each occasion, the subject of the meeting . . . concerned itself with BCCI's apparent desire to enter the United States. In each instance, Mr. Abedi attempted to convince us of the secure nature and correct operations of BCCI, its financial strength, etc. On each of these occasions, I expressed my concern that BCCI did not have a primary regulator, and that, until it did, my office was reluctant to permit entry into the US.(6)

Abedi had by now tried the back door into the United States twice and been rejected, and the front door once, with the same result. New York, the most important U.S. banking market for BCCI, would be closed to BCCI so long as Heimann was its chief regulator.

Soon thereafter, however, Jimmy Carter was elected President, and Heimann was appointed to become Comptroller of the Currency, responsible for supervising national banks, and in a position to opine on nearly any attempted purchase by BCCI in the United States. At the same time, Carter appointed as his new director of the Office of Management and Budget, T. Bertram Lance, head of the National Bank of Georgia (NBG), which Lance had purchased in 1975 from the Financial General Bankshares (FGB) group, a bank holding company headquartered in metropolitan Washington. BCCI alone might not be able to circumvent Heimann. Abedi knew that in such circumstances, the only way to proceed was through going over a bureaucrat's head through making use of one's political ties. In 1975, Abedi had few such ties in the United States. In 1977, however, Abedi was introduced to Bert Lance, and BCCI's previous failures in trying to penetrate the U.S. banking system were replaced with success.

History of Financial General Bankshares In 1910, a socialist visionary named Arthur J. Morris decided to find a means of providing credit to small wage earners and consumers through creating a kind of cooperative banking system later to be known as the "Morris Plan."

Under the Morris Plan, wage earners depositing their paychecks in a cooperative fashion into Morris' institutions became entitled to receive small loans back in return. The concept was successful, and lead to Morris building consumer banks that by the 1940's extended to Florida, Georgia, Maryland, New York Tennessee, Virginia, and the District of Colombia. All of these lending institutions were under the control of another entity, incorporated in 1925, called Financial General Bankshares ("FGB"). Eventually, these banks converted to and merged with conventional banks, and expanded their services to cover insurance, venture capital, mortgage banking and industrial operations.(7)

In 1955, FGB came under the control of retired Army General George Olmstead. By then, the FGB franchise was one of a small number of banks that had been grandfathered to permit interstate banking, generally prohibited by the McFadden Act. The Federal Reserve grandfathering also permitted Financial General's ownership by another corporate entity of Olmstead's, International Bank ("IB"), despite the fact that IB also had several non-banking subsidiaries.(8)

FGB's unique market position attracted criticism from other banks and by 1966, the Federal Reserve decided that FGB was a holding company subject to its regulation, and that International Bank could not retain FGB. General Olmstead was forced by the Federal Reserve to sell out his interests in FGB on or before 1978.(9)

General Olmstead decided to retire as soon as he could sell FGB, and began looking for buyers. Bank stocks were not in favor with investors at the time. Olmstead was initially unable to find anyone who would buy the entire franchise. But in June 1975, he was able to sell FGB's Georgia operation, the National Bank of Georgia, to Georgia banker Bert Lance.

Bert Lance By September 21, 1977, when Bert Lance tendered his resignation from the position of director of the Office of Management and Budget (OMB) to President Jimmy Carter, Lance had become the most notorious banker in the United States.

Prior to coming to Washington, Lance's entire career had been in banking in Georgia, starting in 1951 with his work as a teller at the Calhoun National Bank, a bank owned by the grandfather of his wife, Labelle. Lance had stayed with the Calhoun Bank and eventually become its president. He began to support Jimmy Carter in his political activities in 1966, when Carter first ran for governor and lost, and again in 1970, when Carter ran for governor and won. In 1974, at the end of Carter's term, Lance himself ran for governor and lost, before emerging as Carter's most important fund-raiser and political advisor in his successful race for President in 1976.

Lance had become president of National Bank of Georgia in January 1975, and quickly come into conflict with Financial General's headquarters in Washington for making loans which both exceeded his lending limit and were not secured by collateral. FGB's chairman, William J. Schuiling, was sufficiently disturbed by Lance's practices that he intended to force a show-down with Lance. But by June, 1975, Lance instead offered to buy FGB's controlling interest in National Bank of Georgia for $7.8 million.(10)

When Olmstead needed to sell the rest of FGB in 1976, he turned first to Lance. At the time, Lance was working to elect Jimmy Carter president. Anxious to join the Administration, rather than to remain in banking, he turned Olmstead down.(11)

Lance was formally precluded from engaging in financial transactions while director of OMB. However, according to later SEC charges, Lance continued to meet with General Olmstead regarding the sale of FGB, and put Olmstead in touch with William G. Middendorf, a former secretary of the Navy who ultimately decided to take over FGB. Lance met with both Olmstead and Middendorf at the Washington Metropolitan Club about the proposed sale while director of OMB.(12). As of April 1977, Middendorf and a group of twenty investors purchased Olmstead's interests in FGB, and Middendorf was installed as the chairman of the bank. But the takeover group, including former ambassador to Iran Joseph Farland, Arkansas banker Jackson Stephens, and Occidental Petroleum chairman Armand Hammer, swiftly began to disintegrate. By November, 1977 the shareholders had split, with Stephens heading a group opposed to Middendorf -- even as the Federal Reserve ordered Olmstead and his group to end their dual relationship to both International Bank and FGB by January 31, 1978.(13)

It was precisely at this point that FGB, Bert Lance, and BCCI came together to bring about BCCI's secret purchase of a $2 billion bank in the nation's capitol.

Lance's problems had begun on July 11, 1977, when President Carter asked the Congress to suspend ethics rules that would have forced Lance to sell 190,000 shares of stock he owned in National Bank of Georgia. He based his request on the ground that Lance would lose $1.6 million if he was forced to sell, because the bank's stock was depressed. Weeks of bad publicity followed, as well as an investigation by the Office of the Comptroller of Lance's Georgia banks which found "unsafe and unsound" banking practices at NBG and the other banks, but no criminal behavior by Lance.

Following Congressional hearings in which he was represented by Clark Clifford and Robert Altman on September 8-14, 1977, Lance resigned from OMB and found himself in terribly difficult circumstances. Not only was he exiled from President Carter's Administration, but his greatest asset -- his network and experiences as a banker in Georgia -- had been turned into an apparent liability. Also, Lance was still deeply in debt as a result of his borrowing $3.4 million to purchase NBG just two years earlier, and had no ready buyer for his interest in the National Bank of Georgia, his principal asset, given the fall in the price of its stock. Moreover, as Lance's practices at NBG had received a vast amount of negative national publicity, the value of the franchise itself was potentially permanently impaired.

Lance's and NBG's perilous position, coinciding with FGB's perilous position, provided a unique opportunity for Agha Hasan Abedi and BCCI to exploit.

The marriage between Lance and BCCI in 1977 was one not merely of convenience, but necessity. At the time, BCCI had already attempted to enter the United States market and failed; and Lance was facing indictment, deeply in debt, and had literally no other place to turn. Moreover, Abedi and Lance shared some characteristics in common. Both Abedi and Lance were entrepreneurial financiers who liked to operate at the border of legal restrictions, in disregard of customary and usual banking practices. Both had reached high positions in their home countries through providing financial and other backing to political figures in their home countries -- Abedi to a succession of Pakistani prime ministers, Lance to Jimmy Carter. And both had come to a point in their respective careers where their entrepreneurial spirit had been stymied by their respective establishments. They both needed to create new opportunities to escape their difficulties. Without Abedi, Lance was only a few steps away from bankruptcy. Without Lance, Abedi lacked any clear means of entering the United States. Together, they were able to make Lance wealthy, and to gain for BCCI secret entry to several of the most important financial and banking markets in the United States.

During the process, both BCCI and Lance -- each notorious within banking circles -- drew the persistent scrutiny of bank regulators, federal investigators, and journalists alike. Both experienced the most bitterly contested bank take-over in U.S. history in connection with the Financial General Bankshares' takeover litigation. In the face of this unusual regulatory scrutiny and public attention, BCCI was still ultimately able not merely to enter the U.S. market, but to acquire the most important bank in metropolitan Washington. This advantageous market entry would ultimately result in BCCI owning a network of U.S. banks extending coast to coast through seven states and the District of Colombia.

BCCI's Targeting of National Bank of Georgia

And Financial General Bankshares As in most areas concerning BCCI, there is more than one, mutually inconsistent, account of how BCCI and Bert Lance came together, and of how BCCI came to target Financial General Bankshares (FGB) for takeover.

The first account, as testified to by Lance himself, suggests that a former Georgia state Senator named Eugene Holly had developed a relationship with Abedi and BCCI and wanted Lance to meet Abedi to see if they could help one another. By this account, Lance went to New York in October 1977, met Senator Holly there, was joined by Abedi and his number two at BCCI, Swaleh Naqvi. Lance was told that BCCI had developed a unique approach of economic development for the Third World which it wanted to expand in the United States. As Lance testified:

Basically, Mr. Abedi said to me: I am building a bank headquartered in London that has a deep and abiding interest in the problems of health, hunger, economic development. . . I shared that concern, especially about economic development, because I had come from a poor section of Georgia.(14)

After discussing economic development issues, Lance and Abedi got down to basics: BCCI was looking to expand into the United States, and wanted Lance's help. As Lance testified, Abedi understood that Lance might need to know more about BCCI -- the last thing either Abedi or Lance would wish to do was further embarrass the President of the United States. Accordingly, Abedi would leave Lance with BCCI's annual reports, and Lance could get back to him as to whether Lance could help. According to Lance, he then turned to Clark Clifford, who had represented him in Congressional hearings into Lance's activities in Georgia, and asked Clifford to do due diligence on BCCI. When Clifford called Lance back to tell Lance that Abedi was "a man of integrity and character," Lance agreed to meet with Abedi and Naqvi in London, and there became BCCI's agent for its forays into the U.S.(15) Thus, by Lance's account, Clifford first had contact with BCCI on behalf of Lance in October, 1977.

According to Lance, while in London on October 15, 1977, he learned that Abedi had already targeted the Bank of Commerce in New York for possible purchase by BCCI. Lance told Abedi that FGB was a much better prospective purchase for BCCI, because it "enjoyed a very unique position in American banking at that point in time in the sense that it was one of the two or three, maybe four, multistate holding companies that were in existence in the United States."(16)

Lance testified that while he had read other accounts of how BCCI became interested in FGB, it was his belief that he brought FGB to Abedi's attention, not anyone else.(17)

Lance also testified that in London, he also piqued Abedi's interest in purchasing National Bank of Georgia from Lance -- on behalf of Abedi's investor clients, not BCCI, and that Abedi soon advised him that Ghaith Pharaon might be interested. As a result, Abedi arranged to have the Pharaon purchase of National Bank of Georgia proceed on one track, while Abedi arranged for the other Middle Eastern "investors" to work on the FGB takeover on a second track.(18)

Jackson Stephens: BCCI's Principal U.S. Broker? A second, and inconsistent, account of BCCI's initial entry into the U.S. was provided to the Washington Post in 1978 by participants in the FGB takeover battle, and later reiterated in filings with the Federal Reserve by Lance and BCCI attorney Robert Altman. By this account, the initial contact between BCCI and FGB came from Arkansas multi-millionaire and FGB shareholder Jackson Stephens.

At the time, Stephens was both a close friend of Lance's, and a longtime activist in Democratic political circles. Stephens had been instrumental in fundraising efforts for President Jimmy Carter, who had been his classmate at the U.S. Naval Academy in Annapolis. Moreover, Stephens retained a financial interest in National Bank of Georgia after Lance purchased it from FGB.(19)

According to the Post account, by the time of Lance's resignation, Stephens had already begun to broker the sale of National Bank of Georgia to "a client of BCCI" -- BCCI front-man Ghaith Pharaon -- as a means of assisting Lance. Stephens then went to BCCI and Abedi to see if BCCI might be interested in acquiring the metropolitan Washington FGB franchise directly. As the Post wrote:

A BCCI executive said the Arabs weren't interested in FGB, but the subject came up again on Nov. 26 when Stephens and Lance met Abedi in Atlanta for more talks about National Bank of Georgia. Abedi began to sound interested, and Stephens reportedly offered to sell a block of 4.9 percent of FGB and recommended Abedi meet [Eugene Metzger, a dissident shareholder with a significant number of FGB shares] to pursue the matter.(20)

Altman's account to the Federal Reserve removed Lance from the picture even further, contending that Jackson Stephens, not Lance, handled all the negotiations regarding National Bank of Georgia, and first proposed to BCCI the possibility of buying FGB.

As set forth in a May 9, 1978 letter from Altman to the Federal Reserve, Jackson Stephens told a BCCI representative during negotiations over the sale of National Bank of Georgia to Pharaon in November, 1977 that FGB might be available and could be a good investment for other BCCI customers. In late November, Stephens told Abedi that Abedi should meet with FGB investor Eugene Metzger, and designate Metzger and Stephens as agents for these Middle Eastern investors. Neither BCCI nor any of its affiliates provided financing for the purchase of the stocks, although BCCI advanced the funds through the accounts the Middle East investors maintained at BCCI. Some funds were borrowed by one "investor," Fulaij, from the Kuwait International Finance Company ("KIFCO"), which BCCI purportedly had a 49 percent interest in, but actually owned and controlled through its nominee, Faisal al-Fulaij.

Adham's Account of Origin of FGB Takeover A fourth account of the genesis of the BCCI's interest in FGB, completely inconsistent with the Lance, Post, and Altman accounts, came from BCCI shareholder and front-man Kamal Adham, who advised the Federal Reserve on April 10, 1991 by letter that an Middle Eastern friend of his, Hasan Yassin, told him that FGB would be a good investment, and Adham as a result brought the prospective investment to BCCI for review as his business agent. Adham did not explain to the Federal Reserve how Yassin had known of FGB's availability, or why Yassin believed Adham might be interested, nor had Lance ever heard of Yassin. Two weeks later, Adham reiterated these statements in formal testimony before the Federal Reserve.(21)

Oddly, given Altman's representation to the Federal Reserve that the Middle Eastern investors became involved as a result of a meeting between Stephens and Abedi, Clifford himself told the Federal Reserve in 1981 that Adham's involvement came "from a friend who was associated with the Saudi Arabian embassy" with "contacts" to Mr. Middendorf. Clifford's reiterated this statement to the Senate on October 24, 1991, testifying that "the man in the Saudi Arabian Embassy looked into [FGB] in more detail and concluded that it might be an attractive acquisition. Apparently, that was one of his functions in the Saudi Arabian Embassy, to pass information of that kind back to Saudi Arabia."(22)

Later, Adham, Clifford, and Altman would seek to resolve the contractions in these accounts in testimony before the Federal Reserve, discussed below.

The Federal Reserve's Findings On July 29, 1991, the Federal Reserve issued findings concerning the genesis of the 1977-78 takeover suggesting that in fact, Lance, Stephens and BCCI, working together, had initiated the discussions regarding the BCCI group's purchase of FGB in a meeting on November 7, 1977. According to the Federal Reserve:

At the suggestion of T. Bertram Lance ("Lance"), Abdus Sami ("Sami"), a senior BCCI officer from its inception and a close associate of Abedi, met with Jackson Stephens ("Stephens") to discuss the purchase by a BCCI client of the interest of Lance and others in NBG. . . During the meeting, Stephens, who was dissatisfied with his investment in Financial General, told Sami that Financial General might be a good investment for BCCI clients.(23)

The Federal Reserve findings are indeed the only account that is consistent with the contemporaneous documentary records concerning what took place. These Federal Reserve findings show Lance's testimony to have incorrectly omitted Stephens' key role; Altman's account to have incorrectly omitted the key roles of Lance and of BCCI; and Adham's account, bolstered by Clifford at the Federal Reserve hearing, to be at best, immaterial to the FGB purchase, and at worst, an outright fabrication.

Ghaith Pharaon and the NBG Takeover In both the National Bank of Georgia and Financial General Bankshares takeovers, although BCCI was the real party at interest, it disguised that interest for a number of reasons, including the fact that at the time, Bank of America's 24 percent ownership of BCCI would have made BCCI's purchase of a U.S. bank outside California illegal under any circumstance.

Both purchases began moving on a fast track in November and December, 1977. Although Lance and the others involved took pains to suggest that the two purchases were unrelated, as Lance acknowledged, Lance, Abedi, Clark Clifford, and Robert Altman were central to both of them, and the two transactions took place simultaneously.(24)

For example, while Clifford and Altman have testified that they did not become involved with Lance and the FGB transaction until February, an article in the Washington Post on December, 18, 1977, quotes Altman, as Lance's representative, confirming negotiations among "Middle Eastern financial interests" and Lance concerning Lance's establishment of "a holding company to direct their capital into banks and other U.S. investments."(25)

The article describes Abedi's role as the "matchmaker" for the proposed transactions, and specified that "Lance's attorney, Altman" had announced earlier in December that Lance was negotiating to sell shares of NBG stock for $20 each -- precisely the price paid in early 1978 to Lance by BCCI nominee Ghaith Pharaon.(26)

Of the two transactions, the National Bank of Georgia transaction was far simpler, and consummated with far greater ease. The principal reason for the difference was that the National Bank of Georgia was not a bank holding company, and as a result, was regulated only by the Office of the Comptroller of the Currency, which was more worried about the wretched condition of the bank and its possible failure than about the possibility that its purchaser, Saudi "billionaire" Ghaith Pharaon, might be a front-man for BCCI.

BCCI's relationship with Pharaon went back to the foundation of Pharaon's fortune. Pharaon inherited funds and opportunities, from his father Rashid, who had been a physician for the founder of Saudi Arabia, Abdul Aziz. His father became close to the King, and was posted abroad as a Saudi Arabian Ambassador to all Europe from 1948 to 1954, during which the younger Pharaon was educated in Paris. Later, Pharaon studied in Lebanon, Syria, and Switzerland. He completed his education in the U.S. at the Colorado School of Mines and Stanford University, where he studied petroleum engineering, and completing it with a Harvard MBA, after which he began referring to himself as "Dr. Pharaon."(27)

While in his twenties in the mid-1960's, Pharaon became friendly with then-Saudi intelligence chief Kamal Adham, who introduced him to Abedi and BCCI. Pharaon and Adham went into business together, building a Hyatt Hotel in Jeddah, Saudi Arabia, financed by BCCI, which in turn generated enough money for Pharaon to found a construction firm, REDEC, whose success formed the basis for Pharaon's reputation as a billionaire. Ultimately, numerous banks financed Pharaon's activities as well as BCCI, and by 1977, Pharaon had already taken short-term passive interests in banks in Texas and Michigan.

Chronology of the Sale of NBG to Pharaon The National Bank of Georgia sale to Pharaon and BCCI began, according to testimony by Bert Lance, through discussions and negotiations between Lance, Abedi and other BCCI officials in Atlanta over Thanksgiving weekend in 1977.(28) It was precisely the same time that Lance, Abedi and BCCI reached agreement on beginning the takeover of Financial General Bankshares as well.(29)

Abedi handled all the negotiations with Lance concerning the purchase of National Bank of Georgia. Although Pharaon was the apparent buyer, Lance never even met him until January 1978, after the negotiations had been completed, the day before the sale of National Bank of Georgia from the Lance group to Pharaon was announced. Ultimately, Lance received $2.4 million for his interest in the bank, twice the previous market value of the shares.(30) In addition, Lance received another $3.5 million from BCCI's Grand Caymans affiliate, ICIC, for acting as BCCI's business agent. Lance used these funds to repay debts to the National Bank of Chicago, and to purchase shares of FGB.(31) The funds provided Lance were originally described as "loans," but BCCI never asked Lance to sign a note or to arrange terms for repayment, and in time, the payment came to be understood as a consulting fee, or retainer.(32)

Unlike the bitterly contested FGB takeover, the sale of National Bank of Georgia from Lance and its other investors proceeded quickly, and reasonably smoothly. The $20 per share tender offer, with a total cost of $21 million for Pharaon at twice the recent market value of the shares, assured little opposition from the shareholders. Moreover, Pharaon's purchase of his stake of NBG shares from Lance was completed by the beginning of January, 1978 -- before the regulators knew of the BCCI group's attempt to take over FGB, and before a federal grand jury in Atlanta began a criminal probe of Lance's banking affairs.

Nevertheless, federal regulators were uneasy about the Pharaon transaction from the beginning because of the involvement of BCCI officials in it. A memorandum to the files from then-Comptroller of the Currency John Heimann on January 4, 1978 articulated the nature of the concerns:

Tomorrow, January 5th, the sale of Lance's stock to Pharaon will be completed at 2 pm. . . Guyton [President of NBG since Lance's departure for OMB] noted he was somewhat disturbed about the role played by the Pakistanis in this transaction. Not that he knew anything negative about them but their role at present or in the future, seemed to be ill defined and caused him some concern. He believes that Lance is presently on the BCCI payroll working with Addabi [sic] and Sami. As a matter of fact, Lance went to London last week and will be back today. The purpose of that trip, presumably, was to discuss further expansion of BCCI in the U.S.(33)

In the conclusion of the memo, Heimann noted that Pharaon and BCCI apparently had plans for acquiring additional U.S. banks. This fact gave Heimann additional cause for concern given his opposition to BCCI's entry into the U.S. in New York two years previously.

Pharaon had told [Guyton, the NBG president] that Pharaon was negotiating for another bank in the United States and would have an announcement to make within 30 days. Guyton also understands that BCCI is looking for another bank in the United States.(34)

There is no evidence that Pharaon was looking at any other U.S. bank at this time, apart from BCCI's still secret interest in FGB. Thus, while Pharaon was ultimately not involved in the 1978 FGB takeover, in retrospect, this reference suggests that Pharaon may have been considering participating with BCCI in its FGB takeover as a nominee for the bank.

Within two weeks, OCC received additional disturbing information. A small aviation company was requesting an unsecured loan for $890,000 from NBG to purchase a Grumman airplane, backed up by a irrevocable letter of credit issued by BCCI, all at Lance's request. The president of the company was Lance's personal pilot, and the loan was being made to purchase a plane to facilitate Lance's business activities for BCCI. The loan was not one that NBG, or any well-run bank would ordinarily make, because the credit was unsecured. However, NBG officers felt they were under pressure from Lance to approve the loan, who was now on BCCI's payroll, receiving "a tremendous salary," an airplane, office space, and secretarial assistance from BCCI. NBG president Guyton told the OCC that BCCI intended to invest for its own account as well as for other investors in the U.S., and Lance was to be its business agent.(35)

OCC officials told Guyton it would be "foolish" to make the loan, and NBG accordingly agreed not to make it. The incident represented precisely the kind of self-dealing that Heimann had already seen in reviewing Lance's finances at part of the inquiry that arose while Lance was director of OMB. When the FGB takeover attempt became public month later, Heimann directed OCC officials in enforcement to determine whether Pharaon, like Gokal before him, was a front for BCCI.

On March 30, 1978, Robert B. Serino, director of Enforcement and Compliance of OCC, met with Pharaon, to find out just what role BCCI and Lance were going to play in Pharaon's NBG. Pharaon assured the OCC that Lance would not be involved further in his bank, and that BCCI would act merely as an advisor, but Serino, in a memorandum to Heimann, was uncertain as to whether to believe him.

Pharaon . . . indicated that there never was an understanding or desire on his part to have Lance participate in the management of NBG and this was not to be a term of his purchase. This is contrary to the representations given to us and the SEC by Lance's counsel during the original meetings . . . at that time, they indicated that one of Pharaon's conditions of the purchase would be that Lance would be acting as chief executive officer.

Pharaon indicated that Abedi, in fact, was the one who suggested to him that this would be a good investment and essentially put the deal together for him. He indicated that BCCI was, in fact, one of his financial advisors and that he had hoped to use employees of BCCI (paid by him personally) to review the transactions at NBG periodically to advise him as a controlling shareholder of the condition of the bank in the future. . .

My conclusions from meeting with Pharaon are that he tells a convincing story; however, it appears that he is "beholden" to or at least influenced by Abedi. I believe he could, in fact, be Abedi's alter ego in the United States.(36)

There is no evidence in OCC files to suggest that OCC sought to investigate further its suspicions about Pharaon acting as a front man for BCCI in the purchase of National Bank of Georgia. Instead, the OCC, accompanied by the SEC, filed a joint civil suit against Lance, National Bank of Georgia, and Lance's other bank, the Calhoun bank, charging them with "fraud and deceit" in violating banking and securities laws, and including among the charges allegations that Lance used the banks to personal enrich himself by providing himself with excessive and unsecured loans. All three signed consent decrees, neither admitting nor denying the allegations -- but agreeing not to engage in unsafe and unsound banking practices in the future.

Given OCC's concerns about Lance, there was an obvious tension between trying to protect the National Bank of Georgia from Lance's practices by letting a sale to Pharaon go forward, and with trying to protect the National Bank of Georgia by stopping the sale because of concerns about BCCI. The likely consequence of the latter course of action, however, would be that no one would buy NBG at all and it would be left in Lance's hands. The OCC knew in private what was not known by the public, although it was whispered in banking circles -- that NBG was in financial trouble, and had inadequate capital. Pharaon's tender offer for the shares of the bank would expire on June 20, 1978. If the OCC took any action to delay or prevent that acquisition, NBG might never recover.(37) The OCC gave Pharaon permission to move forward and he concluded his tender offer to purchase a 60 percent interest in NBG on May 30, 1978. OCC thus took the conservative approach of accepting Pharaon's dubious account about his relationship to BCCI, and permitting Pharaon to "rescue" the bank, rather than challenging Pharaon's purchase and placing the bank at immediate risk.

The truth was that Pharaon and BCCI had purchased NBG in a partnership, with BCCI lending Pharaon some of the funds to buy the bank, and agreeing to share the expenses, profits, and losses with Pharaon 50-50. This arrangement was convenient for both Pharaon and BCCI because it permitted them to rearrange the ownership of NBG as needed depending on their respective financial situations.(38) It went undetected until 1991, when the Federal Reserve for the first time investigated the NBG takeover of 1978 and concluded that Pharaon had borrowed at least part of the funds he used for the acquisition, with BCCI as his partner in the transaction from the beginning.(39)

OCC's decision about NBG was unfortunate. As later bank examination documents demonstrate, NBG remained what OCC termed a "problem" bank for years following its sale to Pharaon, with a substantial number of Lance-related substandard and non-performing loans remaining in its portfolio. A decade later, after its purchase by First American at the behest of BCCI, NBG -- renamed First American Georgia -- remained in "unsatisfactory" condition according to OCC examiners, with serious problems of asset quality, earnings, loan losses, and monitoring system. Moreover, in buying National Bank of Georgia through its nominee, Pharaon, BCCI had succeeded in overcoming the regulators to acquire its first bank in the United States. This lesson would have been especially powerful to Abedi. During this very time, he was in the very midst of high publicized actions in Washington involving many of the same players and where allegations were again being raised about BCCI's possible use of front-men. It was a lesson that with persistence, BCCI would also be able to succeed in deceiving the regulators in its attempt to take over FGB.

Clifford and Altman and FGB Takeover By all accounts, Clifford and Altman's introduction to BCCI and FGB came as a consequence of their representation of Lance before Congress beginning on Labor Day weekend in 1977. But the parties involved provide differing accounts of how and when Lance brought Clifford and Altman into his bank deals in the ensuing months.

According to Lance, he first discussed the possibility of Clifford becoming counsel for Abedi and BCCI as early as October, 1977, because Lance "thought that Mr. Clifford ought to be Mr. Abedi's counsel in regard to what he was doing." Lance said that Clifford was already familiar with BCCI at this time, because Clifford had on Lance's behalf "done the due diligence that he reported back to me on from the standpoint of BCCI and Mr. Abedi" before Lance became involved with them in October.(40)

By contrast, Clifford testified that his and Altman's involvement with BCCI began in December 1977 when Lance, as a "former client," brought Abedi in to talk with Clifford for "a social visit." Although the FGB takeover attempt had in fact already begun in November, according to Clifford, there was no discussion at the meeting involving Lance, Clifford, and Abedi, of any prospective takeover. Rather, according to Clifford, Abedi confined himself to telling Clifford of his philosophy of banking -- to provide the Third World with banking services which they had never had before, as a means of bringing progress to developing lands.(41)

According to Clifford, in the weeks that followed, he would "hear from time to time [from] little reports [that] would sift in that Mr. Abedi and BCCI were in the process of acquiring stock in a company called Financial General Bank Shares . . . I had not heard of them before."(42) According to Clifford, only after BCCI and the Middle Eastern investors had made their acquisitions of FGB stock, and only after the SEC had been alerted by the Middendorf group of the action by the BCCI group, did Abedi and the others involved retain Clifford and his firm, Clifford & Warnke to assist them in the litigation regarding the attempted takeover. Clifford testified that his representation of the bank and its investors began in February, 1978.(43)

As Clifford affirmed in his written testimony to the Senate:

Without our involvement or advice, four of these investors had purchased stock in an American bank holding company called Financial General Bankshares ("FGB"), the predecessor to First American, without filing certain disclosures with the Securities and Exchange Commission ("SEC"). The SEC investigated these transactions, and the management of FGB, concerned that these purchased foreshadowed a possible corporate takeover effort, filed suit against the Arab investors, BCCI, Mr. Abedi and others. We were retained to represent Bert Lance, Agha Hasan Abedi, BCCI, Sheikh Mohammed bin Zaied al Nahyan, Sheikh Sultan bin Zaied al Nahyan, Faisal al Fulaij, and Abdullah Darwaish, certain of these defendants.(44)

Thus, by Clifford's account, the entire structure of the FGB transaction and the assembling of the shareholders had been conceived and implemented by BCCI and the "investors" before Clifford had ever become involved. The representation began in connection with SEC action that took place in mid-February, 1978. This account would buttress Clifford and Altman's contentions that they were "grossly deceived" from the first by BCCI.(45)

However, the chronology described by Clifford is inconsistent with both the details and the sense of Lance's testimony, and with a contemporaneous telex sent to Abedi and BCCI by BCCI official Abdus Sami, who was working closely with Lance in late 1977 and early 1978 on the FGB takeover.

The Sami Memo:

Documentary Evidence of BCCI's Actual Intentions The Sami memo to BCCI chairman Agha Hasan Abedi, written January 30, 1978, provides the best documentary summary of the actual structuring of the FGB takeover by Lance and BCCI. It reveals the clear involvement of Clark Clifford in the month of January, 1978, a time when Clifford contends he was uninvolved in BCCI's attempt to take over FGB, and prior to what Clifford described as the triggering event for his involvement, the commencement of litigation involving the SEC in mid-February, 1978.

The Sami memo, written in Washington and sent to Abedi in Karachi, Pakistan, first describes the "situation of acquisition of FGB," noting the purchase to date by the BCCI group of 17.5 percent of the FGB stock, with commitments or control over 23 to 24 percent of the stock, and that a meeting needed to take place between "our friend," Bert Lance, and the Middendorf group, to determine whether the BCCI takeover would proceed by with the consent of the Middendorf group, or through a contest. In the telex, Sami advised Abedi that they needed to prepare for litigation in which the Middendorf group would argue that it was undesirable for FGB to be taken over by foreigners. He added that BCCI needed to retain Clark Clifford as counsel in the event of a contest for control. Sami then described further steps BCCI needed to take in preparation for such a struggle:

To keep individual ownership to below 5 percent we have to distribute the ownership to 4 persons of substance. We have already given the names of Sheikh Kamal Adham and Mr. Fulaig [sic]. We want two other names immediately. Under Securities and Exchange Regulations we are also obligated to report to Commission as well as Financial General details of purchases. We require their biodata and powers of attorney for them. We must have this early this week to avoid possible liability on Mr. Metzger and purchases. We have to be careful that our name does not appear as financier to most of them for this acquisition. The necessity of filing this return has arisen on account of concentration of over 5 percent in the hands of Metzger, his knowledge and our intention to acquire control.(46)

The Sami memo described an intentional strategy by BCCI, Lance, Adham, Fulaij, and other members of the BCCI group to disguise BCCI's underlying interest in the transaction, and the fact that the individuals were acting as a group, in order to circumvent SEC disclosure rules. Under American securities law, anyone who buys five percent of a publicly traded company must file a disclosure form with the Securities and Exchange Commission. In the memo, Sami also advised Abedi that he has "met Clark Clifford and explained to him our strategy and our goal. He was happy to know the details and has blessed the acquisition," suggesting that Clifford was a knowing participant in BCCI's takeover scheme on or before January 30, 1978, and had already been retained as lawyer for the group prior to that date.(47)

Sami's dating of Clifford's involvement is buttressed by the legal bill sent by Clifford to BCCI for this period. The bill, dated May 24, 1978, describes the legal services rendered them by Clifford as dating not from mid-February, but from January 1978.

Significantly, the federal district court judge who heard the case brought by the Middendorf group against BCCI and the Lance group made a specific finding regarding BCCI's apparent use of nominees in connection with the initial takeover, as suggested by the Sami memorandum. On April 27, 1978, the court found that in early December 1977, BCCI's agents sought to purchase a percentage of Financial General shares substantially in excess of any amount for which Abedi then had purchasers.(48) Thus, rather than responding to investment requests from clients, BCCI was in effect acting not only as agent but as principal in the takeover.

Within a matter of days following the writing of the Sami memorandum, BCCI added the crown prince of the Abu Dhabi royal family, Sheik Sultan bin Zayed al Nahyan, and Abdulah Darwaish, financial adviser to the Abu Dhabi royal family, as the two additional shareholders for the purpose of the takeover referred to by Sami. Significantly, during this period, Abedi also solicited Iranian millionaire Mohammed Rahim Motaghi Irvani, a business partner of former CIA director Richard Helms, to be a nominee shareholder. Irvani, was listed in the original SEC filing in the early, 1978 takeover attempt, as a 5 percent shareholder of CCAH, and BCCI's lead front-man in the original takeover. Several documents, introduced in civil litigation involving Irvani in Georgia, describe Irvani's recruitment by Abedi in early 1978 to act as a front-man for BCCI.(49)

The FGB Litigation, Consent Decree and Takeover On February 7, 1978, a meeting of FGB shareholders was convened at which Lance announced that the BCCI group controlled 20 percent of the FGB stock and wanted eventual control -- despite having never previously disclosed its takeover intentions, as required by federal securities laws, to the SEC.

The Middendorf group, recognizing that Lance's statements amounted to a confession of violating SEC disclosure laws, immediately complained to the SEC and the Federal Reserve, which launched investigations.

Lance had made a significant mistake in advising the Middendorf group of the coordinated takeover effort by the BCCI group. Within days, both Lance and BCCI began publicly announcing that FGB investors had purchased the stock individually, not as a group. He also announced that BCCI was uninvolved in the purchases and honoring the legal prohibitions against its involvement that existed due to its partial ownership by Bank of America.(50) The revised version of events by Lance and BCCI had come too late: the Middendorf group, which still controlled FGB, filed suit on February 17, 1978 alleging violations of securities laws.

A month later, the SEC filed its own suit to block the Lance-BCCI FGB takeover attempt. Eleven defendants were named in the action, including Lance, Abedi, BCCI, and four BCCI clients. However, an agreement had already been struck between the SEC and the Lance-BCCI group, which suited both the SEC and the would-be investors.

Given Lance's admissions, and the careless assemblage of the Middle Eastern shareholders by BCCI, the SEC case against the Lance-BCCI group was formidable, and hard to contest. For example, each "individual" Middle Eastern investor sought to acquire, at precisely the same time, an identical interest in the bank of 4.9 percent, which placed each one, supposedly acting independently, at just under the level that would otherwise have required them to disclose their purchase to the SEC. It was all too obvious that they were acting jointly, as a group. But the SEC was not looking for punitive action, merely corrective action. So long as Lance-BCCI group agreed to live by SEC rules in the future, and compensate the injured parties by paying more for the shares of the bank, the SEC would let them go forward. The Lance-BCCI group agreed to pay the highest price to date for stock in FGB to any shareholders who wanted to sell -- and promised to keep BCCI out of any continued takeover efforts of FGB, other than as an investment "advisor."

The SEC's surprisingly mild position, given the baldness of the group action, was a further demonstration of Abedi's principal of not being overly concerned about laws. Here, BCCI had broken SEC laws and while hampered by SEC action, would be permitted to move forward with its arrangements to take over FGB so long as it paid the current FGB shareholders enough for the privilege.

On April 27, a federal judge permanently enjoined Lance and ten other defendants form violating securities laws, and the SEC consent decree was issued. In its injunction, the federal district court made specific findings that there was evidence BCCI was at the center of the takeover, and might well have controlled the takeover. The court said that the BCCI clients relied "heavily, if not exclusively" on Abedi and BCCI in deciding to purchase the FGB shares and, tellingly, that BCCI's agents had to sought to purchase a percentage of FGB shares substantially in excess of any amount for which Abedi then had purchasers. These findings should have been warning lights to regulators. In fact, because of these warnings, the Federal Reserve later sought and received assurances from BCCI, the Middle Eastern investors, and the attorneys, that BCCI was not behind the purchase.

In the meantime, BCCI executives began making false statements to the press in an apparent attempt to rewrite history and discourage further litigation. For example, two top BCCI officials, Allaudin Shaikh and Dildar H. Rizvi, told the Washington Post in mid-March, 1978 that Lance was merely "an informal adviser who pointed out investment opportunities in the U.S." for BCCI," suggesting that he was "not employed by the bank . . . was paid nothing by the bank. . . and had received absolutely no loans from BCCI or loans arranged by BCCI." The executives also told the Post that the Middle Eastern investors advised by BCCI were "four individuals from different countries, absolutely unknown to each other."(51)

On March 28, 1978, a memorandum to the Federal Reserve Board of Governors discussed the Fed's investigation into the Lance-BCCI activities, stating that the SEC had found "no evidence" that the Middle Eastern investors had actually acted in concert, despite Abedi's and BCCI's serving as their joint financial advisor. However, within days, the U.S. District Court judge hearing the SEC complaint found that BCCI, Abedi and the four investors had indeed acted as a group.

By April, the Federal Reserve was asking detailed questions of Clark Clifford and Robert Altman as attorneys for Lance and the "individuals" in the BCCI group, inquiring whether ICIC, BCCI's Grand Caymans affiliate, was acting as a vehicle for the acquisition of FGB. On May 9, 1978, Altman told the Federal Reserve that Abedi and BCCI were acting as the commercial banker and financial advisor for the Middle Eastern investors, and that while BCCI had been used to move funds for the investors into the U.S., it had not financed any of the FGB purchases.(52)

Thus, by mid-1978, BCCI had developed a theory of its involvement with the Middle Eastern investors in FGB designed to reconcile its central role in the original takeover with the various securities and banking laws which prohibited it having an actual direct interest in taking over FGB. The theory was that BCCI was a financial advisor to the actual parties at interest, and never a principal itself in their purchases of FGB stock. From May 9, 1978 onward, Clark Clifford and Robert Altman, as attorneys for Lance, BCCI, and the BCCI-related shareholders, would articulate the position that BCCI at no time acted inconsistently with this role.

Although the takeover was now able to move forward, Lance's poor judgment would soon result in his being severed from both National Bank of Georgia and FGB. In February, his statements had set off the SEC action and FGB civil litigation. Moreover, his own legal problems pertaining to his sloppy banking practices in Georgia were mounting. Over the remainder of 1978, Lance was eased out by Clifford, and replaced at the apex of the BCCI group by retired Senator Stuart Symington. Symington would later become chairman of the Board of Directors of the acquisition vehicle BCCI created for the takeover, and would remain so until his death.

In the months that followed, the Middendorf group and the BCCI group continued to litigate the takeover. Dozens of depositions were taken, and all the parties to the takeover were placed on the record. During those depositions, the BCCI investors repeatedly stated under oath that they were purchasing FGB shares for their own interest; that BCCI did not control, vote, or have the power to dispose of their shares; that BCCI would not finance the purchase of their shares; and that BCCI's role was limited to that of commercial banker and investment advisor for the Middle Eastern investors.(53)

In 1991, Clifford testified that "nothing in the course of this litigation . . . indicated in any way that they [the Middle Eastern investors] were nominees for BCCI, as is now alleged."(54) However, throughout the litigation and takeover, there were in fact recurrent allegations that BCCI was behind the takeover, and regulators, including the Federal Reserve, the Office of the Comptroller of the Currency, and various state banking authorities, continued to insist on receiving affirmations from everyone involved that BCCI was not a principal.

The ambiguous nature of BCCI's role was demonstrated again during the summer of 1978, when BCCI, ostensibly on behalf of the Middle Eastern investors, formed Credit and Commerce American Holdings ("CCAH"), N.V., as a Netherlands Antilles holding company, which in turn held a subsidiary, Credit and Commerce American Investment, B.V., of the Netherlands, as vehicles for acquiring shares of FGB. In statements filed with the SEC, BCCI, Abedi, and the four Middle Eastern investors stated that BCCI would have no interest in CCAH. They advised the SEC that ICIC Overseas would own up to 5 percent of CCAH's shares. At the time, ICIC Overseas was ostensibly a staff benefit fund for BCCI, but in fact was then and remained a slush fund for and alter ego of BCCI itself.

The 1978 CCAH Application By October, no agreement had yet been reached between the Middendorf group and the BCCI group. However, the BCCI group in the form of CCAH pressed forward with making a formal application to the Federal Reserve for the acquisition of all the voting shares of FGB. Under the terms of the application, CCAH, CCAI, and FGB would become bank holding companies and acquire all of the shares of Financial General Bankshares. The four Middle Eastern "investors" would contribute all of their shares of the bank to CCAI, in return for shares of CCAH. CCAI would then make a tender offer for the remaining shares of Financial General Bankshares. As stated to the Federal Reserve by Robert Altman in his capacity as counsel to CCAH, "neither BCCI nor any other organization related to BCCI contemplates owning any equity interests in CCAH."(55)

At the time, Clifford and Altman were dealing simultaneously with BCCI on the acquisition and with BCCI's various front-men and nominees.

For example, in this precise period, Clifford and Altman received a power of attorney from one acknowledged BCCI front-man or nominee, Iranian businessman Mohammed Irvani, for Irvani's proposed involvement as a participant as a shareholder of CCAH, in a transaction handled on Irvani's behalf by former CIA director Richard Helms. Helms drafted an agreement indemnifying Irvani from any loss in connection with Irvani giving Clifford's law firm a power of attorney to act in Irvani's name in purchasing CCAH shares.(56) The fact that Irvani was acting as a front-man for BCCI at the time was confirmed recently by his son, Bahman Irvani, who told the Atlanta Constitution that his father "lent his name to the 1978 takeover bid at the request of BCCI founder Agha Hasan Abedi."(57)

Through the remainder of 1978 and early 1979, the critical issue focused on by regulators was whether BCCI actually had a hidden interest in CCAH. For example, on November 7, 1978, Federal Reserve Lloyd Bostian of the Richmond Fed wrote Altman to ask for more information on the relationship between CCAH, CCAI, and BCCI. Two weeks later, Altman replied that although ICIC would have an ownership interest of 4.5 percent in CCAH, and one or two persons associated with BCCI or ICIC might serve as directors of FGB, neither BCCI nor ICIC would have contracts with the bank or their holding companies relating to management or investments. Soon thereafter, the Comptroller of the Currency raised concerns about who would be providing financing for the proposed FGB purchase. On January 12, 1979, Altman wrote the Federal Reserve to specify that no more than $20 million would be borrowed by the shareholders for the acquisition, and that all such borrowing would be made by institutions having no affiliation with either CCAH or CCAI.

In the meantime, the Middendorf group had continued to object to the takeover, and on January 26, 1979, the Attorney General of Maryland issued an opinion stating that Maryland law precluded a hostile takeover of a bank. On February 16, 1979, the Federal Reserve dismissed the 1978 CCAH application on the ground that it violated Maryland law, and in response, CCAH and CCAI sued to overturn the Maryland decision.

The 1980 CCAH Application Those involved in the original takeover believed that the Federal Reserve's objections would end if they were able to resolve the continuing fight with the Middendorf group and end the take-over battle. They therefore sought to sweeten the financial reward to the non-CCAH shareholders of FGB, and find ways to shield the CCAH purchase from the shadow of BCCI. Tentative agreement was reached with the non-CCAH shareholders for the sale of the bank in March 1980, while Senator Symington was pressed into a leading role as chairman of CCAH and a would-be director of Financial General Bankshares. Thus BCCI had arranged to replace its shady reputation with the very distinguished and respectable reputation of retired United States Senator and former Democratic Presidential nominee. In May, the non-BCCI faction sent a letter of understanding to Symington setting out the guiding principles of the FGB acquisition, which included the requirement that Symington himself hold and vote 60 percent of the stock of CCAH for the first five years, with Clifford succeeding Symington in the event of his death or inability to complete his term. The provision was suggested by Clifford as a means of assuring regulators that BCCI would not secretly control the bank.(58)

Even at this point, lawyers for the Middle Eastern investors knew that the actual shareholders they were representing were potentially a fluid group. As former Federal Reserve lawyer Baldwin Tuttle explained in a May 27, 1980 memorandum to Robert Altman and two other BCCI attorneys, entitled "The Application (At Long Last!)":

It will be necessary to determine who the new investors will be (we should try to keep as closely as possible to the original cast of characters to help with our moratorium problem.) (emphasis added)(59)

The memorandum from Tuttle implies that even in 1980, the attorneys for the acquiring group believed that the identities of the "investors" were not in control of the proposed takeover, but names to be manipulated at will to deal with legal, regulatory, and financial issues as they arose.

On November 25, 1980 -- three years after the original takeover of the bank began with Bert Lance -- CCAH and CCAI filed a second application with the Federal Reserve to become bank holding companies. The application made a number of key representations, required by the regulators, regarding the nature and source of the financing of the venture, in part to demonstrate that BCCI had no direct or indirect interest in the transaction. These representations included:

** None of those purchasing the CCAH stock would retain any personal indebtedness in connection with the transaction.

** All of the funds used in the transaction would be provided from the personal funds of the investors.

** None of the funds would be from financial institutions affiliated with BCCI.

The application, filed on CCAH's behalf by Clifford and Altman, also made an iron-clad statement that BCCI had no interest, direct or indirect, in the bank:

BCCI owns no shares of [Financial General], CCAH, or CCAI, either directly or indirectly, nor will it if the application is approved. Neither is it a lender, nor will it be, with respect to the acquisition by any of the investors of either [Financial General], CCAI or CCAH shares."

In a written response to questions concerning the relationship between BCCI and CCAH, Altman further stated that the shareholders of CCAH had all made personal investments, and none of them were acting "as an unidentified agent for another individual or organization."

As part of the application process, the investors provided the Federal Reserve with financial information, typically consisting of extremely general statements about the net worth of the applicants. For example, the certificate provided for Kamal Adham consisted of a declaration by a Middle East accountant based in Saudi Arabia on June 19, 1978, addressed "To whom it may concern," that states:

Without any responsibility, we here certify that the estimation of the net worth properties [sic] and investments of H.E. Kamal Adham, as at June 15th 1978, is U.S. dollars 134.000.000 ($134 million).

According to the accountants, this conclusion was based on an estimated value of his investments in land and buildings at $100 million, buildings outside Saudi Arabia at $8 million, and "investments" not otherwise specified at $26 million.

The Federal Reserve made additional efforts to secure more precise information on the finances of the would-be purchasers, and were eventually told that the financial resources of many of the shareholders could not be calculated, because they were rulers of nations who owned all of the land of the countries they ruled, and their financial resources were essentially the net national wealth of their countries.

In a letter from BCCI lawyer Baldwin Tuttle to the Federal Reserve, dated November 5, 1990, Tuttle advised the Federal Reserve:

By tradition and historical background of the Trucial Sates, the ruler of an Emirate owns all of the land of his State . . . Similarly, all the natural resources of the State are also regarded as the personal property of the ruler and his heirs who enjoy complete authority to utilize them as they consider fit.(60)

Tuttle told the Federal Reserve that it was "impossible to estimate or segregate" the assets of the Al Nayhan family from those of the Sheikh himself or of the emirate of Abu Dhabi because they are "not regarded as separate entities." According to Tuttle, the legal situation of all property in these emirates was identical -- the proposed investors in FGB owned everything of value in the emirates they ruled.(61)

Assured of the solvency of these apparent investors in FGB, by early 1981 the Federal Reserve was moving to lift the remaining barriers to the purchase, if it could be certain that BCCI was not secretly behind the transaction. This issue was of deep concern not only to the Federal Reserve, but to the Office of the Comptroller of the Currency, which knew the most about BCCI. OCC had learned of BCCI's use of nominees in connection with its review of Bank of America's interest in BCCI; it had concerns about Ghaith Pharaon being BCCI's alter ego in his purchase of National Bank of Georgia. Given its knowledge, the FGB transaction made OCC officials uneasy. But the Federal Reserve was the primary regulator, and the OCC was not willing to stop the FGB transaction from moving forward, so long as they received assurances from everyone involved that BCCI was not a party to the transaction.

On March 12, 1981, the OCC finally signed off on the CCAH takeover based on the understanding that BCCI would have no involvement with the management of the bank or the holding companies or with the financing of the acquisition.

As Charles Muckenfuss III, the senior deputy comptroller of the currency, explained in the letter to the Federal Reserve:

We note that in the October, 1978 application a relationship between the investors group and the Bank of Credit and Commerce International (BCCI) was outlined. Members of the proposed investors group or Credit and Commerce American holdings, N.V. and Credit and Commerce American Investment, B.V., also hold an interest in BCCI. It has now been represented to us that BCCI will have no involvement with the management and other affairs of Financial General nor will BCCI be involved in the financing arrangements, if any are required, regarding this proposal. This commitment is critical, both now and in the future, since such a relationship with another financial institution would be a significant factor in appraising this application. This is especially important in light of the overlapping ownership which will exist between Credit and Commerce American Holdings N.V., Credit and Commerce American Investment, B.V., and BCCI. Moreover, any enhanced direct or indirect affiliation or relationship would take on even greater significance in light of the fact that BCCI is not subject to regulation and supervision on a consolidated basis by a single bank supervisory authority.(62)

Thus, by early 1981, the technical securities and banking regulatory issues had been solved by the CCAH group. The only remaining obstacle to approval of the CCAH group takeover was continued suspicion by regulators that BCCI -- investment advisor to most of the shareholders and owned by a number of the shareholders -- might still somehow be a direct or indirect shareholder. The regulators therefore repeatedly asked Clifford, Altman, and the CCAH shareholders for assurances on this point, and repeatedly received them. The Federal Reserve and the OCC were now ready to accept these assurances. State regulators, especially Sidney A. Bailey, the chief bank regulator for Virginia, responsible for overseeing FGB banks in Virginia, were not.

Virginia's Objection to the CCAH Takeover Bailey had served at OCC for twenty years as a bank examiner before becoming the number one bank regulator for Virginia in 1978. Bailey had previously been visited at the state banking offices in Richmond by Clifford and Altman, and had felt that Clifford's representations to him were theatrical and rehearsed. Clifford had argued that America was strengthened by foreigners recycling petrodollars to the U.S., while Bailey believed in local control, so that regulators would have access to the people in charge if there were trouble.(63)

As far as Bailey was concerned, there was no way of knowing who this Middle Eastern group really represented, what they intended to do with the bank after they took it over, or why they had selected this bank in the first place. Bailey believed that banks were like churches, not just basic local institutions in which citizens placed their money, but the repositories for that which is good and sound in a community, the embodiments of a community's past, present and future. The representations that were being made to him by Clifford and Altman were designed to provide comfort to him concerning the intentions of the Middle Eastern investors, but to Bailey, they were inherently unverifiable. For that reason, Bailey had told the Federal Reserve that as far as the State of Virginia was concerned, "the proposed acquisition will be inimical to the convenience and needs of the community."(64)

As Bailey later testified:

Representations were made that the operation of the subsidiary banks of Financial General Bankshares . . . would be improved, that their quality and quantity of service to the communities they served would be raised . . . However, how that was to be done was not made clear and it seemed, with control to pass outside the country, it seemed, well, a little hard to believe that the real intent of this group of individuals was to improve the quality of banking service in the Shenandoah Valley or Virginia or in McLean and Washington, D.C. or anywhere else. There wasn't any real incentive for them to do that . . . Take me at my word. Believe me. Have I ever lied to you? That sort of thing. . . I had the word of the people speaking to me that none of these negative detrimental things would occur, and nothing more.(65)

Bailey was also concerned about the corporate walls created by the holding company structure of CCAH, CCAI, and FGB. With neither CCAH nor CCAI being located in the U.S., Bailey felt the offshore holding company structure provided an invitation to abuse. He was sufficiently concerned about the problem that he had contacted both the State Department and CIA in an effort to learn more about the shareholders, but had received no information from either about any of those involved in the transaction.(66) In all of these objections, Bailey was joined by state regulators from Tennessee, who, in concert with the local bankers at FGB's Tennessee branches, opposed the takeover as against the interests of the community.

The April 23, 1981 Federal Reserve Hearing In response to Bailey's concerns, and in an effort to put the allegations concerning BCCI's involvement to rest, the Federal Reserve scheduled an unusual hearing on the CCAH application for April 23, 1981, convened by associate counsel Robert Mannion. Prior to the hearing the Federal Reserve advised Baldwin Tuttle, as lawyer for the CCAH group, that the first issue the Federal Reserve wanted answered was how the various shareholders became involved in investing in U.S. banks and decided to acquire FGB. In the letter, the Federal Reserve also asked the applicants to "clarify the historical, current and expected future relationships between the Bank of Credit and Commerce International, S.A., London, England, and its affiliated companies, on the one hand, and Applicants and their principals, on the other."

The hearing opening with Bailey reiterating his opposition to the takeover, and reiterating the concerns he had previously expressed to the Federal Reserve by letter. First, the U.S. might not be able to insure that these foreign owners would abide by its laws. Second, it would be difficult to tell who really controlled the bank. Third, it was possible the bank's new Middle Eastern owners might strip the bank of its assets and move them elsewhere before anyone found out. Bailey listed another half dozen related reasons, mostly related to the difficulties of verifying financial information of foreign shareholders. Finally, Bailey suggested that the key issue the Federal Reserve should consider was why the Middle Eastern investors were willing to pay so much for the bank.

What is the motive giving rise to these protracted, expensive campaign to buy Financial General? Allegedly, Financial General is viewed by these applicants simply as an investment, but it is obvious that the price which the applicants are prepared to offer for control of Financial General bears little logical relationship to either the actual book value of those shares or their price in the market prior to the initial stimulation of the market by the applications or their agents. There can be little doubt that some incentives other than orthodox investment motives must have prompted this effort. . . One obvious plausible answer to this riddle lies in the unique position of Financial General in the market. No other single financial institution is situated in both the financial and government hubs of the United States.(67)

Bailey warned the other regulators that he believed the purchasers had some secret agenda. Bailey did not know for sure what it was, and neither did any of the other regulators. Until they could determine what it was, the Federal Reserve should turn the application down.

In response to this impassioned presentation by Bailey, Clark Clifford opened the presentation of the case on behalf of the Middle Eastern investors. He began by expressing his regret at Bailey's concerns, and promised to answer them, noting that if the Fed permitted the acquisition, Clifford looked forward "to many years of an agreeable relationship between us, Mr. Bailey."

Clifford described the genesis of the FGB takeover as arising from Adham -- not BCCI and Abedi, not Jackson Stephens or Lance -- and that as a result of Adham becoming interested in the bank, Adham had interested his associates and friends, and brought BCCI into the picture to analyze FGB as an investment.(68)

Clifford said that the Middle Eastern group put together by Adham was interested in bringing substantial new capital to the bank as passive investors, and that in addition to Senator Symington and Clifford, other prominent Americans such as retired General Elwood Quesada and General James Gavin would serve on FGB's boards, demonstrating the honorable intentions of the bank's shareholders and their commitment to quality.

He also suggested that it was critical for the national interests of the Untied States itself that the Federal Reserve permit the application to go forward.

It is in the interest of our country that an effort is made to bring back to the United States as many of the dollars as we can that through the years we send over to the OPEC countries.(69)

Clifford explained that some $90 billion in payments had left the U.S. for crude oil to the Persian Gulf countries the previous year. If those funds were taken and invested in West Germany, Great Britain, Switzerland, they would bring no benefit to the United States, whereas if the application was approved, it would be the U.S. that would benefit.

Clifford then introduced the investors, beginning with Sheikh Kamal Adham, whom Clifford described not as the brother-in-law to the late King, nor as the former head of Saudi intelligence, but merely as a prominent Saudi businessman. Clifford said that he had the "deepest respect for his [Adham's] character, for his reputation, for his honor and for his integrity." Clifford suggested that Bailey's concerns were founded on some naive form of anti-foreign bias. He warned that such anti-Arab bigotry was unfair and implied that such a factor could not justify a refusal to grant the CCAH application:

I believe deeply in this country. I believe deeply in its attitude of fairness. I believe deeply in its attitude that it is a country of laws and not of men. I do not believe in prejudice. I do not believe in bias. Our government does not, and with all of these factors, it seems to me that these men bring into this operation those qualities that our country can well receive.(70)

Adham then addressed the Federal Reserve, reiterating the account that his interest in FGB began not with Abedi and BCCI, but with Hassan Yassin of the Saudi Arabian embassy, that BCCI was brought in by Adham to evaluate the bank, and that Adham then learned that BCCI was already independently and coincidentally involved in evaluating the bank for other Middle Eastern investors.

Adham told the Federal Reserve that BCCI was a banker for him and some of the other investors, but that there were no understandings or agreements involving him or any of the investors and BCCI concerning FGB. Parroting language used by Clifford and Altman in formal statements to the Federal Reserve, Adham testified that "whatever relationships are developed between Financial General and BCCI in the future, if any, are matters to be decided by the new management of Financial General based upon that institution's best interests."(71)

Similar statements followed from Faisal al Fulaij, Abdul Raouf Khalil, and El Sayed El Gohary.

At this point in the hearing, Mannion, the Federal Reserve lawyer conducting the hearing, focused on the contradiction between Adham's explanation of how he became interested in FGB, and the apparent earlier involvement of BCCI and Abedi with the Lance group.

MR. MANNION: As I read the statements . . . Sheikh Adham and Mr. Fulaij were originally interested in this investment by the Bank of Credit and Commerce, BCCI.

MR. ALTMAN: That is not correct. . . I believe that Sheikh Adham's testimony was that he was advised of this by a friend who worked in the Saudi Arabian Embassy, Mr Yassin . . . Mr. Fulaij has said that he was seeking to make investments abroad, particularly in the United States, and asked for his representatives to locate some of them and advise him of their availability. They had contacted BCCI in that effort, and BCCI brought to their attention the fact that there was stock available in Financial General.(72)

Thus, according to Adham, Fulaij and Altman, it was sheer coincidence that BCCI was the investment advisor for everyone involved. This testimony, provided to the regulators for the purpose of attempting to reconcile the otherwise inconsistent accounts provided by Lance, Altman and others of how BCCI came to be involved in the takeover, strained the credulity of regulators even in 1981. Mannion again asked Altman whether Adham was the leader of the investor group, the person who had brought together all of the other investors. Adham responded by explaining, again, that there were two independent groups of Middle Eastern investors -- one Saudi, the other Kuwaiti -- who had become interested in FGB as a matter of utter coincidence. Oddly, at this point, Adham had chosen to ignore the third group involved, the Abu Dhabi investors, entirely. Given the fact that Abu Dhabi was even then the largest shareholder in BCCI apart from BCCI itself, the omission may not have been inadvertent.

SHEIKH ADHAM: I invited some of my friends from my part of the world and I guess some friends from Kuwait invited some friends from Kuwait and some of their friends. But I am called the lead because perhaps I now own more shares than the others.(73)

After a lunch break, Mannion returned to the issue that was troubling him.

MR. MANNION: We are still a little bit uncertain as to how the group came about. In Sheikh Adham's written and oral presentation this morning, he indicated how he became interested in Financial General, and then went to BCCI and had them do an analysis of the organization. Then we understand that Mr. Fulaij, on his own, was looking for investments in the United States, and he was advised by BCCI to get involved in or suggested that he might want to get involved in Financial General. Was Sheikh Adham aware that Mr. Fulaij was getting involved in Financial General or when Mr. Fulaij made his investment, was he aware that Sheikh Adham was involved in it?(74)

This question had apparently not been anticipated by Adham, Fulaij, or their lawyers, and hence Adham and Fulaij replied as follows:

SHEIKH ADHAM: I don't know what -- I certainly don't know.

MR. FULAIJ: The same.(75)

Mannion, troubled by the unbelievable nature of the coincidence, persisted.

MR. MANNION: So you were told that Financial General was a good investment by BCCI, and on that basis, is it just a coincidence that BCCI is first asked by Sheikh Adham to do an investigation or analysis of Financial General, and . . . they then gave advice to several of their investment clients to be involved in Financial General?

MR. FULAIJ: (Nods in the affirmative.)

SHEIKH ADHAM: That is very possible. Such things happen in our parts of the world.(76)

Adham then advised the Federal Reserve -- falsely -- that he had not met Fulaij for ten years, had no immediate contacts with him and that their mutual involvement was mere coincidence. In fact, both had been involved with other transactions involving BCCI, including acting as nominees for BCCI in connection with recent stock transactions involving BCCI's oil company, Attock Oil.

Concerned by the nature of Mannion's questions, Adham sought to put his concerns to rest directly.

SHEIKH ADHAM: I think that from the line of questions, it appears there is doubt that somebody or BCCI is behind all of this deal. I would like to assure you that each one on his own rights will not accept in any way to be a cover for somebody else.(77)

In an effort to enlighten the Federal Reserve, Clifford and Altman then compared BCCI's role as an investment advisor to Merrill Lynch in the United States -- independently looking at investment opportunities for its clients. Another lawyer for the BCCI group, Baldwin Tuttle, a former Federal Reserve attorney who previously had been Mannion's superior at the Fed, then took his turn to explain his understanding of what had happened:

MR. TUTTLE: Both [Adham] and Mr. Fulaij have stated that originally they were buying shares as an investment like anyone else buys a small minority interest as an investment. It is only after Financial General commenced the litigation that they considered the possibility of increasing their shareholding.(78)

Mannion then returned to the issue of BCCI directly, noting the similarity of the names "Bank of Credit and Commerce" on the one hand, and "Credit and Commerce Holdings" on the other. Why were the names so similar? Clifford responded:

The terms "Credit" and the term "Commerce" are terms that are used extensively in the Persian Gulf in financial affairs. His Excellency [referring to Adham] has said that he deals with banks that used the terms "credit," and used the terms "commerce." Of course a number of banks used the term "Commerce." . . . I know of no additional reasoning behind it.(79)

Clifford then reiterated the key representation pertaining to the application before the Federal Reserve. In response to a question from Mannion as to precisely the function of BCCI in the application, Clifford testified:

None. There is no function of any kind on the part of BCCI. I think when the question was asked, having to do with what might occur in the future, I think somehow may have given the answer, "well, that would depend upon the judgment of Financial General in the future." I know of no present relationship. I know of no planned future relationship that exists, and other than, I don't know what else there is to say.(80)

Based on the representations made by Clifford, Altman, Tuttle, Adham, Fulaij, and the other Middle Eastern investors, the Federal Reserve, despite its obvious suspicions, approved the application on August 25, 1981. The Federal Reserve also granted a request, made by Altman on behalf of the Middle Eastern investors and CCAH on June 2, 1981, to seal portions of the transcript of the hearing, preventing anyone outside the Federal Reserve from learning the identities of several of the shareholders.(81) A year later, perhaps as a way of breaking with the past and moving beyond the ugly publicity pertaining to the litigation over the takeover, and the bank's new Middle Eastern ownership, FGB formally changed its name of its banks to First American, and its holding company to First American Corporation.

In approving the application, the Federal Reserve explicitly accepted "the entire record" of statements made to it by the Middle Eastern investors, BCCI, and their attorneys. These included certain statements made in the April 23, 1981 hearing and in the applications which constituted loop-holes regarding BCCI's ability to be involved with FGB in the future, and which were contrary to the understandings which the OCC had said were critical for its approval of BCCI's application. These statements suggested that if BCCI loaned funds to the shareholders after the original acquisition in connection with CCAH, such loans would not be precluded. Together with the Federal Reserve's acceptance of the concept that BCCI could act as a liaison between FGB and the shareholders in its capacity as "investment advisor," the ability of BCCI to "lend" to its shareholders following the initial acquisition created a mechanism by which BCCI could at any time "call" its interest in CCAH shares, in collusion with its nominees, by "lending" funds, secured by those shares, on which the nominees defaulted, leaving BCCI in possession of the shares. In the decade to come, this device was used by BCCI repeatedly to deceive the regulators, in some cases with the apparent knowledge of some of BCCI's attorneys and agents in the U.S.

The True Account of the 1978 Takeover While there had been numerous warning signs in front of the Federal Reserve prior to its approval of the CCAH application to take over CCAH, and again, recurrently, through the 1980's, the Federal Reserve did not conclude that it had been lied to about BCCI's role until December, 1990, when attorneys for Sheikh Zayed and BCCI at the firm of Patton, Boggs & Blow, prompted by investigative activity by the District Attorney of New York and other factors, advised the Federal Reserve of the apparent control of First American by BCCI. Seven months later, after BCCI had been closed globally, the Board of Governors of the Federal Reserve voted to issue an order banning the four Middle Eastern investors from banking activities in the United States forever, on the basis of the false statements they made to the Federal Reserve in the course of the 1978 and 1980 applications to take over FGB, and in the course of the April 23, 1981 hearing. In that order, the Federal Reserve also made findings as to the true state of affairs pertaining to the FGB takeover a decade earlier.

On July 29, 1991, the Federal Reserve found:

** BCCI owned CCAH in violation of the Bank Holding Company Act.

** BCCI concealed its intended ownership and control of CCAH at the time of CCAH's 1980 application to acquire First American.

** At least four of the Middle Eastern investors involved in the 1980 application were nominees for BCCI, including all of the Middle Easterners who had appeared in person before the Federal Reserve during its April 23, 1978 hearing, Adham, Fulaij, Khalil, and Jawhary. In addition, other BCCI nominees included the head of one emirate within the United Arab Emirates -- Sheikh Naomi, ruler of the Emirate of Ajman and a corporation wholly owned by the head of a second emirate, Sheikh Hamad bin Mohammed al-Sharqi, ruler of the Emirate of Fujeriah. Other nominees included Sheikh Shorafa, a government official of the United Arab Emirates.

** The head of BCCI, Agha Hasan Abedi, and his chief assistance, Swaleh Naqvi, had coordinated the nominee scheme for BCCI.

The Federal Reserve found that beginning in late 1977, BCCI began using these nominees to purchase stock in Financial General through an arrangement under BCCI loaned the money to the nominees to purchase the CCAH shares, subject to side agreements under which the nominees were not liable for serving or repaying the loans. Under the terms of the scheme, the nominees signed deeds to transfer their stock in blank, leaving it to BCCI to fill in the name of the transferee at BCCI's convenience. BCCI was also authorized by the nominees to sell the shares at whatever price it chose and to keep any profits it might earn, and BCCI promised to indemnify the nominees against any losses they might sustain for acting as nominees. BCCI was also given the power to vote the shares held by its nominees, had powers of attorney to sell the shares, and agreed to make fixed payments in fees to the nominees in compensation for their agreement to act as nominees.(82) The Federal Reserve found that BCCI also financed the start-up costs of CCAH and a $50 million loan to First American supposedly from an outside bank, BAII, which had interlocking directors with BCCI.(83)

In short, BCCI, Kamal Adham, Faisal al Fulaij, A.R.K. Khalil, and the other Middle Eastern nominees had secretly done precisely what the Federal Reserve had sought to assure they would not do, and had done precisely what they had promised not to do, in writing and in testimony to the Federal Reserve prior to its approval of the 1980 CCAH application. From late 1977 through December 1990, BCCI and its nominees lied to the Federal Reserve, repeatedly filling out false reports to the Federal Reserve, and providing the Federal Reserve false statements and information.

1. See e.g. Price Waterhouse Note of Audit Committee Meeting on 4 April 1989, BCCI, "SN [Swaleh Naqvi] said that it was unlikely there could be a merger between BCCI and CCAH in the immediate future, although it is possible that there could be a reverse merger in the future. In the view of BCCI's problems in the USA, he did not consider it advisable that this possibility was discussed [publicly] for a couple of years."

2. London Daily Telegraph Magazine November 19, 1991, "No Questions Asked."

3. Staff interview, Lance, October, 1991.

4. Harris and Berry, "Arab Investors Want Lance to Manage Funds," Washington Post, December 18, 1977, A1.

5. Testimony of Heimann, S. Hrg. 102-379, p. 76.

6. Id at 77.

7. Washington Post, April 2, 1978, John F. Berry and Jerry Knight.

8. Id.

9. See Washington Post, April 2, 1978.

10. Washington Post, April 2, 1978.

11. Id.

12. SEC civil complaint, US District Court Washington DC, March 17, 1078; see also Washington Post, March 18, 1978.

13. Id.

14. Lance, S. Hrg. 102-350, Pt. 3, p. 5.

15. Id. p. 6.

16. Id at 8.

17. Id.

18. Id. p. 11.

19. Forbes, December 15, 1976, p. 95, "A Couple of Country Slickers."

20. Washington Post, April 2, 1978.

21. S. Hrg. 102-350, Pt. 3 pp. 8-9; see also Federal Reserve Hearing April 23, 1981 transcript p. 54.

22. Federal Reserve Hearing transcript, April 23, 1981, p. 25; Clifford, S. Hrg. 102-350 Pt 3., p. 59.

23. Summary of Charges, U.S. Board of Governors of the Federal Reserve System, In the Matter of BCCI, No. 91-043, Paragraph 22, July 29, 1991.

24. Id. at 12.

25. Harris and Berry, Washington Post, December 18,1 977, A1.

26. Id.

27. Resume, Ghaith Pharaon, in BCCI Senate documents; see Atlanta Business Chronicle, April 27, 1987. While "Dr." Pharaon's doctorate was self-conferred, his decision to adopt the honorific had lasting impact. Even after Pharaon had been indicted by the Justice Department and New York District Attorney and cited for numerous violations of banking law, federal banking regulators continued to refer to him in prepared and oral testimony before the Subcommittee as "Dr. Pharaon." See, e.g. prepared testimony of John Stone, head of enforcement, FDIC, May 14, 1992, which refers to Pharaon as "Dr Pharaon" some 33 times, S. Hrg. 102-350 Pt. 5 pp. 158-163.

28. Id.

29. In its suit in the FGB case, the SEC found the FGB takeover battle formally began just a few days later, on November 29, 1977, when Lance, Stephens, Metzger and BCCI, through Abedi, set in motion a plan for taking over FGB. Lance began buying up the bank's stock, telling none of the sellers that the secret purchaser was BCCI.

30. The Economist, April 1, 1978; Lance, id., p. 14.

31. See e.g. The Economist, April 1, 1978, "The Nine Lives of Bert Lance."

32. Facts on File, March 24, 1978; The Economist, September 9, 1978.

33. Memorandum, Office of the Comptroller of the Currency, January 4, 1978, Comptroller John Heimann.

34. Id.

35. Memorandum, OCC, to File from John G. Hensel, January 17, 1978.

36. Memorandum, OCC, Serino to Heimann, April 3, 1978, "Notes On Meeting with Pharaon."

37. Various documents, OCC files on NBG, March-July, 1978.

38. See e.g. memorandum, Patton, Boggs & Blow re: National Bank of Georgia, March 14, 1991.

39. Summary of Charges, U.S. Board of Governors of the Federal Reserve, In the Matter of BCCI, #91-043 Paragraph 181, July 29, 1991.

40. Lance, S. Hrg. 102-350 Pt. 3 p. 32.

41. Clifford, Id., p. 70.

42. Id. at 59.

43. Id. at 60.

44. Clifford, id., p. 70.

45. S. Hrg. 102-350 Pt. 3 p. 63.

46. S. Hrg. 102-350 Pt. 3 pp. 25-27.

47. Id.

48. See e.g. Summary of charges, Federal Reserve, In re Clifford, 92-080, July 29, 1992, Paragraph 23.

49. Confidential and Privileged Attendance Note, November 19, 1990, BCCI Attorney memcom of meeting with Roy Carlson, Exhibit D in G&H Montage case, id.; S Hrg. 102-350 Pt. 4 pp. 286-298.

50. Wall Street Journal, February 14, 1978.

51. Washington Post, March 22, 1978.

52. Letter, Robert Altman to Mannion of Federal Reserve, May 9, 1978.

53. See e.g. Clifford written testimony, id., at 71.

54. Clifford, id., at 72.

55. Federal Reserve Application, October 19, 1978.

56. Plaintiff's exhibit, Helms 9, G&H Montage, id., reprinted S. Hrg. 102-350 Pt. 4 p. 237. Helms' involvement with various BCCI figures is discussed in detail in the chapter concerning BCCI's links to U.S. and foreign intelligence.

57. Peter Mantias, "BCCI: Case reveals former CIA chief's ties to bank," Atlanta Constitution, February 15, 1992, A1.

58. S. Hrg. 102-350 Pt. 3 pp. 75-77.

59. Letter, Tuttle to Altman, May 27, 1980, on file at Federal Reserve.

60. Tuttle to Bostian, Federal Reserve Bank Richmond, November 5, 1980.

61. Id.

62. S. Hrg. 102-350, Pt. 3 pp. 328-330.

63. Staff interview, Bailey, April, 1991. See also testimony of Bailey, S. Hrg. 102-379, pp. 60-63.

64. S. Hrg. 102-379, p. 61.

65. S. Hrg. 102-379 pp. 61-63.

66. Staff interview with Bailey, April, 1991; at the time, the CIA knew precisely who Adham was, having had extensive contact with him in his role as the liaison between Saudi and U.S. intelligence, but did not advise Bailey of this relationship. A detailed treatment of Adham and of the CIA are contained in separate chapters of this report.

67. Bailey, Federal Reserve Hearing, April 23, 1981, pp. 15-17.

68. Federal Reserve Hearing Transcript, April 23, 1978 p. 26.

69. Transcript, Federal Reserve Hearing, April 23, 1981.

70. Clifford, Federal Reserve Hearing April 23, 1981, transcript p. 46.

71. Adham, Federal Reserve Hearing transcript April 23, 1981 p. 56.

72. Federal Reserve Hearing transcript April 23, 1981 p. 75.

73. Id p. 76.

74. Id. p. 78.

75. Id p. 78.

76. Id. p. 79.

77. Id. p. 80.

78. Id p. 90.

79. Id. p. 143.

80. Id. p. 144.

81. The Federal Reserve only unsealed this material in 1990, after providing it in a heavily redacted form to journalist Larry Gurwin following repeated requests from Gurwin in the preparation of his ground-breaking story on the BCCI-First American connection for Regardies' magazine.

82. Summary of Charges, US Board of Governors of the Federal Reserve, No. 91-043, July 29, 1992, pp. 1-11.

83. Id. Paragraphs 152-154; see also staff interview, Akbar Bilgrami, July 13, 1992.

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BCCI IN THE UNITED STATES, PART TWO

ACQUISITION, CONSOLIDATION, AND CONSEQUENCES

Initial Plan For BCCI in the U.S. After the Takeover Following the exhausting process of the FGB takeover, BCCI began undertaking a number of steps to carry out Abedi's plan for penetrating the U.S. banking and capital markets, with the intention of making BCCI's U.S. holdings its largest and of controlling a substantial market share of U.S. banking overall by building First American into one of the twenty largest banks in the United States.(1)

Abedi set into motion a dual approach, in which he would establish branch offices of BCCI in the U.S. which would be permitted to accept deposits from foreigners but not take deposits from Americans, and use those offices to feed business to the U.S. banks BCCI owned. An undated BCCI memorandum, titled, "A Strategy for the USA," gives the flavor of the bank's thinking.

The memorandum states that BCCI's purpose in the U.S. is "to make it the most successful country in the BCC network in the next 5 years," through building upon BCCI's existing base of correspondent banking for Third World Central Banks, trade finance, and private banking, and adding to that base the financing of the "export of technology and services from USA." In addition, BCCI would use its U.S. network to branch out into the U.S.'s then profitable real estate development industry, growing through direct investments in U.S. real estate.(2)

According to the memorandum, "penetration of the market" would require BCCI's presence in at least twelve jurisdictions: California, Washington state, Arizona, New York, New Jersey, Connecticut, Florida, Texas, Chicago, DC, Virginia and Maryland.

Accordingly, Abedi assembled a team of BCCI people for North America, placing them, variously, at the BCCI representative offices and branches, at First American, and at National Bank of Georgia. Within BCCI, management discussions on operations in the United States viewed the operations of FGB/First American, National Bank of Georgia and BCCI's branch offices as an organic whole, to be thought of together.

As described by BCCI regional general manager Abdur Sakhia:

In any management discussions, in any discussions on our future in the United States, we would think of three entities -- BCCI, National Bank of Georgia, First American, then Financial General -- in the same breath. Who would be going where, who would work in which entity, what area of business would be handled by which entity, allocation of businesses, markets, geographical territories, all took place as if this was one entity.(3)

To ensure a discreet BCCI role in its new U.S. empire, Abedi placed key employees at each of the institutions BCCI had purchased. At National Bank of Georgia, four officials with ties to Abedi or BCCI were installed. At First American, BCCI limited its direct employment of officers to First American New York, where long-time BCCI officials K. K. Elley and Aijaz Afridi were put into place, where they continued to draw benefits from BCCI while officially employed by First American. Elley obtained his job at First American in 1983 as a consequence of Swaleh Naqvi, the number two official at BCCI, telling Altman to hire him. Afridi, who had previously worked for another secretly-controlled BCCI entity in Switzerland, Banque de Commerce et de Placement of Geneva, was placed at the First American through Abedi's intervention.(4)

From the point of view of BCCI, it was the senior partner in this arrangement, despite the official title given to Clark Clifford as chairman of the board following the death of Stuart Symington. As an article written for Worldpaper on August 24, 1982 following interviews with BCCI officials, including Abedi, described it, BCCI's intention was to "manage" First American and all of its branches in the U.S., just as it was already managing the National Bank of Oman. However, in the years that followed, mid-level BCCI officials in the United States would feel that they were engaged in a struggle for control of First American with Clifford and Altman. Whenever BCCI officials would push too hard to more directly involved in controlling First American's affairs, Clifford and Altman would appeal to Abedi, and Abedi would usually -- but not always -- take steps limiting the BCCI intrusion into First American.

To preserve deniability for the regulators, Abedi and top BCCI management sought to segregate and compartmentalize their activities, making certain that Clifford and Altman would meet separately with Abedi outside the presence of other BCCI officials. As BCCI regional manager Abdur Sakhia described it, typically, when Clifford and Altman visited BCCI offices in New York and Miami from 1982 onwards, Mr. Abedi would meet with them first, they would leave, and Abedi would then separately brief the BCCI staff as to what happened.(5)

In pursuit of a unified U.S. strategy, within one year of the FGB takeover, BCCI moved to establish its U.S. presence directly, opening offices in New York, Miami, and San Francisco, with later branches and representative offices targeted for Chicago, Houston, Los Angeles, Tampa, Boca Raton, and Washington, D.C. These offices primarily engaged in marketing commercial banking services to import-export businesses, and in providing personal banking to "high net worth" individuals who were non-U.S. citizens, and therefore permitted to make deposits at a branch office of a foreign bank in the U.S.

BCCI worked make these branch offices high-profile from the beginning. In Miami, for example, the bank deliberately sought out well-known public officials and invited them to visit the bank. Both past and present Florida governors accepted the invitation, as did a U.S. Senator, and the then-son of the Vice President of the United States, Jeb Bush, who was at the time Florida's Secretary of State. Miami branch chief Abdur Sakhia said although BCCI had only been in south Florida a short time before its opening, it was already growing rapidly and becoming profitable, and political figures were glad to help the bank celebrate its growth.

We started in April 1982, but our formal opening in August 1982. Governor Graham came to that opening. Jeb Bush came to that opening too, along with Atlanta Mayor Andrew Young. Oil ministers from Venezuela, Abu Dhabi, the minister of economy and finance from Jamaica, Barbados, officials from Central Banks from all over the region. We had eight to ten ministers and central bank governors and leading businessmen from Venezuela and Peru and Trinidad, everywhere. It was a very successful opening. . .I have a videotape of portions of those in which Graham is being introduced to all BCCI people. Jeb Bush is also in those videotapes. Dante Fascell came to my house. We had met socially a couple of times. Reuben Askew came to the bank several times and had been to my house. Paula Hawkins came to the bank several times separately.(6)

BCCI's Involvement in First American Management Shortly after purchasing First American, BCCI recognized that expansion of First American's operations to include offices in New York would be expensive. Accordingly, Abedi and BCCI decided to add $30 million in capitalization to First American/CCAH, with some of these funds coming from the Crown Prince of Abu Dhabi's deposits with BCCI, and the remainder from BCCI itself, as loans to its nominees, Fulaij, Khalil, and Shorafa.(7)

Initially, First American had intended to retain the Bank of Commerce in New York, which had been one of the banks owned by FGB in New York. However, the Bank of Commerce board opposed the acquisition, and purchased the New York branch themselves, leaving First American without offices in New York City. As Robert Altman testified:

In the spring of 1982 we were then in a very awkward, and to some extent, unhappy posture. We were under an obligation to sell the New York City bank. And we were under a need to set up a new bank and really start it from scratch. We had nothing in the city. We had no staff. We had no location. We had no resources. It put us, as I say, in a difficult position. . . We essentially had two contacts in New York. One was the law firm of Wachtell, Lipton, Rosen & Katz that was cocounsel with us . . . the other was BCCI which had a representative office and was acting as an investment advisor. And we used those resources to try to get set up in New York.(8)

Thus, according to Altman, BCCI, acting as an investment advisor to the shareholders, helped First American set up its New York offices as a convenience to Clifford, Altman and First American. This account raises the question of why, under the circumstances of having no resources in New York City, First American would have wanted to establish officers there at all. New York City was already among the most competitive of all banking environments in the United States with giants as Citibank, Chase Manhattan, Chemical Bank, as well as dozens of other already well-established domestic and foreign banks.

The key business reason for opening a New York bank of First American was BCCI's desire to have it become the correspondent bank for BCCI's commercial bank relationships in the United States, and to act as BCCI's U.S. alter ego, free from interference by the DC-Maryland-Virginia banks of First American, which were being managed by Clifford and Altman.

A memorandum dated July 25, 1983, from BCCI employee Aijaz Afridi to BCCI Number 2 Swaleh Naqvi, with copies to BCCI officials Kemal Shoaib and K.K. Elley, described BCCI's plan for First American New York in terms that suggest it would operate independently from the other First American banks, apart from using them as sources of funds and sources for "their entire international business," in which First American New York would "become their Central Treasury."(9)

The memorandum discusses such issues as how to achieve growth and profitability for First American New York, how to project its image domestically and internationally, how to introduce the bank to Third World countries, new products and services, and related issues. Under "basic assumptions," Afridi noted:

Management style and Philosophy will be on the pattern of BCC -- No interference from the Holding Co. and free hand to the Management.(10)

The record also shows that BCCI's involvement in directing the establishment of this office was pervasive. For example, as both BCCI officials and BCCI documents show, it was BCCI, not First American, that determined how much office space First American would lease in New York. As Sakhia testified:

The decision of hiring, decision for acquisition of space . . . the New York office of First American was identified by BCC officers and approved by Mr. Abedi. He made the decision to rent that space.(11)

Over the ensuing decade, the space would prove grossly excessive for the actual needs of First American, and its costs would become a significant drain on First American's resources. A letter dated December 13, 1982 from Elley to Swaleh Naqvi, Abedi's number two at BCCI, on BCC New York stationery, documents the nature of the relationship between BCCI and First American in New York. In the letter, Elley brings Naqvi up to date with a meeting he has had with Altman concerning the First American Bank in New York, and covering the subletting of space at 350 Park Avenue, renovation of the space, selection of board directors, recruitment of key staff, selection of auditors and attorneys, and coordination with the holding company and the shareholders -- all matters being handled for First American by Elley as a BCCI employee and reported to Naqvi, the BCCI senior executive at a time when Clifford and Altman were ostensibly in control of First American.(12)

BCCI also handled the purchase of new branch offices in New York for First American. In March 1983, while Elley was still employed by BCCI as head of its New York representative office, he began discussions with Bankers Trust officials regarding the purchase of branches of their bank for First American. Six weeks later, when First American submitted bids for the branches, BCCI officials -- not First American officials -- handled the negotiations.(13)

From the outset, officials at National Bank of Georgia and First American frequently travelled to meet with top management at BCCI. Soon after Pharaon's purchase of the National Bank of Georgia was approved by the OCC, NBG hired as its president former Bank of America officer Roy Carlson, who had worked closely with Abedi in the Middle East. Carlson soon began making trips to London to visit BCCI and in return, entertaining Abedi and his wife in Atlanta. In 1983, Carlson made two BCCI-related trips abroad, to London and Athens. In 1984, he made three such trips. In 1985, he made three such trips again, together with trips to Miami and Chicago to meet with BCCI officials there. Tariq Jamil, a former BCCI employee who went to National Bank of Georgia until its sale to First American in 1986, when he returned to BCCI, had a similar pattern of BCCI-related trips, as did two other Pakistani NBG employees with ties to BCCI. And National Bank of Georgia in turn financed the travel of top BCCI officials like Abedi and Naqvi to the United States, beginning as early as August, 1982.(14)

U.S. Marketing Meetings Apart from the situation in New York, where BCCI's branch office managed the start up of First American before its two principal officers there, Elley and Afridi, transferred to the new start up office of First American, BCCI was sufficiently busy during the first two years of its start-up in the U.S. that little effort was made to coordinate the activities of First American and BCCI overall. For example, the first branch in Manhattan of First American Bank opened its doors for the first time on March 1, 1984. By late 1984, BCCI had established a network of branches, representative offices and agencies in the U.S., Canada, and Latin America, including Miami, San Francisco, Los Angeles, New York, and Washington, D.C. Abedi believed that both First American and BCCI were sufficiently well-established that it was time to begin coordinating the different parts of BCCI's empire. In early 1984, Abedi asked the BCCI officials in the Americas to form a committee, which first met in April, 1985 in New York, "to coordinate the efforts of different locations of BCC and other institutions so that the President's desire to have a totality in approach is achieved." (emphasis added)(15)

In attendance at this first meeting were representatives of all of BCCI's offices in the United States and Canada, along with Elley and Afridi from First American New York and Tariq Jamil from the National Bank of Georgia. Its purpose was described by BCCI officers as coordinating the efforts of the entire group of BCCI-controlled institutions, including National Bank of Georgia and First American, to increase their overall market share in the United States. During the meeting, Jamil presented a report on the operations of NBG and Elley presented a report on the operations of First American Bank of New York. The memorandum summarizing the meeting ended with the following conclusion:

Mr. Elley concluded that in America we are sitting on 7 Billion dollar assets and this is just the beginning. There is much to do and inspite [sic] of diversity of operations as different agencies and banks we have to find a common denominator.(16)

The reference to seven billion dollars accurately described BCCI's assets in the U.S. only if one included both National Bank of Georgia and First American.

According to Abdur Sakhia, who was the U.S. coordinator for the meetings, the key mission of the meetings was to find ways to better cross-market between BCCI, First American, and National Bank of Georgia:

There was a plan within BCCI to market for First American. The international division, based in London, marketed for correspondent relationships for BCC group, including First American. So not only the branches of BCCI worldwide sent business to First American, but BCCI correspondents also were sending business to First American. Similarly, the deposits of U.S. residents or U.S. corporations that we could not take in BCCI branches because of the agency status we would market to First American. . . we were parking -- we were giving profits to First American. . . because the overhead, the marketing overhead, was absorbed by BCCI, the profit that was made was made in First American. But it was coming back to us because it was one and the same thing. . . because First American was owned by BCCI.(17)

Later memoranda of the America's Coordinating Committee of BCCI described the sharing of information between First American's officers handling Latin America and BCCI's; the possibility of BCCI procuring mortgages and selling them to First American; and similar coordination among BCCI, National Bank of Georgia, and First American New York.

The absence of First American's Virginia, Maryland and DC banks from these memoranda, despite the inclusion of First American New York, is notable. Clifford and Altman, in their Senate testimony, suggested that the lack of involvement of their branches was evidence that they were deceived by BCCI and BCCI officers at First American New York, Afridi and Elley. An alternate explanation, consistent with the testimony of a number of BCCI officials interviewed, suggests that there was an ongoing battle between BCCI's officials in the United States on the one hand, and between Clifford and Altman on the other, for control of BCCI's empire in the United States; that Abedi insisted on the purchase of First American New York to meet BCCI's needs, despite the lack of market justification for the purchase on the part of First American itself; and that Clifford and Altman temporarily ceded control of aspects of First American New York while jealously guarding First American's metropolitan Washington franchises against encroachment by BCCI's Pakistani second-level managers. Later, Altman would try to regain that control.

Nazir Chinoy, head of BCCI's Paris branch, learned of the struggle over First American New York at a BCCI annual conference in Luxembourg in 1985, from Afridi himself, who confessed over a glass of wine that he was increasingly unhappy at First American New York.

Afridi felt that Altman was not permitting him to run First American on BCCI lines and yet he was answerable to Mr. Abedi for profits. He said Altman was interfering in the management and that he had reported to Naqvi on many an occasion about Altman interfering with his management, or trying to change the management structure or style.(18)

As Chinoy described it, from his point of view as a BCCI official operating outside the U.S., there was not so much a separation between First American and BCCI as two different types of management, one Pakistani and one American.

I saw rivals competing for power -- Afridi wanting to be the top man, and Altman wanting to be the top man.(19)

Abdur Sakhia, who was directly involved in U.S. expansion plans for BCCI, saw the problem in similar terms.

I was insistent that BCCI should have a direct presence of BCCI in the United States because we had a lot of opportunity, we were marketing with out hands tied behind our back because we were agencies. And he would say: Well, why don't you do marketing for our other banks, First American Bank, for National Bank of Georgia? Here are two banks; what do you want? I'd say: Sir, it makes a difference because we do not control the transactions, we do not provide the services directly . . . We were frustrated at the response time, turnaround time, service of First American. In BCC we in terms of business used to give a very good turnaround time, very good service. First American was in that sense very bureaucratic.(20)

Joint Marketing Numerous BCCI and First American documents demonstrate that the offices of the two banks were working together in the early 1980's in an effort to expand First American's and National Bank of Georgia's business, especially in the international realm. For example, BCCI officers helped First American develop relationships with the Government of Sri Lanka for handling it imports of U.S. agricultural products under the Department of Agriculture's PL 480 program; BCCI officials set up meetings with the World Bank and International Monetary Fund to which officials of First American and National Bank of Georgia would be invited; and sponsored meetings with officers of various Latin American central banks.

Documents retrieved by Subcommittee staff from BCCI's files at its former offices in New York after liquidation provide detailed information about some of the joint marketing efforts. One such document, a discussion paper concerning "Relationship With First American Bank," describes the relationship between BCCI and First American for joint marketing as follows:

We are liasing [sic] closely with First American Bank in their marketing efforts in the Washington area. Already a number of accounts of individuals/corporations have been subpoenaed and a good beginning has been made on Embassy accounts (Brunei, Bangladesh, Guatemala, Pakistan, Panama). We hope to gear up this activity and make substantial progress in the coming months. In addition next week we are jointly calling on thirteen embassies in Washington to get PL 480 business. . . . All efforts are being made to mobilize deposits for other BCC offices and in some cases for First American Bank.(21)

Another document from BCCI's Washington representative office, written by BCCI protocol chief Sani Ahmad, and dated July 5, 1985, suggests that First American would takeover any business in the United States that BCCI could not lawfully engage in, such as taking deposits, or participating in U.S. government programs like agricultural credits.

All business that our own agencies in the United States are precluded from handling is being passed on to First American Bank, and also those contacts who desire local bank accounts. The accounts worth mentioning in this respect are the [deleted] Account with balances of around $100,000, [deleted] restaurant with a turnover of about $35,000 per month and the Bangladesh Embassy who have placed a Term Deposit of over $1 million with First American. . . Bangladesh business is already being routed through [First American] because of this office.(22)

A later BCCI memorandum states that "a number of personal accounts have been opened at different branches of First American bank" through BCCI's efforts . . . we are now working with their [First American's] Asset Management Group who have provided us with a number of top multinational contacts such as Westinghouse and Northrop Corporation."(23)

In early 1986, BCCI officials at the Washington representative office began conducting meetings with prospective clients at First American's Washington offices. Later that year, BCCI introduced First American officers to officials at the Chinese Embassy. According to a BCCI "Business Call Memorandum," dated April 18, 1986:

The purpose of the meeting was to introduce First American to the Chinese Embassy to try and obtain their account. Mr. Barry Blank and Ms. Maureen Mcdonald from First American attended the meeting. . . This meeting was with officers of the political section [which] maintains both current and fixed deposit accounts.(24)

First American documents maintained by BCCI describe the same transactions from the point of view of First American. These documents typically underplay the involvement of BCCI officials in the marketing, simply noting their presence at meetings. However, BCCI officers were provided copies of at least some of the letters produced by First American concerning the joint marketing operations, and were even copied on First American's internal memoranda.

The fullest documentary record of the joint marketing program pertains to BCCI's successful solicitation of UPI to use BCCI as its international bank and First American as its U.S. bank.

In May 27, 1986, Barry Blank of First American wrote to Mario Vazsquez Rana, whose Mexican company was about to purchase UPI, as a follow up to a meeting in Mexico City attended by representatives of both First American and BCCI, and referring to BCCI's involvement in the meetings. In July, additional follow up letters were written by First American officials to UPI, referring to BCCI as First American's "affiliate." In this letters, written by First American personnel, First American officials describe the interrelationship of First American and BCCI and the benefits of banking with them together:

First American Bank, N.A., in cooperation with its affiliate Bank of Credit and Commerce International (BCCI) and its extensive international correspondent bank network, is prepared to establish an international cash management program to meet your company's needs. . . The first step we recommend is that UPI establish banking relationships with BCCI in the locations where they have full service branches corresponding with your bureau locations, and that UPI establish the remaining banking relationships with our [First American's] correspondent banks . . .(25)

Ultimately, UPI agreed to open accounts at both BCCI and First American.(26) From the First American correspondence, it would appear that First American itself successfully solicited the business. A fuller account of the solicitation, contained in the BCCI memoranda, makes it clear that the UPI relationship was initiated by and developed by BCCI officials, and that UPI selected First American for its U.S. banking at BCCI's request. Ironically, UPI was unhappy with the handling of its accounts by First American and quickly ended the relationship.(27)

Correspondent Banking BCCI sought to strengthen First American through providing it with profitable activity from BCCI. As of February, 1991, some 46 branches of BCCI world-wide still maintained accounts at First American, with First American holding an average of $35 million in BCCI demand deposits, overnight placements and term placements. As part of its relationship with BCCI, First American made credit lines available to numerous BCCI branches and affiliates, for which First American received compensation in the form of demand deposits and cash fees. (28)

Expansion: Purchase of Independence Bank Abedi had from the beginning intended to expand BCCI's operations into California, as a means of linking BCCI's U.S. operations with its rapidly growing operations on the Pacific rim. Accordingly, BCCI officials in the U.S. were directed in 1983 and 1984 to investigate California banks for secret acquisition by BCCI. In November, 1984, they selected Independence Bank of Encino and began negotiating its sale. Soon thereafter, Abedi and Pharaon agreed to make Pharaon BCCI's nominee for the purchase in order to avoid the regulatory scrutiny that would follow if BCCI sought to purchase Independence directly. Abedi arranged for BCCI's alter ego, ICIC, to enter into an agreement with Pharaon in which Pharaon agreed to act as nominee and agent for ICIC in acquiring Independence. Under the terms of the arrangement, Pharaon would hold 15 percent of Independence Bank on his own behalf, and the 85 percent would be held by ICIC for BCCI.(29)

Regulators were told that Pharaon would pay for Independence through a mixture of his own funds and from a loan from a major domestic bank. However, in fact, BCCI loaned or guaranteed the funds for the purchase, laundering the funds through other banks.

As BCCI Number Two Swaleh Naqvi admitted to BCCI's London attorneys in early 1991, BCCI in fact provided all the financing for the acquisition and later increases in capital. The financing was provided from accounts in Pharaon's name with BCCI holding all the shares as security, although BCCI's security interest was never registered with the company in order to evade detection by regulators.(30)

First, BCCI loaned $8.5 million to Pharaon and transferred the proceeds to Pharaon's account at Banque Arabe et Internationale d'Investissement, Paris (BAII), a bank which shared directors in common with BCCI, and which had also been used to shield BCCI's funding of the First American purchase four years earlier. BCCI instructed BAII to send a telegram to California banking authorities stating that Pharaon had deposits of that amount with BAII that were being held for the purchase of Independence, and thereby disguising the fact that the funds came from BCCI. The remainder of the funding for the transaction came from First National Bank of Boston -- with a letter of credit, guaranteeing First National Bank of Boston against loss coming from BAII, which in turn received a counter-guarantee from BCCI holding BAII harmless against any claim that might arise. Thus, BCCI in effect was responsible for the entire financing of the Pharaon purchase, and disguising this role through both of the banks involved.(31)

After acquiring Independence through Pharaon, BCCI undertook its typical follow-up. Abedi appointed a high-level BCCI official, Kemal Shoaib, to become chief operating officer of Independence, while abandoning its original plan of also placing Roy Carlson, president of National Bank of Georgia, on the bank's board of directors. Shoaib then continued to report to BCCI while heading Independence, and to receive benefits from BCCI such as a subsidized home mortgage loan and accrual of his BCCI pension benefits. Independence's budget, strategy and planning, its directors and senior employees, all were run by BCCI's number two, Swaleh Naqvi, for approval. As Independence required additional capital infusions, BCCI loaned the money to Pharaon.(32) Just as envisioned in BCCI planning memoranda, Independence Bank began to make direct investments in real estate, as permitted by California law, and incurring losses as a result of BCCI's management which ultimately would bring about Independence Bank's collapse.

By 1991, when federal regulators finally conducted a serious review of Independence Bank's condition, they found atrocious conditions at the bank, unusual in a U.S. financial institution, but typical of BCCI's practices:

Loans subject to adverse classification total $194 million, representing nearly 44% of total loans, a phenomenal ratio for a commercial bank. . . The bank has an especially unenviable record of selecting or attracting borrowers of questionable character and creditworthiness. Many files include derogatory credit information, such as delinquencies, tax liens, litigation, and judgments, which were often not addressed in internal memoranda or excused as normal in the real estate business . . . Financial statements were often not complete . . . lacking supporting specifics, sometimes not even signed by the borrower, often not of the legal entity borrowing the funds, and frequently not on the bank's forms, which included a number of pertinent questions which therefore went unanswered. Requesting tax returns was almost unheard of. Rarely were the existence of assets verified, and less frequently were values independently confirmed. In many cases even the most basic financial analysis was not attempted, and when it was, it was often badly flawed.(33)

In all, BCCI spent $90 million on Independence, whose collapse in 1992 later cost the bank insurance fund, and indirectly, the U.S. taxpayers, some $140 million.(34)

Consolidation:

First American Purchases National Bank of Georgia

On BCCI's Behalf As the Office of the Comptroller of the Currency had suspected in early 1978, BCCI in fact owned 50 percent of National Bank of Georgia (NBG) from the moment of its ostensible sale to Ghaith Pharaon in May of that year, with Pharaon acting as BCCI's nominee for those shares to avoid the hostility regulators had already demonstrated towards any direct acquisition by BCCI. As the Federal Reserve ultimately found following BCCI's closure, when Pharaon acquired his shares of NBG from Lance, he borrowed at least part of the funds used for the acquisition from BCCI.

In November 1981, Pharaon established a holding company, GRP, Inc., of which he owned 100 percent, to hold his shares of NBG, and established a cost-sharing arrangement with BCCI concerning NBG under which BCCI and Pharaon would divide expenses equally and consider NBG to be equally owned by both. The following year, this holding company changed its name to NBG Financial Corporation. A year later, in August, 1983, Pharaon formed two more holding companies, Interedec (Georgia) N.V. or Curacao in the Netherlands Antilles, and a second Interedec (Georgia), incorporated in Nassau, Bahamas. Under this arrangement, shares in the National Bank of Georgia were held by NBG Financial, shares in NBG Financial were held by Interedec of the Netherlands Antilles, and shares in Interedec of the Netherlands Antilles were held by Interedec of Nassau Bahamas, which in turn were held by Pharaon. The obvious purpose and intent of this series of holding companies -- so similar to the holding companies and locations set up to hide BCCI's ownership of First American -- was to permit Pharaon and BCCI to sell or mortgage Pharaon's interest in NBG without regulators or creditors finding out.(35)

Soon after setting up these holding companies, Pharaon formed another company, Pharaon Holdings Limited of Nassau, which immediately acquired Pharaon's 50% interest in NBG, making Pharaon Holdings a bank holding company under U.S. law and requiring Pharaon under U.S. law to notify the Federal Reserve of the change in ownership, which Pharaon ignored.(36) The other 50% of the stock, held by Pharaon as a nominee for BCCI from the beginning, remained in NBG Financial.

During the years NBG was "owned" by Pharaon, it adopted a number of BCCI's practices and employed a number of former BCCI employees. NBG personnel regularly attended BCCI conferences, at BCCI's expense. NBG adopted BCCI's management style and hexagonal logo, and reoriented its orientation as a bank from focusing on local business at the retail level to international transactions.(37)

On January 1, 1985, Pharaon, who was experiencing significant financial difficulties, executed a secret "Memorandum of Deposit" with BCCI which provided that all of the outstanding shares of NBG Financial would be deposited with BCCI as collateral for loans to Pharaon and his companies, and giving BCCI "or its nominees" the right to vote the shares. As a result, as of that date, BCCI had effective control over the 50% of the shares of NBG which had been BCCI's from the beginning.(38)

By November 1985, with Pharaon's financial difficulties intensifying, BCCI's auditors, Price Waterhouse, began to express concern to BCCI about its exposure to Pharaon and calling on the bank to reduce this exposure. In fact, a portion of this exposure was related to Pharaon's holding of NBG on BCCI's behalf.

Accordingly, BCCI and Pharaon agreed to liquidate Pharaon's 50% interest in NBG, and sell his holdings of NBG stock held by Pharaon Holdings Limited back to NBG Financial, now controlled by BCCI. At this point, BCCI had direct and total secret control of all of the outstanding shares of National Bank of Georgia, and had demonstrated to Price Waterhouse its ability to force "loans" to major borrowers like Pharaon to be "repaid." But these financial manipulations did not solve the other serious problem created by Pharaon's deteriorating financial condition -- the possibility that creditors might seek to attach the shares of NBG Financial -- still officially "owned" by Pharaon. The result would not merely put BCCI's ownership of NBG at risk, but could set in motion the destruction of BCCI's entire empire in the United States and possibly globally.(39)

In London, Abedi looked at the NBG situation and determined that the simplest solution to the Pharaon problem was to merge National Bank of Georgia into First American, and thereby take Pharaon out of the picture. In the terms of the Federal Reserve charges, "in December 1986, BCCI caused CCAH to agree to purchase the shares of NBG [Financial] from Pharaon for $220 million."(40)

Significantly, while the transaction did not close until August 19, 1987, First American provided $80 million at the end of December, 1986 as an option on the purchase, securing those $80 million worth of shares and leaving Pharaon "holding" only a remainder of $140 million worth of the bank -- shares already held by BCCI as security for defaulted loans. Thus, any outsider who tried to attach Pharaon's shares in NBG would find that as creditors, they were now in back of First American and BCCI, making such an attachment of little legal value and thereby protecting the shares.

Within BCCI at the time, it was generally understood that the sale of NBG from "Pharaon" to "First American" was principally a consolidation of BCCI entities within the United States. As Abdur Sakhia testified, First American had been planning to expand its operations to Florida in the mid-1980's, and had never discussed a move into Georgia, until 1985. In late 1985, he became aware that Pharaon's financial situation had become shaky, and at Abedi's request arranged for a meeting to take place in Miami in November of 1985 involving Abedi, Naqvi, Clifford, Altman, and two officials from National Bank of Georgia -- Carlson and Jamil. No one else was permitted to attend the meeting. After it ended, Abedi came out and told Sakhia and other BCCI officials that National Bank of Georgia would be merged with First American.(41) Later, in preparation for BCCI's possible purchase of a bank in Florida, Sakhia was provided with a model file of the Independence Bank transaction, which had the details of the National Bank Transaction showing Pharaon's role as a nominee.(42)

After the Miami meeting, Sakhia wrote Abedi in London in February 1986 regarding BCCI's "Future Plans in the United States." In the memorandum, Sakhia referenced his discussions with Altman concerning the planned purchases by BCCI of banks in Florida. In a paragraph concerning the National Bank of Georgia, Sakhia suggested that in view of "the forthcoming restructuring of the bank in Georgia, it may be useful to merge their Miami operation with BCC Overseas, Miami, as this will offer additional dollar deposit and correspondent banking relationship to BCCI Overseas."(43)

In their written testimony before the Senate, Clifford and Altman denied that the acquisition of NBG by First American was directed by BCCI, stating instead that the acquisition "was as reflection of First American's consistent corporate strategy of expansion since 1982 . . . in December 1986, based solely on its judgment of First American's best interests, the CCAH Board approved the proposed acquisition of NBG. BCCI did not influence these deliberations, nor did it control the Company's decision to acquire NBG. First American, not BCCI, initiated the NBG transaction."(44)

Pharaon himself took a similar position, which he has maintained to this date, that he was never a BCCI nominee and acted independently in connection with his sale of NBG to First American, as in all other matters. As Pharaon told reporters in 1987, the transaction took place for sound reasons of banking business on both sides:

[NBG] really needed to be part of a larger organization. We let First American take a very deep look at the bank because we knew that we were not selling them anything they wouldn't be totally satisfied in purchasing. It was not a situation where I was simply telling them no look, no see, no touch, just pay. I'm dealing with people with whom I have other dealings and I can't afford to pass on to them something they wouldn't be totally happy with."(45)

As Altman said at the same time:

It was clearly an arms-length business deal, that is to suggest we didn't get any special consideration in terms of price. . . It's a logical move for us in terms of our market expansion.(46)

The statements made by Clifford and Altman to the Committee and to journalists, and by Pharaon to regulators and journalists, cannot be reconciled with the documentary and testimonial accounts of all the other parties involved, as well as the findings of the Federal Reserve concerning the NBG sale to First American, and fails to account for the manner in which BCCI and Pharaon handled the transaction.

At BCCI, the transaction was viewed to be a matter of utmost secrecy, because of the risk to the bank if the regulators should understand that BCCI was directing the National Bank of Georgia sale. Paris branch manager Nazir Chinoy, who had no direct involvement with the sale of NBG to First American, only happened to learn of BCCI's involvement in the deal -- and the secrecy involved concerning BCCI's real role in it -- when Abedi came to Paris and lost a briefcase containing key documents regarding the sale:

Either in December 86 or January 87 Naqvi and Abedi came to meet with Pharaon and through a communications error I was not there to receive them at the airport. They wound up having to take a taxi to BCCI's offices at the Champs Elysee. Abedi gave the taxi driver $30 for a $5 drive. When Abedi got into the bank he said, where's my briefcase. All of us looked surprised. It had been left in the luggage compartment of the taxi. I talked to the girl at the airport and offered a $100 (1000 franc) reward. The next morning at 9 am I got a call. The taxi driver came up and said, the briefcase is there. Naqvi said, you collect it and bring it to London. I said I am leaving for Ivory Coast. They said never mind then you go back and catch your flight. It was a trip I didn't want to make. It's tiring. I saw written National Bank of Georgia written on the briefcase. Naqvi told me to open it and see if the papers are right to the top. I did and they were. The following week they came again and Naqvi and Abedi arranged for it. Abedi told Naqvi in Urdu, thank god the National Bank of Georgia deal is done. Then Naqvi signalled to Abedi to keep quiet because I was in the front seat.(47)

Internal documents produced by British lawyers for BCCI in 1990 and 1991 describe admissions by Naqvi to the bank's lawyers about the true state of affairs between Pharaon and BCCI, at a time when Pharaon was threatening to "trade information for protection from prosecution" with the Manhattan District Attorney if BCCI did not cooperate with Pharaon.(48) According to Naqvi, BCCI and Pharaon had undertaken a complex series of financial maneuvers in 1985, months before Clifford and Altman supposedly initiated the transaction over NBG, to sell Pharaon's interests in NBG to BCCI in response to Pharaon's shortages of funds, even setting an expected price for NBG's sale:

The bank agreed to settle [Pharaon's] 50% interest in advanced based on expected proceeds of $205 million, giving him $102.5 million [as BCCI already secretly owned the other half of National Bank of Georgia]. This payment date was taken as 17 May 1986. In fact Pharaon received some funds before this in 1985 and the remainder through 1986 and 1987, with a small balance carried forward. The payments were structured [not as payment for the stock but] as loans to Pharaon. These payments also covered $95 million due to Pharaon on the sale of his own BCC shares. . . the bank and Pharaon entered a formal agreement signed by Pharaon dated 17 October 1986 for the bank to receive a 10% commission for finding a buyer for the NBG shares. The agreement warrants that Pharaon/Interdec [sic] own all the NBG shares.(49)

When First American purchased National Bank of Georgia a year after Pharaon started receiving his "loans," the funds -- which came from BCCI itself into First American and from First American to NBG -- were used to pay off the "loans." Ironically, since the "loans" were used by BCCI to wipe out Pharaon's shares of BCCI itself and Pharaon's interests as a nominee in other BCCI-related institutions such as Attock Oil, the entire transaction was largely a wash, with the consequence of eliminating Pharaon's nominee interests in National Bank of Georgia, BCCI itself, and BCCI-related entities and consolidating (50)

CenTrust: BCCI Schemes With A Dirty S&L Throughout the 1980's, BCCI had wanted to establish a foot-hold in Florida through owning a bank in that state with the ability to take deposits from Americans, a power precluded BCCI's branch operation there under federal bank laws applying to foreign banks, which are outside the U.S. federal deposit insurance system. Internal memoranda at BCCI begin referring to a variety of possible acquisitions of banks in South Florida, and a number of different BCCI officials, including Abdur Sakhia, who testified before the Subcommittee, began investigating possible target banks in Florida for BCCI's acquisition. A memorandum from Sakhia to Abedi in early 1986, entitled, "Future Plans in the United States," describes BCCI's intentions:

With reference to our brief meeting in London, we are pursuing bank acquisition with Mr. Altman the two institutions I mentioned to you in London. As you are aware, the statewide banking in the state of Florida is achieved either through acquisition in different counties and subsequent merger or by incorporation of Denovo Banks in each county, and merging them subsequently . . . As I suggested to your good self, we may apply for state chartered agencies of BCC Overseas in Ft. Lauderdale, Orlando and Jacksonville counties. Because of our relationship with state authorities we can get approval ourselves within two to three months without involving any legal cost whatsoever. When we complete the acquisition of a bank we may then transfer existing agencies with the exception of the Miami Agency to the acquired bank with considerable savings of cost and time.(51)

In point of fact, BCCI had expanded its branch offices to three in Florida -- Miami, Tampa and Boca Raton -- but was unable to find a suitable target bank in Florida over the remainder of 1986. Moreover, BCCI had decided by early 1986 that whatever it did in Florida would have to be secret, because the Treasury losses discovered by BCCI's auditors in 1985 and announced publicly in December 1985 had made BCCI even more notorious in international banking circles, and would subject any proposed purpose of a U.S. bank by BCCI to even more scrutiny.(52) Sakhia, as well as others affiliated with BCCI, had already begun meeting with CenTrust chief David Paul beginning in early 1985 and continuing through 1986, socializing with Paul. According to Sakhia, nothing came of these meetings. (53)

By early 1987, however, Pharaon, who had developed a personal relationship with CenTrust Savings & Loan high-flyer David Paul, had advised BCCI that Paul was looking for financing for CenTrust, and might ultimately be willing to give up control of BCCI. Paul was at the time an active political fundraiser for the Democratic party, the Democratic Senate Campaign Committee, which the Subcommittee chairman then chaired, a number of Democratic politicians, and some Republican politicians and entities as well.

At the time, BCCI was not sufficiently satisfied it knew the full extent of CenTrust's problems to be willing to simply purchase the bank. But BCCI and CenTrust's top officials saw a second opportunity. BCCI did not have to make a final decision regarding its ownership of CenTrust. It was sufficient that it could help CenTrust strengthen its eroding capital base through a scheme that would help both CenTrust and BCCI. Working in collusion, Pharaon, BCCI and CenTrust could create a profitable market in CenTrust subordinated debentures by artificially propping up the price through BCCI buying debentures from CenTrust, demonstrating their marketability, and then CenTrust i turn agreeing to repurchase the debentures under a buy-back agreement.

As the Justice Department described the scheme in its late 1991 indictment of BCCI, Abedi, Naqvi, and Pharaon, Pharaon would seek to sell CenTrust subordinated debentures to investors; arrange for a branch of BCCI to purchase $25 million of the debentures to deceive other investors as to their market value; and CenTrust would in turn agree to repurchase any of the debentures that had been purchased by BCCI.(54) As a result, CenTrust -- whose ultimate collapse is likely to cause the taxpayers $1 billion to $2 billion -- was kept afloat and its true condition withheld from regulators. As the Justice Department has charged:

Paul and Pharaon on or about May 16, 1988 would and did cause Pharaon to use his position and relationship with BCCI to arrange BCCI's assistance in purchasing approximately $25,000,000 (par value) of the $150,000,000 offering, with the condition that the debentures would be purchased within a short period of time at full par value. Under this arrangement, the apparent purchaser of the debentures would hold the bonds briefly, creating the appearance that the $150 million offering had been fully sold, and then return the bonds and receive a full refund of the purchase price, assuming no risk of a drop in the market price while earning interest on the bonds for the period they were held.(55)

At first, Pharaon himself was intending to purchase the CenTrust debentures, but as was typical of Pharaon's ventures with BCCI, there was a great deal of flexibility between Pharaon and BCCI as to who between them would actually undertake a particular transaction.

Paris branch manager Nazir Chinoy, who testified before the Subcommittee, developed detailed knowledge of the arrangements involving Pharaon and BCCI as a result of his having had a surplus of dollar funds available for investment out of BCCI's Paris office. Chinoy had in 1988 advised Naqvi that Paris would be happy to loan funds for BCCI investments elsewhere, on a "parked loan" basis, under which the Paris office would not take the credit risk, which would be taken on by BCCI's Central Office in London, but would earn interest and commissions. Soon after, Chinoy received a call from BCCI London that Ghaith Pharaon wish to borrow $25 million to purchase the bonds of a U.S. bank. According to Chinoy:

They asked me, would I be interested in lending it? My initial response was, why is Mr. Naqvi giving this to Paris and not to New York or Miami region? Why not to the States? The answer I got back was that Dr. Pharaon -- I don't know why he was referred to as Dr. Pharoan -- that he had dealings with Paris and his staff knew our people in Paris and he was happy with the service in Paris and he would like it there. The rates were 1 percent front end fee and that was juicy -- $250,000 straight -- and 1 and a half over LIBOR. The loan would be for a period of six months. Collateral American bank bonds. Mr. Naqvi felt they were good bonds and there would be no problem in getting credit committee approval. He may have said the name but it didn't mean anything to me.(56)

Chinoy was told that Pharoan expected the price of the debentures to improve and would ultimately sell the bonds, and that he should make payment for the bonds to Drexel, Lambert, which was handling the transaction for the U.S. bank, CenTrust. According to Chinoy, in making the decision to go ahead with the financing, he was relying not on financial information for CenTrust or for Pharaon, but on the reputation of Drexel, Lambert as an investment banker which created markets, and on Naqvi in London.

If Mr. Naqvi as president of the bank says the collateral is good, he knows better than you. I said fine, and set in progress the loan formalities. The paper work was set into operation and we got instructions to pay Drexel in NY. Payment was made through traditional BCCI bankers in New York Security Pacific. The bonds were held by Drexel in NY to order of BCCI-Paris. Almost $25 million were disbursed. Later negotiations with Imran Iman indicated that Pharoan was not willing to let BCCI buy the bonds after all, instead he wanted to buy them and have BCCI loan him the funds. In April or May of 1988, we had booked a front-end fee of $200,000. $25 million was one of the biggest loans of Paris to an individual. If you did any loan over $5 million you prepared a credit report based on the Bank of Americas loan reporting procedure adopted years ago -- profitability, shareholders profitability etc. 15 pages. In this case, we did not prepare this. We did a CYA letter instead to cover ourselves -- shot off a memo, signed by me, to London.(57)

As branch manager of BCCI Paris, Chinoy was told by BCCI London that he had to go ahead with the transaction however it was structured, and regardless of how the terms changed over the course of the transaction. Ultimately, the debentures arrived at BCCI-Paris as security, and Pharaon later sold the bonds and BCCI Paris was repaid, earning almost $700,000, with another $300,000 being provided to Pharaon as commission or interest. The funds for the repayment of BCCI-Paris in turn came from BCCI London.(58)

Later, Chinoy saw a fabricated document, ostensibly from the Paris branch of BCCI, addressed to BCCI's credit committee and requesting the loans for the CenTrust transaction, which he believed was created by Naqvi after the fact to cover the unusual transaction and to make it appear to auditors that authority for it had been requested and granted by the committee. According to Chinoy, Pharaon's "profits" on CenTrust were transferred to BCCI's offices in Bahrain as a means of reducing Pharaon's defaults to BCCI there, and demonstrating to auditors that Pharaon's loans from BCCI were being serviced.(59)

In the meantime, BCCI also agreed to finance Pharaon's purchase of an interest in CenTrust, with the possibility of assuming actual control of the bank.

On August 12, 1987, Pharaon filed disclosure statements with the SEC stating that he had purchased 16.9 percent of CenTrust common stock and 24.4 percent of its Series One participating stock, a preferred stock, from two insurance companies which had purchased the shares the preceding year. Reminiscent of the FGB takeover purchases of just under the 5 percent holdings required for reporting in 1977, this represented just under the 25 percent ownership that would constitute the legal definition of "control" of CenTrust by Pharaon. The next day, Paul advised inquiring journalists that Pharaon was "one of my very close personal friends. He is probably one of the three of four closest personal friends Mrs. Paul and I have." By January 7, 1988, Pharaon acquired 748,901 shares of voting common stock of CenTrust, and on April 14, 1989, he purchased an additional 812-681 shares of Centrust, bringing his total holdings of CenTrust voting shares to 1,561,582 shares. At no time did Pharaon or BCCI disclose the fact that all of these purchases had been financed by BCCI, and that the CenTrust shares purchased by Pharaon would be held by BCCI as security for those borrowings, placing BCCI in the position of being able to control CenTrust. As a Memorandum of Deposit signed by Pharaon and BCCI stated, "BCC or its nominees may exercise . . . in respect of the [CenTrust] Securities or any of them any voting rights as if BCC or its nominees were a sole beneficial owner thereof." At the very time that BCCI was under indictment in Tampa, Florida for money laundering, it had secretly acquired and controlled the largest S&L in Florida, CenTrust.(60)

Ironically, consistent with its pattern of expanding into areas of operation that BCCI had been interested in exploiting, First American also purchased a bank in Florida, the Bank of Escambia, at almost the same time as BCCI acquired its interest in CenTrust. The purchase of the bank, renamed First American Florida, caused federal regulators to ask for further information concerning First American's dealings with BCCI. On receiving assurances that First American's shareholders still were not nominees for BCCI, and that BCCI was not in back of the transaction, the Federal Reserve permitted the purchase to go forward.(61)

BCCI's Attempts to Sell its US Empire BCCI's secret purchase of U.S. banks had been extraordinarily expensive for BCCI. Because it had used nominee arrangements to pay for the banks, its ownership of the banks was carried on its books as loans which were not being serviced. As a result, each year, BCCI was forced to add the interest to the amount secured by its shares of First American to its books. Additionally, First American's series of acquisitions, including operations in Tennessee and Florida, had stripped BCCI of further capital. By 1989, Price Waterhouse, as BCCI's auditors, were becoming increasingly unhappy and vocal about the size of BCCI's exposure on First American, and demanding that BCCI contact the shareholders and have them at least been servicing the loans they supposedly had. Since both the shareholders and BCCI knew the loans were bogus, BCCI was left in the position of having to consider the forced sale of First American.

Indeed, that strategy was first considered, and attempted, by BCCI, in 1986 in connection with the purchases of BCCI and CCAH stock by the Khalid bin Mahfouz, head of the National Commercial Bank of Saudi Arabia and the most powerful banker in the Middle East. Bin Mahfouz had purchased shares of both BCCI and CCAH under a complex agreement that would permit him to purchase both banks, or to hold his interests temporarily with BCCI guaranteeing to buy them back at no risk to bin Mahfouz. After auditors for National Commercial Bank raised questions about bin Mahfouz's actions regarding BCCI, the transactions were fully unwound by 1989, leaving the First American problem for BCCI unsolved.

In 1989, after meetings with auditors, BCCI concluded that it should place First American on the market, and asked Clifford to retain an investment banker to seek purchasers for First American. As an internal task force headed by BCCI chief financial officer Massihur Rahman noted in April, 1990:

Since 1989 the bank has advised the major borrowers to dispose of their shares in CCAH to repay their loans in BCCI . . . the legal representatives of the shareholders of CCAH have retained the services of a major U.S. investment bank to advise, evaluate and assist either in the outright sale or in the merger of the CCAH group of First American banks with a larger banking entity.(62)

Goldman Sachs was retained by Clifford, on behalf of "CCAH" in July 1989. On October 10, 1989, Clifford wrote First American's shareholders to inform them that they had been approached by Barnett Banks "to discuss their interest in a possible merger or acquisition arrangement with First American," and had retained Goldman Sachs to evaluate the "express interest of Barnett Banks as well as other possible candidates."(63)

By April, 1990, Price Waterhouse concluded that BCCI's financial situation was perilous, and demanded that action be taken immediately. BCCI's $702 million exposure had not been reduced, as bank officials had promised, but had gone up, with interest, to a staggering amount -- $870 million. Price Waterhouse concluded that based on its estimate, if a buyer were found, BCCI would still lose $200 million or more on a sale of First American at 2.1 times net tangible assets.(64) Price Waterhouse also warned that if a buyer were not found, the auditors might well classify a portion of this debt, wiping out BCCI capital in the process and drawing public attention to the loans in BCCI's annual report. Given the ignorance of U.S. regulators about the nature of BCCI's lending for First American, this would be a catastrophe.

The only way out of this problem was a sale of First American, and the initial interest from Barnett Banks had disappeared. However, at Clifford's recommendation, Goldman Sachs had also contacted NCNB, now known as Nation's Bank, to determine whether NCNB might be interested in purchasing First American. NCNB was indeed interested, and prepared to offer $1 billion for First American based on the financial information provided to them by Goldman Sachs. The offer, which represented 1.5 book value, was subject to a number of conditions, including "satisfactory completion of normal business and legal due diligence by both you and us."(65) Oddly enough, NCNB and BCCI never moved ahead with the due diligence. Little further paperwork was done, and within two months, BCCI executives were told that negotiations had stopped entirely.(66)

By the end of July, BCCI's board of directors had become involved in seeking other ways to dispose of BCCI's holdings in First American. In a letter from BCCI director J.D. Van Oenen to BCCI's then senior executive, Swaleh Naqvi, Van Oenen noted that there were "many problems of which we were not fully aware" in selling the franchise, because of limits on interstate banking, foreign ownership, and because of unspecified problems with the New York operation of First American. Van Oenen noted that if BCCI could not sell First American, it would lose another $60 to $70 million by the end of 1990 on holding the bank. Further, Price Waterhouse had developed an "attitude" regarding the First American shares that might well result in the auditors classifying a portion of the loans, which could damage BCCI's balance sheets further. An attachment to the Van Oenen letter showed annual losses for BCCI connected with First American as amounting to $106 million, and that BCCI would have to sell First American at three times book value to break even, at a time when it had been unable to move ahead with an offer for half that amount.(67)

According to the memorandum the preferred option BCCI was considering was the "internal solution" -- a sale of First American to Abu Dhabi. Unfortunately, the questions that regulators would raise appeared to make this approach impossible. Alternatively, Abu Dhabi might be convinced to lend funds to BCCI and "call the loans, at a time of their choosing, take possession of the security and thus gain two years breathing space to dispose of it." Under this scheme, Abu Dhabi would in effect replace BCCI as the lender to the nominees, and then remove them at its convenience, at which time it could hold or sell First American as it pleased. Van Oenen acknowledged that there was a fundamental flaw with this plan -- if Abu Dhabi called all of its loans simultaneously, regulators would again ask questions, and might charge that Abu Dhabi had secretly gained control of the bank without due notification.(68)

A third approach recommended in the BCCI/Van Oenen memorandum would involve BCCI "garaging" loans with other institutions to "slim down" its balance sheets, either on a "re-purchase basis," or "as an outright sale." The former approach amounted to juggling BCCI's books to take its loans for First American off the balance sheets. The approach had already been effectively used by BCCI in connection with purchases and sales of CCAH stock by Khalid bin Mahfouz and the National Commercial Bank of Saudi Arabia in 1986. But it would do nothing to resolve the underlying losses other than buy time, and it would face severe criticism from regulators, if they found out, and from BCCI's own auditors. Outright sale of First American stock was simpler, but faced an equally daunting objection -- no institution would buy the stock without some form of guarantee from BCCI's shareholders, and favorable terms, costing BCCI further funds it could not afford.(69)

The BCCI directors also wished further to explore selling First American to a domestic U.S. bank, but recognized that the only bank that expressed interest, NCNB, had for unknown reasons done nothing further to move ahead with negotiations. Finally, they considered the possibility of the sale of First American to a foreign bank, noting that the only identifiable institution that might be interested would be the National Bank of Abu Dhabi, a very small institution, with assets of $150 million, that could "theoretically qualify for a 'reverse' procedure by merging into CCAH." Van Oenen acknowledged that "the chances [for approval of such a transaction] do not rate very high."(70)

In fact, by the summer of 1990, the Morgenthau investigation of BCCI's activities in the United States had already moved into high gear, and BCCI's lawyers in the United States, including Clifford and Altman, were in the position of resisting the attempts of the New York District Attorney to obtain documents concerning the relationship between First American and BCCI. Subcommittee staff were also questioning the relationship, and had scheduled hearings for July or August, 1990 on the topic of BCCI's possible ownership of First American. In such an environment, any orderly sale of First American to any potential buyer would be fraught with difficulty, and there is no documentation following the Van Oenen letter indicating that an actual sale of First American was anticipated by anyone.

Consequences for First American

Of BCCI-Related Expansion Up and until the indictment of BCCI in October, 1988 in Tampa on money-laundering charges, BCCI continued its expansion and consolidation in the United States, with First American expanding operations in Tennessee and Florida, and considering the development of operations in Utah and elsewhere. While the metropolitan branches of First American were kept largely free of BCCI's direct involvement, its New York and Georgia operations were never completely free of BCCI's influence, and even in the metropolitan branches of First American, BCCI had provided a variety of services up to the Tampa indictment. As Abdur Sakhia concluded:

You have enumerated the whole list of interlocking relationship, joint business, joint marketing, joint . . . staff transfers, hiring of staff, merger of First American and National Bank of Georgia, renting of space, appointment of chief executives . . . how the raising of capital and purchase prices were circulated. It is nothing but one institution.(71)

In the face of Clifford and Altman's position that First American bank was never controlled by BCCI, and that the two operations were separate, officials at First American New York took pains to reiterate to BCCI officials at far-away locations elsewhere that the two banks were operating jointly. One such letter, to a BCCI official in Nairobi, Kenya, written on First American stationery, and signed by two First American officials specifically sought to rebut assertions to the contrary:

Recently an article appears in the Financial Times of February 13, 1990 ascribing certain comments to an unnamed senior First American officer. We have taken exception to the report where it states that, in the future, our two institutions shall not be dealing together.

To set the record straight, we wish to reiterate that First American values the relationship between our two institutions, and we are continually desirous of enhancing it. As you are aware, we are maintaining about forty accounts of the BCC Group's various locations. Additionally, sizable credit facilities are also available in all categories.(72)

Unfortunately, a number of BCCI's purchases in the U.S. were proving unprofitable. Independence Bank grew ever weaker as the value of its real estate plummeted. First American New York's operations never justified the costs of the space in Manhattan which BCCI insisted that it lease, and which was still costing First American substantial sums as of May, 1992. And National Bank of Georgia remained a weak institution, with very significant problems, including, as bank regulators late found, "inadequate supervision by board and management, an eroding capital base, an ineffective corporate liquidity function, and deteriorating asset quality and earnings performance."(73)

Even First American's core banks had become severely stressed by the end of the 1980's, in part due to the softening real estate and office building markets on the East Coast generally and in metropolitan Washington in particular. Thus, by the time BCCI was closed internationally on July 5, 1991, federal regulators had sought and received an additional $200 million in new financing and capitalization for First American to keep the bank from being at risk of failure even before the avalanche of negative publicity hit the bank during the second and third quarters of 1991.

By the time BCCI closed, federal bank organizations would find that overall, the First American banks owned by BCCI were "run in a very disorganized manner [with] very little direction being given to the banks" by central management, and Georgia and New York operating "virtually autonomously" from the central management associated with the metropolitan banks of First American.(74)

Similarly, First American's current management, including president George L. Davis, told the Subcommittee in May that despite the opportunities for First American to have used its unique multi-state status to provide enhanced banking services, in actual fact they found the various franchises of First American to have never been centrally coordinated or managed. Instead, each entity had maintained a largely separate existence from others, with the result that there were few benefits to First American from extending its geographic reach. Accordingly, Clifford and Altman's successors at First American were choosing to sell off the various branches of First American other than the metropolitan banks, because they could find no adequate business purpose to keep them.(75)

Conclusions By the time of the October 1988 indictment of BCCI in Tampa as a result of a Customs money-laundering sting operation, BCCI had secretly acquired a coast-to-coast network of United States banks operating in New York, Maryland, Virginia, the District of Colombia, Georgia, Florida, Tennessee, and California without U.S. or state regulators ever catching on to BCCI's ownership and control of the institutions. Accomplishing this goal had been expensive for BCCI, which had consistently paid more for each bank than the market would dictate for any normal banking institution. Moreover, in some cases, such as the lease for First American New York, BCCI made poor business judgments which cost First American money. In other cases, such as the purchase of National Bank of Georgia, BCCI financed First American's costs, so that First American itself was not stripped of its resources by the purchase, but found itself buying a bank that it did not need, failed to make use of, and which had severe ongoing operational problems that were clearly not taken into account in its pricing.

Thus, even apart from the events that took place as a consequence of the Tampa money-laundering sting and the concurrent Subcommittee investigation of BCCI in 1988, and the resulting investigation conducted by New York District Attorney Morgenthau in 1989, BCCI's U.S. empire was in serious difficulties by the end of the 1980's. Maintaining that empire was already proving increasingly costly to BCCI, which was already being pressured to liquidate its loans to First American shareholders by its auditors and the Bank of England. Yet through financial manipulations which had become routine at BCCI, these banks were kept afloat regardless, because the consequences for BCCI of not maintaining them would have been catastrophic.

1. See e.g. Clifford statement to First American Board re First American growth, October 4, 1984.

2. Senate BCCI document 391-393, produced by BCCI liquidators July, 1991.

3. Sakhia, S. Hrg. 102-350 Pt 2. p. 505.

4. Findings, U.S. Board of Governors of the Federal Reserve System, In the Matter of BCCI, 91-043, July 29, 1991, Paragraphs 165-167.

5. Sakhia, staff interviews, October 7, 1991.

6. Abdur Sakhia, staff interviews, October, 1991.

7. U.S. Board of Governors of the Federal Reserve, In the Matter of BCCI Holdings, 91-043, Paragraph 61, July 29, 1991.

8. Altman testimony, S. Hrg. 102-350 Pt. 3 pp. 234-235.

9. Board of Governors Federal Reserve System Exhibit AD 134, Afridi to Naqvi, July 25, 1983.

10. Id.

11. Sakhia testimony, S Hrg. 102-350 Pt. 2 p. 513.

12. S. Hrg. 102-350 Pt. 3 p. 332.

13. Charges, Board of Governors of the Federal Reserve System, In the Matter of BCCI Holdings, 91-043, July 29, 1991, Paragraphs 176-178.

14. Travel reimbursement records of Tariq Jamil, 1981-1987, First American Georgia.

15. Minutes of U.S. Marketing Meeting, April 24, 1985, S. Hrg. 102-350, Pt. 3 p. 336.

16. Minutes of U.S. Marketing Meeting, S. Hrg. 102-350 Pt 3 p. 342.

17. Testimony of Sakhia, S. Hrg. 102-350 Pt. 2 p. 547.

18. Staff interview, Chinoy, March 9, 1992.

19. Id.

20. Sakhia testimony, S. Hrg. 102-350 Pt. 2 pp. 598-599.

21. BCCI Discussion Paper, dated "London, 1985," retrieved from documents at BCCI offices at 350 Park Avenue, New York, March, 1992.

22. Sani Ahmed, BCCI internal memo, July 5, 1985.

23. BCCI Washington Rep Office Marketing Report, September 30, 1985.

24. BCCI Business Call Memorandum, April 18, 1986.

25. First American Bank/BCCI joint presentation, United Press International, July 1986, retrieved from BCCI files, BCCI-New York.

26. See Office Call Report Form, S.P. Schmidt, November 20, 1986.

27. First American documents, Barry Blank to Mario Vasquez Rana, UPI, May 27, 1986; Susan Schmidt to Miguel A. Bursat, General Manager, UPI, July 23, 1986; BCCI memoranda, Akbar Bilgrami, to S.M. Shafi, August 8, 1986; letter, Susan [Schmidt] to Amjad [Awan], BCCI, regarding UPI account, September 26, 1986.

28. Memo, First American New York, "Correspondent Banking Relationship Between First American Bank of New York and BCCI," February 7, 1991.

29. Charges, Board of Governors of the Federal Reserve System, In the Matter of Ghaith R. Pharaon, 91-037, September 17, 1991, Paragraphs 10-15.

30. Strictly Privileged & Confidential Produced For Legal Advice Memorandum, Pharaon, Background Paper, For Discussion with Messrs Blair and Siddiqui, Considerations Before Pharaon Meeting 5/6 March 1991.

31. Id, paragraphs 20-23.

32. Id, paragraph 28.

33. FDIC, Report of Examination, November 25, 1991.

34. Prepared testimony of Comptroller of the Currency, May 14, 1992.

35. Charges, Board of Governors of the Federal Reserve, In the Matter of BCCI, 91-043, July 29, 1991, Paragraphs 179-195.

36. Id.

37. See summary of charges, Federal Reserve, In re Clifford, id., Paragraph 129.

38. Id. Paragraph 184.

39. Id,. Paragraphs 184-187.

40. Charges, Board of Governors of the Federal Reserve, In the Matter of BCCI, 91-043, July 29, 1991, Paragraph 188.

41. Sakhia testimony, S. Hrg. 102-350 Pt. 2 p. 604.

42. S. Hrg. 102-350 Pt. 2, p. 606.

43. Sakhia letter to Abedi, Future Plans in the United States, February 10, 1986, S. Hrg. 102-350, Pt. 2 p. 595.

44. Written statement, Clifford and Altman, S. Hrg. 102-350 Pt. 3 p. 78.

45. Atlanta Business Journal, April 27, 1987, "Pharaonic reflections: Thoughts on an empire."

46. Id.

47. Staff interview, Chinoy, March 9, 1992.

48. Privileged and Confidential Pharaon Background Paper, unattributed, "For Discussion With Messrs. Blair and Siddiqi, Considerations Before Pharaon Meeting 5/6 March 1991.

49. Id.

50. See February 25, 1990 draft "Strictly Privileged & Confidential, Produced for Legal Advice, re: Dr. GR Pharaon," BCCI Attorneys, London.

51. Sakhia letter to Abedi, Future Plans in the United States, February 10, 1986, S. Hrg. 102-350, Pt. 2 p. 595.

52. Sakhia, S. Hrg. 102-350, Pt. 2 p. 606.

53. S. Hrg. 102-350, Pt. 2 pp. 643-650.

54. Indictment, U.S. v. BCCI, US District Court for DC, Grand Jury January 16, 1991.

55. U.S. v. Paul, Indictment, US District Court for the Southern District of Florida, February 23, 1992.

56. Staff interviews, Chinoy, March 9, 1992.

57. Chinoy id.

58. Chinoy, id.

59. Chinoy, id.

60. Charges, Board of Governors of the Federal Reserve, In the Matter of BCCI, July 29, 1991, Paragraphs 201-206.

61. S. Hrg. 102-350 Pt. 3 p. 83.

62. S. Hrg. 102-350 Pt. 1 p. 408.

63. S. Hrg. 102-350 Pt. 3 p. 453.

64. Price Waterhouse letter to shareholder, S. Hrg. 102-350 Pt. 1 p. 483.

65. S. Hrg. 102-350 Pt. 3 pp. 457-458.

66. BCCI Memo from J.D. van Oenen to S. Naqvi, July 30, 1990, S. Hrg. 102-350 Pt. 3 pp. 463-479.

67. Id.

68. Id.

69. See e.g. Charges, Board of Governors of the Federal Reserve System, In the matter of Khalid bin Mahfouz, 92-074, July 2, 1992.

70. Id.

71. S. Hrg. 102-350 Pt. 2 p. 640.

72. Letter from Maurice Acoca and Mansoor Shafi to S. S. Dinamani, February 21, 1990, First American New York to BCCI Kenya.

73. OCC letter to the Board of Directors, First American Bank Georgia, as of August 30, 1990.

74. OCC, FAB Exam Status Report, June 13, 1991.

75. Staff interview, George Davis, May, 1992.

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BCCI AND LAW ENFORCEMENT:

The Justice Department Introduction Over the past two years, the Justice Department's handling of BCCI has been criticized in numerous editorials in major newspapers, including the Wall Street Journal, the Washington Post, and the New York Times, reflecting similar criticism on the part of several Congressmen, including the chairman of the Subcommittee, Senator Kerry; the chief Customs undercover officer who handled the BCCI drug-money laundering sting, Robert Mazur; his superior at Customs, Commissioner William von Raab; New York District Attorney Robert Morgenthau; former Senate investigator Jack Blum, and, within the Justice Department itself, the former U.S. Attorney for the Southern District of Florida, Dexter Lehtinen.

Typical editorials criticized Justice's prosecution of BCCI as "sluggish," "conspicuously slow," "inattentive," and "lethargic." Several editorials noted that there had been "poor cooperation" by Justice with other agencies. One stated that "the Justice Department seems to have been holding up information that should have been passed on" to regulators and others. Another that "the Justice Department's secretive conduct in dealing with BCCI requires a better explanation than any so far offered."(1)

In response to all these critics, the Justice Department has suggested that their comments are ill-informed, their motives suspect, and that in time, the wisdom and probity of the Justice Department's approach would emerge. As Assistant Attorney General Robert S. Mueller III stated to the Subcommittee in prepared testimony on November 21, 1991:

We are responsible, ethical prosecutors. We will not indict simply to get favorable press coverage or to quiet our critics. We require evidence sufficient to prove a crime beyond a reasonable doubt, and we will not indict if that evidence does not exist . . . It is premature to assess our performance. We cannot even respond fully to criticism, because we cannot reveal grand jury proceedings or the details of our investigations. Our record when the investigations and prosecutions have concluded will speak for itself. . . a fair review of the available facts will show that the Department of Justice has done an excellent job on the BCCI investigations, and that the criticisms of the Department are fundamentally unfair.(2)

Unfortunately, as time has passed it has become increasingly clear that the Justice Department did indeed make critical errors in its handling of BCCI prior to the appointment of Attorney General Barr in October, 1991, and moreover masked inactivity in prosecuting and investigating the bank by advising critics tat matters pertaining to BCCI were "under investigation," when in fact they were not.

These critical strategic errors, which arose in the earliest stages of the Justice Department's handling of the Customs sting, Operation C-Chase, in 1988, were compounded by the Justice Department's attempts to hinder other legitimate investigative efforts, and by the Justice Department's inability to admit that it had made any of these mistakes.

While mid-level officials in the US Attorney's office in Tampa worked long hours under atrocious conditions to bring the money laundering case against BCCI which arose out of Operation C-Chase, it is clear now, and should have been clear as of the date of the C-Chase indictment against BCCI in October 1988, that BCCI represented much more than a drug money laundering case.

Nevertheless, the US Attorney's office chose to bring, and not to supersede, a limited, money-laundering case against the bank in Florida and indicted several mid-level BCCI officials, throwing out a possible Racketeering Influenced and Corrupt Organizations (RICO) case that would have enabled it to have gone after all of BCCI's assets in the United States -- possibly including any interest it had in the First American bank.

The US Attorney in Tampa then made its second strategic mistake as it allowed the bank to plead out while prosecuting the individual bankers. BCCI mounted a $20 million defense in Florida and provided for the legal costs and living expenses of its former employees throughout their trials. The bank's strategy was obviously to blunt to the extent possible any attempt by the US Attorney's office to "flip" individual defendants, causing them to plead out of the case and to agree to provide damaging testimony against the institution itself. BCCI's strategy largely succeeded when in January, 1990, the U.S. Attorney and Justice Department agreed to permit the bank to avoid trial, and pled guilty to the narrow set of offenses contained in the indictment, and thereby end investigation and prosecution of BCCI in the only judicial district where any such activity existed. The October, 1988 indictment had charged BCCI as institution with having a corporate policy of soliciting drug money. Following the plea, prosecutors changed their underlying theory of the case to suggest that the real guilt lay not with the bank, but with the individual bankers at BCCI who happened to fall into the net of the Customs' sting.

The result was that the Justice Department permitted BCCI to sever its Florida operations and sacrifice a handful of bank employees and thereby to continue its worldwide criminal activity.

Soon after the January 1990 plea agreement, the Justice Department stopped investigating BCCI entirely. Despite the fact that hundreds of leads had not been followed up on in the C-Chase investigation, and that law enforcement officials in the filed recognized the importance of those leads, the Justice Department took which government agents later characterized as a "time-out".

There does not appear to have been anything sinister that prompted this decision. Rather, the decision to stop investigating BCCI appears to be an example of poor communication, overwork, understaffing, inadequate understanding of the meaning of information in the possession of Justice, and a flawed prosecutorial and investigative strategy. It was also the unintended consequence of the BCCI case arising as a Treasury Department investigation brought by Customs and IRS agents only, without the involvement of the FBI. Given the focus of Treasury agents on crimes pertaining to issues such as money laundering and customs violations, the failure to bring the FBI into the case may have contributed to the lack of follow through on the broader criminality pertaining to BCCI.

During the remainder of 1990 and the first half of 1991, it became increasingly clear from the Subcommittee's investigation, New York District Attorney Morgenthau's investigation and media investigations that BCCI was an international criminal organization. Throughout that period, the Justice Department found itself in the apparently uncomfortable position of having to give the public impression that it was aggressively moving against BCCI, at a time when it was doing very little concerning the bank, and investigators and prosecutors involved in the Tampa case were no longer working on matters pertaining to BCCI. Instead of immediately renewing their investigation, the Department sought to impede the investigations of others through a variety of mechanisms, ranging from not making witnesses available, to not returning telephone calls, to claiming that every aspect of the case was under investigation in a period when little, if anything, was being done.

Only after regulatory agencies around the world seized the bank on July 5, 1991, did the Justice Department begin to give the BCCI investigation an unprecedented urgency and importance. Under Assistant Attorney General Mueller, the Department assigned nearly three dozen attorneys to the case. During 1992, the Department brought several indictments, which remained narrower, less detailed and, at times, seemingly in response to the efforts of District Attorney Robert Morgenthau of New York, the Federal Reserve, or both.

Findings ** Federal prosecutors in Tampa handling the 1988 drug money laundering indictment of BCCI failed to recognize the importance of information they received concerning BCCI's other crimes, including its apparent secret ownership of First American. As a result, they failed adequately to investigate these allegations themselves, or to refer this portion of the case to the FBI and other agencies at the Justice Department who could have properly investigated the additional information.

** The Justice Department, along with the U.S. Customs Service and Treasury Departments, failed to provide adequate support and assistance to investigators and prosecutors working on the case against BCCI in 1988 and 1989, contributing to conditions that ultimately caused the chief undercover agent who handled the sting against BCCI to quit Customs entirely.

** The January 1990 plea agreement between BCCI and the U.S. Attorney in Tampa kept BCCI alive, and had the effect of discouraging BCCI's officials from telling the U.S. what they knew about BCCI's larger criminality, including its ownership of First American and other U.S. banks.

** The Justice Department essentially stopped investigating BCCI following the plea agreement, until press accounts, Federal Reserve action, and the New York District Attorney's investigation in New York forced them into action in mid-1991.

** Justice Department personnel in Washington lobbied state regulators to keep BCCI open after the January 1990 plea agreement, following lobbying of them by former Justice Department personnel now representing BCCI.

** Relations between main Justice in Washington and the U.S. Attorney for Miami, Dexter Lehtinen, broke down on BCCI-related prosecutions, and key actions on BCCI-related cases in Miami were, as a result, delayed for months during 1991.

** Justice Department personnel in Washington, Miami, and Tampa actively obstructed and impeded Congressional attempts to investigate BCCI in 1990, and this practice continued to some extent until William P. Barr became Attorney General in late October, 1991.

** Justice Department personnel in Washington, Miami and Tampa obstructed and impeded attempts by New York District Attorney Robert Morgenthau to obtain critical information concerning BCCI in 1989, 1990, and 1991, and in one case, a federal prosecutor lied to Morgenthau's office concerning the existence of such material. Important failures of cooperation continued to take place until William P. Barr became Attorney General in late October, 1991.

** Cooperation by the Justice Department with the Federal Reserve was very limited until after BCCI's global closure on July 5, 1991.

** Some public statements by the Justice Department concerning its handling of matters pertaining to BCCI were more cleverly crafted than true.

Early Warnings About BCCI Although the Justice Department did not indict BCCI until 1988, there were rumors about the bank virtually since its inception. BCCI officially first came to the United States as a branch in New York during the 1970's. New York state banking officials subsequently denied BCCI's takeover of a small bank. Furthermore, bank regulators and law enforcement agencies in other countries, such as the United Kingdom, had reservations about the bank. The British, in fact, refused to grant BCCI full banking status. According to U.S. banking regulators, they routinely make inquiries to the Justice Department about BCCI.

In September 1991, the House Subcommittee on Crime and Criminal Justice, issued a report detailing federal law enforcement's handling of allegations involving BCCI. According to the report, "[F]ederal authorities had scores of contacts concerning BCCI as far back as 1983," and "the government had enough information on BCCI by the mid-1980's to have put BCCI on the most wanted list."(3)

Among the findings of the House Subcommittee:

a.) The DEA had a plethora of case information which, taken in totality, led to the inevitable conclusion that "BCCI is the place to launder money."(4) The report stated that:

[A] review of the files has, so far, revealed 125 cases that have been identified "as having something to do with BCCI." Most of the cases are undercover storefront operations which lead to warrants to seize BCCI bank accounts containing suspected drug proceeds.(5)

b.) Senior IRS officials refused to begin an undercover investigation of BCCI despite the fact that the criminal division had developed important information about the bank. The report states:

Former BCCI employee Aziz Rehman was interviewed by IRS special agents in IRS's Miami office in April 1984 shortly after he was fired by BCCI for refusing to transport large volumes of currency which he believed to be in violation of existing Federal laws. He provided them with documentation of deposits to a nonexistent BCCI branch in Nassau, Bahamas, and described his role as a former courier for large cash deposits to BCCI accounts of "customers" and other banks.(6)

c.) The Customs Service had information as far back as 1983 concerning the illegal smuggling operations of one of BCCI biggest customers, a Jordanian arms merchant named Munter Bilbeisi. According to the House Subcommittee report, "Any reasonable investigation into Bilbeisi's operations would have uncovered that Bilbeisi's coffee business had established a financial relationship with BCCI in 1983, and that BCCI had issued phony letters of credit from 1983 to 1986 to finance smuggling."(7)

d.) Representatives of the Government of India provided the IRS with evidence of a money laundering scheme involving BCCI. However, according to the report, because India did not have a tax treaty with the United States, the allegations were not followed-up on.(8)

Abdur Sakhia, the former regional manager for BCCI in the United States, testified before the Subcommittee on Narcotics, Terrorism and International Operations that he met with Justice Department officials in the autumn of 1984 in the office of former then-Senator Paula Hawkins to discuss allegations of BCCI's involvement in drug money laundering. Sakhia testified that he was told by the President of BCCI, Agha Hasan Abedi, to meet with Senator Hawkins after the Senator, on a trip to Pakistan, told President Zia that she was concerned about drug money laundering by a Pakistani bank in the Cayman Islands, which she subsequently identified as BCCI. According to Sakhia, he was told by the Justice Department that BCCI was not under investigation and that he subsequently learned that the US Department of State had communicated the same message to the Pakistani government.(9)

The Subcommittee has been unable to determine the source for Senator Hawkin's information, although notes that she was at the time the Chairman of the Subcommittee on Narcotics, Terrorism and International Operations and would have had access to classified material from both the DEA and the CIA.

There is also evidence that the regulators had passed on information about BCCI to the Justice Department in 1987. Robert Forrestal, President of the Federal Reserve of Atlanta, testified before the House Banking Committee on Sept. 1992, and stated that "while participating in an April, 1987 examination of BCCI Miami, our examiners discovered possible money laundering transactions that appeared to be structured to evade reporting requirements, The transactions were detected in a review of checks and money orders sent from BCCI Panama to BCCI Miami for payment. A criminal referral concerning the activities discovered at the Miami agency was filed with the U.S. Attorney's office in Miami and with the Federal Bureau of Investigation in North Miami Beach on May 18, 1987.

Operation C-Chase In 1986 undercover Customs agent Robert Mazur wrote a memorandum to his superiors proposing an undercover money laundering operation called Operation C-Chase. According to Mazur, the proposal sprung from almost two and one half years of undercover work in Florida on international money laundering. Mazur's proposal was accepted and the Customs Agency notified the Justice Department which provided strategic and tactical assistance.(10)

Mazur, who coordinated the undercover operation, posed as a businessman coordinating a number of investment and mortgage businesses which were used as a cover for the laundering of drug proceeds. According to Mazur, after the front was established, an informant approached members of a Colombian drug ring based in Medellin. Cartel members slowly gained confidence in Mazur and his team and over a period of time began to provide him with substantial amounts to drug money to be laundered. Mazur testified that in an "effort to ultimately obtain a Panamanian account" he opened an account at BCCI because it was the only bank with which he was familiar that had international branches.(11) Mazur testified that he had not been "armed with any particular information that BCCI was involved in that type of activity."(12)

Operation C-Chase ultimately proved an extremely successful undercover operation and helped to shed light on the massive drug money laundering taking place in the United States. Mazur testified that one of the money launderers ensnared in Operation C-Chase had gross receipts in the United States "of roughly $200 million per month in currency that needed to be removed from the United States on his behalf."(13) While the early stages of the investigation focused on the cartel and drug money laundering, as Mazur learned more about BCCI, he began to focus his efforts on the bank's complicity in money laundering.

From his very first meeting with officials at BCCI, Mazur was struck by the bank's "polished marketing approach . . . everything fit to have an institution that might have an ulterior motive for its locations."(14) After Mazur checked with local prosecutors in Tampa and discovered that the bank showed up in another drug-related investigation, his suspicions were heightened.(15) Directing the activities of his undercover team, Mazur set about to investigate BCCI and he quickly discovered that the bank was all too willing to assist him in the laundering of funds.

Mazur testified that after he opened his account in Panama:

"the bank came back to have a broader relationship ... an operations officer .. recognized the nature of the transactions and called me, unsolicited, to inform me that he would be in the United States and that he felt the bank, being a full service bank, had the types of abilities to keep my transactions conducted in a very confidential way that would enhance the businesses I was involved in."(16)

According to Mazur, the bank provided him with a sophisticated means for laundering money which entailed receiving the cash at "either their Panama branch or their Luxembourg branch and several locations in the Middle East." Mazur described in Subcommittee testimony how an officer at BCCI, Sayed Hussain, advised him not to repeat the mistakes that other drug money launderers had made in Operation Pisces, a previous U.S. government undercover money laundering sting which had traced the proceeds of drug money laundering to BCCI accounts in Panama. BCCI clients had been implicated in that government undercover operation and apparently Hussain believed that there were better ways to conceal client's funds.

Mazur told the Subcommittee that his undercover operation handled "roughly $14 million through BCCI on behalf of clients." BCCI earned banking fees on these transactions totaling in excess of $250,000, but according to Mazur the bank was much more interested in getting large deposits so as cause "their balance sheets to look very strong."(17)

During the winter of 1988, a tentative date was established for the takedown of BCCI. That date was altered slightly during the ensuing months but remained within a two week time frame at the beginning of October. In July, an implementing plan was put into effect with the October time frame in mind.(18)

However, it became increasingly evident to agent Mazur that there were significant leads and evidence that could not be followed up on by October. Moreover, Mazur testified that he was on the verge of meeting with the "inner circle" at BCCI which could have potentially unlocked many of the criminal secrets about the bank. Senator Kerry asked agent Mazur if the predetermined date in October, which seemed increasingly arbitrary to the agents, was politically motivated:

Senator Kerry: Did you have any discussion with anybody about whether or not October was the date? Because October 1988 was a Presidential election year. And by having an October takedown it would make Customs be able to present the administration with a sort of present on a platter.

Mr. Mazur: There certainly was mere speculation that that played a part by people at low levels like mine. But beyond that I cannot say more.

Senator Kerry: But it went through your head that might have been a reason that there was such a compulsion to terminate this thing in October.

Mr. Mazur: I was at a loss for understanding why October. I would say that for sure.(19)

Mark Jackowski, the Assistant US Attorney overseeing the case testified to the Subcommittee, however, that the decision was predicated on other considerations. He testified that his office had made a decision that "if there came a point in the investigation where we continued to launder funds on behalf of old clients without developing evidence against additional defendants, we would attempt to terminate the operation." Jackowski added that the date had been originally set -- in February -- with the expectation that they would be able to make a case by the fall against BCCI officers and that, in fact, they had accumulated the requisite evidence.(20)

By the summer of 1988 Mazur had compiled enough evidence to indict the bank and several of its officers. But Mazur believed that the corruption went much higher than the mid-level officers with whom he had been dealing. As he explained to the Subcommittee, "It appeared to me that the knowledge of the source of the funds and the method of seeking out drug proceeds as a source of deposits for the bank was something that was promoted at every level of senior management within the bank."(21)

On September 9, 1988, one month before the sting operation against BCCI was scheduled to be taken down, Mazur, in his undercover role as drug-money launderer Robert Musella, had met with Amjad Awan, BCCI's personal banker to Panamanian General Manuel Noriega, at the Grand Bay Hotel in Miami, Florida, where he engaged in a conversation with Awan that was wired and recorded by Federal agents. In that conversation, Awan told Mazur that he had been subpoenaed by the Foreign Relations Committee of the U.S. Senate in connection with his handling of Noriega's accounts, and the accounts of others in Panama. He also told Mazur about his understanding of BCCI's secret ownership of First American, about the political implications of Clark Clifford's chairmanship of First American, and about alleged obstruction of the Subcommittee's investigation into Noriega and BCCI by BCCI lawyer Robert Altman. As the transcript of the wiretap showed, Awan told Mazur:

What's happened is that we were served a subpoena last month. The bank was and Mr. Shafi our general manager was. I was supposed to have been served also . . . This is why I've been going up and down to London with our attorneys in Washington . . . On a personal level, last Friday, I was told that, ah, our lawyers, Mr. Altman was there, and he suggested to the bank that I should be immediately transferred from the U.S. to Paris. . . . So, they duly transferred me Friday to Paris. . . I'm not too, too happy on, on what our attorneys are telling us to do. I think that's they're doing a very stupid thing. As long as I am an employee of the bank, I can be anywhere, I can, I can be in Timbuctu, if they throw a subpoena on me, they can demand that the bank produce him. . . So I think that's a very stupid policy to take. . . .

I went to, ah, I met with the counsel to the Foreign Relations Committee . . . I've got a good rapport going with them. And ah, without really damaging the bank or without, without ah, disclosing anything about, uh, business, I think I can, with a bit of luck, I can extricate myself from the whole situation quite cleanly. . . I think they're going to go through BCCI's records with a tooth comb . . . if anything gets released there that BCCI is being investigated, BCCI is dead . . . no customer is going to keep an account with BCCI. . . I don't think the bank could stand up to any sort of publicity. It's gonna, it's going to, it's gonna hit them bad. . .

Our attorneys are, are, they're heavyweights, I mean Clark Clifford is, is sort of the Godfather of the Democratic party. I mean, when he calls Jesse Jackson for dinner, that means Jesse Jackson can receive us for dinner. . . .

I have, I have totally different, uh, uh, assessment of the situation. And it might be far-fetched, it might sound stupid, but my assessment is, that we own a bank in washington . . . We own a bank, uh based in Washington, it's called the First American Bank. The holding company is in Washington, and there are 5 banks actually. First American of New York, First American of Washington, D.C., First American of Virginia, Maryland, Tennessee and Georgia. There's six banks. Six large banks, they are $10 billion banks. Bought out by BCCI about 8 years ago . . . And BCCI was acting as advisor to them, but truth of the matter it is that the bank belongs to BCCI. Those guys are just nominee shareholders. . . Clark Clifford and his, uh, law partner Bob Altman are the chairman and capital holders. I personally feel it would suit them if BCCI withdrew . . . and they just take over that entire part of the bank. . . . I wouldn't at all be surprised if, you know, if they're totally screwing BCCI to take over this bank. I, I don't know, but this is the way I see it. Because the advice he's giving, in my opinion, I, I just don't respect it. . . . He, he knows a lot, and uh, that's why I don't want him to represent me. That's why I've gone on to another lawyer.(22)

Awan had provided Mazur with sufficient background information regarding violations of federal law to enable another agent assigned to the case, IRS Special Agent David Burris, to conclude that seven separate federal criminal statutes had been apparently violated. In addition to the money laundering charges already being contemplated, Awan had now alerted the C-Chase agents to an apparent conspiracy to obstruct a Senate investigation by BCCI and its lawyers, and to BCCI's possible illegal ownership of First American. Accordingly, Burris set down the relevant facts from the Awan wiretap, and drafted an affidavit stating that he believed there was sufficient evidence to make out a case that these statutes, including obstruction of the Senate, had been violated.(23) Burris understood the meaning of Awan's statements, describing them in Paragraph 4 of his affidavit in the following terms:

Awan said that BCCI has bought and controls First American Bank and National Bank of Georgia through private individuals. The banks were bought through individual names rather than BCCI because BCCI could not buy the banks and run them due to U.S. law.(24)

Nevertheless, in the weeks that followed, the prosecutors directing Operation C-Chase made no effort to broaden the case against BCCI, or to investigate any of the new allegations raised by the Awan wiretap. There was no attempt to interview Clifford or Altman, no attempt to seek further information from the Subcommittee to determine whether its investigation had been interfered with, no subpoenas prepared to be issued against First American, and, even after the take-down of the sting, no investigation of any links between BCCI and First American.

Against the desires of Mazur, who wanted to keep the C-Chase operation going longer, the takedown was set in motion on October 8, 1988. A phony wedding had been arranged between Mr. Mazur and another undercover agent posing as his fiancee. The ruse of the wedding successfully lured BCCI officers and narcotics traffickers into the United States who believed they were attending the marriage of an important customer. At a phony bachelor's party for Mr. Mazur, federal agents swooped in and made numerous arrests. The operation had been coordinated with law enforcement authorities in the UK and France who also conducted searches and made arrests.(25)

With the arrests, the effort to make the money-laundering case against BCCI and the BCCI officials indicted in Tampa took precedence over any further investigative efforts concerning broader issues of criminality regarding BCCI. The small team of agents and attorneys, who soon became grossly outnumbered by the defense team retained by BCCI, and selected and coordinated by Clark Clifford and Robert Altman, soon had all they could do to prepare for trial on the specific money-laundering counts brought in the October, 1988 indictments.

Justice Handling of Operation C-Chase:

Failure to Charge RICO Months before the takedown of Operation C-Chase, many of those most involved in investigating and prosecuting BCCI had concluded that BCCI was a quintessential example of corporate organized crime, and suitable for being prosecuted under the Racketeering Influenced and Corrupt Organizations Act (RICO), whose provisions contained powerful tools for prosecutors, including broad forfeiture possibilities.

Under RICO, any business that is convicted of investing the proceeds of two or more criminal acts, constituting a pattern of racketeering activity, in a legitimate business, is subject to having all of the proceeds of its criminal activity, including the legitimate businesses, forfeited to the government.

RICO would have an especially powerful tool against BCCI, because once the government proved that BCCI committed two or more acts of money laundering, the government might be able to take the entire bank. Given BCCI's actual secret ownership of First American, a RICO case against BCCI would have had a devastating impact on BCCI, and might well have blown open BCCI's core secrets.

A series of memoranda from early 1988 detail the discussions within the Justice Department and among the agents about the basis for a RICO prosecution of BCCI. By March, 1988, high level Customs officials were reporting to Commissioner Von Raab that several BCCI officials were indictable under RICO. On April 6, 1988, another Customs memorandum stated that it was the opinion of the U.S. Attorney's Office in Tampa that "probative evidence exists to establish corporate criminality against BCCI as an institution," and that "current plans for prosecution are to indict BCCI as an institution under the provisions of the RICO statutes." This recommendation was reiterated in a second memorandum, May 10, 1988.(26)

Mazur and the other undercover agents involved in Operation C-Chase strongly supported the bringing of a RICO case against BCCI, because if the bank were convicted of racketeering, they could "seek forfeiture of a lot of the bank's assets that would be located in the United States."(27)

Yet, for reasons that were never explained to the Customs agents, the Justice Department in the fall of 1988 did not give approval to a RICO prosecution, and the RICO case against BCCI was abandoned.(28)

Robert Genzman, the US Attorney for Tampa, told the Subcommittee that it was his view that "RICO charges would have complicated an already complicated case."(29) According to Genzman:

Put simply, we believed that RICO charges would have added nothing, and would have greatly complicated the case. It is absolutely, untrue, as has been suggested, that the entire bank could have somehow been forfeited out the U.S. government had RICO charges been brought in Tampa. There was simply insufficient evidence to support such a sweeping international forfeiture.(30)

Thus, according to Genzman, RICO charges would not have placed additional pressure on BCCI and would not have created the risk of significant additional assets at the bank being forfeited to the government, beyond the $14 million at stake in the narrower case ultimately brought.

Genzman's statements again suggest the blindness at the U.S. Attorney's office to the broader evidence already developed by Mazur and the other Customs agents. This material included, but was not limited to, the Awan allegations contained in the Burris memorandum. Genzman's position also fails to take into account the obvious potential, if Justice had indeed decided to make a RICO case, of seeking plea agreements with the individual officers as a means of securing a broader RICO case against the bank itself in a superseding indictment. Such a strategy, unlike the strategy actually pursued by the U.S. Attorney in Tampa, could well have resulted in a forfeiture of BCCI's assets in the U.S., and led to the uncovering of its ownership of First American as well.

In addition, a RICO case could have permitted the United States to achieve the critical objective for Operation C-Chase defined by Customs agents in March, 1988 -- establishing the corporate culpability of BCCI's involvement in the laundering of "literally hundreds of millions of dollars in drug proceeds," rather than the mere $14 million handled in connection with the sting.(31) In a RICO case against the bank, one or another of BCCI's officers could have been turned to help make the larger case against BCCI that was so important.

Justice Handling of Operation C-Chase:

Failure to Provide Adequate Resources During the entire post indictment investigation, Mazur and the entire investigative team were strapped for resources. According to Mazur, "I was confronted with some 1,200 tapes that needed to be perfected for the benefit of the defendants.... I and a small number of other agents, two or three, spent at times literally twenty-four hours in a given day transcribing and trying to meet deadlines." When asked by Senator Wofford if he felt "outgunned" by the BCCI defense team, Mazur replied "tremendously," noting that BCCI had investigated him personally, and that there were threats to the lives of agents and witnesses.(32)

As Mazur advised his superiors:

The problems created by defense tactics have resulted in the need for resources to be expended to document improper conduct (ie, misleading business associates of government witnesses, improperly issuing subpoenas, intimidating government witnesses.(33)

Mazur recalled a pretrial hearing at which AUSA Mark Jackowski appeared alone on behalf of the government and 23 lawyers appeared on behalf of BCCI.(34) In recalling the incident to the Subcommittee, Jackowski offered that "it was a fair fight."

Subpoenas and searches related to the takedown had also produced some 16,600 documents from individual defendants, and another 100,000 documents from BCCI itself. These documents, some of which have since been reviewed by Subcommittee staff, contained significant information concerning BCCI's broader criminality. But more than six months after the takedown, the government had yet to review a single page.(35)

In an effort to keep the investigation and prosecution of BCCI on track, Mazur and his colleagues in Tampa made numerous requests to their superiors for help, requests which were largely ignored. As Mazur testified:

After the undercover operation was concluded, the Government was confronted with a massive task. Records had been seized from BCCI in Miami, from the homes of several officers in Miami, from the BCCI offices in London and Paris, from the homes of traffickers. And a tremendous task with a tremendous potential benefit faced the Government in using those records . . .And very little resources of those that were available could be used to deal with those matters because of the tremendous resources that were needed just to attend to pretrial motions and the upcoming trial in Tampa . . .

For one reason or another it was impossible for the Government to locate people who could fill that void or it was in the opinions of those who had the authority to make that decision an unnecessary use of resources, one or the other.

And I think a lot of follow up in contacting witnesses and reviewing records that was lost . . . would have been a great advantage to us all to see the things that are happening in the BCCI case happen more quickly and smarter . . . I think that that was, that time out, was a costly time out.(36)

On April 11, 1989, Mazur wrote superiors to remind them that Operation C-Chase was being severely damaged by the inability to add resources to the case, noting that the problem had been discussed repeatedly since November, 1988 without improvements, and that a much biggest case could yet be made against BCCI if additional resources were provided:

The network of the bank is awesome. Since the have over 14,000 employees and operate in 74 countries, the viable leads are endless. Attempts to superceed [sic] the indictment to include a nucleus of evidence that would reveal BCCI's criminal enterprise is a monumental task, in view of the bank's magnitude. There are inadequate resources to follow up professionally relative to: [next half page of text redacted by Justice Department](37)

Mazur summarized the conditions under which he worked as being a soldier on a forward mission in a war zone, backed up by a government that refused to send in reinforcements when they were needed:

We were somewhat of a reconnaissance squad that had been out in the middle of the desert and encountering the enemy, and sent word back to the fort that we needed some help. And waited and fought and fought and fought but no help came.(38)

Mazur continued to work for the U.S. Customs Service on the BCCI prosecution through to the conviction of the BCCI officers indicted in the case in August, 1990. But the experience had left him frustrated and angry. In April, 1991, Mazur resigned from the U.S. Customs Service in a letter to Customs Commissioner Carol Hallett, to whom he wrote the following:

I know that my formally advising you of the deplorable conditions in Tampa could cause some individuals in a professional circle to question my loyalty. But it is simply out of my love for this country and our critical need for ethical government that I think its appropriate to respond to a request for my candor. . . If it had not been for the nearly two years of achievement prior to March 1988, the ultimate outcome would also have been lost. The outcome of the case, while notable, was considerably less than it could have been. The indictment of additional defendants and the seizure of substantially more drug proceeds was lost, directly as a result of the application of inadequate resources . . . to the investigation. This opinion is shared by individuals meaningfully involved int he successes preserved within Operation C-Chase, including the lead prosecutor.(39)

Mark Jackowski, the assistant U.S. Attorney in Tampa who worked most closely with Mazur on Operation C-Chase, expressed his own unhappiness with the handling of the C-Chase investigation in a memorandum, attached to the Mazur letter, which the Justice Department withheld from the Subcommittee. Jackowski testified about the memorandum, however, in response to questions from Senator Kerry, as follows:

My unhappiness with the C-Chase investigation . . . was that there were a number of documents that were seized as a result of searches conducted in Miami and other places. It was my view that included within those records were leads to other narcotics traffickers and money launderers.l It was my further view, as of the time I wrote my memorandum, which was at the end of January 1991, that those documents had not been adequately reviewed to pursue all those leads. That was the nature of my unhappiness.(40)

In direct contradiction to Customs Special Agent Mazur and Jackowski, an assistant U.S. attorney from his own office, Robert Genzman, the U.S. Attorney in Tampa, testified that the BCCI investigation and prosecution were not substantially impeded by the lack of resources, arguing that the case was extremely successful, because BCCI pled guilty and its officers were convicted, and BCCI paid what was then the largest fine ever imposed on a financial institution in a money-laundering case -- $14 million.

But while characterizing the results of the Tampa prosecution as superb, Genzman acknowledged that the investigative and prosecutorial resources in Tampa had indeed been stretched to the breaking point by the case, due to the complexity of the money-laundering sting; the "scorched earth" strategy of BCCI's lawyers, who "filed hundreds of motions and briefs on every imaginable subject," and the need to transcribe some 2,000 taped conversations between the undercover agents and their targets.(41)

This situation was typical of the kind of conditions faced by government prosecutors, Genzman testified, and nothing unique to the BCCI case:

More resources could always be added to a case of this magnitude and complexity. While agents and prosecutors had to put in very long hours and work under severe time constraints along the way to bring the case to a successful conclusion, that is a regular, albeit unfortunate, fact of law enforcement.(42)

Justice Handling of Operation C-Chase:

Failure To Follow-Up Robert Genzman, the US Attorney in Tampa, told the Subcommittee that "[I]t was never our intention to simply stop investigating BCCI after the first indictment."(43)

But Genzman's own assistant, Mark Jackowski, told the Subcommittee that the grand jury investigation of BCCI had to be suspended "due to a lack of available leads and the press of the upcoming trial."(44)

A dearth of leads, however, was clearly never a problem in the case. As Mazur told the Subcommittee, the "time-out" consisted of leads that were not followed up, bank officers who were not interviewed and superseding indictments which were not issued. When Senator Kerry suggested that "there was not a follow up and there was not really a continuation of investigation into the leads that existed at the time," Mazur responded, "To a limited extent there was, but not in effect, no."(45) In fact, the "time out" lasted for a full thirteen months, by the calculation of Tampa prosecutor Jackowski.(46)

Mazur testified that among the things not followed up because of the resource crunch were criminal activity involving other BCCI officers and the subpoena of records which could have lead to additional indictments of others or broader, superseding indictments of BCCI.(47) In all, there were hundreds of leads not followed up, including BCCI's involvement in illegal arms transactions, what Mazur described as "the association between BCCI, First American, and National Bank of Georgia," and possibly on payoffs to government officials.(48)

In fact, by mid-1989, the US Attorney's office in Tampa had information on BCCI's alleged ownership of First American in four instances from two separate sources. Initially, a few steps were taken by the Tampa office to follow-up on this information. AUSA Jackowski moved to subpoena the Federal Reserve for First American documents. But following this action, the pressure of preparing for trial against BCCI and the inability to get additional resources allowed the effort to peter out without further efforts being made.(49)

Various officials at the Justice Department provided different explanations as to why the information was not followed-up on. Assistant Attorney General Mueller "passed the buck" to the Federal Reserve, noting that "the essence of the information. . . regarding the allegations of secret ownership was passed on to the Federal Reserve after the October 1988 takedown of the undercover case." Quoting from the Federal Reserve General Counsel Virgil Mattingly's testimony before the Subcommittee, Mueller claimed the Federal Reserve disregarded the information as "the kind of allegation [that] they had heard before."(50)

Kehoe explained to the Subcommittee that once the US Attorney in Tampa had indicted Awan, one of the sources of the allegations regarding First American, it became difficult for him "to point to the documents to corroborate that piece of information." But even on this narrow point Kehoe's testimony is at odds with his colleague, AUSA Jackowski, who told the Subcommittee, "we obtained information from Mr. Awan throughout the course of the case concerning that [First American]."(51)

In the view of the Subcommittee, none of the officials provided an adequate explanation as to why the Justice Department did not follow-up on the evidence it received relating to the secret ownership of First American.

Jackowski perhaps best summed up the myopic strategy of the US Attorney's office in Tampa when he told Senator Kerry, "this, our case, was a money laundering case.(52) As Jackowski testified:

We were at dinner, and the first course was to eat the money laundering plate. And when you look at the evil behind this bank . . . the alleged evil is that they facilitated the cartel. That was what was on our plate. We ate that meal. We did not ignore the dessert, which was First American Bank; we simple put it aside.(53)

However, as Senator Kerry pointed out, "That is the problem. It was not a money laundering case. It was a case that was much bigger than that."(54)

What appears to have happened is that some members of the Operation C-Chase team were never able to move conceptually beyond the original goal of Operation C-Chase, namely, to target drug money laundering. The team of agents working on Operation C-Chase did not include anyone from the FBI with a broader perspective on criminal investigation or a background in major financial fraud. The Tampa prosecutors responsible for trying Operation C-Chase viewed any of the broader panoply of issues pertaining to BCCI as being, as Jackowski testified, "dessert," to be digested following the main course, money laundering. There was little recognition even as late as November 1991 by Jackowski or the other Tampa prosecutors that focusing attention on BCCI as a case study of global organized financial crime could have been more rewarding and more important than the narrower approach they adopted. Given the difficulties facing the Operation C-Chase team, the real solution would have been a referral of the First American and other broader allegations concerning BCCI from the Tampa office to a financial crimes unit at main Justice, and to the FBI, or to another appropriate office within the Justice Department. Unfortunately, rather than make such a referral, the Tampa prosecutors held onto all the BCCI-related matters, while failing to follow up on many of the key ones.

Justice Handling of Operation C-Chase: The Plea Agreement The plea agreement reached between BCCI and the U.S. Attorney for the Middle District of Florida (Tampa) in January, 1990, came as a surprise to many. On November 17, 1989, Price Waterhouse informed BCCI's directors that the lawyers for BCCI "will attempt to come to a pre-trial settlement with the prosecution, but the lawyers do not expect the prosecution to be amenable. As such there is now a real prospect of a trial."(55) Similarly, BCCI officers indicted in the Tampa case were told by BCCI higher-ups up to the day of the agreement that they should expect no agreement, but if there was one, the settlement would include bank and officers alike.(56)

During mid-December, a series of meetings took place among BCCI's lawyers and representatives of the US Attorney's office in Tampa, together with representatives of the Customs Service, Internal Revenue Service, and Drug Enforcement Administration. Representing BCCI were two prominent former federal prosecutors from Washington, D.C., Lawrence H. Wechsler and E. Lawrence Barcella, Jr. The lawyers for BCCI were anxious to avoid a trial, and offered a guilty plea by BCCI to money laundering and the complete cooperation of the bank in helping convict other drug money launderers, if they could in return obtain a commitment by the U.S. Attorney that this would end BCCI's criminal problems for all offenses then known to the government.

The offer was intriguing to the prosecutors, but they wanted to make sure that BCCI would not be seen as getting off lightly. The trial judge had indicated during a pre-trial conference that he was of the opinion that BCCI's participation in laundering drug money would be insufficient to prove to him that BCCI and its officers were also guilty of drug trafficking. As a result, given the state of the government's evidence, BCCI could not be convicted on any drug offense itself, but only for laundering drug money. As a result, the most the government might gain if it convicted BCCI was a $28 million fine, twice the amount which the government had moved through BCCI. In practice however, the judge would be unlike to impose much more than the $2.5 million fine imposed against another bank in Puerto Rico the previous year. Accordingly, if BCCI was willing to pay a substantially larger fine -- such as the $14 million fine it ultimately agreed to pay, to be characterized as forfeiture so that it would go to law enforcement instead of back to the U.S. Treasury -- the prosecutors were willing to deal. BCCI's lawyers, after consulting with the bank, agreed, and the plea agreement was struck. According to everyone involved, those making the decision on behalf of the government were in Tampa, not Washington.(57)

As Robert Genzman, the Tampa US Attorney, testified:

We made that determination in the district ...[a]s a courtesy, we advised the Department of Justice of what we were about to do, and received no opposition.(58)

Genzman explained that the plea agreement was entered into for several reasons:

First, the Government secured the conviction of the bank, one of its principle objectives. Second, eliminating the corporation from the trial prevented a recurrence of a problem confronted in the 1986 case against the Bank of New England, where the corporation was convicted, but all the individual defendants were acquitted. Third, BCCI agreed to a number of substantial terms beyond the plea of guilty, including cooperation with the government and a probation condition which incorporated the terms of its consent decree with the Federal Reserve. Most importantly, the Government had been threatened with an adverse legal ruling, which would have substantially reduced the amount of any financial penalty that could be imposed against the bank, had it gone to trial. The $14 million was forfeitable only if the bank was convicted of drug conspiracy.(59)

This rationale was correct, to the extent that one viewed the case against BCCI to be no bigger than the amount of drug funds it demonstrably moved. But the indictment had alleged something larger -- that BCCI itself had a corporate policy of drug money laundering -- and as a result of the plea, there would be testimony about this practice, and no further exposure of what BCCI was doing.

As Mazur testified, the Justice Department and Jackowski "went out of their way" to solicit the opinions of those involved in the case, including him, before agreeing to the plea. Unlike Genzman, Mazur saw advantages to keeping BCCI in the case. Mazur testified that "I was, in the long run, of the opinion that we may as well go to trial [against BCC itself], in view of the terms."(60)

There was one obvious and foreseeable consequence of permitting BCCI itself to plead out, while prosecuting the nine individual officers of BCCI and its commodities trading affiliate, Capcom, involved in the indictment. With BCCI having taken a plea, there was no incentive for the individual officers to negotiate a plea based on their offering up information about BCCI's other criminality. The basic notion of using lower-level employees of a company to go after higher-ups was effectively lost, as the lower-level officers felt betrayed and abandoned, while the prosecutors in Tampa had given up any right to go after BCCI for other crimes.

Thus, Genzman's rationale, while understandable from a technical point of view, missed the underlying point. Long before the trial, the Tampa prosecutors had before them information that BCCI secretly owned First American, that BCCI's lawyers, Clark Clifford and Robert Altman, might well have committed crimes, and that BCCI itself might well be a host for criminality activity on a global basis. Amjad Awan, Akbar Bilgrami, Nazir Chinoy, and likely several other of the Tampa defendants could have provided the information to have led to the swift indictment of BCCI on an array of offenses far more serious than those on which the bank was indicted in Tampa. According to Bilgrami and Awan, they and perhaps several of the other defendants would have been receptive to providing information about BCCI's larger criminality if they had ever been informed by the government that there was a possibility that BCCI itself would plea and leave them in the lurch, and that if they talked, the government would agree to reduce their sentences.(61) The decision to permit BCCI to plead out of the case, while continuing to prosecute its individual officers, effectively put an end on that rather obvious and important, prosecutorial strategy.

While it is always easier to be critical in hindsight, Senator Kerry, among other members of Congress, was harshly critical of the plea bargain at the time and went so far as to write a letter to the Judge. First, while the $14 million fine represented three times the largest money forfeiture ever, was, as Senator Kerry said at the time, a drop in the ocean of the proceeds BCCI had derived from criminal activity. Ultimately, that fine was dwarfed by the $200 million assessment later made against BCCI on these larger issues by the Federal Reserve.

Anticipating this criticism in his testimony, Genzman told the Subcommittee that:

"[T]hose who used the $200 million fine figure imposed by the Federal Reserve in July as an example of that the Justice Department should have obtained are confusing apples with oranges. These are simply two cases for which BCCI has been punished separately according to the law that applied in each offense."(62)

What Genzman appears to be saying is that the Justice Department brought a narrow case and received an appropriate fine. The issue, of course, is whether a broader indictment should have been brought, and whether anything was lost by the plea agreement, which ended the ability of the Tampa prosecutors to take further action against BCCI.

US Attorney Genzman testified that "BCCI did, in fact, cooperate, and its cooperation during the seven-month trial against individual defendants in 1990 was utilized in obtaining the convictions and the resulting jail sentences against those individuals."(63)

Genzman may not have been aware that while the bank was allegedly cooperating, it was also paying the astronomical lawyer's fees -- reaching upwards of $20 million -- for the defendants, providing for their housing, and working to insure that they could continue to stay silent about what they knew concerning the bank.(64) Nor is there evidence that BCCI has provided meaningful assistance in helping Justice make any significant criminal case. Indeed, other information obtained by the Subcommittee suggests that BCCI may have used information it obtained from the government in the course of "cooperation" to alert foreign money-launderers of U.S. law enforcement interests, goals, and strategies, providing the criminals important information used to evade the U.S.(65)

Genzman's argument that it was more important to convict the individuals than prosecute the bank was incorrect. The strategy was wrong, not only in hindsight, but clearly flawed at the outset given that the investigators understood that the corruption in the bank reached the highest levels, and that sworn affidavits by one of them, David Burris, articulated other important crimes involving BCCI's lawyers that cried out for investigation and prosecution.

Double Jeopardy Perhaps the most controversial aspect of the plea bargain relates to the question of double jeopardy or possible future prosecution of the bank. Justice Department officials repeatedly denied that the plea agreement between the U.S. Attorney in Tampa and BCCI did anything more than preclude that federal prosecutor's office from undertaking further action against BCCI. In no case, according to the Justice Department, did the entering of the plea by BCCI result in any limitation being placed on any other office of the Justice Department in investigating or prosecuting BCCI. As US Attorney Genzman testified:

The plea agreement contained relatively standard language, committing the US Attorney's office for our district not to prosecute BCCI for any other Federal criminal offense then known to the government. . . It does not prevent the US Attorney in Tampa, or any other prosecutor, state or federal, from prosecuting any individual from the President of BCCI on down. .. [Nor does it] bar any other prosecutors, state or federal, from prosecuting BCCI for offense. (66)

Genzman's first assistant, Greg Kehoe, added, the issue "had been discussed at length within the Department," and had concluded that it would not be an impediment.(67)

Notwithstanding the testimony of Genzman and Kehoe, the plea bargain apparently did cause double jeopardy problems for the only other federal prosecutor then looking into BCCI, the US Attorney in Miami, Dexter Lehtinen.

In testimony before the Subcommittee, Lehtinen, who in 1991 was set to indict BCCI on tax fraud charges, stated:

"By the middle of September (1991). . . I couldn't indict and we set the grand jury each Friday. . . [T]he statement made to use each Friday, was the statement made to us from the Department of Justice that you are blocked from bringing the indictment because of the Tampa plea and the Tampa double jeopardy. You can't do it, period. Nothing like lack of evidence."(68)

While the plea agreement did not technically bar any office of the Justice Department outside Tampa from prosecuting BCCI, the entrance of the plea by BCCI protected it on double jeopardy grounds from being prosecuted for any of the actions it took which arguably were included within the substance of the Tampa indictment. The exact extent of this coverage would in any subsequent indictment of BCCI have been a matter for substantial legal argument. What is significant about Lehtinen's testimony is that contrary to the statements of other Justice Department personnel, the Tampa plea did in fact interfere with further prosecution of BCCI. Justice Department statements to the contrary to the Congress were thus to that extent misleading.

Justice Provides Assistance to BCCI

Following the plea agreement, some Justice Department officials adopted an inexplicably benign attitude towards the bank, taking at least two separate actions to help BCCI. First, Justice Department officials asked another U.S. Attorney's office not involved in the negotiations to join in the plea agreement, and thereby be utterly barred from taking any further action against BCCI. Second, another Justice Department official asked state regulators in Florida, New York and California to keep BCCI open when they were considering closing it, and a few days later, on being asked to explain this request, denied having made it.

Each of these requests were made by the Justice Department officials involved at the explicit behest of BCCI's lawyers, who themselves were former prominent federal prosecutors. They raise the question of whether the revolving door, and personal relationships among prosecutors, may have influenced certain Justice Department officials to assist BCCI in contravention of sound public policies.

The Request to Broaden the Plea to Include Miami In January, 1990, after negotiating the plea agreement, at BCCI's request, the Tampa prosecutors entreated the US Attorney's office in Miami to join them.

This was an odd request. At the time, the US Attorney for the Southern District of Florida had its own investigation of BCCI. It had not participated in the negotiations over the plea agreement and if it joined the Tampa plea it would be completely precluded from prosecuting BCCI further. Arguably, there could be some benefit to the Miami office for entering such a plea, in that it would facilitate that office's receipt of BCCI's cooperation in making cases against other criminals. On the other hand, BCCI was already legally required under its plea agreement with Tampa to provide such cooperation to the government on every matter. Obviously, the real beneficiary of Miami joining Tampa in the plea would be BCCI, whose attorneys were aggressively pushing the concept. As the then US Attorney for the southern district, Dexter Lehtinen, told the Subcommittee:

[In] the normal course of events, the defendant . . . in order to gain a benefit form a plea agreement, would want as much of the government estopped or barred from prosecuting again.(69)

According to Lehtinen, "In this particular case, we saw no benefit to the Government by our participation."(70) The Miami's office refused to join the plea agreement, which went forward without the Southern District of Florid's participation.

The Request to Keep BCCI Open At the time of the plea agreement, BCCI's attorneys became aware of the possibility that BCCI's guilty plea on drug money laundering charges might well result in BCCI's closure by the various state banking regulatory agencies that had licensed it to do business in Florida, New York, and California. The BCCI lawyers pointed out to prosecutors that if BCCI were closed, it would be more difficult for BCCI to cooperate in making cases against other criminals. Accordingly, the attorneys asked the Tampa prosecutors to send a letter to the state regulators asking the regulators to keep the bank open.

Within the U.S. Attorney's offices, there was some sentiment that Justice should recommend BCCI should be closed down entirely. Dexter Lehtinen told the Subcommittee that "Tampa [the US Attorney for the Middle District of Florida] wanted to know our position with respect to BCCI's license, and that BCCI's lawyer's wanted to know . . . my position." According to Lehtinen, he told "both groups that we were of the opinion that a license should be in jeopardy if we made a successful prosecution."(71)

Despite US Attorney's Lehtinen's recommendation, US Attorney Genzman decided to adopt a neutral position regarding the revocation of the license. The Tampa prosecutors accordingly on January 31, 1990, wrote state regulators to advise them that the Tampa U.S. Attorney's office had no position whatsoever as to whether BCCI should be closed down, or stay open.

BCCI's lawyers, principally former federal prosecutors Lawrence Wechsler, Lawrence Barcella, and Raymond Banoun, dissatisfied with this result, decided to talk to others in the Justice Department to bring about a different result. Two weeks later, they achieved their goal. Chuck Saphos, head of the narcotics section of the Criminal Division of Justice in Washington, D.C., agreed to write a letter to the state regulators urging them to keep BCCI open. In return, BCCI would be able to cooperate with Justice.

BCCI's lawyers contacted the state regulators' office in Florida, and told the regulators that a letter would be coming from Washington, asking them to keep BCCI open. Soon afterwards, the letter did, in fact, arrive, signed by Saphos, stating that BCCI's cooperation was important to the Justice Department and that keeping it open would allow the Department to monitor BCCI's customer accounts:

"We are, therefore, requesting that BCCI be permitted to operate in your jurisdiction, with the understanding that certain accounts may be maintained by the bank, at the request of the Department of Justice, which otherwise would be closed to avoid legal and regulatory violations."(72)

In addition to the regulators, Saphos sent copies of his letters to the Federal Reserve, and to BCCI lawyers Banoun and Wechsler.

The rationale for keeping the bank open was in fact, very weak. First, there were like to be few significant drug money launderers still using BCCI following its highly publicized indictment in October, 1988. Second, to the extent such accounts existed at the time of the indictment, BCCI's lawyers had systematically sought to shut down them or refer them over to law enforcement as part of its consent decree entered into with the Federal Reserve in early 1989 as a result of the indictment. Finally, the plea agreement, and promise to cooperate with the government, would be as public as the indictments had been. It would be hard to imagine that any drug money launderers could still be enticed to use BCCI under such conditions. Saphos' letter had adopted BCCI's position about the case, rather than recognizing the true facts at the time.

In Florida, state regulators were baffled by the Saphos letter. They felt there was no logical reason to allow BCCI to continue to operate in Florida. The day after receiving the Saphos letter, Florida Comptroller Gerald Lewis wrote Saphos back in the following terms:

Thank you for your letter of February 13, 1990, requesting that the Bank of Credit and Commerce International (Overseas) Limited ("BCCI") be permitted to continue operating in Florida as a state licensed foreign bank agency despite BCCI's guilty plea to money laundering charges . . . Because BCCI has pled guilty to felony charges, the ultimate decision of renewal becomes a difficult one. Your letter indicates that you may have information I should consider in resolving this matter. To this end, I invite you and any other appropriate Department of Justice officials to meet with me in Tallahassee on February 19, 1990.(73)

Saphos, although chief of the narcotics section, had little previous involvement with any aspect of the BCCI investigation or prosecution. His position that BCCI should be kept open had evidently not been approved by the Attorney General, or by anyone else at Justice. Accordingly, Saphos was in no position to travel to Tallahassee to explain why BCCI should be kept open. He immediately wrote Lewis back to change his position:

I must apologize if there was ambiguity in my letter of February 13, 1990, which led to a belief on your part that the Department of Justice wished to influence your decision on whether to permit BCCI to retain its license. The Department of Justice takes no position in that regard. The sole purpose of my letter was to indicate that, if you allow BCCI to continue in business, there may be occasions where the Department of Justice may request BCCI, pursuant to its obligations under the plea agreement, to make or continue a banking relationship with customers who are the subjects of criminal investigations. . . . I merely wanted to make certain that you and I were communicating concerning criminal investigations.(74)

Thus Saphos who had only three days earlier stated "we are therefore requesting that BCCI be permitted to operate in your jurisdiction," was now forced to state on the record that this was not the position of the Department of Justice, and to mischaracterize the position he had clearly taken to help BCCI in his earlier letter.

In testimony before the Subcommittee, Assistant Attorney General Mueller struggled to explain the circumstances surrounding the Saphos letters, admitting, "that first letter is ambiguous at best," and "I do not know what initiated it ..."(75)

Greg Kehoe, US Attorney Genzman's First Assistant testified that when he first learned about Saphos' letter to the state regulators, he was upset.(76) As Kehoe testified, "[O]bviously the attorneys for BCCI were talking to Mr. Saphos" and "[they] tried to go behind my back." Yet Kehoe, who negotiated the plea agreement, seemed indifferent to the incident, testifying that in his view, "Saphos' efforts were with the best intentions of law enforcement involved," while acknowledging that, "nothing surprises me in the murky world of criminal law enforcement."(77)

In testimony before the Subcommittee, US Attorney Genzman did little to clarify this bizarre chain of events. The US Attorney told the Subcommittee that "... in this case we told the Comptroller's office that we were taking no position" relative to the reissuing of BCCI's license to operate in Florida.

The obvious explanation for what happened is that Saphos was personally lobbied by people he knew who had formerly been with the Justice Department and now represented BCCI on the outside, and agreed to do them a favor. There is no record of any other person within the Justice Department signing off on Saphos' letter, and it appears likely that he sent it without the letter having gone through any formal approval process. When his recommendation to keep BCCI open became an issue, he retreated from it.

The Miami Investigation By the latter part of 1989 another investigation of BCCI had been launched, in the Southern District of Florida under the direction of US Attorney Dexter Lehtinen.(78) The Miami investigation centered on the theory that BCCI could be indicted for various tax frauds. It was Lehtinen's belief that this case would not be barred by double jeopardy, because it involved different facts from the Tampa case, and because the Miami office had refused to participate in the plea agreement with BCCI. Lehtinen testified that the investigation was "an important matter . . . a priority matter."(79)

At the time Lehtinen was also investigating David Paul's dealings in Miami's largest Savings & Loan, CenTrust, which had a variety of ties to BCCI and in which BCCI held a secret interest of 25 percent through its nominee, Ghaith Pharaon. Lehtinen described to the Subcommittee the strategy behind his two-track investigation and the aggressiveness with which his assistants moved to make the case against the bank:

"CenTrust was alleged to have had some relationships to BCCI, and so we had two teams which would issue what would you call BCCI subpoenas. One team would issue BCCI subpoenas on behalf of its CenTrust investigation, one would issue BCCI subpoenas on behalf of its BCCI investigation."(80)

Lehtinen explained that the case was "records intensive," which made the subpoenas vitally important.(81)

In late 1990 and early 1991, Lehtinen's office issued a series of subpoenas pursuant to the CenTrust and BCCI investigations. Many of the subpoenas were to BCCI in other countries for records and documents that had been moved from the Miami branch.(82) As Lehtinen described the subpoenas, "[they] never mentioned foreign countries."(83) The investigators in Miami, however, were frustrated when BCCI asserted the bank secrecy laws of foreign jurisdictions. Lehtinen's assistants then proposed to seek compulsion through the courts to have the records located abroad produced. Lehtinen told Senator Brown, "[O]ur circuit, the Eleventh circuit is very clear, those subpoenas will be enforced. Some other circuits are a little bit different, but our circuit is very aggressive."(84)

Before proceeding, however, Lehtinen's office was first required to have authorization from the Justice Department's Office of International Affairs. However, according to Lehtinen, the response from the Justice Department was that they would not authorize enforcement of the subpoenas.(85) Lehtinen told the Subcommittee that he didn't "recall a specific reason for the refusal."

Ultimately, with the assistance of Deputy Assistant Attorney General Mark Richard, the US Attorney's office in Miami did seek compulsion for enforcement to two of the subpoenas, one in the United Arab Emirates and one in Panama. When BCCI continued to refuse to comply with the two subpoenas, the bank was fined $50,000 a day, until seven days later, when it capitulated and supplied the records.(86)

Lehtinen and his assistants continued to urge the Department of Justice to assist in the enforcement of the other subpoenas. By August, 1991, following the Morgenthau indictment, the Justice Department began a series of meetings in an effort to move more swiftly against BCCI. In one such meeting at Justice in Washington, Lehtinen again raised the issue of the failure to enforce his subpoenas in response to Assistant Attorney General Mueller's offer to provide assistance to any US Attorney office pursuing a case against BCCI. Despite Mueller's offer, no assistance was forthcoming and the subpoenas continued to languish, leaving Lehtinen perplexed:

[E]xactly why the Department of Justice handles matters as they do is -- whatever factors they take into account are not particularly known to us in Miami in all circumstances. We in Miami wanted all of those steps taken that we proposed. They were not taken and we are just not able to say why.(87)

Despite the problems with not having the subpoenas enforced, Lehtinen's office continued to pursue the investigation of BCCI for tax fraud. Lehtinen testified that in his meeting with Assistant Attorney General Mueller in early August, Mueller encouraged him to "work aggressively on it as much as possible."(88) By the third week in August, Lehtinen was ready to move forward with an indictment after having been notified by his assistants that "there was no problem with the on-site review by the Justice department's tax division. Then, suddenly, on August 22, Dennis Saylor, chief assistant to Assistant Attorney General Mueller, called Lehtinen and, according to the US Attorney, "indicated to me that I was directed not to return the indictment."(89) As Lehtinen testified:

[I] asked who was requesting me not to return it, and he said [Acting] Attorney General William Barr. I asked why we weren't returning the indictment, if it was tax, tax was on-site and tax would talk to us. . . I asked, why we are being told this way not to indict, and he said he didn't know. . . (90)

Lehtinen thought that it was strange that he would be receiving a telephone call from "non-tax" people telling not to proceed.(91)

The next day Lehtinen received a letter from the Assistant Attorney General for the Tax Division Bruton, informing him that he should not move forward because his investigation of BCCI was not "an authorized" tax investigation. Lehtinen told the Subcommittee, "I don't know what they are talking about there...That is very odd."(92) Later in his testimony, Lehtinen added:

Well, the statement that you are not doing an authorized Tax Division case is foolish. If it is not an authorized tax case that is because the Tax division -- I don't know what that means. I mean, you are doing a grand jury. The Tax Division knows it. You are urged for more than a month by DOJ to indict it. You coordinate with tax. You ask for a special review and then a day after you get a phone call saying the Attorney General says don't do it. The tax division tells you, oh, by the way, your grand jury isn't an authorized grand jury. In late July or early August, the head of the criminal division, Mr. Mueller, told us he -- he told Andreas Rivera directly that he would specifically make sure the Tax Division handled this case effectively and efficiently. So to say tax didn't know until August 19th doesn't make a lot of sense."(93)

Moreover, Lehtinen had sent a letter to the Justice Department on May 13, 1991 in which he concluded that "the BCCI tax case is a case of the greatest national urgency."(94)

Lehtinen was particularly concerned because the statute of limitations was set to run on one his counts. When he conveyed his concern, the reply from the tax division, according to Lehtinen was "Why don't you just claim that BCCI was out of the country," because the statute does not run if the target is out the country. Lehtinen testified that he dismissed this advice as "disingenuous and a real legal problem."(95) When pressed by Senator Brown on the ramifications of the Department's actions, Lehtinen testified "We believed that a decision to not go to the grand jury would mean a decision to drop the charge."(96)

Lehtinen testified that he would have understood had the tax division criticized his case on evidentiary grounds, but, at the time, that did not appear to be the case. Instead the Miami US Attorney was given the somewhat ambiguous instructions that more work needed to be done on the case. According to Lehtinen, "[T]here was functionally speaking no additional work that could be done," pointing out that "if you [the Justice Department] want me to do additional work, you should have approved my grand jury subpoena."(97)

Lehtinen became even more confused when one month later he was told by the Justice Department that he could not indict because of problems of double jeopardy arising out of the Tampa case. Senator Brown spoke for the Subcommittee when he characterized the unwillingness of the Justice Department to allow the Grand Jury to return indictments in the southern district as "very strange."(98)

By early November, the concerns over evidence and double jeopardy previously expressed by the Justice Department had all but vanished. On November 6, 1991, Deputy Attorney General, George J. Terwilliger, wrote Lehtinen that he was "prepared to defer to your prosecutorial judgment on this matter..." When asked by Senator Kerry if the state of his evidence had changed from August, Lehtinen responded, "No, it was the same evidence."(99) Lehtinen implied to the that the reversal by the Department of Justice was the result of Congressional and media pressure:

There had been significant, Time Magazine and New York Times articles, very critical of the Department.

I know Congressman Schumer sent staffers to Miami and to various districts on behalf of the House Judiciary Subcommittee on Crime.(100)

While it is difficult to sort out precisely what went wrong between the U.S. Attorney for Miami and main Justice in Washington, it is obvious from the above account that two important cases involving BCCI in Miami were frustrated, if not paralyzed, by inaction at main Justice in Washington during much of 1991. In part, that outcome may have been the result of continuing attempts by the Justice Department to defend the plea agreement in Tampa, and to steer any further activities pertaining to BCCI to the Tampa office. Additionally, the Justice Department may have been uncomfortable dealing with the possible preclusion of investigation or prosecution in Miami arising out of the double-jeopardy problems created by BCCI's plea in Tampa, problems that had to date not surfaced even in interviews with Congressional investigators.

Jack Blum and the Justice Department In March of 1988, months before the takedown of Operation C-Chase in Tampa, the chief investigator for the Foreign Relations Committee, Jack Blum, contacted the Justice Department with startling information about BCCI. In the course of his investigation into narcotics trafficking in Panama, Blum had come into contact with "a very senior BCCI officer who was in the process of disengaging from the bank."(101) According to Blum, the BCCI banker provided him with a substantial amount of information about the bank's criminality. Blum proceeded to seek authorization from the Foreign Relations Committee to issue subpoenas to the bank, which were granted. Before issuing the subpoenas, however, Blum contacted the US attorney's office in Miami and Tampa, which asked him not to proceed. Blum told the Subcommittee:

I talked to Joe Maigre, who was then the deputy in Tampa, who told me there was an undercover operation underway. . . the well-advanced Operation C-Chase. . . I was not told the nature of the operation. What I was told was that agent's lives were in danger, and that he -- and that he was followed-up by the Department of Justice in a formal way -- requested that we defer the issuance of a subpoena until we get a go-ahead.(102) Blum did defer issuance of the subpoenas until late July, 1988. At that time, he contacted Tampa, and asked if he had clearance for now issuing the subpoenas. He was told there was no objection. The four Committee on Foreign Relations subpoenas were then served on BCCI and its officers.

Blum's next contact with the Department of Justice occurred in March 1989. The contact was precipitated after Blum received a telephone call from a former client who knew a highly placed BCCI officer who claimed that the Senate investigation "almost brought the house down and there was a full court press to make sure that it didn't get anywhere."(103) Blum had his friend convince the BCCI officer to talk to Blum. Blum then arranged to have Customs and IRS secretly "wire" a hotel room in Miami to secretly record their conversation.

Blum debriefed the BCCI official over the course of the next three days. He testified that the BCCI official "laid out in exquisite detail the false capitalization of the bank, the question of straw men holding stock, the use of the bank to purchase First American, National Bank of Georgia, Independence Federal in Encino, CA..."(104) According to Blum, he then:

"flew up to Tampa and met with a team that consisted of other Customs and IRS agents and two representatives of the U.S. attorney's office. The agents were quite excited. They seemed ready and eager to go forward. I had lengthy conversations with at least one of the assistants, Mark Jackowski. He was eager to go forward."(105)

Two weeks later, after Blum had left the Subcommittee, he made arrangements with law enforcement to secretly tape the BCCI official who had originally provided him a great deal of information about the bank. Again, Blum secretly met the individual in a hotel room in Miami and debriefed him for several hours. And, again, Blum believed that the Justice Department would use the information in its investigation of the bank.(106)

Following the taping, Blum had further contact with the Tampa investigators and prosecutors, providing further information over the course of a lengthy conference call.

However, according to Blum, the Justice Department did not follow-up on the information:

"I waited for something to happen and, and what happened was, I started getting calls from the two guys I took to Tampa who said they're [the Justice Department] is not following up. Then, I talked to the agents, and the agents said, well, we're very busy. . . No follow-up. And I began to worry that something was very wrong with this case. In -- I now believe it was late May, I decided that I would bring this matter to another jurisdiction, and that was New York... [I] talked to Bob Morgenthau and essentially told him what I knew. On the basis of the same evidence essentially, and he ultimately communicated with the same witnesses, he produced the indictment. . ."(107)

Mark Jackowski, the principal assistant United States attorney in Tampa handling the prosecution of BCCI from 1988 through 1990, presents a very different version of events:

The ex-BCCI official who had been portrayed by Blum as having direct, firsthand knowledge concerning various matters, either did not have such information, or was unwilling to admit it. The ex-official's information appeared to be primarily hearsay, gossip, rumor and innuendo. He was also unwilling to testify at any public proceeding. . . We were disappointed because Mr. Blum had led us to believe that the witness could provide firsthand information relative to the bank's involvement in money laundering and other matters.(108)

Rather than tell Blum that the interviews had been failures, and that the U.S. Attorney's office would not make use of the witnesses he had proffered, Jackowski and the Tampa prosecutorial team issued a subpoena to the Federal Reserve for documents pertaining to the First American relationship, and then permitted the broader inquiry suggested by Blum to lapse.

In justification of this failure to act, Jackowski, in sworn testimony, raised questions about Blum's credibility and even his honesty. Jackowski testified that he discounted what Blum told him about BCCI because Blum had made several wild accusations about the Subcommittee and asked for money for the information he was providing the Justice Department.(109) In staff interviews prior to his testimony, Jackowski claimed Blum had made even more outrageous statements -- that Senator Kerry had been paid one million dollars by BCCI, and that as a result Blum was fired from his job.(110) Jackowski contended that he did not believe these claims, any more than he believed the other information Blum had provided him, characterizing Blum as a "wacko." (111) Jackowski acknowledged that he failed to make any contemporaneous memorandum of the alleged conversations during which Blum supposedly made the statements cited by Jackowski, failed to investigate Blum's alleged wrongdoing, failed to investigate Kerry's alleged wrongdoing. failed to inform the Subcommittee of Blum's alleged remarks, and first raised the allegations 30 months later, in interviews with Congressional staff and at the public hearing, some five months after Blum had made his public criticisms of Justice.

Blum took the same information that he had presented to Jackowski to the Manhattan District Attorney's office some weeks later after he had been told by his BCCI informants that Justice Department officials in Florida were not following up on the information. According to the Manhattan District Attorney's office, which provided the Subcommittee with a letter dated November 21, 1991:

At no time did Mr. Blum ever seek or request money form this office for his assistance to us in the investigation of BCCI, nor did he receive any money from this office for his out-of-pocket expenses.

At no time did Mr. Blum ever ask for or suggest that he wanted, employment with this office.

At no time, during this office's dealings with Mr. Blum, did he ever accuse you, Senator Kerry, of misconduct.(112)

It seems highly illogical and unlikely that Blum would make the kind of representations to Jackowski which Jackowski has asserted, and then, only weeks later, adopt an entirely different demeanor with the Manhattan District Attorney's Office. What is more likely is that Blum did complain about not being able to complete the investigation of BCCI that had begun to develop in his final months with the Subcommittee, and may have offered to assist the U.S. Attorney's office on the case if they wanted his help.

It is notable that both of the witnesses who were taped with Blum by Justice, and who Jackowski viewed to have no useful information, were in fact placed before a grand jury by the New York District Attorney, to provide the testimony they had originally offered the Justice Department. That testimony became part of the record on which the grand jury then voted to indict BCCI on July 29, 1991.

The Subcommittee finds Jackowski's testimony not merely unconvincing, but given the severity of the charges, malicious. The Subcommittee believes Jackowski's testimony may stem from a personal dislike of Blum, who has not only been critical of the Justice Department, but who garnered significant media attention for having broken open the case when Jackowski had labored long and hard for months as the principal Justice Department official dedicated to Operation C-Chase. Jackowski deserves significant credit for his work, but not for his testimony.

Notably, in response to questions from Senator Brown, Jackowski acknowledged that the tape recordings made by the U.S. Attorney's office, involving Blum and his BCCI informant, focused on the issue of BCCI's use of nominees in the course of its secret take-over of U.S. banks. As Jackowski acknowledged:

The tapes, sir, contained information with respect to First American, that is correct. They contained information relative to NBG, that is correct. They contained information relative to Independence. With respect to Independence, the first witness said that he had in fact gone to a law firm because he suspected that Independence Bank might be owned by BCCI through Ghaith Pharaon.(113)

Because the witness did not have what Jackowski regarded as sufficient first hand information concerning these issues, Jackowski and the other Tampa prosecutors considered the information offered to be of little value, and shrugged off the witnesses Blum had believed to be so important.

Cooperation with the District Attorney

and the Federal Reserve Inexplicably, at times in the investigation the Justice Department has provided halting or reluctant cooperation with other law enforcement and regulatory bodies. In some instances the cooperation was non-existent, and in others, the Subcommittee has concluded that the Justice Department actually tried to frustrate or delay the provision of witnesses and documents to other law enforcement.

In testimony before the Senate Banking Committee, the General Counsel of the Federal Reserve, Virgil Mattingly, described to Senator Kerry the cooperation that his office was receiving from law enforcement:

Senator Kerry. What kind of cooperation is the Fed receiving from the New York District Attorney who is investigating both CCAI and CCAH?

Mr. Mattingly. Superb.

Senator Kerry. What kind of cooperation have you received from the Justice Department?

Mr. Mattingly. We have cooperated fully with the Justice department. We have given them everything we have on this matter.

Senator Kerry. What kind of cooperation are you receiving from them?

Mr. Mattingly. We are actively working with them.(114)

What Mattingly did not state in his public testimony is that over the past year, the Justice Department had actually been refusing to provide assistance to the Federal Reserve, and to some extent, had actually mislead the Federal Reserve about the existence of important information.

On February 7, 1990, the Federal Reserve had sent investigators to Tampa to meet with federal prosecutors, who were at the time in the midst of the trial of five BCCI officers who had been indicted in the Tampa case. The prosecutors said that while rumors of the BCCI-CCAH relationship abounded, they had investigated them and found no evidence to substantiate them.(115) This position was then confirmed by IRS agents working with the Tampa prosecutors. The agents told the Federal Reserve that they wrote a report to the grand jury setting out the facts, which they would be glad to provide to the Federal Reserve, and that they had an informant who could also provide further information on the issue. Following the meeting, the Federal Reserve investigator was told by a Tampa prosecutor that the report contained no relevant information, and therefore would not be provided. The Federal Reserve persisted in requesting the report, and the Tampa prosecutor, for reasons not explained, continued to refuse to cooperate by providing it. In the meantime, the investigator tried repeatedly to talk to the informant, and was told by the informant's wife that the informant was out of the country.(116) Instead of cooperating with the Federal Reserve, the Tampa prosecutor had actually refused to provide requested information. At the time of Mattingly's testimony, the Federal Reserve had yet to be obtain the report it had been requesting from the Justice Department for 18 months.

During that same hearing District Attorney Morgenthau spoke directly to some of the problems that his office was having in working with the Justice Department. The District Attorney stated, "We've had a number of meetings with senior people in the fraud section of the Justice Department, and I think that their position is that they would rather go it alone." (117)

District Attorney Morgenthau also testified that he had sought documents from the US Attorney's office in Tampa and that those documents had not been provided. According to Morgenthau,

"I wrote him a letter on March 8. I've never had a response to that letter. We were told that it had to be cleared by main Justice and a name was given to us. We called that lawyer three or four times on the phone, and he didn't answer his phone. I'm sure they are all very busy down there."(118)

As the New York District Attorney's case continued to develop, the tapes that had been created by Blum became of significant concern to the office. Given their assessment of the importance of the information they had been provided by Blum's witnesses, the New York prosecutors wanted to be sure they had told Justice the same thing, and that the stories had not changed. Accordingly, District Attorney Morgenthau requested that the tapes made in March, 1989 of the Blum-BCCI official conversations be made available to his office. Initially, his assistants were advised by the U.S. Attorney for Tampa's office that no such tapes existed. Later, the U.S. Attorney acknowledged their existence, but refused to provide them to the Manhattan District Attorney on the ground that to do so would threaten to reveal a source -- the BCCI official who Blum had been taped with, with whom the Justice Department had had no contact since March 1989, and whose identity was already known to the Manhattan District Attorney.

In another case, District Attorney Morgenthau requested that the Justice Department provide a witness to New York who had important information that New York needed.

Senator Kerry. I have heard through the grapevine as we have been investigating this of an instance or instances in which the Justice Department has access to or custody of a witness with material information regarding this case, which your office would like to interview but they have refused to provide your office with access to such a witness. Is that accurate?

Mr. Morgenthau. With this correction. They have said that he may be available in a year.

Senator Kerry. In a year?

Mr. Morgenthau. Yes. Not at this time. . . in a year. I don't want you to think that they have refused to let us see him.(119)

Morgenthau went on to say that his office had offered to exchange information with the Justice Department, but that they had rejected the offer. The District Attorney told the Subcommittee that he had run many collaborative investigations in the past and that the actions of the Justice Department in the BCCI case represented the "exception, not the rule."(120)

In response to Morgenthau's criticisms, US Attorney Genzman argued that "all sorts of problems crop up" in cooperative efforts and he specifically noted that "because of the differing systems of immunity, giving up information [to a county DA] might taint the Federal investigation."(121) There was a certain irony to Genzman's remarks given that at this point in time, the investigation of the Manhattan District Attorney's office was far in advance of his own. Indeed, the US Attorney's September 1991 indictment closely mirrored that of District Attorney Morgenthau, although it trailed the local prosecutor by nearly six weeks.

The Investigation Begins Again In late 1990, upon receiving information from several sources, including lawyers for Abu Dhabi and BCCI, that BCCI might well own First American, the Federal Reserve made a criminal referral to the Justice Department. As a result, for the first time, a grand jury was sworn in to hear evidence concerning BCCI's secret ownership of First American on January 16, 1991.

At that point, the New York District Attorney had been investigation these issues for about 18 months, and the Federal Reserve was in the initial stages of what would soon became a very significant investigatory effort to sort out who had participated in violating the Bank Holding Company Act and other banking statutes.

After the collapse of the bank on July 6, 1991, and the impending indictments by the District Attorney in Manhattan, the Justice Department in Washington moved swiftly to broaden its investigation. According to Dexter Lehtinen:

"[S]omewhat prior to the indictment, briefly, believing that he [Morgenthau] would indict, and thereafter, the Department's criminal division surveyed all of the United States Attorney's offices. Of course, they knew all about us because of our efforts to enforce the subpoenas, but [they] surveyed everyone with respect to what they were doing on any of these issues that Morgenthau had dealt with and what did they need?"(122)

As Lehtinen put it, "There was substantially more interest after [Morgenthau's] indictment."(123)

On September 5, 1991, the US Attorney in Tampa returned an indictment alleging racketeering and additional money laundering charges. And on November 15, 1991 the Department of Justice in Washington issued BCCI related indictments alleging racketeering and other offenses based on the secret acquisition and control of Independence Bank and the parking of securities in Centrust.(124)

According to Assistant Attorney General Mueller, "It was only in May of this year [1991] that we received a referral from the Federal Reserve on this bank.....the Department has moved with remarkable speed given the complexity of the matters involved."(125)

In testimony before the Subcommittee, Mueller described the importance which the Justice attached to the BCCI case after the worldwide collapse of the bank. He stated that:

The Department is pursuing allegations of wrongdoing of BCCI and its employees. It is conducting investigations through a Washington based task force, and in a number of US Attorneys' offices. At present 37 Federal prosecutors, supported by dozens of agents and supervisory and support personnel, are conducting or supporting investigations nationwide....The Washington task force alone has interviewed dozens of witnesses and reviewed tens of thousands of pages of records. It is interviewing witnesses and securing evidence in locations such as Britain, France, Abu Dhabi, Pakistan, Egypt, the Cayman Islands, the Channel Islands, Argentina, Peru and other countries.(126)

On July 29, 1992, the Justice Department, the District Attorney of New York, and the Federal Reserve each moved against BCCI's top officials, some of BCCI's nominees, and Clark Clifford and Robert Altman in a coordinated effort. Clearly, at least as of the time that Attorney General Barr was confirmed at Justice, many of the problems that had surfaced between the Justice Department and other law enforcement agencies had been worked through by the end of 1991, and a clear effort was being made to collaborate effectively on investigating and prosecuting BCCI.

Justice and the CIA From early 1985 on, the CIA possessed and disseminate to other governmental agencies detailed and important information about BCCI's plans in the United States, and its secret ownership of First American. That information was made available initially to the Treasury and to the Comptroller of the Currency, neither of which passed the information on to anyone else. In 1986, a broader group of agencies received the same information. In neither case did the CIA's memoranda trickle down to the agents or prosecutors responsible for investigating and prosecuting BCCI, until after the takedown of Operation C-Chase, when information in a third memorandum from the CIA did reach Tampa Customs agents.

Undercover Customs agent Mazur testified that during Operation C-Chase he never received any information from his superiors "about information the CIA might have."(127) According to Mazur, information from the CIA was brought to his attention "after the conclusion of the undercover operation."

Assistant Attorney General Mueller told the Subcommittee that while the CIA may have known about BCCI's criminality and illegal ownership of First American dating as far back as 1985, "regrettably, the Justice Department was not on the CIA's dissemination list until 1990 and therefore the Department never received this 1986 report at the time it was disseminated." Mueller is correct that no component of DOJ ever received the 1986 report, but the May 1989 report, which contained many of the same facts, including BCCI's ownership of First American -- in some cases with more detail provided -- was provided to both the DEA and the FBI.

As Assistant Attorney General Mueller testified:

At no time, to my knowledge, has anyone from the CIA, or any agency, attempted to obstruct or interfere with the Department of Justice's investigation and prosecution of BCCI.(128)

For the record, assistant US Attorney Mark Jackowski, who oversaw the undercover operation and prosecuted the case, has provided a variety of answers on this subject. When asked by a journalist whether he had uncovered any CIA involvement in BCCI or whether the agency had ever interfered with Operation C-Chase or the ensuing prosecution, Jackowski responded "no comment." When asked the same question by Subcommittee staff, Jackowski replied that "I read a lot of spy novels. Let's leave it at that." When asked by Senator Kerry in a public hearing, Jackowski, under oath, stated that he did not come into contact with the CIA.

The Justice Department and the Senate Investigation Through much of the Subcommittee's four year investigation into BCCI, the Justice Department treated the Subcommittee's investigation with visible disdain, at times bordering on contempt. As Jackowski testified, the Tampa prosecutors viewed the principal Subcommittee investigator of BCCI in 1988 and 1989, Jack Blum, to be unreliable at best, someone who wished to trade his information for money, and who had produced little of real value for them. In interviews with Senate staff in the fall of 1991, Jackowski characterized Blum as a "wacko," who had done little more than provide him with "bullshit."(129) Accordingly, after initial interviews of his witnesses, Jackowski and his colleagues did nothing further with the information and leads he had provided.

Following Blum's departure, other Senate staff efforts were treated equally cavalierly.

In the fall of 1989, the Subcommittee sought to depose a Colombian money-launderer who was also cooperating with the Tampa prosecutors, and who had used BCCI in Panama. The Tampa prosector's office and the Justice Department, without prior notification to Subcommittee staff, began making telephone calls to other Senate offices, not involved in the investigation, in an effort to prevent the deposition. The Justice Department told these offices, and Subcommittee staff that even staff interviews with the witness would inevitably prejudice the federal prosecution of BCCI and of Manuel Noriega, and that the government could be forced to provide to the defendants any material the Colombian provided to the Subcommittee. Staff advised the Justice Department that the deposition would be held Committee confidential, and was in any case constitutionally protected against disclosure. However, because of the level of concern the Justice Department expressed, and the implicit threat by Justice that the Subcommittee would be blamed if something did go wrong with the Noriega prosecution in connection with the Colombian, the deposition was halted. As a result, the important information possessed by the witness concerning BCCI's criminal activity in Panama was never provided to the Subcommittee on the record. To make matters worse, the communications by Justice seeking to stop the deposition with other Senate offices not involved in the investigation resulted in a leak that the Colombian was cooperating with the government, imperiling his family and property in Colombia. As a result of this leak, generated through incautious actions by Justice, the Colombian refused to cooperate further with the Subcommittee. Ironically, the Colombian, far from being essential to the government's criminal cases against BCCI and Noriega, was never used by the government in either trial.

During the spring of 1990, when the Subcommittee was seeking to obtain documents from BCCI directly, lawyers for BCCI took the position that they would gladly provide documents they were making available to the Justice Department from overseas if the Justice Department would in turn provide copies to BCCI's lawyers in the United States. In response, Justice attorneys advised the BCCI lawyers on May 25, 1990, that the Subcommittee staff should contact Justice directly for the documents involved, which came from Panama. Subcommittee staff contacted federal prosecutors in Tampa and Miami about the documents, who did not return telephone calls or reply to letters for many weeks. In early July, a prosecutor from Tampa advised the Subcommittee staff to ask main Justice in Washington for its position regarding the documents. Following repeated telephone calls, the Justice Department finally advised the Subcommittee in mid-July, 1990, that it could not provide the Subcommittee any documents whatsoever from any location whatsoever, other than the materials entered into the record in the BCCI trial in Tampa. The decision was made by Justice following a meeting between Subcommittee staff and Chuck Saphos, the head of Justice's narcotics section who had six months earlier written the state regulators to recommend that BCCI be kept open.

In the meeting with the Subcommittee, Saphos took the position that any question the Subcommittee might ask about BCCI would inevitably prejudice ongoing matters at the Justice Department. Saphos told staff that there was no matter pertaining to BCCI that could be discussed without prejudicing the Noriega trial. Accordingly, the Justice Department could not consent to testify concerning any aspect of the BCCI case, nor would it provide any information concerning any aspect of the BCCI case apart from what was on the public record in the Tampa trial.

Following the meeting between Subcommittee staff and Saphos, Deputy Assistant Attorney General Bruce Navarro advised Senator Kerry in a letter dated July 24, 1990:

Your questions about the nature of BCCI's cooperation under the plea, BCCI's potential involvement in the handling of assets of Antonio Noriega and the possibility of further investigative efforts by the United States concern matters upon which the Department can not comment without jeopardizing any future prosecutions that might be undertaken. . .

Many of the specific questions you have raised may be addressed by BCCI itself. The Department simply can not testify on matters which are under investigation or subject to pending litigation.(130)

As is now made clear by the record, this was during a period in which law enforcement had taken an acknowledged "time-out" from its investigation.

Even after the global closure of BCCI, the Justice Department continued to impede attempts by the Subcommittee to gather information concerning BCCI, and its own handling of the BCCI case. The Subcommittee had requested copies of Customs Service memoranda related to Operation C-Chase. As the Customs Service is an agency of the US Treasury -- not the Justice Department -- it would have been the Treasury's decision as to whether to release them. Treasury had no objection to their release. However, after conferring with Justice, Treasury explained to the Subcommittee that it would not release them without Justice's permission, and that permission had not been granted by Justice.

The Subcommittee then asked Justice to explain its refusal to release the documents. The reason provided by the Department was that the memoranda contained information that would jeopardize ongoing investigations. After considerable wrangling, and after the Justice Department was advised that any additional delays in providing the documents could result in equal delays in a Senate vote on confirmation Acting Attorney General Barr in a permanent position, Subcommittee staff were allowed to review the memoranda in an unredacted form.

When the documents had been produced, few revealed anything about ongoing investigations. Many referred to embarrassing criticisms by Customs agents of the handling of the BCCI investigation, including the lack of resources that had been devoted to Operation C-Chase, internal discussions concerning the advisability of bringing a RICO case and the advisability of pursuing a plea agreement with the bank.

Prior to the warning concerning a delay in the Barr nomination, the Justice Department also refused to allow Senator Kerry to meet one-on-one with DEA agent Mazur, formerly the lead Customs agent in Operation C-Chase. The Department insisted that a member of the Justice Department be present in the interview, contending that any private interview between a Senator and a Department of Justice employee was precluded by "Attorney General Order 504-73," which charges the Assistant Attorney General for Legislative Affairs "with the responsibility of coordinating all Department of Justice activities relating to the Congress." The Assistant Attorney General for Legislative Affairs stated that a private meeting between a United States Senator investigating BCCI and the undercover agent who exposed the bank, without the presence of officials from Justice's legislative relations office, would prevent him with "fulfilling the responsibilities charged to him by the Attorney General."(131) As a result, despite numerous requests from Senator Kerry to meet with Mazur personally, the meeting did not place. Senator Kerry therefore decided to simply request Mazur to testify publicly, without any prior debriefing of what he might to say to either the Senator or the Senator's staff. Senator Kerry also decided to seek testimony from Mark Jackowski as the chief prosecutor in the Tampa case.

On September 16, 1991, September 18, 1991, and October 16, 1991, in response to a series of requests from the Subcommittee, the Justice Department expressed its refusal to accede to Subcommittee requests for the testimony of Jackowski and Mazur before the Subcommittee concerning BCCI. At the time, neither of them were involved in further activities concerning BCCI. In the September 16, 1991, the Justice Department suggested that the Subcommittee's requests would not only compromise ongoing cases, but put Mazur's personal safety at risk:

Department's policy on provision of Departmental representatives for Congressional hearings is that line attorneys and investigative personnel do not represent the Department in Congressional hearings . . . One effect of having Mr. Mazur testify in an open Congressional hearing on his role in the undercover operation which led to the successful prosecutions in the BCCI matter, even with safeguards such as attempting to disguise his identity, would increase the possibility of drug traffickers attempting to seek revenge by harming Mr. Mazur or his family.(132)

Mazur's personal attorney advised staff that Mazur believed his identity could be protected through the mechanism of having him testify behind a screen with his voice altered, an approach that was ultimately adopted by the Subcommittee. Later, Mazur personally advised staff of the Subcommittee that he had no reason to believe his testimony before the Subcommittee, with those precautions, would create any risk to him or his family.

The Justice Department also advised the Subcommittee that if Mazur testified, he could never be used again in an undercover assignment.(133) Later, after Mazur testified before the Subcommittee, he in fact returned to an undercover role, without incident. Finally, the Justice Department, reiterating a line that it had previously taken on several occasions with the Subcommittee, said that the Subcommittee's requests threatened to prejudice ongoing matters.(134)

After attempting to resolve any legitimate problems the Justice Department might have, without success, the Subcommittee chairman advised the Justice Department on October 31, 1991, that if it continued in its refusal to provide these witnesses, the Subcommittee would seek the authorization of subpoenas to compel the Justice Department to produce them as witnesses.

At this point, having delayed hearings concerning the Justice Department's handling of BCCI for months in 1991, and for more than a year since the Subcommittee's original request for its testimony in July, 1990, the Justice Department agreed to produce the witnesses in order to prevent the confrontation between the Senate and the Justice Department that would ensue should a subpoena be issued.(135)

In summary, between March 1988 and October 1991, the Justice Department repeatedly requested delays or halts to action by the Subcommittee concerning BCCI, criticized Subcommittee staff and information concerning BCCI, refused to provide assistance to the Subcommittee concerning BCCI, and, on occasion, made misleading or false statements to the Subcommittee concerning the status of investigative efforts concerning BCCI. This pattern shifted substantially after Senator Kerry advised the Justice Department that its handling of the Subcommittee could impede the Barr nomination. While some differences of opinion concerning Congressional access to documents have taken place, following Attorney General Barr's confirmation, the Justice Department has generally demonstrated a dramatically improved responsiveness to Subcommittee inquiries and requests concerning matters relating to BCCI.

Post-Script On August 26, 1992, some weeks after the date of the drafting of this chapter of the report, the Justice Department delivered to the Subcommittee chairman and ranking member a response to a request made to Justice by the Subcommittee one year earlier, on August 1, 1991, and reiterated on November 21, 1991, for a rebuttal by the Justice Department to any of the statements made by former Subcommittee investigator Jack Blum before the Subcommittee which the Justice Department considered incorrect.(136)

The rebuttal provided on August 26, 1992 consisted of a thirteen page statement challenging the August 1, 1991 sworn testimony of former Customs Commissioner William von Raab, an eleven page statement challenging the August 1, 1991 sworn testimony of former Subcommittee investigator Blum, and a cover letter apologizing "for any inconvenience our delay in responding may have caused you."

Nearly all of the statements contained in the rebuttals were previously made by Justice Department officials either in prepared statements or in sworn testimony before the Subcommittee on November 21, 1991 and May 18, 1992, and have been previously analyzed, incorporated, and referred to within the body of this chapter.

As noted at the start of this section, editorial writers commenting on the Justice Department's handling of BCCI frequently described its response as "sluggish," an assessment which the Justice Department has termed unfair. The delay of over nine months by the Justice Department before providing the Subcommittee the requested response unfortunately provides some ironic further demonstration of the underlying problem.

Given the lack of celerity of this response, and the repetitious character of its rebuttals, the Subcommittee, rather than attempt to incorporate these further statements at the last minute in the body of the section, includes them, without comment or further analysis, as appendices below.

1. See e.g. editorials, "Why So Slow on BCCI?", Washington Post, May 29, 1991, "What the U.S. Knew About BCCI," Washington Post September 9, 1991, "Greed, Influence and BCCI," The Washington Post, November 1, 1991; "Questions For Mr. Barr," Washington Post, November 12, 1991; "What Took So Long?," New York Times, August 3, 1991.

2. S. Hrg. 102-350 Pt. 3 p. 789.

3. Federal Law Enforcement's handling of Allegations Involving the Bank of Credit and Commerce International. Staff Report Issued On September 5, 1991 by the Committee on the Judiciary. September 1991., p.2.

4. Id. p.3.

5. Id.

6. Id.

7. Id.

8. Id. p.4.

9. S. Hrg. 102-350 Pt. 2. p. 524.

10. S. Hrg. 102-350, Pt. 3, p. 716.

11. Id. p. 671.

12. Id. p.672.

13. S. Hrg. 102-350, Pt. 3, p. 669.

14. Id. p. 672.

15. Id. p. 672

16. Id. p. 678.

17. Id. p. 681.

18. Id. p. 688.

19. Id. p. 689.

20. Id. p. 732.

21. Id. p. 683.

22. Transcript, federal wiretap of conversation between Robert Musella, undercover agent and Amjad Awan, September 9, 1988, 5:05 pm, Grand Bay Hotel, Miami, Florida.

23. S. Hrg. 102-350 Pt. 1 p. 52.

24. S Hrg. 102-379, Subcommittee on Consumer and Regulatory Affairs, Senate Committee on Banking, Housing and Urban Affairs, May 23, 1991, p. 231.

25. S. Hrg. 102-350 Pt. 3, p.731.

26. S. Hrg. 102-350 Pt. 3 p. 686.

27. Id. p. 687.

28. Id.

29. Id. p.721

30. S. Hrg. 102-350 Pt. 3 p. 721.

31. Customs Memorandum from Mazur to Group Supervisor, March 15, 1988.

32. Id. p.691.

33. Memorandum from Mazur to [redacted by Justice Department], April 11, 1989, Subject: Current Resource Needs of Operation C-Chase.

34. Id. p.691

35. S. Hrg. 102-350 Pt. 3 p. 753.

36. S. Hrg. 102-350 Pt. 3 p. 696.

37. Mazur Memorandum to [redacted by Justice Department] April 11, 1989, Subject: Current Resource Needs of Operation C-Chase.

38. Id. p. 701.

39. Id. p. 695.

40. S. Hrg. 102-350 p. 746.

41. S. Hrg. 102-350 Pt. 3 p. 723.

42. Id. p.717

43. Id. p.719.

44. Id. p. 736.

45. Id. p.697.

46. S. Hrg. 102-350 p. 773.

47. Id p. 697.

48. Id p. 698.

49. Id. p. 749.

50. Id. p. 792.

51. Id. p.750.

52. Id. p. 754.

53. S. Hrg. 102-350 Pt. 3 p. 752.

54. Id. p. 754.

55. S. Hrg. 102-350 Pt. 1 p. 279.

56. Staff interviews, Amjad Awan and Akbar Bilgrami, July 20-29, 1992.

57. Testimony of Deputy Assistant Attorney General Paul Maloney, S. Hrg. 102-379 pp. 222-223.

58. S Hrg 102-379. p. 233.

59. S. Hrg. 102-350. Pt. 3. pp. 718-719.

60. Id. p.694.

61. Staff interviews, Bilgrami and Awan, July 20-29, 1992.

62. Id. p.719.

63. Id. p. 718.

64. Staff interviews, Amjad Awan and Akbar Bilgrami, July 20-29, 1992.

65. Oral communication, June, 1992, U.S. government official.

66. Id. p. 720.

67. Id. p.782.

68. Lehtinen testimony, p.64.

69. Id. p. 13.

70. Id.

71. Id. p.16.

72. Id. p. 768.

73. Gerald Lewis to Charles S. Saphos, February 14, 1990.

74. Saphos letter to Lewis, February 16, 1990.

75. Id. p.799.

76. S. Hrg. 102-350 Pt. 3 p. 768.

77. Id. p.768.

78. S. Hrg. 102-350 Pt. 5, Lehtinen testimony, p. 11.

79. Id. p.19

80. Id. p. 15.

81. Id.

82. Lehtinen recalled in testimony that the countries included the United Kingdom, France, Holland, Luxembourg, Switzerland, panama, United Arab Emirates, and the Bahamas and Grand Cayman. Id. p. 23.

83. Id. p.23.

84. Id. p.39.

85. d. p.26.

86. Id. p. 28.

87. Id. p. 34.

88. Id. p.50.

89. Id. p.51.

90. Id. p.52.

91. Id. p.54.

92. Id. p.58.

93. Id. p. 63.

94. Id. p.70.

95. Id. p. 76.

96. Id. p. 82.

97. Id. p.80.

98. Id. p.77.

99. Id. p. 60.

100. Id. p. 61.

101. S. Hrg. 102-350, Pt. 1. p.27.

102. Id. p.27.

103. Id. p. 32.

104. Id. p.32.

105. Id. p.33.

106. Id. p.33.

107. Id. p. 33. Greg Kehoe, First Assistant US Attorney in Tampa testified that District Attorney Morgenthau's indictment was based on Price Waterhouse audit reports. However, District Attorney Morgenthau credits Blum with providing him the evidentiary foundation for beginning his investigation that led, months later, to New York's securing the audit reports.

108. Id. p.735.

109. Id. p. 735.

110. Winer memo to files, Jackowski interview, September 23, 1991.

111. Id.

112. Letter to Senator John Kerry, signed Michael Cherkasky, District Attorney of the County of New York, November 21, 1992, Id. p. 770.

113. S. Hrg. 102-350 Pt. 3 p. 759.

114. Id. p.137. In testimony later in the day, Robert Genzman explained that "With regard to cooperation with the Federal reserve, let me mention one problem... If we gave certain information to the federal Reserve, that information could become subject to the regulatory scheme under which the federal Reserve works." p. 235.

115. Chronology, House Banking Committee, BCCI Pt 1, id., p. 689.

116. Chronology, House Banking Committee, BCCI Pt. 1, id. pp. 689-690.

117. Id. p. 163.

118. Id.

119. S. Hrg. 102-379, pp. 166-167.

120. Id.

121. Id. p.235.

122. Lehtinen testimony, p. 29.

123. Id. p.30.

124. S. Hrg 102-350, Pt. 3, p. 787.

125. Id. p. 788.

126. Id. p, 788.

127. Id. p. 673.

128. S. Hrg. 102-350 Pt. 3, p. 789.

129. Memo to files, Winer, Re: Jackowski interview, September 23, 1991.

130. Letter, Navarro to Senator Kerry, July 24, 1990.

131. Letter to US Senators Hank Brown and John Kerry from Assistant Attorney General W. Lee Rawls, September 18, 1991.

132. Letter from Assistant Attorney General W. Lee Rawls to Senator Kerry and Senator Brown, September 16, 1991.

133. Id.

134. Id.

135. Letter, W. Lee Rawls, Assistant Attorney General, to Senators Kerry and Brown, November 4, 1991.

136. S. Hrg. 102-350 Pt. 4 p. 778.

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BCCI AND LAW ENFORCEMENT:

District Attorney of New York Introduction While the Justice Department's handling of BCCI has received substantial criticism, the office of Robert Morgenthau, District Attorney of New York, has generally received credit for breaking open the BCCI investigation.

It did so not on the basis of having any witnesses or information available to it which were not available to other investigators, including the Justice Department, and the Federal Reserve. Rather, District Attorney Morgenthau broke the case because he recognized BCCI's importance and significance as a case of global international organized crime, and devoted sufficient attention and resources to force out the truth.

As District Attorney Morgenthau testified, he made the decision to target BCCI once the bank's activities came to its attention because of his recognition that prosecuting a financial institution handling many millions in drug money could, in the long run, have as much impact on fighting crime as the hundreds of prosecutions his office was making every week against traffickers themselves in New York.

[J]ust as illegal drugs are smuggled into this country, illegal profits must be smuggled out. The sums involved are truly staggering . . . the simple truth is that the wire transfer and the bank book are as much the tools of the drug trade as the scale and the gun. . . the nexus between drugs and money means that if we are to succeed in the war against drugs, we must be as vigorous in our prosecution of corrupt bankers as we are of street dealers.(1)

In going after BCCI, Morgenthau's office quickly found that in addition to fighting off the bank, it would receive resistance from almost every other institution or entity connected to BCCI, including at various times, BCCI's multitude of prominent and politically well-connected lawyers, BCCI's accountants, BCCI's shareholders, the Bank of England, the British Serious Fraud Office, and the U.S. Department of Justice. Each, while professing to cooperate with the District Attorney, in fact withheld information from the District Attorney and in some cases, impede, delay, or obstruct his inquiry for months. Ultimately, Morgenthau proved BCCI's criminality, not because of information or cooperation provided by other government agencies -- with the key exception of the Federal Reserve, there was almost none -- but because BCCI had left a trail of evidence of wrongdoing there for anyone with the tenacity to pursue it.

Information From Senate Aide Initiates Investigation In the late spring of 1989, Jack Blum, who had been the chief counsel to the Subcommittee investigation concerning "Drugs, Law Enforcement, and Foreign Policy," during 1987 and 1988, went to New York to meet with prosecutors working for District Attorney Robert Morgenthau concerning information he had about criminal activity involving BCCI.

Blum knew Morgenthau's reputation as an aggressive prosecutor, and had worked with Morgenthau in the course of the 1987-1988 Subcommittee investigation. Morgenthau had testified as the lead witness before the Subcommittee in February, 1988 concerning the importance of money laundering in attacking crime. In that testimony, he had stated that some $5 billion to $10 billion a year was being laundered through New York banks and other financial institutions, suggesting that laws combatting money laundering were inadequate, and that the New York banks had a role in preventing the laws from being tougher.(2) In that testimony, Morgenthau made a commitment to the Subcommittee concerning his approach to money-laundering:

We are going to spend more resources now in trying to trace [illegal] funds. I think we are going to be successful, although, again, that is a labor-intensive kind of activity.(3)

Based on the statements made to the Subcommittee by Morgenthau, Blum believed he might be in a position to follow up on the information Blum had developed about BCCI in connection with his work for the Senate. As Blum testified, he believed he had critical information and witnesses about BCCI's criminality, and had taken that information in March, 1989 to the U.S. Attorney for the Middle District of Florida in Tampa who had prosecuted BCCI on money laundering charges as a result of the Operation C-Chase sting. Blum had brought in two witnesses with information concerning, and arranged for a lengthy conversation to take place between him and the witnesses under circumstances where they could be secretly taped by the government. Moreover, Blum had convinced both of the witnesses to cooperate with the Justice Department. Yet in Blum's view, after all of his efforts,

the Justice Department had done nothing with the information:

The strange thing is that after that effort to put this all in the hands of the Justice Department -- and I might add that at the time I went to Miami, at the instruction of the chairman [Senator Kerry], I shared with the agents working the case materials we had gathered, memos I had written, and other materials we had gathered, so that they would have a complete picture of what we knew.

I waited for something to happen, and what happened was, I started getting calls from the two guys I took to Tampa who said, they're not following up. Then I talked to the agents, and the agents said well we're very busy. We're working on preparations for the trial.

No follow up, and I began to worry that something was very wrong with this case. In . . . late May, I decided that I would bring this matter to another jurisdiction, and that was New York. Our Federal system mercifully allows for parallel activities. If the State government fails, the Federal Government is there, and vice versa. . .

So I went up to New York and I talked to Bob Morgenthau and essentially told him what I knew. On the basis of the same evidence, essentially, and he ultimately communicated with the same witnesses, he produced the indictment that you read about the other day.(4)

After Blum met with Morgenthau, he was introduced to other prosecutors in the New York DA's office, and debriefed them. He told them he believed BCCI had engaged in money-laundering in New York, and described the evidence that BCCI owned First American. Morgenthau's prosecutors found his information to be startling, and viewed it with skepticism. As Michael Cherkasky, Morgenthau's chief of investigations later stated:

Blum's story was ridiculous. [He said] the entire Third World was involved and that they had bought and sold entire governments and maybe some United States officials. It was a fascinating tale -- this guy was telling us the world was corrupt!(5)

Morgenthau decided to move forward, and assigned the investigation of the case to John Moscow, an experienced fraud prosecutor. Moscow in turn interviewed Blum's witnesses, looked at documents, investigated the case Blum brought to them, and, in Cherkasky's words, Blum's "'story' was proven to be true."(6) While the Justice Department prosecutors who had the most information about BCCI regarded Blum as a "wacko," and his information as worth little, the New York District Attorney's office took it seriously, investigated it, and proved it out.

BCCI's Reputation

Contributing to Initiation of Investigation During the July 4th weekend of 1989, several members of District Attorney Morgenthau's staff attended an international conference on money laundering in Cambridge, England. At the conference, they learned that BCCI had an international reputation for capital flight, tax fraud, and money laundering that far exceeded the conduct charged in the Florida indictment.(7)

In addition, Morgenthau's staff learned that BCCI did not have a single regulator and did not operate on a consolidated basis anywhere and that its two major operating subsidiaries were chartered in separate bank secrecy havens -- Luxembourg and the Cayman Islands -- where customer privacy was paramount. They concluded that this structure multiplied BCCI's opportunities to conceal fraud. Following the trip, they conferred with the District Attorney and decided to pursue an investigation against BCCI in earnest. At the time they made this decision, all of the information they had was also available to the Justice Department.(8)

From the start, given the allegations presented to them by Blum, the New York District Attorney's office recognized that an important part of the investigation would be uncovering the exact relationship between BCCI and First American. After Blum left Morgenthau's office, Morgenthau looked at First American in Moody's stock guide, and noted that First American was owned by a series of holding companies starting in Delaware that then moved offshore to various bank secrecy havens, and that First American itself was headed by Clark Clifford. Morgenthau later said that looking at the series of holding companies and seeing Clifford's name at the top, he concluded that "somebody was trying to hide something.(9)

Because First American had a New York operation, First American Bank of New York, any misrepresentations made in connection with that bank by BCCI or anyone else would confer a primary basis for jurisdiction for Morgenthau's office.

Thus, while BCCI's possible ownership of First American was never more than a peripheral issue for the Tampa prosecutors, one which prosecutor Jackowski termed "dessert," with money laundering being the main course, the issue was always at the center of attention at the District Attorney's office. As Moscow stated later:

We kept asking one basic question: 'Who owns B.C.C.I. and where did the money come from?' We never got to the advanced questions. We got stock on the simple questions and on 'Who owns First American?'"(10)

Problems Obtaining Information While the New York District Attorney was able to subpoena those documents held at BCCI New York, and at the offices of First American in New York, subpoenas outside the immediate jurisdiction of New York posed greater problems for a local district attorney. These problems, while in some cases substantial, were dwarfed further by the District Attorney's difficulties in obtaining information pertinent and material to BCCI's activities in New York, but held at such locations as the United Kingdom, Luxembourg, the Grand Caymans, Panama, and Abu Dhabi. Moreover, on even simple issues, New York was finding tremendous obstacles in getting answers.

When New York sought documents from the Serious Fraud Office in London -- the British version of the financial crimes unit within the Justice Department -- the SFO was unwilling to provide it with any assistance in obtaining BCCI documents. When New York met with BCCI's lawyers, former federal prosecutors Lawrence Wechsler and Lawrence Barcella, they told the New York prosecutors that the documents concerning the issues of BCCI's capitalization and stock were held abroad and protected by bank secrecy, and the prosecutors could not obtain them.(11) As Morgenthau later testified, BCCI had been careful to keep its critical records in countries that would protect its right to keep them secret, making investigation of BCCI extraordinarily difficult:

When you try to get the records, they invoke the secrecy laws of all those jurisdictions. The main audit of BCCI was done by Price Waterhouse U.K. They are not permitted, under English law, to disclose, at least they say that, to disclose the results of that audit, without authorization from the Bank of England. The Bank of England, so far -- and we've met with them here and over there -- have not given that permission.

The audit of BCCI, the financial statement, profit and loss balance sheet that was filed in the State of New York was certified by Price Waterhouse Luxembourg. When we asked Price Waterhouse U.S. for the records to support that, they said, oh, we don't have those, that's Price Waterhouse U.K.

We said, can you get them for us? They said, oh, no, that's a separate entity owned by Price Waterhouse Worldwide, based in Bermuda.

So, here you have financial statements, profit and loss, filed in Washington, filed in Virginia, filed in Tennessee, filed in New York, and audited by auditors who are beyond the reach of law enforcement.

So that creates some very, very serious problems.(12)

Thus, accounting firms in the United States affiliated with those elsewhere that had certified BCCI responded to subpoenas with the claim that they could not provide the documents that could prove BCCI's criminality; the Bank of England, which could have made those documents available also refused to provide them; and the British Serious Fraud Office refused to provide them. Moregenthau's attempts to obtain documents concerning BCCI's money laundering and other crimes from Panama met similar resistance. Finally, when the District Attorney of New York turned to the Justice Department for assistance, it too refused to cooperate. As Morgenthau testified on May 23, 1991:

We've had a number of meetings with senior people in the fraud section of the Justice Department, and I think their position has been that they'd rather go it alone.(13)

In fact, at the time the Justice Department had, as detailed in the chapter on the Justice Department, refused to provide the New York District Attorney with access to its documents and certain witnesses under its control in connection with BCCI, and in one case, a prosecutor in Tampa actually lied to the Morgenthau office and claimed that the Blum tapes pertaining to his debriefings of the BCCI witnesses did not exist and had never existed.(14)

Techniques to Obtain Information Documents subpoenaed by the Foreign Relations Committee from BCCI and provided by BCCI's liquidators to the Committee after the closure of the bank on July 5, 1991 provide a base-line mechanism for assessing how the District Attorney of New York put together his case. The documents initially provided by the liquidators to the Committee consisted almost entirely of materials that had previously been subpoenaed in 1990 by the District Attorney of New York.

What the documents show is that the District Attorney had several insiders who either still worked at BCCI, or had formerly done so, who had provided guidance to the relationships between BCCI and First American.

Subpoenas to BCCI in New York had revealed hundreds of documents pertaining to BCCI's involvement in various aspects of decision making concerning the First American Bank in New York. They also revealed financial benefits to First American and National Bank of Georgia employees being paid them by BCCI while they ostensibly were employed by the U.S. banks, numerous and differing kinds of financial transactions involving BCCI and First American, and participation by First American employees who formerly worked for BCCI in BCCI's annual conferences.

A number of the witnesses who testified before the Subcommittee were first interviewed by investigators from Morgenthau's office. These BCCI insider, such as Abdur Sakhia, who testified in detail about the ties between BCCI and First American, Clifford and Altman's alleged knowledge of these ties, and Clifford and Altman's alleged actions at First American at the direction of BCCI, provided critical information linking together the documents and leading to subpoenas to other, less cooperative, BCCI insiders.

Thus, based on the information that existed within the United States, it was possible to develop a theory of what had taken place, as well as a substantial amount of direct and circumstantial evidence to confirm it. However, it was clear from the first additional critical information was outside the United States, and had to be obtained to further document some of the essential matters to bring an indictment.

Morgenthau's office had learned in the autumn of 1990 that audits of BCCI by Price Waterhouse UK would detail massive fraud at BCCI, and describe in detail BCCI's interest in First American. But subpoenas to Price Waterhouse in the United States produced no information, as the accounting firm's attorneys took the position that the U.S. firm had no power to obtain such information from its foreign affiliates. Accordingly, Morgenthau, as described in a journalistic account, used personal contacts he had in the United Kingdom to cut the knot of secrecy the UK had imposed on the audit reports:

[Morgenthau] contacted Eddie George, the deputy governor of the Bank of England. Morgenthau reminisced about his time in England during the war. . . "Morgenthau told George, 'We are going to charge this bank.' . . . And when we charge them you are going to be looked at publicly. We would like to be able to say that the Bank of England helped us."(15)

It is not by any means clear that the Bank of England responded to Morgenthau's plea. However, ultimately, through a mechanism that has never been made public, Morgenthau was able to obtain the Price Waterhouse audit reports, detailing BCCI's frauds, its massive lending on First American, its use of nominees, and related matters. As his investigation intensified, he found that the Federal Reserve had by late 1990 became engaged in its own investigation of BCCI and First American, and the two offices began working closely to assist one another.

The Federal Reserve was able to conclude by February, 1991 that there had been violations of the Federal Bank Holding Company Act in connection with failures by BCCI to keep it apprised of changes in share holdings at First American/CCAH. The situation threatened the restructuring of BCCI that was going on in the United Kingdom, and the Federal Reserve was able to convince the Abu Dhabi government that cooperation with it was essential if Abu Dhabi and BCCI were to have any hope of keeping the bank alive. Federal Reserve investigators Richard Small and Thomas Baxter went to Abu Dhabi and there found the key documents showing BCCI's secret ownership of First American through nominees, which were in turn provided to the District Attorney's office. Thus, as of the spring of 1991, Morgenthau had assembled more than enough information to indict BCCI as a classic Ponzi scheme from its beginning. Yet even as he prepared to indict BCCI, he continued to face massive obstacles in obtaining information from any government agency besides the Federal Reserve, let alone from the vigorous defense being pursued by his targets. As Morgenthau testified on May 23, 1991:

We are finding problems at every step of the way. We are finding problems with the Justice Department in getting records. We have had subpoenas out to various banks for records which have not been honored. We have been trying to get the cooperation of the Bank of England. We are trying to get the cooperation of Price Waterhouse U.K., and we have not been successful.

The one organization that has been very helpful to us is the Federal Reserve Bank of New York and the Federal Reserve Board in Washington.(16)

The New York Indictment On July 29, 1991, the New York District Attorney indicted BCCI. In contrast to the narrow money laundering charges brought against BCCI by the Justice Department in Tampa, the indictment alleged a broad, international criminal organization which stole funds from poor countries and small depositors and used them to keep BCCI afloat despite massive mismanagement and the fact that the bank had no real assets of its own.

As the indictment described it:

[BCCI's] scheme was premised on the fact that banks rely on credit. The essence of the scheme was to convince depositors and other banking and financial institutions, by means of false pretenses, representations, and promises that the BCC Group was a safe financial repository and institution for funds, and thereby defendants acted to persuade depositors and banking and other financial institutions to provide the BCC Group banks with deposits and credit.(17)

Thus under Morgenthau's theory of the case, BCCI had from the beginning never had the assets it purported to have, but relied on the reputations of prominent people to provide it with the aura of wealth and respectability it needed. He saw BCCI to a massive, multi-billion dollar confidence scheme, whose collapse was inevitable if the facade BCCI had so carefully constructed were ever ripped away. During the months prior to his July 29, 1991 indictment of BCCI, the New York grand jury had heard witness after witness detail the mechanisms by which the facade had been maintained, and having hearing those details, they indicted.

The New York District Attorney found that among the major actions taken by BCCI to carry out its fraud were:

** Employing the ruling families of a number of Middle Eastern states as nominees for BCCI, who pretended to be at risk in BCCI but who were in fact guaranteed to be held harmless by BCCI for any actual losses.

** Using bank secrecy havens including Luxembourg and the Cayman Islands to avoid regulation on a consolidated basis by any single regulator of BCCI, and thereby to permit BCCI to transfer assets and liabilities from bank to bank as needed to conceal BCCI's true economic status.

** Paying bribes and kickbacks to agents of other banking and financial institutions, thereby avoiding the scrutiny of regulators. (18)

By December, 1991, BCCI's liquidators had pled guilty to the first six counts of the New York indictment as part of an agreement concerning BCCI's assets in the United States. Essentially every one of the matters which Blum had put in front of the District Attorney two and a half years earlier had proven to be true, and had now been acknowledged by BCCI's representatives in formal court proceedings.

Consequences of New York's Investigation The persistence of the District Attorney in 1989 and 1990 led to a series of events which brought BCCI down. First, the questions being asked by the District Attorney intensified the review of BCCI's activities by its auditors, Price Waterhouse, in England. Second, the District Attorney's questions led to the Federal Reserve again seeking information about BCCI's possible ownership of First American beginning in late 1989. Third, the District Attorney's efforts were critical to stopping an intended reorganization of BCCI worked out through an agreement among the Bank of England, the government of Abu Dhabi, BCCI's auditors, Price Waterhouse, and BCCI itself, in which the nature and extent of BCCI's criminality would be suppressed, while Abu Dhabi would commit its financial resources to keep the bank going during a restructuring.

By the late spring of 1991, the key obstacle to a successful restructuring of BCCI bankrolled up Abu Dhabi was the possibility that the District Attorney of New York would indict. If such an indictment came, the restructuring could prove exceedingly embarassing for the Bank of England, depending on what Morgenthau charged and whether it had the consequence of causing a global run on BCCI.

The Federal Reserve, the only other government agency then engaged in an active investigation of BCCI, was focused on a relatively narrow set of issues. It had already reached a consent decree with BCCI under which BCCI would agree to give up its secret interest in First American and cease to do business in the United States. These were serious steps, but related to issues that BCCI could characterize as technical violations of U.S. banking laws, rather than matters that went to the fundamental integrity of BCCI's record keeping and bookkeeping and finances.

By contrast, a criminal indictment in New York might be far broader. The questions asked to date by the District Attorney's office indicated it might well charge that since BCCI's inception, it had been an insolvent pyramid scheme to obtain credit by pretending to have the deep pockets of its Middle Eastern shareholders, when in fact at least a majority of these shareholders were not at risk. Such an indictment would have inevitably caused a swift and thoroughly justified international run on BCCI by depositors all over the world. In threatening such an indictment, the New York District Attorney was making the restructuring proposal intended by the Bank of England, Abu Dhabi, Price Waterhouse, and BCCI, impossible.

The result was that in late June, 1991, confronted both with mounting evidence of BCCI's frauds and with the probability of an indictment within weeks by the New York District Attorney, the Bank of England was forced to begin setting into motion the process of BCCI's international closure.

Thus, the pressure from a single, local prosecutor's office that would not relent when it found evidence of global criminality, proved sufficient to shut down a $23 billion criminal bank operating in some 73 countries. The result is testament to the power of a single local district attorney unwilling to abandon his search for the truth, and the trail of evidence left by BCCI of its crimes around the world.

1. S. Hrg. 102-379, pp. 152-153.

2. S. Hrg. 100-773, Pt. 2 pp. 20-21.

3. Id.

4. S. Hrg. 102-350 p. 33.

5. Vanity Fair, April, 1992, "How They Broke the Bank," p. 261.

6. Letter, Michael Cherkasky to Senator Kerry, November 21, 1991, S. Hrg. 102-350 Pt. 3 p. 771.

7. S. Hrg. 102-379 p. 148.

8. Id p. 149.

9. Vanity Fair, April 1992, "How They Broke the Bank," p. 261.

10. Id.

11. Id p. 262.

12. Morgenthau, S. Hrg. 102-379 p. 158.

13. Id. p. 162.

14. See Vanity Fair, April 1992, "How They Broke the Bank," p. 266.

15. Vanity Fair, April, 1992, "How They Broke the Bank," p. 266.

16. S. Hrg. 102-379 p. 167.

17. People v. BCCI, Supreme Court of the State of New York, County of New York, July 29, 1991.

18. Id.

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BCCI AND ITS ACCOUNTANTS

Introduction

External auditors of banks everywhere play a critical role in the self-regulatory process by which both ordinary depositors as well as players in the financial marketplace evaluate their own business performance, and that of those with whom they may place their savings or do business. In addition, in many foreign jurisdictions, external auditors of banks are relied upon by regulators to provide them with important internal information about bank practices, performing the kind of function in those countries that federal bank examiners do in the United States.

In the case of BCCI, there can be no question that the auditing process failed to work. As the Bank of England stated in determining that BCCI be closed:

It appears from the Price Waterhouse Report [of June 1991] that the accounting records [of BCCI] have completely failed and continue to fail to meet the standard required of institutions authorised under the Banking Act. It further appears that there is not [a] proper or adequate system of controls for managing the business of BCCI.(1)

Given the demonstrable failure of the auditing process, serious questions have been raised about how and why BCCI's outside auditors permitted BCCI to flourish as long as it did, despite fraud and other bad practices which went back many years. The record offers both support for assessing blame on BCCI's auditors, and the suggestion that their work in the spring of 1991 was an essential component of the investigative process that ultimately forced BCCI's closure.

One view of the culpability of BCCI's accountants was expressed by BCCI's own chief financial officer, Masihur Rahman. Rahman testified that as BCCI's top financial official, he did not know of BCCI's frauds prior to the spring of 1990. He testified that has the bank's chief financial officer in London, he did not have access to any of the underlying loan information and related files at BCCI's various field offices. Rahman testified that he therefore relied on the work of the outside auditors, operating around the world at the local level, to review BCCI's records at its various offices and branches, and thereby ensure their truth and accuracy.

At the other extreme was the position taken by BCCI's principal auditor, Price Waterhouse (UK), that it was completely deceived by BCCI until the spring of 1990, and handled its responsibilities concerning BCCI without any fault whatsoever.

As Masihur Rahman expressed his position, regarding the auditors' handling of BCCI's first set of major losses in 1985:

I used to tell the Price Waterhouse and Ernst & Whinney to please review these reports and also please keep me informed, because you are more my eyes and ears than my own inspection division . . .[if] Price Waterhouse had been doing its job, there's no way that this $1 billion exposure [in BCCI's Central Treasury] which was taken to $11 billion exposure in the course of 3 or 4 months [in 1985] could have happened.(2)

According to Rahman, Price Waterhouse (UK) had signed off on BCCI practices year after year without issuing any red flags, until suddenly, in April, 1990, it found massive deficiencies at the bank, in which, as Senator Kerry put it, "every red flag in the world was flying," raising the question of how Price Waterhouse could have missed all of BCCI's bad practices previously.(3) From Rahman's point of view, local auditors at each of BCCI's locations had the opportunity to review the underlying loan documentation from the beginning. Rahman believed that process of review was precisely what they had been hired to do and failed at. From his point of view, as chief financial officer, his job was to accept the numbers provided him and audited locally the accountants, and from there to put together the overall financial accounts of BCCI. Thus, the deceptions that took place were made possible through the auditors' failure to have looked sufficiently closely at BCCI's customer-by-customer financial records around the world, and especially in the Grand Caymans. As Rahman explained in an annotation to the report prepared by Price Waterhouse to the Bank of England in June, 1991 which helped bring about the closure of BCCI globally:

Price Waterhouse should have known from their audit of Grand Cayman over many years that deposits of BCCI were being misused. The 'fictitious' loan accounts were in most cases so obviously fictitious that the year after year audit of PW should have detected most, if not all. PW not only knew about ICIC Overseas accounts [where some $600 million of the fraud had at BCCI had taken place] but irregularly "certified these accounts. . . It all happened in, or were initiated by Grand Cayman. . . done by a few people in an amateurish way, right under the nose of PW (Grand Cayman) and PW (UK), who had done audit of these units from their inception (1975.)(4)

Rahman further stated to the British inquiry into BCCI undertaken by Lord Justice Bingham that essentially all of BCCI's serious treasury problems were related to the activities at Grand Cayman, which had taken place in a blatant and repetitive form over many years. According to Rahman, BCCI was paying its auditors $5 million per year to conduct audits which each year took nearly five months. According to Rahman, if properly done, these audits should have uncovered the problems and forced action long before April, 1990.

In contrast, as Price Waterhouse expressed their position, BCCI had deceived them through colluding with shareholders and borrowers to create false documentation that mislead them:

The auditor's responsibility is to design and execute an audit so as to have reasonable expectation of detecting material misstatement in the financial statements whether due to fraud, irregularity, or error. However, common sense dictates, and it is accepted internationally, that even the best planned and executed audit will not necessarily discover a sophisticated fraud, especially one where there is collusion at the highest level of management and with third parties. Under such circumstances, it is reasonable to expect that it may take a number of annual audits before accumulating concerns change to suspicions and ultimately lead to the identification of fraud; in fact, this is what happened in our audit of BCCI.(5)

Price Waterhouse found that BCCI Treasury losses had been concealed and its profits manufactured through BCCI's failure to record deposits and other liabilities; the creation of fictitious loan accounts; the use of funds from ICIC which were controlled by BCCI; use of third party funds which BCCI was managing; circular routing of funds using various BCCI affiliates; the purchase and repurchase of BCCI's own shares through nominees with buy-back arrangements; and the collusion between BCCI and major customers in supplying false confirmations to the external auditors, among other techniques.(6)

In fact, many aspects of BCCI's relationship to its auditors, especially Price Waterhouse's partnerships outside the United States, were sufficiently unusual to provide evidence for both the positions expressed by Rahman and by Price Waterhouse.

Over BCCI's nineteen year existence, BCCI lent at least two Price Waterhouse partnership's funds for business projects, while those partnerships were auditing BCCI; had an affiliate make substantial payments to at least one key former Price Waterhouse official after he had had handled audits of BCCI; allegedly "took care" of Price Waterhouse partners through providing benefits to them such as the use in the Grand Caymans of a villa; according to federal regulators, made use of BCCI-Hong Kong to handle its routine banking needs in the Far East; and according to one BCCI official, may even have been compromised by mid-level BCCI employees who allegedly provided them with sexual favors for that purpose.

Moreover, when Price Waterhouse (UK) discovered massive losses at BCCI in 1985 which the bank falsely characterized as commodities trading losses, Price Waterhouse (UK) accepted BCCI's explanation and did not undertake the kind of comprehensive review of BCCI's Treasury operations in the Grand Caymans which should, even then, according to statements by various BCCI officials, have demonstrated BCCI's fraud.

After 1985, Price Waterhouse (UK) made note of and reported to BCCI's directors and officers exceptionally poor practices by many BCCI entities year after year, including BCCI's failure to keep adequate records. Nevertheless, Price Waterhouse (UK) did not inform regulators of this or other problems at BCCI until April, 1990, and continued through 1990 to sign off on BCCI's annual statements that its consolidated audits "give a true and fair view of the financial position of the group."

Moreover, Price Waterhouse (UK) according to its own audit reports was told by BCCI officials in years prior to 1990 that they had violated U.S. law in failing to inform the Federal Reserve of changes in ownership by shareholders of CCAH/First American, and in various practices relating to CCAH/First American. Yet the firm took no action to advise any regulator, let alone the Federal Reserve, of what they had knew -- or, alternatively, to resign their position as BCCI's auditors.

In defense of the auditors, it should be noted that BCCI's top officials, key major shareholders and some principal borrowers did seek to deceive them through creating false records and documents. The full nature and extent of the fraud would indeed have been difficult to penetrate, given BCCI's far-flung empire and structural complexity, and the bank's decision for its first 15 years of operation to divide responsibility for its audits between Price Waterhouse and Ernst & Whinney, thus ensuring that no one auditor had an overall view of its activities. It is also true that once Price Waterhouse recognized that the hole in BCCI's books had grown so significant that it threatened the solvency of the institution in early 1990, they brought the matter to the attention of the Bank of England. As a result, from that date forward, the Bank of England shared in whatever blame might be attached to Price Waterhouse's decisions following that date, and prior to its final certification of BCCI's books in April, 1990.

Difficulties of Investigating BCCI's Auditors

A full understanding of what took place between BCCI and its auditors has been severely impeded by the inability to obtain documents and testimony from BCCI's principal auditors, especially Price Waterhouse. While Price Waterhouse's US partnership provided full cooperation regarding its audits of BCCI activities in the United States, it took the position that it had neither any knowledge of, or responsibility for, BCCI's overall auditing, which was handled solely by their affiliated partnership in the United Kingdom, Price Waterhouse (UK).

Price Waterhouse (UK), which handled the consolidated audit of BCCI world-wide from 1987 on, and which previously was responsible for over 15 years for the audits of one of BCCI's two flag banks, BCCI Overseas (Grand Cayman), where a substantial portion of the frauds took place, refused to provide the Subcommittee with any of its voluminous audit reports pertaining to BCCI in response to the subpoena of the Committee on Foreign Relations. Price Waterhouse (UK) argued that provision of such material was precluded by British law, and that the British partnership of Price Waterhouse did not do business in the United States and could not be reached by any subpoena.

Price Waterhouse (US), which said it did not possess any documents pertaining to BCCI operations outside the United States, explained its relationship with other Price Waterhouse partnerships in other countries as one of a loose affiliation of independent partnerships linked together by a set of agreed-upon standards for audit work, but entirely separate from one another in legal responsibilities. As set forth in a Price Waterhouse (US) letter to Subcommittee staff on October 17, 1991:

[T]he 26 Price Waterhouse firms practice, directly or through affiliated Price Waterhouse firms, in more than 90 countries throughout the world. Price Waterhouse firms are separate and independent legal entities whose activities are subject to the laws and professional obligations of the country in which they practice. . .

PW-US, like other Price Waterhouse firms throughout the world, is a separate and distinct partnership. For your immediate purposes, it is appropriate to note that no partner of PW-US is a partner of the Price Waterhouse firm in the United Kingdom; each firm elects its own senior partner; neither firm controls the other; each firm separately determines to hire and terminate its own professional and administrative staff. . . each firm has its own clients; the firms do not share in each other's revenues or assets; and each separately maintains possession, custody and control over its own books and records, including work papers. The same independent and autonomous relationship exists between PW-US and the Price Waterhouse firms which practice in Luxembourg and Grand Cayman.(7)

As Price Waterhouse (US) partners explained to the Subcommittee, when Price Waterhouse, or any auditing firm, signs off on an audit and certifies that its audit represents a true and accurate picture of a company's books, the certification is not made by Price Waterhouse as a single entity, as would be true in a corporate structure. Rather, the certification is made by, and binds only the members of the partnership of the accounting firm in the country in which they themselves are certified as accountants.

In the case of BCCI, Price Waterhouse (UK), relying on work performed by its affiliates in a number of locations around the world, conducted the consolidated audit of BCCI from 1987 through 1992. During that time, many other Price Waterhouse partnerships, including Price Waterhouse (US), provided Price Waterhouse (UK) with written summaries of BCCI's financial condition locally, in accordance with their audit instructions from Price Waterhouse (UK), which were then incorporated into the consolidated accounts of the group. Questions about BCCI's activities in the Grand Caymans or Panama or Colombia could be answered only by Price Waterhouse (UK), in connection with its consolidated audits, or by the local partnerships of Price Waterhouse in those countries.

Thus, under the partnership system that all the international accounting firms use, Price Waterhouse (US) has maintained that it has no knowledge of, or responsibility for, a consolidated audit certified by any of its partnerships in other countries, including those done pertaining to BCCI. Accordingly, in response to the Committee subpoena to Price Waterhouse, Price Waterhouse (US), provided complete documentation of its work on behalf of BCCI in the United States, but no documents regarding Price Waterhouse's work on behalf of BCCI elsewhere, including its reports to BCCI's board of directors, and the background to its annual certifications of BCCI's books and records. On these critical issues, Price Waterhouse (US) referred all questions to Price Waterhouse (UK), which in turn took the position that it was legally precluded by British bank confidentiality and privacy laws from providing any of the documents subpoenaed by the Committee. In lieu of testimony or documents, Price Waterhouse (UK)'s attorney provided the Subcommittee a copy of the firm's written answers to questions from a Committee of the British House of Commons.(8)

It is worth noting, for the record, Masihur Rahman's view that for years, Price Waterhouse has held themselves out to be a global firm with uniform standards and one single responsibility. According to Rahman, Price Waterhouse brochures were submitted to BCCI repeatedly emphasizing Price Waterhouse's global integration as a critical strength of the firm.

Due to Price Waterhouse (UK)'s refusal to respond to the subpoena, the Committee has been unable to obtain a complete set of Price Waterhouse's audit reports concerning BCCI, and has had to rely on fragments of such reports obtained from the Federal Reserve and other sources amounting to a small percentage of the total work. As a result, for some years, no audit reports of any kind have been obtained. For other years, the audit reports obtained are limited to fragments of the whole. These fragments do provide some important information about Price Waterhouse's concerns about BCCI from the early 1980's on; unfortunately, the fragments exclude other critical information necessary to evaluate the history of Price Waterhouse's handling of these audits.

In reaching its conclusions, the Subcommittee has sought to make use of all available information, including the answers provided by the auditors to questions from the British House of Commons. However, given the incomplete state of the information the Subcommittee has been able to obtain, it is possible that additional documents from the auditors concerning BCCI could have changed the conclusions reached by the Subcommittee on some of these matters. It is therefore especially unfortunate that the foreign auditors refused to honor the Committee's subpoena.

Findings

As noted above, reaching conclusions concerning the responsibility of the auditors in connection with BCCI's maintenance of its deceptions until July, 1991 have been hampered by the inability to obtain full documentation and any interviews from any of BCCI's foreign auditors. Nevertheless, the information and testimony gathered by the Subcommittee is adequate to find:

** BCCI's decision to divide its operations between two auditors, neither of whom had the right to audit all BCCI operations, was a significant mechanism by which BCCI was able to hide its frauds during its early years. For more than a decade, neither of BCCI's auditors objected to this practice.

** BCCI provided loans and financial benefits to some of its auditors, whose acceptance of these benefits creates an appearance of impropriety, based on the possibility that such benefits could in theory affect the independent judgment of the auditors involved. These benefits included loans to two Price Waterhouse partnerships in the Caribbean. In addition, there are serious questions concerning the acceptance of payments and possibly housing from BCCI or its affiliates by Price Waterhouse partners in the Grand Caymans, and possible acceptance of sexual favors provided by BCCI officials to certain persons affiliated with the firm.

** Regardless of BCCI's attempts to hide its frauds from its outside auditors, there were numerous warning bells visible to the auditors from the early years of the bank's activities, and BCCI's auditors could have and should have done more to respond to them.

** By the end of 1987, given Price Waterhouse (UK)'s knowledge about the inadequacies of BCCI's records, it had ample reason to recognize that there could be no adequate basis for certifying that it had examined BCCI's books and records and that its picture of those records were indeed a "true and fair view" of BCCI's financial state of affairs.

** The certifications by BCCI's auditors that its picture of BCCI's books were "true and fair" from December 31, 1987 forward, had the consequence of assisting BCCI in misleading depositors, regulators, investigators, and other financial institutions as to BCCI's true financial condition.

** Prior to 1990, Price Waterhouse (UK) knew of gross irregularities in BCCI's handling of loans to CCAH/First American and was told of violations of U.S. banking laws by BCCI and its borrowers in connection with CCAH/First American, and failed to advise the partners of its U.S. affiliate or any U.S. regulator.

** There is no evidence that Price Waterhouse (UK) has to this day notified Price Waterhouse (US) of the extent of the problems it found at BCCI, or of BCCI's secret ownership of CCAH/First American. Given the lack of information provided Price Waterhouse (US) by its United Kingdom affiliate, the U.S. firm performed its auditing of BCCI's U.S. branches in a manner that was professional and diligent, albeit unilluminating, concerning BCCI's true activities in the United States.

** Price Waterhouse's certification of BCCI's books and records in April, 1990 was explicitly conditioned by Price Waterhouse (UK) on the proposition that Abu Dhabi would bail BCCI out of its financial losses, and that the Bank of England, Abu Dhabi and BCCI would work with the auditors to restructure the bank and avoid its collapse. Price Waterhouse would not have made the certification but for the assurances it received from the Bank of England that its continued certification of BCCI's books was appropriate, and indeed, necessary for the bank's survival.

** The April 1990 agreement among Price Waterhouse (UK), Abu Dhabi, BCCI, and the Bank of England described above, resulted in Price Waterhouse (UK) certifying the financial picture presented in its audit of BCCI as "true and fair," with a single footnote material to the huge losses still to be dealt with, failed adequately to describe their serious nature. As a consequence, the certification was materially misleading to anyone who relied on it ignorant of the facts then mutually known to BCCI, Abu Dhabi, Price Waterhouse and the Bank of England.

** The decision by Abu Dhabi, Price Waterhouse (UK), BCCI and the Bank of England to reorganize BCCI over the duration of 1990 and 1991, rather than to advise the public of what they knew, caused substantial injury to innocent depositors and customers of BCCI who continued to do business with an institution which each of the above parties knew had engaged in fraud.

** From at least April, 1990 through November, 1990, the Government of Abu Dhabi had knowledge of BCCI's criminality and frauds which it apparently withheld from BCCI's outside auditors, contributing to the delay in the ultimate closure of the bank, and causing further injury to the bank's innocent depositors and customers.

BCCI's Early Audit Relationships As specified in the chapter of BCCI's criminal activity, BCCI was from its earliest days made up of multiplying layers of entities, related to one another through an impenetrable series of holding companies, affiliates, subsidiaries, banks-within-banks, insider dealings and nominee relationships. By fracturing corporate structure, record keeping, regulatory review, and audits, the complex BCCI family of entities created by Abedi was able to evade ordinary legal restrictions on the movement of capital and goods as a matter of daily practice and routine. As a result, the records of BCCI's criminal activity were buried beneath a layering that substantially impeded anyone's ability to make sense of them.

Yet, this problem was not something which developed slowly, near the end of BCCI's existence in 1991, but rather, a structure which BCCI's head, Abedi, created from the earliest days of the bank, and which was accepted for over a decade by both of BCCI's principal auditors, Price Waterhouse and Ernst & Whinney.

According to Masihur Rahman, he recognized the potential for abuse in the system developed by Abedi from the beginning, and insisted on retaining top accounting firms for BCCI as a mechanism to counter Abedi's complexities. As Rahman explained it:

Soon after formation of the bank, it started as BCCI S.A. which was the Luxembourg Bank, but within a couple of years, Mr. Abedi decided to restructure it, and the holding company was produced. It was called BCCI Holdings. And the bank underneath it, BCC S.A. was split into two parts, one bank was left with its head office in Luxembourg called BCCI S.A., and another bank was created with its head office in Grand Cayman. The BCC S.A. bank was mostly with European and Middle East locations, and BCC Overseas Bank was mostly Third World countries. . . .

Well, the more number of entities there are in any organization, obviously the more isolation you can put each section to. And if you do an intercompany position, then unless you know both companies' position, you could get half a picture. So there was that situation also . . .

Because I realized the danger of this evolving structure and the management style, I insisted that we had the best and biggest auditors. And so we from the early days had two of the biggest audit firms, Ernst & Whinney which became Ernst & Young, and Price Waterhouse.(9)

Initially, both the holding company and all BCCI's other banks other than its Grand Cayman's banking unit, BCCI Overseas, was handled by Ernst & Whinney, with BCCI Overseas in Grand Caymans as a "flag-ship" bank, handled by Price Waterhouse from its formation in 1975. According to Rahman, in an effort to deal with BCCI's "free-wheeling structure," both firms were instructed by him to notify him, as BCCI's chief financial officer, of any abnormalities they encountered at the local level in the course of their audits, as they found them, and not to wait until the end-of-the-year audit to report them. Moreover, controls were placed on BCCI's Treasury operations requiring the Treasury department of BCCI to maintain 90 percent of its deposits in a liquid form -- such as placements with prime banks and U.S. and European government securities -- and permitting the Treasury to engage in trading on no more than a maximum of 10 percent of BCCI's dollar surpluses, which would limit the exposure to about $100 million in all.

Price Waterhouse Audits -- Mid-1980's

The earliest audit for which the Subcommittee has been able to obtain any records consists of a few sample pages of audit findings and recommendations from Price Waterhouse Grand Caymans to BCCI dated December 31, 1983, prepared by Price Waterhouse Grand Cayman personnel Richard W. Harris and Richard D. Fear. As of the end of 1983, the auditors found that BCCI's loan portfolio contained:

a relatively high concentration of risk to a number of prominent clients. The inherent risk associated with these major exposures is significant in the context of the capital base of the Bank particularly in cases were advances have been made on an unsecured basis.(10)

Accordingly, the auditors recommended that BCCI consider limiting the maximum loan exposure to individual clients or groups, and increasing its loan loss provisions. The pages provided the Subcommittee do include references to other problems with the bank, but the full explanation of those problems was apparently set forth on pages not obtained by the Subcommittee.

Excerpts from a report prepared in 1984 by Price Waterhouse provides a fuller account of the nature of the problems Price Waterhouse had previously found. While again the documents provided are fragmentary, they contain the following:

Although there have been marked improvements in the quality of the credit files maintained at Head Office [Grand Cayman's] we have again noted instances where the files contain inadequate financial information such that the credit worthiness of the borrow cannot be readily established.(11)

Portions of an internal control report prepared by Price Waterhouse dated April 26, 1986 concerning BCCI's Grand Caymans office described numerous additional problems pertaining to BCCI's lending practices and documentation:

We noted instances where funds had been disbursed . . . prior to the perfection of the security arrangements required . . .

Instances were noted in which items of security were not supported by independent valuations . . .

We have noted some instances where the documentation received by the Bank to create a charge or pledge over security had been accepted without any evidence of consideration having been given to its legal enforceability in the jurisdiction in which the enforcement would be made . . .

We noted instances where exposure exceeded authorized limits, occasionally by significant amounts, and also that in many such cases such excesses were caused by the accrual of interest. . .

During the course of our audit we had several requests from local auditors to review loans for which documentation was not available locally . . .

No regular reporting procedures exist at Head Office whereby senior management, the Central Credit Committee or the Board of Directors are notified of non-compliance with the terms and conditions of borrowing, particularly in relation to the non-payment of principal and interest . . .

We noted instances whereby the interest rate being applied to an account differed from that quoted . . .

We noted instances, where for general reasons of confidentiality, certain borrowers were designated with a numbered account reference rather than the account being entitled with the full name of the borrower. Whilst we have no particular objection to this practice, we found that in most instances none of the officers of the Grand Caymans office were able to correctly identify either the name of the borrower or the credit officer responsible for monitoring the account at other locations. . .(emphasis added)

We noted instances of errors occurring in the accounting records at Head Office accounting to ensure their completeness and accuracy. . .

We have noted during the past few years that the level and number of staff loans booked at Head Office has steadily increased but that regular monitoring is not carried out to ensure that the terms and conditions of such loan are being followed.(12)

Asterisks adjacent to a number of these concerns were placed by the auditors to indicate issues which they had previously raised with BCCI, in some cases for several years. Many of the concerns taken independently might not be cause for unusual concern. But taken together, they demonstrate at minimum that as early 1986, BCCI's auditors knew of a significant number of exceptionally poor practices at BCCI concerning its record keeping, treatment of interest to borrowers, handling of numbered accounts, and handling of accounts where customers were failing to pay interest or principal or both.

While Price Waterhouse may have considered BCCI's poor banking practices to be a demonstration of a lack of sophistication or professionalism on the part of BCCI, in fact, these practices, taken together, were essential mechanisms by which BCCI maintained its global frauds.

For example, BCCI's practice of simply tacking on interest to principal in cases in which loans were non-performing was necessitated by its practice of using nominees to disguise transactions in which BCCI was the real party at interest, such as BCCI's secret ownership of First American. The nominees understood from the beginning that they were not responsible for paying interest, and that BCCI would take care of it. The simplest means for BCCI to take care of it, was, so long as the auditors permitted it, to just add the interest to the principal. Then, when BCCI was ready, it would proceed against the borrower, its nominee, and "acquire" the property secured by these loans. Accordingly, BCCI often would not want any independent valuation of the secured property, because its intention from the beginning was to own or control the secured property -- such as First American -- rather than to sell the property if its "borrower" did not pay BCCI back its "loan."

Similarly, the practice of BCCI officials not being able to identify the borrower behind a numbered account, or the BCCI officer responsible for monitoring the account at other locations, would have been a logical means of compartmentalizing knowledge about accounts in order to limit the possible criminal exposure of the officials and the bank for irregular loans or drug money laundering. To the extent that an official monitoring a numbered account cannot identify a customer, he cannot very well know the quality of his credit or the source of the customer's funds. To the extent that the official cannot identify the other bank officials involved in monitoring the account, they can each claim that they are not responsible for the recovery of this loan, or in a drug-related case, did not possess adequate knowledge to recognize that the funds they were moving were laundered funds.

Without speculating on the possible reasons for these deficiencies, or expressing any concerns that these deficiencies might not be inadvertent on the part of BCCI, the auditors made a number of recommendations to BCCI in 1986 on how to correct them:

We recommend that efforts be made to obtain current financial and other supporting information in respect to all borrowers. . .

We recommend that, except in the most exceptional circumstances, funds should not be disbursed prior to the perfection of any required security arrangements. . .

We recommend that independent valuations be obtained on a regular periodic basis to enable the adequacy of security to be properly monitored. . .

We recommend that all charge or pledge documentation be approved by the legal department before funds are disbursed . . .

We recommend that loans should not be allowed to be drawn down in excess of approved limits prior to increased facilities being sanctioned in writing. . .

We again recommend that, in accordance with the group policy, interest on loans against which there is a specific loan loss provision is always created to reserve and not to income . . .

We again recommend that the Central Credit Division take positive steps to ensure that branch managers throughout the Bank are fully aware that they are responsible locally for maintaining complete credit files for all loans. . .

We recommend that procedures be introduced to enable management to readily identify non-performing loans. . .

We recommend that all credit files contain written authorization to support the interest rate being applied to an account. . .

We recommend that the Head Office manager maintain a private register of borrowers using numbered accounts. . .

We again recommend that procedures be introduced to monitor and control staff loans and advances.(13)

These recommendations, if followed by BCCI, and if insisted upon by Price Waterhouse, backed up by the threat of qualifying the accounts, or by the threat of resignation, would have limited BCCI's ability to continue to engage in many of the deceptions that were essential for its continued survival -- including the use of nominees to own BCCI's secretly-held subsidiaries, such as First American and the Independence Bank. In practice, BCCI continued over its remaining five years of life to abide by few of these recommendations, with the result that the auditors repeated them year after year, with ever greater specificity, while continuing to sign off year after year on BCCI's accounts, concluding that their audit reports represented a "fair and true" picture of BCCI's actual financial status when in fact they did not.

BCCI's 1985 Treasury Losses

In 1985, BCCI and its auditors faced the first major crisis of the bank. The crisis came in one of BCCI's flag-ship operations -- BCCI Overseas (Grand Caymans), which had been audited from its inception by Price Waterhouse. The crisis was acute and involved BCCI's Central Treasury. It required the recognition of a loss of approximately $500 million, the equivalent of the bank's entire capitalization. BCCI characterized the loss as due to as trading losses in the securities and commodities markets, ostensibly brought about through unauthorized trades by a junior BCCI officer, Ziauddin Akbar, who had been placed to run the Treasury Department by BCCI CEO Abedi.

By the account of BCCI chief financial officer Rahman, Abedi and Naqvi had permitted Akbar to take "very, very large exposures," in securities and commodities trading, in what was actually a Ponzi scheme, in which front-end commissions received, representing offsets against liabilities under open futures contracts, were treated as profits rather than as offsets, and actual losses were hidden through BCCI taking ever-larger futures positions in securities and commodities trades to create offsets against the past losses; plus additional "profit" as and when required; until by the autumn of 1985 the forward exposures had become $11 billion against a board approved limit of $1 billion. According to Rahman:

This was done by not more than two or three of the executives in the treasury division directly under Mr. Naqvi.(14)

These huge losses imperiled BCCI on several accounts. First, they had nearly wiped out the capital of the bank, and BCCI would have to find ways to recapitalize. Second, they suggested recklessness on the part of BCCI's top officials, and made many wonder what had prompted the recklessness. But most dangerous of all, these losses could have prompted a thorough review of all BCCI's books and records from the beginning by BCCI's auditors, a review which would have brought down the bank if the auditors had discovered the frauds involved.

As Ziauddin Akbar later told associates, the truth was that the losses had taken place over a number of years and were in fact not really losses at all, but falsified bookkeeping instituted by Abedi and Naqvi to inflate BCCI's books and show phony profits. According to Akbar, he agreed to be the scapegoat for the losses in an effort to avoid a situation in which the auditors would conclude that there been systematic fraud at BCCI, conducted at the top. In fact, the auditors wrongly concluded that the losses had taken place over a short period, and that did not force the further review of BCCI documents which would likely have revealed the years of systematic and massive fraud in the bank's books.(15)

Instead, Price Waterhouse, working closely with Abedi and Naqvi, agreed to the shift of $150 million from the ICIC Staff Foundation/Trust to meet part of this loss, and then splitting the balance of the loss into three years on technical grounds. Akbar was fired, and BCCI was saved.

Nevertheless, recognition of the losses was costly for BCCI. The losses became a significant factor in the decision soon thereafter of BCCI's regulators in Luxembourg, the Institut Monetaire Luxembourgeois (IML) to notify BCCI's other regulators that the Luxembourg authority was unhappy with its responsibility for monitoring BCCI while BCCI actually was headquartered in London. Moreover, it brought about a crisis among the auditors themselves.

According to Ernst & Whinney, the Treasury losses had caused it to doubt whether the auditors could trust BCCI and Naqvi, although Price Waterhouse's confidence in Naqvi remained unshaken. As Ernst & Whinney told the British House of Commons:

PW say that "Until Price Waterhouse exposed him [in 1990], Naqvi enjoyed the respect and engendered the confidence of all those who met him". E&W's confidence in Mr Naqvi was shaken when it was told for the first time on 13 February 1986 of the problems in the Treasury Division of BCCI Overseas and of his involvement therein.(16)

In May 1986, Ernst & Whinney advised BCCI that unless they were permitted to assume responsibility for the whole audit and BCCI's management style were changed and its record keeping systems were improved, they would resign from their commission as auditors for BCCI. In addition to the Treasury losses, Ernst & Whinney were concerned about "a marked reluctance by both Mr. Abedi and the board of BCCI Holdings to take prompt action to disclose these [Treasury losses] to the regulators, to disclose them in the group accounts in a manner satisfactory to E&W and to discipline those responsible." Finally, Ernst & Whinney had advised BCCI that if it were to continue to act as the bank's auditors, BCCI needed to achieve "a marked improvement in the financial and managerial controls exercised throughout the group."(17)

Over the following several months, BCCI, Ernst & Whinney and Price Waterhouse had extensive discussions about the changes which needed to be implemented, and had mutually agreed about the nature of the changes to be put into effect.(18) Nevertheless, for reasons which Ernst & Whinney has declined to specify, it resigned from further work auditing for BCCI, leaving Price Waterhouse for the first time in the position of being BCCI's sole global, consolidated auditor. At the time of Ernst & Whinney's withdrawal, it was auditor to 12 of BCCI's various subsidiaries and affiliates, and Price Waterhouse was auditor for the remaining 19.(19)

1987 Audits

Year after year, BCCI's auditors continued to find evidence of poor banking practices and imprudent lending on issues unrelated to the massive Treasury losses. In its end of year report for 1987, Price Waterhouse noted numerous concerns on accounts involving close to $1 billion of exposure to BCCI involving many of the accounts which regulators would later conclude involved front-men. Yet no action was taken by Price Waterhouse, by BCCI's directors, or by regulators who later received these reports, to require any concrete action by BCCI, backed up by sanctions for any failure to comply, to correct the obvious banking irregularities.

For example, in its 1987 audit of accounts pertaining to the Gokal brothers and their shipping empire, the Gulf Group, Price Waterhouse found that exposure to the group amounted to $318 million -- or 23 percent of BCCI's capital base, with exposure rising every year, repayment performance "below expectations," security held against the lending likely unenforceable, and financial information regarding the loans "inadequate." Three years later, Price Waterhouse would conclude that on many of the Gokal related loans, the financial information was not merely "inadequate" but non-existent. Price Waterhouse also found that "cash allocations to [some Gokal] accounts appear to be arbitrary and, as a result of this and the lack of formal repayment schedules, it is difficult to assess the underlying performance of each account."(20)

In the same set of audits, Price Waterhouse found that BCCI faced exposure on loans to former Saudi intelligence chief Kamal Adham of over $200 million, involving large, unsecured exposures, "poor interest repayment performance," "no evidence of long term repayment schedule," "other related exposures with BCCI/ICIC," and that bank documents showed little evidence of regular contact between BCCI and Adham.(21) Worse, Price Waterhouse found that many of the shares Adham had in the First American Bank, CCAH, were pledge as security for loans BCCI had made to other BCCI borrowers. Nevertheless, Price Waterhouse did not require that the loans to Adham -- or to the Gokal brothers -- be classified or that BCCI make "provision" against them, so long as BCCI promised to correct the problems in the account in the future, which BCCI of course did not do.

The audit of the Adham accounts mirrored that of the audit of the accounts of his successor at Saudi intelligence, Abdul Raouf Khalil. In its end of the year audit for 1987, Price Waterhouse described the situation in the following terms:

AR Khalil is a Saudi Arabian national who has had facilities with the bank for a number of years. In the past the bank operated a large investment trading portfolio on his behalf, however this ceased in 1985 and he now channels his trading activities into Capcom Financial Services Limited, an independently managed investment house with a paid up capital of f25m of which he owns 20%.

Little is known publicly about Khalil, however he is the owner of a substantial museum of Arabian artifacts in Jeddah reputed to be worth some $350m. This value is inherently subjective, but it is understood that he is attempting to arrange the sale of the museum to the Saudi Arabian authorities.

MAJOR CONCERNS.

- Lack of documented evidence of contact with borrower for 1987

- Balance confirmation outstanding

-Interest unpaid

-Lack of evidence of long term repayment schedule

-Lack of formal documentation to secure CCAH shares . . .(22)

Price Waterhouse expressed its anxieties about the Khalil account, but once again, decided that it would not force BCCI to classify any of the loans to Khalil as doubtful or bad, or require BCCI to make provision in a manner that would be reflected in its public audit, again so long as BCCI promised to clean up the problems in the future:

We remain concerned about his account however no provision will be required for 1987 providing:

- the account balance is confirmed to us by the borrower

- interest for 1987 is fully repaid

For the future we require:

- full loan files to be maintained to include all details of correspondence, meetings and other pertinent evidence of the monitoring the account

- adherence to an agreed repayment schedule

- formalization of security arrangements.(23)

In the months that followed, BCCI did not undertake any of the promised reforms, but Price Waterhouse took no action to force BCCI's hand for another two years.

1989 Audit The Subcommittee was not able to obtain any of Price Waterhouse (UK)'s reports to BCCI covering the period between December, 1987 through December, 1988, which includes the date of the indictment of BCCI and seven of its officers on drug money laundering charges by the U.S. Attorney in Tampa in October 1988, following a "sting" by the Customs Service.

Audit reports to BCCI from Price Waterhouse dated November 17, 1989, demonstrate that BCCI had made very little progress in responding to any of Price Waterhouse's expressed concerns, but that relations between Price Waterhouse and BCCI had remained cordial and cooperative, and that Price Waterhouse felt at the time that BCCI was actually "performing reasonably."

The audit report begins with the following sanguine assessment:

Overall the bank has performed reasonably over the past year considering the significant repercussions that could have resulted from the US indictment. The Group has continued to remain relatively liquid and also attract some new business.(24)

While over the course of the report, Price Waterhouse reiterated several of the concerns it had previously expressed in various other audit reports taking place over the previous six years, its overall tone was of an auditor reporting that outstanding issues were in the process of being resolved. While not free of all warnings and caveats, this 1989 interim report did indeed, consistent with Masihur Rahman's testimony, imply that no obvious major problems existed.

1990 Audit: Price Waterhouse Puts Out Red Flags The Subcommittee does not have any coherent account of why, suddenly, Price Waterhouse began in the spring of 1990 to shift from its previous position of politely making recommendations to BCCI to change its behavior, to aggressive criticism of practices at the bank that for the most part it had already been aware of for years. However, the consequences for both Price Waterhouse and BCCI were obvious. Under British law, Price Waterhouse in finding gross irregularities at BCCI, would now be able to report these findings to the Bank of England, and thereby share any responsibility for BCCI's future.

In the April 1990 audit report, Price Waterhouse found that all the previous practices it had condemned and recommended be corrected, had instead persisted and worsened. Among Price Waterhouse's findings was the recognition that BCCI's lending in connection was among serious problems facing BCCI. As Price Waterhouse noted:

** BCCI faced more than $850 billion of exposure in connection with lending for First American (CCAH). BCCI's practices regarding these loans were atrocious. The number of shares pledged by some borrowers had been changing from year to year. BCCI held blank transfer deeds and powers of attorney on the shares that allowed it to transfer them at will, against lending that had been for First American itself, or any other lending to First American's shareholders. Worse, BCCI's were giving conflicting stories about whether BCCI itself owned First American or not. In past years, Price Waterhouse stated, they had been told that BCCI held all the shares of First American, and not simply those pledged as security on lending. This year, they were saying the reverse.(25)

** Many of the loans for First American had never been reduced to writing with loan agreements involving the shareholders, so there was no real way to determine what the terms of the lending were supposed to be, or whether the shareholders had actually authorized them.

** The files maintained by the bank concerning the $850 billion in lending against First American were sparse, with little evidence of customers acknowledging decisions concerning their "investments," let alone directing them.

** Interest was not being serviced on loans for First American. And the interest charges BCCI was crediting on the First American loans were substantial, without evidence that the shareholders had agreed to the interest charges.

** Audits of two companies, Midgulf and Rubstone, who had secured loans from BCCI against their ownership of stock in First American, had been certified by representatives of BCCI shareholder Mohammed Hammoud, yet now BCCI was stating that Hammoud did not own those companies, and it was not clear who, if anyone, did.

** In the past, management had told the auditors that they had not reported all the changes in share holdings in First American to federal regulators as required by law.

Price Waterhouse thus acknowledged for the first time that there were serious questions as to who owned First American, and that it had known from past representations by BCCI management that the bank was violating U.S. laws in failing to tell regulators about changes in ownership when they occurred.

Other findings of the new audit reports by Price Waterhouse were equally damning. Price Waterhouse found that there had been little or no direct contact with Saudi intelligence figure A. R. Khalil since 1985. Yet Khalil had still somehow purchased an additional 57,748 shares of BCCI in April 1989 in a rights offering, with money loaned by BCCI. Price Waterhouse found this disturbing, given "an apparent breakdown in the relationship between the borrower and the bank," and the fact that Khalil had not made any interest payments in five years on previous borrowing from BCCI. Price Waterhouse also found that documentation to support Khalil's borrowings from BCCI was absent, and representations by various BCCI officers about his relationship with the bank were "inconsistent." Price Waterhouse found it impossible to determine whether Khalil still owned the 13,250 shares of First American/CCAH attributed to him, which BCCI held as security against $120 million it had ostensibly lent Khalil.(26)

The new Price Waterhouse reports on BCCI's relationship with the Gokal brothers and their Gulf shipping group, who together owed BCCI over $400 million, were similarly dismal. Price Waterhouse noted in addition to the kind of problems described above, violations of Indian and Pakistani exchange control violations in connection with loans to the Gokals, and statements by BCCI management that the auditors should look to the relationship of trust between the Gokals and BCCI's top officials rather than to any documents in determining BCCI's ability to recover its lending to the Gokals.(27)

Concerning BCCI's banking arm in Kuwait, the Kuwait International Finance Company (KIFCO), Price Waterhouse found that placements recorded by BCCI with KIFCO were inconsistent with Kifco's financial statements regarding the same transactions. Price Waterhouse noted that the principal mechanism for repaying Kifco's loans from BCCI was a mysterious Kuwaiti entity called "the IZ company for Exchange," and that "we now have suspicions as to the propriety of the transactions." Price Waterhouse noted that it had requested access to KIFCO's records which had been denied.(28)

Concerning BCCI's relationship with its Swiss banking representative (and secretly held subsidiary) Banque de Commerce et de Placements SA (BCP), Price Waterhouse stated "Swiss secrecy laws have prevented us from being provided with information relating to customer accounts by the incumbent auditors," and described a number of transactions involving BCCI, its affiliates, and BCP, which Price Waterhouse could not penetrate.(29)

Concerning BCCI front-man Mohammed Hammoud, Price Waterhouse noted that it had no evidence that Hammoud owned any of the companies to which BCCI and its Grand Caymans affiliate ICIC had lent some $110 million. Worse, various companies which had BCCI officials had previously said were owned by Hammoud were now being claimed by BCCI officials not be owned by Hammoud, but by others, who in turn reiterated that Hammoud did own the companies. Finally, Hammoud supposedly now owned 2.6 million shares of BCCI itself, but there were no records backing up this purported ownership.(30)

Concerning the Saigol family, who now owed BCCI $44 million, Price Waterhouse found that there was no evidence that loans or interest on loans were being repaid. Worse, BCCI had lied about the Saigol accounts to the auditors in the past:

Representations previously given about the beneficial ownership of companies to which new loans were extended in Bahrain in 1989 have been false. The loans have been given, in part, to repay delinquent loans in other locations.(31)

The reporting on lending to other prominent BCCI shareholders such as Ghaith Pharaon, the bin Mahfouz family, and members of the Abu Dhabi royal family raised similarly serious problems.

In total, the new audit reports by Price Waterhouse -- the first of which reached BCCI acting head Swaleh Naqvi in February, 1990 -- were devastating, and raised fundamental questions as to whether the bank could -- or should -- survive. And yet the information in the audits was different from previous audit reports largely in tone and detail rather than in substance. All but one or two of the issues identified had been raised by the auditors before, and reasons for the sudden shift in attitude remain obscure.

Price Waterhouse's own account of the sudden change is unilluminating. As it told a committee of the British House of Commons in February, 1992:

Our 1987 and 1988 audits revealed imprudent lending: during the 1989 audit we identified that, contrary to management's previous assurances, further lending had been permitted on the major customer accounts where the credit risk was already heavily concentrated. Additionally, around this time, Price Waterhouse identified certain loan transactions in a number of locations for which senior management were unable to provide adequate explanation. Price Waterhouse communicated concerns about these matters and their implications on the credibility of management to the Bank of England early in 1990.(32)

What appears to have happened is that the auditors had spent many years detailing record keeping, documentation, and other problems with BCCI's lending practices, without having had any appreciable impact on change those practices, while each year receiving approximately $5 million for their audit work. By early 1990, it was becoming increasingly clear that the lending problems were so severe that the auditors themselves might be held at risk if they did not alert authorities. What is striking is Price Waterhouse's decision to notify the Bank of England "early in 1990," before it notified BCCI's own board of directors of the problems, and without telling BCCI it had reached out to the regulators. As the visible financial hole at the heart of BCCI grew ever larger, the relationship between BCCI and Price Waterhouse had finally snapped.

Response to 1990 Audit Report

BCCI chief financial officer Rahman testified that he was shocked by the sudden change in attitude by Price Waterhouse, as well as by some of the information provided to him by them in their new reports, which he received on March 14, 1990:

In the usual process, the whole world audit was completed in the month of February, 1990. . .my wife and family were planning to go on holiday the later part of March, April. And when I received a call on a weekend from Price Waterhouse saying that they wanted to meet me, the partners, and -- I was a bit hesitant because I had been seeing all the partners throughout the last few months and I did not know what it was that they wanted to bring up. Anyway, I went to their office and they produced for me a whole list of what they thought was irregularities, illegalities, and misuse of funds.(33)

According to Rahman, the problem cases identified were exactly those Price Waterhouse had identified for years, but this time the attitude of the auditors was completely different.

Senator Kerry: Now, the irregularities and problems that they put forward to you had been in existence for several prior years, had they not?

Mr. Rahman: Yes. All the names that they listed were names which had appeared in prior years. . .

Senator Kerry: Some were fronts?

Mr. Rahman: Some were fronts, obviously. . . . They presented this list of huge problems whose potential loss could be $1 billion, plus. . . . They said the only thing before we go to the regulator . . . is that we can allow you to have an inquiry of your own from all our findings, and come up with your interpretation and facts.(34)

Price Waterhouse was now taking the hard line with BCCI that it had no choice but to notify the regulators, when in fact, they had already been notified. All that BCCI could do was supplement Price Waterhouse's reporting with its own analysis, which Price Waterhouse urged Rahman to undertake as head of a BCCI interim task force.

Rahman testified that as chief financial officer of a $22 billion concern, he had previously been relying year after year on the auditors reports in preparing BCCI's overall books, and had never been permitted to look at the underlying documentation himself. Now, as he began for the first time reviewing the underlying documentation on the loans, he was shocked at what he found. On the one hand, Price Waterhouse's criticisms of BCCI's operations were valid. On the other hand, from Rahman's point of view, these obvious frauds and illegal acts should have been brought to his attention years previously, and the auditors should not have permitted the practices to go on so long.

The Task Force report prepared by Rahman and three other BCCI officers during March 1990, began by acknowledging BCCI's failures, but criticized Price Waterhouse for taking so long in alerting management to how bad the problem was:

The Task Force after many hours of interviews with the concerned Accounts Executives . . . and reviewing many files and documents made available to it (most of which were of very poor quality) . . . confirms the 'concern' of PW in many of the referred cases . . . The Task Force simultaneously expresses considerable surprise and disappointment at such obvious flaws in basic banking procedures and documentation. The Task Force feels that the annual audit thereof should have easily detected and corrected such haphazard transaction several years ago.

The Task Force concludes that there is little doubt from the sparse records available and inadequate explanations given by the Accounts Executives/Officers that there must be some 'interlocking' arrangements between the shareholders of both BCCI Holdings (Lux) SA and CCAH whereby in several cases 'nominee' routes may have been taken to front each others investment in these two banking groups with corresponding loans being drawn from BCCI (& ICIC) to fund such 'interim' holdings. . .

It took the Task Force only a few days to note that nearly each of these cases had common patterns of initiation, activity, fund flow, weak documentation and vague explanations from the concerned account officers which any reasonable audit process should have tracked down, identified and stopped forthwith. That is extended over so many years is a great disappointment to the Task Force -- particularly since their initiations was all rom the same source in Grand Caymans (and London).(35)

Thus, as of April, 1990, both Price Waterhouse and BCCI's senior financial official, Rahman, had explicitly recognized, in writing, BCCI's dire financial condition, its poor lending practices, and its frauds in connection with First American and other matters. Ironically, in the weeks to come, it would be Rahman who would voluntarily resign his commission and leave BCCI, and the auditors who would stay and try to find a way to save the bank.

Price Waterhouse's Sign Off on 1990 Audit in May, 1990

On April 18, 1990, Price Waterhouse provided a report to the Bank of England which stated that a number of financial transactions at BCCI booked in its Grand Caymans affiliates and other offshore banks were "false and deceitful," and that it was impossible at the present time to determine just how far the fraud reached. Thus, a critical decision had to be made. Either BCCI had to be closed down now, or the Bank of England itself had to give its assent to keeping it open in some new form as a means of avoiding losses to BCCI's million or more depositors. New management needed to be installed. New financing had to be found, and the holes in BCCI's books had to be plugged.

The obvious solution was to ask Sheikh Zayed and the government of Abu Dhabi to take over the bank. As Zayed and the Al Nayhan family who ruled Abu Dhabi had been major depositors of BCCI, and had long had billions in family finances handled by BCCI, they stood to lose as much as anyone if the bank collapsed. Accordingly, Abu Dhabi would have to be told the truth about BCCI's perilous condition, and asked to commit funds to keeping the bank solvent.

A series of urgent meetings were held in Abu Dhabi and Luxembourg, beginning in March, 1990, in which Naqvi confessed his errors and resigned from his position as CEO at BCCI. A new management team was brought in. Unfortunately, rather than constituting a strong group of banking professionals, the new team was headed by a long-time Abu Dhabi insider from BCCI itself, Zafar Iqbal, the former head of BCCI's branch in the United Arab Emirates, the Bank of Credit and Commerce Emirates, or BCCE, who had long had a close personal relationship with important members of the royal family of Abu Dhabi arising out of his provision of intimate personal services for them in Pakistan and elsewhere. Within the bank, Iqbal was not considered to be an expert on much besides pleasing the Abu Dhabi royal family. BCCI junior officers knew him as the man who had for years provided "singing and dancing girls" to the royal family, and related personal services.(36) BCCI operations were moved, with the apparent approval of the Bank of England, to Abu Dhabi, along with all of BCCI's most important records. And assurances were given to Price Waterhouse that Abu Dhabi would back BCCI all the way.

These assurances were needed because Price Waterhouse was threatening to refuse to sign-off once again on BCCI's books with an unqualified audit report, and relations between the auditors and BCCI had deteriorated substantially after BCCI's directors had criticized the auditors for providing their audit reports to the Bank of England. On April 20, a meeting was held in Luxembourg with the shareholders in which Price Waterhouse made a dire presentation, and during which Abu Dhabi representatives advised Price Waterhouse that Abu Dhabi would make an open-ended financial commitment to bail out BCCI. As Price Waterhouse stated to the chairman of the Abu Dhabi Finance Department on April 25, 1990:

Your representative, HE G Al Mazrui, has confirmed to use that you are fully aware of the nature and magnitude of the uncertainties and prepared to provide the necessary financial support in the event that losses arise from realisation of these loans.(37)

In return for Abu Dhabi bankrolling BCCI's restructuring, Price Waterhouse would agree to certify BCCI's books, subject to a single caveat -- that the basis of the preparation of the certification was Abu Dhabi's intention to maintain BCCI's capital base while it reorganized and restructured. Instead of telling the world the truth -- that the consolidated accounts reported by Price Waterhouse in April 1990 did not in fact give a "true and fair view of the financial position of the group at December 31, 1989," Price Waterhouse contends that it did, using the Abu Dhabi commitment as its justification for so doing.

In justification of this decision, Price Waterhouse stated the following:

The circumstances existing in the last week of April 1990, when Price Waterhouse had to decide on the form of report on the accounts of BCCI for the year ended 31 December 1989, were extremely complex as there was material uncertainty about the recoverability of significant loans and advances shown in the balance sheet. Significant matters taken into account including the following:

-- The Abu Dhabi Government had given a commitment to indemnify BCCI against loss either by taking over balances at no loss to BCCI or by contributing equivalent funds to make good any losses incurred on the loans and advances in question;

-- the Government of Abu Dhabi and related institutions had taken a controlling (over 77 per cent) interest in BCCI and stated their intention to make further share acquisitions and to reorganize and restructure BCCI;

-- the Bank of England the Institut Monetaire Luxembourgeois had been informed of all the uncertainties known to Price Waterhouse and of the financial support commitment by the Government of Abu Dhabi and had decided to allow BCCI to continue to operate;

-- whilst evidence of certain false and deceitful transactions had been discovered we believed the extent of these transactions to be limited to a small number of specific situations;

-- the individuals in management who were thought to have been responsible were to be removed.(38)

Accordingly, after receiving these sign-offs from everyone else involved, including most importantly the Bank of England, Price Waterhouse signed off once again on BCCI's books stating:

In our opinion, the consolidated accounts give a true and fair view of the financial position of the group at December 31, 1989 and the results of its operations and changes in financial position for the year ended in accordance with International Accounting Standards.(39)

The certification was subject to a small footnote, listed as Note 1 in BCCI's annual report, which cited that the "Basis of Preparation" for the Price Waterhouse report was the fact that "the Government of Abu Dhabi has subscribed US$400 million for new shares and acquiring a major holding from an existing shareholder such that together with related institutions they now hold over 77 per cent of the share capital of the holding company. They have advised the directors of their intention to maintain the group's capital base whilst the reorganization and restructuring necessary for its continued development is undertaken." Price Waterhouse also charged off a loan loss for BCCI of $600 million, a loss for the year of nearly $500 million, and a reduction in shareholders equity of approximately 50 per cent, from $886 million to $424 million. In so doing, Price Waterhouse for the first time recognized losses that had in actuality, taken place over many preceding years.

By agreement, Price Waterhouse, Abu Dhabi, BCCI, and the Bank of England had in effect agreed upon a plan in which they would each keep the true state of affairs at BCCI secret in return for cooperation with one another in trying to restructure the bank to avoid a catastrophic multi-billion dollar collapse. Thus to some extent, from April 1990 forward, BCCI's British auditors, Abu Dhabi owners, and British regulators, had now become BCCI's partners, not in crime, but in cover-up. The goal was not to ignore BCCI's wrongdoing, but to prevent disclosure of the wrongdoing from closing the bank. Rather than permitting ordinary depositors to find out for themselves the true state of BCCI's finances, the Bank of England, Price Waterhouse, Abu Dhabi and BCCI had together colluded to deprive the public of the information necessary for them to reach any reasonable judgment on the matter, because the alternative would have been BCCI's collapse.

For its part, in June, 1990, Price Waterhouse was actually to file another report with the Bank of England, known as a Section 39 report, finding that BCCI's systems and controls were satisfactory -- findings that Price Waterhouse would have to entirely abandon just five months later.

Abu Dhabi Deceives the Auditors

In April, 1990, Naqvi and the other chief officers who resigned with him from their positions in BCCI were placed under house arrest in Abu Dhabi, as Abu Dhabi took formal control of BCCI. Unfortunately, as it did so, it did not disclose to Price Waterhouse certain information that it now had about the extent of the fraud at BCCI, and it took positions that had the clear intention of seeking to sweep the true nature of BCCI's problems under the rug, and to avoid the disclosure to BCCI's regulators of what had really taken place. Essentially, Abu Dhabi was now seeking to make certain that the money it was spending on BCCI would suffice to keep secret the relationship between Abu Dhabi and other Arab shareholders in BCCI, even, as necessary, from Price Waterhouse, the outside auditors for the bank it now owned.

In September, 1990, Price Waterhouse learned that BCCI had concealed further lending of over $500 million to its major customs by "parking" that lending with a Middle Eastern bank, namely, the National Commercial Bank of Saudi Arabia controlled by Khalid bin Mahfouz, the most powerful banker in the Middle East, who was later indicted in the United States in connection with his activities pertaining to BCCI and First American. This was bad enough, but was worse was the fact that since Naqvi's removal, the practice had continued, "with the knowledge and approval of the Board representative of the controlling shareholders" -- the government of Abu Dhabi. The auditors had begun to realize that Abu Dhabi was now colluding with BCCI in continuing fraudulent practices, and in hiding them from Price Waterhouse.

According to Price Waterhouse, worse was to come. Since March or April, 1990, Naqvi, who had personally handled many of BCCI's frauds, had been living under house arrest in Abu Dhabi. Incredibly, Abu Dhabi had decided to retain Naqvi as a consultant to advise them on BCCI, and were giving him access to BCCI's documents. Even more incredibly, Naqvi was said to be maintaining some 6,000 files personally in Abu Dhabi, whose very existence had still never been disclosed to the auditors. For months, as Price Waterhouse continued its efforts to review BCCI's books, it had been lied to by BCCI and it was finding, by Abu Dhabi, kept in ignorance of some of the bank's most vital records, and only stumbling onto the fact of their existence in November, 1990.

As Price Waterhouse described it, when they confronted Abu Dhabi with their concerns about Naqvi, and a request to review the files he controlled, they were told by Abu Dhabi authorities that the auditors could not have access to them, and that they would remain under the control of the discredited Naqvi:

Price Waterhouse's report to the directors of 3 October 1990 revealed that management may have colluded with some of BCCI's major customers to misstate or disguise the underlying purpose of significant transactions. Following this, the controlling shareholders of BCCI [Abu Dhabi], under pressure from Price Waterhouse, agreed to a full investigation of the problem accounts and to enforce the resignations of Abedi and Naqvi as directors.

An Investigative Committee comprising representatives from Price Waterhouse, E&W Middle East Firm (who were auditors of the Abu Dhabi Government interests), two firms of lawyers and the Abu Dhabi Government was established in November 1990 to supervisor the investigation into the problem accounts. Price Waterhouse were advised by senior BCCI management that Naqvi had been retained as an "advisor" to provide explanations to the Abu Dhabi Government and that they could not have access to files being used by him. Price Waterhouse made clear to the controlling shareholders that without access to Naqvi and the files he was using there could be no investigation.

Ultimately access was granted and we were shocked to find that Naqvi was holding around 6,000 files. After initial steps to secure the files, a preliminary review revealed that amongst them were details of transactions and agreements not previously disclosed to us despite management's prior assurances that they had provided all relevant information to Price Waterhouse.(40)

For reasons the auditors could not fathom, Abu Dhabi had placed Naqvi, a principal architect of BCCI's frauds, in charge of BCCI's most important and secret records without telling them. For the past eight months, Naqvi and Abu Dhabi had maintained exclusive control of those records, with essentially unlimited opportunities to destroy them or falsify them throughout that time. By the time Price Waterhouse finally obtained access to these records in November and December, 1990, it found massive fraud in the materials that still existed. But the auditors had no way of determining the extent to which those documents were already cleansed of any material damaging to the new owners of BCCI, along with any other material which Abu Dhabi or Naqvi wanted hidden forever.

Section 41 Report and BCCI's Closure

Throughout the remainder of 1990, and the spring of 1991, BCCI, Abu Dhabi, and the Bank of England continued to work on a restructuring of BCCI as a means of saving the bank, with the intention of collapsing its dozens of entities into three banks, to be based in London, Abu Dhabi, and Hong Kong. At the same time, Price Waterhouse continued to provide each of them with the information that the fraud at BCCI was massive, and that the losses associated with the fraud were mounting into the billions. All the while, BCCI, Abu Dhabi, the Bank of England, and Price Waterhouse worked together to keep what they knew about BCCI secret. The secrecy had become critical now that they all knew about the ongoing criminal investigation into BCCI taking place in New York City by the District Attorney. Each made a strenuous effort to prevent the District Attorney from obtaining the Price Waterhouse audit reports which contained the information that if known would destroy BCCI. But by late 1990, the District Attorney, after months of effort, had obtained some of the audit reports, and appeared to be narrowing in on an indictment of BCCI.

Oddly enough, Price Waterhouse continued to resist finding that fraud had taken place for many months after the information available to it provided ample basis for such a conclusion. As late as its October, 1990 report to the Bank of England, the auditors avoided concluding that BCCI was involved in fraud, and suggested that they believed that the restructuring and remedial efforts being taken would be adequate to solve the bank's problems.

During December, 1990, at the very time that the New York District Attorney had obtained some of the most critical of its earlier audit reports, Price Waterhouse completed its initial review of the formally hidden Naqvi files. In that review, Price Waterhouse found evidence of phony loans and hidden deposits amounting to hundreds of millions of dollars, nominee arrangements, hold harmless agreements relieving borrowers of any obligation to repay loans, and other, similarly criminal practices at the bank. Again, to Price Waterhouse's shock, Abu Dhabi had known of these practices since at least April, 1990, and never disclosed them to the auditors.(41)

The implications of these findings for BCCI's future were devastating. If there were in fact deposits that had been made to BCCI amounting to hundreds of millions that had never been recorded at the bank, how was anyone to ever determine what claims by BCCI depositors might be real, and what claims might be phony? Price Waterhouse decided that it dare not put this information in writing, and would confine itself to reporting it orally to the Bank of England, which it did in January 1991. In response, Abu Dhabi again agreed to make good any losses in connection with these unrecorded deposits.

In the months that followed, Price Waterhouse began tracing the circuitous routing of funds between BCCI and its Grand Caymans affiliate, ICIC, and found additional fraudulent activity amounting to as much as $1 billion through this mechanism alone. In March, the Bank of England commissioned it formally to investigate BCCI under Section 41 of the UK's Banking Act. Finally, on June 22, 1991, Price Waterhouse delivered a draft report to the Bank of England, known under British law as a Section 41 report, demonstrating that "fraud on a significant scale had been committed and that it had involved a significant number of people both inside and outside the bank."(42) Nine days later, at the direction of the Bank of England, BCCI's offices around the world were closed down and BCCI ceased to exist.

BCCI's U.S. Auditors

Given the limited extent of BCCI's official activities in the United States, which were limited to state-licensed local branches and representative offices, and not licensed to accept deposits in the United States, the audit activities of BCCI's United States outside auditors, Price Waterhouse (US), were extremely narrow in scope. As noted above, Price Waterhouse (US) responded to a subpoena by the Committee by providing all requested documents and full cooperation regarding any materials it possessed regarding BCCI in the United States.

These documents demonstrate that over the course of that audit relationship, Price Waterhouse (US) did find that BCCI's U.S. offices maintained inadequate documentation on many of their loans, and engaged in other sloppy banking practices. But the documents provided by Price Waterhouse (US) to the Subcommittee also confirmed that Price Waterhouse (US) handled its auditing of BCCI's U.S. activities professionally and diligently, albeit within the narrow confines of its commission from its UK partnership.

Such a finding might be odd, given BCCI's extensive involvement in this period in laundering funds from Latin America and the Caribbean. But until the spring of 1989, the Price Waterhouse (US) audits were designed to look only at lending practices and overall bookkeeping issues, rather than the issue of whether BCCI might be laundering funds from abroad. Moreover, given Price Waterhouse (US)'s ignorance of BCCI's true relationships with First American, the Independence Bank, and other entities, there would have been any number of improper activities by BCCI in the United States in the aggregate that would fall outside the ordinary purview of auditors.

In early 1989, after BCCI had been indicted on money laundering charges in Tampa, Price Waterhouse (US) was selected by BCCI to create a compliance program under which BCCI would submit to extremely rigorous standards for the handling of transactions from abroad which were designed to trace and stop money laundering. The compliance program was put into place under a June 1989 Memoranda of Understanding with the Federal Reserve, which permitted BCCI to stay open in the United States only if it developed policies to insure its compliance with Bank Security Act and anti-money laundering regulations.

The Price Waterhouse compliance program, designed to be state-of-the-art, for the first time established a comprehensive anti-money laundering regime at BCCI, and forced BCCI's U.S. offices to become ever more careful in handling funds from foreigners. Its implementation was effective, and its results positive in terms of compliance with U.S. law for BCCI's U.S. branches, but very negative in terms of BCCI's U.S. cash-flow. As Price Waterhouse (UK) noted in November, 1989:

We understand there has been a noticeable drop in the funds transferred from other BCCI locations to the US agencies because of this onerous requirement to obtain the necessary details from their customers. Most of their US dollar transactions formerly with the US agencies are being routed to third party banks. Management are investigating this matter to satisfy themselves that there is nothing untoward in such transactions.(43)

By insisting the BCCI's offices in the US document where their funds were coming from, Price Waterhouse had ended the ability of the U.S. offices to engage in profitable activity. BCCI's business dried up, demonstrating the degree to which the US operations had been functioning largely to launder dirty money from other countries in the first place.

However, there were substantial limitations the effectiveness of the compliance effort undertaken by Price Waterhouse, which were built into its design by BCCI. Originally, Price Waterhouse (US) had proposed to BCCI the establishment of a very broad global review of the bank's procedures to insure that the bank was able to stop laundering money world-wide, and turn BCCI into bank that rigorously honored the laws of every country in which it did business. On February 1, 1989, Price Waterhouse (US) wrote Robert Altman to propose to:

Work with BCCI officials on an immediate to medium term plan to regularize the bank's regulatory and supervisory status on a global consolidated basis. This would necessitate visiting key supervisors around the world and learn of their concerns and expectations and provide the framework to enable BCCI to meet these expectations.(44)

The naive approach by Price Waterhouse (US) was of course, incompatible with BCCI's survival. BCCI could tolerate such a program in any case. But by 1989, the UK auditors already knew of dozens of problems that BCCI was supposed to have cleaned up and had failed to rectify. That failure was because the practices were ones which BCCI relied upon for its continued survival. If BCCI had agreed to permit Price Waterhouse (US) to undertake this court, Price Waterhouse (US) would have swiftly learned of these practices, and possibly have been forced to tell U.S. regulators about them. But there was an even more direct problem. The information already contained in Price Waterhouse (UK)'s audits, that there had been massive lending by BCCI on CCAH shares and securing those shares, contained the great secret that BCCI effectively owned controlled First in violation of U.S. laws. Such a confrontation with reality was obviously not in BCCI's interests, or in the interest of Altman himself. The terms of engagement were swiftly narrowed to include only an anti-money laundering compliance program focused on the particular BCCI entities that had been implicated in the C-Chase sting in Tampa. The narrower engagement was signed by Price Waterhouse and sent to Altman, as BCCI's attorney, on March 9, 1989.(45) For this engagement, together with its regular audits of BCCI branches, Price Waterhouse (US) received approximately $4.5 million per year.(46)

Thus, before hiring the Price Waterhouse (US), BCCI and Altman narrowed the framework for their efforts, with the result that they were sufficiently narrow to preclude Price Waterhouse (US) from learning of problems at BCCI in the United States already known to Price Waterhouse (UK), but apparently never communicated to their US affiliated partnership.

Loans, Payments and Favors from BCCI to Accountants

One especially troubling aspect of BCCI's relationship to its accountants was its practice of providing them with loans. While the Subcommittee has not been able to determine the complete extent of this practice, the Subcommittee has received documentation of at least two such instances -- the first involving a 1987 loan of BDS $587,000 to Price Waterhouse's partners in Barbados, the second involving a loan of $17,000 to Price Waterhouse's partners in Panama in 1984, increased to $50,000 a year later.(47)

Even within BCCI, this practice was controversial. When Price Waterhouse applied for the Panama loan, BCCI official A. M. Akbar wrote Amjad Awan, then head of BCCI's Panama branch, to express his concern about the propriety of lending money to one's auditors:

The firm is our auditors and we do not consider it proper to sanction or enhance the limit of USDLR 50,000.00 to our own auditor. However, we shall re-exam the matter on receipt of your justification as well as your confirmation that local laws does not prohibit loans & advances to the company's auditors.(48)

In response, Awan advised Akbar that "there are no restrictions about advances to company auditors [which] may be allowed" and the lending was approved.

Separately, regulatory reviews of the books and records of Capcom Financial Services Ltd., BCCI's commodities trading affiliate, showed payments of $100,000 by Capcom to former Price Waterhouse Grand Caymans partner Richard Fear in the three years since he left Price Waterhouse in 1986. Fear had previously handled audits of the books of BCCI in the Grand Caymans, the location of many of the worst frauds at BCCI.

Both Capcom's head, Ziauddin Akbar, and former Price Waterhouse partner Fear, had been held at fault in connection with BCCI's massive trading losses in 1985, described above, which were discovered in 1986. At the time, Akbar was the head of BCCI's Treasury, and therefore held responsible for the losses, and Fear was the principal person responsible for insuring the propriety of BCCI Grand Cayman's books and records.

In late June, 1992, at the behest of the Serious Fraud Office of the United Kingdom, Royal Cayman Islands police conducted dawn raids of Price Waterhouse officers in the Grand Caymans, as well as the home of Fear and a second Price Waterhouse partner there, as well as the office of Price Waterhouse's local Grand Caymans attorney, conducting searches for records.

In late February, the Subcommittee requested copies of any reports or memoranda created by Price Waterhouse concerning Fear and BCCI, and related documents. Price Waterhouse refused to provide the documents requested, stating that in its view it was "inappropriate to produce the work product of its lawyers for examination by any governmental or private third-party," and that in any case, "Mr. Fear's participation [in PW's investigation] was predicated upon implicit understandings of confidentiality." However, despite the "implicit understandings of confidentiality" Price Waterhouse reached with Fear, Price Waterhouse did advise the Subcommittee that it had concluded Fear was innocent of wrongdoing in accepting funds from BCCI's affiliate, Capcom. According to Price Waterhouse (UK):

Richard Fear left the employment of PW-UK in July, 1986. . . PW-UK first became aware of the payments to Mr. Fear mentioned in the Wall Street Journal article, in September, 1991.

Upon learning of the payments, PW-UK obtained Richard Fear's agreement to cooperate in an inquiry by lawyers acting for PW-UK. Counsel for PW-UK had discussions on the subject with Richard Fear and ascertained from looking at various records which he showed to them that the payments were indeed made in two installments in July and August 1988 by Capcom Financial Services Limited ("Capcom"). The payments, which totalled $100,000, were stated to be for referral to Capcom of potential clients requiring brokerage or investment services.

We understand that the United Kingdom Serious Fraud Office ("SFO") has investigated the circumstances in which the payments were made and has interviewed Mr. Fear. We further understand that the SFO has concluded its investigation with respect to Mr. Fear and the matter is not being pursued.

Based on all the above, PW-UK concluded that these payments by Capcom to Richard Fear, which were made two years after he had ceased to be employed by PW-UK, were unconnected with any work that he did on the audit of BCCI or while at PW-UK.(49)

According to press accounts, Fear's alleged receipt of funds from Capcom remains under investigation by the British Serious Fraud Office.

In sworn testimony before the Subcommittee on July 30, 1992, Akbar Bilgrami, formerly head of BCCI's Latin American and Caribbean region and convicted in the Tampa money laundering case, stated that he had been informed by other BCCI officials that Price Waterhouse in the Grand Caymans had been "taken care of." Bilgrami said he did not have details as to how the auditors had been taken care of, other than that it was his understanding that BCCI had provided one or more of them with the use of a villa.(50)

Robert Bench

Robert Bench, a partner in Price Waterhouse (US), had minimal involvement in any BCCI affair while at Price Waterhouse, becoming responsible for some assistance to BCCI in early 1989 in connection with the compliance program instituted by Price Waterhouse for BCCI as part of BCCI's first consent decree with the Federal Reserve following its indictment on money laundering charges in October, 1988.

However, in his previous positions as a senior official of the U.S. Comptroller of the Currency during the late 1970's to the mid 1980's, Bench was exposed on two occasions to important information regarding BCCI which, taken together, raise questions as to Bench's handling of BCCI affairs as a partner at Price Waterhouse.

First, in 1978, as Associate Deputy Comptroller for International Banking, Bench was provided with information about a variety of shoddy banking practices at BCCI, including BCCI's use of nominees, by an OCC bank examiner working under him, Joseph Vaez. The memorandum prepared by Vaez and provided to Bench was a clear warning signal to OCC, as well as the Bank of America, which still had an ownership interest in BCCI, that BCCI was a danger to anyone involved with it. As the Vaez memorandum noted, if the Bank of America did not sever its relationship with BCCI, the OCC might well classify its entire investment in BCCI.(51)

Second, in 1985, Bench was provided a report by the CIA concerning BCCI that detailed BCCI's plans for the United States. This memorandum, described in detail in the chapter on BCCI's ties to the intelligence community, contained striking information, including the fact that BCCI secretly owned First American.

Bench testified that he had only a very limited memory of the 1985 report:

I do recall reviewing a classified piece of information that dealt with BCCI. . . it was somewhere in the middle of the '82 to '87 period. I feel comfortable about that. . . I recall receiving a document from the CIA that dealt with BCCI. To the best of my recollection it didn't deal with First American and it didn't deal with anything in the United States. There is an action step that I took within the office on that information . . . which was to look at this information in terms of LCD [Lesser Developed Country] debt.(52)

In staff interviews prior to this testimony, Bench emphasized that he had no memory whatsoever of having ever been advised that BCCI held interests in any financial institution in the United States, let alone First American.(53)

In fact, the memorandum provided Bench by the CIA focused significantly on BCCI's plans in the United States, including its ownership of a Washington, D.C., based, multistate bank holding company that Bench would have surely known was First American.

Obviously, this was information that the Federal Reserve should have had and did not have at the time that Bench was participating in BCCI's compliance program in connection with its consent decree with the Federal Reserve following its money-laundering indictment.

Bench testified that he had no memory of the 1978 memorandum prepared by Joseph Vaez for him at OCC, and that his memory of the 1985 memorandum was almost equally dim.(54) According to Bench, based on his lack of memory of either memorandum, there was no reason for him to have connected any of the information in them to his ongoing work on BCCI compliance years later at Price Waterhouse.

During that compliance work, Bench travelled to London twice to meet with BCCI officials in London, including Abedi and Naqvi, and provided technical assistance to BCCI in the United Kingdom and the U.S. in anti-money laundering matters, "under the direction of Robert Altman."(55) At the time, Altman was not only BCCI's attorney, but the President of First American. Yet according to Bench, it never occurred to him that there might be a relationship between the two institutions that needed to be understood to determine whether BCCI was truly complying with the Federal Reserve's requirements.

According to Bench, the reason for this was that the focus of the compliance effort solely focused on money laundering. As he testified:

Senator, to the best of my recollection, there was no linkage whatsoever, in any of the work we did or any of the discussions we had, with First American . . . I don't recall any First American issues . . . it was very clear that in this exercise Mr. Altman and Mr. Clifford were lawyer for BCCI.(56)

At the time Bench met with BCCI officials and Price Waterhouse (UK) partners in London, both the BCCI officials and the British accountants knew that BCCI has massive loans on First American secured by First American's shares. Bench himself had been told by the CIA that BCCI owned First American back in 1985. Thus, Bench's personal obliviousness to this issue as a partner of Price Waterhouse (US) raises obvious questions. If Bench had remembered, recognized, or understood the information that was available to him from his days at the OCC, or reviewed any of the recent audit reports at Price Waterhouse (UK) to BCCI's directors, Bench would have had the truth in front of him concerning BCCI's secret ownership of First American. Price Waterhouse (US) and BCCI would have been ethically required to tell the Federal Reserve the truth. And the Federal Reserve would have learned about BCCI's ownership of First American as of the spring of 1989 -- almost two years earlier than the time it actually learned of the relationship.

Instead, according to Bench's testimony, he never focused his attention on the BCCI-First American relationship in any respect, and so confined himself to advising BCCI on how to improve its practices to avoid being used to launder drug money. Bench's approach was narrow and incurious at best.

Conclusions Regarding The Auditors' Role

From the beginning, BCCI's fractured system of banking, involving a multiplicity of entities spanning the globe, posed an obvious challenge to auditors responsible for providing a base-line of protection to those relying on its annual certifications of BCCI, which the auditors failed to meet.

The auditors' options in responding to this problem were quite clear. First, they could respond by highlighting problems, and working with BCCI to solve them, an approach applied through the first 15 years of BCCI's existence. Second, when BCCI failed to respond to their recommendations, the auditors could respond by resigning, an option adopted by Ernst & Whinney in 1986. Price Waterhouse, for reasons that are not clear, but which may relate to the $5 million a year being generated by BCCI-related work, remained with BCCI, and signed off on BCCI's books year after year until early 1990. At that time, recognizing that the financial hole inside the bank required emergency action, Price Waterhouse sought to avoid the risk of being destroyed together with BCCI by taking the information it had developed to the British regulators, and seeking further guidance from them.

The auditors' role also created special problems for those investigating BCCI. BCCI's consolidated audits were based on the work product from auditors around the world. Yet those investigating BCCI in the U.S. found that the local partnership of the auditing firm involved possessed none of the information it requires, and contended it had no power to obtain any of the information it requires.

This problem raises squarely the question of whether remedial legislation is necessary to require international accounting firms to include as a condition of their relationship with foreign affiliated partnerships, that these foreign partnerships agree to provide information in response to valid subpoenas in the United States on cases affecting the United States.

Additional institutional issues arose regarding the auditors' role in BCCI's failure in the UK. In the UK, the issue is whether external auditors have responsibilities to depositors, customers, and the general public independent of their duty to a bank's shareholders.

When an external auditor certifies the financial statement of a business, it is simultaneously providing different services to different audiences.

For the shareholders of the institution it is certifying, it is providing what is supposed to be a clear, full, and fair description of the actual performance of the business to assist the shareholder in determining the value of his investment, the performance of the company, and the strength of the company's management, as well as assurances that the company has no untoward risks from violations of law or regulatory compliance.

To anyone else, an annual certification represents what may be the principal means by which an outsider can evaluate the safety of entering into a transaction with a business. An annual report tells a would-be depositor in a bank about the health of the bank and its business, its level of capital, its past returns on investment, its areas of difficulty. In reviewing such a report's audit certification, an outsider is assuming the reputation for expertise of the auditor, and focusing not on the quality of the audit, but on the information the ostensible neutral and complete audit is providing.

Thus, true and accurate financial statements, certified by reputable accounting firms, are at the heart of the self-regulatory process of financial markets throughout the world. In the United States, this seldom has significant implications because first, depositors are insured by the federal government and therefore need not worry about a bank's solvency, so long as they maintain less than $100,000 per account; and second, the United States conducts independent bank examinations by seasoned examiners employed by bank regulators. Outside the United States, however, bank deposits remain largely uninsured, and outside auditors, rather than bank examiners, are relied upon to insure that reliable financial information is provided to the markets.

Unfortunately, the accounting profession generally has regarded its primary responsibilities as being to shareholders of a company, rather than to potential customers, creditors, or others who might have an interest in obtaining accurate information concerning a company. In the case of a bank, this approach is potentially quite dangerous for uninsured depositors, as it leaves them in the position of having to rely on the work of auditors whose principal duties are not to them, but to those who have placed capital in the bank. This result is especially unfortunate as depositors provide the preponderance of funds used by banks -- typically 90 to 95 percent -- while working capital tends to be limited to 10 percent of a bank's assets or less.

In the case of BCCI, the duty Price Waterhouse viewed itself to owe was to BCCI's shareholders -- a small number of Middle Eastern sheikhs most of whom were in fact not real shareholders at all, but nominees, who were not even paying interest to BCCI on its lending to them in their capacity as nominees. Thus, Price Waterhouse in fact wound up owing a duty principally to the people who were deceiving it.

Moreover, even apart from the nominee issue, because BCCI was a bank, the vast preponderance of its funds came not from capital contributions for stock, but from its one million or more depositors, to whom it surely also had a duty. As Professor Richard Dale of the University of Southampton has noted, this problem was inherent in the system of regulation in the United Kingdom:

BCCI's 1989 accounts were not qualified, even though the auditors were aware of serious problems the nature of which had been reported to the bank's majority shareholders. In explaining the decision not to qualify, the auditors have argued that in general terms a bank's accounts cannot be qualified without risking a collapse in confidence and a potentially calamitous withdrawal of deposits. While this approach may be consistent with an auditor's established legal obligation to shareholders, it is not necessarily in the interests of existing depositors, cannot be in the interests of prospective depositors and is difficult to justify on public policy grounds. . . For the banking system as a whole the absence of credible financial information is likely to mean an increased incidence of destablising bank runs.(57)

Thus, under the system as it stood in 1990 and 1991, Price Waterhouse (UK) was in the unenviable position of having to try to keep BCCI open, even as it uncovered ever more information demonstrating that the only fit conclusion to BCCI's existence was its swift termination. Only a few choices presented themselves. Once again, Price Waterhouse could have resigned its commission as BCCI's auditors, a choice available to it from the beginning. Or it could do as it belatedly did, and make use of a provision of British law that enabled it to advise the regulators of its findings of improper banking practices in early 1990, and seek the regulators' advice on how to proceed further. When it chose the latter course, it obtained the comfort of knowing that its every action was being reviewed contemporaneously by regulators at the Bank of England who would share ultimate responsibility for whatever happened.

Possible Changes in International Accounting Practice

The BCCI case raises the issue of whether the current structure for accounting firms as independent partnerships, with authority and liability limited to the nation in which they are licensed, is appropriate and adequate to meet the challenges posed by an international financial marketplace.

One of the great difficulties in uncovering BCCI's fraud for regulators and investigators was the fact that its frauds were carried out through diverse and widespread jurisdictions spanning the globe, while its activities were audited by local accounting partnerships.

Arguably, the current system by which one partnership of an accounting firm sets out audit instructions to all of its global affiliated partnerships in other countries, for them to carry out its instructions, should be adequate to maintain the standards of an audit that would be carried out within the borders of one country. But in cases where something goes wrong, as in BCCI, the structure leaves those injured in countries other than that in which the accounting firm is licensed, in a difficult situation. The firm responsible for the consolidated audit may be located in a jurisdiction with strong financial confidentiality and privacy laws that preclude disclosure of essential information. It may, as Price Waterhouse (UK) did, contend that it does not do business in a jurisdiction in which people have been injured by its handling of audits, and may even refuse, as Price Waterhouse (UK) did, to honor subpoenas issued to it. Such a result is against public policy, and new structures for international accounting firms need to be considered to avoid a recurrence.

One efficient approach that could be adopted unilaterally by the United States, would be to require accounting partnerships, as a condition of being licensed in the United States, or as a condition of being permitted to have their certifications relied upon by any government agency, to reach agreements with its foreign affiliated entities insuring that they will respond to authorized subpoenas in the United States, and provide information as required by U.S. law.

A second approach would rely on the major accounting firms to modify their partnership agreements without being explicitly required by government to do so, as a matter of self-regulation, to insure the availability of documents from their affiliates in accord with the domestic law of the countries in which they are licensed. Thus, a firm such as Price Waterhouse (US) would seek to amend the Memorandum of Association and Bye-Laws of Price Waterhouse World Firm Limited (PWWF) to reach a new binding understanding among it and its affiliates. Under that new binding understanding, if Price Waterhouse (US) received a legal subpoena in the United States concerning documents possessed by any of its affiliates, the affiliates would have to provide that information to U.S. authorities, subject to the requirements of the laws of their jurisdictions. While such a change would not solve all problems in countries which retain strict financial secrecy laws, it would provide a mechanism by which lawful U.S. subpoenas could be cooperatively enforced in many cases.

A third approach would be legislation prohibiting the use or reliance by any federal agency on an audit prepared by any accounting firm not licensed in the United States. This approach would dramatically reduce the risk to the United States from certifications by foreign accounting firms who do not view themselves to be subject to U.S. subpoenas, such as Price Waterhouse (UK). On the other hand, it could well impose some substantial additional costs on firms, especially foreign firms, whose consolidated audits are prepared by non-U.S. auditors, and further hearings and comments on the proposal would be appropriate.

1. Affidavit of John Bartlett, Bank of England, July 5, 1991.

2. S. Hrg. 102-350 Pt. 1 p. 498 and 500.

3. S. Hrg. 102-350 Pt. 1 p. 516.

4. Commentary, Massihur Rahman, Price Waterhouse Section 41 Report to the Bank of England, June, 1991.

5. Memorandum submitted by Price Waterhouse in response to questions from the British Treasury and Civil Service Committee of the House of Commons; provided to the Subcommittee by counsel to Price Waterhouse (UK), February 5, 1992, Answer 1.

6. Section 41 Report, Price Waterhouse, Bank of England, June 1991.

7. Letter, Gilbert Simonetti, Jr., Price Waterhouse, to Jonathan Winer, Subcommittee staff, October 17, 1991.

8. For the record, Price Waterhouse (UK) did offer to provide the Subcommittee with the opportunity to interview Price Waterhouse (UK) partners in London without the provision of the subpoenaed documents, an offer precluded by Subcommittee rules regarding staff travel, and which, in the absence of the provision of the subpoenaed documents would have been of marginal utility in any case.

9. S. Hrg. 102-350 Pt. 1 p. 496.

10. Price Waterhouse Grand Caymans papers dated December 31, 1983.

11. "Commentary on the Independent Examination of the Accounts of Bank of Credit and Commerce International (Overseas) Ltd. for the year ended 31 December 1984," Price Waterhouse Grand Caymans.

12. "Internal Control Report," 28 April 1986, Bank of Credit and Commerce International (Overseas) Ltd., S. Hrg. 102-350 Pt. 4. pp. 152-155.

13. Price Waterhouse report to BCCI, id, S. Hrg. 102-350 Pt. 4 pp. 152-155.

14. S. Hrg. 102-350 Pt. 1 p. 500.

15. Staff interviews, Akbar Bilgrami and Amjad Awan, July 20-30, 1992.

16. Memorandum submitted by Ernst & Young in reply to Questions from the Treasury and Civil Service Committee, February 21, 1992, p. 102.

17. Memorandum submitted by Ernst & Young in reply to Questions of House of Commons Committee on Treasury and Civil Service, February 21, 1991, p. 101, Fourth Report, Banking Supervision and BCCI.

18. Id.

19. Memorandum submitted by Ernst & Young in reply to Questions from the Treasury and Civil Service Committee of the House of Commons, February 21, 1992.

20. Price Waterhouse Audit Report, "Our Large Exposures," December, 1987, BCCI, Subcommittee document.

21. Id.

22. Id, re "AR Khalil."

23. Id.

24. S. Hrg. 102-350 Pt 1 p. 264.

25. S. Hrg. 102-350 Pt. 1 p. 307.

26. S. Hrg. 102-350 Pt. 1 pp. 314-316.

27. S. Hrg. 102-350 Pt. 1 pp. 317-324, 332-343.

28. S. Hrg. 102-350 Pt. 1 p. 352.

29. S. Hrg. 102-350 Pt. 1 p. 353.

30. S. Hrg. 102-350 Pt. 1 pp. 356-358.

31. S. Hrg. 102-350 Pt. 1 p. 360.

32. Memorandum submitted by Price Waterhouse in reply to Questions from the Committee on Treasury and Civil Service, February 5, 1992.

33. S. Hrg. 102-350 Pt. 1 p. 518.

34. S. Hrg. 102-350 Pt. 1 pp. 518-520.

35. S. Hrg. 102-350 Pt. 1 pp. 450-458.

36. Staff interviews, Nazir Chinoy, Abdur Sakhia, Akbar Bilgrami.

37. S. Hrg. 102-350 Pt. 1 p. 481.

38. Memorandum submitted by Price Waterhouse in reply to Questions from the House of Commons Committee on Treasury and Civil Service, February 5, 1992.

39. BCCI Annual Report For the Year 1989, dated April 1990.

40. Memorandum submitted by Price Waterhouse in reply to Questions from the House of Commons Committee on Treasury and Civil Service, February 5, 1991.

41. Memorandum submitted by Price Waterhouse in reply to Questions from the House of Commons Committee on Treasury and Civil Service, February 5, 1991.

42. Id. Price Waterhouse's findings of the Section 41 report are reviewed in some detail in the chapter concerning BCCI's criminality.

43. S. Hrg. 102-350 Pt. 1 p. 279.

44. S. Hrg. 102-350 Pt. 4 p. 50.

45. S. Hrg. 102-350 Pt. 4 p. 53.

46. S. Hrg. 102-350 Pt. 4 p. 92.

47. BCCI Loan documents obtained by Subcommittee; some reprinted in S. Hrg. 102-350 Pt. 2 pp. 624-629.

48. BCCI Documents, Federal Reserve, Miami, obtained pursuant to Committee subpoena.

49. Letter, James E. Tolan to Jonathan Winer, March 4, 1992.

50. Bilgrami testimony, S. Hrg. 102-350 Pt. 6, July 30, 1992, and staff interviews, July 20-29, 1992.

51. S. Hrg. 102-350 Pt. 4 pp. 15-23.

52. Testimony Bench, S. Hrg. 102-350 Pt. 4 pp. 36-37.

53. Staff interview, Bench, February 14, 1992.

54. S. Hrg. 102-350 Pt. 4 pp. 36, 85.

55. S. Hrg. 102- 350 Pt. 4 p. 86.

56. S. Hrg. 102-350 Pt. 4 p. 89-91.

57. Professor Richard Dale, Minutes of Evidence Taken Before the Treasury and Civil Service Committee, id, January 15, 1992, p. 4.

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BCCI, THE CIA AND FOREIGN INTELLIGENCE Introduction The relationships involving BCCI, the CIA, and members of the United States and foreign intelligence communities have been among the most perplexing aspects of understanding the rise and fall of BCCI. The CIA's and BCCI's mutual environments of secrecy have been one obvious obstacle. For many months, the CIA resisted providing information to the Subcommittee about its involvement with and knowledge of BCCI. Moreover, key players who might explain these relationships are unavailable. Some, including former CIA director William Casey, and BCCI customers and Iranian arms dealers Ben Banerjee and Cyrus Hashemi, are dead. Others, including most of BCCI's key insiders, remain held incommunicado in Abu Dhabi. While promising in public hearings to provide full cooperation to the Subcommittee, to date the Abu Dhabi government has refused to make any BCCI officers available for interview by the Subcommittee. Former BCCI chairman Agha Hasan Abedi remains severely incapacitated due to a heart attack. Finally, some persons in a position to know portions of the truth have denied having any memory of events in which they participated and of documents which they reviewed.

A baseline for assessing the BCCI-CIA story is the CIA's official record of its use of BCCI and its targeting of the bank, as set forth in several hundred CIA records created from 1982 through 1992. That record was, by and large, accurately represented by CIA acting director Richard Kerr in public testimony on October 25, 1991, supplemented by more detailed, classified testimony on October 31, 1991. Unfortunately, that record also contains ostensible gaps in knowledge on the part of the CIA about the activities of key contacts in the Middle East for U.S. intelligence -- including BCCI shareholders Kamal Adham and Abdul Raouf Khalil, and BCCI customer and Iran/Contra arms merchant Adnan Khashoggi -- which strain belief.

Outside the documentary record provided to the Subcommittee by the CIA, there is additional material, consisting of BCCI documents, testimony from BCCI officials and insiders, and extrinsic, circumstantial and historic information describing other substantial contacts between BCCI and the intelligence community. These include contacts between BCCI and:

** former U.S. intelligence officials, including a former head of the CIA;

** former and current foreign intelligence officials; and

** individuals engaged in covert operations on behalf of the United States government, including in the Iran/Contra affair.

In addition, the Subcommittee has received allegations of meetings between former CIA director William Casey and BCCI's head, Agha Hasan Abedi.

CIA officials have told the Subcommittee that the CIA as an institution has rules requiring the creation of written records on every activity engaged in by the Agency, and on all significant information reported to the Agency. In the summer of 1991, the CIA engaged in what its officials described as a "dumb" or "brute force" review of its documents, essentially reviewing all possible files for information on BCCI, rather than relying on knowledgeable individuals to select such information. The review located a substantial amount of material generated by the CIA throughout the 1980's, which was produced in July and August, 1991 for CIA internal reviews, in September and October for the Congressional intelligence oversight committees, and beginning in March, 1992, to the Subcommittee.

Unfortunately, there remains a wide disparity between the CIA's official account of critical relationships between BCCI and persons associated with the CIA, and the information available from other sources, including BCCI's own records. One is left with the choice of accepting the official record, which requires an assessment that the other contacts between BCCI and U.S. intelligence figures and operations are coincidental, or of assuming that the full story of BCCI's relationship to the United States has been intentionally veiled by critical players on both sides of that relationship.

The Subcommittee Investigation and the CIA The Subcommittee's contact with the CIA regarding BCCI began in March, 1991, when staff learned from a Subcommittee source that the CIA had prepared a report concerning BCCI's criminality which was made available to Customs in late 1988. Cleared staff contacted the CIA's congressional liaison office to request a copy of the document. The staff was told that no such document had ever existed. Perplexed, staff contacted its source to determine whether he was certain that the material had been provided. The source referred staff to former Customs Commissioner William Von Raab, who confirmed the existence of the document. Staff contacted the CIA a second time, and informed the agency that a senior Reagan administration official had viewed the document. Again, the Subcommittee was told that no documents concerning BCCI had ever been created by the CIA.(1)

Staff then met with Von Raab, who revealed that not only had the CIA provided him with a briefing paper regarding BCCI, but that he obtained it through the offices of then-CIA assistant director Robert Gates, who referred to BCCI as "the Bank of Crooks and Criminals." Von Raab also advised the Subcommittee that Customs agents handling the C-Chase investigation of BCCI had discovered in the course of their work several BCCI accounts that were actually accounts held by the CIA. Von Raab told Subcommittee staff that his agents were told to cease their investigation of those particular accounts.(2) However, in an interview with Subcommittee staff, AUSA Mark Jackowski denied that he had ever uncovered any CIA involvement with the bank and Assistant Attorney General Robert Mueller testified that "at no time ...has anyone from the CIA ... attempted to obstruct or interfere with the Department of Justice's investigation and prosecution of BCCI."(3)

On May 14, 1991, Senator Kerry wrote CIA Director Webster to again request the briefing paper on BCCI prepared by the CIA, as well as information on the CIA's own use of the bank. No reply was received in response to this letter from the CIA for over two months, during which BCCI was closed globally following its seizure in the United Kingdom by the Bank of England on July 5, 1991.

In the meantime, cleared staff requested a formal briefing from CIA staff concerning the CIA's knowledge of BCCI's activities. The CIA provided an oral briefing at its offices in June, 1991 at the "secret" level, consisting of very general information concerning BCCI's use by drug traffickers, material which was by then already largely a matter of public record. The briefer provided by the CIA to Congressional staff was unfamiliar with other basic information about BCCI, such as the names of BCCI's shareholders, including former Saudi intelligence chief Kamal Adham, the key figure in BCCI's secret takeover of First American, and the CIA's former principal contact in the Arab Middle East. Further, the briefer also appeared to be ignorant of the principal analytic documents concerning BCCI previously prepared by the CIA and disseminated to Executive Branch agencies, which contained this and other more important information about BCCI.(4)

On July 23, 1991, CIA director Webster replied to Senator Kerry's May 14 request by letter, admitting to the existence of two documents concerning BCCI, which were described as "extremely sensitive" and therefore restricted to being held by the Senate intelligence committee.(5) On reviewing these memoranda, Senator Kerry recognized that the earlier of the two documents, created in early 1986, contained startling information -- that the First American Bank in Washington was secretly owned by BCCI. The distribution list attached to the memorandum indicated that the CIA had communicated this information at the time to the Treasury Department. These was no indication that either Treasury or the CIA had ever advised the Federal Reserve, the primary regulator of First American, of this critical information.

Senator Kerry asked Judge Webster to declassify immediately the fact that the CIA had known as of 1986 that BCCI owned First American, and to begin the process of declassifying the entirety of both memoranda. On July 31, 1991, the CIA advised Senator Kerry that he could reveal the information concerning BCCI's secret ownership of First American, but no other information from the memos. The CIA had not yet acknowledged its own use of BCCI to the Subcommittee, or provided access to any other materials prepared by the CIA concerning BCCI.

When the single sentence from the 1986 memorandum was declassified, Senator Kerry supplied it immediately to the Federal Reserve, whose counsel expressed shock that the CIA, Treasury, State Department, and Office of the Comptroller of the Currency had possessed this information in 1986 and never provided it to the Federal Reserve.(6)

On August 2, 1991, with Congress in recess, acting CIA director Richard Kerr chose to provide the first public account of the CIA's involvement with BCCI at the National Press Club, to a group of high school students, who were not permitted to ask questions.

During the August recess, the Senate Select Committee on Intelligence began its audit of the CIA's relationship with BCCI, and requested that the CIA provide its auditors with all documents prepared by the CIA concerning BCCI. In the same period, the CIA began its own internal reviews of its handling of BCCI, including a management review, an intelligence review, and an "independent investigation" by the CIA's statutory Inspector General.(7) By the end of August, 1991, the CIA had determined that there were several hundred reports on BCCI by the CIA, of which perhaps four dozen contained substantial information regarding the bank.

Through early October, 1991, in response to further requests from Senator Kerry, the CIA continued to refuse to declassify any of the remainder of the information concerning BCCI on the ground that to do so might imperil sources and methods. The CIA also remained unwilling to permit staff outside the Intelligence Committees to review this material. As CIA legal staff later explained it, the CIA was unaccustomed to providing information pertaining to oversight issues to staff outside the Intelligence Committees, and felt uncomfortable with the questions being posed by the Subcommittee.(8)

Ultimately, Acting Director Richard Kerr agreed to testify before the Subcommittee concerning BCCI in public, after Senator Kerry advised the CIA that the nomination of CIA director Robert Gates would be delayed until the CIA provided such testimony.

On October 25, 1991, Acting Director Kerr testified in open session before the Subcommittee regarding the CIA-BCCI relationship, expressing from his opening statement his personal discomfort about providing information concerning intelligence matters in public:

As an intelligence officer for 30 years, I find myself a little reluctant in an open hearing to talk about intelligence, intelligence sources, and intelligence methods, and the information that we acquire through that process (emphasis added).

Despite Kerr's reluctance, the information contained in his testimony, summarized below, substantially advanced the Subcommittee's knowledge of the official record regarding the CIA's contacts with BCCI. For example, the Subcommittee learned for the first time that there were not two memoranda regarding BCCI prepared by the CIA, but hundreds which had been disseminated to other agencies. Kerr also disclosed that he had provided the Treasury Department with information about BCCI's secret ownership of First American in 1985, a year earlier than previously known, and implying the existence of a separate memorandum to Treasury not previously acknowledged.

Kerr refused to answer a number of questions in open session. In closed session the following week, Kerr acknowledged that several of the questions he refused to answer did not refer to classified information or concern national security. Instead, he had refused to discuss the information in open session because he felt uncomfortable discussing information in public that might embarrass the United States, or any U.S. agency or official.(9)

Initially, Kerr resisted providing the Senators serving on the Subcommittee the opportunity to review the documentary material pertaining to BCCI created by the CIA, suggesting instead that the CIA provide the Senators only general information characterizing the number of reports and the general substance, to "protect sources and methods." Following the closed session, during which Senator Kerry pressed again for the documents, it was agreed between the Subcommittee and the CIA that all the memoranda prepared by the CIA concerning BCCI would be sent to the Senate Intelligence Committee storage facility to permit review. Months later, that material had still not been provided.

Finally, on February 18, 1992, some eleven months after the Subcommittee had first sought information concerning BCCI from the CIA, Director Gates, after meeting with Senator Kerry, directed the CIA to permit staff to review additional records at the CIA pertaining to BCCI. Following this directive from Gates, the CIA for the first time made substantial information regarding its knowledge of BCCI available to the Subcommittee, although information on CIA operations using the bank remained unavailable, channeled solely to the Congressional intelligence committees.

The Subcommittee review culminated in the CIA agreeing to declassify certain material from the 1985 memorandum about BCCI, discussed below.

The Official Record The CIA's first user request in connection with BCCI was from the Federal Reserve in 1981, which asked the CIA whether the CIA had any derogatory information concerning the Middle Eastern shareholders who were about to buy Financial General Bankshares (FGB), which later became First American Bankshares, through the holding company CCAH. The CIA, after reviewing its records, told the Federal Reserve that it had no derogatory information on the shareholders, who included Kamal Adham and Abdul Raouf Khalil, the past and then-current Saudi intelligence liaisons to the United States.(10)

The CIA did not tell the Federal Reserve that Adham and Khalil were foreign intelligence liaisons of the United States, nor did it advise the Federal Reserve that both Adham and a third FGB shareholder, Faisal al-Fulaij, had been the subject of a Securities and Exchange Commission probe in connection with violations of the Foreign Corrupt Practices Act by Boeing and Lockheed for arms sales to Saudi Arabia.(11)

There is conflicting evidence as to whether the Governors of the Federal Reserve were aware of the intelligence background of any of the CCAH shareholders. However, at the staff level at least the Federal Reserve did learn in 1981 of both the intelligence contacts of Adham and the SEC probe into his and Fulaij's alleged receipt of bribes.(12) Former Federal Reserve Chairman Paul Volcker, who signed the order approving the application of CCAH shareholders to take over Financial Bankshares, testified before the Senate Banking Committee in early 1991 that he "wasn't aware" of Mr. Adham's intelligence background, and that "he was sure that it might send an eyebrow or two up," and that "it might provoke further investigation."(13)

Because BCCI was not officially purchasing FGB, and a condition of the purchase was that BCCI not be involved in the transaction except as an investment advisor, the Federal Reserve did not ask the CIA about BCCI itself. If it had done so, it would likely have learned about BCCI's involvement in money laundering.

According to the contemporaneous CIA records retrieved during the search of Agency files during the summer of 1991, the CIA first developed information concerning BCCI, which it provided users in the U.S. government, in 1979. After learning in the early 1980's that BCCI was, as an institution, involved in money laundering activities, the CIA began by the mid-1980's to target BCCI as an institution for foreign intelligence collection. Initially, this collection operation was small. The CIA began a larger and more comprehensive operation as of 1986, which continued through 1990. This operation focused on the "people, the mechanisms, and the way that BCCI laundered narcotics money."(14)

In the course of targeting BCCI for laundering drug money, the CIA learned of BCCI's involvement in manipulating certain financial markets, in arms trafficking, and in supporting international terrorism, including handling the finances of Sabri Al-Bannah or Abu Nidal, and his terrorist organization.(15)

Between 1979 and 1991, the Directorate of Operations of the CIA produced several hundred reports containing intelligence concerning BCCI. BCCI was also discussed in a number of finished Directorate of Intelligence analytic studies, as part of larger discussions of terrorism and counter narcotics.(16) Among these reports was detailed reporting on the use of BCCI Panama by major narcotics traffickers. The Operations Directorate also prepared three special analytic reports, incorrectly characterized by Kerr as having been prepared by the CIA's Intelligence Directorate, one each in 1985, 1986, and 1989, discussed below in some detail.(17)

Kerr acknowledged that the CIA had also used BCCI for certain intelligence-gathering operations, and characterized the use as limited and routine, and undertaken without the knowledge of any person at BCCI. A Senate Intelligence Committee audit, conducted in the summer and fall of 1991, confirmed Kerr's testimony on that point, according to a briefing provided by the auditor to Subcommittee staff. The Subcommittee was not permitted by the CIA to read the actual report generated by Senate Intelligence Committee staff, and thus detailed review by the Subcommittee of that audit has not been possible.(18)

Kerr also acknowledged what the Subcommittee had learned in testimony just one day previously from former First American president Robert Altman, that the CIA had made extensive use of First American for a variety of purposes, including as a repository for "normal banking" and for savings accounts.(19)

The agency later informed Subcommittee staff that neither Clifford nor Altman had been made aware of the existence of the accounts prior to the summer of 1991.

According to Kerr, critical to understanding the contacts between the CIA and BCCI were a number of things the CIA did not do. Kerr testified that contrary to press reports, the CIA had not been involved with any BCCI black network of thugs and assassins, had not been involved with or had knowledge of any use of BCCI for the same of arms to Iran or the diversion of funds for the Nicaraguan Contras, had not violated any laws, had no relationship with BCCI's head, Agha Hasan Abedi, and had never placed Abedi on a watch list.(20)

The 1985, 1986 and 1989 Reports The Operations directorate produced two finished analytic reports regarding BCCI, the first in early 1986, and the second in early 1989, as well as a special intelligence report in early 1985, which was the basis of the material provided to the Treasury and to OCC. Kerr testified that as of early 1985, the CIA had learned that BCCI had succeeded in gaining control of Financial General Bankshares in late 1981, which then was renamed First American, and told the Treasury and Office of the Comptroller of the Currency ("OCC"), about BCCI's secret purchase.(21) Kerr did not inform the Subcommittee that the original report containing this information was then lost, and has never since been located by the CIA.(22) Congressional Relations at the Agency did inform Subcommittee staff that the author of the 1985 could not be identified. However, in a subsequent meeting, the Associate Director of Operations informed Subcommittee staff that, indeed, the author had been identified and that he had been asked to reconstruct the memo to the extent possible.

The 1985 Report There are a number of oddities pertaining to the early 1985 report by the CIA on BCCI.

The first oddity is the fact that original report is missing and has not been located by the CIA, which has instead, at the request of the Subcommittee, reconstructed the contents of the report by looking to the source information it was based upon, and relying on its normal procedures for analyzing and disseminating similar material.

The second unusual aspect of the report is that the CIA has records showing it to have been commissioned by the then-head of the International Division of the OCC, Robert Bench, who has denied under oath having ever sought the information.

A third oddity is that CIA records also show Douglas P. Mulholland, then the intelligence chief of the Treasury Department, as having also solicited the information. Yet like Bench, Mulholland denies having any recollection of having done so.

Fourth, the information contained in the report -- that BCCI owned First American -- was important and startling, and would have been so recognized by anyone in the position of Mulholland or Bench -- yet neither of them recollect that the report discussed this issue. First American was by then the largest bank holding company in the metropolitan Washington area, and BCCI's prohibition from ownership had received widespread attention in the Washington Post and the financial press.

Firth, no action was taken by Mulholland or Bench in response to this critical information to alert federal law enforcement or the Federal Reserve, the primary regulator. The CIA, having provided the information to Treasury and the OCC, believed it had no further obligation to disseminate the information, either.

In an effort to sort through these anomalies, the Subcommittee in the spring of 1992 reviewed the material provided by the CIA to Mulholland and Bench in 1985. During the course of that review, the CIA provided a complete record to the Subcommittee of all the raw information upon which the 1985 memo was based. The Subcommittee requested the declassification of material from the 1985 material concerning First American and the bribery of officials. The declassification was completed on April 9, 1991, and consisted of the following account, which excerpts the substance, and on critical factual issues, the actual language, of the original 1985 material:

The CIA's Summary Background:

In the early 1980s, as part of the overall U.S. Government effort to stop international narcotics trafficking, the Agency began collecting strategic foreign intelligence on narco-dollar money laundering. A successful intelligence collection operation in the Caribbean developed operational leads to several major foreign banks, including BCCI, suspected of narcotics money laundering. Pursuing these leads, CIA initiated a mutually productive dialogue with international banking experts at the Office of the Comptroller of the Currency to determine how CIA could meet OCC's intelligence needs. In late 1984, Agency officers met with a senior official from OCC, who expressed interest in a broad range of international financial intelligence CIA could provide. One of several issues in which the OCC official expressed interest was the takeover efforts and suspicious activities of institutions such as BCCI, which he specifically cited for its spectacular growth and the mystery surrounding its activities. In a later meeting, a Treasury intelligence liaison official expressed the interest of that organization in BCCI because of a possible concern about the less than wholesome reputation of the bank.

Foreign Intelligence Collection:

In late 1984 and early 1985, the Agency collected some intelligence on BCCI and disseminated the information to the Treasury Department. The foreign intelligence provided to the Treasury dealt with several activities, including the following information.

The primary goal of BCCI senior management was growth in deposits at all branches internationally. The strategy being employed by BCCI to achieve rapid growth in assets and profits included manipulation of international financial markets and bribery, which was an approved policy encouraged by senior executives, including the general managers and President Abedi. The objectives of BCCI included developing both profits and political/economic leverage in the Near East, Africa, and Asia through the use of a tremendous volume of financial assets. BCCI expansion in the United States included the secret ownership of the Washington, D.C.-based bank holding company with which BCCI was affiliated. All of the shareholders in the Washington D.C.-based bank holding company were fronts for BCCI. BCCI loaned them the capital to make the purchase in return for their shares as collateral, which was regarded as a sensitive secret within BCCI management circles. If all of BCCI's assets in the U.S. were included in their balance sheet, the bank would be much higher in the worldwide ranking of the top one hundred financial institutions.

The Agency-Treasury Dialogue:

CIA provided this foreign intelligence to the Treasury intelligence community liaison representative in January 1985 [Douglas P. Mulholland], who reported to CIA that he carried it directly to the Secretary [Donald Regan] for his further disposition. The Treasury intelligence liaison officer also recommended only two persons in the Comptroller hierarchy see this material, which he described as "dynamite." The liaison officer praised this information, promised to keep the Agency fully informed of Treasury's reaction to it, and provided follow-up collection requirements to the Agency. These included a request for examples of BCCI management encouraging the use of bribery. The Treasury liaison officer also requested the name of the Washington, D.C.-based bank holding company owned by BCCI and the names of any other U.S.-based companies controlled by BCCI.

In April 1985, Agency officers had a curiously unsatisfactory discussion with the Treasury intelligence liaison representative concerning BCCI activities reported earlier by the Agency. The Treasury official explained that the position of the Treasury enforcement offices was that the BCCI activities reported by the Agency were not surprising and complemented the general picture Treasury had of BCCI. The Treasury officer stated that although his organization was interested in BCCI's activities to manipulate an international financial market and in the bank's buying into the U.S. along the lines of its acquisition of Financial General Bankshares [First American], Treasury was not concerned enough to levy further collection requirements on the Agency. The Treasury intelligence liaison officer said that money laundering remained the major focus of Treasury's enforcement side.(23)

What is notable about the information contained in the memorandum is that it was emphatic on BCCI's ownership of a Washington, D.C. based holding company, identified by Treasury as First American. The Treasury's senior intelligence official, Mulholland, initially considered the information to be "dynamite," but by April, after conferring with then Secretary of the Treasury Donald Regan, had concluded that Treasury saw no need for receiving further information about BCCI's ownership of First American, or its plans in the United States generally.

Mulholland's Testimony On February 19, 1992, Douglas P. Mulholland, currently the Assistant Secretary of State for Intelligence and Research, testified about his contacts with the CIA concerning BCCI as the special assistant for national security to the Secretary of the Treasury from 1982 through 1987, when he was the CIA's chief liaison in the Treasury.

Mulholland, a career officer of the CIA, had been placed in Treasury by CIA chief William Casey, and left his job at Treasury on retirement from the CIA in 1987 to become a researcher for the Bush election campaign, before being appointed to his current position as head of intelligence at the State Department.

Mulholland described his contacts with the CIA concerning BCCI as follows:

I have a very limited memory of any specific documents, discussions, or events relating to BCCI, including any information that may have been introduced by the intelligence community during the mid-1980's.

Although I may well have discussed sensitive information on BCCI with senior department officials, including then-Secretary Donald Regan, that was not such an unusual experience as to ingrain such a discussion in my mind. . . With regard to BCCI, I recall only receiving one report during my time at the Treasury . . . The report was hand carried to me by a CIA officer who emphasized the sensitivity of the report.

I also recall this report because of its unusual format. The report lacked any heading or identifying numbers, and was typed on a plain piece of paper. One substantive aspect of the report struck me as particularly surprising, but because this information was produced and remains controlled by CIA, I am unable to discuss with you today any of the substance.(24)

In public testimony, Mulholland therefore declined to discuss the substance of the single aspect of the report which he found surprising. However, in interviews with Subcommittee staff prior to his testimony, Mulholland advised the Subcommittee that his memory concerned a matter in the CIA report which had nothing to do with BCCI's possible ownership of U.S. institutions, and that he had no personal memory that the issue was raised in the report.(25)

Mulholland emphasized throughout his testimony that his own memory regarding the BCCI report was very limited. He acknowledged that the CIA's documents reported him having provided the report Secretary Regan, but he stated he had no personal memory of having done so.(26) He estimated the frequency of his meetings with Secretary Regan regarding CIA reports as being anywhere from "zero to one hundred percent" of the time, and said he had not the "vaguest idea" of how often he had discussed such matters with the Secretary. He testified that the secondary source chronology the CIA concerning his activities was plausible, but that he could not say for certain whether it was correct, as he had no memory of having asked for any information, or having briefed anyone else on the information.(27)

Mulholland stated that even if he had recognized that the information contained in the report important, he would not have the right at the Treasury Department, let alone the responsibility, to take any action to disseminate the information further, since the CIA was the agency which created the information and controlled it.(28)

Mulholland acknowledged that he had never received a comparable report from the CIA about any other bank besides BCCI, and that the BCCI report was not "normal." He testified that there was no record maintained at the Treasury Department of the report having been logged in, and he could not give any reason for this omission.(29)

Mulholland said he had no memory of having commissioned such a report, despite the CIA's documentary record that he had done so, and hence, he was unable to provide the Subcommittee with any reason why any person at Treasury might have asked the CIA to develop information concerning BCCI in late 1984 and early 1985.

Bench's Testimony Bench, like Mulholland, had only a very limited memory of the 1985 report. As he testified:

I do recall reviewing a classified piece of information that dealt with BCCI. . . it was somewhere in the middle of the '82 to '87 period. I feel comfortable about that. . . I recall receiving a document from the CIA that dealt with BCCI. To the best of my recollection it didn't deal with First American and it didn't deal with anything in the United States. There is an action step that I took within the office on that information . . . which was to look at this information in terms of LCD [Lesser Developed Country] debt.(30)

In staff interviews prior to this testimony, Bench emphasized that he had no memory whatsoever of having ever been advised that BCCI held interests in any financial institution in the United States, let alone First American.(31)

Bench also told staff that not only had he no memory of having commissioned a report on BCCI, but he would have been unlikely to have done so in any case, because of the OCC's need to work abroad without officials from other countries being concerned that it was doing so in conjunction with U.S. intelligence. Bench was therefore perplexed that the CIA had identified him as the requester, noting that to the extent he had an interaction concerning BCCI, it was the CIA asking him if he wanted information.(32)

Regan's Recollection Following the declassification of the 1985 memorandum by the CIA, the Subcommittee contacted former Secretary of the Treasury Donald Regan to determine what memory he had regarding Mulholland having provided him with the 1985 memorandum. According to an aide to Regan, he initially believed he had not been shown the memorandum by Mulholland because he had left Treasury to take the position of chief of staff at the White House, and so advised a Wall Street Journal reporter who contacted him at home in August, 1991. Regan was then contacted by Mulholland in August or September, 1991, who advised Regan that Mulholland had reviewed records at the CIA showing that he did provide the memorandum to Regan, and that Mulholland had no personal recollection regarding the matter, either. According to Regan's aide, Regan still has no recollection of Mulholland ever providing information regarding BCCI to him.(33)

In reviewing the CIA documents and the testimony of Kerr, Mulholland and Bench, it appears that the CIA has accurately set forth the information regarding First American provided Mulholland, Regan and Bench in 1985, and that Mulholland, Bench and Reagan's memories that the CIA did not tell them about BCCI's secret control of First American are, at best, incorrect.

The 1986 and 1989 Reports While the 1985 report received oddly limited distribution, the 1986 report, containing most of the key elements of the earlier report, including the fact that BCCI was owned by First American, was distributed more widely, to the Department of State, Defense Intelligence Agency, National Security Agency, National Security Council, Commerce Department, and to Treasury. Thus, every major CIA user that might be interested in the information received it, except for the two agencies which would have had a statutory responsibility to begin investigations in response -- the Federal Reserve and the Justice Department. However, Treasury logs again showed no actual receipt of the document, and there is no record of Treasury having passed the information to its agents in U.S. Customs, including those in Tampa whose investigation of BCCI lead to its indictment on money laundering charges in October, 1988.(34) The 1989 report, which provided detailed information concerning BCCI's criminality, was provided both Customs and the FBI, and reiterated the information, reported in the 1985 and 1986 memos, that First American was owned by BCCI. Even at this late date, the Federal Reserve was notified by no one of the existence of the report, or of any of the material in it.

Unofficial BCCI-CIA Links The unofficial story of BCCI's links to U.S. intelligence is complicated by the inability of investigators to determine whether private persons affiliated with U.S. intelligence were undertaking actions such as selling U.S. arms to a foreign government outside ordinary channels on their own behalf, or ostensibly under sanction of a U.S. government agency, policy, or operation.

In the 1970's and 1980's, there have been cases of people with ties to U.S. intelligence engaging in operations on their own behalf which in fact had no ties to any approved U.S. government interest, such as former CIA officer Edwin Wilson's illegal arms sales to Idi Amin of Uganda and to Colonel Qaddafi of Libya. There have been other cases, such as retired General Richard Secord's arms sales to Iran and to the contras in the Iran/Contra affair, which are hard to distinguish from Wilson's case, except for the fact that the sales had actual secret approval and support from officials within the government, although they were not authorized by law under the Arms Export Control Act, and although Congress did not receive notifications required by law from the President.

In the case of BCCI, former CIA officials, including former CIA director Richard Helms and the late William Casey; former and current foreign intelligence officials, including Kamal Adham and Abdul Raouf Khalil; and principal foreign agents of the U.S., such as Adnan Khashoggi and Manucher Ghorbanifar, float in and out of BCCI at critical times in its history, and participate simultaneously in the making of key episodes in U.S. foreign policy, ranging from the Camp David peace talks to the arming of Iran as part of the Iran/Contra affair.

As early as the mid-1980's, sources in the United Kingdom were alleging that BCCI was providing services not only to the CIA, but to intelligence agencies of a number of countries, including the Soviet Union. For example, a November 5, 1986 letter to the Governor of the Bank of England, written anonymously, stated the following:

The BCCI is involved in helping people avoid Tax, illegal transfers of money, Hawala transfers, off the record deposits, conduit for drug and crime money and also as banker to intelligence agencies for most major agencies of the world.(35)

Did BCCI, its shareholders, or its officers, perform services for the United States government during any part of its existence? Were such services linked in any respect to BCCI's activities, such as its acquisition of First American? The unofficial record, explored below, raises these questions but cannot answer them definitively.

Kamal Adham: BCCI's Godfather of Middle East Intelligence Kamal Adham, who was the CIA's principal liaison for the entire Middle East from the mid-1960's through 1979, was the lead front-man for BCCI in its takeover of First American, was an important nominee shareholder in BCCI, and remains one of the key players in the entire BCCI affair. On July 29, 1992, he reached a plea agreement with the District Attorney of New York, acknowledging that he had been a BCCI front-man in the United States, and agreeing to provide full cooperation with U.S. law enforcement in BCCI-related investigations and prosecutions.

Adham was at the time of BCCI's creation in 1972, the brother-in-law of King Faisal of Saudi Arabia, and the head of Saudi Intelligence, responsible for internal security and relations with external intelligence agencies. Press accounts concerning Adham from the late 1970's refer to him as the "godfather of Middle East intelligence," emphasize the closeness of his ties to the Central Intelligence Agency, and describe his having had responsibility for making payments, on behalf of the CIA, to Egyptian President Anwar Sadat when Sadat was merely Nasser's Vice President and having financial troubles.(36) As Bob Woodward described it:

Relations between the CIA and the Saudi intelligence service were generally good, going back to the days when the legendary and enormously wealthy Kamal Adham had been its head. In 1970, the Saudis had provided then Egyptian Vice President Sadat with a regular income. It was impossible to determine where Saudi interests in these arrangements ended and American CIA interests began.(37)

Adham's historic relationship with U.S. intelligence was indeed unusually close. While Adham was still in place as the CIA's liaison in 1977, the CIA's station chief for Saudi Arabia, Raymond H. Close, chose to go to work for Adham upon leaving the CIA, according to press reports at the time which Close has only denied since the BCCI scandal broke.(38) As Jeff Gerth of the New York Times reported in 1981:

In the case of Mr. Close, the one time station chief in Saudi Arabia, former Government officials say his actions, while in the CIA and since retirement, are often clouded in mystery. In the first place, some think Mr. Close may still be working for the CIA in some capacity, although he officially retired in 1977. They add that a further complicating factor is that some Saudis privately share the same perception.(39)

The Times account describes how Close had actually given approval to weapons sales from Saudi Arabia to Pakistan in the early 1970's, in contravention of the "official policy" enunciated by the American ambassador, and states that Close went into business with Kamal Adham upon leaving the CIA.(40)

Within months of going into business with Close, Kamal Adham became the "lead investor" for the CCAH group taking over First American, officially on his own behalf, but in fact, acting as a nominee for BCCI. On April 23, 1981, Adham personally appeared at the Federal Reserve's hearing on the First American takeover, to inform the Federal Reserve of his personal wealth and background, and his desire to be a passive investor. In that appearance, Adham neglected to tell the Federal Reserve of his background in Saudi Arabian intelligence, historic ties to the CIA, or that Adham had acted as the most important liaison between the United States and his long-time friend, Anwar Sadat, in helping negotiate the Camp David accords.(41)

As President Carter's former Director of the Office of Management and Budget, Bert Lance, testified,

There was an opportunity there for Kamal Adham to have done the kind of work he did with regard to Sadat's visit to Jerusalem and that sort of thing, and subsequently playing a role in regards to satisfying some of the Arab countries with regard to the action that Sadat had taken, both in going to Jerusalem and also in Camp David.(42)

The key role played by Adham in Camp David was apparently to encourage other Arab political figures not to repudiate Sadat for agreeing to peace with Israel. Although such attempts may have appeared unsuccessful in terms of public statements by Gulf rulers, it is clear that many of the Gulf rulers in private provided some support for Sadat, including then-Crown Prince and now King Faud of Saudi Arabia, who sought to strengthen ties with the United States as a means of defending the Saud family from a variety of possible instabilities.

The actual intent of BCCI and its Arab shareholders in participating with BCCI in the takeover of First American remains a matter of speculation. One article, appearing in the Washington Post on December 18, 1977, at the very beginning of the takeover efforts regarding First American and the National Bank of Georgia, described the intent of BCCI and the Arabs as gaining "access to the administration" through Lance.(43) The involvement of Gulf leaders in the takeover in Washington at the same time as the Camp David accords were put into place, would have been recognized within the Middle East at the time as an important symbolic gesture by each of them to strengthen ties with Israel's superpower sponsor, the United States. Their ownership of First American also would have providing a direct means to gain influence in the U.S. through the ownership of the bank.

To recapitulate: Adham was at the same time in business with a retired CIA station chief whose activities caused people in the U.S. and Saudi governments to question whether he was truly "retired," acting as an intermediary for the U.S. in negotiations regarding Camp David, and acting as a phony "lead shareholder" in a take-over of the largest bank in the nation's capital on behalf of BCCI. The simultaneity was thus either part of a larger political plan of Adham, BCCI, and people within the Carter Administration and the CIA, or merely a coincidence.

Questioned about the concurrence of these events, Adham has told U.S. investigators that they were unrelated, and thus, BCCI's purchase of First American was not a quid pro quo for Camp David. Instead, Adham has suggested that his involvement in these events, and BCCI's later involvement in financing the Presidential library, charities, and travel of President Jimmy Carter, for whom Camp David was the major achievement of his presidency, were in fact coincidence.(44)

Clark Clifford, in sworn interrogatories, stated that he, too, believed Adham's roles in Camp David and in the simultaneous takeover of Financial General were coincidence. Clifford stated that while Adham had told him of his friendship with Sadat, he had not advised Clifford of having any role in Camp David.(45)

A fuller account of Adham's role as a front-man for BCCI from its creation and in connection with the CCAH takeover is contained in the chapter on BCCI's nominees.

Abdul Raouf Khalil Abdul Raouf Khalil, like Kamal Adham, was a BCCI shareholder and front man from its creation, and a key nominee in BCCI's secret takeover of First American. Like Adham, Khalil appeared at the Federal Reserve on April 23, 1981 to tell the Federal Reserve he intended to be a passive investor. Like Adham, Khalil failed to advise the Federal Reserve that he was, at the time of the Federal Reserve's hearing, a key figure in Saudi Arabian intelligence, and its liaison to the United States. Indeed, Khalil's description of his activities at the hearing were fundamentally misleading on this point, as they presented Khalil to be nothing more than a private Arab businessman, who as a friend of Adham, joined Adham to be passive investor of Middle Eastern money in the stable U.S. banking system. As Khalil told the Federal Reserve:

My career has been devoted to business and I presently hold interests in real estate, mechanical and electrical maintenance projects, and commodities. In addition, I have been involved in some business ventures with American and British manufacturers for the installation of electronic and computer equipment in Saudi Arabia.(46)

Khalil did not characterize the kind of electronics and computers he was installing in Saudi Arabia, or advise the Federal Reserve of the telling name of one of his businesses: the Saudi Security and Technical Services Company. In fact, the electronic and computer equipment which Khalil referred to included the electronic and computer equipment for the Government of Saudi Arabia, and for its intelligence operations.

Price Waterhouse audit reports suggest that Khalil had no written contact with BCCI from 1985 on. By the late 1980's, senior officials of BCCI knew of no way to contact Khalil, and in some cases, such as that of chief financial officer Massihur Rahman, even doubted his existence.(47) Yet throughout this period, BCCI used Khalil -- or his name -- extensively as a nominee in transactions in Latin American and the Caribbean, as well as in Europe, while Khalil continued to have ongoing contact with the CIA, which continued, according to law enforcement officials, until well after BCCI's closure on July 5, 1991. Moreover, Khalil simultaneously was a principal shareholder and director of Capcom, BCCI's commodities trading affiliate, throughout this period.

Khalil's continuing ties to the CIA are exemplified by the experience of U.S. regulators, who asked the State Department in 1991 to locate Khalil for service of legal documents, and were told that Khalil could not be located. After some months, the regulators determined that Khalil was frequently found in the offices of the CIA station chief in Saudi Arabia. Upon making this suggestion to the State Department, the regulators found that service of the legal documents on Khalil was quickly arranged.(48)

Former CIA Director Richard Helms

and BCCI Front Man Mohammed Irvani Adham and Khalil were not the only BCCI and CCAH shareholders with intelligence ties. Before Adham acted as the lead shareholder in the takeover of First American, another person acted as BCCI's chief front-man in an earlier, unsuccessful takeover attempt. That man, Mohammed Rahim Motaghi Irvani, was listed in the original SEC filing in the early, 1978 takeover attempt, as a 5 percent shareholder of CCAH. Irvani was at the time the principal partner of former CIA director Richard Helms in Helms' international consulting firm, Safeer, and the chief financier of that firm. During the time Irvani acted as BCCI's lead front-man in the original takeover, he received advice on how to be protected from any liability in that role by Helms. Thus, there were personal, legal, and financial links between Helms and Irvani at a critical time in the history of BCCI's acquisition of First American.

Irvani founded the Melli Industrial Group in Iran in 1949 to manufacture footwear and leather goods, and developed close ties to the government of the Shah of Iran. By the time of the first Financial General Bankshare's takeover in 1978, the Melli Industrial Group owned 23 operating companies, as well as joint ventures with foreign firms such as Goodyear and United Chemical. Irvani also owned the Alwand Industrial Co., which held interests in the Iran Arab Bank, and had a net worth estimated in financial documents of over $50 million personally and a financial empire whose corporate value was as much as $800 million.(49)

Irvani's friendship and financial support were critical to Helms in this period. Helms, a thirty-year veteran of the CIA and its predecessor, the OSS, was dismissed in February, 1973 from his position as CIA director by President Nixon and appointed Ambassador to Iran until 1977, where he met Irvani. When he returned to the U.S., Helms was indicted for lying before a Congressional committee concerning CIA activities in Chile. On October 31, 1977, Helms plead no contest to two charges, in return for a recommendation by the government that he not be sentenced to prison.

In arranging this plea agreement, Helms was represented by Washington defense attorney Edward Bennett Williams. But in addition to Williams' negotiations, Helms also called upon Clark Clifford for help. In the fall of 1977, Clifford visited a top Justice Department official to argue against an indictment of Helms, saying such charges could damage the U.S. intelligence community.(50)

Despite Clifford's successful intervention with Justice, as a result of the guilty plea, Helms was, in the words of the federal judge who presided over the case, "in disgrace and shame."(51) It was precisely at this time that Irvani provided a critical lifetime to Helms through financing the Safeer Company, named for the Iranian word for "Ambassador," as an international consulting firm whose initial business was mostly supplied by Irvani and Irvani's contacts.

According to Safeer Company corporate records and other documents on file in civil litigation in Atlanta in the case of G&H Montage, Gmbh v. Irvani, Superior Court of Gwinnett County, Georgia, 88-A-03571-6, 80 percent of Safeer was capitalized and owned by Irvani. Moreover, much of Safeer's early business activity was handled by Irvani's former chief U.S. assistant, Roy Carlson, who became Vice President of Safeer and had close ties to BCCI.

Carlson, who served as a Naval officer in the Pacific during World War II, joined the U.S. foreign service and was detailed to South Africa, before moving to the Bank of America, where he spent twenty years. While working for BOA, Carlson was stationed in Teheran in the 1960's and in Beirut in the early 1970's. Carlson ultimately became head of the bank's operations throughout the Middle East and East Africa. During that time, he came into close contact with Abedi, advising Abedi on the formation of BCCI in 1972, prior to BCCI's incorporation in Luxembourg. In turn, Abedi had introduced Carlson to Irvani, one of the most successful industrialists in Iran, who hired him to be manager of the Melli group.

During this period Carlson started his own company, the "North West Investment Company", which was created in order "to help expedite shipments through Europe to companies in Iran." (52) North West invested $120,000 into Safeer Company during its first year, and one year later, liquidated this investment in Safeer, selling its shares to an entity, "Brockton Leather Company," which in turn sold them to Richard Helms for one dollar.(53)

Corporate records obtained from Switzerland in May, 1992 show that North West is still listed as in operation, and that Carlson is listed as Vice-President of the Company and as a resident of Teheran, although Carlson lives in Snellville, Georgia. Northwest corporate records also show that Dr. Marco Jagmetti, the lawyer for Northwest, is a director of Rothschild Continuation Holdings, a holding company run by BCCI director Dr. Alfred Hartmann.(54) Although it has not been able to determine if they are related companies, the Subcommittee has uncovered documents indicating that BCCI shareholder Kamal Adham was President of a Panamanian holding company called "North West International".(55)

After the Iranian revolution, Carlson fled Iran and went to work for Richard Helms in Safeer, on transactions financed by Irvani. Then, after Ghaith Pharoan purchased National Bank of Georgia from Bert Lance on behalf of BCCI, Agha Hasan Abedi personally selected Carlson as the new head of National Bank of Georgia.(56)

A memorandum prepared by BCCI lawyers following a meeting with Carlson in November, 1990 describes how Irvani by early 1978 became a front-man for BCCI in its takeover of First American, at the very time Irvani was financing Helms' international consulting firm. The memorandum described Carlson as telling BCCI the following:

In the mid-1970's, and arising out of the relationship which had grown from Agha Hasan Abedi's involvement with Irvani over Iran Arab Bank, Agha Hasan Abedi had invited Rahim Irvani to take a 5% stake in [First American]. Carlson said that Agha Hasan Abedi wished the consortium holding the shares to have a broad background including those from Iran. Carlson said the material produced at trial purported to indicate that Rahim Irvani had applied to Credit & Commerce Americas for a loan in order to purchase the share stake... The investment had not proceeded because firstly, Rahim Irvani had never been keen to make the investment at all, but had been persuaded that he could do so on the basis of the loan to be made to him [by Abedi and BCCI.](57)

When Irvani agreed to act as a front-man, Richard Helms drafted legal language to protect Irvani against possible liability for the use of his name as a shareholder by Abedi, BCCI, and the Clifford law firm. A telex from Helms to Irvani, dated October 20, 1978, describes Helms' assistance to Irvani as follows:

Roy Carlson asked on October 19 that I have an independent attorney review the seven documents he sent me by telex. . . you are not running undue risks.

Carlson also told me that you wanted a draft of a simple agreement which would hold you harmless in these arrangements. The text of this agreement is as follows:

LETTER AGREEMENT. For value received, the undersigned jointly and severally agree to indemnify you from any liability, loss, or damage, including reasonable attorneys' fees, arising out of or caused by your granting, as shareholder or a director, a power of attorney to any partner of Clifford, Glass, McIlwain and Finney, a Washington D.C. law firm, to act in your name with respect to the transaction involving Financial General Bankshares of Washington, D.C.(58)

The telex ended with the sign-off, "With Warmest Regards, HELMS."

With this suggestion, Helms was assisting Irvani in acting as a front-man for BCCI, who would not be at risk for the use of his name by the BCCI group represented by Clark Clifford and Robert Altman. Helms was assisting Irvani in his acting as a BCCI front-man in the takeover being handled by Clifford just

one year after Clifford had assisted Helms in his negotiations with the Justice Department on his perjury indictment.

Irvani's role in the takeover was acknowledged recently by his son, Bahman Irvani, who told the Atlanta Constitution that his father "lent his name to the 1978 takeover bid at the request of BCCI founder Agha Hasan Abedi."(59)

Despite the existence of the October, 1978 telex from him to Irvani regarding how to structure the hold-harmless agreement for Irvani to the Clifford firm in the original FGB takeover, Helms has recently denied that he was involved in the transaction, terming the allegation "totally untrue . . . absolute nonsense."(60)

Irvani's role in BCCI's initial attempt to acquire Financial General ended with the Iranian revolution in January 1979, as he became an unnecessary nominee.

Over the following decade, Irvani, Carlson, and Helms continued to interact with one another and with BCCI.

Helms provided introductions for Irvani to then U.S. Ambassador to Germany Walter J. Stoessel, Jr in January, 1979, and through former Senator Albert Gore Senior, contacted Senator Bumpers' office for assisting on locating rice dealers for Irvani. Helms and Irvani also continued to refer business to one another.(61)

During the 1980's, Helms continued to introduce Irvani to prominent Americans, writing Vice President Bush on Irvani's behalf in October 29, 1987, forwarding an October 16, 1991 letter from Irvani to Bush, and forwarding letters of congratulations from Irvani to President-elect Bush and Secretary of State James Baker on November 28, 1988. None of the actual letters from Irvani to George Bush discussed in the Helms-Irvani correspondence have been located. But the cover letter from Irvani to Helms on the October 16, 1987 letter, refers to Irvani's desire to provide Vice President Bush with advice on his presidential campaign.(62)

Helms took other steps on Irvani's behalf, including introducing Irvani's son Ali to Ambassador Paul Nitze, arms control advisor to President Reagan, and writing to U.S. Ambassador to Egypt Frank Wisner on Irvani's behalf on May 22, 1989. Helms introduced Irvani's son, Ali, to former CIA station chief for Saudi Arabia Raymond Close -- who had previously worked for Irvani's successor as BCCI's lead front-man in the First American takeover, Kamal Adham -- on July 11, 1989.(63)

Throughout this period, BCCI financed Irvani investments in the United Kingdom and in the United States, which in 1989 amounted to $38 million in a single transaction to buy a New York office building, 140 East 58th Street. Other BCCI documents show numerous loans, typically of millions of dollars at a time, to the Irvani family, as well as indications that the Irvanis also received substantial loans from the National Bank of Georgia, both while that bank was owned by BCCI through Ghaith Pharoan, and after Pharoan was replaced as a nominal owner by First American.

BCCI and William Casey and His Network On February 23, 1992, NBC News broadcast the allegation that former Director of Central Intelligence William Casey met secretly for three years with Abedi, that such meetings took place every few months at the Madison Hotel in Washington, D.C., and that they discussed matters relating to U.S. arms deals to Iran and the arming of Afghani rebels.

Prior to the broadcast, NBC contacted the CIA and was advised of the following by the CIA:

"An extensive search of CIA files and cable traffic revealed no evidence that CIA was involved in or had any knowledge of any use of BCCI for the sale of arms to Iran or the diversion of funds for the Nicaraguan contras, in connection with the Iran-contra affair."(64)

Previously, Kerr had testified before the Subcommittee on October 25, 1991 that:

allegations that the Agency had any direct or indirect relationship with Abedi or recruited him for CIA activities are absolutely baseless.(65)

According to the CIA in February, 1992, the CIA found "no records or evidence whatsoever to indicate that former Director Casey or the Agency had any sort of relationship with Abedi."(66)

Balanced against these flat denials are statements to the contrary by one BCCI official in a position to know to U.S. officials. The BCCI official explicitly described meetings between Casey and Abedi at the Madison Hotel in the mid-1980's, identified one other person who had personal knowledge of the meetings, and provided an account which one U.S. official deemed credible.(67) In addition, there are statements by BCCI officer Abdur Sakhia and Bert Lance that each had noticed in 1985 a change in Abedi's attitudes towards the United States, which they attributed to his developing a relationship with the CIA.

Sakhia testified that in 1984, he was told by Abedi, or one of his associates in London that Abedi was uncomfortable about travelling in the United States because he feared he was on a CIA watch list, but that as of a year later, Abedi's attitude had changed completely, giving Sakhia an impressions that "a deal had been struck somewhere."(68)

Lance provided a more detailed account, describing a meeting with Abedi at a symposium on conflict resolution at Emory University sponsored by President Carter in October 1983:

What [Abedi] said was . . . from the precise moment that Ronald Reagan was sworn in as President of the United States, I have been on the CIA Watch List. And my every movement, my every act, whatever I do, personally as well as through BCCI, is noted, watched, observed, under surveillance of the Central Intelligence Agency. . . I said: Well, why, Mr. Abedi? . . . And he said something that was very interesting, Mr. Chairman. He said: You have to understand that I fall into the category of being a Third World liberal . . .(69)

According to Lance, Abedi's attitude and concern about the CIA suddenly changed significantly in 1984. Where he had been concerned about making visits to the United States, and about expanding his operations in the United States, he now felt confident, leading Lance to conclude that Abedi had received "an assurance" that the U.S. government would no longer impede his activities. Lance, acknowledging he had no hard evidence for his assertion, nevertheless concluded that the CIA had made an effort "to coopt Mr. Abedi and BCCI, and in effect, turn them into the bank of the CIA."(70)

Neither Lance nor Sakhia had been exposed to the other's testimony at the time of making these statements, or had ever met one another.

One possible explanation of the contradictory accounts is that Casey undertook actions in the foreign policy or intelligence sphere while director of the CIA outside its record keeping and operations. The CIA's legal department has described such activity by Casey, including any role he had in the Iran/Contra affair, as being undertaken in his position as an advisor to the President, rather than in his position as Director of Central Intelligence.(71) In such cases, Casey would have taken actions which were outside the record keeping of the CIA, undocumented, fully deniable, and effectively irretrievable.

Iranian Arms Deals and Dealers Regardless of whether Abedi and CIA director Casey concluded a deal under which BCCI would provide off-the-books assistant to any unofficial or "off-the-books" operation of Casey, BCCI was incontestably used by key Iran/Contra figures to finance arms shipments to Iran in connection with the secret Reagan Administration initiative. CIA records, as well as Kerr's testimony, state the CIA did not know this. However, the record is clear that a number of BCCI officials knew of the U.S. government arms sales to Iran at the time. Ironically, BCCI knew of this Reagan Administration initiative at a time when the Iranian arms sales remained secret not only from the U.S. public but the Congress, and at a time when the CIA knew that BCCI was a criminal enterprise.

BCCI was also involved in a number of other Iranian arms sales after the fall of the Shah, some of which appear not to have been completed, and others of which appear not to have involved the United States. In still other cases involving BCCI's use for arms sales to Iran, it is simply not possible to determine the extent of involvement by U.S. officials.

BCCI was used from the late 1970's in London by Iranian arms brokers who became the central figures in the "October Surprise" allegations of secret negotiations with Iran involving Casey and Iranians over the fate of U.S. hostages. It was also used by Iranian arms dealers in Britain who never completed arms sales with Iran. Most important, it was extensively used by Adnan Khashoggi and Manucher Ghorbanifar in arms deals that were directly on behalf of the United States.

1984-1986: Adnan Khashoggi and Manucher Ghorbanifar Both Saudi businessman Adnan Khashoggi and Iranian arms merchant Manucher Ghorbanifar were central agents of the United States in selling arms to Iran in the Iran/Contra affair. According to the official chronologies of the Iran/Contra committees, Khashoggi acted as the middleman for five Iranian arms deals for the United States, financing a number of them through BCCI; and Ghorbanifar was the individual who conceptualized the arms-for-hostage negotiations, and provided the initial channel to the "Iranian moderates" with whom the Reagan Administration negotiated prior to delivering shipments of U.S. TOW missiles and HAWKs to Iran in 1985 and 1986.

Khashoggi was served as the "banker" for arms

shipments as the undercover scheme developed in 1985 and 1986. Khashoggi himself said he advanced $1 million in August 1985 to "get the deal going." According to his own and other published accounts, he provided some $30 million in loans altogether, depositing money in a Swiss bank account controlled by Lake Resources, the company run by former White House aide Oliver North, who played the pivotal role in the operation involving the arms sales and diversion of funds to Nicaraguan Contra rebels.

Both Khashoggi and Ghorbanifar banked at BCCI's offices in Monte Carlo, and for both, BCCI's services were essential as a means of providing short-term credit for sales of arms from the U.S. through Israel to Iran. Khashoggi's use of BCCI for the Iranian arms sales was first described, in passing, in an Iran/Contra committee deposition on June 8, 1987, describing the movement of $10 million from Credit Swisse which would to through BCCI four times to produce $40 million of sales "and therefore, additional profit." In the same deposition, the witness, Khashoggi business manager Emanuel Floor, described Ghorbanifar as stating, "these are my associates," and writing down the name, "BCCI." Floor described BCCI as acting not merely as Ghorbanifar and Khashoggi's bank for the purpose of these transactions, but as an actual partner in the Iranian arms deals.(72)

As described in detailed Subcommittee testimony by BCCI Paris manager Nazir Chinoy on March 18, 1992, Khashoggi came to Paris to meet with Chinoy in early 1986 to discuss continuing transactions he had until then been conducting through BCCI's Monte Carlo branch. According to Chinoy, the meeting was set up when Chinoy wished to learn more about the reasons for the sudden increase in assets and activity of the Monte Carlo branch of BCCI, which was under his jurisdiction as chief manager for the French region of the bank. He learned from Manir Karim, the branch manager for Monte Carlo that most of the new assets and activity were the result of a very successful relationship that had been developed with Saudi arms dealer Adnan Khashoggi. Khashoggi had two to three "very active" deposit accounts at Monte Carlo, according to Chinoy, and kept very large balances there, paying "his crew" through travellers checks at the rate of $100,000 to $150,000 each month. Chinoy decided to learn more, and met with Khashoggi and Karim in BCCI's office in Paris:

I met Khashoggi in a small room at the bank. He told me he had a deal, he was to be a supplier, buy American arms through Israel and supply them to the Iranians. What he wanted was a four-day credit.(73)

Khashoggi told Chinoy he was working directly for the U.S. government and the CIA, and needed BCCI because none of the parties involved in the Iran/Contra affair trusted one another:

The Israelis wanted their money for the arms whereas the Iranians would only pay when the arms physically would reach them. The Americans wanted their money as soon as they gave their arms to the Israelis and Khashoggi did not have the money himself at the time. Khashoggi wanted a revolving $5 million credit, and the charges he was prepared to pay were generous -- 2% front end fees per transaction. For $2 million you would get $40,000 per transaction. Then you would get interest at 1 1/2 % over LIBOR for the actual number of days the overdraft loan or line of credit was operating. This was juicy.(74)

In meeting Khashoggi, Chinoy learned for the first time that BCCI had been providing these services for Khashoggi for a number of months through the Monte Carlo office of BCCI, without the knowledge of the Paris office, which was responsible for the Monte Carlo office. Karim explained that there had been at least five transactions as of early 1986, that had never been detected by other BCCI offices and which had never received formal approval in writing by BCCI's headquarters in London. This was done by exploiting BCCI's "float," through BCCI's officer taking a check on a Thursday or Friday from Khashoggi and holding it over the weekend, while giving Khashoggi credit for the check immediately. Khashoggi in return would use the money and make the payments to the Israelis. The arms would be delivered over the weekend and by Monday or Tuesday Khashoggi would have the check from a Swiss bank, normally Credit Suisse, where the North/Secord "Enterprise" maintained its accounts. Credit Suisse would give Khashoggi a "Demand draft," which BCCI would then cash for its credit on the transaction on a Tuesday or Wednesday after Khashoggi had his funds from the Iranians.(75)

According to Chinoy, the five or more transactions had involved eight to ten million dollars in all. Chinoy recognized that the activity was profitable, but he was uncomfortable about BCCI being involved in a transaction that secretly involved the U.S., Israel and Iran in arms deals, and that had not been and would not be approved in writing by BCCI's London office. Chinoy said that he told Khashoggi he could not continue the deals, that they would have to stop them. In the weeks that followed, Chinoy noticed that profits at the Monte Carlo branch fell, indicating to him that his subordinate had obeyed Chinoy's order. But he then learned that the arms deals started up again anyway, and that Khashoggi and Karim completed two to three more transactions out of Monte Carlo totalling $15 million to $17 million dollars.(76)

In the same period, Chinoy learned from Karim that Iranian arms sales Manucher Ghorbanifar also maintained a regular deposit account at BCCI Monte Carlo, in amounts ranging from $2 million to $2.5 million, typically kept in short-term certificates of deposit. Chinoy suggested to Karim that BCCI sever its relation with Ghorbanifar and was told:

We should let the account be. He is in very good books with French intelligence, with the American government, he is helping everybody and he has good accounts in Switzerland and I hope we will get more money from him.(77)

According to Chinoy, BCCI officers understood that Ghorbanifar had helped the French government obtain the release of hostages held in Beirut, and that accordingly, BCCI would strengthen its status in France by handling Ghorbanifar's business.

Further confirmation for Chinoy's account came from BCCI's senior office in the United States, Abdur Sakhia, who testified that in the mid-1987, he was contacted by FBI agents investigating the Iran/Contra affair who needed to obtain records from BCCI Monte Carlo, which was the "missing link" in their documentary chain involving the U.S. and Credit Suisse. According to Sakhia, the FBI told him that a BCCI branch manager in Monte Carlo had been paid $100,000, "presumably by the U.S. government," and deposited that check in Switzerland in his own account. They asked Sakhia to obtain BCCI's records concerning the transaction from Europe. Sakhia contacted his superiors in London and they discussed whether or not BCCI should provide the information to the FBI despite the fact that to do so would violate French secrecy laws. The official at BCCI-London, Ameer Siddiki, agreed with Sakhia that if BCCI's involvement in Iran/Contra became known, it would focus dangerous attention on the bank's other activities. BCCI London informed Sakhia that if the United States government agreed to prevent BCCI's involvement from becoming public, BCCI would violate French law and provide the records to the United States. The FBI agreed to this arrangement, and the records regarding the Iranian transactions were provided by BCCI to the FBI.(78)

Following this agreement, Sakhia remained concerned about the fact that the BCCI official involved, Manir Karim, had accepted a $100,000 bribe to handle the transactions, and deposited them in a non-BCCI institution, and yet had not been disciplined by BCCI. Based on this and related information, Sakhia concluded that the handling of the arms sales by BCCI "was all being orchestrated from London and London was aware of what was happening."(79)

According to the Iran/Contra deposition of Albert Hakim, banker for the North/Secord Enterprise, Khashoggi made deposits in the North/Secord accounts from BCCI in the amount of $2.5 million on February 7, 1986; $2.5 million on February 10, 1986; and two checks of $5 million each on February 18, 1986. Still additional deposits were made from BCCI by Khashoggi for $5 million on May 18, 1986. Provocatively, Hakim referred to additional transactions amounting to millions more involving an entity referred to simply as "IC" of the Grand Caymans, reminiscent of BCCI's own Grand Caymans affiliate "ICIC." (80)

Three payments to BCCI from the North/Secord accounts, including Lake Resources, the account used to finance arms to the contras, are shown in the ledger books maintained by Hakim on behalf of the enterprise, amounting to $10 million only.(81) In addition, the Hakim ledgers show five wire transfers amounting to $346,000 to First American Bank, which may merely indicate that Secord, North, or the fourth partner of the enterprise, former CIA agent Thomas Clines, may have had an account there.

Evidence for the involvement of BCCI headquarters in London and Abedi in the Iran/Contra arms transactions is contained in documents between BCCI Grand Caymans and BCCI London in March 1986 involving a $10 million arms transaction -- the exact amount referred to by Emanuel Floor as having been intended for movement through BCCI by Khashoggi and Ghorbanifar, and tracking the February 18, 1986 payments referred to by Hakim.

The documents, which refer to the use of a front company "in formation" to handle the transaction, are in the nature of preliminary discussions regarding whether BCCI would handle the transaction. But they contain a critical fact: they demonstrate the involvement of BCCI-London in transactions involving BCCI Monte Carlo and BCCI Grand Caymans. From Chinoy's point of view, the meaning of the documents is that when he expressed concern about the Khashoggi transaction, London simply went around him. From Sakhia's, the documents showed that Abedi had approved the BCCI project from the beginning. (82)

Ironically, Clark Clifford had his own long-standing ties to Khashoggi. In 1981, Khashoggi took $250,000 from Northrop intended for Saudi Arabian Air Force General Hashim M. Hashim. Four years later, Northrop released documents accusing Khashoggi of demanding the bribe for the general, and then converting it to his own use, Khashoggi retained Clifford to represent him in the subsequent federal grand jury investigation of the matter. Significantly, both Kamal Adham and Faisal al Fulaij, BCCI's front-men for the 1981 takeover, were investigated as well as Khashoggi for taking money from Northrop and Lockheed in connection with U.S. arms sales to Saudi Arabia.(83)

Perhaps as a matter of coincidence, the business formed by Secord in May, 1983 immediately upon his retirement from the U.S. government in partnership with Hakim, Stanford Technology Trading Group International of Vienna, Virginia, used a BCCI shareholder as its local agent in Saudi Arabia for contracts to provide security services in the Middle East. The person who Secord hired to help him acquire Saudi government contracts was Abdullah Said Bugshan and his brothers. Together, the Bugshan brothers owned about one half of one percent of BCCI during the period they reprsented Secord and Hakim in Saudi Arabia. While representing Secord, they had also deposits in BCCI ranging from $13 million to $21 milllion in BCCI and had outstanding loans of about $6 million from BCCI.(84)

Other Iranian Arms Dealers and BCCI

Ben Banerjee A recurring question about the Iran/Contra scandal is the issue of whether there may have been earlier arms sales to Iran, prior to the period covered by the Iran/Contra Congressional committees. On September 29, 1987, Die Welt, a German newspaper, reported that in 1984, Iran's ambassador authorized the purchase of 20,000 U.S.-made TOW missiles after talks between U.S. Lt. Col. Oliver North and Iranian officials in Hamburg. According to Die Welt, the deal fell through and the weapons were never delivered after an Iranian contact disappeared with the letter of credit.

According to Die Welt, Iran's ambassador to West Germany, Mohammad Djavad Salari, signed a letter authorizing the purchase of the anti-tank weapons worth $264 million, and North, then a member of the U.S. National Security Council, took part in one

negotiating session on Nov. 20, 1984. The newspaper said the purchase authorization came after talks in a Hamburg hotel between Iranians and two British-based arms dealers, Michael J. Aspin, owner of the weapons dealership Delta Investments and Indian-born millionaire weapons dealer Ben Banerjee, chief of the British company BR and W. Industries.(85) Both Banerjee and North denied the allegation.

Documents obtained by the Subcommittee, filed in a British criminal case later brought against Aspin for fraud in connection with the attempted sale of the American TOW missiles to Iran in 1984, and a second attempted sale in 1985, include a "pro-forma invoice," dated November 21, 1985, for the supply and delivery of 1250 units of BCM 71A TOW MISSILES, manufactured in the USA, "all brand new in manufacturers original packing," from B.R. & W. Industries, Ltd., signed by Ben Banerjee, U.S., denominated "lift trucks" for the purpose of bank and customs documentation, and handled by BCCI in London. The invoice was accompanied by telexes and letters on BCCI stationary of a nature and type ordinarily used by BCCI, showing BCCI providing counter guarantees and letters of credit for a transaction involving the "lift trucks" in November and December, 1985, involving the Iranian government and its bank, Bank Melli, and channeled through the Arabian Gate General Trading Co. of Dubai, United Arab Emirates.(86) In staff interviews, BCCI Paris manager Chinoy confirmed that Banerjee banked with BCCI in London and was involved in "large dealings with Iran."(87)

During the Aspin trial, Leslie Aspin, Michael Aspin's brother, testified that the TOW missile sale was a legitimate sale authorized by the United States government as part of a 1984 -1985 effort to ransom CIA agent William Buckley, with the weapons to be transferred from Portugal to Iran. In a sworn statement of May 1, 1987, Aspin attested that he and Oliver North opened three joint accounts in BCCI Paris into which North deposited $5 million on November 15, 1984, and listed the account numbers and signature cards of the three accounts, one of which was maintained for an entity called "Devon Island," allegedly, under the signature of North and Bannerjee, and the other two accounts, which were numbered accounts, maintained under the signatures of Aspin, Bannerjee and Ghorbanifar.(88)

The Subcommittee has confirmed the existence of accounts in London involving Banerjee and in Monte Carlo involving Ghorbanifar, but has not received access to BCCI's accounts in Paris to determine whether or not the accounts referred to by Aspin existed. North has denied having maintained such an account. However, BCCI Paris manager Chinoy did learn of an account in the name "Devon Island" when he received a telephone call in 1988 from a London office of BCCI asking about it, and was advised by his assistant that the account existed but had not been used.(89)

Both Banerjee and Aspin are dead. The Subcommittee is continuing to seek Banerjee and Aspin's records from BCCI's liquidators in hopes of determining whether the arms sales to Iran in which they were participated had the backing of or involvement of any U.S. official.

1980: BCCI and October Surprise: Cyrus Hashemi The late Cyrus Hashemi, an Iranian expatriate living in London, is a key figure in the "October Surprise" allegations charging that William Casey and other members of President Reagan's election team in 1980 engaged in negotiations with Iran, whereby Iran would delay the return of U.S. hostages held in Iran until after the November, 1980 election, in return for the U.S. providing Iran with needed arms for its war against Iraq. According to these allegations, which are substantially based on states made by Hashemi's brother Jamshid, who was based in Paris in this period, Cyrus Hashemi was to have acted as the middle-man in these secret negotiations between Casey and Iran. Later, Hashemi was indicted by the U.S. Attorney for the Southern District of New York for weapons dealings with Iran in a case that was ultimately thrown out of court as a result of complications arising out of the Iran/Contra affair.(90)

Without reaching any judgments concerning these allegations, records obtained by the Subcommittee demonstrate that BCCI was one of the principal banks used by Cyrus Hashemi in the United Kingdom.(91)

Bruce Rappaport, Alfred Hartmann, and BCCI Bruce Rappaport, an Israeli-born Swiss businessman who was investigated in 1987 by Independent Counsel Robert McKay for certain activities he engaged in on behalf of former CIA director Casey, had several connections to important participants in the BCCI affair. For example, he placed one of BCCI's key "rent-a-faces," Alfred Hartmann, who headed BCCI's secretly-held Swiss affiliate, Banque de Commerce et Placements, on the board of directors of his Intermaritime Bank of Geneva and New York; developed a relationship with BCCI's original contact in the U.S., Bert Lance, in the mid-1980's, and purchased an Antiguan melon-farm from Israeli arms dealers who were significant customers of BCCI in Miami.(92)

Rappaport's links to BCCI are significant chiefly because of his relationship to Casey, a frequent golfing partner. For example, Rappaport threw a party in Washington in the summer of 1985 for Casey to demonstrate high-level support for a project to build a pipeline to ship oil from Iraq through Jordan. Rappaport was also the person who allegedly controlled accounts which received $10 million for the contras provided the North-Secord operation by the Sultan of Brunei, at the request of Elliot Abrams. The Iran/Contra Committees were told by Swiss authorities that the $10 million had disappeared, and was found to have "mistakenly" gone to an unwitting Swiss businessman, who then returned the money after the Iran/Contra affair was discovered. Press accounts, which Rappaport has denied, contend that the businessman was Rappaport. If Rappaport did indeed receive the funds, the placement of the $10 million with him would not likely have been in error, given his close relationship with Casey.(93)

Oman While reviewing the complex relationships between BCCI and the Bank of Oman, which was affiliated with BCCI, the Subcommittee came across several linkages suggesting ties between the Sultanate of Oman, key figures in Saudi intelligence and U.S. persons with connections to the intelligence community.

As a 1985 article in the New York Times noted, Western intelligence has been a major influence in this tiny, but strategically placed, Gulf State, adjacent to the United Arab Emirates headed by Sheik Zayed. Although BCCI is not mentioned in the article, there is a substantial amount of evidence which demonstrates that both BCCI and the CIA has played a major role in the foreign policy and economic affairs of that country. The article discusses a Pasadena corporation, Tetra Tech, operated by a former CIA agent, which "helps manage several key Omani government agencies."(94)

It is clear that several companies and government agencies in Oman had multimillion dollar loans from BCCI. BCCI's loan book, dated March 3, 1991, for example, shows: Oman Aviation Service had an $8 million loan; Oman Building and Contracting Co. had over $11 million; Oman Flour Mills Co. had a $13 million loan; Oman Development Bank had $13 million; Oman Investment and Finance Company had a $10 million loan; Oman Building and contracting Services had a $16 million loan; and Sultanate of Oman had $14 million in loans. These are, of course, only the companies or government agencies which are clearly identifiable as having an Oman connection: there are undoubtedly other companies which the Subcommittee has been unable to identify.(95)

Besides the entities listed above, BCCI may have been moving money through the National Bank of Oman to fund the war in Afghanistan. British journalists have written:

"BCCI's role in assisting the U.S. to fund the Mujaheddin guerrillas fighting the Soviet occupation is drawing increasing attention. The bank's role began to surface in the mid-1980's when stories appeared in the New York Times showing how American security operatives used Oman as a staging post for Arab funds. This was confirmed in the Wall Street Journal of 23 October 1991 which quotes a member of the late General Zia's cabinet as saying 'It was Arab money that was pouring through BCCI.' The Bank which carried the money on from Oman to Pakistan and into Afghanistan was National Bank of Oman, where BCCI owned 29%."(96)

The National Bank of Oman and its CEO, Case Zawawi, also did business with Bruce Rappaport. Jerry Townsend, the President of Colonial Shipping in Atlanta, told the Subcommittee that his former employer, Bruce Rappaport, had business relations in Oman with Case Zawawi at the National Bank of Oman. Townsend, who claims to have worked as a soviet analyst with the CIA, was employed by Rappaport between 1981 and 1990. Townsend recalled that Rappaport flew Zubin Mehta and the London Philharmonic to Oman on one occasion to entertain the Sultan and other members of the royal family. More importantly, according to Townsend, Rappaport and Zawawi had numerous "contracts with the Saudis." The consolidated loan report for BCCI of March 3, 1991 shows a loan authorization of almost $11 million to the Zawawi group with an outstanding balance of nearly $8 million.(97)

Conclusions Key questions about the relationship between U.S. intelligence and BCCI cannot be answered at this time, and may never be answered, without the ability for investigators to review BCCI records and interview BCCI witnesses held by the government of Abu Dhabi. Other questions could be answered from documents available in the United Kingdom, and subpoenaed by the Committee, but for the decision by the British judge on an application of BCCI's liquidators not to permit the Committee to receive them without the written "permission" of the depositors involved, such as Abu Nidal, and the deceased Ben Banerjee and Cyrus Hashemi. Still other BCCI documents in the United Kingdom have been segregated and sealed by British intelligence (MI-5), and withheld from dissemination to anyone.(98)

Finally, other relevant information in the possession of the CIA concerning certain important figures in BCCI's history remains classified, and hence outside the scope of this report. Summaries of some of this classified material have been provided to staff in a classified form that cannot be referred to. However, even there, the underlying material upon which these summaries were based, has been withheld, and therefore any additional relevant information the underlying material may contain can only be a matter of speculation.

However, even by its own account of its activities, the CIA made two significant mistakes in its handling of BCCI.

First, the CIA failed to provide the critical information it had gathered to the correct users of the information -- the Federal Reserve and the Justice Department. Kerr testified that he was "not sure it was a bad decision," a judgment challenged immediately during the hearing by Senator Hank Brown, who noted:

My training was that somebody's supposed to take responsibility. . . . And when a decision is made that is a bad decision, you identify who made it. . . You may feel a failure to get information about a criminal activity to the Federal Reserve is not [a bad judgment], I have a different view of it.(99)

Second, even when the CIA knew that BCCI was as an institution a fundamentally corrupt criminal enterprise, it used both BCCI and First American, BCCI's secretly held U.S. subsidiary, for CIA operations. In the latter case, some First American officials actually knew of this use.(100)

While the reporting concerning BCCI by the CIA was in some respects impressive -- especially in its assembling of the essentials of BCCI's criminality, its secret purchase of First American by 1985, and its extensive involvement in money laundering -- there were also remarkable gaps in the CIA's reported knowledge about BCCI.

According to Kerr, the CIA did not have any information regarding the involvement of Kamal Adham -- its chief intelligence liaison in the Arab Middle East during the 1960's and 1970's -- in BCCI, or that of his successor, Abdul Raouf Khalil, or of Iran/Contra arms dealer Adnan Khashoggi.(101) Those statements have since been reiterated to the Subcommittee by the CIA in April 1992, following a further review of CIA records, with the caveat by the CIA that CIA record keeping is not consolidated, and that it remains possible that information which exists has not been retrievable.

The professed lack of knowledge by the CIA about the activities of its foreign intelligence liaisons and operatives who were BCCI's major shareholders and customers is perplexing and disturbing. The relationships between the CIA and Adham and Khalil were, according to public accounts, among the most important intelligence relationships the United States has had in Saudi Arabia over a quarter of a century. Similarly, Khashoggi and Ghorbanifar performed a central role for the U.S. government in connection with the Iran/Contra affair in operations that involved the direct participation of CIA personnel.

The CIA's professions of total ignorance about their respective roles in BCCI are out of character with the Agency's detailed knowledge of many critical aspects of the bank's operations, structure, personnel, and history.

If one accepts these statements at face value, it is hard not to conclude that the CIA's ignorance on these matters constituted a significant intelligence failure on the part of the CIA. Given the CIA's responsibilities to protect the U.S. against covert action by foreign powers, it would be especially disturbing if the United States does not, as a general matter, know anything whatsoever -- as the CIA has testified here -- of very substantial financial activities within the United States of chief foreign intelligence liaisons such as Adham and Khalil.

The errors made by the CIA in connection with its handling of BCCI were complicated by its handling of this Congressional investigation. Initial information that was provided by the CIA was untrue; later information that was provided was incomplete; and the Agency resisted providing a "full" account about its knowledge of BCCI until almost a year after the initial requests for the information. These experiences suggest caution in concluding that the information provided to date is full and complete. Caution is especially warranted given the CIA's recurrent statements that its record keeping has not been consolidated, and that it is possible that records pertaining to BCCI, or its shareholders, could have been missed in its search.

The lack of recollection by the chief intelligence officer of the Treasury, Douglas Mulholland, and by a then-senior official of the Office of the Comptroller of the Currency, Robert Bench, of the CIA having told them about BCCI's secret ownership of First American, is troubling.

According to the CIA's records, Mulholland recognized at the time that the information was important, and sought more information. The original memoranda are written in a fashion that makes it unlikely that any recipient would have not have noted BCCI's secret ownership of Washington's largest bank holding company, and have remembered it later. Accordingly, the testimony of both Bench and Mulholland raises questions about their candor.

1. S. Hrg. 102-350 Pt. 3, pp. 569-570.

2. Id.

3. S. Hrg. 102-350, p. 794.

4. . Hrg. 102-350 pt.3, pp.569-570

5. Letter, Webster to Kerry, S. Hrg. 102-350, Pt. 3, p. 607.

6. Communication between Subcommittee staff and Virgil Mattingly, Federal Reserve, July 31, 1991.

7. Testimony of Richard Kerr, Acting Director of Central Intelligence, S. Hrg. 1012-350 Pt. 3 p. 573.

8. Briefings, Subcommittee staff, by CIA office of general counsel and deputy director of operations, March-April, 1991.

9. Kerr testimony, closed session, Subcommittee, October 31, 1991.

10. Testimony of Virgil Mattingly, Senate Banking Subcommittee on Consumer and Regulatory Affairs, S. Hrg. 102-379 p. 141.

11. Staff interview, Virgil Mattingly, Federal Reserve, June, 1991, and review of Federal Reserve documents.

12. Testimony of Virgil Mattingly and William Taylor, Senate Banking Subcommittee on Consumer and Regulatory Affairs, S. Hrg. 102-379 pp. 141-143.

13. Senate Banking Committee Testimony, March, 1991.

14. Testimony of Kerr, S. Hrg. 102-350, Pt. 3 p. 573.

15. Id.

16. Id.

17. Id.

18. Id. at 590-591.

19. Id., testimony of Altman, S. Hrg. 102-350, Pt. 3, p. 259. 268.

20. Testimony of Kerr, id. at 374.

21. Testimony of Kerr, S. Hrg. 102-350, Pt. 3, p. 573.

22. See February 18, 1992 testimony of Douglas P. Mulholland before Subcommittee.

23. CIA summary, declassified on April 9, 1992, based on Subcommittee review of internal Agency cable traffic on BCCI and CIA's interaction with Treasury, S Hrg. 102-350 Pt. 4, pp. 360-363.

24.

24Mulholland Testimony, S. Hrg. 102-350 Pt. 4, pp. 6-7.

25. Staff interviews with Mulholland, February 14, 1991.

26. Mulholland Testimony, id. at 8.

27. Id at 32-33.

28. Mulholland Testimony, S. Hrg. 102-350, Pt. 4 p. 9.

29. Id. p. 28.

30. Testimony Bench, S. Hrg. 102-350 Pt. 4 pp. 36-37.

31. Staff interview, Bench, February 14, 1992.

32. Interview, Bench, March 13, 1991.

33. Staff interview with secretary to Donald Regan, May 5, 1992.

34. Kerr, id, at 573; Mazur, S Hrg. 102-350, Pt. 3, p. 673.

35. Minutes of Evidence Taken Before House of Commons Treasury and Civil Service Committee, Banking Supervision and BCCI, February 5, 1992, Sec. 252.

36. BBC, excerpts, Radio Peace and Progress in Arabic, July 1, 1981, S. Hrg. 102-350, Pt. 3 p. 291.

37. Woodward, Veil, Simon & Schuster, New York, 1987 p. 352.

38. See Jeff Gerth, New York Times December 6, 1981, "Former Intelligence Aides Profiting From Old Ties," S. Hrg. 102-350 Pt. 3 pp. 293-299.

39. Id.

40. Id.

41. Statements of Adham to U.S. law enforcement officials, March, 1992.

42. Testimony of Lance, S. hrg. 102-350 p. 22.

43. Harris and Berry, "Arab Investors to Manage Funds; Arabs Want Lance to Direct Investments," Washington Post, December 18, 1977, A1.

44. Statements of Adham, id.

45. Affidavit of Clark M. Clifford, February 7, 1992, S. Hrg. 102-350 Pt. 4 p.710.

46. Transcript, Federal Reserve Board hearing, April 23, 1981, p. 65.

47. Testimony of Rahman, S. Hrg. 102-350, Pt. 1, p. 501.

48. Staff interview, U.S. investigator, April, 1992.

49. S. Hrg. 102-350 Pt. 4 pp. 310-316.

50. National Law Journal, December 22, 1980; UPI, December 13, 1980.

51. Washington Post, March 1, 1981, G1.

52. staff interview by telephone with Roy Carlson, July 16, 1991.

53. Safeer Company, Second Annual Meeting, minutes, November 23, 1979, S. Hrg. 102-350, Pt. 4, p. 255.

54. Swiss corporate register, Zurich, p.155.

55. documents filed by Kamal Adham with the Federal Reserve, 1989 FRY-6: Principal Shareholder data, p.3.

56. BCCI documents, including telex to Frank Van Court from Swaleh Naqvi, 11/12/79, "seen by Agha Saheb," curriculum vitae of Irvani, Alwand Investment Company.

57. Confidential and Privileged Attendance Note, November 19, 1990, BCCI Attorney memcom of meeting with Roy Carlson, Exhibit D in G&H Montage case, id.; S Hrg. 102-350 Pt. 4 pp. 286-298.

58. Plaintiff's exhibit, Helms 9, G&H Montage, id., reprinted S. Hrg. 102-350 Pt. 4 p. 237.

59. Peter Mantias, "BCCI: Case reveals former CIA chief's ties to bank," Atlanta Constitution, February 15, 1992, A1.

60. Atlanta Constitution, "Ex-CIA chief Helms denies helping BCCI," February 18, 1992, S Hrg. 102-350 Pt. 4 p. 236.

61. Letter, Stoessel to Helms, January 26, 1979; Letter, Rahim Irvani to Helms, March 21, 1984, S. Hrg. 102-350 Pt. 4 pp. 270-277.

62. Letters on file in G.M.H. Montage case, id.; S. Hrg. 102-350 Pt. 4, pp. 259-260, 265, 272-273, 275.

63. Id.. S Hrg. 102-350 Pt. 4 p. 266.

64. NBC Memo, February 21, 1992.

65. Testimony of Kerr, S. Hrg. 102-350, Pt. 3 p. 573.

66. NBC Memo, id; communications of CIA DDO to Subcommittee staff, April 9, 1992.

67. Staff interview, federal investigator.

68. Testimony of Sakhia, S. Hrg. 102-350, Pt. 2, p. 527.

69. Testimony of Lance, S. Hrg. 102-350, p. 39.

70. Id at 40-41.

71. Staff briefing, CIA legal department staff, February, 1992.

72. Deposition of Emanuel Floor, Congressional Iran/Contra Committees, June 8, 1987, pp. 31-34, reprinted S. Hrg. 102-350 PT 2. pp. 539-540.

73. Chinoy, Staff interview, March 9-16, 1992.

74. Id.

75. Id.

76. Testimony of Chinoy, March 18, 1992, staff interviews, March 9-16, 1992.

77. Chinoy staff interview, March 9-16, 1992.

78. Testimony of Sakhia, S. Hrg. 102-350, Pt. 2, pp. 529-531.

79. Id.

80. Hakim Deposition, April 20, 1987, Vol 13, Iran/Contra Depositions, pp. 16-17.

81. Iran-Contra Affair, Appendix A: Volume 2, Source Documents S. Rept. No. 100-216, pp. 255-256.

82. Chinoy, staff interviews, March 9-16, 1992; Sakhia testimony, S. Hrg. 102-350, Pt. 2, pp. 530-531.

83. The New York Times, p. 56, September 3, 1975.

84. BCCI Holdings (Luxembourg), Statement of Shareholders, Giving Percentage of Shareholders, Deposits and Liabilities Including Contingent Liabilities of Each Shareholder, 1985-1987, Subcommittee document, Iran/Contra Appendix A, Volume 2, Source Documents, S. Rept. No. 100-216, p. 200.

85. See Associated Press, September 27, 1987.

86. S. Hrg. 102-350 Pt. 3 p. 618-628.

87. Staff interview, Chinoy, March 9-16, 1992.

88. Affidavit of John J. Loftus, Esq., September 12, 1991.

89. Staff interviews, Chinoy, March 9-16, 1992.

90. See generally October Surprise, Gary Sick, ________________, New York (1991).

91. FBI teletype, October 8, 1980, New York to Director, Attn Criminal Investigative Division, Terrorism Section, re Cyrus Hashemi.

92. See e.g. testimony of Lance, S. Hrg. 102-350, Pt. 3, p. 43-44.

93. See e.g. Legal Times, July 31, 1989, "I'm Not Rappaport."

94. New York Times, Jeff Gerth, 3/28/85 p. 5

95. BCCI Consolidated loan book, March 3, 1991.

96. Bankrupt, the BCCI Fraud, Kohan and Whittington p. 220

97. BCCI consolidated loan report. March 3, 1991

98. Communications, firm of Nussbaum and Wald, legal representatives to BCCI liquidators, Touche Ross, June, 1992.

99. S. Hrg. 102-350 Pt. 3 pp. 592-593.

100. Testimony of Altman, S. Hrg. 102-350 Pt. 3 p. 259.

101. Id. at 574.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

THE REGULATORS Introduction BCCI, which managed to penetrate every country it targeted, including the United States, was a bank which regulators always recognized as a risky institution. Having no lender of last resort and no consolidated auditor, BCCI presented a structure which to Western bank regulators was unsound, regardless of how BCCI happened to use the structure. From the beginning, regulators in the United Kingdom and the United States sought to discourage BCCI from entering their jurisdictions. Their hostility was not based on a cultural contempt for a Third World or Pakistani bank, as BCCI's chief, Agha Hasan Abedi, sometimes contended. Rather, it was based on the very structure of the bank, which was viewed, correctly, as having been deliberately created to avoid regulation.

As William Taylor, then staff director of the Federal Reserve's Division of Banking Supervision and Regulation testified in May, 1991:

I want to make it clear that BCCI, unlike virtually any other major international bank, was not subject to a comprehensive system of supervisory oversight by authorities in its home country. . . both the holding company for BCCI and one of its major banking subsidiaries are chartered in Luxembourg; but neither the holding company nor the subsidiary has conducted a banking business in that country. BCCI appears to manage most of its global business out of offices in London. The regulatory authorities in Luxembourg, therefore, did not provide consolidated supervision of the BCCI organization.(1)

Luxembourg was thus one of BCCI's homes, yet did not regulate it, because BCCI did not engage in banking business there. BCCI's other home, the Grand Caymans, did not regulate any bank licensed there. The Caymans lack of regulation was precisely the inducement for banks to charter themselves there.(2) BCCI's operational home, the United Kingdom, also did not regulate BCCI's activities: the UK regulator, the Bank of England, considered BCCI to be a foreign bank, based in Luxembourg and the Grand Caymans, and thus the responsibility of regulators in those countries.

This neat arrangement by BCCI, together with its division of its auditing functions between two auditors, one for "Luxembourg" and the other for "Grand Caymans," ensured that BCCI's activities could not be adequately monitored by anyone. As former Comptroller of the Currency John Heimann testified:

Early on in my government service, I learned one very important and fundamental lesson; namely, that those so inclined to manipulate banks for their own benefit find it easiest to do so if they operate between different supervisory regimes.

Many bank swindles have been built around this practice. For example, an individual owns a bank in New York State, another bank in Belgium, a third bank in Switzerland, and still another bank in Argentina. Each of these banks is regulated by a different Supervisor. . . For years, the same situation applied domestically. There were some who owned both state chartered and national chartered banks who moved assets between them to improve examination results. This practice was stopped during my term as Comptroller when all relevant agencies began to coordinate examinations.(3)

Despite being chartered elsewhere, BCCI chose London as its operational home and headquarters, creating oversight problems that gave regulators headaches for years. The Bank of England indeed considered BCCI "the most difficult bank we have to deal with," as far back as the 1970's.(4) It repeatedly limited BCCI's ability to expand there and to gain full bank powers, even as the U.S. halted BCCI's attempts to purchase U.S. banks openly, leaving it with the legal ability only to enter the U.S. through establishing foreign branches which could not accept deposits from Americans.

Yet in the face of this regulatory hostility, BCCI ultimately succeeded in developing large banking operations in both the United States and the United Kingdom anyway, through its secret ownerships of U.S. banks and its accretion of licensed deposit taking status in the UK. While BCCI did not need to bribe central officials in the United States and the United Kingdom, as it did in many other countries, its success in flourishing in both countries for so long demonstrates obvious flaws in the regulatory process.

In the U.S., BCCI was able first to deceive the Federal Reserve, despite making numerous errors in the course of its takeover of Financial General Bankshares that provided obvious warnings of its intentions. It then was permitted to merge that bank, renamed First American, with National Bank of Georgia, which the Federal Reserve also knew to be associated with BCCI. It then was permitted to expand further into Florida, despite further warning signs to the Federal Reserve about the identity between BCCI's shareholders and those of First American. Even after it was indicted on drug money laundering charges, the Federal Reserve undertook only limited investigative efforts. The Federal Reserve's extensive current investigation of BCCI began after the Federal Reserve was notified by the New York District Attorney that BCCI had massive loans securing First American's stock which had never been disclosed to the Federal Reserve. As late as the spring of 1991, after the Federal Reserve understood that BCCI and many of First American's shareholders had lied to the regulators, and that BCCI itself was involved in massive fraud, the Federal Reserve still took no position as to whether BCCI should be closed globally, so long as the bank was shut down in the United States.

In the UK, the Bank of England took minimal steps to investigate the bank until it was notified by BCCI's auditors in early 1990 that BCCI had engaged in fraud. Even then, the Bank of England's approach to the problems posed by BCCI was not to close BCCI, but to find ways to keep BCCI alive and thus avoid embarrassing financial losses. In order to prevent BCCI from collapse, the Bank of England arranged with BCCI's auditors, with the government of Abu Dhabi, and with BCCI itself to keep secret what it had learned about BCCI. The Bank of England simultaneously committed itself to an agreement with Abu Dhabi whereby if Abu Dhabi would guarantee BCCI's losses, the Bank of England would lend its hand to helping BCCI survive, and with BCCI auditors that they would certify BCCI's books and accounts for another year, in return for Abu Dhabi's guarantee. The Bank of England even agreed to permit BCCI to restructure in the form of three banks, headquartered in three different jurisdictions -- precisely the structure already identified as the key to BCCI's previous success in evading regulation. Finally, as part of its agreements with Abu Dhabi, the Bank of England encouraged BCCI to move its headquarters and officers out of British jurisdiction to Abu Dhabi, along with its records, a move which later deprived investigators in the US, as well as the UK, with essential information about what BCCI had done.

Together, these actions by the regulators highlight the lack of accountability that still exists internationally in dealing with financial institutions as they cross national borders. BCCI's homes in Luxembourg and the Grand Caymans were not responsible for keeping track of what BCCI was doing. Neither was the United Kingdom, where BCCI was actually headquartered. So far as the Federal Reserve was concerned, BCCI's activities in the U.S. were limited to small state-chartered branch offices over which it had no jurisdiction whatsoever. Yet even after each of these authorities knew that BCCI had losses amounting to billions of dollars, none of the regulators had a picture of BCCI's whole operations, none of the regulators considered BCCI to primarily their problem, and each of the regulators remained prepared to permit BCCI to continue to survive if its survival meant that the interests of their country were protected.

In the case of the Federal Reserve, this meant leaving it to the Bank of England to make judgments concerning whether BCCI would continue to exist or not, so long as BCCI withdrew entirely from the United States and the Abu Dhabi government continued to provide funds to help prop up the now shaky First American Bank.

In the case of the Bank of England, this meant planning to permit BCCI to reopen as three "independent" banks so long as Abu Dhabi was willing to put in the cash necessary to prevent the bank from collapsing. That judgment by the Bank of England only changed at the end of June, 1991 when two simultaneous factors converged -- the announcement by Price Waterhouse in its Section 41 report that it was impossible to tell how deep, or how far, BCCI's frauds might ultimately extend -- and the fact that BCCI might shortly be indicted by the New York District Attorney as an example of organized crime, an indictment that would cause the collapse of the bank in any case.

Thus, in the end, it was not the regulatory process itself that brought about the exposure and removal of BCCI from either the United States or the United Kingdom. In both cases, the ultimate regulatory action was prompted by the criminal investigation brought by a local district attorney, Manhattan prosecutor Robert Morgenthau. But for Morgenthau's investigation, the Federal Reserve may well never have learned from the Bank of England, Price Waterhouse, Abu Dhabi, or anyone else that reports prepared by BCCI's auditors showed massive loans against the shares of CCAH/First American, information that caused them to open the investigation that swiftly led to BCCI's closure in the United States. But for Morgenthau's investigation, the Bank of England might well have proceeded with BCCI's restructuring regardless of the new revelations about fraud, and simply hoped for the best.

Findings: The U.S. Regulators ** When the Federal Reserve approved the take over of Financial General Bankshares by CCAH in 1981, it had substantial circumstantial evidence before it to suggest that BCCI was behind the bank's purchase. The Federal Reserve chose not to act on that evidence because of the specific representations that were made to it by CCAH's shareholders and lawyers, that BCCI was neither financing nor directing the take over. These representations were untrue and the Federal Reserve would not have approved the CCAH application but for the false statements made to it.

** In approving the CCAH application, the Federal Reserve relied upon representations from the Central Intelligence Agency, State Department, and other U.S. agencies that they had no objections to or concerns about the Middle Eastern shareholders who were purporting to purchase shares in the bank. The Federal Reserve also relied upon the reputation for integrity of BCCI's lawyers, especially that of former Secretary of Defense Clark Clifford and former Federal Reserve counsel Baldwin Tuttle. Assurances provided the Federal Reserve by the CIA and State Department, and by both attorneys, had a material impact on the Federal Reserve's willingness to approve the CCAH application despite its concerns about BCCI's possible involvement.

** In 1981, the Office of the Comptroller of the Currency had additional information, from reports concerning BCCI's role in the Bank of America and the National Bank of Georgia, concerning BCCI's possible use of nominee arrangements and alter egos to purchase banks on its behalf in the United States, which it failed to pass on to the Federal Reserve. This failure was inadvertent, not intentional.

** In approving the CCAH application, the Federal Reserve permitted BCCI and its attorneys to carve out a seeming loophole in the commitment that BCCI not be involved in financing or controlling CCAH's activities. This loophole permitted BCCI to act as an investment advisor and information conduit to CCAH's shareholders. The Federal Reserve's decision to accept this arrangement allowed BCCI and its attorneys and agents to use these permitted activities as a cover for the true nature of BCCI's ownership of CCAH and the First American Banks.

** After approving the CCAH application in 1981, the Federal Reserve received few indicators about BCCI's possible improper involvement in CCAH/First American. However, at several critical junctures, especially the purchase by First American of the National Bank of Georgia from Ghaith Pharaon in 1986, there were obvious warnings signs that could have been investigated and which were not, until late 1990.

** As a foreign bank whose branches were chartered by state banking authorities, BCCI largely escaped the Federal Reserve's scrutiny regarding its criminal activities in the United States unrelated to its interest in CCAH/First American. This gap in regulatory oversight has since been closed by the passage of the Foreign Bank Supervision Enhancement Act of 1991.

** The U.S. Treasury Department failed to provide the Federal Reserve with information it received concerning BCCI's ownership of First American in 1985 and 1986 from the CIA. However, IRS agents did provide important information to the Federal Reserve on this issue in early 1989, which the Federal Reserve failed adequately to investigate at the time.

** The FDIC approved Ghaith Pharaon's purchase of the Independence Bank in 1985 knowing him to be a shareholder of BCCI and knowing that he was placing a senior BCCI officer in charge of the bank, and failed to confer with the Federal Reserve or the OCC regarding their previous experiences with Pharaon and BCCI.

** Once the Federal Reserve commenced a formal investigation of BCCI and First American on January 3, 1991, its investigation of BCCI and First American was aggressive and diligent. Its decisions to force BCCI out of the United States and to divest itself of First American were prompt. The charges it brought against the parties involved with BCCI in violating federal banking standards were fully justified by the record. Its investigations have over the past year contributed substantially to public understanding to date of what took place.

** Even after the Federal Reserve understood the nature and scope of BCCI's frauds, it did not seek to have BCCI closed globally. This position was in some measure the consequence of the Federal Reserve's need to secure the cooperation of BCCI's majority shareholders, the government and royal family of Abu Dhabi, in providing some $190 million to prop up First American Bank and prevent an embarrassing collapse. However, Federal Reserve investigators did actively work in the spring of 1991 to have BCCI's top management removed, including the then head of BCCI, Zafar Iqbal, who had close ties to the Abu Dhabi shareholders.

** In investigating BCCI, the Federal Reserve's efforts were hampered by examples of lack of cooperation by foreign governments, including most significantly the Serious Fraud Office in the United Kingdom and, since the closure of BCCI on July 5, 1991, the government of Abu Dhabi.

** The Federal Reserve has fully cooperated with the Subcommittee in its investigative efforts, providing essential information, documentation, and assistance in obtaining access to witnesses. This cooperation was unique among federal agencies, and materially assisted the Subcommittee's work.

** U.S. regulatory handling of the U.S. banks secretly owned by BCCI was hampered by lack of coordination among the regulators, which included the Federal Reserve, the FDIC, and the OCC, highlighting the need for further integration of these separate banking regulatory agencies on supervision and enforcement.

Findings: The Bank of England ** The Bank of England had deep concerns about BCCI from the late 1970s on, and undertook several steps to slow BCCI's expansion in the United Kingdom.

** In 1988 and 1989, the Bank of England learned of BCCI's involvement in the financing of terrorism and in drug money laundering, and undertook additional, but limited supervision of BCCI in response to receiving this information.

** In the spring of 1990, Price Waterhouse advised the Bank of England that there were substantial loan losses at BCCI, numerous poor banking practices, and evidence of fraud, which together had created a massive hole in BCCI's books. The Bank of England's response to the information was not to close BCCI down, but to find ways to prop up BCCI and prevent its collapse. This meant, among other things, keeping secret the very serious nature of BCCI's problems from its creditors and one million depositors.

** In April, 1990, the Bank of England reached an agreement with BCCI, Abu Dhabi, and Price Waterhouse to keep BCCI from collapsing. Under the agreement, Abu Dhabi agreed to guarantee BCCI's losses and Price Waterhouse agreed to certify BCCI's books. As a consequence, innocent depositors and creditors who did business with BCCI following that date were deceived into believing that BCCI's financial problems were not as serious as each of these parties already knew them to be.

** From April, 1990, the Bank of England relied on British bank secrecy and confidentiality laws to reduce the risk of BCCI's collapse if word of its improprieties leaked out. As a consequence, innocent depositors and creditors who did business with BCCI following that date were denied vital information, in the possession of the regulators, auditors, officers, and shareholders of BCCI, that could have protected them against their losses.

** In order to prevent risk to its restructuring plan for BCCI and a possible run on BCCI, the Bank of England withheld important information from the Federal Reserve in the spring of 1990 about the size and scope of BCCI's lending on CCAH/First American shares, despite the Federal Reserve's requests for such information. This action by the Bank of England delayed the opening of a full investigation by the Federal Reserve for approximately eight months.

** Despite its knowledge of some of BCCI's past frauds, and its own understanding that consolidation into a single entity is essential for regulating a bank, in late 1990 and early 1991 the Bank of England tentatively agreed with BCCI and its Abu Dhabi owners to permit BCCI to restructure as three "separate" institutions, based in London, Abu Dhabi and Hong Kong. This tentative decision demonstrated extraordinarily poor judgment on the part of the Bank of England. This decision was reversed abruptly when the Bank of England suddenly decided to close BCCI instead in late June, 1991.

** The decision by the Bank of England in April 1990 to permit BCCI to move its headquarters, officers, and records out of British jurisdiction to Abu Dhabi has had profound negative consequences for investigations of BCCI around the world. As a result of this decision, essential records and witnesses regarding what took place were removed from the control of the British government, and placed under the control of the government of Abu Dhabi, which has to date withheld them from criminal investigators in the U.S. and U.K. This decision constituted a costly, and likely irretrievable, error on the part of the Bank of England.

The U.S. Regulators The OCC and John Heimann The Federal Reserve, rather than the Office of the Comptroller of the Currency was the primary decision maker as to whether to permit the Middle Eastern group which fronted for BCCI to take over Financial General Bankshares. However, due to several accidents of history, the OCC did have more information concerning the threat posed by BCCI to the U.S. banking system, and BCCI's actual intentions. Moreover, the OCC was the primary decision maker in approving whether to permit Ghaith Pharaon, another BCCI front-man, to take over the National Bank of Georgia from Bert Lance in precisely the same period.

Despite having very serious reservations about BCCI, and fears that BCCI might secretly be trying to enter the U.S., the OCC ultimately decided in both cases to accept assurances that its fears were unjustified. The reasons for OCC's decisions in both cases are not entirely clear, but appear to have been related in the case of the National Bank of Georgia, to having no viable alternative to the Pharaon purchase, and in the case of Financial General Bankshares, to extract tough concessions from the shareholders as to the condition that BCCI was not involved, and then leave responsibility for the ultimate decision on the CCAH application to the Federal Reserve.

The main historical accident that placed OCC in this position was the coincidence of John Heimann, the Comptroller of the Currency, having previously been the chief banking regulator for the State of New York at a time when BCCI was trying to enter the New York market through nominees.

As detailed in the chapter on BCCI's early activities in the United States, Heimann had found that a young Pakistani with few personal financial resources had applied to take over a New York bank, with BCCI behind him. On investigating BCCI, Heimann determined that BCCI had no central regulator, divided its operations between two auditors, and had no consolidated financial report, and therefore that its true financial picture could not be determined. Heimann stopped the application from proceeding, BCCI tried to enter New York again through targeting a second bank through a second nominee, and ultimately, Agha Hasan Abedi himself had met with Heimann in an unsuccessful effort to convince him that BCCI was a good bank.

Soon thereafter, Jimmy Carter became President, and Heimann became Comptroller of the Currency, where he wound being the principal person in the Carter Administration who determined that Bert Lance's banking practices were serious enough to warrant criminal investigation, and to require that Lance not remain as director of the Office of Management and Budget.

In early 1978, when Lance sold his shares in the National Bank of Georgia to Ghaith Pharaon, Heimann was in a quandary. A man who in his judgment was among the least trustworthy bankers in the United States was selling his bank to a man who, if history was repeating itself, might be a nominee for the least trustworthy bank in the world.

Heimann began probing the situation to determine whether BCCI was behind Pharaon. As a memorandum he wrote to his files on January 4, 1978 stated::

Tomorrow, January 5th, the sale of Lance's stock to Pharaon will be completed at 2 pm. . . Guyton [President of NBG since Lance's departure for OMB] noted he was somewhat disturbed about the role played by the Pakistanis in this transaction. Not that he knew anything negative about them but their role at present or in the future, seemed to be ill defined and caused him some concern. He believes that Lance is presently on the BCCI payroll working with Addabi [sic] and Sami. As a matter of fact, Lance went to London last week and will be back today. The purpose of that trip, presumably, was to discuss further expansion of BCCI in the U.S.(5)

In the conclusion of the memo, Heimann noted that Pharaon and BCCI apparently had plans for acquiring additional U.S. banks. This fact gave Heimann additional cause for concern given his opposition to BCCI's entry into the U.S. in New York two years previously. Within two weeks, OCC learned that Lance was not merely on BCCI's payroll, but receiving "a tremendous salary," an airplane, office space, and secretarial assistance from BCCI. NBG president Guyton told the OCC that BCCI intended to invest for its own account as well as for other investors in the U.S., and Lance was to be its business agent.(6) Soon thereafter, Heimann learned of Lance's involvement in the FGB takeover, and ordered his staff to determine whether Pharaon was a front for BCCI. As detailed in the chapter on BCCI's activities in the U.S., OCC staff met with Pharaon, who assured them that BCCI was merely an advisor to the purchase. The staff were not sure whether to believe Pharaon, and feared that he might be merely an "alter ego" for BCCI in the U.S.(7)

But Heimann was faced with a difficult choice. Pharaon had agreed that Lance would have no further involvement with National Bank of Georgia if his application to buy it were approved. Shortly, the OCC would be filing suit against Lance, charging him with fraud, which Lance would settle through a consent decree. If the National Bank of Georgia were not severed from Lance, it could be taken down with him.

Given OCC's concerns about Lance, there was an obvious tension between trying to protect the National Bank of Georgia from Lance's practices by letting a sale to Pharaon go forward, and with trying to protect the National Bank of Georgia by stopping the sale because of concerns about BCCI. The likely consequence of the latter course of action, however, would be that no one would buy NBG at all and it would be left in Lance's hands. The OCC knew in private what was not known by the public, although it was whispered in banking circles -- that NBG was in financial trouble, and had inadequate capital. Pharaon's tender offer for the shares of the bank would expire on June 20, 1978. If the OCC took any action to delay or prevent that acquisition, NBG might never recover.(8) The OCC gave Pharaon permission to move forward and he concluded his tender offer to purchase a 60 percent interest in NBG on May 30, 1978. OCC thus took the conservative approach of accepting Pharaon's dubious account about his relationship to BCCI, and permitting Pharaon to "rescue" the bank, rather than challenging Pharaon's purchase and placing the bank at immediate risk.

OCC's decision about NBG was unfortunate. As later bank examination documents demonstrate, NBG remained what OCC termed a "problem" bank for years following its sale to Pharaon, with a substantial number of Lance-related substandard and non-performing loans remaining in its portfolio. A decade later, after its purchase by First American at the behest of BCCI, NBG -- renamed First American Georgia -- remained in "unsatisfactory" condition according to OCC examiners, with serious problems of asset quality, earnings, loan losses, and monitoring system.

Another unfortunate aspect of OCC's decision is that OCC never advised the Federal Reserve of the tentative judgement of its staff that BCCI might be using Pharaon as a nominee at NBG. The OCC had also encountered this practice of BCCI's in a completely different setting at precisely the time it was considering the Pharaon-NBG matter. An OCC auditor based in London, Joseph Vaez, had determined that BCCI, which was still partly owned by Bank of America, had been making use of nominees in purchases of other banks.(9) This information was developed by the OCC's foreign examination division, and did not apparently reach the OCC examiners dealing with NBG.

Thus, while the OCC did ultimately require that BCCI not be involved in owning, lending, controlling, or managing Financial General Bankshares as a condition of signing off on the CCAH application, as an institution, the OCC had been in a position to do much more, and to insist upon further investigations. Instead, it made its concerns known to the Federal Reserve, and left it to the Federal Reserve to reach the ultimate judgments about the wisdom of the CCAH acquisition, and to insure that CCAH and its shareholders lived up to the commitments obtained from them by the OCC.

In buying National Bank of Georgia through its nominee, Pharaon, BCCI had succeeded in overcoming the regulators to acquire its first bank in the United States. This lesson would have been especially powerful to Abedi. During this very time, he was in the very midst of high publicized actions in Washington involving many of the same players and where allegations were again being raised about BCCI's possible use of front-men. It was a lesson that with persistence, BCCI would also be able to succeed in deceiving the regulators in its attempt to take over FGB.

The Federal Reserve Like OCC, the Federal Reserve was not blind to the issues involved in the CCAH application to take over FGB. BCCI's role was the key question throughout the highly-contested litigation during the take over and application process for FGB, and the Federal Reserve sought assurances that BCCI was not an owner, lender, controller, or manager of CCAH, on many occasions, and from many sources.

For example, as early as April, 1978, the Federal Reserve was asking detailed questions of Clark Clifford and Robert Altman as attorneys for Lance and the "individuals" in the BCCI group, inquiring whether ICIC, BCCI's Grand Caymans affiliate, was acting as a vehicle for the acquisition of FGB, receiving in reply a statement from BCCI lawyer Robert Altman that BCCI was acting as the commercial banker and financial advisor for the Middle Eastern investors, and that while BCCI had been used to move funds for the investors into the U.S., it had not financed any of the FGB purchases.(10)

Thus, by mid-1978, BCCI had developed a theory of its involvement with the Middle Eastern investors in FGB designed to reconcile its central role in the original takeover with the various securities and banking laws which prohibited it having an actual direct interest in taking over FGB. The theory, a clever cover story for the truth, was that BCCI was a financial advisor to the actual parties at interest, and never a principal itself in their purchases of FGB stock. From May 9, 1978 onward, Clark Clifford and Robert Altman, as attorneys for Lance, BCCI, and the BCCI-related shareholders, would articulate the position that BCCI at no time acted inconsistently with this role. It was a theory that was easy to abuse, as it would be very difficult for anyone, including the Federal Reserve, to distinguish between BCCI's actions as a financial advisor for legitimate shareholders, and the truth, which was that BCCI owned FGB, and the shareholders were nominees.

Nevertheless, the Federal Reserve continued to question whether BCCI actually had a hidden interest in CCAH, receiving further assurances. On March 12, 1981, the OCC finally signed off on the CCAH takeover based on the understanding that BCCI would have no involvement with the management of the bank or the holding companies or with the financing of the acquisition. And on April 23, 1981, the Federal Reserve convened a hearing on the application, focusing again on the issue of BCCI's role in CCAH, receiving still further assurances. A detailed account of the regulators' concerns, and the assurances provided by the CCAH shareholders, Clifford, Altman and others, are specified in detail in the chapter on BCCI's early activities in the U.S.

Based on the assurances, the Federal Reserve, despite its obvious suspicions, approved the CCAH application on August 25, 1981, and the acquisition was completed the following April, following delays involving state authorities.

In approving the CCAH application, the Federal Reserve explicitly accepted "the entire record" of statements made to it by the Middle Eastern investors, BCCI, and their attorneys. These included certain statements made in the April 23, 1981 hearing and in the applications which constituted practical, if not necessarily legal, loop-holes regarding BCCI's ability to be involved with FGB in the future, and contrary to the understandings which the OCC had said were critical for its approval of BCCI's application.

These statements made by the CCAH shareholders, Clifford and Altman, suggested that if BCCI loaned funds to the shareholders after the original acquisition in connection with CCAH, such loans would not be precluded. Together with the Federal Reserve's acceptance of the concept that BCCI could act as a liaison between FGB and the shareholders in its capacity as "investment advisor," the ability of BCCI to "lend" to its shareholders following the initial acquisition created a mechanism by which BCCI could at any time "call" its interest in CCAH shares, in collusion with its nominees. It would do this by "lending" funds, secured by those shares, on which the nominees defaulted, leaving BCCI in possession of the shares. In the decade to come, this device was used by BCCI repeatedly to deceive the regulators, in some cases with the apparent knowledge of some of BCCI's attorneys and agents in the U.S.

Assessment of Federal Reserve Decisions On FGB/CCAH A review of the entire record shows the Federal Reserve to have diligently sought to learn the truth about the nature and extent of BCCI's involvement in the CCAH acquisition of FGB. The Federal Reserve queried relevant federal agencies, such as the CIA and Statement, and learned nothing negative about the proposed shareholders. It asked detailed questions of the shareholders themselves and of its attorneys, and received repeated assurances. Its investigative efforts were persistent and significant, and it is hard even in retrospect to understand much else the Federal Reserve might have done to prove that BCCI in fact was using nominees to buy FGB without looking beyond the transaction to larger issues about BCCI. None of the documents that would show the nominee relationships were available to anyone not part of the conspiracy of deception; any loans made by BCCI in connection with the purchase were hidden abroad, or among its affiliates. Ultimate proof that these wealthy Middle Easterners were lying to the Federal Reserve would have been essentially impossible to obtain.

On the other hand, the Federal Reserve did have before it very substantial circumstantial evidence that the applicants, their attorneys, and BCCI were not telling it the full truth. There were some obvious leads available to the Federal Reserve which it did not follow up. And if the Federal Reserve had decided that BCCI might well be a secret party to the deal, and broadened its investigation to look at BCCI's overall goals and typical procedures, it might well have been able to discover enough about what was actually going on to justify rejecting the application.

To begin with, it was patently obvious that the original four Middle Eastern shareholders working with Lance and BCCI to take over FGB in early 1978 had been acting jointly, and the SEC had specifically made this finding, which was admitted by the shareholders, Lance and BCCI in a consent decree. Yet Kamal Adham, Faisal al Fulaij and the other shareholders had taken great pains to testify to the Federal Reserve that not only did they not act together in the original takeover, they did not even know one another. The implausible -- and wildly contradictory -- accounts given the Federal Reserve by these shareholders concerning how they came to invest in FGB should have been sufficient, in and of themselves, to have justified disapproval.

In addition, Lance's sale of the National Bank of Georgia at precisely the same time to another person associated with BCCI, Ghaith Pharaon, at an inflated price, was further evidence to any reasonable skeptical mind that BCCI might well be behind both transactions. This should have been especially obvious given the many public accounts of BCCI having bailed Lance out of his financial problems with millions of dollars in loans and payments. Moreover, Heimann at OCC had already seen BCCI use nominees, and an OCC bank examiner had made reference to BCCI's use of nominees in a 1978 memorandum on BCCI and the Bank of America. The possible relationship between the NBG purchase by Pharaon from Lance to the FGB purchase by the Middle Eastern investors with Lance, with BCCI involved as the "investment advisor" in both cases, was never explored by the Federal Reserve. Basic questions concerning that relationship would likely have raised very disturbing questions about what was actually taking place. However, in part because the National Bank of Georgia purchase was regulated by the OCC rather than the Federal Reserve, the Federal Reserve never put the two transactions together, and thus missed a very significant opportunity to find out the truth.

Finally, because BCCI was not an official party to the transaction, the Federal Reserve never considered the possibility of investigating BCCI itself. When it asked the CIA and State Department about the CCAH shareholders, it neglected to ask the agencies what they knew about BCCI. Because it did not view BCCI to be party to the transaction, it did not look at BCCI's other efforts to enter the United States, which would have alerted the Federal Reserve to BCCI's practice of using nominees. Instead, the Federal Reserve looked solely to the parties before it, unable to move past the formal statements in the application to understand what was actually taking place behind it.

Other factors were also at work. BCCI's use of Clark Clifford and Baldwin Tuttle clearly had an impact on the Federal Reserve's willingness to challenge the statements being made to it by the CCAH shareholders. Clifford's prestige was enormous, and his reputation for integrity impeccable. During the April 23, 1981 hearing before the Federal Reserve, he gave the Federal Reserve his word that BCCI was not involved in language that has since often been quoted:

None. There is no function of any kind on the part of BCCI. I think when the question was asked, having to do with what might occur in the future, I think somehow may have given the answer, "well, that would depend upon the judgment of Financial General in the future." I know of no present relationship. I know of no planned future relationship that exists, and other than, I don't know what else there is to say.(11)

Clifford's additional suggestion in the hearing that rejection of the application by the Federal Reserve would be a sign of bigotry and intolerance on the part of the regulators was also an effective means of discouraging regulators from being overly skeptical of the Middle Eastern investors, despite their inherently implausible stories about their investment in FGB.

The fact that Baldwin Tuttle, a former Federal Reserve counsel, was acting as the regulatory lawyer for the group would also have had a significant sobering effect on any Federal Reserve attorney who might otherwise advocate further investigation, or rejection of the application. To deny the application on the ground that one did not believe the assurances given by clients of a former colleague, with the high professional standards of the Federal Reserve itself, would have been a difficult, and painful, judgment.

For all of these reasons, the Federal Reserve in essence gave the CCAH shareholders the benefit of the doubt, and BCCI was given its first significant foothold in the United States.

A second error by the Federal Reserve, which would come back to haunt the regulators later, was its undefined acceptance of the concept that BCCI could be the investment advisor and conduit for the CCAH shareholders. These concepts were to become almost infinitely expandable by BCCI, and to complicate substantially later investigations and prosecutions, although it is now evident the concept was intended by BCCI, its front-men and attorneys as a cover story from the start.

Compounding this error was a third mistake by the Federal Reserve. While initial statements to regulators by the CCAH shareholders had made broad statements about BCCI's non-involvement, by the time of its approval, suggesting that BCCI was free to lend money to FGB shareholders, and to engage in other actions regarding FGB in the future, as implied by the Clifford statement, "what might occur in the future, I think. . . well, that would depend upon the judgment of Financial General."(12) The notion that whatever obligations everyone had been under at the time of the takeover would end the moment that the Federal Reserve approved the CCAH application threatened to undermine the assurances that the regulators had so patiently sought over the previous three years. Yet nowhere on the record is there a clear statement by the Federal Reserve prior to the approval of the CCAH application, that the transactions prohibited in the past would also be prohibited in the future -- as was clearly understood and required by the OCC.

In short, the Federal Reserve was neither sufficiently skeptical, tough, or imaginative to combat the cleverness of those who conspired to deceive it. Justifiably suspicious of the presentation that had been made to them by the Middle Eastern investors, the regulators ultimately lacked the bureaucratic will to refuse them permission to buy the bank they had targeted. The result was that BCCI was able to get away, for a decade, with secretly owning what became with BCCI's money the biggest bank in the nation's capital.

1982-1989: Sleeping Regulators As far as the Federal Reserve was concerned, once it had approved CCAH's application to buy FGB, its role was, for the time being, finished. As Federal Reserve council Virgil Mattingly testified in May, 1991 it was the Federal Reserve's view that:

In the years immediately following the acquisition, there was no evidence to suggest that CCAH and First American were functioning other than in accordance with the statements made to the Board and the other regulators . . . Both federal and state examinations of First American and its subsidiary banks and of the U.S. offices of BCCI detected no irregularities in their dealings with each other, which were reported as limited.(13)

As Mattingly testified, nothing unusual was noticed by the Federal Reserve until BCCI was indicted for drug money laundering in Tampa in October, 1988.(14)

Non-Regulation of BCCI Branches While completing its secret purchase of First American, BCCI itself had opened branch offices, licensed by and primarily regulated by the states in which they were located, in San Francisco, Los Angeles, Miami, Tampa, and Boca Raton, with additional representative offices in Washington DC and Houston. As none of these offices could accept domestic deposits, U.S. regulatory interest in them was slight, and they operated with almost no supervision prior to the Tampa indictment. During that time, these branches worked quietly to take in funds from foreigners who wished to place funds in the U.S., engaging in commercial banking transactions, service the needs of foreign embassies, commercial entities, and central banks, and becoming the home away from home for flight capital from the Third World, for tax evaders, and for those engaged in arms trafficking, commodities fraud, and money laundering.

Regulators were remarkably innocent of all of this activity, which was clearly rampant at BCCI's U.S. offices, and visible in its documents, as later reviewed by Subcommittee staff. Because of BCCI's status as a foreign branch, licensed by states, checks by federal regulators were infrequent and limited. It was not until 1987 that the Federal Reserve first identified money laundering at BCCI, in its Miami office, triggering a criminal referral to the IRS, the FBI, and the U.S. Attorney in Miami.

Even then, the Federal Reserve did not consider BCCI's wrongdoing sufficiently worrisome to require a broader look at what BCCI was doing in the United States, making no attempt to coordinate an examination for money laundering in all of BCCI's offices. Such a coordinated examination took place for the first time only in October and November, 1988 -- after the Tampa sting had shown BCCI to be laundering money from drug countries like Colombia and Panama through the United States to Europe and back on a systematic, institutional basis. When it was finally undertaken, it revealed that BCCI had also been laundering money out of its New York and Boca Raton branches, that the BCCI branches' internal controls and lending practices were poor, and that remedial action was required.(15)

Remarkably, even then, after BCCI had been indicted for having a corporate policy of soliciting the proceeds of cocaine trafficking, and multiple branches of BCCI had been found by regulators to have engaged in money laundering, the Federal Reserve took no action to force BCCI to leave the United States. Its attitude was that this would be a decision for the states which licensed BCCI's local branches. All that the Federal Reserve insisted upon was that the past violations be cleaned up, and that BCCI agree to a anti-money laundering compliance program as a condition of continuing to do business, a deal that BCCI was glad to accept.(16) Under the circumstances, this was a remarkably tolerant attitude on the part of the Federal Reserve. That attitude persisted even after BCCI pled guilty to the drug money laundering charges in January 1990. At that time, the Federal Reserve advised the chairman of the Subcommittee that it lacked the power to simply order the closure of a state-chartered foreign bank for laundering drug money, prompting Senator Kerry to propose legislation -- currently pending before the full Senate -- explicitly mandating the closure of any bank convicted of such a charge.

Irregularities At First American Even at First American, although the bank examiners had failed to detect irregularities, they had certainly already occurred, as later investigations were to show.

For example, almost immediately following the acquisition, BCCI directed First American to re-establish banks in New York City, after New York regulators had prevented the New York branches of FGB from being purchased by the CCAH group along with the rest of FGB. The space leased by First American, at BCCI's direction, was far in excess of its needs and imprudent. At the same time, BCCI directed the hiring of employees for First American, and placed on First American's payroll two key officers to staff international operations out of New York. Soon thereafter, BCCI officials began to engage in joint marketing operations with First American officials, and to steer flight capital from Latin American, including Colombia and Panama, to First American.(17)

Moreover, despite the Federal Reserve's contention that nothing unusual took place, in fact, First American's purchase of the National Bank of Georgia in 1986 from "Ghaith Pharaon" should have raised substantial concerns if the regulators had been paying any attention whatsoever. After all, the Federal Reserve knew National Bank of Georgia was officially owned by Ghaith Pharaon, whose "financial advisor" was BCCI, while at the same time, First American was officially owned by other Middle Eastern investors whose "financial advisor," once again, was BCCI. Moreover, Clifford and Altman, chairman and president of First American, and lawyers for BCCI, had previously been the lawyers for Bert Lance in the sale of National Bank of Georgia to Pharaon, at the very time they were also helping Lance, BCCI, and the Middle Eastern investors in their original take over attempt of FGB. These facts surely should have caused the Federal Reserve to undertake a serious investigation in 1986. Not only did this not happen, but in the Federal Reserve's public testimony in May 1991, there was no recognition by Mattingly that such an investigation should have happened.

Federal Reserve Actions After Tampa Indictment Within weeks after the Tampa indictment, IRS agents working on the case against BCCI advised the Federal Reserve that it had information that BCCI owned First American. As Federal Reserve counsel Mattingly testified:

On December 27, 1988, an IRS agent working with the Justice Department authorities in Florida contacted by telephone one of the Federal Reserve staff personnel and asked for access to the transcripts to the hearing and so forth and so on. . . . . we were told the staff member was told that [the] BCCI employee indicated that BCCI owned First American Banks. That was basically when we were advised. And again, that kind of allegation we had heard before.(18)

Two days later, a reporter for a Florida newspaper contacted Federal Reserve official Lloyd Bostian in Richmond looking for information concerning the ownership of First American. The reporter advised Bostian that an affidavit filed by an undercover FBI agent stated that a BCCI official said BCCI had not bought U.S. banks directly, but BCCI did control the National Bank of Georgia and other banks through individuals.(19)

In response to this disturbing information, the Federal Reserve undertook the first significant review of the BCCI-First American relationship that had occurred since its approval of the CCAH application seven and a half years earlier. As Mattingly characterized the review:

We went into the bank [First American] and one of the things that the Reserve bank did was contact each of the First American banks and ask them, what are your dealings, what kind of relations do you have with BCCI. We got back responses from the presidents of each of these banks. Basically, most of them said there were no affiliations whatsoever. . . . We also went into the bank, the First American banks, and contacted and talked to the senior management of the company, including its lawyers, reviewed with them the commitments, and were assured that everything, that any relationships between BCCI and First American were as they had been portrayed in the application. There was no controlling influence. We were subsequently told there are no loans to fund the acquisition by the investors of the CCAH stock.(20)

However, the Federal Reserve did find a number of facts during the review which should have been sufficient to cause the Federal Reserve to open an investigation.

Its examiners found "multiple" First American Accounts at BCCI (there were in fact 40 in all), and a very significant correspondent bank relationship between BCCI and First American, and that the common ownership of CCAH and BCCI had increased.(21)

In addition, its officials had been directly provided with additional information concerning the nature of the BCCI-First American relationship from the IRS itself.

On February 1, 1989, the IRS agent who originally had contacted the Federal Reserve, David Burris, came to Washington with a supervisor and met with William Ryback, a senior Federal Reserve international bank supervisor. The two IRS agents provided Ryback with a briefing of the evidence they had obtained concerning the links between BCCI and First American. According to the IRS agents, they offered to provide Ryback with witnesses who would describe how BCCI owned First American. According to the IRS agents, Ryback declined their offer, and instead suggested that he need documents in order to take further action. However, by Ryback's account, no offer of witnesses was mentioned by the IRS agents in the course of their debriefing.(22)

Regardless of the contradictions between the IRS account and Ryback's concerning what was said in their February 1 meeting, by that date the Federal Reserve had ample information sufficient to justify the opening of an investigation. Yet instead it concluded on February 8, 1989 -- just one week after the Ryback-Burris meeting -- that there were no evidence of irregular contacts between First American and BCCI or of the failure by CCAH to adhere to its commitments.(23) The judgment, needless to say, was flawed. Eight days later, the Federal Reserve approved the acquisition by CCAH/First American of yet another bank -- the Bank of Escambia, of Pensacola, Florida.

Regardless of whether it was the fault of the Federal Reserve or that of federal law enforcement, nothing was done by the regulators with the information that federal law enforcement had developed concerning BCCI's secret ownership of First American. Nowhere is this more evident than in the treatment of a critical tape, made by federal agents on September 9, 1988, during which BCCI officer Amjad Awan had told undercover Customs agent Robert Mazur about BCCI's secret ownership of First American, and his perception of Clark Clifford and Robert Altman's role in a coverup. The tape contained a road map for regulators as to how the FGB transaction was structured, through nominees. But the Federal Reserve never obtained it until December, 1990 -- nearly two years after Burris had first contacted the Federal Reserve -- and some six months after it had already been introduced at trial and become a public document.

The Federal Reserve's lack of diligence in pressing for the information possessed by federal law enforcement was matched by the failure of federal law enforcement, apart from the IRS agents, to provide the Federal Reserve with the information it had. For example, at no time did the Tampa U.S. Attorney's office advise the Federal Reserve that in addition to the original information it had received, the Subcommittee had provided it with further sources concerning the alleged relationship. Similarly, in May, 1989, the information the CIA had previously developed concerning BCCI's secret ownership of First American was provided anew to selected federal agencies, including the State Department, Treasury Department, Commerce Department, National Security Council, Office of the Comptroller of the Currency, and Federal Bureau of Investigation, and yet no one had bothered to notify the Federal Reserve.(24)

On August 21, 1989, in the midst of the Federal Reserve's review of BCCI's compliance with its anti-money laundering consent decree with the Federal Reserve, the Federal Reserve did hear from a local law enforcement agency concerning information that BCCI owned First American. A representative of the New York District Attorney told a Federal Reserve investigator that an informant had reported that BCCI owns or controls First American through nominees. However, the Federal Reserve took no immediate action in response, except to not that it head heard this allegation before.(25)

Thus, from early February on, the Federal Reserve did little if anything further to investigate the BCCI-First American relationship until the end of 1989. At that time, it learned -- informally -- from a Bank of England official that some of First American's shareholders had outstanding loans from BCCI, possibly secured by their stock in CCAH/First American. In response to this new information, the Federal Reserve in December, 1989 wrote Robert Altman, as CCAH's counsel, to again ask whether there were any loans by BCCI or its affiliates to any of CCAH's past or present shareholders, regardless of the purpose of the loan.(26) The questions asked of Altman by Ryback showed that the Federal Reserve was, whatever the failings of its investigations to date, fully focused on the central issue:

In connection with the application of Credit and Commerce American Holdings N.V. [CCAH] . . . a question was raised . . . whether any of the financing of the equity investment would be provided directly or indirectly by Bank of Credit and Commerce International S.A. (BCCI). It was indicated at the time that the individual investors had substantial funds and only a modest portion of the total investments would be financed. Further, any personal borrowing by the investors would come from financial institutions unaffiliated with BCCI.

It has come to our attention that at least some of the investors may have borrowed from BCCI. It may be that these borrowings were unconnected with the Financial General Bankshares transaction, but nevertheless were granted close to the time the acquisition was made. Some, if not all, of the borrowings may be secured by the stock of Financial General Bankshares. In order to clarify the situation it would be helpful if you would provide information on any loans extended to the original or subsequent investors, either directly or indirectly, by BCCI or any other affiliated organizations. This information should include all loans extended to the investors regardless of purpose, whether any of these loans are secured and if so, in what manner, and the date any loans were originally granted. It would also be useful to provide information on the repayment history of any such loans.(27)

True and honest answers to the questions asked by Ryback would have, of course, brought to an immediate end BCCI's secret ownership of First American, and commenced the kind of investigations which in fact began only one year later. Instead, Altman advised Ryback by telephone that he did not know the answers to Ryback's questions and had therefore contacted BCCI and CCAH's shareholders to ask them what they knew. Altman enclosed a letter from Naqvi and BCCI -- which according to later Federal Reserve charges Altman himself had drafted -- contending that the information requested was confidential and could not be released without the permission of the shareholders, which to date had not been granted. The Naqvi letter once again gave assurances that BCCI had not financed the original FGB acquisition, and through artful wording, sought to leave the impression, without so stating, that CCAH shares had been pledged against BCCI lending.(28) The Altman letter concluded by recharacterizing Ryback's broad, and detailed, request, in terms that would if accepted by the Federal Reserve, relieve Altman from the obligation of disclosing his own and Clark Clifford's prior loans from BCCI:

I shall, of course, press ahead with my request for the detailed information you wish to review, with my understanding that you primary interest is the current state of borrowings from BCCI by any of the First American investors, including any stock that may have ben pledge as collateral for loans.(29)

These artful dodges did not relieve the Federal Reserve's mounting anxieties that it might have been duped by BCCI. The Federal Reserve accordingly reached out again to the Justice Department and federal law enforcement.

On February 7, 1990, the Federal Reserve sent investigators to Tampa to meet with federal prosecutors, who were at the time in the midst of the trial of five BCCI officers who had been indicted in the Tampa case. The prosecutors said that while rumors of the BCCI-CCAH relationship abounded, they had investigated them and found no evidence to substantiate them.(30) This position was then confirmed by IRS agents, including Burris. The agents told the Federal Reserve that they wrote a report to the grand jury setting out the facts, which they would be glad to provide to the Federal Reserve, and that they had an informant who could also provide further information on the issue. Following the meeting, the Federal Reserve investigator was told by a Tampa prosecutor that the report contained no relevant information, and therefore would not be provided. The Federal Reserve persisted in requesting the report, and the Tampa prosecutor, for reasons not explained, continued to refuse to cooperate by providing it. In the meantime, the investigator tried repeatedly to talk to the informant, and was told by the informant's wife that the informant was out of the country.(31)

Thus, when the Federal Reserve finally went to federal law enforcement in search of information, the information it was given was either of little help, or actually incorrect. Instead of cooperating with the Federal Reserve, the Tampa prosecutor actually refused to provide requested information.

The Federal Reserve also reached out, with equal lack of success, to the Bank of England. It asked the Bank of England to provide it with more information about the nature of BCCI's lending to CCAH shareholders. In return, the Bank of England advised the Federal Reserve "that it had encountered difficulties in obtaining the necessary information but would continue its investigation."(32)

The previous December, the Bank of England had provided the Federal Reserve with an important warning about BCCI's lending to First American. But since then, the Bank of England itself had been drawn into BCCI's troubles as a result of Price Waterhouse advising it of the massive losses at BCCI and Price Waterhouse's own unwillingness to sign off on further audits of the bank. Thus, the Bank of England was now struggling with the problem of how to prevent BCCI from collapsing entirely, how to work out agreements with Abu Dhabi to guarantee BCCI's losses, and how to keep knowledge of the depth of BCCI's troubles from becoming public. By the spring of 1990, its own perceived vital interests were at stake. Accordingly, the Bank of England chose to be less than completely candid with the Federal Reserve about what it knew. If it had told the Federal Reserve that BCCI had $850 million in lending secured by CCAH's shares, the result would have been the instantaneous action that the Federal Reserve ultimately took the following January, just weeks after it finally saw the Price Waterhouse audits that the Bank of England withheld from it earlier in the year.

Despite its investigatory efforts, from the spring of 1990 through November, 1990, the Federal Reserve made little progress on the BCCI-First American issue. The Justice Department had given it almost nothing. The Bank of England had given it almost nothing. Both were in fact, for differing reasons, withholding important information from the Federal Reserve. At last, in November, the New York District Attorney's office gave the Federal Reserve the information it needed to break the investigation open. As Mattingly testified:

In November 1990, the New York County District Attorney's Office informed Federal Reserve staff that a confidential source had stated that a report prepared in October 1990 by BCCI's outside auditors indicated that BCCI had made substantial loans to CCAH shareholders secured by CCAH shares. Board staff immediately requested access to this report from the United States General Manager of BCCI. After a delay occasioned by the initial refusal of the auditor [Price Waterhouse] to permit the report to be examined by the Federal Reserve, BCCI agreed to make the report available for review by a senior member of the Board's examination staff in BCCI's London office. The review was conducted on December 10, 1990. The auditor's report and a conversation on that date with the new chief executive officer of BCCI [Zafar Iqbal] indicated that BCCI had substantial loans outstanding secured by CCAH stock. This was the first substantive evidence received by the Board confirming a financial relationship between BCCI and CCAH.(33)

Eleven days after this event, the Federal Reserve was contacted by counsel for the Abu Dhabi shareholders of BCCI and First American, Patton, Boggs & Blow, who advised the regulators

that Abu Dhabi had the previous April become BCCI's new majority shareholders, and had invested "a very large sum in BCCI stock to correct certain capital deficiencies." The lawyers for Abu Dhabi confirmed that "a substantial amount of the stock of CCAH had been pledged to BCCI as collateral for hundreds of millions of dollars in loans to certain shareholders of CCAH," and suggested that Patton, Boggs, instead of Clifford and Altman, would now be coordinating the handling of issues pertaining to CCAH with the regulators.(34)

Two weeks later, the Federal Reserve initiated its formal investigation, including the authorization of full discovery power, into the circumstances of BCCI's acquisition of control of CCAH and whether false or misleading statements had been made to the Board during the application process in 1981 and afterwards. Two weeks later, Patton Boggs acknowledged that there was material in BCCI's files concerning nominee arrangements for some of the CCAH shareholders. One week later, on January 22, 1991, the Federal Reserve sent a proposed cease and desist order to BCCI's counsel and made criminal referrals to the Justice Department.(35)

Federal Reserve Actions, 1991-1992 Having decided at last to place all the resources at its disposal to investigating BCCI's activities in the United States, the Federal Reserve put together a team of attorneys, examiners and investigators to conduct a comprehensive investigation of BCCI.

In Washington, the Board of Governors of the Federal Reserve swiftly reached consent decrees with BCCI and CCAH on March 4, 1991, requiring BCCI to divest itself of any interest it had in CCAH, and prohibiting transactions between BCCI and CCAH except as specifically approved by the Federal Reserve, and requiring BCCI to submit a plan to the Federal Reserve under which it would cease all banking operations in the United States.

At the same time, the Federal Reserve devoted its primary attention to severing First American from BCCI, and trying to stave off its collapse. When the Federal Reserve and other U.S. regulators ultimately did undertake a systematic review of BCCI's relationship with its secretly-held U.S. subsidiaries, they found evidence that BCCI had directed First American's decisions at the holding company level, including in connection with First American's costly decision to open offices in New York City and its even more costly decision to purchase the National Bank of Georgia.(36) But the regulators found only limited evidence that BCCI, its shareholders, or customers had received preferential treatment from First American. Thus, in a sense, BCCI had made only limited use of the asset it had bought. With certain exceptions pertaining to First American's deposits of funds in BCCI's Grand Caymans affiliate, ICIC, First American had been collected as an asset to be held for a rainy day, rather than as an asset to be immediately raided. First American was BCCI's piggy-bank, not BCCI's dust-bin bank, its place to deposit resources created elsewhere.

Nevertheless, First American also had serious financial problems, due in large part to its over-reliance on real estate and agricultural lending, similar to that of other banks in the metropolitan Washington region, that had now turned sour. These problems were now being exacerbated by the bad publicity First American was receiving in connection with its ownership by BCCI. Normal forms of recapitalization were no longer available to First American. It could not call on its nominee shareholders to pump in more funds. Nor could BCCI itself add new funding to First American. Nor would any "white knight" be able to come in and purchase the bank at any price until many more of the legal problems pertaining to its ownership were resolved. Apart from the Federal Reserve's own discount window, the only possible place to turn was Abu Dhabi. Accordingly, the Federal Reserve began negotiations with Patton, Boggs and Blow to determine the degree to which the Abu Dhabi shareholders of CCAH/First American were willing to help the Federal Reserve preserve the value of their investment -- which would disappear entirely in the event of a First American collapse. Thus, both Abu Dhabi and the Federal Reserve during the first half of 1991 had substantial incentives to cooperate with one another. Abu Dhabi needed to find ways to avoid the closure of BCCI globally, a closure which the Federal Reserve had the potential of forcing. The Federal Reserve needed Abu Dhabi's money.

Squeezed out of this equation was the ability of the Federal Reserve to find out the full story -- including the issue of the precise role Abu Dhabi had played in the original FGB takeover, and subsequently. Obviously, it would not be possible for the Federal Reserve to insist on full and complete disclosure by Abu Dhabi with the same vigor that it was insisting on disclosure by other shareholders, and at the same ask Abu Dhabi to place its cash into First American. The result was that the Federal Reserve and Abu Dhabi entered into a period of cooperation for the purpose of saving First American that in its way, was no different from the same kind of cooperation the Bank of England was getting from Abu Dhabi in Abu Dhabi's attempt to save BCCI. In return for Abu Dhabi giving the regulators money, the regulators would accept Abu Dhabi's assurances of innocence, at least for the time being.

In mid-March, the Federal Reserve sent two experienced investigators, Richard Small in Washington and Thomas Baxter in New York, to Abu Dhabi, where they requested the Abu Dhabi authorities to provide them with all relevant documents pertaining to BCCI's activities in the United States. Abu Dhabi would not grant Small and Baxter direct access to BCCI's files. Instead, they agreed to arrange the transport of particular categories of files, as designated by Small and Baxter, to a suite in the hotel in which they were staying in Abu Dhabi. This arrangement successfully produced vital documents concerning nominee arrangements between BCCI and all of the non-Abu Dhabi shareholders of CCAH. It was never likely to, and did not in practice, result in the provision to the Federal Reserve of useful material concerning Abu Dhabi's relations with BCCI.

Despite its need for funds for First American, the Federal Reserve did take a strong position with British regulators concerning the need for BCCI to be totally reformed if it were to continue in any form. In the weeks prior to BCCI's closing, Federal Reserve investigators, including Small and Baxter, lobbied the Bank of England aggressively on the issue of BCCI being permitted to restructure with any of its former officers remaining in charge of the bank, including the new head, Zafar Iqbal, installed by Abu Dhabi. In part as a result of the Federal Reserve's lobbying, the Bank of England in turn advised Abu Dhabi of the need to remove Iqbal, which in turn lead to a temporary stalemate over the proposed restructuring of BCCI, until the Bank of England ended the issue, and the bank itself, with its order closing BCCI of July 5, 1991.

Following BCCI's closure, the Federal Reserve worked with outside members of the First American board of directors such as former Maryland Senator Charles Mac Mathias, to force Clifford and Altman out of their roles as chairman and president of First American, and working with other bank regulators, closely monitored First American for signs of a run on the bank, and proceeded to a series of enforcement actions, including an assessment on July 29, 1991 of a $200 million fine against BCCI, a $37 million fine against BCCI nominee Ghaith Pharaon, a $20 million fine against BCCI official Kemal Shoaib, and the commencement of civil enforcement proceedings against Clifford and Altman, and together with the Justice Department and New York District Attorney Morgenthau, a plea agreement on December 17, 1991 by BCCI's liquidators that forfeited some $500 million of BCCI assets in the U.S., together with a complex, asset sharing agreement designed to protect both U.S. interests and assist innocent BCCI depositors and creditors abroad.(37)

The Federal Reserve's summaries of charges accompanying the various enforcement actions have collectively amounted to several hundred pages of detailed, precise information on how, when, and by whom, the Federal Reserve was lied to in connection with BCCI's activities in the United States. These summaries leave little doubt as to what happened on the matters they cover. They demonstrate clearly the very substantial investigatory and legal capabilities placed by the Federal Reserve into the BCCI investigation since January 3, 1991, and collectively provide the most complete account to date of what took place concerning BCCI's activities in the United States.(38)

At the same time, the Federal Reserve has adroitly, if not always swiftly, handled the complexities of severing First American from BCCI. Untangling BCCI's ownership of CCAH was a lawyer's nightmare, and without resorting to the regulatory takeover of First American some believed inevitable, the Federal Reserve now appears to have taken First American from the brink of extinction to long-term survival. While First American did lose several billion dollars in deposits and was severely weakened by the bad publicity surrounding BCCI's closure, buffered by the $190 million obtained from Abu Dhabi, it has, to date, appeared to weather the storm. After extensive and protracted negotiations, the CCAH shareholders placed their shares of CCAH into a trust and an independent trustee was appointed, shortly before the Subcommittee's final hearing, on July 30, 1992. Various First American assets, including its Georgia, Florida and Tennessee operations, have been sold off, and the sale of the metropolitan Washington operations to another bank is anticipated to occur by the end of 1992.

Throughout this period, the Federal Reserve and Abu Dhabi have sought to retain a cordial relationship, deferring problem areas in order to permit the sale of First American to go forward, with Abu Dhabi continuing to provide some, albeit limited, assistance to the Federal Reserve concerning some formerly privileged BCCI documents held in Abu Dhabi, and with the Federal Reserve remaining unaccountably "hopeful" that it will in time gain access to the top BCCI officers still held under house arrest in Abu Dhabi.(39)

Obstacles to Completing Federal Reserve Investigations While the Federal Reserve made profound progress in investigating BCCI during 1991 and 1992, substantial obstacles have remained to the Federal Reserve's ability to complete its investigation. As noted above, eighteen key witnesses and many key BCCI documents have remained held in Abu Dhabi and unable to any U.S. investigator to date. Foreign bank secrecy laws have also continued to hinder the Federal Reserve's ability to get information it requires, especially in Luxembourg and France.(40) The Federal Reserve has yet to be able to interview key participants in BCCI's frauds in the United States, including former Saudi intelligence liaison and BCCI front-man Abdul Raouf Khalil, former head of Kuwaiti Airlines and BCCI front-man Faisal al Fulaij. And the Federal Reserve has been prevented from interviewing certain witnesses and reviewing certain documents in the United Kingdom by the British Serious Fraud Office.(41) While all of these issues remain a problem, the most serious of them remains Abu Dhabi's refusal to provide access to the documents and witnesses it controls. As Mattingly testified:

Senator, I think it is absolutely imperative that the Federal Reserve and Mr. Morgenthau and the Justice Department have access to BCCI employees in Abu Dhabi, and that we also have access to all of the documents of BCCI that are in Abu Dhabi.(42)

Until such access is provided, the Federal Reserve's investigations of BCCI cannot be said to be complete.

Federal Deposit Insurance Corporation (FDIC)

And Independence Bank On January 30, 1992, the FDIC was forced to close the Independence bank of Encino California, held by Ghaith Pharaon as a nominee for BCCI, at a cost to the bank insurance fund of an estimated $130 million to $140 million.(43) The action took place just weeks after $5 million was injected into the bank by BCCI's liquidators one week after they had entered a guilty plea with the Justice Department and District Attorney Morgenthau on the bank's criminal indictments. The Independence Banks's closure, so soon after the final cash infusion, suggests just how far the bank had fallen by the time the regulators stepped in.

In fact, U.S. regulators were essentially oblivious to BCCI's ownership of the Independence Bank, and consistently underestimated the financial damage done to the Independence Bank by the management put into place there by BCCI, until the spring of 1991. The reasons for this are not entirely clear. The FDIC was aware of Pharaon's reported 15 percent ownership of BCCI and his borrowing relationship with BCCI, and aware that the person selected by Pharaon to chair Independence Bank, Kemal Shoaib, was a former officer of BCCI. There are two likely explanations for the FDIC's failures. First, the Independence Bank was a state chartered bank, and a non-member of the FDIC, whose principal regulator was the California State Superintendent of Banks, only secondarily backed up by the FDIC. Thus, the FDIC's monitoring of the Independence Bank was less rigorous than it would be if the FDIC were the primary regulator. Second, the FDIC had not been the decision maker in connection with the FGB take over, as was the Federal Reserve, or the decision maker in connection with Pharaon's take over of the National Bank of Georgia, as was the OCC. Accordingly, it had no reason to recognize the pattern that had emerged of BCCI's use of nominees to buy U.S. banks.(44)

Pharaon's purchase of the Independence Bank in 1985 had shown the usual pattern of BCCI. He filed documents showing that he would be financing 40 percent of the purchase himself, with the remaining 60 percent coming from a domestic bank, whose cooperation BCCI had secured through guarantees from BCCI which were not disclosed to the FDIC.(45) A routine background check of Pharaon was conducted, including requests for comment from the FBI, Customs Service, CIA, INTERPOL, and other regulatory agencies. No adverse information about Pharaon was uncovered by the background checks.(46)

Most interesting about the lack of information was the response by the CIA, which knew at the time of the FDIC's request that BCCI had engaged on a nationwide strategy of acquiring U.S. banks and had by the time of the FDIC request for comment already created a memorandum describing this strategy that it had provided to Treasury Secretary Donald Regan and to Robert Bench at the OCC. What appears to have happened is that the CIA was either unaware of Pharaon's connection to BCCI, or had failed to cross-reference its information about BCCI with Pharaon's name.(47)

After Pharaon purchased the Independence Bank, the condition of the bank was monitored regularly by state and FDIC examiners, and for the next three years, the State banking department conducted gave the bank a composite 2 rating on a scale of five, with 1 being the highest possible rating. This indicated the regulators' view that the Independence Bank was in strong, although not outstanding, financial condition. In mid-1988, this was downgraded to a 3 rating based on the bank's rapid growth and changing asset mix. An on-site examination by the state banking department and the FDIC a few months later downgraded this rating to a 4, indicating that the bank had, in the regulators' view, suddenly developed rather serious problems.(48)

As FDIC enforcement chief Stone testified:

This examination in 1988 marked a turning point for Independence Bank. From 1988, FDIC examiners became increasing concerned and alerted to problems at the bank. The examination report disclosed heavy asset classifications, low capital, weak earnings, thin liquidity, poor underwriting policies and inadequate record keeping and internal controls. Growth had been uncontrolled since mid-1987 and had been concentrated in joint venture real estate investments permitted under California law.

Mr. Shoaib had embarked on a program of investing in joint ventures involving acquisition, development and construction of real estate projects, primarily in southern California. In 1988, FDIC examiners discovered improper account of these projects which resulted in the understatement of total assets and liabilities, and the overstatement of the bank's capital.(49)

While the FDIC took the position that these problems had developed rather suddenly at the Independence Bank, in fact, as Senator Kerry suggested to the FDIC, "a bank does not accumulate" such problems overnight. Stone acknowledged that on detailed examination, the FDIC found that "file documentation was horrible," and that there had been "outright misrepresentation[s] by bank officials during [a] previous examination."(50)

Moreover, the Independence Bank had also begun to earn substantial fees -- $4 million in 1990 alone -- on transaction involving the swapping and restructuring of Third World debt. This was an area that Pharaon had used to his advantage in Argentina, as a result of personal relationships with high Argentine officials, including Argentine central bankers, to engage in transactions with BCCI in that country which were questionable at best.(51) Although the FDIC did not recognize this practice as pertaining to BCCI, it believed it completely inappropriate for a small, state-chartered bank and ordered the practice halted.(52)

Thus, once again, BCCI had successfully taken over a U.S. bank, and in this case actually brought BCCI's own typical practices to bear on the bank, under the nose of regulators who did not recognize what was happening. In the case of the Independence Bank, however, the FDIC did move to try to solve its problems from late 1988 on, through requiring further capital infusions from Ghaith Pharaon, and the resignation of Kemal Shoaib, the former BCCI officer, from his position as head of the bank in January, 1989.

At the same time, the FDIC sought to investigate whether the Independence Bank's ties to BCCI meant that it was engaged in money laundering. It found no systematic money laundering, but a few suspicions customer transaction which it then brought to the FBI. It did not, however, suspect that BCCI might have used Pharaon as a nominee and did not investigate that possibility.(53) It did, however, require Pharaon over the next two and a half years to inject some $46 million in new capital into the bank as the price for avoiding action by the regulators. In April, 1991, Pharaon, then under active investigation by District Attorney Morgenthau and the Federal Reserve, refused to inject any further capital into Independence, placing the bank's survival in doubt. Regulators installed examiners at the bank, looked to the royal family of Abu Dhabi as a source of capital, who refused to assist, considered a sale of the bank, and sought funds from BCCI and then its liquidators in an effort to prevent its collapse. However, it deteriorated rapidly, especially following the bad publicity due to revelations that it had been secretly owned by BCCI, and on January 30, 1991 was closed at the loss of $130 million to $140 million to the bank insurance fund.

In summary, BCCI's purchase of the Independence Bank demonstrated both the weaknesses and the strengths of the U.S. regulatory system. BCCI easily purchased a state bank in California through a nominee, attracting little notice, and using simple devices available to anyone with financial resources and willing to lie to regulators. While its ownership was never caught by examiners, the negative consequences of its ownership were, after about three years, and from there on, the examiners placed very significant pressure on the BCCI nominee, Pharaon, to force the bank to comply with U.S. standards and regulations.

Lessons Learned And Analysis of

Foreign Bank Supervision Enhancement Act of 1991 The Federal Reserve acted swiftly in the wake of the development of the BCCI scandal in the spring of 1991 to write legislation, then introduced by the chairman and ranking member of the Senate Banking Committee, and the chairman of the Subcommittee, to enhance its supervision of foreign banks. That legislation swiftly passed the Congress in 1991, and is already being implemented by the Federal Reserve. The new law:

** Bars entry of any foreign bank into the U.S. unless it is subject to consolidated home country supervision and agrees to permit supervisory access to any information regarding it that the regulators want.

** Applies to foreign banks the same financial, managerial and operational standards governing U.S. banks.

** Grants specific authority to federal regulators to terminate the U.S. activities of any foreign bank that is engaging in illegal, unsafe, or unsound practices.

** Grants the Federal Reserve authority to examine any office of a foreign bank in the U.S.(54)

The new law filled many of the regulatory gaps specifically applicable to the BCCI case, but at least three broad problems remain:

WEAK FOREIGN REGULATORS. While the new foreign bank supervision law does prohibit banks without a central regulator from entering the U.S., it not does prohibit banks which are regulated in bank regulatory havens, such as Grand Caymans, Luxembourg, or, for that matter, any of the significant number of tiny nations who seek to attract business through offering lax regulatory standards and stringent bank secrecy laws. If BCCI had been based solely in the Grand Caymans, it might not have been able to maintain its deceptions as long once they were uncovered, but penetrating those deceptions in the first place would have just as difficult. The Federal Reserve needs to consider whether it is appropriate to deny access for a foreign bank to engage in activities in the U.S. if it is based in a country that does not certain essential standards for banking regulation.

FOREIGN BANK SECRECY LAWS. Criminals use bank secrecy laws to commit crimes. As the BCCI case demonstrates, even after those crimes have been discovered, foreign bank secrecy laws substantially interfere with legitimate U.S. law enforcement and bank regulatory interests in determining what went and who committed the illicit activity. The Foreign Bank Supervision Enhancement act substantially improved the Federal Reserve's ability to secure information directly from foreign banks doing business in the U.S., as a condition for their participation in the U.S. market. However, vital information pertaining to the activities of those banks may be in the possession of individuals or institutions other than banks not directly subject to the Federal Reserve's jurisdiction. For example, if BCCI had wired funds to a foreign bank, based in a bank secrecy haven, that did not do business in the U.S., the provisions in the Foreign Bank Supervision Enhancement Act would be of no help in obtaining the needed information. The Federal Reserve needs to consider whether it is appropriate to press for broader changes in bank confidentiality laws by foreign countries, beginning with the United Kingdom.

COORDINATION AMONG BANK REGULATORS. Regulation of U.S. banks has become a remarkably complex web, with bank examiners working for the Federal Reserve, the Office of the Comptroller of the Currency, the FDIC, and the Office of Thrift Supervision, at the Federal level, and approximately 52 additional regulators at the state level. It is inevitable under the circumstances that there are failures to communication, cooperation, and coordination among these differing agencies. At numerous, critical times in the BCCI case, information available to one regulator was not passed on to another regulator. The Federal Reserve needs to consider whether it is an appropriate use of regulatory resources to create some form of central federal banking data base regarding every financial institution regulated in any form by the federal government. Such a data base could compile application forms, bank examination reports, audits, correspondence, and other data for the use of all federal regulators which otherwise would remain segregated and scattered at each individual agency.

THE BANK OF ENGLAND Background: BCCI in the United Kingdom Although BCCI was chartered in Luxembourg and the Grand Caymans, its real home through most of its existence was the United Kingdom, where Abedi established BCCI's headquarters, and the senior BCCI officers made key decisions for BCCI's operations world-wide.

Abedi's choice for a world headquarters in London's financial district, "The City," made sense in the early days of the petrodollar boom. At the time, London was a favored vacation and shopping destination for oil-rich Middle Easterners, and BCCI needed to serve them. London was in any case one of the world's great banking centers. And yet, the location of BCCI's in the United Kingdom also created difficulties for the bank. For one thing, the British banking system viewed BCCI with suspicion and hostility from the beginning, because BCCI was not regulated in the United Kingdom, was managed by Pakistanis, and was therefore, as Abedi's put it, "outside the club."(55)

Despite the hostility shown towards BCCI by the British banking system, the actual jurisdiction over BCCI by the Bank of England was distinctly limited. Because BCCI was chartered in Luxembourg and the Grand Caymans, the Bank of England considered them to be the "lead regulators," and itself to have only a secondary role under British banking laws. This reduced the level of scrutiny imposed on BCCI by the Bank of England, even as British bank secrecy and confidentiality laws combined to impede the ability of any other regulator to penetrate BCCI's activities in the United Kingdom, where it was headquartered, and did all of its essential business.

Thus, in making the UK its actual headquarters, while keeping its charters in Luxembourg and the Grand Caymans, BCCI effectively fractured oversight by each of the regulators to a mere part of its operations, and frustrated consolidated oversight by anyone. At the same time, concern over this arrangement in the UK prompted repeated attempts by the British to curtail BCCI's activities, which proved to have relatively little effect.

Early Warning Signals BCCI's problems in the United Kingdom were notorious and public by mid-1978, as contemporaneous press accounts, describing the frigid response of British authorities to BCCI's expansion, demonstrate.(56) As the House of Commons Treasury and Civil Service Committee concluded following its investigation of BCCI:

The evidence we have received makes it quite clear that the Bank of England was well aware that there were problems at BCCI even as far back as the 1970s. The Governor told us: "I cannot say I was happy or, indeed, any of us have been particularly happy about having these branches in the UK. It has been the most difficult bank we have had to deal with." [As another bank regulator testified] "We had no shortage, if I may use that term, of allegations and accusations . . . about BCCI."(57)

BCCI's inherent problems in the UK were exacerbated by BCCI's over-rapid expansion, from four offices in the United Kingdom in 1973, to 45 offices four years later. The depth of the problems had already become clear by 1976, when BCCI still had not received the authority from the Bank of England to engage in full banking services in the UK. By 1978, the UK regulators were taking still more aggressive action against BCCI -- blocking the bank from being permitted to engage in any further expansion through branching, in order to "bring greater transparency to the operations of BCCI in the UK," and thus enable regulators to analyze just what BCCI was doing.(58) In 1980, the Bank of England turned down BCCI's request for recognized status under the Banking Act of 1979, limited it only to be a licensed deposit taker in the UK.(59)

Having taken these steps to limit BCCI's activities in the UK, the Bank of England did not seek to investigate BCCI further, or encourage others to do so. Instead, it sought to limit its own involvement in bearing responsibility over BCCI.

For example, in 1985, Luxembourg regulators, increasingly uncomfortable with their inability to oversee BCCI's activities, suggested that BCCI be required by the Bank of England to establish a separately incorporated entity in the UK that would enable the Bank of England to become the lead regulator. The Bank of England's response to the Luxembourg overture was to discourage it.(60) As Brian Quinn, executive director of the Bank of England, testified before the House of Commons, the Bank of England rejected Luxembourg's offer because:

You become lead regulator of an organisation you believe you can regulate.(61)

Prodded by the continuing rumors and allegations about BCCI, on December 4, 1985, the Bank of England decided that it would be appropriate for it to visit BCCI's Central Treasury offices in London, in what was apparently the first time the Bank of England had sought such an examination. Its examiners met with BCCI directors and officers, and after spending a week in the bank reached some startling conclusions. As one Bank of England official wrote in an internal memorandum:

1. After spending one week in BCCI, I am absolutely certain that the real head office is located on six floors of 100 Leadenhall Street. It is here that Abedi, Naqvi, Twitchin, Farqui et al work 12 hours a day managing assets of $15bn. . . . .

2. It is clear that Luxembourg is an historic chapter in the BCCI story and that Grand Cayman is a tax haven used as a booking centre. The Bank of England are effectively the prime supervisors of BCCI, not the IML [the Luxembourg Monetary Institute]. UK incorporation of the UK branch network followed by recognition must be traded with Abedi in exchange for the movement out of Leadenhall Street of the Central Support Organisation.(62)

From this memorandum, it appears that not until the end of 1985 did the Bank of England even understand that BCCI's headquarters was located in London. When it did, its first reaction was not to decide to upgrade its regulation of BCCI, but to consider trading upgraded status for BCCI's deposit taking in the UK in exchange for BCCI's agreement to move its headquarters out of the UK to the Bank of England would not have to regulate it.

In this same period, the Bank of England learned of BCCI's huge Treasury losses, which had nearly wiped out BCCI's capital, and did not object when BCCI moved its Treasury operations out of London to Abu Dhabi.

Formation of the BCCI College of Regulators But a larger solution to the BCCI problem was still required, and the problem was considered sufficiently severed to require a structural response. After the Luxembourg Monetary Institute found itself unable to convince anyone else to take over the responsibility of monitoring BCCI's activities that were beyond its capabilities -- especially with BCCI's most important records now held in London and Abu Dhabi -- Luxembourg began to press for the formation of a College of Regulators to regulate BCCI. As Luxembourg had explained it, the Basle Concordat signed in May 1983 by many of the European banking regulators established a provision to permit a "college of regulators" to be set up to regulate banks that otherwise would escape regulation. While it was recognized that such a college was a second best approach after supervision on a consolidated basis," it was a lot better than the existing situation, in which Luxembourg did not even have the right to obtain BCCI's records in the UK. As Luxembourg described it, the college was the only solution available to Luxembourg to exercise supervision "over a group 98 per cent of whose activities feel outside its jurisdiction and for which none of the other banking supervisory authorities involved was prepared to take responsibility as parent authority."(63)

The British authorities, as well as Luxembourg, recognized that the college was not an ideal solution, because it perpetuated a problem that had been recurrent in the handling BCCI internationally: each nation focused on its own domestic concerns, and refused to accept full responsibility for BCCI's overall activities.(64)

The College was also, as might be expected of a newly created bureaucratic entity, slow to develop. Its was not formed until 1987. Its first meeting did not take place under April of 1988. At that meeting, which took place in Luxembourg, the regulators met with four BCCI officials and three partners of Price Waterhouse and discussed BCCI's large loan exposures. These consisted of the massive lending to CCAH shareholders for shares of First American; massive lending to BCCI shareholders such as Ghaith Pharaon and Kamal Adham; massive lending to the Gokal brothers; and other large loans which later were shown to be to nominees. As Lord Justice Bingham found:

Reference was made to the large loan exposures, but these were not examined in detail. . . The management were not taxed as to when and how these loans were to be reduced and no plan or timetable was sought. . . There was a brief and inconclusive discussion of CCAH which, according to the IML note of the meeting, had "to be seen as BCCI's steeping stone to set up in the US." . . . The meeting ended with a consideration of the College's enlargement to include Hong Kong, the Caymans and perhaps the United States and some Middle Eastern authorities. Naqvi was opposed to this. A College of that size, he argued, would be unmanageable. He wanted the group to be supervised on a consolidated basis by one supervisor and wanted the group to be restructured with that end in mind.(65)

The last thing that BCCI's top officials wanted was for the U.S. to participate with foreign regulators in overseeing its activities. As Naqvi knew, the moment the Federal Reserve knew of its massive loans for shares of CCAH, BCCI would be on a swift road to being forced out of the United States, and perhaps out of existence entirely.

What is remarkable about the summary of the meeting is the casual manner in which the regulators were approaching BCCI's problems. They saw massive outstanding lending that was not being serviced, and yet failed to recommend, let alone insist upon, any serious effort to correct the situation. Instead, they considered further additions in membership to the college, in what was in retrospect a further attempt to avoid having to take on the responsibility for overseeing BCCI themselves.

In later meetings of the college, discussions continued among BCCI, its auditors, and its regulators, concerning the need for BCCI to put aside additional funds as provisions against country risk, due to BCCI's very large lending to Nigeria -- some $260 million in all -- and its smaller, but still substantial exposure in countries like the Philippines, Zambia, and Sudan.(66)

In the spring of 1989, the college regulators listened to Price Waterhouse express its concerns about BCCI's continued high concentration of lending. Price Waterhouse also told the regulators that some of the largest borrowers were not paying interest on loans, let alone principal when due, and there was evidence that funds had been "drawn down" by BCCI without its central credit committee having provided prior approval. Yet in response, neither the Luxembourg regulators nor the Bank of England suggested that anything in particular be done, and accordingly, Price Waterhouse once again signed off on its audits, again certifying them to be a true and fair representation of BCCI's financial condition.(67)

By the end of 1989, the college regulators were placing increasing pressure on BCCI to reform, in concert with Price Waterhouse. In early 1990, Price Waterhouse informed the Bank of England that it now was confident that top BCCI officials had provided false information to it, and that there was fraud at BCCI, in an amount that was yet to be determined. The problem that the college regulators and the auditors had been slowly trying to come to grips with over the previous three years had accelerated, and action had to be taken.

The April 1990 Price Waterhouse Report On April 18, 1990, Price Waterhouse provided a report to the Bank of England which stated that a number of financial transactions at BCCI booked in its Grand Caymans affiliates and other offshore banks were "false and deceitful," and that it was impossible at the present time to determine just how far the fraud reached. Thus, a critical decision had to be made. Either BCCI had to be closed down now, or the Bank of England itself had to give its assent to keeping it open in some new form as a means of avoiding losses to BCCI's million or more depositors. New management needed to be installed. New financing had to be found, and the holes in BCCI's books had to be plugged.

The obvious solution was to ask Sheikh Zayed and the government of Abu Dhabi to take over the bank. As Zayed and the Al Nayhan family who ruled Abu Dhabi had been major depositors of BCCI, and had long had billions in family finances handled by BCCI, they stood to lose as much as anyone if the bank collapsed. Accordingly, Abu Dhabi would have to be told the truth about BCCI's perilous condition, and asked to commit funds to keeping the bank solvent.

A series of urgent meetings were held in Abu Dhabi and Luxembourg, beginning in March, 1990, in which Naqvi confessed his errors and resigned from his position as CEO at BCCI. Abu Dhabi agreed to provide a $1.2 billion cash infusion to BCCI, and to guarantee its losses. Naqvi was removed to Abu Dhabi, and a new management team was brought in. Best of all, from the point of view of the Bank of England, Abu Dhabi and BCCI had agreed to remove BCCI from its headquarters in London, a goal that the Bank of England had been seeking for years.

Rather than increase its jurisdiction over BCCI at this critical time, the Bank of England was increasingly anxious to make it someone else's problem. Abu Dhabi seemed only too glad to comply, and accordingly, the Bank of England gave its blessing to the removal not only of BCCI's headquarters, but its officers, and most importantly, all of its records, from British jurisdiction to that of Abu Dhabi.

At the same time, the Bank of England met with Price Waterhouse, which wanted to know the Bank of England's position concerning whether or not it should once again sign off on BCCI's books, despite the fraud which now the Bank of England, the Luxembourg regulators, and Abu Dhabi knew about in addition to Price Waterhouse and BCCI. The Bank of England and the Institut Monetaire Luxembourgeois, informed of what the auditors termed "all the uncertainties known to Price Waterhouse and of the financial support commitment by the Government of Abu Dhabi," agreed that BCCI could continue to operate, and Price Waterhouse duly signed off on BCCI's books.(68)

By agreement, the Bank of England had in effect entered into a plan with BCCI, Abu Dhabi and Price Waterhouse in which they would each keep the true state of affairs at BCCI secret in return for cooperation with one another in trying to restructure the bank to avoid a catastrophic multi-billion dollar collapse. From April 1990 forward, the Bank of England had now inadvertently become partner to a cover-up of BCCI's criminality. The goal was not to ignore BCCI's wrongdoing, but to prevent its disclosure, for that in turn could cause a massive run on the bank, BCCI's collapse, and potential billions in losses.

As the Governor of the Bank of England, Robin Leigh-Pemberton, testified before the House of Commons Treasury and Civil Service Committee:

On receipt of both the [Price Waterhouse] report of April 1990 and October 1990 we were alerted to [fraud and deceit], but those phrases described what I call the state of evidence, namely there was an indication that certainly things were not well. Some transactions had been either false or deceitful . . . but our view was that even if this added up to individual acts of fraudulent conduct it did not give evidence of a system of fraud throughout the Bank which was wide enough to justify closure. I hope it does not shock you too much, it is only a matter of realism that we do have occasions of fraud in banks. . . if we close down a bank every time we find an individual act or two of fraud we would have rather fewer banks than we do at the moment.(69)

Moreover, according to the Governor of the Bank of England, the moment the decision was made by the Bank that it would try to keep BCCI open rather than close it, it became essential to do everything possible to avoid contributing to its demise:

It is impossible for us to give what one might call an advance warning or a health warning. A hint from the Bank of England that somebody on our list may not be quite pukka would be the kiss of death to the future of a bank. We are in the difficult position that our banks are either on the list or they are struck off. I am sorry to say we have to leave it people to make their best judgment as to whether any one of those institutions is or is not fit to be a depository for the purpose they want.(70)

In short, depositors in the United Kingdom should regard their choice of banking institutions, according to the Governor of the Bank of England, by the ancient Latin maxim, "caveat emptor," let the buyer beware, and should not rely on the regulators to provide them with the facts. BCCI had become a bank too big to fail. In the effort to avoid that failure, the Bank of England was in no position to tell anyone the truth about its difficulties until it was too late for them to protect themselves.

Thus, unfortunately, rather than permitting ordinary depositors to find out for themselves the true state of BCCI's finances, the Bank of England, Price Waterhouse, Abu Dhabi and BCCI found themselves in collusion to deprive the public of the information necessary for them to reach any reasonable judgment on the matter, because the alternative would have been an immediate collapse of the bank.

Section 41 Report and BCCI's Closure Throughout the remainder of 1990, and the spring of 1991, BCCI, Abu Dhabi, and the Bank of England continued to work on a restructuring of BCCI as a means of saving the bank, with the intention of collapsing its dozens of entities into three banks, to be based in London, Abu Dhabi, and Hong Kong. At the same time, Price Waterhouse continued to provide each of them with the information that the fraud at BCCI was massive, and that the losses associated with the fraud were mounting into the billions. All the while, BCCI, Abu Dhabi, the Bank of England, and Price Waterhouse worked together to keep what they knew about BCCI secret. The secrecy had become critical now that they all knew about the ongoing criminal investigation into BCCI taking place in New York City by the District Attorney. Each made a strenuous effort to prevent the District Attorney from obtaining the Price Waterhouse audit reports which contained the information that if known would destroy BCCI. But by late 1990, the District Attorney, after months of effort, had obtained some of the audit reports, and appeared to be narrowing in on an indictment of BCCI. At the same time, the Bank of England was also finally having to deal with inquiries from the Federal Reserve, which had been fully alerted to the state of affairs at BCCI for the first time not by the Bank of England, but by the Manhattan District Attorney.

As news continued to filter into the Bank of England from Price Waterhouse and from former BCCI officials, such as Masihur Rahman, who were now working to expose what had happened at the bank, the Bank of England began to conclude that the restructuring proposal advocated by Abu Dhabi might not be possible after all. In March, the Bank of England commissioned it formally to investigate BCCI under Section 41 of the UK's Banking Act. Finally, on June 22, 1991, Price Waterhouse delivered a draft report to the Bank of England, known under British law as a Section 41 report, demonstrating that "fraud on a significant scale had been committed and that it had involved a significant number of people both inside and outside the bank."(71)

One week later, the Bank of England alerted the UK's Serious Fraud Office to begin an investigation of BCCI. Four days later, on July 5, 1991, BCCI was closed internationally in an action initiated by the Bank of England. Apart from the information contained in the Price Waterhouse report, the Bank of England would have had reason to act in any case. The Bank of England had reason to know that the New York District Attorney was only a few weeks away from indicting BCCI for massive fraud in an indictment that would outline in some detail most of the practices described privately to the Bank of England by Price Waterhouse. If the Bank of England had not finally acted, the indictments would have triggered a massive run on BCCI that would have resulted in the bank's immediate global closure in any case.

1. S. Hrg. 102-379 pp. 99-100.

2. See S. Hrg. 102-350 Pt. 4 p. 80, on the popularity of the Cayman Islands for banks because of lax licensing requirements, absence of reserve requirements, income taxes, or lending limitations.

3. Heimann, id, pp. 73-74.

4. House of Commons Treasury and Civil Service Committee Fourth Report, Banking Supervision and BCCI: International and National Regulation, March 4, 1992, hereafter "House of Commons Report," p. xiii.

5. Memorandum, Office of the Comptroller of the Currency, January 4, 1978, Comptroller John Heimann.

6. Memorandum, OCC, to File from John G. Hensel, January 17, 1978.

7. Memorandum, OCC, Serino to Heimann, April 3, 1978, "Notes On Meeting with Pharaon."

8. Various documents, OCC files on NBG, March-July, 1978.

9. Office of Comptroller of the Currency Report of Joseph Vaez, February 15, 1978, memo to Robert R. Bench from J.E. Vaez, National Bank Examiner London regarding BCCI Holdings (Luxembourg).

10. Letter, Robert Altman to Mannion of Federal Reserve, May 9, 1978.

11. Id. p. 144.

12. Clifford, April 23, 1981 hearing, id.

13. Prepared testimony of Virgil Mattingly, S. Hrg. 102-379 p. 118.

14. Id.

15. Prepared testimony of Virgil Mattingly and William Taylor, S. Hrg. 102-350 Pt. 1 pp. 86-87.

16. Id at 87.

17. The details of these interactions between BCCI and First American are set forth in some detail in the chapter on BCCI's later activities in the United States and in the chapter concerning Clifford and Altman.

18. S. Hrg. 102-379 p. 138.

19. House Committee on Banking, Finance and Urban Affairs, September 11, 1991, Pt. 1, "Bank of Credit and Commerce International Investigation, Serial No. 102-69 p. 685.

20. S. Hrg. 102-379 p. 139.

21. Testimony of Virgil Mattingly, S. Hrg. 103-479 p. 139.

22. Chronology, Committee on Banking, Finance and Urban Affairs, House of Representatives, September 11, 1991, Bank of Credit and Commerce International, Pt 1, Serial No. 102-69 p. 686.

23. S. Hrg. 102-379 p. 118.

24. The details of this information, and of how and when it was communicated within the U.S. government, are set forth in the chapter concerning BCCI's relations with the CIA and foreign intelligence.

25. Chronology, House Committee on Banking, Finance, and Urban Affairs, BCCI Pt 1, September 11, 1991, Serial No, 102-89 p. 688.

26. S. Hrg. 102-379 p. 119.

27. Ryback of Federal Reserve to Robert Altman, Clifford & Warnke, S. Hrg. 102-350 Pt. 3 pp. 440-441.

28. Naqvi to Altman, January 31, 1990, S. Hrg. 102-350 Pt. 3 pp. 442-443.

29. Altman to Ryback, February 5, 1990, S. Hrg. 102-350 Pt. 3 pp. 444-445.

30. Chronology, House Banking Committee, BCCI Pt 1, id., p. 689.

31. Chronology, House Banking Committee, BCCI Pt. 1, id. pp. 689-690.

32. S. Hrg. 102-379 p. 119.

33. S. Hrg. 102-379 p. 120.

34. S. Hrg. 102-379 p. 120.

35. Id.

36. The Federal Reserve's findings on these issues are set forth in the Summary of Charges issued by the Board of Governors of the Federal Reserve, In the Matter of BCCI, issued July 29, 1991, and In the Matter of Clark Clifford, issued July 29, 1992. These findings are set forth in some detail in the chapters on BCCI in the United States and the chapter on Clifford and Altman.

37. An account of those enforcement actions as of May 18, 1992, provided by the Federal Reserve to the Subcommittee, is contained at S. Hrg. 102-350 Pt. 4 pp. 144-145.

38. Numerous Federal Reserve investigators and attorneys participated in the investigation and drafting of the summary of charges, including Richard Small, Thomas Baxter, and Kit Wheatley. While their personal roles, and the roles of their colleagues, in exposing the full extent of wrongdoing in connection with BCCI have remained necessarily behind the scenes, the value of their work has been incalculable, both to the Subcommittee specifically and to the public at large.

39. Prepared testimony of Virgil Mattingly, S. Hrg. 102-350 Pt. 4 pp. 147-148.

40. S. Hrg. 102-350 Pt. 5 p. 153.

41. S. Hrg. 102-350 Pt 5 p. 169.

42. S. Hrg. 102-350 p. 171.

43. Prepared testimony of John W. Stone, FDIC, S. Hrg. 102-350 Pt. 5 p. 163.

44. See testimony of John Stone, FDIC, S. Hrg. 102-350 Pt. 5 p. 160.

45. A detailed account of this transaction is set forth in the chapter on BCCI's later activities in the United States.

46. S. Hrg. 102-350 Pt. 5 p. 158.

47. A detailed account of what the CIA knew at the time, and what it told the Treasury and OCC is contained in the chapter concerning BCCI, the CIA and foreign intelligence.

48. S. Hrg. 102-350 Pt. 5 p. 158.

49. S. Hrg. 102-350 Pt 5 p. 159.

50. S. Hrg. 102-350 Pt. 5 pp. 156-157.

51. See section on Argentina in chapter on BCCI's activities in foreign countries.

52. S. Hrg. 102-350 Pt. 5 p. 162.

53. S. Hrg. 102-350 Pt. 5 p. 160.

54. The full hearing on this legislation is set forth in S. Hrg. 102-379, May 23, 1991, which includes its text at p. 9, and a Federal Reserve analysis at p. 122.

55. See Euromoney, S. Hrg. 1-2-350, Pt. 3 p. 308.

56. Euromoney, id., Financial Times, The Many Who Adds a Touch of Mysticism to Banking, May 17, 1978, S. Hrg. 102-350, Pt. 3 pp. 303-304.

57. Bank of England chronology, Annex, Fourth Report, House of Commons Treasury and Civil Service Committee, March 4, 1992, "Banking Supervision and BCCI" p xiii.

58. House of Commons report, id, p. xiii.

59. Id.

60. House of Commons Report, id p. xxxi.

61. House of Commons Report, id, p. 54.

62. Extract, Paragraph 144, Report, Inquiry into the Supervision of the Bank of Credit and Commerce International, The Right Honorable Lord Justice Bingham, July 27, 1992, hereafter, "Bingham Report."

63. House of Commons Report, id, Memorandum submitted by the Institut Monetaire Luxembourgeois (IML) p. 95.

64. See Price Waterhouse comment, reprinted in House of Commons report, id, p. ix.

65. Paragraph 268, Bingham Report, id.

66. Price Waterhouse Report BCCI Holdings to the Audit Committee, Unaudited Results to 30 September 1989 and Outlook for the Year; Subcommittee document.

67. Bingham Report, id, Paragraphs 3l3-320.

68. Memorandum submitted by Price Waterhouse in reply to Questions from the House of Commons Committee on Treasury and Civil Service, February 5, 1992.

69. Minutes of Evidence Taken Before The House of Commons Committee on Treasury and Civil Service, July 23, 1991, Fourth Report, Banking Supervision and BCCI, printed March 4, 1992, p. 104.

70. Id, p. 108.

71. Id. Price Waterhouse's findings of the Section 41 report are reviewed in some detail in the chapter concerning BCCI's criminality.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

CLARK CLIFFORD AND ROBERT ALTMAN

Introduction

For twelve years, from BCCI's initial attempts to acquire FGB/First American in January, 1978, until their forced resignation in August, 1991 from their positions as the top officials of First American, former Secretary of Defense Clark Clifford and his law partner, Robert Altman, were the central figures in BCCI's acquisitions and management of U.S. banks.

During that time, they met with and represented BCCI's top management, major shareholders, major borrowers, and every figure of consequence who participated in BCCI's frauds in the United States. Their roles included:

** Representing Bert Lance in his sale of National Bank of Georgia (NBG) to BCCI nominee Ghaith Pharaon in 1977 and 1978.

** Representing Lance, BCCI, and all of the Arab shareholders in the Financial General Bankshares (FGB) takeover and all related litigation from late 1977 through late 1990.

** Representing Commerce and Credit American Holdings (CCAH), the new entity created to buy FGB, and several levels of holding companies below CCAH, from 1978 through late 1990.

** Acting as chairman and president, respectively, and directors of First American, from 1981 through August 1991.

** Negotiating First American's purchase of National Bank of Georgia from Pharaon and BCCI in 1985 and 1986.

** Handling legal matters for First American, and selecting First American's other counsel from 1978 through late 1990.

** Representing BCCI before state and federal regulators from 1978 through late 1990.

** Representing BCCI before Congress from 1988 through 1990.

** Purchasing shares of First American and borrowing funds from BCCI for their shares of First American from 1986 through 1989.

** Coordinating the legal defense of BCCI and of all of its officers charged in the Tampa case, including handling the selection of attorneys for all of the individual BCCI officers, following BCCI's October, 1988 indictment.

Clifford and Altman have testified that they were throughout this period deceived as to BCCI's ownership of and control of First American and other BCCI entities in the United States, and ignorant of the bank's wrongdoing in any material respect. In Clifford's words:

In all these years, we didn't encounter a single suspicious circumstance. . . Were we deceived? Apparently, we were deceived.(1) (emphasis added)

We have not violated any law. We have not been guilty of any impropriety. . . if all that we read about, this poisonous, constant stream of misconduct, if that is a true statement of what this bank did, then we have been grossly deceived.(2)

As Altman testified:

The allegations that relate to misconduct on our part, I want the record to be clear, that we deny them totally and completely.(3)

In contrast, numerous BCCI officers who appeared before the Subcommittee testified that Mr. Clifford and Mr. Altman must have known that BCCI owned First American. Abdur Sakhia, for instance, testified:

[I]n any management discussions . . . on our future in the United States, we would think of three entities -- BCCI, National Bank of Georgia and First American -- in the same breath. Who would be going where, who would work in which entity, what area of entity will be handled by which entity, allocation of businesses, markets, geographic territories, all took place as if this was one entity. . . [I]t is very hard to believe, very, very hard to believe, almost impossible to believe. . . that Clifford and Altman did not know [about BCCI's ownership of First American].(4)

Similar statements were made in public testimony and in staff interviews by BCCI officials Amjad Awan, Akbar Bilgrami, and Nazir Chinoy concerning Clifford and Altman's role in BCCI and First American.

While it is clear that no one, with the possible exception of BCCI's top two officials, Abedi and Naqvi, knew of all the criminal conduct at the highest levels of the bank's operations, numerous people at BCCI and associated with it did know of BCCI's ownership of First American, its use of nominees for acquisitions generally, its lending to First American's purported shareholders, and its strategy for expansion in the United States.

Findings

The Subcommittee received with care the detailed proffer of information and testimony provided by Clifford and Altman, and struggled to reconcile their statements with the other information provided to the investigation. Reaching judgments regarding the nature and extent of Clifford and Altman's intentions is impeded by the lack of witnesses to a number of key meetings over the course of a decade regarding BCCI and First American in which only Clifford, Altman, and BCCI's top two officials, Abedi and Naqvi, were permitted to participate. Few memoranda exist as to the substance of any of these meetings, and it was the practice of Abedi, Naqvi, Clifford and Altman to exclude all others from these meetings who might otherwise give witness as to what was discussed and decided.

Nevertheless, based on a review of all of the documents and testimony before the Subcommittee, the account provided by Clifford and Altman to the Subcommittee is not consistent with the facts. Regrettably, as the chapter below details, in case after case, explanations provided by Clifford and Altman concerning their conduct are contradicted not merely by sworn testimony of other witnesses, but by contemporaneous documents which set forth facts that are at odds with their testimony. The totality of the information concerning Clifford and Altman leads to the conclusion that regardless of whether they too were deceived by BCCI in some respects, both men participated in some of BCCI's deceptions in the United States. Testimony of mid-level BCCI officials, contemporaneous documents created by others, and the legal documents and correspondence involving Clifford and Altman directly, together lead to the conclusion that Clifford and Altman:

** Assisted BCCI in purchasing a U.S. bank, Financial General Bankshares, with the participation of nominees, and understood BCCI's central involvement in directing and controlling the transaction.

** Made business decisions regarding acquisitions for First American that were motivated by BCCI's goals, rather than by the business needs of First American itself.

** Represented as their own to regulators decisions that had been made by Abedi and BCCI on fundamental matters concerning First American, including the purchase by First American of the National Bank of Georgia and First American's decision to purchase branches in New York City. While these decisions were ratified by First American's board of directors, they were decisions made initially by BCCI and communicated to Clifford and Altman, who in turn secured ratification of them, as necessary, by First American's boards.

** Concealed their own financing of shares of First American by BCCI from First American's other directors and from U.S. regulators.

** Withheld from regulators critical information that they possessed to secret BCCI's ownership of First American.

** Deceived regulators and the Congress concerning their own knowledge of and personal involvement in BCCI's illegalities in the United States.(5)

Early Involvement

Clifford, Altman and Bert Lance each testified that their mutual involvement with BCCI began in the fall of 1977, in connection with Lance's decision to participate in a hostile takeover of Financial General Bankshares (FGB) in Washington, and the participation of a group of Middle Eastern investors, advised by BCCI.

But their accounts diverge as to how Clifford and Altman came to know BCCI and Abedi, and when Clifford and Altman began to participate with Lance and Abedi in planning BCCI's strategy for acquiring U.S. banks.

By Clifford and Altman's account, they knew nothing of BCCI and were introduced to the bank by Lance in December, 1977 and did not represent BCCI until mid-February, 1978 in connection with litigation with SEC and FGB's management. By Lance's account, Clifford's involvement with the case began two months earlier, soon after Lance met with Abedi in New York and discussed with Abedi BCCI's need to enter the U.S. market.

In Lance's account:

I went to see Mr. Clifford, who had represented me since Labor Day weekend of 1977, and I said: Mr. Clifford, I have made the acquaintance of Mr. Abedi. His bank is BCCI. He has some interest in talking to me about future relationships, whether that is in regard to being merely a consultant or being actively involved in one of his operations somewhere

. . . it is absolutely imperative and incumbent upon me to make sure that we know what kind of people that I am getting involved with . . . I asked Mr. Clifford, because of his knowledge and expertise . . . to do his due diligence on my behalf, as my attorney . . . Every instance o[r] report that I either got or from what Mr. Clifford told me came back that Mr. Abedi was a man of integrity and character.(6)

Based on the assurances he had received from Clifford, Lance went to London, met with Abedi again in late October, and began discussing the possibility of a takeover of FGB with Abedi and BCCI.(7)

In contrast, Clifford testified that the first he learned of BCCI was when Lance, as a "former client," brought Abedi to meet them in December, 1977 on "merely a social visit."(8) By Clifford's account:

One of the main subjects we discussed in that brief social meeting was the aid that he had for his bank, of providing the Third World with banking services which they had not ever had before . . . I found him to be pleasant and a man of importance. Thereafter, I'd hear from time to time that the little reports would sift in that Mr. Abedi and BCCI were in the process of acquiring stock in a company called Financial General Bank Shares. That's a bank holding company, centered in Washington. I had not heard of them before.(9)

In fact, in the period that Clifford testified he was merely hearing "little reports" sifting in "from time to time," Clifford and Altman were already representing Lance in connection with his attempt to sell the National Bank of Georgia to Ghaith Pharaon in a transaction fully negotiated by and handled by Abedi, ostensibly on Pharaon's behalf. This representation had begun no later than early December, 1977. As Lance testified, the negotiations concerning National Bank of Georgia with Abedi had taken place between Thanksgiving and Christmas, and were in that period turned over by Lance to his attorneys:

They [Mr. Clifford and Mr. Altman] were very aware of what I was trying to do and were very helpful to me in trying to do that. . . After discussions with Mr. Abedi about the National Bank of Georgia, I turned over these negotiations to Bob Altman to deal with Pharaon's attorney, a gentleman by the name of Frank Van Court, who is a member of the Vincent and Elkins law firm in Houston.(10)

Thus, Lance refers to an ongoing representation of him by Clifford and Altman, stemming out of Congressional testimony a month earlier, while Clifford describes Lance as a "former client." Lance places Clifford's involvement with him with BCCI in October, prior to discussions about the structuring of the FGB takeover, while Clifford places his first contact in late December. Lance places Clifford's representation of him on the BCCI-related acquisitions by December, while Clifford places the representation in mid-February. In each case, the difference between the testimony is that Lance places Clifford as a participant in the critical decisions that BCCI made in late 1977, while Clifford places himself at a distance from these decisions. Clifford's desire not to have been involved is understandable, because the manner in which Lance and the Middle Eastern investors chose to conduct their takeover bid for Financial General Bankshares would prove, within three months, to have been illegal by a federal judge.

A mid-December, 1977 article in The Washington Post provides irrefutable evidence of Clifford and Altman's involvement in negotiations by Lance at that time regarding investments by "Middle Eastern financial interests . . . into banks and other U.S. investments" in a deal in which the "matchmaker" was described as Abedi, head of BCCI. The article states that the Middle Eastern investors represented by Abedi want Lance "to set up a holding company to direct their capital into banks and other U.S. investments," and quotes Altman as confirming that negotiations between Lance and Abedi had taken place concerning the bank transactions:

"There are a lot of people who are trying to guess what's going on," said the attorney, Robert A. Altman, but he added that few are privy to the details. "The terms are still being negotiated. We hope to have a statement shortly."(11)

In the same article, Altman is described as announcing Lance's intention to sell his shares in the National Bank of Georgia as of early December, 1977 to an unnamed purchaser for $20 a share -- the exact amount paid in early January, 1978 to Lance by Ghaith Pharaon on behalf of himself and BCCI.(12) Thus, Altman and Clifford were already representing Lance in his negotiations over sales of his bank to Pharaon at the beginning of December, 1977; and in connection with the establishment of a bank holding company, obviously referring to the structure to be used by BCCI to acquire Financial General Bankshares, by mid-December, 1977; the period in which Clifford testified he had been privy only to "a social visit" from Abedi concerning other matters, and during which Clifford by his account did not represent Lance, described by Clifford as "a former client," at all.

Takeover of Financial General

As of January, 1978, Clifford and Altman were simultaneously representing Lance in his discussions with BCCI about the possible takeover of Financial General Bankshares; meeting with Abedi and other BCCI officials concerning that takeover; representing Lance in negotiations with Abedi and BCCI officials concerning the purchase of National Bank of Georgia by Ghaith Pharaon; and preparing to handle representation of the Arab shareholders who were ostensibly using BCCI as an "investment advisor" for the Financial General Bankshares transaction.

These roles were not being undertaken casually, or in a routine fashion, but in the context of what was about to become a high-stakes, highly-publicized hostile takeover of a major metropolitan Washington bank. The takeover bid was agreed to by Lance and BCCI in late November, 1977 and begun in December with purchases of Financial General Bankshares shares on the open market. It was structured so that each shareholder participating in the bid with BCCI would purchase an amount of shares just below the 5% that would trigger the requirement of SEC disclosure -- a strategy demonstrating some sophistication about and knowledge of U.S. regulations. The strategy, an obvious violation of SEC law if discovered, was dictated by the group's need to acquire an adequate block of shares in the FGB stock to challenge the controlling management of FGB, the Middendorf group, which already owned about 20 percent of the target bank.

This initial strategy created an underlying problem for Lance, BCCI, the Arab group, and its attorneys which was never corrected. If Lance, BCCI, the Arab investors, or their attorneys admitted the truth -- that they had been acting as a group from the beginning, purchasing blocks of FGB shares just under disclosure requirements to avoid premature disclosure and a more aggressive defense against the takeover by FGB's current management -- they would be admitting to possibly criminal violation of U.S. securities laws. Yet in denying this truth, they committed themselves to what was at the time a significant distortion of the truth, and a distortion which grew ever complicated over time.

Thus, an original, untrue proposition -- that the BCCI group was not a group at all, but a collection of Arab individuals who happened to use BCCI as a joint investment advisor, and who happened individually to independently become interested on the same week in the same U.S. bank -- was one which Clifford and Altman wound up maintaining from February, 1978 onwards, from the time the SEC filed suit against the Arab investors, Lance, and BCCI, charging that they had acted as a group, and had intentionally violated U.S. security disclosure laws by failing to disclose their intent to gain control over FGB. The representations made by Clifford and Altman concerning BCCI's role regarding First American in the years that followed were consistent with this original lie, and therefore inconsistent with the truth.

In their prepared testimony before the Senate, Clifford and Altman described the thrust of the SEC suit and their state of knowledge upon entering the case:

BCCI served as the banker and investment adviser to a number of wealthy Middle Eastern rulers and businessmen. Without our involvement or advice, four of these investors had purchased stock in an American holding company called Financial General Bankshares ("FGB"), the predecessor to First American, without filing certain disclosures with the Securities and Exchange Commission ("SEC").(13)

In their joint written statement to the Subcommittee, Clifford and Altman testified explicitly that they were not involved in the structuring of the original takeover attempt, the selection of the investors, or any other aspect of the transaction:

Without our involvement or advice, four of these [Middle Eastern] investors had purchased stock in an American bank holding company called Financial General Bankshares . . . without filing disclosures with the Securities and Exchange Commission ("SEC"). The SEC investigated these transactions, and the management of FGB, concerned that these purchases foreshadowed a possible corporate takeover effort, filed suit against the Arab investors, BCCI, Mr. Abedi, and others. We were retained to represent Bert Lance, Agha Hasan Abedi, BCCI, Sheikh Mohammed bin Zaied al Nayhan, Sheikh Sultan bin Zaied al Nahyan, Faisal al Fulaij, and Abudullah Darwaish.(14)

This account is contradicted by a January 30, 1978 memorandum found in BCCI files in Abu Dhabi by the Federal Reserve, and previously held in BCCI files in Karachi, Pakistan, from Abdus Sami, a BCCI official, to BCCI chairman Abedi. In this memorandum, Sami advises Abedi that Clifford personally approved the details of the plans for the takeover, and describes BCCI's intention to circumvent SEC disclosure by keeping purchases of the shares to just under 5 percent for each shareholder.

In the memorandum, Sami advised Abedi that in order "to keep ownership to below 5 percent we have to distribute the ownership to 4 persons of substance." Sami noted that "we have already given the names of Sheik Kamal Adham and Mr. Fulaij. We want two other names immediately." In the memorandum Sami also told Abedi that Lance had suggested the retention of Clifford as chief counsel "in view of the possibility of this [takeover] contest and also for presentation of the holding company application to Fed[eral Reserve]." According to Sami, "[I] met Clark Clifford and explained to him our strategy and goal. He was happy to know the details and has blessed the acquisition."(15) [emphasis added]

The memorandum clearly states that Clifford was involved in the FGB takeover from the beginning -- before two of the original four shareholders had even been chosen, before a takeover contest had actually begun, before an application was made to any regulator, before the SEC knew of any activity that might prompt its interest. The memorandum, found by the Federal Reserve in BCCI's files, is a contemporaneous representation of the understanding of the BCCI official most directly involved at the time in meetings with Lance and Clifford concerning the purchase of FGB. Accordingly, its clear import has to be given considerable weight.

The chronology in the memorandum is supported by the legal bills sent by Clifford and Altman to BCCI, and provided to the Subcommittee in the spring of 1992 by BCCI's liquidators. In their written statement to the Subcommittee, Clifford and Altman testified that they did not provide advice to BCCI, or its Arab investors, until the litigation involving the SEC and the Middendorf group, which began in mid-February 1978. But the bills from Clifford's law firm to BCCI, provided to the Subcommittee in May, 1992, demonstrate that they actually represented BCCI and the Arabs in January, 1978, just as Sami had specified, and contrary to Clifford and Altman's testimony.

Clifford, Altman and the Regulators

Neither Clifford or Altman were experienced in either banking law, or in takeover litigation. Accordingly, Baldwin Tuttle, a former Federal Reserve attorney, was retained to handle banking regulatory issues, and the law firm of Wachtell, Lipton, Rosen & Katz in New York was retained to advise on the takeover itself.

In the months that followed, numerous filings were made with banking regulators by Tuttle, the Wachtell firm, and Clifford and Altman on the behalf of the Arab investors, BCCI, and Lance concerning the nature and extent of BCCI's involvement in the transaction.

For example, the original application to the Federal Reserve of October 19, 1978, made by CCAH and the original Middle Eastern shareholders and signed by Altman, stated:

The proposed individual investors in CCAH have substantial funds and it is contemplated that the funds to be used by each of them to purchase the equity interest in CCAH will be provided from their personal funds and possibly from personal borrowings from one or more financial institutions (which would be unaffiliated with BCCI or any of its affiliates), except that at least an aggregate of $50 million will be provided from personal funds and not more than an aggregate of $20 million will be borrowed. Such investors intend that if personal borrowings are made, Financial General Shares purchased pursuant to the Offer will not serve as collateral for such borrowings. (emphasis added)(16)

A November 24, 1978 letter from Altman to the Federal Reserve Bank of Richmond reiterated the commitment that:

neither BCCI nor any other organization related to BCCI contemplates owning any equity interest in CCAH.(17)

On January 12, 1979, Altman again told the Federal Reserve by letter that the shareholders would not borrow from BCCI or its affiliates. In October, 1980, when CCAH resubmitted an application to the Federal Reserve signed by Altman, Altman reiterated that BCCI had no role in the transaction:

BCCI owns no shares of FGB, CCAH, or CCAI, either directly or indirectly, nor will it if the application is approved. Neither is it a lender, nor will it be, with respect to the acquisition by any of the Investors of either FGB, CCAI, or CCAH shares . . . All of the Investors in CCAH have substantial funds and the funds to be used by each of them to purchase their equity interest in CCAH will be provided from their personal funds . . . . No principal of Applicant will retain any personal indebtedness in connection with this transaction.(18)

As described in the chapter on BCCI's activities in the United States, ultimately the decision came down to a public hearing at the Federal Reserve on April 23, 1981 in which Clifford and Altman, along with Mr. Adham and Mr. Fulaij, made an appeal to regulators to allow the acquisition to move forward. As Clifford told regulators at the hearing when he was asked about BCCI's involvement in the acquisition, BCCI's role would be:

None. There is no function of any kind on the part of BCCI . . . I know of no present relationship. I know of no planned future relationship that exists.(19)

In their prepared testimony before the Senate, Clifford and Altman testified that they made full disclosure to the regulators at that meeting concerning the contemplated relationship between BCCI and the Middle Eastern investors who bought shares in CCAH. Clifford and Altman testified that the regulators "were advised that certain of First American investors were also shareholders in BCCI; that the investors used BCCI as their commercial and investment bank; that BCCI had provided and would continue to provide "advisory and other services to the shareholders with respect to their CCAH investments; and that BCCI served as a communications link with the investors."(20)

As discussed earlier, Robert Mannion, the Associate General Counsel for the Federal Reserve, who conducted the public hearing on the FGB takeover, broached the issue of the relationship between the Middle Eastern investors and BCCI on numerous occasions, but ultimately accepted the assurances of Clifford, Altman and the Middle East investors themselves that BCCI would neither own nor control Financial General Bankshares.

Part of the problem is that the permissible relationship between BCCI and First American was never explicitly set out by anyone at the Federal Reserve, beyond the original requirement that BCCI could not act as a lender to the shareholders for the original purchase of FGB, and was limited to acting as an "investment advisor," and conduit for information. The principal official regulatory discussion of the degree to which BCCI and FGB could interact was set forth in a letter to the Federal Reserve from the Deputy Comptroller General, Mr. William Muckenfuss, in a letter to the Chairman of the Federal Reserve Board, which became part of the record upon which the Federal Reserve's approval of the CCAH application was granted. The Comptroller's office signed off on the takeover of Financial General Bankshares, stipulating certain conditions:

It has now been represented to us that BCCI will have no involvement with the management, and other affairs of Financial General, nor will BCCI be involved in the financing arrangements, if any are required, regarding this proposal. This commitment is critical, both now, and in the future, since a relationship with another financial institution would be a significant factor in appraising this application. This is especially important in light of overlapping ownership, which will exist between Credit and Commerce Holdings, Credit and Commerce Investment, and BCCI. Moreover, any enhanced, direct or indirect affiliation or relationship between BCCI and Financial General, would take on even greater significance in light of the fact that BCCI is not subject to regulation and supervision on a consolidated basis, by a single bank supervisory authority."(21)

Testifying before the Subcommittee, Clifford acknowledged that he interpreted the Muckenfuss letter to have signified a definite agreement in three areas: "one, BCCI would not acquire any stock in First American at the time of the tender offer; two, that they would not, in any way, finance the purchase of the stock in First American; and three that they would have no control over the operation of First American."(22)

Clifford's interpretation of the obligation differs from the plain text of the Muckenfuss letter and OCC's requirements. OCC stated that its approval was condition on BCCI not being involved with management. For that concept, Clifford unilaterally substituted the word "control," a substantially less stringent standard than that which the OCC actually required.

Concerning the first point, no documents have been found by the Subcommittee which definitively prove Clifford and Altman knew BCCI had acquired stock in First American prior to the conclusion of the FGB acquisition. But the Sami memorandum contains material suggesting that precisely such an arrangement had been approved by Clifford in the early days of the FGB takeover, and other documents provide circumstantial documentation of Clifford's knowledge about the proposed Middle Eastern shareholders in FGB not being at risk.

An October, 1978 telex from former CIA Director Richard Helms to Mohammed Rahim Irvani, one of the original investors, shows Helms advising another BCCI front-man on language designed to hold him harmless for acting as a front-man for BCCI. The language of the telex states that by agreement, Irvani would be not be liable for any liability caused by granting a power of attorney to Clifford and his firm in connection with the FGB takeover, and suggests that this language be sent to the Clifford firm.(23) Irvani was then listed, within days of the telex, in an application filed with the Federal Reserve by Altman on behalf of CCAH, listed as one of its intended principal shareholders, along with representatives of the Abu Dhabi royal family, and Faisal al Fulaij -- another nominee for BCCI.(24)

What was unusual about this agreement provided to Irvani by Helms at the time of Irvani's application to the Federal Reserve as a shareholder of CCAH is not the power of attorney given to Clifford and Altman -- they would hold a power of attorney for all of the Middle Eastern investors -- but rather the indemnification, which essentially states that Clifford and Altman have the power to act in Irvani's name without liability attaching to Irvani -- meaning that someone else, presumably BCCI, would be indemnifying Irvani against any possible liability as a result of the use of his name. As a result, Irvani would not be at risk for any actions he participated in during the takeover, and therefore would be understood to be a nominee by anyone knowing of the indemnification.

On point two, William Taylor, the head of Banking Supervision for the Federal Reserve, and Gerald Corrigan of the New York Federal Reserve, gave credence to Clifford's interpretation in testimony before the House Banking Committee. Corrigan stated that "there was no prohibition of borrowing from First American even when the stock of First American was placed as collateral." According to Altman, the only prohibition on pledge of stock was for the initial takeover. Nevertheless, Taylor's and Corrigan's testimony is at odds with the specific language of the Muckenfuss letter relating to "financial arrangements .... both now and in the future." Moreover, whenever Clifford and Altman clearly knew of such borrowing by First American shareholders from BCCI against collateral, such as in connection with their own such borrowings, various rights offerings, and First American's purchase of National Bank of Georgia, they took steps to hide this information from the regulators.

On point three, Clifford and Altman have remained adamant that BCCI never exercised any control over First American. On this point, however, there is substantial evidence to the contrary.

Management of First American

In testimony to the House Banking Committee, Clifford stated that "Before accepting the offer to serve [as Chairman of First American] however, a fundamental agreement was made with the shareholders on the issue of authority," that he [Clifford] would run the bank. (25) Counsel for Clifford acknowledged, however, that "the specific agreement... was an oral agreement" and that there was nothing in writing to support their client's assertion.(26) Clifford characterized his involvement in the operations of the bank as "no ivory tower experience for us." He explained that "This was a hands-on occupation. I took it as my first obligation."(27)

However, BCCI in fact participated in the selection of First American's top management from the outset of Clifford and Altman's tenure. As detailed in the Federal Reserve's summary of charges, Abedi, BCCI's CEO, interviewed a series of candidates for the new chief executive officer of First American, including former Citibank president William I. Spencer, Daniel J. Callahan, James Drumwright, and Robert Stevens, the last of whom ultimately became First American's CEO and president. While Spencer turned down the job offer after meeting with Abedi following an introductory meeting with Clifford, Callahan was informed by Clifford that he would not be offered the position of CEO of First American because Callahan had requested "exclusive administrative, operational and executive control" of the bank.(28)

Clifford's involvement with Abedi in this process -- which begin within days of the April 23, 1981 hearing before the Federal Reserve -- is evidence of his understanding at the time that BCCI would have a substantial say in the most important decisions affecting First American's future, beginning with the selection of a CEO. Contrary to the assurances provided the Federal Reserve by Clifford and Altman, no CEO would be chosen who would require full autonomy in decisions regarding the bank.

In prepared testimony before the Senate Foreign Relations Committee, Clifford and Altman stated that "The evidence is conclusive that the two companies [BCCI and First American] had different -- and incompatible--operating policies and procedures, strategic concepts, bank support functions, staffing and administrative programs, customer bases and controls and systems." Clifford cited as proof that BCCI did not control First American the testimony before the House Banking Committee of Robert P. Black, the Chairman of the Richmond Federal Reserve.

who said, that in a review of First American's activities in 1991, "we have found no evidence of influence or control."(29)

In practice, BCCI's involvement in day-to-day affairs of some of First American's members banks was either very limited, or non-existent, and in others, such as First American Virginia, the institution under the jurisdiction of the Richmond Federal Reserve, limited to a few transactions. But in other parts of First American, including First American Georgia and First American D.C., BCCI clearly influenced both important banking investment decisions and other transactions. In connection with First American New York, BCCI controlled most of the critical decisions by First American, including the hiring of management, the size, location and choice of office space, and the business strategy. More importantly, when it came to fundamental issues of First American's acquisition and sales strategy, BCCI's needs over the course of a decade repeatedly dictated First American's decision making, rather than independent business judgments by the U.S. officials of First American.

First American New York

In their written testimony to the Subcommittee, Clifford and Altman made the following presentation concerning the issues related to BCCI's involvement with decisions concerning First American New York:

BCCI has not in any way controlled First American Bank of New York ("FABNY"), much less the First American organization. These events now being questioned cannot be viewed in isolation, and are related to unique circumstances in New York during the 1982-1983 time period. . . In connection with the 1981-1982 regulatory proceedings to acquire two New York banks owned by FGB, an application was submitted to the New York State Banking Board. Due to strong opposition, the investors agreed to divest the New York City bank following the tender offer. The Middle Eastern investors, in effect, were forced to create a new bank in New York City -- an unforeseen development.

As a result, an entire management group to operate the New York bank had to be identified and hired. Mr. Abedi, as investment advisor to the shareholders, was consulted about bankers whom he might know or recommend for employment by the new First American Bank of New York. This assistance was particularly welcome as FABNY was to have an international banking capability, and Mr. Abedi's background was devoted to international banking. At no time, however, did Mr. Abedi make decisions concerning the selection, hiring, or dismissal of officers. Final authority -- as made clear by Board minutes -- rested with Mr. Clifford and the FABNY board.(30)

However, in testimony before the Subcommittee, Altman acknowledged that the circumstances pertaining to BCCI's involvement in the establishment of a New York office for First American had lead to BCCI being unusually involved in some of the start-up functions of First American there.

When the acquisition was completed in the spring of 1982 we were then in a very awkward and, to some extent, unhappy posture. We were under an obligation to sell the New York City bank. And we were under a need to set up a new bank and really set it up from scratch. We had nothing in the city. We had no staff. We had no location. We had no resources. It put us, as I say, in a difficult position.

Now throughout the takeover litigation and during the regulatory proceedings, we essentially had two contacts in New York. One was the law firm of Wachtell, Lipton, Rosen & Katz that was co-counsel with us and represented the shareholders during these proceedings. And the other was BCCI, which had a representative office and was acting as the investment advisor. . . And so we went to the people we knew at Wachtell, Lipton and we asked the attorneys did they know of space in the city. And they did. And they recommended space. And we went to BCCI's representative office in New York, which was then headed by this man, Elley. And he also attempted to assist us by telling us of brokers or space that he was aware of. And, indeed, this was something that I worked on personally.

But I was not in New York City and when I would go up there and I was to get back messages or information, I would usually ask people to send it either to BCCI in New York or to the New York lawyers. They acted, in effect, as a local contact for us.

And so BCCI was trying to be helpful to us. Now this did not seem particularly out of the ordinary.(31)

Thus by Altman's account, BCCI, like Wachtell, Lipton, was acting a local contact and assistant to help First American establish its presence. Unfortunately, the account does not square with other information obtained by the Subcommittee concerning the circumstances which lead to the opening of the New York office of First American, nor does it provide any business justification for First American having made the decision to open a New York office in the first place.

To begin with, there was no obvious business justification for First American to purchase two branches in New York City from Banker's Trust, where banks like Citibank, Chase Manhattan, and Chemical Bank collectively had many hundreds of branches. Indeed, a decade later, George Davis, Clifford's successor as CEO of First American, would conclude that the New York operation of First American had lost money for years and remained in 1992 a drain on the resources of First American overall.(32) By contrast, Abedi and BCCI had made acquisition of a bank in New York his priority since 1975, while First American had not done any preparation in insure its ability to do business there. Again, in Altman's words:

We had nothing in the city. We had no staff. We had no location. We had no resources.(33)

The obvious question was why First American, under the circumstances, would as among the earliest actions of Clifford and Altman at the head of First American, go ahead with expanding First American's operations through purchasing New York branches under such difficult conditions. The answer, as numerous BCCI memoranda suggest, was that Abedi and BCCI needed the branch to act as an outpost in the U.S. for BCCI's international operations, and that Clifford and Altman were essentially acting as covers for BCCI's acquisition there, that had been previously blocked by New York bank regulators when BCCI sought to go in directly.

For example, a memorandum dated July 25, 1983, from BCCI employee Aijaz Afridi to BCCI Number 2 Swaleh Naqvi, with copies to BCCI officials Kemal Shoaib and K.K. Elley, described BCCI's plan for First American New York in terms that suggest it would operate independently from the other First American banks. According to this BCCI official, while operating independently, First American New York would be subsidized by the other First American banks, using their assets as sources of funds and their clients as sources for "their entire international business," with First American New York becoming "their Central Treasury."(34)

The BCCI memorandum discusses such issues as how to achieve growth and profitability for First American New York, how to project its image domestically and internationally, how to introduce the bank to Third World countries, new products and services, and related issues. Under "basic assumptions," Afridi noted:

Management style and Philosophy will be on the pattern of BCC -- No interference from the Holding Co. and free hand to the Management.(35)

The record also shows that BCCI's involvement in directing the establishment of this office was pervasive. For example, as both BCCI officials and BCCI documents show, it was BCCI, not First American, that determined how much office space First American would lease in New York. As Sakhia testified:

The decision of hiring, decision for acquisition of space . . . the New York office of First American was identified by BCC officers and approved by Mr. Abedi. He made the decision to rent that space.(36)

The space that was rented by First American was 350 Park Avenue, close to the offices already established by BCCI in New York at 320 Park Avenue. According to the Federal Reserve, and contrary to Altman's sworn testimony, it was BCCI, not Wachtell, Lipton, that directed the choice of a location, and when Clifford and Altman objected to the cost of the location, they were overruled by Abedi.(37)

Over the ensuing decade, the space would prove grossly excessive for the actual needs of First American, and its costs would become a significant drain on First American's resources. A letter dated December 13, 1982 from Elley to Swaleh Naqvi, Abedi's number two at BCCI, on BCC New York stationery, documents the nature of the relationship between BCCI and First American in New York. In the letter, Elley brings Naqvi up to date with a meeting he has had with Altman concerning the First American Bank in New York, and covering the subletting of space at 350 Park Avenue, renovation of the space, selection of board directors, recruitment of key staff, selection of auditors and attorneys, and coordination with the holding company and the shareholders -- all matters being handled for First American by Elley as a BCCI employee and reported to Naqvi, the BCCI senior executive at a time when Clifford and Altman were ostensibly in control of First American.(38)

BCCI also handled the purchase of new branch offices in New York for First American. In March 1983, while Elley was still employed by BCCI as head of its New York representative office, he began discussions with Bankers Trust officials regarding the purchase of branches of their bank for First American. Six weeks later, when First American submitted bids for the branches, BCCI officials -- not First American officials -- handled the negotiations.(39)

For instance, in an October 14, 1982 letter to Swaleh Naqvi, Khusro Karamat Elley, an employee of BCCI in New York, wrote concerning "the subletting of space, ... selection of board of directors, recruitment of key staff, selection of auditors, selection of lawyers, compensation package, including fringe benefits, projections for first year's operations, coordination with holding company and shareholders." (40)

Another letter written by Mr. Elley to Mr. Naqvi concerns the Board of Directors of First American Bank in New York and Mr. Elley's recommendation of Mr. Richard Paget to the board. In response to a question regarding the Paget recommendation, Altman testified only that:

We had a very unusual situation that developed in New York. And you were focusing on a period nearly 10 years ago, very limited in time.(41)

Clifford and Altman's written testimony referred to a single candidate for First American New York recommended to them by Abedi.(42) In fact, as specified below, BCCI had direct involvement in, and apparent control over, numerous key personnel decisions in First American New York beginning in early 1982 and continuing through at least early 1986.

For example, in October, 1982, Abedi had contacted Joseph Feghali, the president of another bank with whom BCCI had a correspondent banking relationship, interviewed him in Los Angeles, and offered Feghali the position of president and CEO of First American New York. In subsequent meetings, Abedi and his number two at BCCI, Naqvi, offered Feghali a seven-year contract with First American, including benefits and salary for Feghali, before Feghali had communicated with either Clifford or Altman. Only after these decisions had been made did Feghali meet with Altman. At that point, Altman and Feghali met to discuss First American New York operations with Elley, and continued further negotiations over the terms of a draft employment contract Altman provided Feghali, who ultimately turned down the offer from BCCI and from Altman for medical reasons.(43) Later, this scenario was repeated in 1983 in connection with BCCI first interviewing and then recommending to Clifford and Altman the hiring of Bruno Richter as CEO and president of First American New York, a position he accepted in July 1983.(44)

Following Richter's hiring by Clifford and Altman, he in turn sought to hire other bank officials for First American New York who were required to interview not only with Altman, but with Abedi and Naqvi in London. Later, when Clifford and Altman became unhappy with Richter, his firing was discussed at length with Abedi by Clifford and Altman. His replacement, William Duncan, was selected as First American New York's new president and CEO only after interviewing with Abedi in London.(45)

Ultimately, two BCCI officers, Elley and Afridi, were transferred by BCCI's New York agency to First American New York. Naqvi discussed the issue with Altman and then offered Elley a position at First American New York as senior Vice President. After leaving BCCI for First American, both officers continued to receive BCCI benefits including reimbursements from BCCI for gas, electric and telephone bills, as well as concessionary mortgage rates from BCCI.(46)

The minutes of a BCCI U.S. marketing meeting held in 1985 describe the participation of these two former BCCI officials during their tenure at First American in meetings aimed at strengthening BCCI's control of the U.S. bank. As the memorandum stated:

"Mr. Afridi opened the meeting and emphasized that the purpose of the meeting was to coordinate the efforts of different locations of BCCI and other institutions [emphasis added] so that the President's desire to have a totality of approach is achieved. It is a great challenge that the group faces in the present and future U.S. operations."(47)

Afridi was a former employee of BCCI who at the time was working for First American of New York and, according to the memorandum, "requested the members to work together to overwhelm the U.S. market. Historically, we have not made a calculated approach to the U.S. market." When Senator Kerry asked Mr. Altman to comment on the memorandum, Mr. Altman, who did not attend the meeting, said, "I can't explain what this does mean.....I can't comment on the propriety of what the participants were doing, but I think it is troubling."(48)

When asked by Senator Kerry if Mr. Elley and Mr. Afridi, whom Mr. Altman had hired from BCCI, were working behind his back on the joint marketing plan, Altman replied. "That is correct."(49) However, Abdur Sakhia, the head General manager for U.S. operations, testified that Altman talked to him personally "about [joint BCCI-First American] marketing."(50)

First American Bankshares' Capitalization

The handling of First American's capitalization by BCCI and by Clifford and Altman raise further substantial questions about their independence of BCCI's control in handling First American's most important financial transactions -- its capitalization. BCCI's direct involvement with Clifford and Altman in connection with financing for First American began almost immediately after the Federal Reserve approved the CCAH application, and continued throughout the 1980's.

As the Federal Reserve found in its summary of charges, on about May 13, 1982, BCCI or ICIC Overseas made a payment to one of First American's holding companies, CCAI, of $2.5 million to permit it to pay interest on a loan from BAII, followed by a second payment of $2.3 million on about July 13, 1982 from BCCI or ICIC Overseas for the same purpose. According to the Federal Reserve, these payments violated the commitment made by Clifford and Altman and CCAH that no more than $50 million in debt would be incurred by CCAH and its subsidiaries for the acquisition of FGB, because they represented an addition $4.8 million in debt to BCCI or ICIC Overseas by CCAH. The Federal Reserve additionally found that they violated the commitment made that BCCI would not fund the CCAH acquisition of FGB, a commitment violated through the payment of the interest.(51)

Two weeks after the second payment, CCAH's outside auditors, Ernst & Whinney, who at the time were also auditing BCCI's Luxembourg holding company, wrote to BCCI and to Altman concerning the $4.8 million in new funds, and describing the new funds as a capital contribution by a new investor. In effect, the auditors were viewing the payment by BCCI to be a capital contribution by BCCI entitling it to own shares in First American. In response, BCCI told the CCAH manager in the Netherland Antilles and the auditors on September 20, 1982 that the funds should be treated as a short-term subordinated loan from the shareholders of CCAH, making it a loan from BCCI to all of CCAH's shareholders. Six months later, Altman wrote the CCAH manager in the Netherlands Antilles that only one CCAH shareholder had lent the money -- Kamal Adham -- despite knowing that BCCI itself had lent the money and was now using Adham as a pass through or nominee. Later, after BCCI officials in London complained about how much the loan was costing BCCI, Altman directed CCAH to prepay the loan 19 months prior to its maturity, replacing it with a new loan at a higher interest rate, costing CCAH $152,0000 over the remaining term of the loan.(52)

In August, 1982, BCCI provided $30 million to First American through its holding company, CCAH, to purchase the remaining common and Class A shares of Financial General, making FGB a wholly-owned subsidiary of CCAH by eliminating any shareholders from Financial General who were not controlled by BCCI. As the Federal Reserve found:

At the time CCAH received and used the funds, no decision had been made as to the method by which they would be reflected on the books of the company. The board of directors had not authorized the issuance or sale of additional shares of the company, and no decision had been made as to whom, if anyone, new shares would be issued.(53)

In effect, the $30 million capital contribution gave BCCI a direct stake in First American less than one year after the Federal Reserve had approved its application on the understanding that BCCI would not be involved. Alternatively, the $30 million could be characterized as a BCCI loan to First American, also prohibited by the Federal Reserve. It took BCCI over four months to decide how to structure the contribution. Its conclusion was to direct its resident agent in the Netherlands to direct Altman to treat the $30 million as capital contributions from three existing Middle Eastern shareholders and from a fourth new shareholder, Sheikh Khalifa Bin Zayed al Nahyan. The resident agent provided Altman with back-dated resolutions authorizing this handling of the funds, which Altman duly had signed by CCAH's directors.(54)

In 1983, when CCAH raised $75 million in additional capital through a "rights offering," BCCI again paid the funds to First American, advancing the purchase price for the shares, despite the fact that responsibility for payment of the funds had not yet been allocated among the various shareholders in accordance with their acceptances, or waivers, of the shares due them in the rights offering. According to the Federal Reserve's summary of charges:

Altman was aware of BCCI's payment, and was concerned that the funds had not yet been allocated among the various shareholders . . .(55)

Later in 1983, when BCCI failed to provide an additional $25 million requested by CCAH, BCCI provided CCAH with a $20 million credit line, stating that CCAH had requested the loan. These funds were paid by BCCI to First American, with documentation created later attributing the lending to Kamal Adham, a key front-man for BCCI in the CCAH stock purchases. Tellingly, although BCCI treated Adham as the lender of the funds, Altman and another partner at Clifford & Warnke dealt exclusively with BCCI concerning the terms and repayment of the loan, despite Altman's frequent contacts with Adham on other matters pertaining to First American. Later, another Clifford & Warnke attorney drafted loan documents memorializing Adham's involvement in the matter, back dated two and a half months, and signed by Altman, which were provided to BCCI for Adham's signature.(56)

In future years, Clifford & Warnke lawyers communicated with BCCI a number of times concerning the "Adham" loan, and described the loan in two instances as one "arranged by you [BCCI] in our favor."(57) Despite BCCI's handling of every aspect of the loan, including the original disbursement to First American, Altman in filings with the Federal Reserve described it as a "loan from Investor." In 1991, when Altman gave sworn testimony to the Federal Reserve, he represented that the loan was made to CCAH by Adham.(58)

First American's Purchase of NBG Perhaps the clearest example of Clifford and Altman undertaking an action, ostensibly on behalf of First American, but directed by BCCI, was First American's decision to purchase the National Bank of Georgia in 1986 from Ghaith Pharaon. Clifford and Altman have testified that they "learned that the owner of NBG, Ghaith Pharaon, was in financial difficulty and might be willing to sell his bank."(59) Clifford and Altman describe the acquisition of the National Bank of Georgia by First American in 1986 as a "reflection of First American's consistent corporate strategy of expansion since 1982," suggesting that it was mere coincidence that First American purchased a bank already owned by another member of the BCCI family, Pharaon, and which they understood to have adopted BCCI's hexagonal logo and banking practices.(60)

As the Office of the Comptroller of the Currency had suspected in early 1978, BCCI in fact owned 50 percent of National Bank of Georgia (NBG) from the moment of its ostensible sale to Ghaith Pharaon in May of that year, with Pharaon acting as BCCI's nominee for those shares to avoid the hostility regulators had already demonstrated towards any direct acquisition by BCCI. If any of Pharaon's creditors attached NBG's assets, the ensuing civil litigation could threaten to reveal this secret interest, with the result that BCCI be destroyed. Accordingly, BCCI decided to consolidate its U.S. holdings through the sale of NBG to First American, as specified in some detail in the chapter on BCCI's later activities in the U.S. Thus, while BCCI's business need to bring about this purchase is clear, First American's was not, especially given the actual underlying problems at NBG, which had begun when the bank had been under the control of Bert Lance and accelerated as a consequence of BCCI's management of NBG while Pharaon held the bank.

BCCI's Business Need for First American/NBG Purchase

On January 1, 1985, Pharaon executed a secret "Memorandum of Deposit" with BCCI which provided that all of the outstanding shares of NBG Financial would be deposited with BCCI as collateral for loans to Pharaon and his companies, and giving BCCI "or its nominees" the right to vote the shares. As a result, as of that date, BCCI had effective control over the 50% of the shares of NBG which had been BCCI's from the beginning.(61)

By November 1985, with Pharaon's financial difficulties intensifying, BCCI's auditors, Price Waterhouse, began to express concern to BCCI about its exposure to Pharaon and calling on the bank to reduce this exposure. In fact, a portion of this exposure was related to Pharaon's holding of NBG on BCCI's behalf.

Accordingly, BCCI and Pharaon agreed to liquidate Pharaon's 50% interest in NBG, and sell his holdings of NBG stock held by Pharaon Holdings Limited back to NBG Financial, now controlled by BCCI. At this point, BCCI had direct and total secret control of all of the outstanding shares of National Bank of Georgia, and had demonstrated to Price Waterhouse its ability to force "loans" to major borrowers like Pharaon to be "repaid." But these financial manipulations did not solve the other serious problem created by Pharaon's deteriorating financial condition -- the possibility that creditors might seek to attach the shares of NBG Financial -- still officially "owned" by Pharaon. The result would not merely put BCCI's ownership of NBG at risk, but could set in motion the destruction of BCCI's entire empire in the United States and possibly globally.(62)

In London, Abedi looked at the NBG situation and determined that the simplest solution to the Pharaon problem was to merge National Bank of Georgia into First American, and thereby take Pharaon out of the picture. In the terms of the Federal Reserve charges, "in December 1986, BCCI caused CCAH to agree to purchase the shares of NBG [Financial] from Pharaon for $220 million."(63)

Significantly, while the transaction did not close until August 19, 1987, First American provided $80 million at the end of December, 1986 as an option on the purchase, securing those $80 million worth of shares and leaving Pharaon "holding" only a remainder of $140 million worth of the bank -- shares already held by BCCI as security for defaulted loans. Thus, any outsider who tried to attach Pharaon's shares in NBG would find that as creditors, they were now in back of First American and BCCI, making such an attachment of little legal value and thereby protecting the shares. From the point of view of First American, however, this secret arrangement had a significant problem. BCCI's security interest in NBG preceded that of First American. If something went wrong, First American might not be able to recover its $80 million.

BCCI's Understanding of First American Purchase of NBG

Within BCCI at the time, it was generally understood that the sale of NBG from "Pharaon" to "First American" was principally a consolidation of BCCI entities within the United States. As Abdur Sakhia testified, First American had been planning to expand its operations to Florida in the mid-1980's, and had never discussed a move into Georgia, until 1985. In late 1985, he became aware that Pharaon's financial situation had become shaky, and at Abedi's request arranged for a meeting to take place in Miami in November of 1985 involving Abedi, Naqvi, Clifford, Altman, and two officials from National Bank of Georgia -- Carlson and Jamil. No one else was permitted to attend the meeting. After it ended, Abedi came out and told Sakhia and other BCCI officials that National Bank of Georgia would be merged with First American.(64) Abdur Sakhia remembers organizing the meeting. According to Sakhia, it was at this meeting that the decision was made to merge National bank of Georgia and First American. According to Sakhia, afterwards he met with Abedi, who talked of "merger and not buy and sell."(65)

Later, in preparation for BCCI's possible purchase of a bank in Florida, Sakhia was provided with a model file of the Independence Bank transaction, which showed Pharaon's role as a nominee, which was to be the model for the purchase of the Eagle Bank by BCCI. Sakhia then met with Naqvi in Luxembourg, and discussed BCCI's planned purchase of Eagle, with Faisal al Fulaij to act as the nominee instead of Pharaon. Altman was present during the conversation, and thus participated in a meeting in which the use of nominees by BCCI to purchase banks in the U.S. was discussed.(66) Altman's knowledge of this practice by BCCI and by Pharaon in connection with Independence would obviously have been important in the NBG transaction, causing him as a lawyer to have asked many questions concerning the relationship between BCCI and Pharaon. No document provided the Subcommittee shows Altman having ever expressed concern about the possibility that Pharaon was a nominee. The obvious explanation is that he did not do so because it was a fact Altman already knew, and because Altman himself had become a party to the arrangements involving BCCI and Pharaon.

After the Miami meeting, Sakhia wrote Abedi in London in February 1986 regarding BCCI's "Future Plans in the United States." In the memorandum, Sakhia referenced his discussions with Altman concerning the planned purchases by BCCI of banks in Florida. In a paragraph concerning the National Bank of Georgia, Sakhia suggested that in view of "the forthcoming restructuring of the bank in Georgia, it may be useful to merge their Miami operation with BCC Overseas, Miami, as this will offer additional dollar deposit and correspondent banking relationship to BCCI Overseas."(67)

Clifford and Altman's Explanation of NBG Transaction

In their written testimony before the Senate, Clifford and Altman denied that the acquisition of NBG by First American was directed by BCCI, stating instead that the acquisition:

was a reflection of First American's consistent corporate strategy of expansion since 1982 . . . in December 1986, based solely on its judgment of First American's best interests, the CCAH Board approved the proposed acquisition of NBG. BCCI did not influence these deliberations, nor did it control the Company's decision to acquire NBG. First American, not BCCI, initiated the NBG acquisition.

The price paid by First American was reasonable and determined free of control by BCCI.(68)

As Altman told journalists in 1986 who wondered at the coincidence of Clifford and Altman buying the bank once held by Lance and whose sale by Lance to Pharaon they had participated in:

It was clearly an arms-length business deal, that is to suggest we didn't get any special consideration in terms of price. . . It's a logical move for us in terms of our market expansion.(69)

In answers to written questions from the Subcommittee, Altman denied attending any meetings regarding the NBG purchase by First American in Miami, as described by Sakhia. However, Roy P.M. Carlson, the former President of NBG, has told Subcommittee staff that he, Mr. Clifford and Altman all met together at the Grand Bay Hotel in Miami in February 1986 to discuss the price for NBG.

Unfortunately, the statements made by Clifford and Altman to the Committee regarding the National Bank of Georgia transaction cannot be reconciled with the documentary and testimonial accounts of the other parties involved.

Federal Reserve Findings on NBG Purchase On July 29, 1992, the Federal Reserve issued a lengthy summary of charges against Clifford and Altman in connection with their roles in BCCI and First American, including 350 paragraphs setting forth their roles in connection with alleged violations of various federal regulatory provisions. Of those 350 paragraphs, 78 paragraphs were devoted to Clifford and Altman's handling of the purchase of NBG by First American, and they define in detail the factual basis for concluding that the purchase was occasioned not by the independent needs of First American, or an independent business judgment by Clifford and Altman, but by BCCI. The following account summarizes the Federal Reserve evidence and findings.

The Federal Reserve found that in 1977, Pharaon became the nominal owner of National Bank of Georgia in a transaction negotiated and bankrolled by BCCI, and in which BCCI had a secret 50 percent interest from the beginning. While nominally owned by Pharaon, NBG employed several BCCI officials, NBG personnel regularly attended BCCI conferences at BCCI's expense, NBG adopted BCCI's management style and hexagonal logo, and revised its business orientation from a retail bank to an international bank.(70)

In February 1983, Altman joined National Bank of Georgia officials at a BCCI-sponsored conference in New York, whose purpose was to integrate NBG into BCCI's corporate culture. Following a presentation by BCCI officials, an executive vice president of NBG, William Batastini, "gave public remarks at which he expressed his happiness at being part of the BCCI family," in Altman's presence. Batastini then repeated these remarks at a later annual conference of BCCI in Athens in March 1983, again in Altman's presence.(71)

By January 1, 1985, BCCI, in the course of restructuring Pharaon's loan portfolio with BCCI, acquired control of all NBG shares. In November, Pharaon's financial problems -- including a possible default on a $200 million loan that had been syndicated to a number of banks -- became public -- with the result that the prospect of liens on Pharaon's property by creditors became a significant threat. Moreover, the news caused Price Waterhouse, BCCI's auditor, to express concerns about BCCI's exposure to Pharaon, and to urge that BCCI call in loans to reduce its exposure. As the Federal Reserve found:

Because BCCI secretly owned and controlled NBG and its shares, an attachment of those assets by Pharaon's creditors threatened BCCI with a substantial financial loss. . . BCCI thus had an incentive to cause NBG to be sold to another BCCI nominee, one that would not be subject to levying creditors.(72)

Accordingly, BCCI began to plan the sale of NBG to CCAH and First American. In September 1985, Altman met with NBG's president, Roy Carlson, who had been placed at NBG by Abedi, who had known Carlson through Carlson's work at the Bank of America when Bank of America owned a stake in BCCI, and two other NBG officials. At the time, Georgia law prohibited the acquisition of a Georgia bank of a bank holding company, such as CCAH, which had substantial assets outside the south. The following month, Altman asked First American's Treasurer, A. Vincent Scoffone, to conduct a preliminary evaluation of NBG to determine a purchase price for NBG. Scoffone estimated that NBG's book value was approximately $80 million, and that based on recent bank sales prices of Georgia banks, a realistic price for NBG would range from $120 million to $180 million. At the time, Scoffone warned that "no review has been performed on the quality of the asset base. Such a review is mandatory before any real meaningful analysis can be made regarding the tangible net worth of NBG."(73)

According to testimony from Sakhia, and the summary of charges of the Federal Reserve, in November, 1985, Clifford and Altman attended a conference of BCCI managers in Miami, including Abedi, Naqvi, Sakhia, and two NBG officers, Carlson and former BCCI official Tariq Jamil. Following a conference with the managers, Clifford and Altman met separately with Abedi, Naqvi, Elley, Jamil and Carlson, during which Abedi decided and announced that NBG would be sold to CCAH, that Jamil would be transferred from NBG back to BCCI's headquarters in London, and that Elley would be transferred from First American New York to NBG to replace Jamil. Some time later, Altman told Sakhia he was not pleased with Abedi's decision to purchase NBG and that he would not have purchased the bank of his own free will.(74)

In February 1986, in connection with an evaluation of Pharaon's holdings, an independent valuation of NBG was conducted by the firm of Keefe, Bruyette & Woods, which determined that NBG was worth between $130 million and $144 million, and a copy of this report was provided to the firm of Clifford & Warnke. In May, 1986, First American's Treasurer, Scoffone, conducted a second analysis of NBG's value, without having been told by Clifford of Altman of the Keefe, Bruyette & Woods valuation. In a memorandum to Altman dated May 7, 1986, Scoffone concluded that based on the median purchase price for banks within the past year, its value was $152 million. Arguing that "NBG may be a unique situation because of its location in Atlanta, Georgia," Scoffone said that "a premium over the median purchase price may be appropriate," and on that basis concluded that a fair price for NBG would be $211 million if one assigned a higher multiple times book price for the shares than banks in the Georgia region had been sold for during the past year. He also acknowledged that at such a price:

this transaction would be highly beneficial to the present owner of NBG. The bank would be sold at a significant premium over both the national and local median sales prices.(75)

Contrary to normal banking practice on a purchase of this magnitude, Clifford and Altman did not retain an independent investment banker to assist in valuing the shares, as they had previously done in the purchase of branches for First American in New York from Banker's Trust in 1983, and would do again in 1990 when they were considering the sale of First American overall. Instead, First American relied on Scoffone's evaluation, and Altman became the sole representative of First American in negotiations over the acquisition and the structuring of the transaction. Significantly, in doing so, Altman did not deal with Pharaon, but with Abedi, Naqvi, and other BCCI officials.(76)

On May 8, 1986, Altman wrote Naqvi, enclosing Scoffone's evaluation, and expressing his hope that the purchase price would be in the range of $160 million to $175 million, as "we are nearing the point at which this purchase is too expensive."(77) A week later, meeting in London with Batastini at BCCI's London headquarters, Altman and Batastini agreed to a purchase price of $205 million, of which $80 million would be paid up front for an option to purchase, and $125 million upon consummation of the transaction. Under the agreement, First American (CCAH) would pay Pharaon the $80 million immediately, and against the $80 million would receive a security interest in NBG's shares -- thus protecting them from other Pharaon creditors. At the same time, BCCI and Altman discussed the fact that BCCI would simultaneously have lending to Pharaon for the remainder of the $205 million, leaving NBG's shares entirely pledged and protected from creditors. Altman then discussed this situation further with other attorneys for First American, who noted the following:

The proposed structure may focus unwelcome attention on the relationship between CCAH [First American's holding company] and BCCI and raise questions as to whether BCCI has acquired control of NBG. . . . A bigger problem [then certain other regulatory issues raised by the structure], however, arising from BCCI's involvement in the transaction is that it might focus closer attention on the relationship between CCAH and BCCI. An argument could be made perhaps that CCAH and BCCI are acting together and/or as principal and agent.(78)

Altman then sent a copy of this memorandum to Naqvi, and Clifford sent a second copy to Abedi in London, with a note from Clifford dated June 17, 1986 warning Abedi that the memorandum would "give you some idea of the difficulties and complexities facing us." Later in June, when CCAH and First American filed drafts of the option agreement with the Federal Reserve under which CCAH would acquire the National Bank of Georgia, the documents did not refer to the pledge of NBG shares to BCCI that was simultaneous with the pledge of NBG shares to First American, or to the fact that BCCI would acting as an "escrow agent" and would hold the funds paid to Pharaon by First American until the completion of the transaction.(79)

By August, Baldwin Tuttle at Milbank, Tweed, the regulatory attorney involved in handling the First American-NBG transaction, became sufficiently concerned about the structuring of it that he wrote to warn him that there five separate legal problems for First American arising out of it. First, the payment of the $80 million option placed CCAH/First American at risk; second, under the structure of the deal, First American did not have the right until the acquisition was completed to exercise any control of management of NBG, leaving it vulnerable should the current management not do their job; third, there was no provision in the agreement for negotiation of the price if the value of NBG declined prior to the option's exercise; fourth, legal opinions were necessary to determine "the validity of Pharaon's ownership of NBG;" and finally, there was no guarantee CCAH/First American would recover its $80 million if it chose not to exercise its option.(80)

These issues arose in part because Tuttle had previously been advised that BCCI would also have a security interest in NBG shares, raising the question of whether BCCI's interest in the shares, or First American's interest in the shares, would be satisfied first in the event something went wrong.

In response to this letter, Altman demanded that Tuttle appear at Altman's office, and during a "brief and hostile meeting," handed Tuttle both the original and the only other copy of his letter and warned Tuttle that if he ever wrote such a letter again, Tuttle would no longer represent CCAH/First American.(81)

While there are many conclusions one might draw on the basis of this incident, one notable element is Tuttle's recognition that there reasons to doubt "the validity of Pharaon's ownership of NBG." The only possible reason to doubt his ownership under the circumstances was the issue of whether BCCI was the actual owner already. Altman's response to Tuttle offers a convincing example of Altman's determination that no inquiries be made regarding this issue. It is evidence that Altman's failure to advise the Federal Reserve of BCCI's involvement in the transaction was wilful and intentional, rather than accidental, as reflected in the charges brought against Altman by the Federal Reserve in connection with this incident.

On September 4, 1986, Altman provided Naqvi at BCCI with draft documents relating to the option and loan transaction for his review, and identifying BCCI as pledge agent for First American's option payment and BCCI's loan. In a cover letter to Naqvi, Altman wrote that the agreements assumed that there was no debt secured by the NBG shares "except as may be later authorized with respect to the BCCI loan to Dr. Pharaon." As the Federal Reserve found, Altman was already aware of the Pharaon debt to BCCI secured by the NBG shares.(82)

The significance of the September 4, 1986 letter from Altman is that it identifies how Altman chose to respond to the problems posed by revealing the fact that BCCI already had a security interest in National Bank of Georgia shares that might impair the value of First American's security interest in them and raise questions about the $80 million option. Altman's response was, in effect, to join BCCI in a subterfuge -- that BCCI would not lend the money to Pharaon or gain security from Pharaon until First American's debt was secured -- when in fact, both Altman and Naqvi knew this was untrue.

On October 23, 1986, Pharaon and BCCI executed various agreements to effectuate the planned acquisition of National Bank of Georgia, which included a loan agreement between Pharaon and BCCI whereby BCCI would lend Pharaon $140 million at the time that CCAH/First American acquired its option to purchase NBG, secured by another pledge of NBG shares to BCCI. Altman did not sign these documents on behalf of CCAH, however, because, as the Federal Reserve found, he "became concerned that the documents as then drafted in connection with the NBG option would reveal to the Board BCCI's extensive participation in the transaction."(83) According to the Federal Reserve, Altman then went to London, where he met with a BCCI officer, Imran Iman, and a BCCI lawyer, to discuss the transaction. A memorandum written by the BCCI lawyer memorializing the meeting stated the following:

Mr. Altman stated that because the Federal Remere will see the Pledge Agreement they will see the references to the Loan Agreement and BCCI SA and will therefore want to see the Loan Agreement. By seeing all the documents, they would most likely arrive at an adverse conclusion.

Altman suggested that a better way to have structured the agreements would have been for the Option and Pledge Agreements to have been executed and then perhaps 60 days later, a Loan Agreement signed an addendum [sic] made to the Pledge Agreement to make BCCI a party to the Pledge Agreement. . .

[The BCCI attorney] would contact [C&W Partner] of Mr. Altman's office and appraise [sic] him of the above. [C&W Partner] would prepare the fresh Pledge Agreement on the above facts. . . Mr. Altman would discuss the above with Mr. Naqvi and if he is agreeable, Dr. Pharaon would be approached.(84)

Following the meetings with Altman, the documents were redrawn to separate the integrated transaction into two transactions in order to mislead the Federal Reserve. As a British lawyer for BCCI wrote in a memorandum:

[t]he reason for having two Pledge Agreements is that Mr. R. Altman feels that in the previous Pledge Agreement, the references to "Loan Agreement" would have given the Federal Reserve cause to see the "Loan Agreement" and possibly decide that an "integrated transaction" was being entered into. Whereas now, with the two Pledge agreements, the Federal Reserve will only see the Option Pledge, which contains no reference to the "Loan Agreement."(85)

A later memorandum by the BCCI lawyer to Naqvi, conveying the substance of meetings between him and Altman in Washington D.C. between December 18 and December 20, describes Altman advising that the documents pertaining to BCCI be signed after "a reasonable period will have elapsed" in order to prevent the Federal Reserve from concluding that the transactions involving BCCI were integrated with the First American purchase of NBG.(86)

The result of the signing of these documents is that NBG stock was simultaneously pledged to BCCI and to CCAH/First American, without it being clear which claim was subordinated. On December 18, 1986, Altman wrote BCCI to advise BCCI that CCAH consented to BCCI holding a security interest in Pharaon's stock in NBG up to a level of $140 million, in a letter that did not specify whose claim to Pharaon's pledged shares would come first.(87) In order to protect First American's interest, a subordination agreement was created on behalf of CCAH, which was executed by Altman the same day, December 18, 1986. BCCI did not, however, execute the agreement, leaving it of no effect. When First American lawyer Tuttle brought this to Altman's attention, Altman ordered the $80 million to be disbursed to Pharaon regardless, placing CCAH/First American at risk. Later, Altman lied about the situation to the Federal Reserve, denying that he was responsible for seeing to it that BCCI executed the subordination agreement.(88)

In the spring of 1987, months after paying the $80 million option to Pharaon, First American began its due diligence review of NBG to determine what First American had acquired. In the course of the due diligence, First American found numerous problems at NBG, including NBG having paid the expenses of its officials to meet with BCCI officials in London; NBG paying for hotel expenses for the crew of Abedi's private plane; NBG paying to fly Abedi to the opening of President Carter's Presidential library; NBG paying the salary of a former NBG employee for 15 months after he went back to work for BCCI; and paying a fee of $475,000 to BCCI in connection with the CCAH purchase. The due diligence also showed extraordinary expenses over NBG's assumption of a lease from Pharaon's business, Interedec, which would cost NBG another $25 million to $30 million over the 15 years life of the lease. Finally, it showed that NBG was at or near the bottom of its peer group on a wide variety of measures of financial performance, including its return on assets, return on equity, margin on earning assets, and percentage of non-performing loans. Any of these items would have justified First American demanding a reduction of the price paid for NBG, or its right to withdraw from the transaction. First American did neither.(89)

On April 22, 1987, CCAH/First American filed an application with the Federal Reserve to acquire NBG, which made no mention of BCCI's involvement in the transaction or of Clifford & Warnke's simultaneous representation of both CCAH and BCCI in the transaction. The application stated that Pharaon had control of 100 percent of NBG's shares, and did not disclose the existence of Pharaon's pledge of the NBG shares, and other documents giving BCCI the power to vote NBG's shares. When the Federal Reserve asked the source of funds for the purchase, at Altman's direction, CCAH's regulatory counsel, Tuttle, advised the Federal Reserve that the funds had been raised through a rights offering paid for in cash, with less than 5 percent of the equity capital involving borrowings by shareholders secured by a pledge of shares. In fact, at that very time, Altman and Clifford had themselves borrowed from BCCI about 10 percent of the equity capital in the rights offering, against shares in First American which they pledged to BCCI, in direct contravention of the representation they were making to the Federal Reserve.(90)

Finally, on July 24, 1987, Clifford and Altman sent all shareholders of First American an offering memorandum relating to a proposed share issuance to raise $115 million in new capital for CCAH to complete the purchase of NBG. This memorandum represented the first time that Clifford and Altman had asked the shareholders for their approval of the transaction they had commenced in September 1985 at BCCI's direction. It was, as the Federal Reserve found, materially incomplete about BCCI's involvement in the transaction. Moreover, its omission of any notice to the shareholder's of Clifford and Altman's own financial interest in the transaction, breached Clifford and Altman's fiduciary duties to the CCAH/First American shareholders.(91)

Final evidence of the fact that the NBG transaction was not in the interest of First American, is contained in the Federal Reserve's last finding concerning the transaction:

The acquisition of [NBG] created a serious drain on the financial health of First American . . . In 1992, First American transferred NBG to one of its subsidiaries at a fair market value of only $90 million -- $130 million less than it had paid for the bank only five years earlier. In addition, First American paid approximately $12 million to get out of the obligations of the master lease [on the Interedec property it assumed from Pharaon].(92)

The decision by BCCI, Clifford and Altman, to have First American buy National Bank of Georgia had ultimately cost First American over $140 million.

Other Conflicts of Interest

Part of the difficulty in unravelling the decision-making process relating to BCCI, First American, and the National Bank of Georgia, and Clifford and Altman's role in this process, is that Clifford and Altman simultaneously represented all parties in the transactions over a period of 12 years spanning each permutation of purchase and sale of each of the organizations involved.

The ambiguity about their multiple roles may have been convenient for Clifford and Altman in some circumstances, such as during attendance at BCCI's international conferences. But the ambiguity also created an overwhelming, ongoing conflict of interest between their obligations to First American's board of directors, officers and employees on the one hand, and BCCI on the other. This was especially true because in the United States, within both BCCI and First American, it was often perceived that there was an ongoing struggle for control of First American's destiny, between two competing organizations, one Pakistani, pertaining to BCCI, and the other American, and controlled by Clifford and Altman.

Nazir Chinoy, head of BCCI's Paris branch, learned of the struggle over First American New York at a BCCI annual conference in Luxembourg in 1985, from Afridi himself, who confessed over a glass of wine that he was increasingly unhappy at First American New York.

Afridi felt that Altman was not permitting him to run First American on BCCI lines and yet he was answerable to Mr. Abedi for profits. He said Altman was interfering in the management and that he had reported to Naqvi on many an occasion about Altman interfering with his management, or trying to change the management structure or style.(93)

As Chinoy described it, from his point of view as a BCCI official operating outside the U.S., there was not so much a separation between First American and BCCI as two different types of management, one Pakistani and one American.

I saw rivals competing for power -- Afridi wanting to be the top man, and Altman wanting to be the top man.(94)

The conflict of interest between First American's needs and BCCI's needs was made explicit to Clifford and Altman in a memorandum from an official of First American New York to them written in early 1987, concerning the termination of a First American employee in New York. Enclosed with the memorandum provided to Clifford and Altman was a letter from a First American employee that stated that the association between BCCI and First American was threatening to destroy First American as a bank:

Your basic error has been BCCI. This association is "on the street" and as soon as this becomes known (with BCCI reputation) decent accounts fly. . . . Either FAB must take over and become First American Bank and buy out BCCI shares, or let them have it. But have two factions running FAB, Eastern and Western, and until you decide just whom and what you are, FAB is doomed to extinction.(95)

There is no record that Clifford or Altman undertook any response to this letter, which contradicts Clifford's testimony that there was never a "suspicion" about BCCI's involvement in First American during the period he ran First American.

Another area of difficulty in assessing Clifford and Altman's knowledge of the relationship between First American and BCCI is that Clifford and Altman have maintained that BCCI acted as an investment advisor to the shareholders. In testimony before the Senate, Clifford testified, "we treat Mr. Abedi, we treat Mr. Naqvi, as the representatives of our investors."(96) In other words, not only did Clifford and Altman wear many hats, but they have maintained that Abedi and BCCI also played various roles, ranging from client to investment advisor to "communications link" for the middle eastern investors.

Sakhia, however, challenged Clifford and Altman's characterization of Abedi as a communications link for the Middle Eastern investors. Sakhia testified:

I fail to understand . . . that it was difficult to communicate with the Middle Eastern investors. . . . They were not Bedouins in the desert. . . . These were intelligent people who owned banks and businesses. The Abu Dhabi investment Authority has several billion dollars invested in this country, and if they can manage those businesses they did not need a channel via Mr. Abedi to First American. They could have done it directly.(97)

Clifford and Altman did begin to communicate directly with First American's shareholders in 1989, after the New York grand jury had begun and both BCCI and Clifford and Altman understood that the key issue would be whether the shareholders were nominees for BCCI. Thus, in October 1989, Altman, instead of his past practice in routing communications with shareholders through BCCI, wrote Adham and other shareholders directly to seek their position regarding the possible sale of the bank.

Clifford and Altman Loans From BCCI

And Share Purchases of CCAH/First American

Perhaps the most controversial aspect of Clifford and Altman's relationship with BCCI was their purchase of CCAH shares with loans provided by BCCI, a transaction that not discovered by First American officials until the summer of 1990 and not disclosed to the Federal Reserve until the spring of 1991.

The transaction was controversial for a number of reasons. First, from the beginning, regulators had stated their understanding that BCCI would not be lending funds to BCCI shareholders which would be secured by CCAH shares. Second, when regulators asked Clifford and Altman whether they had been such lending now in the past, Altman's responses did not acknowledge the existence of the loans. Third, the loans had never been disclosed to First American's board of director or other offices. Fourth, the terms of the loans were very unusual in that they were non-recourse, and BCCI could not proceed against Clifford and Altman if they failed to repay them. Moreover, as specified below, there were secret side agreements between Clifford and Altman and BCCI which is essence guaranteed that BCCI would handle the sales of the stock for Clifford and Altman at a price agreed to among the three of them.

In their written testimony to the Subcommittee, Clifford and Altman provided a detailed explanation of how they came to purchase the stock, and how BCCI came to finance the purchase:

The amount paid us by the Company was relatively modest. Mr Clifford, as Chairman, requested, and was paid, $50,000 a year -- a modest amount compared to the substantial annual compensation paid to the top officials of major banks. Mr. Altman . . . received no payments other than the usual director's fees. . . Nor were we given the valuable perquisites that are normally provided senior officers of large corporations. We received no financial bonuses, incentive compensation, or profit sharing. . .

If First American prospered under our leadership, we hoped to have the opportunity to invest in stock and thereby participate with the shareholders in the economic benefits we were creating. In effect, we chose to take our financial rewards as managers by making an investment in stock. . . In 1985, in the light of 4 years of sustained economic growth experienced by First American under our control, we discussed with Sheikh Adham the possibility of acquiring stock in the Company. We also discussed it with Mr. Abedi, as the advisor to the shareholders. We learned the shareholders favored our investment in the company . . .

We had learned that certain of the shares [to be offered in a rights offering] might remain unsubscribed, and that we could purchase such shares at the same price -- book value -- as was paid by the other shareholders.

We determined to acquire shares on this basis, and, after considering alternatives, sought to finance this investment through bank loans, if possible. . .

The first institution we approached for financing was Banque Arabe et Internatinale d'Investissement ("BAII") in Paris, the consortium bank that acted as the lead lender in the syndicate that had lent $50 million in connection with the acquisition of FGB in 1982. . . When problems arose in the negotiation of terms by our counsel, efforts commenced to explore with BCCI financing for the contemplated stock purchase. BCCI, too, was familiar with the [First American/CCAH] stock being offered as collateral and the market for the shares. . .(98)

Thus, by this account, both the share purchase and the lending were intended as compensation by CCAH's grateful shareholders to Clifford and Altman for the superior job they had done in strengthening First American over the first five years of their management. As Clifford testified, "we got to a point where we knew we were over the hump. And I thought the time had come for Mr. Altman and me to participate in the results of this very determined effort that we had made, that was proving to be so successful."(99) Clifford testified that "I wanted to own some stock in my own company."(100)

With the loans that they secured from BCCI, Clifford and Altman purchased stock in CCAH in 1986. In testimony to the Senate, Altman said that he and Clifford participated in a "rights" offering which was confined to the 14 shareholders of CCAH, paying "book price" for the stock, which was $2,216.000.(101)

The account suggests that both the share purchases by Clifford and Altman, and the lending from BCCI were normal arms-length business transaction, such as other banks might contemplate to reward officers and directors. Moreover, it explicitly separates the decision by CCAH shareholders to compensate Clifford and Altman through permitting them to purchase shares in the bank from the decision by BCCI to lend them funds for the purchases. In fact, the two activities were integrated from the beginning, with BCCI committing from the start to arrange no-risk financing for Clifford and Altman as part of the transaction.

Evidence for the integration of the lending by BCCI to Clifford and Altman with the decision by Clifford and Altman to purchase shares, and the intention that the purchase be risk free, is set forth in some detail by the Federal Reserve in its findings against Clifford and Altman.

As the Federal Reserve detailed, prior to coming up with the "rights offering" approach, with lending done against the shares by BCCI, BCCI and Clifford and Altman considered a number of different alternatives by which they would acquire a risk-free interest in First American.

For example, in early drafts of the arrangement, CCAH itself agreed to issue shares to Clifford and Altman, with one draft including a commitment requiring Kamal Adham, with BCCI as a back-up, to repurchase Clifford and Altman's shares at any time at their discretion. Significantly, the requirement that Adham repurchase their shares was never discussed with him, demonstrating the degree to which Clifford and Altman, as well as BCCI, regarding him as no more than a nominee for BCCI.(102)

Ultimately, Clifford, Altman, and BCCI instead decided to provide them shares through a rights offering in which another BCCI nominee, Masriq, would "waive" its rights to shares in order to make them available to Clifford and Altman, at book value or $2216, one day after Masriq had purchased other CCAH shares at the price of $4044.20 a share -- a transaction that would be economically inconceivable if Masriq were a real party at interest rather than a nominee.(103)

In their written and oral testimony, Clifford and Altman never specified exactly what had gone wrong to prevent BAII [the French bank which they had originally contacted for the loans] from agreeing to lend funds to them for their stock, instead suggesting merely that unspecified difficulties with BAII had lead them to open negotiations over loans with BCCI.

In fact, BAII was considering the possibility of issuing such a loan solely on the basis that BCCI would simultaneously provide BAII with a guarantee of the loan -- making BAII effectively acting as a pass through to cover BCCI's involvement, just as it had done in connection in lending money at the outset of the FGB purchase. But Clifford and Altman insisted on the lending being on a non-recourse basis.

Clifford testified that the non-recourse aspect of the loan -- which prevented BCCI from suing him personally if he failed to repay the loan, or interest on the loan -- had been recommended to him by New York counsel who felt his advanced age required such an arrangement.(104) Despite Altman's relative youth -- he was under 40 years old at the time -- Altman's loan was on the same terms. Altman testified that the concern in his case stemmed from "the [lack of] liquidity of the investment."(105) Regardless of Clifford and Altman's actual reason for insisting that they not be at risk for the borrowing necessary to finance their purchases of CCAH shares, BAII refused to provide the lending, even with a backup guarantee from BCCI, on a non-recourse basis, viewing such lending in this circumstance to be inadequately secured. Thus, even with protection from BCCI, and with a BCCI director on its board, BAII viewed the transaction as sufficiently unusual to pull out.(106)

As Clifford testified, ultimately BCCI provided a $15 million loan on a 100% non-recourse basis for 18 months at the London Interbank Rate, which ordinarily runs below the Prime rate. When pressed by Senator Brown as to whether or not First American had ever loaned money to any individual on such favorable terms, Clifford replied, "I do not know."(107) In staff interviews, Virgil Mattingly, General Counsel for the Federal Reserve, has confirmed that First American has never made loans on such favorable terms.

The loans were due on January 1, 1988. The loans, however, were not paid off at that time. Altman explained that

"they [the loans] were not actually in default because we had gone to the lender [BCCI] . . . and asked if they would refinance the loan or roll it over. The lender [BCCI] indicated a willingness to do that, but before the documents were prepared for a second loan, we started the process of disposition of the shares."(108)

Once BCCI lent the money to Clifford and Altman for the loans, it immediately agreed to providing further protection to them to make certain they would never be at risk from their stock purchases, and in fact, committing to help them sell their shares "at such prices as BCCI and [Clifford or Altman] shall mutually determine."(109)

These unusual terms were set forth not in the loan agreements between BCCI and Clifford and Altman, but in a side agreement they executed, which recited the following terms on the loans:

notwithstanding any provision of the Note or Pledge Agreement (or any other document relating to the loan by the undersigned to BCCI) to the contrary, it is understood and agreed that the undersigned shall not be obligated personally to repay to BCCI the loan principal or any interest accrued thereon[, and that] BCCI shall be limited solely to the undersigned's interest in the CCAH shares and any proceeds thereof to repay the loan and interest thereon . . . BCCI shall arrange for the sale of said CCAH shares to . . . interested buyers in such manner, amount, and at such prices as BCCI and [Clifford or Altman] shall mutually determine.(110)

Failure to Disclose Terms of BCCI Loans

Clifford and Altman did not disclose the unique terms of its arrangements with BCCI to anyone, but actively sought to conceal it. In their written testimony to the Subcommittee, they suggest they provided full disclosure in the following terms:

As noted earlier, our investment in CCAH stock was known to and encouraged by the shareholders. In addition, our intended purchase of stock was duly disclosed to and authorized by the Board of CCAH, the parent company of First American. In advance of the 1986 rights offering, Mr. Clifford personally informed Managing Directors Symington and Quesada that we intended to acquire stock in the corporation . . . We also disclosed the acquisition of this stock to the Federal Reserve Board.(111)

In fact, First American itself was never told by Clifford or Altman of their borrowings from BCCI in connection with their purchase of CCAH shares, until the issue arose as First American began to respond to questions arising out of an audit of BCCI-First American wire transactions in the summer of 1990.

As the Federal Reserve found, Clifford and Altman failed to disclose a number of material facts to Symington and Quesada about their stock purchases, including that they were financing their purchases by means of non-recourse, preferential-rate loans from BCCI and that BCCI had agreed to arrange for the subsequent repurchase of their shares at a price to be agreed upon by Clifford, Altman and BCCI later.(112)

First American only learned of the existence of the Clifford and Altman loans, although not all of their unusual terms, when First American officials were conducting a review of BCCI wire transfers to First American accounts in response to matters arising out of the New York criminal investigation into the BCCI-First American relationship. In that review, they discovered millions of dollars in wire transfers from BCCI to Clifford and Altman's accounts, and asked them what these transfers pertained to.

A letter from Clifford and Altman to First American senior vice president James E. Lewis, dated August 1, 1990, details their handling of this inquiry from their own officers at First American. Clifford and Altman replied as follows:

This memorandum is written to provide you with background concerning certain wire transfers in 1988 you have identified between the Bank of Credit and Commerce International (Overseas) lt., and or personal accounts at First American Bank, N.A. . . .

You are informed that in connection with the 1986 Rights Offering to the shareholders of Credit and Commerce American Holdings, N.V., the parent holding company of First American, to raise additional capital for the Company, all of the new rights shares were not subscribed by the shareholders. We determined to acquire a small amount of CCAH shares which were thus available. In this regard, we explored financing of the purchase with possible lenders, including BCCI.

Satisfactory loans with BCCI (Overseas) Ltd. were negotiated by each of us and the purchase of the CCAH shares at the offering price was effected. (Mr. Clifford invested approximately twice as much as Mr. Altman.) . . .

In early 1988 we were interested in selling some of our CCAH stock and upon making inquiries in this regard, learned that a Middle East businessman wished to acquire shares of CCAH. As a result, we each sold him, for cash, a portion of or shares. BCCI serviced that transaction and wired to our respective accounts at First American the sale proceeds. From those proceeds we decided to pay off all outstanding indebtedness to BCCI (including interest) and, accordingly, we arranged to wire monies from or First American accounts to BCCI for that purpose.

We understand this information will be maintained on a confidential and privileged basis.(113)

Notable in this account is what Clifford and Altman did not tell First American on August 1, 1990: that BCCI had held a security interest in their First American shares, in contravention of the understanding of regulators that BCCI would not lend for the purpose of purchases of such shares; that BCCI's lending was made on a non-recourse basis, in which BCCI could recover only Clifford and Altman's interest in First American, rather than against them directly; that BCCI, not Clifford and Altman, had located the "Middle East businessman" who purchased their shares; or that from the beginning, Clifford and Altman had arranged with BCCI for guaranteed buy-backs of their stock to insure them against any possible loss.

Significantly, Clifford and Altman also failed to disclose the existence of these arrangements to their partners at Clifford & Warnke, who under normal partnership rules would have been entitled to a share of Clifford and Altman's profits from the compensation being provided them for their work at First American.

In June 1987, Clifford and Altman met with Abedi and Naqvi in London, and insisted on paying interest on their respective loans from BCCI, despite the fact that the side letters they agreed executed relieved them of any obligation to do so. Two months later, they participated in a second rights offering for CCAH stock. They again paid for the shares with non-recourse loans from BCCI, against which they pledged their shares of CCAH. They again executed side-letters relieving them of any risk on the transaction and insuring that they would be permitted to sell the stock at a price to be determined by BCCI, Clifford and Altman. At this point, Clifford held 5446 shares of CCAH, Altman 2722 shares. All were pledged to BCCI. Nowhere was BCCI's security interest in these shares recorded, including in the Netherland Antilles, where CCAH was incorporated, and where it was legally required.(114)

In early 1988, several events took place which could have given rise to Clifford and Altman's decision to sell enough of their shares in CCAH to eliminate the BCCI lending to them. First, on February 9, 1988, Abedi suffered a heart attack and stroke. The same day, in hearings before the Subcommittee, former Panamanian consul Jose Blandon disclosed that BCCI was handling drug money for General Noriega. In turn, Blandon's testimony prompted the issuance in March of a subpoena by the Foreign Relations Committee to BCCI for Noriega records.

In this very period, Clifford wrote a letter, dated February 8, 1988, to Naqvi, to ask Naqvi to arrange a sale of some or all of Clifford and Altman's stock. Significantly, the Federal Reserve concluded that the letter was not written on February 8, 1988 by Clifford, as dated, but "some time thereafter" and was backdated to make it look as if it were written prior to February 9, the date of the Abedi heart attack and the Blandon testimony.(115)

In March, 1988 the shares of CCAH stock owned by Clifford and Altman were sold for $6,800 per share. Although the stock had been purchased at book value, it was sold at market-value, which essentially meant whatever someone was willing to pay for it. Altman testified to the Subcommittee that "the distinction between a purchase at book value and a subsequent sale of the shares... was not a practice that was unique to Mr. Clifford and me and this transaction."(116) Mr. Mohammed Hammoud, a CCAH shareholder and the purchaser of the shares, was apparently willing to pay $6,800.00 per share -- the highest price ever paid for CCAH stock - which afforded Clifford and Altman a combined gross profit of $9.5 million. Clifford explained the high price by noting that "there were no rights offerings in 1988," the year Mr. Hammoud purchased the stock of Altman and Clifford. (117)

In fact, the price of the stock was set not by Hammoud, and not even by BCCI, but by Clifford and Altman, who told Naqvi the amount of net profit they wanted on the sale, after all taxes had been paid. As the Federal Reserve found:

In late February or early March 1988, Altman met in London with Naqvi. Naqvi called Imam and directed him to speak with Altman concerning the sale of Clifford's and Altman's shares. Altman stated that he wanted a net profit on his shares of $1.5 million, and that Clifford wanted a net profit on his shares of $3 million. These profits were to be after payment of all taxes and repayment of all loans from BCCI. Altman also stated that he and Clifford each wanted to retain a portion of their CCAH shares. Naqvi agreed to this and instructed Imam to work out the details with Altman.

In consultation with Altman, Imam calculated the sale price that would be necessary to achieve Clifford's and Altman's goals of paying off their loan balances including all interest paid, covering all capital gains taxes to be imposed in the transaction, and retaining a profit of $3 million and $l.5 million respectively. . . . Imam, in consultation with Altman, calculated that a purchase price of 2.69 times book, or $6,800 per share, would be needed to achieve Altman's objectives. In concluding their conversation, Altman instructed Imam not to disclose their conversation to anyone other than Naqvi.(118)

Following the working out of the details of this arrangement, BCCI "found" Mohammed Hammoud, described by BCCI chief financial officer Masihur Rahman as a "front man" for BCCI, to "purchase" Clifford and Altman's shares in First American, for the highest price ever paid for CCAH stock -- $6800 per share -- and with loans from BCCI, secured by the CCAH stock.(119)

Altman has testified that he had never met Mr. Hammoud.(120) However, a power of attorney maintained in BCCI records shows that Hammoud granted Altman a power of attorney allowing Altman to undertake any transaction on behalf of Hammoud he wished in connection with the purchase or sale of CCAH shares. Thus, the power of attorney granted to Altman by Hammoud would have permitted Altman to have effectuated the sale of his shares to Hammoud whenever he chose, any whatever price he chose.

Altman, however, testified that he did not know that he had a power of attorney from Hammoud, stating "to the best of my recollection, I have never seen that document before."(121)

The Federal Reserve concluded that Altman lied to them in his sworn testimony to them concerning the sale of the CCAH stock to Hammoud. According to the Federal Reserve:

On February 12, 1991, in sworn testimony to the Board of Governors, Altman falsely stated that he did not know how the purchase price of $6800 per share was fixed, and that he did not discuss the matter with Imam.(122)

Senator Brown accurately summed up the transaction when he stated, "the substance . . . was that [Clifford and Altman] got title to the stock without putting up a single penny of [their] own money, and suffered no loss if the stock dropped in price . . ."(123)

Remarkably, when Clifford and Altman decided in 1989 to finance purchases of shares in CCAH from their own funds, BCCI automatically advanced loans for those funds regardless, reversing the charges only after BCCI was informed that Clifford and Altman had decided to pay for the additional First American shares themselves.(124)

Concealment of Loans from Regulators

The Federal Reserve showed renewed interest in the issue of whether BCCI might secretly control First American after the indictment of BCCI in Tampa for drug money laundering in October, 1988 renewed simmering allegations that BCCI was in fact a rogue bank. At the time, CCAH had an application before the Federal Reserve to retain control of a Florida bank, the Bank of Escambia, N.A., of Pensacola, which it purchased as part of its purchase of the National Bank of Georgia.

On January 23, 1989, Altman met with a Federal Reserve examiner who questioned him concerning the nature and extent of the First American-BCCI relationship. Altman told the examiner he did not know about any understandings or financial arrangements that might exist between any CCAH shareholder and BCCI, failing to mention his own and Clifford's past such understandings and arrangements, as well as pledges of other shareholders' shares to BCCI of which he had learned.(125)

Following the meeting with Altman, the Federal Reserve decided to approve the application to retain Bank of Escambia, advising Altman in its transmittal letter that it was specifically relying on the representations made by CCAH regarding its relationship with BCCI and its commitment that "BCCI is not involved in the operations" of CCAH or First American.(126)

On December 13, 1989, William Rybeck, the Senior Deputy for Banking Supervision at the Federal Reserve wrote to Altman requesting "information on any loans, original or subsequent to the investors." Altman replied that he had no "access to information regarding any financial arrangements that might exist" between any CCAH shareholder and BCCI. "Based on our consultations with the resident management director for [CCAH] in the Netherlands Antilles, we can only confirm that no pledge or security interest has ever been recorded on the Company's share register by any lender."(127)

This response by Altman to the Federal Reserve was exceptionally misleading. First, Altman knew not only of his own and Clifford's loans from BCCI, but had arranged specifically that the loans not be recorded in the Netherlands Antilles, and had made similar arrangements for other CCAH shares pledged to BCCI. Thus, his confirmation that no pledge or security interest has been recorded was knowingly misleading, and provided to the Federal Reserve for the obvious purpose of convincing the Federal Reserve that no such loans had ever been made, when Altman knew this to be a lie.

On February 5, 1990, Altman followed up this initial misleading answer with a second letter to the Federal Reserve, this one characterized as one he had "just received" from Naqvi at BCCI concerning BCCI's loans to CCAH shareholders. The letter stated that the acquisition of Financial General "was not financed in any respect by BCCI," and was drafted to create the false impression that none of the loans that BCCI may have made to CCAH shareholders were made for the purpose of purchasing shares in CCAH/First American. This misleading letter, which Altman presented to the Federal Reserve as if it originated from BCCI, had actually been drafted by either Altman, or one of his partners at Clifford & Warnke, and transmitted to BCCI and Naqvi for Naqvi's signature.(128)

Altman explained his actions regarding these letters as a consequence of the Federal Reserve's supposed lack of interest in the issue of BCCI lending for CCAH shares that had not been part of the original FGB takeover in 1981:

Mr. Ryback, in December, had submitted to me a letter that is broadly worded . . . When I received the letter I spoke to Mr. Ryback and indeed, I spoke to him more than once. . . Mr. Ryback explained to me what it is that he was seeking by way of information. I might note that the first paragraph of Mr. Ryback's letter I believe is the matter relating to the tender offer. Then he goes on his second paragraph and deals with the subject of any loans made then or subsequently. . .

I pursued it, other attorneys pursued and we pursued it aggressively. We received information back that we thought at the time was credible. In this time period, the issue of lending arrangements arose, and the matter came up about what BCCI's practices were . . . We did not necessarily think that the lending was impermissible . . . It was not impermissible to borrow, even borrowing secured by the stock. But we gave the Federal Reserve the information we had obtained.(129)

Altman said that he understood that what the Federal Reserve wanted to know was first, whether BCCI had lent money for the original FGB takeover, and second, whether BCCI currently had lending which secured BCCI shares. Altman testified that the one kind of information that Ryback did not want was information about past BCCI lending which no longer existed -- such as the lending made to Clifford and Altman, and it was on that basis that Altman failed to provide him with this information:

Mr. Ryback was not interested in certain kinds of information, even though his original letter would seem to call for it. . . I had also indicated to him that to comply literally with this letter, I am told, would be burdensome, to get every loan ever made to any investor by BCCI. And that is why he focused his inquiry as the specific information that he needed for his purposes.(130)

Mr. Rybeck, however, told Senator Kerry that he had no memory of ever altering his original request.(131)

Ultimately, the Federal Reserve learned of the BCCI loans to Clifford and Altman only from its own investigation, when it discovered the relevant documents in BCCI files held in Abu Dhabi, and interviewed Imam, who participated in meetings, telephone calls, and written communications with Altman in connection with the loans.

What is evident from this history is that Altman systematically took steps to hide the truth about his and Clifford's loans from BCCI from the Federal Reserve, artfully answering questions in such a manner as to mislead the Federal Reserve and prevent the Federal Reserve from discovering their own secret loans. In the latter stages of this cover-up, Altman actually created letters purporting to be from BCCI that were created at Clifford & Warnke for the purpose of hiding Clifford and Altman's borrowings.

Altman's Assessment of His Conflict of Interest

Pertaining To First American and BCCI

On July 6, 1990, Robert Altman wrote a memorandum to the file describing a meeting between him, Swaleh Naqvi, and another of BCCI's lawyers from another U.S. firm named Kim Gagne, on that day in London. Both in what it did say, and even more importantly in what it did not say, the memorandum demonstrated Altman's personal recognition of the potential problems for him relating to BCCI having lent him money for the purchase of his First American stock.

The memorandum, written at a time when the Abu Dhabi interests had just begun to assert their control of BCCI's business and legal strategy, focused on conflict of interest issues involving BCCI, Clifford and Altman, and provided a detailed review by Altman of the supposed nature of the First American/BCCI relationship in the following terms:

I said that I had wanted to inform him [Naqvi] personally why Clifford & Warnke could not provide legal advice to BCCI in connection with the investigation being conducted by the District Attorney in New York State. As he knew, our firm did not do criminal work, and the primary representation of BCCI would be by other lawyers in any event. However, we were general counsel to First American and an issue had arisen about BCCI's relationship with First American. While we did not now know of any actual conflict of interest between BCCI and First American, we were concerned about the appearance of a conflict as well as any potential conflict. . . . Mr. Iqbal [the new head of BCCI, replacing Naqvi at the request of Abu Dhabi] said he did not know much about the First American issue in New York as his focus was solely on BCCI's operations. Mr. Iqbal mentioned that BCCI had loans to some of First American shareholders, but that alone constituted his understanding of BCCI's relationship with First American. He accepted, however, my comments regarding any appearance of conflict.

Mr. Naqvi also accepted the views I presented. However, he seemed frustrated and stated that these allegations about the BCCI/First American relationship were "pure rubbish." Mr. Naqvi said that BCCI had "no interest whatsoever" in First American, except for a financial interest in some loans made to some of the First American shareholders (through general lines of credit). CCAH stock had, at some point, apparently been given as security. Mr. Naqvi said that some years ago BCCI had briefly considered a merger with Fist American, among its various corporate restructuring strategies, but that this had never been pursued, and was merely one of the historical planning models. Mr. Naqvi said he believed the false allegations about BCCI/First American were being spread by disaffected former BCCI employees who felt bitter toward the Bank.(132)

The subject matter of this memorandum is the BCCI relationship to First American, whether BCCI had any interest in First American, and the possible implications of loans BCCI might have made to First American shareholders. At the time Altman wrote this memorandum, both Altman and Naqvi knew well that Clifford and Altman had themselves had previously had such loans, and that loans from BCCI to First American shareholders was a key issue on which the New York District Attorney was seeking information. BCCI's secret loans to Clifford and Altman, secured by First American/CCAH stock, would obviously be material to such an inquiry, and of themselves raise substantial "conflict-of-interest" questions concerning Clifford and Altman. Any competent attorney would recognize this, and be compelled to explore the issue with a client in any genuine conversation about the issue of conflict. Yet nowhere in the memorandum does Altman discuss this issue with Naqvi, as certainly would have happened if such a discussion were authentically exploring the conflict issue.

The omission of any mention of Altman's own loans from BCCI for First American stock during the lengthy discussions of the conflict issues is striking, and extremely unlikely if the conversation and memorandum were intended to reflect an honest analysis and appraisal of the situation.

Legal Fees

Clifford told the Subcommittee that "most of the services were rendered to the operating holding company, First American Bankshares," which "started out at a lower figure when the bank was not so large, and as the bank expanded then the cost of legal services expanded." Clifford indicated that his law firm received "maybe $1 million a year" in legal fees from First American.(133)

Clifford testified that the fees charged BCCI "were nothing like those charged First American, because there wasn't nearly that much work to do."

In fact, Clifford & Warnke billed First American and its related entities a total of about $11 million over about an eight year period, averaging about $1.35 million per year; and BCCI a total of about $6 million over twelve years, or about $500,000 per year, for a total of $17 million in all.

In addition, the law firm of Clifford & Warnke was the lead firm for the defense of the BCCI officers indicted in Tampa in 1988. According to the House Banking Committee, BCCI paid some $45 million in legal fees which were disbursed by Altman. In testimony before the Senate, however, Mr. Altman disputed that figure and indicated that "the amount of money ... paid in this general effort was half that -- approximately $20 million," which Altman testified was used for a variety of purposes including international audits and the implementation of new procedures to guard against money laundering. (134) Clifford testified that "not one penny of that effort came to us."(135) A summary of these disbursements, provided to the Subcommittee on March 2, 1992 by Clifford and Altman's attorneys, specifies a total of $18,975,224.47 paid by BCCI in attorney fees for the Tampa criminal defense, and another $2,817,011.66 for miscellaneous expenses, ranging from computer services and court reporters to private investigators and expert witnesses in connection with the case.

Cooperation with the Subcommittee

In testimony before the Senate, Clifford and Altman explicitly denied having done anything to delay, impede, or frustrate the efforts of the Senate to obtain the full story about BCCI, and BCCI's relationship to First American. As Altman testified:

There have been suggestions made by certain witnesses that we were engaged [in] influence peddling and the like, in order to protect BCCI. Those are totally untrue. There are suggestions that we condoned obstructions of this committee's efforts or investigations of BCCI. Those are totally untrue, and the record should reflect that that is our view, and as I said, we can detail it.(136)

Unfortunately, while repeatedly advising the Subcommittee of their intention to cooperate fully with its inquiries, Clifford and Altman, like BCCI itself, in fact failed to provide documents that had been subpoenaed by the Committee. In addition, according to allegations from a variety of sources, including other attorneys for BCCI and BCCI officials, they undertook a variety of efforts to delay or impede the Subcommittee investigation.

These efforts included:

** Altman allegedly instructing BCCI officer Amjad Awan to mark bank documents "attorney work product" in August 1988 in an attempt to exempt them from subpoena, despite the fact that the documents were bank records maintained in the ordinary course of business that had not been created by attorneys.

** Failing to insure that all BCCI documents specified in the Foreign Relations Committee subpoena in July 1988 were provided to the Subcommittee, and failing to instruct BCCI or First American employees to review BCCI records maintained at First American in response to the subpoena.

** Failing to insure that BCCI officials in Florida did not destroy or alter documents subpoenaed by the Committee in August and September, 1988.

** Altman telling Subcommittee staff on May 14, 1990 that BCCI had no outstanding loans to shareholders of CCAH, when one week earlier, he had told the Federal Reserve that he had heard reports of such lending in amounts ranging from $400 million to over $1 billion.(137)

** Allegedly attempting to use "political chits" to delay hearings of the Subcommittee in the summer of 1990.

Indeed, according to BCCI banker Amjad Awan, at the very time in the summer of 1988 that Clifford and Altman had advised the Subcommittee that they and BCCI would cooperate fully with the Subcommittee, they were simultaneously advising their clients that they intended to play "hardball" with the Subcommittee.(138)

Clifford and Altman have denied intentionally undertaking any of these activities, for example, explaining the failure to provide documents as inadvertent, and based on inadequate document review done by BCCI officials; and denying the "political chit" charge outright. Moreover, the Subcommittee investigation cannot fully answer all the questions raised about Clifford and Altman's response to the inquiries by the Subcommittee. For example, regarding the case in which BCCI officials destroyed and altered documents in response to the Committee subpoena in 1988, it is not clear from the record before the Subcommittee whether Clifford or Altman knew of these activities.

However, there is no question that documents subpoenaed by the Foreign Relations Committee concerning General Noriega, and existing in the United States, were never reviewed by Clifford and Altman as BCCI's attorneys, let alone provided to the Committee in response to a lawful subpoena. And, after Clifford and Altman were no longer representing BCCI, responses by them to document requests were delayed repeatedly, and some of the answers that were ultimately provided proved to be incompatible with the documentary evidence.

Handling Of Subcommittee Witnesses and Documents

In March, 1988, following testimony before the Subcommittee by Jose Blandon and other witnesses in February concerning the use of BCCI by General Noriega and members of Noriega's business groups, the Foreign Relations Committee authorized subpoenas to BCCI for Noriega's records. At the time the Committee acted, Clifford and Altman had already begun their own internal investigation at BCCI of the relationship between BCCI and Noriega.

Documents provided to the Subcommittee on May 20, 1992 by Clifford and Altman, following BCCI's waiver of the attorney-client privilege, describe a witness interview with Amjad Awan, Noriega's personal banker at BCCI, conducted by an unspecified lawyer at Clifford & Warnke on February 23, 1988 -- two weeks following Blandon's disclosures. At the time, Awan was based in Miami, having been BCCI country manager in Panama from 1981 through 1984, and an officer at BCCI's Washington, D.C. representative office in 1984 and 1985. As the Clifford & Warnke attorney described the situation:

BCCI's New York office believes that BCCI may receive a subpoena, perhaps from Congress, to testify about BCCI's role vis-a-vis General Noriega . . . there was always an undercurrent that alot [sic] of the money in Panama may be drug money, but BCCI felt it was dealing with lawful activity in dealing with the foreign exchange dealers . . . Mr. Awan knows of no specific instances of drug money passing through BCCI. It is possible some was laundered drug money . . . General Noriega's business with BCCI was limited to the $200,000 to $300,000 he deposited for VISA cards, etc. But Mr. Awan became a personal friend of General Noriega. They became very close after Mr. Awan left Panama in 1984. General Noriega asked Mr. Awan to make hotel reservations, and to book limousine and airline tickets. Mr. Awan would often use his own credit cards to perform these services because the BCCI office in Washington in [sic] only a representative office. . . Mr. Awan meet [sic] General Noriega in New York on one occasion and asked Mr. Awan to give him $100,000 in cash.(139)

Thus, months before the service of a subpoena to BCCI regarding Noriega and Awan, Clifford and Altman had interviewed Awan regarding his relationship with Noriega, been informed of at least one cash payment by BCCI to Noriega in the U.S., and learned of Awan's handling of Noriega finances while at the Washington representative branch office of BCCI.

In the meantime, on June 1, 1988, Clifford wrote a memorandum to Altman concerning information he had received from BCCI's number two official, Swaleh Naqvi, in London, concerning an article in the New York Times that referred to BCCI's alleged involved in money laundering operations in Panama, in a leak arising out of the Customs "C-Chase" sting operation. According to the Clifford memorandum to Altman:

On Wednesday, June 1, at 11:00 am I had a phone call from Mr. Naqvi in London. He had placed the call to you, but in your absence then spoke to me. I explained to Mr. Naqvi that the reason you were away was that you were in California following up on information regarding the possible purchase of a bank.

His call had to do with the BCCI bank in Panama. There had been brought to his attention an article in the New York Times of Wednesday, May 25, that referred to the Panamanian office of BCCI. The report involved missing documents from the bank's records and stated that the authorities have linked BCCI in Panama to money-laundering operations.

Mr. Naqvi says that there are two individuals who operate the bank in Panama and he has told them to come to Washington to see us. . . . He stated that the men would remain here as long as we required their presence. After we have talked to the men we are to report to Mr. Naqvi. The matter is of such importance to him that he may, after our conversation, decide to come to the United States.(140)

Thus, by the time of the issuance of the Committee subpoena on July 27, 1988 and subsequent service August 1, 1988, Clifford and Altman were aware in some detail of both Noriega's involvement with BCCI and serious allegations concerning BCCI's involvement with drug money laundering generally.

After the Committee subpoena was served, in his initial contact with the Subcommittee on behalf of BCCI, Clark Clifford wrote Senator Kerry to advise him of BCCI's intention to cooperate fully with the investigation. Soon thereafter, Clifford contacted Senator Claiborne Pell, chairman of the full Committee, to request a one-month delay in producing documents pursuant to the subpoena. Senator Pell referred that request to Kerry staffer Dick McCall, extending production to September 11, 1988.

In the meantime, Clifford and Altman met with Jack Blum and Kathleen Smith of the Subcommittee staff to discuss the subpoenas. A memorandum to the file from Altman dated August 10, 1988, describes the meeting in the following terms:

During the course of our discussions which lasted about an hour and 20 minutes, Jack Blum described in detail the information collected during the investigation and public hearings by the Subcommittee . . . From its sources, the Subcommittee has been led to believe that BCCI, through its banking locations in Panama, Colombia and in Miami, Florida, has had a major involvement in the management of assets for General Manuel Antonio Noriega, the current head of the Panamanian government; Michael Harari, reputed to be a close aide of Noriega's, an arms dealer, and formerly an Israeli secret service agent; and various other individuals from Panama and Colombia with major involvements in international drug trafficking. The Subcommittee staff has also been led to believe that BCCI, through its banking locations in Colombia and Panama, has been significantly involved in the laundering of large amounts of cash obtained from the sale of illicit drugs in the United States. . .

(1) The staff has amassed extensive information on BCCI. It is their understanding that General Noriega was instrumental in helping BCCI secure a banking charter in Panama. Information on BCCI has been provided by third parties, including government officials and other banks, as well as current and former employees of BCCI.

(2) We advised the Committee that we would soon be going to Miami to begin to assemble facts and related documents and, if need be thereafter, to Colombia and Panama. We expressed concern over the breadth of the subpoena. . .

(3) Altman told them that it was the intention of BCCI's senior management to be cooperative and helpful. He stated that management was unaware of any impropriety of the bank or its employees.

(4) In response to the staff's inquiry, Altman described BCCI's relationship with First American and explained Clifford's and Altman's long-standing representation of the Bank. Altman also expressed our complete confidence in BCCI's management. He stated that criticism that had been levelled at the Bank over the years had proved, upon careful investigation, to be groundless and without merit. . .

Mr. Clifford, in particular, and the firm generally have enjoyed an excellent relationship with the Committee over the years.(141)

Awan was in London at the time the subpoena was served for a regularly scheduled marketing meeting, and was told about the subpoena by Naqvi, who told him the lawyers would work things out.(142) Following Awan's return to the United States, Awan participated in a series of interviews with Altman and two other lawyers from Clifford & Warnke in Miami in mid-August, 1988. Six other BCCI officials were also interviewed by Altman in the same period. In the memoranda prepared by Clifford & Warnke attorneys concerning these interviews, the BCCI officials made numerous untrue statements to the lawyers conducting the interviews, ranging form claims that they did not knowingly launder drug money, to a contention that "BCCI has no professional relationship with General Noriega," but merely had previously "maintain[ed] depository accounts for General Noriega in London and issued credit cards."(143)

On August 17, 1988, Altman and other Clifford & Warnke lawyers met again with BCCI officers in Miami and discussed the Senate subpoenas follows:

Mr. Altman commented on the existence of the Noriega account in London, but stated that the subpoenas requested documents in the possession of [BCCI] Overseas. . . . They were all transactions of S.A. The wire transfers of Panama to London had no names or account numbers. . . there could be unfortunate implications for the bank if we were to produce documents with respect to General Noriega's London account. Those records may be protected by English or other foreign law, an issue we will check. If those documents are produced, BCCI personnel in Panama could be at risk . . .

Mr. Altman suggested that we seek to produce documents in the first week of September. By then, we would have to formulate a position with respect to Mr. Awan.(144)

During the interviews, Awan stated that General Noriega had in fact banked with BCCI, that Awan had handled various transactions on behalf of Noriega while based in Washington, and that Noriega had a maximum deposit relationship with BCCI of $22 million. This final statement was, of course, entirely inconsistent with Awan's representation to Clifford & Warnke the previous February that Noriega's business with BCCI was limited to $200,000 to $300,000.(145) Moreover, Awan told Altman that he "did not think that General Noriega would be above taking bribes from those involved in the drug industry. (146)

It is clear from the documents provided to the Subcommittee that Mr. Altman was concerned about providing too much information to the Subcommittee. As Sanders notes in his memorandum:

Mr. Altman stated that the bank had a potential political exposure as a result of the receipt of substantial dollar deposits from General Noriega. Additionally, there is the concern with respect to money laundering, although the bank does not believe any laundering occurred knowingly. . . As to money laundering, we could explain it may have occurred. We could explain that we took some few millions dollars from unknown sources and that, in addition, we dealt with money changers. We could state, however, that it was the policy of the bank not to deal with drug money and, in any case, the amount of cash we received was insignificant compared to other banks.(147)

Following his meetings with Altman in Miami, Awan returned to London, to review the Noriega financial records and meet with Naqvi. While in London, he again met with Altman, who questioned Awan concerning the nature and extent of BCCI's relationship with Noriega. According to Awan's sworn testimony before the Committee, and staff interviews in connection with that testimony, while in London in late August, Altman told Awan to retrieve documents pertaining to Noriega in response to the Subpoena. Awan retrieved the documents, which included a number of originals and some copies, and showed them to Altman. All of the documents were BCCI financial records, and none of them contained any material prepared by attorneys. Nevertheless, when Altman returned the documents to Awan, he told Awan to mark them as "attorney work product." Awan, who did not understand what the phrase meant, marked the documents, "attorney word product," with the markings appearing on each folder in which they were contained.(148) Awan later recollected that Altman had also told him that regardless of what he might tell the Senate, he intended to play "hardball" in response to the subpoena.(149)

By contrast, Altman testified that there was "no intention to mislead this committee," and "there has been no effort to derail this process."(150)

Altman then met with Naqvi to discuss the Senate subpoena further. Following that meeting, Awan was told by Naqvi not to return to the United States, and that he would be transferred immediately to Paris as a means of avoiding the subpoena.(151) Awan protested, noting that his family and possessions were in Miami and that prior to the subpoena he had no plans to leave the United States. Naqvi agreed that Awan could return briefly to the U.S. to make arrangements to move, but urged him to leave as rapidly as possible. Awan returned to the United States and, believing after his meeting with Naqvi that he could not trust Altman to represent his interests, began communicating directly with Blum without the knowledge of Altman, and decided to resign from BCCI and retain a separate attorney.(152)

Significantly, chronologies of meetings, originally created as privileged and confidential attorney work product pertaining to the Congressional subpoena, and ultimately provided to the Subcommittee on May 20, 1992 by Altman's attorneys, do not show any meeting involving Altman and Awan in London in August, 1988, despite Awan's detailed testimony concerning his meeting with Altman in late August.

These chronologies show Altman's meetings with Awan only in February 23, 1988 in Washington and in mid-August with Awan in Miami, and omit any reference to Altman having Awan in London, or even to Altman having met with Naqvi in London in this period. Given Awan's detailed and explicit statement about meeting Altman in London at the time the subpoena was issued, and Altman having told him in London to mark Noriega documents "attorney work product," the omission of any reference to the London meetings in the Clifford & Warnke internal chronologies and documents is suggestive of Altman's intent.

Following his meeting with Altman and his meeting with Naqvi in August, Awan told Blum that BCCI had sought to transfer him out of the country and to prevent the service of the subpoena, and that this took place immediately following a meeting between his superiors and Altman. Blum arranged to serve Awan without providing further notice to BCCI, or Clifford or Altman, and service was made in early September, 1988.

Soon after the service of the subpoena on Awan, on September 9, 1988, Awan told an undercover Customs agent, Robert Musella, in a conversation secretly recorded by the government, that the Foreign Relations Committee "had a vendetta" against BCCI, and that lawyers for BCCI in Washington advised the bank to immediately transfer Awan out of Miami to Paris to avoid being served with the subpoena:

Last Friday, I was told that, ah, our lawyers, Mr. Altman was there, and he suggested to the bank that I should be immediately transferred from the U.S. to Paris. . . So they duly transferred me Friday to Paris.(153)

Later, Awan would explain to investigators that he was not personally present at any meetings with Altman regarding his transfer, but that the circumstances had lead him to believe that the BCCI decision had been made on the advise of Altman.(154)

On the very day Awan was telling Musella about BCCI's decision to move him to Paris in an effort to circumvent the Senate subpoena, September 9, 1988, Altman and his colleague at Clifford & Warnke, Robert Sanders, met with Blum to discuss the subpoenas issued by the Committee to BCCI. Altman told Blum that BCCI "does not do business" with drug dealers, did not have large depository relationships in Colombia and Panama, and that BCCI "had been approached for several occasions and offered lucrative commissions to accept large cash deposits, but the bank always refused." As detailed in the Clifford & Warnke memorandum of the meeting, Blum then asked Altman concerning the relationship between BCCI and Noriega:

Altman stated that BCCI previously maintained a deposit account for the Panamanian government which General Noriega, as head of the government, could control. BCCI may not disclose information about this account for two reasons. First, such disclosure would be unlawful under Panamanian bank secrecy law. Second, if this information were produced, the employees and business operations of BCCI would be vulnerable.

Mr. Blum wanted to know how much money was in this account and in what country the account was maintained. Mr. Altman stated that this information was not available. Mr. Altman advised that the only one way the bank might be able to disclose information was with the permission of the Panamanian government.

Mr. Blum inquired when the money in this account was withdrawn. Mr. Altman said the account was closed sometime this past summer.

Mr. Blum asked about Mr. Awan's present location. Mr. Altman stated that he was traveling in the United States for a few days, but may be transferred soon to BCCI's office in Paris. . . .

Mr. Blum asked whether BCCI ever made any loans to General Noriega. Mr. Altman stated that if there were any loans, they were minor in nature. Again bank secrecy laws foreclosed disclosure. . . .

Mr. Altman then stated in closing that he wanted to convey to Mr. Blum a serious concern. Mr. Altman noted that the banking business is built on trust and confidence. Accordingly, Mr. Clifford and he were concerned that BCCI's reputation would be unfairly damaged as a result of publicity about the investigation, even though all allegations would be disproved. In this regard we were concerned about any rumors or leaks that could flow from the investigation and might, incorrectly and inequitably, tarnish BCCI's investigation.(155)

On September 14, 1988, Clifford and Altman met with Foreign Relations Committee special counsel Blum to discuss document request and production, and reiterated previous commitments to cooperate with the Senate. Shortly thereafter, in Miami, BCCI officials, under instruction from BCCI management, began altering and destroying documents specified in the subpoena.(156) On September 19, 1988, Clifford and Altman made BCCI's first production of the subpoenaed documents, with a second production on September 21, 1988, accompanied by representations from BCCI, through Clifford and Altman, that no other documents pertaining to the subpoena existed.

After retaining separate counsel from BCCI and ceasing being represented by Clifford and Altman, Awan began to take the position that he would be at less risk if he did not object to the production of documents, and cooperated with the Subcommittee, a position that contradicted Clifford & Warnke's position that if Awan provided information, his life would be risk. Awan's tentative decision to cooperate with the Subcommittee, communicated on September 22, 1988 to lawyers at Clifford & Warnke, caused "distress" to the Clifford & Warnke lawyers handling the matter, as set forth in a September 22, 1988 memorandum from John Kovin, a partner at Clifford & Warnke, to Altman and another partner:

A literal reading of John Grabow's telephone message is somewhat distressing. If it means that no objections of any nature will be interposed to the production of documents in response to Amjad Awan's subpoena -- including any concerns that Mr. Awan may have about his personal safety -- it may cause us to alter the stance that we have adopted with the Committee staff up to this point.(157)

A second memorandum to the file from Kovin describes a meeting five days later in which the Clifford & Warnke attorneys are clearly trying to convince Awan's lawyers to maintain a collective strategy of keeping documents from the Committee. The September 27, 1988 memorandum, marked "privileged and confidential," from Kovin states:

In response to specific questions by Mr. Grabow [Awan's attorney], I responded that we had not provided any copies of Mr. Awan's expense or compensation records for retention by the Committee, nor had we provided any copies of "Noriega documents". With respect to the latter category, we do not intend at the present time supplying any such documents."(158)

In a memorandum three days later, Kovin wrote that "Awan turned over the so-called Noriega documents", and "Awan noted to Grabow but not to Blum that certain of his travel records --supplied to this firm -- from the period when he was stationed in Miami had not been produced."(159) Thus, Clifford & Warnke knew as of September 30, 1988 that documents responsive to the subpoena existed and had not been provided to the Senate. Kovin's recommendation as to how to proceed regarding those documents was not to conduct a search for them in order that they be provided the Senate, as was legally and ethically required of BCCI's attorneys, given the service of the Senate subpoena, but instead to "check on this [the missing documents] in the event it later became the subject of additional questions."(emphasis added)(160)

During September and October, Blum deposed Awan and a second BCCI witness, as the Subcommittee completed its two year investigation of drug trafficking in Central America and prepared its final report. When Blum's appointment at the Foreign Relations Committee lapsed in March, 1989, BCCI officials were told that Clifford and Altman had taken care the Foreign Relations Committee, and that the investigation was over.(161)

On July 7, 1989, after a June 15, 1989 broadcast by NBC on BCCI's involvement with General Noriega, describing BCCI documents concerning Noriega, Senator Kerry wrote Clifford noting that NBC apparently had obtained documents which had been subpoenaed by the Foreign Relations Committee and never provided.

Four days later, Clifford wrote Senator Kerry to state: "I am in receipt of your letter dated July 7, 1989," and noted that "we shall continue to try to be responsive to the needs of the Subcommittee."(162)

A meeting was set up for July 17, 1989, between Kerry staff and lawyers for BCCI to discuss the Subcommittee on Narcotics and Terrorism request for documents relating to bank accounts which General Noriega and the government of Panama held at BCCI branches in London, England. At the meeting, Altman and Raymond Banoun, a criminal defense attorney representing BCCI, advised the Subcommittee that no documents responsive to Subpoena were in the United States and that all documents were in London, had been reviewed, and did not refer to documents in the United States. The next day, Subcommittee staff wrote BCCI's attorneys to request the immediate provision of the documents to the Subcommittee to the extent that any such document had ever been in the United States, prompting a reply letter from BCCI's attorneys reaffirming BCCI's offer to assist the Subcommittee in obtaining the documents. The documents from London were ultimately provided to the Subcommittee in late November, 1989, and were found to refer to dozens of transactions involving BCCI records maintained at First American, which passed through First American, or which involved BCCI's representative office in Washington.

After reviewing these documents, Kerry staff noted that they referred to numerous documents at First American and BCCI Washington which should have been produced by BCCI to the Senate in the fall of 1988. On May 14, 1989, staff met with Altman, Banoun and Larry Wechsler, another BCCI lawyer, and the lawyers produced 775 pages of new documents concerning Noriega.

At this meeting, the attorneys stated that they relied on Awan's statements and conducted no independent searches for documents in 1988 in response to the Committee subpoena. Altman, who had previously told staff that he had reviewed all of Noriega's documents in London and that none of them referred to transaction in the United States, now suggested that his initial review had been casual at best, and that he had simply not noticed any such transactions.(163)

In the meeting, BCCI's lawyers agreed to produce all Noriega and Awan records held at First American by BCCI. Thus, a substantial number of documents which should have been provided to the Committee by Clifford and Altman in response to the subpoena to BCCI by the Foreign Relations Committee were in fact not provided. Indeed, no search at BCCI's accounts at First American had ever been conducted by First American in response to the subpoena to BCCI. The documents ultimately provided showed that, regarding Noriega's banking at least, BCCI and First American had a close working relationship, and that Noriega's funds had passed through First American, focusing further staff attention on the relationship between the two institutions.

During the meeting, in response to a request from the Subcommittee to provide information on loans from BCCI to its shareholders and the shareholders of related entities, including ICIC and CCAH, Altman advised Jonathan Winer of Kerry's staff that none of the shareholders of CCAH currently had loans from BCCI.(164) One week earlier, Altman had told the Federal Reserve precisely the opposite -- that Altman had "heard reports of loans by BCCI to certain shareholders [of CCAH] in amounts ranging from $400 million to over $1 billion."(165) Altman thus made a misleading statement to Senate staff regarding BCCI's outstanding lending to CCAH. Altman of course made no reference to his own past borrowings from BCCI.

By the summer of 1990, as the Subcommittee persisted in its efforts to learn more about BCCI's relationship to First American, the Subcommittee scheduled hearings intended to focus attention on the relationship between the two institutions. In response, according to two confidential memoranda prepared by a BCCI lawyer at the firm of Holland & Knight in Florida, based on conversations with Philip Manuel, a private investigator hired by BCCI in connection with its criminal defense, Altman and Banoun sought to call in "political markers" in an effort to stop the Subcommittee inquiry. As specified in the second of the two memoranda:

The Source [Manuel] stated that Altman and Banoun are opposing the subpoenas and doing everything within their power to call in "political markers." Consequently, it may be that Altman and Banoun will succeed in quashing their subpoenas or having them withdrawn; and not end up testifying before the Kerry Committee.(166)

Altman testified that he had "no idea what the author is talking about when he talks about calling in political markers," noting that he had never even asked for a delay of the hearing in writing.(167) In fact, staff was informed by Banoun, on behalf of BCCI, that attempts by the Subcommittee to question him or Altman would interfere with BCCI's attorney-client privilege, an assertion reiterated by former Senator John Culver, who as part of BCCI's team of lobbyists, contacted the Kerry office to urge a postponement of the planned hearing. After Altman, Banoun, and BCCI refused to appear at any hearing, and the Justice Department alleged that any hearing by the Subcommittee could interfere with its interests, the hearing was postponed, due to the refusal of each of the requested witnesses to agree to testify.

Thus, in contrast to the full cooperation promised by Clifford and Altman to the Subcommittee in the course of its investigation, BCCI's lawyer team, including Clifford and Altman, collectively failed to meet basic obligations to the Senate to insure that subpoenaed documents be produced; sought to convince BCCI officer Awan to tell the Senate that production of documents would threaten his life, at a time when Awan no longer wished to make this assertion; failed to search for documents known to be required by the subpoena and not produced; failed to search other categories of BCCI documents held at the First American Bank; asserted legal obstacles to cooperation on numerous occasions; and declined to provide witnesses at scheduled hearings. These findings represent the bare minimum of their failure to provide the promised cooperation.

Federal Reserve Charges

On July 29, 1992, in coordination with criminal cases brought by the Justice Department and the New York District Attorney, the Federal Reserve issued its summary of charges against Clifford and Altman, specifying its findings of violations of law and regulations, and proposing to bar them from banking for life.

In its summary of charges, the Federal Reserve charged Clifford with four counts of violations of law and regulation, and Altman with seven counts of such violations.

The first count charges Clifford and Altman with having violated the Bank Holding Company Act by participating in BCCI's acquisition of control of CCAH/First American in violation of that law. Included in that count are numerous factual allegations concerning false statements and concealment of information by Altman.

The second count charges Clifford and Altman with having violated the Federal Reserve's order regarding the FGB takeover through violating the commitments made that BCCI would have no role in the management of or lending to First American, and related issues.

The third count charges Altman with having violated the Bank Holding Company Act by participating in BCCI's acquisition and retention of control of the National Bank of Georgia in violation of that act.

The fourth count charges Clifford and Altman with having breached their fiduciary duties to CCAH, First American, and CCAH shareholders by failing to disclose their personal financial arrangements with BCCI regarding their own shares of CCAH.

The fifth count charges Clifford and Altman with having engaged in unsafe and unsound banking practices and breaches of fiduciary duty in connection with premature paying off BCCI loans to CCAH which cost CCAH money.

The sixth count charges Altman with having violated the law by making a number of false statements to the Federal Reserve.

The seventh count charges Altman with having violated the bank Control Act in connection with the purchase of CCAH shares by Masriq, an entity controlled by Saudi banker Khalid bin Mahfouz, against whom the Federal Reserve has issued separate charges, treated elsewhere in this report.

The findings of the Federal Reserve remain subject at this time to a hearing to give Clifford and Altman the opportunity to rebut the Federal Reserve's case prior to the Federal Reserve reaching a final determination on these findings.

1. House Committee on Banking, Finance, and Urban Affairs, September 11, 1991, Serial No. 102-69, p. 36.

2. S. Hrg. 102-350 Pt 3, p. 63.

3. S. Hrg. 102-350 Pt. 3, p. 286.

4. S. Hrg. 102-350 Pt 2 p. 505, 518.

5. These findings should not be viewed to correspond to any conclusions that might be reached in connection with the matters at issue in criminal and civil litigation concerning Clifford and Altman in the U.S. District Court for the District of Colombia, and in New York County in the case brought by District Attorney Morgenthau. These findings have been reached on the basis of a record which may include material not admissible in any of those proceedings, and reflects judgments made in the course of Congressional fact-finding, whose rules and procedures do not correspond to those rules and procedures applicable to other proceedings.

6. Lance, S. Hrg. 102-350 Pt. 3 p. 6.

7. Id pp. 7-8.

8. Clifford, S. Hrg. 102-350 Pt. 2 pp. 58-59.

9. Id p. 59.

10. S. Hrg. 102-350 Pt. 3, pp. 11-12.

11. Art Harris and John F. Berry, Washington Post, December 18, 1977, A1.

12. Id.

13. S. Hrg. 102 Pt. 3 p. 70.

14. Id.

15. Sami memo to Abedi 1/30/78, S. Hrg. 102-350 Pt 3, pp. 26-27.

16. October 19, 1978 Application, CCAH to Federal Reserve; see Summary of Charges, Board of Governors of the Federal Reserve, No, 92-080-E-I1, In the matter of Clark M. Clifford and Robert A. Altman, July 29, 1992, Paragraph 33.

17. Summary of Charges, Federal Reserve, Id.

18. Id, paragraph 33(e).

19. Id, p. 33(i).

20. S. Hrg. 102-350, Pt. 3, p.75.

21. S. Hrg. 102-350 Pt. 3 p. 328-330.

22. Clifford, S. Hrg. 102-350 Pt. 3 p. 93.

23. Confidential and Privileged Attendance Note, November 19, 1990, BCCI Attorney memcom of meeting with Roy Carlson, Exhibit D in G and H Montage case.

24. See e.g. Summary of Charges, Board of Governors of the Federal Reserve System, In the matter of Clark M. Clifford, No. 92-080-E-11, July 29, 1992, paragraph 26.

25. Clifford and Altman written testimony before the House Committee on Banking, Finance and Urban Affairs, September 11, 1991, Serial No. 102-69, Pt. 1, p. 21.

26. Letter from Rauh and Bennett to Kerry, October 11, 1991.

27. S. Hrg. 102-350 Pt 3, p. 63.

28. Summary of charges, Federal Reserve, id, paragraphs 51-53.

29. Id p. 64.

30. S. Hrg. 102-350 Pt. 3 p. 77.

31. Altman, S. Hrg. 102-350 Pt. 3 p. 235.

32. Staff interview, Davis, May, 1992.

33. Altman testimony, S. Hrg. 102-350 Pt. 3 pp. 234-235.

34. Board of Governors Federal Reserve System Exhibit AD 134, Afridi to Naqvi, July 25, 1983.

35. Id.

36. Sakhia testimony, S Hrg. 102-350 Pt. 2 p. 513.

37. Summary of charges, Federal Reserve, In Re Clifford, 92-080-E-I1, July 29, 1991 Paragraph 75.

38. S. Hrg. 102-350 Pt. 3 p. 332.

39. Summary of charges, Federal Reserve, In the Matter of BCCI Holdings, 91-043, July 29, 1991, Paragraphs 176-178.

40. p.236. letter from Elley to Naqvi, October 14, 1982

41. S. Hrg. 102-350 Pt. 3 p. 238.

42. S. Hrg. 102-350 Pt. 3 p. 77.

43. Summary of charges, Federal Reserve, In the matter of Clifford, id, Paragraphs 80-86.

44. Id, Paragraph 92.

45. Id, paragraphs 92-103.

46. Summary of charges, Federal Reserve, Clifford, id, Paragraphs 87-91, see also personnel files, BCCI New York, Elley and Afridi, records reviewed by Subcommittee staff.

47. p. 241

48. p.241

49. p. 242

50. S. Hrg. 102-350 Pt. 2, Sakhia testimony, October 22, 1991, p. 518.

51. Summary of charges, Federal Reserve, Clifford, id. Paragraph 59.

52. Summary of charges, Federal Reserve, Clifford, id., Paragraphs 60-65.

53. Id, paragraph 68.

54. Id, paragraphs 69-72.

55. Summary of charges, Federal Reserve, Clifford, id, paragraph 110.

56. Summary of charges, Federal Reserve, Clifford, id, Paragraphs 111-115.

57. Id paragraphs 116-117.

58. Id, paragraph 123.

59. Id.

60. S. Hrg. 102-350 Pt 3, p. 78.

61. Id. Paragraph 184.

62. Id, paragraphs 184-187.

63. Summary of charges, Federal Reserve, In the Matter of BCCI, 91-043, July 29, 1991, Paragraph 188.

64. Sakhia testimony, S. Hrg. 102-350 Pt. 2 p. 604.

65. S. Hrg. 102-350, Pt. 2, testimony of Abdur Sakhia, October 22, 1992, p. 605.

66.

1019S. Hrg. 102-350 Pt. 2, pp. 521, 606.

67. Sakhia letter to Abedi, Future Plans in the United States, February 10, 1986, S. Hrg. 102-350, Pt. 2 p. 595.

68. Written statement, Clifford and Altman, S. Hrg. 102-350 Pt. 3 p. 78.

69. Id.

70. Summary of Charges, Federal Reserve, Clifford, 92-080-E-I1, July 29, 1992, Paragraphs 128-129.

71. Id, Paragraph 130.

72. Id, paragraph 134.

73. Id, paragraphs 135-136.

74. Id, Paragraphs 137-138.

75.

1028Summary of charges, Federal Reserve, Clifford, id, paragraphs 141-152; see also S. Hrg. 102-350 Pt 3. pp 394-400.

76. Id, Paragraphs 153-154.

77. See document reprinted S. Hrg. 102-350 Pt. 3 pp. 402-403.

78. Id, paragraph 162; see also memorandum "Option to Acquire National Bank of Georgia reprinted in House Committee on Banking, Finance, and Urban Affairs, September 11, 1991, Serial No. 102-69, Pt. 1, pp. 309-311.

79. Summary of charges, Federal Reserve, Clifford, id, paragraphs 163-166.

80. Id, paragraph 170.

81. Id.

82. Id, paragraph 171.

83. Id, paragraph 177.

84. Summary of charges, Federal Reserve, Clifford, id, paragraphs 177-178.

85. Id, paragraph 180.

86. Id, paragraph 183.

87. S. Hrg. 102-350 Pt 4 p. 494.

88. Id, paragraphs 187-188.

89. Id, paragraphs 195-202.

90. Id, paragraphs 205-206.

91. Id, paragraphs 207-212.

92. Id, paragraphs 215.

93. Staff interview, Chinoy, March 9, 1992.

94. Id.

95. Summary of charges, Federal Reserve, Clifford, id, Paragraph 104.

96. S. Hrg. 102-350 Pt 3, p. 245.

97. Sakhia, S. Hrg. 102-350 Pt. 2 p. 597.

98. S. Hrg. 102-350 Pt. 3 pp. 80-81.

99. S. Hrg. 102-350, Pt. 3, p. 62.

100. S. Hrg. 102-350 Pt. 3, p. 97.

101. S. Hrg. 102-350 Pt. 3, p. 103. Clifford explained that "book...is based ...upon the excess of assets over liabilities of that particular company, as of a particular time."

102. Summary of charges, Federal Reserve, Clifford, id, Paragraph 249.

103. Id, paragraph 251.

104. S. Hrg. 102-350, Pt. 3, p. 98.

105. S. Hrg. 102-350 Pt. 3, p.101.

106. Summary of charges, Federal Reserve, Clifford, id, paragraphs 253-254.

107. p. 100

108. S. Hrg. 102-350 Pt. 3, p. 103.

109. Summary of charges, Federal Reserve, Clifford, id, Paragraph 257.

110. Id, paragraph 257.

111. S. Hrg. 102-350 Pt. 3 pp. 80-81.

112. Summary of charges, Federal Reserve, Clifford, Id, Paragraph 258.

113. Clifford & Warnke Memorandum to James E. Lewis from Clifford and Altman, reprinted House Serial No. 102-69, Pt. 1, pp. 760-761.

114. Summary of charges, Federal Reserve, Clifford, id, Paragraphs 264-267.

115. Summary of charges, Federal Reserve, Clifford, id, Paragraph 268.

116. p.191

117. p.193

118. Summary of charges, Federal Reserve, Clifford, id, Paragraphs 269-270.

119. Id, paragraph 271-272.

120. p.197

121. p.194

122. Summary of charges, Federal Reserve, Clifford, id, Paragraph 275.

123. S. Hrg. 102-350 Pt. 3, p. 202.

124. Federal Reserve summary of charges, In re Clifford, id, Paragraph 290.

125. Summary of charges, Federal Reserve, Clifford, id, Paragraph 299.

126. Id, paragraph 300.

127. Id, paragraph 303.

128. Summary of charges, Federal Reserve, Clifford, id, Paragraph 305.

129. S. Hrg. 102-350 Pt. 3 pp. 206-207.

130. S. Hrg. 102-350 Pt 3 p. 207.

131. Kerry-Rybeck communication, October 22, 1991.

132. Altman Memorandum to the File, Clifford and Warnke, July 6, 1990, reprinted in S. Hrg. 102-350 Pt. 5.

133. S. Hrg. 102-350 Pt. 3, p. 266.

134. S. Hrg. 102-350 Pt. 3, p. 269.

135. S. Hrg. 102-350 Pt. 3, p. 270.

136. S. Hrg. 102-350 Pt. 3 p. 286.

137. Compare S. Hrg. 102-350 Pt. 3 p. 449 Memorandum to the File Re: Meeting with Federal Reserve Staff, May 8, 1992; and Memorandum to BCCI Noriega/Senate File From Raymond Banoun, regarding Altman meeting with Kerry Subcommittee staff, May 18, 1990.

138. Staff interview, Amjad Awan, July 20, 1992.

139. Interview with Amjad Awan at Clifford & Warnke on February 23, 1988, reprinted in S. Hrg. 102-350 Pt. 5.

140. Clifford memorandum to Altman, June 1, 1988, reprinted in S. Hrg. 102-350 Pt. 5.

141. Id, Memorandum to the File, Robert A. Altman, August 11, 1988.

142. Awan statements, Staff interview, July 20, 1992.

143. Memorandum to File, Robert C. Sanders, BCCI/Panama, August 29, 1988.

144. Sanders Memorandum to File, August 29, 1988, Re: BCCI/Panama.

145. Id.

146. Id. p. 12

147. Id. p. 22

148. Staff interviews, Awan, July, 1992, and Awan Subcommittee testimony, July 29, 1992, S. Hrg. 102-350 Pt. 6.

149. Id.

150. S. Hrg. 102-350 Pt. 3 pp. 279-280.

151. Id.

152. Id.

153. Awan, Staff Interview, July 20, 1992.

154. Staff interview, Awan, July 27, 1992.

155. Notes of Meeting With Jack A. Blum, Clifford and Warnke, September 9, 1988, reprinted S. Hrg. 102-350 Pt. 5.

156. Staff interview, Akbar Bilgrami, July 13-14, 1992.

157. Privileged and confidential Memorandum to Mssrs. Altman and Sanders Re: BCCI Congressional Matter, September 22, 1988, reprinted in S. Hrg. 102-350 Pt. 5.

158. Kovin, Memorandum to the File, September 27, 1988, p. 1.

159. Kovin, Memorandum to the file, September 30, 1988, p. 2, reprinted in S. Hrg. 102-350 Pt. 5.

160. Id.

161. Staff interview, Sakhia, October, 1991.

162. Clifford-Kerry correspondence.

163. Winer memcom, May, 1989.

164. See e.g. Memo to BCCI Noriega/Senate File, Raymond Banoun, Re: Meeting with Kerry Subcommittee Staff, May 18, 1990.

165. S. Hrg. 102-350 Pt. 3 p. 449.

166. S. Hrg. 102-350 Pt. 3 p. 538.

167. S. Hrg. 102-350 Pt. 3 p. 278.

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ABU DHABI: BCCI'S FOUNDING AND MAJORITY SHAREHOLDERS

Introduction

There was no relationship more central to BCCI's existence from its inception than that between BCCI and Sheikh Zayed and the ruling family of Abu Dhabi.

Abu Dhabi was present at BCCI's creation as one of two providers of BCCI's capital. It was BCCI's largest depositor, and its largest borrower, and for most of BCCI's existence, its largest shareholder. The relationship between the two entities was, as Price Waterhouse told the Bank of England days before BCCI's closure, "very close," with BCCI providing services to the ruling family of Abu Dhabi far beyond the ordinary relationship of a bank to either its shareholders or depositors.(1)

There are numerous examples of the centrality of the Abu Dhabi relationship to BCCI, and its unusual nature.

In 1972, when BCCI was created, Abu Dhabi shareholders purchased 20 percent of its stock with an investment of $500,000, and then generously agreed to have that interest drop to just over one percent of BCCI just three years later.

In January, 1978, when BCCI decided to enter the United States and purchase shares in Financial General Bankshares, and needed two additional names, the ruling family of Abu Dhabi supplied them.

In 1980 and 1981, when BCCI needed a purchaser for Bank of America's shares in BCCI, and had no one other than its bogus Grand Caymans bank-within-a-bank, ICIC, to buy them, Abu Dhabi stepped in once again to increase its interest in BCCI.

Throughout the 1970's and 1980's, the Abu Dhabi ruling family and the Abu Dhabi government placed billions of dollars in deposits at BCCI and its affiliates, such as ICIC, giving BCCI and its head, Agha Hasan Abedi, the right to manage those assets, and a power of attorney to act in the name of Sheikh Zayed.

In 1990, when accountants and regulators in the United Kingdom found fraud at BCCI, the Abu Dhabi ruling family and government stepped in again, agreeing to formally buy the bank, assert control, guarantee its losses, replace BCCI's head with the head of its own BCCI affiliate, the Bank of Credit and Commerce Emirates (BCCE), move BCCI's operations and records from London to Abu Dhabi, and work on a plan to find a way to save the bank despite its having acknowledged "mishandling" at least $2.2 billion of Abu Dhabi's money.

By July 5, 1991, when BCCI was closed globally, the Government of Abu Dhabi, its ruling family, and an investment company holding the assets of the ruling family, were the controlling, and official "majority" shareholders of BCCI -- owning 77 percent of the bank. But since the remaining 23 percent was actually held by nominees and by BCCI's alter-ego ICIC, Abu Dhabi was in fact BCCI's sole owner.

After July 5, 1991, it was in Abu Dhabi that most of BCCI's top officials remained, where they remain under the control of the Abu Dhabi government, under conditions said to be luxurious, which the Abu Dhabi government refuses to discuss. While there, they have remained incommunicado, and out of the reach of foreign investigators, unwilling, or unable, to tell the world what happened.

In short, there is no question that the relationship between Abu Dhabi and BCCI was central to both, and that no adequate understanding of BCCI is possible without an understanding of the Abu Dhabi relationship. Yet according to the testimony presented to the Subcommittee by Abu Dhabi, that relationship was one that boiled down to little more than victim (Abu Dhabi) and criminal (Abedi and BCCI). In essence, according to Abu Dhabi, BCCI abused Abu Dhabi's trust by stealing deposits and mismanaging a bank it owned, making Abu Dhabi by its own account BCCI's largest victim, losing what it describes as some $6 billion in all.

Thus, by Abu Dhabi's account, it never knew that most or all of BCCI's shareholders were front-men or nominees for BCCI, including the heads of state of several of the smaller sheikhdoms of the United Arab Emirates of which Sheikh Zayed is president, sheikhs who are generally understood to treat Sheikh Zayed with great deference. It never knew that such prominent shareholders as Kamal Adham and A.R. Khalil, two successive heads of Saudi intelligence, were also nominees for the bank, along with such well-known Middle Eastern financial figures as Faisal Fulaij of Kuwait and Ghaith Pharaon of Saudi Arabia. Unlike these other figures, who were part of BCCI's deceptions, and who by Abu Dhabi's account participated in BCCI's schemes to deceive Abu Dhabi, Abu Dhabi contends it was innocent of wrongdoing, and utterly duped.(2) To quote the testimony of Abu Dhabi's witness before the Subcommittee, Ahmed Al Sayegh:

We didn't know anything about the bank [BCCI] because of our passive role in the past [prior to taking control in April 1990].(3)

However, unlike any other shareholder, officer, attorney, agent or depositor of BCCI, Abu Dhabi has been in the position, since April, 1990, of having total control over BCCI's records. At least eighteen of its key officers, who have remained held incommunicado and under house arrest in Abu Dhabi since BCCI's collapse. During that period, Abu Dhabi has chosen not to make any of these witnesses available to U.S. law enforcement. While it did, temporarily, make some key documents available to the Federal Reserve concerning the involvement of non-Abu Dhabi figures in BCCI's wrongdoing prior to BCCI's closure, it has at all times prevented federal investigators from having free access to BCCI's records, and all access to those records has been ended since July 5, 1991.

Thus, Abu Dhabi has remained throughout the past fourteen months in the position of being able either to prove its assertions, or risk disproving them, through the simple act of granting access to the critical BCCI information it alone controls, in witnesses and documents. Yet it has chosen not to do so. In the process, Abu Dhabi has made, and broken, repeated commitments to provide both witnesses and documents to the Justice Department, the New York District Attorney, and the Senate, going as far back as November, 1990, and continuing to the present.

Given Abu Dhabi's suppression of critical information about its role in BCCI, its contention that it is innocent of all wrongdoing in connection with BCCI, would, on this basis alone, inevitably be viewed with some skepticism.

But despite Abu Dhabi's withholding of essential witnesses and documents, BCCI financial records obtained to date by investigators, together with testimony and statements from BCCI insiders, outline a picture of the relationship which suggests that Abu Dhabi officials were indeed knowing participants in substantial wrongdoing pertaining to BCCI's activities in the United States and elsewhere, that members of the Abu Dhabi ruling family participated in risk-free investments in BCCI banks, and that Abu Dhabi officials engaged, as of April, 1990 on some issues and on others much earlier, in a cover-up of fraudulent activity involving BCCI, which continues, in substantial part, to this day.

Findings

** Members of Abu Dhabi's ruling family appear to have contributed no more than $500,000 to BCCI's capitalization prior to April 1990, despite being the record owner of almost one-quarter of the bank's total shares, with a book value of over $750 million as of December 31, 1989. However, the Abu Dhabi Investment Authority, holder of a 10 percent interest in BCCI beginning in 1980, appears to have made some cash payments for its interest in BCCI, which had a book value of approximately $250 million as of December 31, 1989. An unknown but substantial percentage of the shares acquired by Abu Dhabi overall in BCCI appear to have been acquired on a risk-free basis -- either with guaranteed rates of return, buy-back arrangements, or both.

** The apparent interest held in BCCI by the Abu Dhabi ruling family, like the apparent interests held by the rulers of the three other gulf sheikdoms in the United Arab Emirates who owned shares of BCCI, materially aided and abetted Abedi and BCCI in projecting the illusion that BCCI was backed by, and capitalized by, Abu Dhabi's wealth. However, Abu Dhabi provided BCCI only the use of its name rather than substantial capital, until at least 1980-1981. At that time, "investments" made in BCCI by the Abu Dhabi Investment Authority to purchase shares of BCCI sold by the Bank of America to ICIC, appear to have involved actual payments from Abu Dhabi, according to some documents, on a no-risk, guaranteed return basis.

** Shares in Financial General Bankshares held by members of the Abu Dhabi ruling family in late 1977 and early 1978 appear to have been nominee arrangements, adopted by Abu Dhabi as a convenience to BCCI and Abedi, under arrangements in which Abu Dhabi was to be without risk, and BCCI was to guarantee the purchase through a commitment to buy-back the stock at an agreed upon price. Later, one of the two original members of the Abu Dhabi ruling family in fact sold back his shares to another BCCI front-man, Kamal Adham.

** Abu Dhabi's representative to BCCI's board of directors, Ghanim al Mazrui, received unorthodox financial benefits from BCCI in no-risk stock deals which may have compromised his ability to exercise independent judgment concerning BCCI's actions; confirmed at least one fraudulent transaction involving Abu Dhabi; and engaged in other improprieties pertaining to BCCI; but remains today in place at the apex of Abu Dhabi's committee designated to respond to BCCI's collapse.

** In April, 1990, Abu Dhabi was told in detail about BCCI's fraud by top BCCI officials, and failed to advise BCCI's external auditors of what it had learned. Between April, 1990 and November, 1990, Abu Dhabi and BCCI together kept some information concerning BCCI's frauds hidden from the auditors.

** From April, 1990 through July 5, 1991, Abu Dhabi tried to save BCCI through a massive restructuring. As part of the restructuring process, Abu Dhabi agreed to take responsibility for BCCI's losses, Price Waterhouse agreed to certify BCCI's books for another year, and Abu Dhabi, Price Waterhouse, the Bank of England, and BCCI agreed to keep all information concerning BCCI's frauds and other problems secret from BCCI's one million depositors, as well as from U.S. regulators and law enforcement, to prevent a run on the bank.

** After the Federal Reserve was advised by the New York District Attorney of possible nominee arrangements involving BCCI and First American, Abu Dhabi, in an apparent effort to gain the Federal Reserve's acquiescence in BCCI's proposed restructuring, provided limited cooperation to the Federal Reserve, including access to selected documents. The cooperation did not extend to permitting the Federal Reserve open access to all BCCI documents, or substantive communication with key BCCI officials held in Abu Dhabi, such as BCCI's former president, Swaleh Naqvi. Access was sufficient, however, to permit the Federal Reserve to identify critical documents regarding frauds involving non-Abu Dhabi shareholders and borrowers of BCCI and BCCI itself pertaining to CCAH/First American, the National Bank of Georgia and the Independence Bank. That access ended with the closure of BCCI July 5, 1991.

** From November, 1990 until September 21, 1992, Abu Dhabi failed to provide documents and witnesses to U.S. law enforcement authorities and to the Congress, despite repeated commitments to do so. Instead, it actively prevented U.S. investigators from having access to vital information necessary to investigate BCCI's global wrongdoing. As of September 21, 1992, Abu Dhabi began making certain documents available for review by U.S. law enforcement, in a move apparently timed to coincide with the publication of this report. No representation has been made by Abu Dhabi, or by U.S. law enforcement, as to the significance or completeness of the documents Abu Dhabi selected for law enforcement review at its Washington, D.C. Embassy. Moreover, none of the BCCI officials held in Abu Dhabi have yet to be made available for interview by U.S. law enforcement. At the time of writing of this report, none of the newly available documents had been made offered by Abu Dhabi for review by the Subcommittee.(4)

** The proposed agreement between Abu Dhabi and BCCI's liquidators to settle their claims against one another contains provisions which could have the consequence of permitting Abu Dhabi to cover up wrongdoing it may have had in connection with BCCI.

** Answers by Abu Dhabi's representative to key questions from the Subcommittee about Abu Dhabi's role in BCCI, were non-responsive, evasive, and misleading, although for the most part artfully crafted to avoid being literally untrue.

** There is some evidence that the Sheikh Zayed may have had a political agenda in agreeing to the involvement of members of the Abu Dhabi ruling family and its investment authority in purchasing shares of Financial General Bankshares, then of CCAH/First American. This evidence is offset, in part, by testimony that Abu Dhabi share purchases in the U.S. bank were done at Abedi's request and did not represent an actual investment by Abu Dhabi until much later.

Origin and Nature of BCCI-Abu Dhabi Relationship

The chapter on BCCI's early history describes in detail the early history of Abu Dhabi and BCCI, which is recapitulated in summary form here.

Abu Dhabi is the largest and wealthiest member of the United Arab Emirates, an oil-rich federation of sheikhdoms, formed in 1971, whose rulers own all the land and natural resources of their nations in fee simple absolute, with no distinctions being made among the wealth of the ruler, his family, and the nation itself. Sheikh Zayed of Abu Dhabi, installed in 1966 as head of the newly wealthy oil state through a British-led coup against his brother in 1966, soon after developed a relationship with Agha Hasan Abedi, head of the United Bank of Pakistan. Six years later, when Abedi decided to form BCCI, he did so after receiving the blessing of Sheikh Zayed, and a commitment of support. That support involved a tiny capital contribution to the bank by Abu Dhabi -- $500,000 -- and a huge placement of petrodollars.

As set forth in the chapter on BCCI's early history in some detail, the relationship between BCCI and Sheikh Zayed exceeded normal standards of bank/client relationships in a number of respects. BCCI was not merely a bank owned in part by Sheikh Zayed. Sheikh Zayed was not merely BCCI's largest depositor. BCCI for many years handled almost every financial matter of consequence for the Sheikh and his family, as well planning, managing, and carrying out trips abroad, and a wide range of services limited only by the desires of the Al Nayhan family itself.(5)

In his testimony of May 18, 1992, Abu Dhabi's representative Ahmed Al Sayegh suggested that Abedi's role in Abu Dhabi has been much overstated:

When Mr. Abedi was a respected banker and founder of BCCI, his role, therefore, was limited to his bank. . . . His role in the case, I guess, was limited to inducing potential investors in making commitments to his bank, whether buying shares or placing deposits. . . He was not a financial advisor [to Abu Dhabi or Sheikh Zayed].(6)

Other information obtained by the Subcommittee from many sources demonstrates that Al Sayegh's testimony on this point was untrue. In fact, for over twenty years, Abedi created and managed a network of foundations, corporations, and investment entities for Abu Dhabi's ruling family, of a complexity similar to the network he had created at BCCI itself. BCCI handled the financing arrangements for many of these entities, and managed a variety of Abu Dhabi's portfolio accounts in U.S. dollars.(7) As far back as 1969 and 1970, when Abedi was still head of the United Bank in Pakistan, Abedi established a cargo shipping company, the Hilal Group, operated by Associated Shipping Services, Limited, London, as an operational company for Abu Dhabi's Department of Private Affairs. Though primarily used to own cargo ships, the entity was also used for trading in equities, holding property investments, and other direct investments. One of the entities owned by Hilal Group, Progressive Investment, had Abedi on its board. Later, when BCCI established the Cromwell Hospital in London to provide a medical facility for the Abu Dhabi ruling family and other prominent Middle Easterners, Abedi arranged for the financing of the purchase for Abu Dhabi through a complex series of transactions involving BCCI and a shell corporation holding Sheikh Zayed's interests by which BCCI lent the funds for the hospital in pounds against dollar accounts of the Department of Private Affairs, with the result that the hospital investment did not appear on the books of the Department.(8)

Moreover, BCCI and Abu Dhabi also engaged in a series of joint ventures, managed by BCCI, throughout the 1980's. Typical of such ventures was the China-Arab bank, a joint venture of BCCI and the Abu Dhabi Investment Authority, established in China in 1985 coincident with BCCI's opening of offices in China, to use funds from Abu Dhabi to invest in China. BCCI accounting records show a number of other ventures involving BCCI and Abu Dhabi in China, as well as numerous financial relationships involving BCCI and Abu Dhabi interests throughout the 1980's.(9)

Contrary to Al Sayegh's testimony, Abedi had broad authority over the investments and finances of the ruling family until his stroke in 1989. As the present chairman of the Department of Private Affairs of Sheikh Zayed, Ghanim Al Mazrui testified in civil litigation in 1982, Abedi could even be viewed as an official of the Abu Dhabi government, because of his position on the Abu Dhabi committee responsible for overseeing Abu Dhabi's wealth.(10)

As Bert Lance observed, the relationship was exceedingly intimate:

Mr. Abedi . . . had, in effect, for lack of a better term, been kind and attentive to Sheikh Zayed when he was still wandering around in the desert and he had all his assets in his tent somewhere . . . I think this is important to you as you search for the truth, to understand that that relationship went back a long way -- and it went back before Sheikh Zayed became "the richest man in the world" at that point in time, with an income of some $4 billion or $5 billion, as the press reported; that there had been a relationship that had developed that Mr. Abedi had helped Sheikh Zayed when he had no real power or influence . . . Sheikh Zayed had absolute and total trust and coincidence in Mr. Abedi, that whatever Mr. Abedi said or suggested was something that Sheikh Zayed would look on with favor; that Mr. Abedi had, in effect, built the house where we were [meeting with Sheikh Zayed in his palace] outside of Lahore without any guidance or direction from Sheikh Zayed, and it was that sort of relationship. It was very, very unique.(11)

BCCI also provided members of the Abu Dhabi ruling family with personal services, ranging from Sheikh Zayed's own modest needs to the more elaborate requirements of his sons and members of his retinue. A history of BCCI's protocol department, and its relationship to Abu Dhabi, is set forth in the chapter on BCCI's early history.

Throughout the first critical decade of BCCI's eighteen year existence, as much as 50% of BCCI's overall assets were from Abu Dhabi and the Al Nayhan family, who were earning about $750 million a year in oil revenues in the early 1970's, an amount that rose to nearly $10 billion a year by the end of the decade. Until the formation of a separate affiliate, the Bank of Credit and Commerce Emirates (BCCE), BCCI functioned as the official bank for the Gulf emirates, and handled a substantial portion of Abu Dhabi's oil revenues. And yet from the beginning, there was an oddity about this central relationship: at no time while Abedi was in charge of BCCI did Abu Dhabi hold more than a small share of BCCI's recorded shares. Abu Dhabi appears not to have invested substantial funds in BCCI, but instead to have insisted on guaranteed rates of return for the use of its money. Thus, rather than being a major investor in BCCI, in the early years, Abu Dhabi only agreed to place extremely large sums of money as deposits at the bank, which BCCI used in lieu of capital.

As a result of the Abedi-Zayed agreement, Abedi now had essentially unlimited resources to create BCCI. He could now act simultaneously as manager of billions of Sheikh Zayed's personal wealth, as banker to the United Arab Emirates of which Sheikh Zayed was chief of state, and as chairman of a new bank that had guaranteed assets of hundreds of millions of dollars from its inception.(12)

Abedi thus relied on the Sheikh's resources to finance his rapid expansion, not through capital investment, but as a huge depositor. The result was BCCI's finances quickly became so intermingled with the finances of Abu Dhabi that it was difficult even for BCCI insiders to determine where one left off and the other began. Whether Abu Dhabi insiders, including Abu Dhabi's representative on BCCI's board of directors, Ghanim Al Mazrui, knew of this intermingling, remains an open question.

Abu Dhabi's Ownership Interest In BCCI

Although Abu Dhabi had a key interest in BCCI from its creation, in accord with Abu Dhabi's failure to provide the initial funds for capitalization, BCCI's early stock recordations did not show Abu Dhabi as the actual owner of the bank. A snapshot of BCCI shares from Bank of America files as of September 30, 1977 described BCCI's majority owner as ICIC, at 50.1 percent; its most important minority owner as Bank of America, at 30 percent; and its largest Arab owner as Majid Al-Futaim of Dubai in the United Arab Emirates at just 4 percent, with the members of the family of Abu Dhabi owning just 3.4 percent all told.(13)

According to Abu Dhabi itself, it actually had a 20 percent interest in BCCI in 1972, which then dropped to less than five percent some two years later, with Abu Dhabi remaining a "passive investor," without formal representation on BCCI's board until 1981.(14)

In response to the Subcommittee's request for information on the history of Abu Dhabi's ownership interest in BCCI, Abu Dhabi provided on May 13, 1992, a list of Abu Dhabi shareholding in BCCI Holdings (Luxembourg) S.A., one of BCCI's two flag-ship holding companies, which it described as "based on preliminary review of documents."

The shareholding list provided by Abu Dhabi does not begin until 1975, three years following BCCI's founding in 1972, and after, for reasons not fully explained, Abu Dhabi's declared ownership in BCCI shares had dramatically dropped. It shows an unusual pattern of ownership of BCCI shares by the Al Nayhan family and the Abu Dhabi Investment Authority (ADIA).

Overall, after beginning at 20 percent in 1972, the Al-Nayhan family's ownership of BCCI dropped to less than three percent in 1975, and then to just over one percent of BCCI in 1976, where its interest remained, with small increases until 1980. In 1980, the Al Nayhan family's holdings of BCCI sharply increased to over 8 percent, in 1981 increased sharply again to over 18 percent, and by 1984 had reached 27 percent, and by 1986, 33 percent, where it remained until 1990, when Abu Dhabi became -- officially -- a 77 percent owner of BCCI.(15)

What is unusual about this pattern is the drop from Abu Dhabi's holdings of 20 percent to less than 2 percent in three years, followed by an increase from 2 percent to 18 percent five years later. It is difficult to understand why any shareholder of a rapidly growing bank would be willing to sell off or dilute so much of its interest in the years in which the bank's value was rapidly increasing, and then buy back that interest at far greater cost following five years of growth.

Sheikh Zayed's own holdings of BCCI displayed a still stranger pattern. After owning 20 percent of BCCI in 1972, his personal ownership had dropped to 2.26 percent in 1975, dropped still further to less than one percent -- just .59 percent -- in 1976, and lower yet in 1977 to .47 percent of BCCI, before suddenly climbing in 1980 to 4.11 percent, when Sheikh Zayed purchased 80,000 shares in the bank. Sheikh Zayed then resold these same 80,000 shares the following year, reducing his ownership interest from the 4.11 percent back to .47 percent. In 1984, he purchased BCCI shares anew and his interest again climbed to over four percent, the vicinity in which his personal interest in BCCI remained to BCCI's closing.

Despite explicit requests to do so, Abu Dhabi failed to provide to the Subcommittee any explanation of the peregrinations of Abu Dhabi's ownership of BCCI stock, the price paid for the shares purchased, or the price received for the shares sold. Prior to the May 14 hearing, staff advised lawyers for Abu Dhabi that the purchase and sales prices of the stock and any funds provided by Abu Dhabi to BCCI as capital were critical issues requiring answers. Apart from the statement that Abu Dhabi paid $500,000 for its original interest in BCCI in 1972, Abu Dhabi provided no answer to these questions. To the extent that Abu Dhabi did not pay for such shares, there would be substantial questions as to whether it, like BCCI's other shareholders, was also a nominee for BCCI.

The patterns shown above, for the period up to April, 1990 are in some respects more consistent with a nominee relationship as with an ownership relationship, except for the 10 percent ownership of BCCI held from 1980 on the Abu Dhabi Investment Authority, which appears to be genuine. However, even that ownership interest in BCCI by Abu Dhabi cannot be viewed as conclusive in the absence of access to any buy-back arrangements from BCCI that might have existed.

For example, evidence for concluding that Sheikh Zayed's interests in BCCI could have been as a nominee for BCCI, or interchangeable with BCCI, is the purchase by him for an unknown price and sale for another unknown price, of 80,000 shares in BCCI, over one year. This is not a normal practice for share trades in a privately held bank by a party with a long-standing ownership interest in the bank. Similar transactions involving BCCI's manipulation of shares in CCAH/First American were definitively found by the Federal Reserve to have been either shams or nominee transactions.

On the other hand, Abu Dhabi did, from 1981 onwards, own ever increasing percentages of BCCI, principally through Sheikh Zayed's son, Sheikh Khalifa, and the Abu Dhabi Investment Authority, becoming the largest shareholders of the bank at some point in the 1980's. This suggests the possibility that Abu Dhabi actually owned the stock, regardless of guaranteed returns or buy-back arrangements to "eliminate" risk to Abu Dhabi.

Following the May 14, 1992 hearing in which Abu Dhabi's representative, Ahmed Al Sayegh, testified, the Subcommittee tried again to elucidate the truth about this issue.

It reiterated in questions to Al Sayegh the request that Abu Dhabi specify the capital actually paid in by the Abu Dhabi shareholders at the time of each stock purchase, including the date of each infusion of capital, and the amount paid in. Al Sayegh did not provide the answer to the question of how much Abu Dhabi paid each time for its shares of BCCI stock. Instead, he stated:

Many of the Majority Shareholders' share purchases were from third parties, rather than purchases of newly-issued stock, and other stock acquisitions came in the form of dividends. . . In any event, I am unaware of the details of amounts paid for shares in particular transactions.(16)

The Subcommittee has asked Abu Dhabi to provide a knowledgeable witness regarding such questions for over two years, beginning in July, 1990. In the spring of 1992, it requested that Abu Dhabi's representative on BCCI's board of directors, Ghanim Al Mazrui, appear to testify. Instead, Al Sayegh was selected. His written answers were provided to the Subcommittee five weeks after his testimony, through Abu Dhabi's Washington, D.C. lawyers at Patton, Boggs & Blow. Hence, Al Sayegh's statement that he is "unaware of the details" amounts to nothing less than a refusal by the government of Abu Dhabi to answer the questions asked: what the Abu Dhabi shareholders of BCCI actually paid for the fifteen separate purchases of BCCI stock listed by Abu Dhabi as having been made and what other shareholders paid for the shares of BCCI stock sold in that period by Sheikh Zayed, his son, Sheikh Khalifa bin Zayed, and the Abu Dhabi Investment Authority. Answers to those questions would be vital in demonstrating that Abu Dhabi was a legitimate, non-nominee shareholder for all of its shares. The fact that Abu Dhabi has refused to answer these questions suggests that the facts if revealed would not be helpful to Abu Dhabi's position that it was never a nominee for BCCI, and was always at risk.

Information contained in the Section 41 report of Price Waterhouse of June, 1991, provided to the Bank of England and obtained by the Subcommittee in an uncensored form only in late August, 1992, further suggests that the shares in BCCI held by the ruling family of Abu Dhabi were purchased according to BCCI's typical practices for nominees -- paid for by loans from BCCI itself, with buy-back agreements and guarantees to insure the purchaser against loss.

The Section 41 report states that the initial capitalization of BCCI was just $2.5 million, and that subsequent increases of capitalization, to $845 million as of December 31, 1990, had been carried out through the extensive use of nominee arrangements, financed directly by loans from BCCI and its bank-within-a-bank, ICIC Grand Caymans.

In the report, Price Waterhouse specifically found that members of the Ruling Family of Abu Dhabi acquired their shares on the basis of guaranteed rates of return and buy-back arrangements, with the result that they were not at risk for their ostensible "shareholdings" of BCCI.(17)

While the evidence is not conclusive, there is a significant possibility that BCCI simply loaned the ruling family the funds for its stock, or provided them gratis

A list of major loans to shareholders of BCCI prepared in connection with a BCCI audit for the year ending September 30, 1987, shows lending to the Ruler of Abu Dhabi as standing at $620,800,000 -- some $74 million more than the authorized "limit" for lending to Sheikh Zayed establish by BCCI's credit committee, and more than twice the amount lent to the next highest borrower, Ghaith Pharaon at $283,900,000. A second such list, dated July 31, 1991, shows loans to the Abu Dhabi group from BCCI totalling $371.8 million, with an additional $17.5 million in loans to Abu Dhabi from BCCI's affiliate, ICIC, for a total lending to Abu Dhabi of just under $390 million. After the Abu Dhabi group, BCCI's next highest level of lending to a shareholder was to its front-man, Kamal Adham, at $323.5 million. In either period, the size of the lending to Abu Dhabi was sufficiently substantial that it could have been applied to any number of purposes by either BCCI or Abu Dhabi, including the financing of a significant proportion of the holdings of members of the Abu Dhabi ruling family in BCCI itself and in CCAH/First American.(18)

Abu Dhabi's Involvement in the FGB Purchase

A lengthy account of how Abu Dhabi became involved as shareholders in the purchase of Financial General Bankshares (FGB) is set forth in the chapter on BCCI's entry into the United States.

The key questions that have arisen regarding those facts are whether Sheikh Zayed had a political agenda in participating in BCCI's secret purchase of FGB; whether the Abu Dhabi shareholders were BCCI's nominees in connection with those purchases; whether the Abu Dhabi shareholders knew that BCCI was the real owner of FGB; and whether Abu Dhabi shareholders or representatives knowingly participated in false statements made to the Federal Reserve in connection with the purchase.

Political Agenda?

From the first public awareness of the FGB takeover, reported in early 1978, the issue of whether the Middle Eastern investors in FGB had a political agenda was of substantial concern to regulators. As Virginia's chief banking regulator, Sidney Bailey stated in the public hearing at the Federal Reserve concerning the takeover in the spring of 1981:

There can be little doubt that some incentives other than orthodox investment motives must have prompted this effort. . . One obvious plausible answer to this riddle lies in the unique position of Financial General in the market. No other single financial institution is situated in both the financial and government hubs of the United States.(19)

Bailey wondered whether that secret agenda was somehow related to political goals of the Middle Eastern group involved.

According to Bert Lance, BCCI's initial partner in its most important acquisitions in the United States, both Sheikh Zayed and Abedi indeed felt that BCCI could become a critical element in strengthening ties between the United States and their constituencies. As Lance described a meeting between him, Sheikh Zayed and Abedi in Islamabad, Pakistan in late 1977:

Abedi was concerned about the shifting tides towards the Soviets in Afghanistan, Iran, India and the Mideast. Both Abedi and Zayed each expressed their concerns about the Arab worlds lack of ties to the US. They wanted to do something about it.(20)

This point of view was reflected in a contemporaneous press account in the Washington Post on December 18, 1977. As the article stated:

An Atlanta source close to the negotiations says the Arabs see Lance as giving them access to the administration. Though a private citizen, Lance is a regular visitor at the White House and is the chairman of a $500-to-$1,000-a-plate fund-raiser for President Carter scheduled for January in Atlanta. "Under normal circumstances," says this source, "NBG would be the last bank anyone would be interested in. But the investors see this as an opportunity to do a favor for someone close to the President."(21)

In response to a written question from the Subcommittee chairman, Al Sayegh denied that any of the Abu Dhabi investments in CCAH/First American were related to a larger political agenda:

The suggestion that Sheikh Zayed purchased shares in Financial General Bankshares to acquire influence in the United States suggests improper motives on his part. Not only . . . did he never purchase FGB shares, but the suggestion of improper motive is vehemently denied. The shares that were purchased for Sheikh Sultan and Sheikh Mohammed were solely intended as a passive commercial investment, not to acquire influence in the United States.(22)

Lance, who was present during the period of the original FGB purchases, had no motive to lie on this particular matter. It is not clear who the Washington Post's source was. Al Sayegh, who was not present during any of the events material to this issue, might well not wish to admit any political agenda that existed on the part of the Sheikh. However, the overall evidence accumulated by the Subcommittee on this point is insufficient to be conclusive either way.

Were Abu Dhabi Investors Nominees in CCAH/First American? The Federal Reserve's judgments about the nominee role of the four Middle East investors in the FGB takeover were reached in large part on the basis of documents provided Federal Reserve investigators in the spring of 1991 by Abu Dhabi in Abu Dhabi.

These BCCI documents were in Abu Dhabi, because Abu Dhabi had insisted on moving them from London to Abu Dhabi in the spring of 1990 after being told of fraud at BCCI by BCCI's external auditors, Price Waterhouse, and agreeing to take over BCCI and to provide new funding for the bank to keep it from collapsing.

During their trip to Abu Dhabi in March, 1991, to review the BCCI documents that been moved there one year earlier by Abu Dhabi, the Federal Reserve investigators were not permitted open access to documents. Instead, they advised the Abu Dhabi government of the documents they wanted, and in return, were provided with access to certain files, which were brought by Abu Dhabi representatives to the Federal Reserve investigators' hotel rooms. As a consequence, the investigators recognized at the time that there was a very significant possibility that they were not being provided access to other important files, and that files pertaining to Abu Dhabi could have been hidden or destroyed.(23) The materials provided by Abu Dhabi to the Federal Reserve documented in detail the mechanisms by which Adham, Fulaij, Khalil, El Gohary, and others were used by BCCI as nominees. The materials provided did not include any documents concerning similar arrangements involving Abu Dhabi. Accordingly, the Federal Reserve's judgments about nominees did not reach the question of whether the Abu Dhabi shareholders had arrangements similar to that of the remaining Arabs involved in the 1978 and 1980 FGB takeover.

The Subcommittee has, however, interviewed and received additional statements in some detail, supplemented in more general terms by his sworn testimony, from a key BCCI official who handled the finances of the Sheikh of Abu Dhabi for BCCI in the relevant period, and who had frequent contact in the period 1977 through 1980 with Abdullah Darweish, the Abu Dhabi official handling the shares on behalf of one of Sheikh Zayed's sons during the takeover. This witness, Akbar Bilgrami, convicted of money laundering the Tampa case in 1989, handled personal finances for Sheikh Zayed's Private Department held at BCCI in the late 1970's, working closely with Abedi, Sheikh Zayed, and Darweish, and having numerous direct contacts with each of them in this period.

Bilgrami told the Subcommittee that while he and Darweish were in Marbella, Spain in late 1977 or early 1978, Darweish received a stack of legal papers from BCCI concerning the proposed FGB takeover and the role of the Abu Dhabi investors. Darweish asked Bilgrami to read and review these documents before he would sign them. Bilgrami read them carefully, and told Darweish that while many of the provisions were left in blank, the terms of the documents were for BCCI to provide loans, with buy-back agreements, to several members of the Abu Dhabi ruling family, in nominee arrangements. Bilgrami said the arrangements were complex and involved several interim entities between BCCI and the ruling family shareholders, but that the documents very clearly set forth a nominee relationship involving loans from BCCI for the purchase of shares in the U.S. bank. According to Bilgrami, Darweish told him this was "Abedi's operation," and that it was Darweish's understanding that Abu Dhabi participation in "Abedi's operation" had been cleared and that Darweish would sign the documents. At the time, Darweish advised Bilgrami that he was not happy about signing documents with blanks in them, but that he had little choice since the arrangements had already been made.(24)

Bilgrami concluded at the time that none of Abu Dhabi's funds were being invested in the U.S. and that Abu Dhabi's investors in FGB were all nominees, for several reasons. First, the documents described loans from BCCI to pay the Abu Dhabi investors for the share purchases. Second, the documents referred to "buy back" arrangements, which would give BCCI control over the shares, including the right to buy or sell them, and to set the price of any sale. Third, Bilgrami had had sufficient experience with the Abu Dhabi government to know that Darweish would not sign any document with blanks in it if Abu Dhabi itself was making an investment. Documentation for such investments were closely scrutinized by several levels of Abu Dhabi officials, and blanks would not have been permitted. Finally, Darweish made it clear to Bilgrami that the purchase of the U.S. bank was an "Abedi operation from beginning to end."(25)

According to Bilgrami, he made a copy of these documents for himself, in order to understand them better, and looked at them carefully at the time and at least one additional occasion to make sure he understood them. He said that he carried the documents with him whenever he was transferred to a new country by BCCI, and believed they remained among his papers at the time of his arrest in October 1988 in Tampa. However, it was his understanding from federal investigators that they had not been found among his seized papers.(26)

Bilgrami's account concerning Abu Dhabi having been nominees has been corroborated generally by another Pakistani who was also close to Darweish and involved in the circumstances pertaining to the FGB takeover in 1977 and 1978.(27) In addition, it is corroborated by the circumstances of Abu Dhabi's shareholders being selected by BCCI to participate in the FGB within days of the preparation of a memorandum by a BCCI employee, Abdus Sami. In the memorandum, dated January 30, 1978, Sami advised Abedi that the details of the FGB takeover had been agreed upon, but that BCCI needed to select two additional shareholders to supplement the two who had already agreed to participate. The memorandum implies that the two are to be nothing more than nominees:

We have already given the names of Sheikh Kamal Adham and Mr. Fulaig [sic]. We want two other names immediately.(28)

Within days, BCCI had the additional two names -- Darweish and Sheikh Zayed's son, Sheikh Sultan bin Zayed Al Nahyan.

According to Abu Dhabi, their participation was solicited by Abedi, and they understood them to be passive investments in a bank with high growth potential.(29) But if they were in fact investments, little if any investigation could have been done by the Abu Dhabi investors into the proposed investment between the time of the Sami memorandum and the time of their share purchases. And the language of the Sami memo -- which refers to names being given, rather than investments being sought -- suggest a nominee relationship instead, especially given the fact that the two names BCCI already had were indeed nominees for BCCI.

As Price Waterhouse told the Bank of England in its June 1991 Section 41 report:

We have . . . seen evidence to suggest . . . that the four investors [Kamal Adham, Faisal al Fulaij, Sheikh Sultan Bin Zayed and Abdullah Darweish on behalf of Sheikh Mohammed Bin Zayed] were used to keep individual ownership below 5% and to ensure that BCCI's name did not appear.(30)

Thus, documents reviewed by Price Waterhouse suggested that the two Abu Dhabi shareholders in the original FGB takeover were as much nominees as Adham and Fulaij.

According to information obtained from a Pakistani national familiar with the transaction, Sheikh Sultan's shares, and the shares held by Darweish on behalf of Sheikh Mohammed, were "allocated" by BCCI for the purpose of avoiding the SEC filing requirement that would have had to have been undertaken if the Abu Dhabi interests were combined together.

It is also significant that Bilgrami's description in staff interviews of the papers allegedly involving Abu Dhabi acting as a nominee for BCCI in 1977 and 1978 closely resembles the actual nominee arrangements BCCI reached with all of the other Arab shareholders -- documents that Bilgrami has never seen.

Abu Dhabi has vigorously denied that it was involved in any nominee arrangements with BCCI. However, given the fact that BCCI had nominee arrangements with the leaders of three other emirates in the United Arab Emirates, as well as with all of the other principal Arab "investors" involved with BCCI, the lack of involvement of Abu Dhabi in nominee arrangements would have been contrary to BCCI's practice. It is difficult to imagine that they would have chosen to be, alone among the Middle Eastern shareholders, including several others from the UAE, principals, rather than nominees, for Abedi and BCCI in the takeover of Financial General Bankshares. There is an additional plausible alternative: that the Abu Dhabi ruling family viewed BCCI already as an institution they owned and controlled, and therefore they did not distinguish between investments made by them personally and guaranteed by BCCI, or nominee arrangements under which they merely held stock for BCCI.

Accordingly, while the direct documentary evidence that would back up Bilgrami's assertions has not been made available by Abu Dhabi authorities, Bilgrami's account, supported by the other facts available to the Subcommittee, is credible. Either the Abu Dhabi shareholders were nominees for BCCI in the early days of the FGB takeover, or alternatively, they did not distinguish between their holdings of FGB and BCCI's.

Darweish's Arrest and BCCI's Role in Abu Dhabi in 1980

From 1977 to December, 1981, Abdullah Darweish was chairman of the private department of Sheikh Zayed and the ruling family of Abu Dhabi, responsible for handling their investments and functioning as a liaison to Abedi and BCCI. According to the Abu Dhabi Attorney General, Darweish's responsibilities were "holding the administration and investment of all monies and assets of this department."(31) Darweish had essentially sole authority for these funds, and worked closely with BCCI on many of the investments. On December 8, 1981, Darweish was arrested in Abu Dhabi and charged with defrauding the ruling family, with his role as chief financial advisor replaced by Ghanim Al Mazrui as head of a committee.

At the time of his arrest, Darweish was still a shareholder in Financial General Bankshares in Washington, having purchased shares in FGB on behalf of Sheikh Mohammed, one of Sheikh Zayed's sons, in the capacity as his guardian. According to various BCCI officials who knew Darweish, there had been a power struggle in Abu Dhabi between Crown Prince Sheikh Khalifa, Sheikh Zayed's son, and Sheikh Zayed, in which Darweish had been caught, with the result that when a compromise was reached between father and son, Darweish was the sacrifice. But his arrest also set into a motion litigation involving others who had been financially injured as a consequence of the power shifts which took place over the incident involving a Panama corporation, registered in the name of Sheikh Zayed, Financiera Avenida. Financiera had been established to invest Sheikh Zayed's wealth, without BCCI's involvement. After Darweish's removal, everyone associated with Financiera lost out, with the investment funds moving to the control of Sheikh Khalifa's long-time aide, Al Mazrui, who replaced Darweish, and to BCCI. The ensuring litigation opened a window into the operations and investments of Sheikh Zayed, and BCCI.

Depositions and documents produced during the litigation in New York, Chicago, London, Switzerland and Abu Dhabi showed that Abedi had come, as of 1980, to supervise essentially all of the handling of Sheikh Zayed and Abu Dhabi's wealth -- through his service on the investment committee of the Department of Private Affairs that supervised the placement of the Sheikhs' wealth outside of BCCI; through his handling, for a period, of essentially all of the oil revenues dedicated by Sheikh Zayed to his private investments; and in his capacity as chairman of BCCI, through his control over Abu Dhabi's funds on deposit at BCCI.

As Abu Dhabi's representative, Ahmed Al Sayegh, testified, "in excess of $2 billion was entrusted to Abedi and Naqvi for investment by Their Highnesses Sheikh Zayed and Sheikh Khalifa under a power of attorney between 1980 and 1990."(32) Al Sayegh did not identify how much in excess of $2 billion was entrusted to BCCI, but given Abu Dhabi's testimony that it lost $6 billion in all in BCCI's collapse, the amount must have been considerable.

In the context of Darweish's fall in 1980, several things happened to intensify the relationship between BCCI and Abu Dhabi. Sheikh Zayed directed that all of his personal oil revenues be placed in BCCI. He directed his investment authority, ADIA, to acquire a 10 percent state in BCCI from ICIC, after ICIC as BCCI's alter ego agreed to buy-back those shares from its departing U.S. partner, Bank of America. And he placed the chairman of his private department, Al Mazrui, on BCCI's board of directors, where Al Mazrui ultimately became chairman of the board. To a remarkable degree, the fallout from the Darweish arrest was the merger of Abu Dhabi's interest, and that of BCCI. This coincidentally took place at the exact time of the Financial General Bankshares takeover in Washington.

Ghanim Al Mazrui

As suggested above, for more than fifteen years, Ghanim Faris Al Mazrui has served Sheikh Zayed as a financial advisor and manager, having been secretary general of the Abu Dhabi Investment Authority (ADIA) from 1976 to the present, which handles the principal government investments of Abu Dhabi; chairman or acting chairman of the Private Department of Sheikh Zayed, which handles the principal personal investments of the ruler of Abu Dhabi, from 1982 to the present; and chairman of a "Shareholders Working Group," which Abu Dhabi describes as "an informal committee appointed to oversee and coordinate the Majority Shareholders' response to the closure of BCCI," since July, 1991, and continuing to the present.(33)

From 1981 on, Al Mazrui also served on the Board of Directors of BCCI itself, in his capacity as secretary general of ADIA, which held 10 percent of BCCI's shares.

Simultaneous with Al Mazrui's appointment to the Board of Directors of BCCI, was his appointment to the Board of Directors of two other banks in Hong Kong, ostensibly unrelated to BCCI, called the Hong Kong Deposit and Guaranty Bank and Tetra Finance, Inc. Both entities, on which he served with several other important Middle Eastern officials, including Yassin Hassan, Kamal Adham's original contact for the FGB takeover, collapsed just two years later, with a total loss of capital and depositor losses amounting to several hundred million dollars.(34) The collapse, however, did not appear have an impact on Al Mazrui's career, and he remained in place handling the ruling family's finances and entrusted with investing billions of Abu Dhabi's oil revenues as well, up to the time of BCCI's collapse a decade later.

Given his long service to both Abu Dhabi and his decade of hands-on experience with BCCI, substantial questions have arisen as to what Al Mazrui knew concerning BCCI's frauds, and when he knew about the frauds. In response to a question to Abu Dhabi from Senator Kerry concerning this issue, Abu Dhabi's designated witness, Ahmed Al Sayegh, stated that Al Mazrui first learned of BCCI's problems, and its involvement in false or deceitful accounting practices, in April, 1990, from Price Waterhouse, along with other members of BCCI's board of directors. According to Al Sayegh, in the same period, BCCI officers, whose names he failed to specify, met with Abu Dhabi officials, with names again not specified but which apparently included Al Mazrui:

in an effort to persuade the Government to make a substantial capital injection into the bank. BCCI's officers confirmed that the Bank was experiencing severe financial difficulties and disclosed the misuse of $2.2 billion of managed funds on behalf of the Ruling Family.(35)

Thus, Abu Dhabi's chief representative on BCCI's board, and Sheikh Zayed's trusted financial manager, Al Mazrui, had for the previous decade somehow failed to detect BCCI having misused, and apparently defrauded Abu Dhabi of, up to $2.2 billion, in addition to having presided over the failures of the two Hong Kong banks in 1983. Moreover, Al Mazrui himself had participated in improprieties and received no-risk financial pay-offs from BCCI.

As Price Waterhouse told the Bank of England, in June, 1991, neither Al Mazrui nor any other representative of Abu Dhabi had advised them that substantial funds of Abu Dhabi had been "mismanaged" by BCCI. The auditors could not determine what else Al Mazrui knew and when he knew it. But the auditors had determined that Al Mazrui himself had been involved in unusual financial practices with BCCI from 1986 on:

The extent to which the major shareholders and in particular their board representative H.E.G.F. Mazrui was aware of the matters discussed in this report [that is, BCCI's frauds] cannot be established. We are, however, informed that H.E.G.F. Mazrui and the government were briefed fully on all the problems in April, 1990, notwithstanding that they allowed the 1989 accounts to be finalised in discussions with ourselves and the Regulators without disclosing this information. In addition, up until discussion of our Report to the Directors and Regulators of 3 October 1990, H.E.G.F. Mazrui contended that the loans for collection by the shareholders which have now been proven to be totally fictitious, were recoverable.(36)

Price Waterhouse further advised the Bank of England that Al Mazrui had his own accounts at BCCI's bank-within-a-bank, ICIC, which showed that he received funds in 1986 and earlier from no-risk transactions involving BCCI shares in which he was guaranteed against possible loss. Price Waterhouse told the Bank of England that Al Mazrui confirmed that he benefitted from these transactions and informed the Abu Dhabi government of his involvement in them, ostensibly for the first time, in April 1990. Price Waterhouse told the Bank of England that Al Mazrui also confirmed a fictitious loan made to the Crown Prince of Abu Dhabi by BCCI, but claimed that he did not remember signing the false confirmation. Al Mazrui told Price Waterhouse that his signature must have been forged, a contention Price Waterhouse rejected.(37)

In summary, the Section 41 report by Price Waterhouse shows that Al Mazrui received substantial personal financial benefits from BCCI through no-risk stock trading; argued that BCCI loans which were really fictitious were recoverable; and personally confirmed a bogus BCCI loan to the Crown Prince of Abu Dhabi and then lied about it, before confessing all to Abu Dhabi authorities in April, 1990. Yet more than two years later, Al Mazrui remains in place as the head of Abu Dhabi's working group to deal with BCCI-related problems. Al Mazrui has neither been fired, nor resigned, from the positions of trust he has clearly violated.

Given these facts, Al Mazrui's continued role in handling Abu Dhabi's response to the collapse of BCCI, raises additional questions. One possible explanation is that Sheikh Zayed and the ruling family are remarkably tolerant of incompetence, deception, fraud, and the personal enrichment of top advisors. Alternative explanations are that Al Mazrui's improprieties had previously been sanctioned by higher-ups, or were consistent with ordinary practices in the Emirate.

Abu Dhabi's Commitments in April-May, 1990

On April 18, 1990, Price Waterhouse provided a devastating report on BCCI to the Bank of England which was simultaneously provided to BCCI's board of directors, including Abu Dhabi representative Al Mazrui. The report stated that a number of financial transactions at BCCI booked in its Grand Caymans affiliates and other offshore banks were "false and deceitful," and that it was impossible at the present time to determine just how far the fraud reached.

Price Waterhouse's report was prompted by its own critical need to solve a problem. It was no longer in a position to certify BCCI's books, unless someone provided financial guarantees to protect against loss. Either BCCI had to be closed down now, or the Bank of England itself had to give its assent to keeping it open in some new form as a means of avoiding losses to BCCI's million or more depositors. New management needed to be installed. New financing had to be found, and the holes in BCCI's books had to be plugged.

The obvious solution was to ask Sheikh Zayed and the government of Abu Dhabi to take over the bank. As Zayed and the Al Nayhan family who ruled Abu Dhabi had been major depositors of BCCI, and had long had billions in family finances handled by BCCI, they stood to lose as much as anyone if the bank collapsed. Accordingly, Abu Dhabi would have to be told the truth about BCCI's perilous condition, and asked to commit funds to keeping the bank solvent.

A series of urgent meetings were held in Abu Dhabi and Luxembourg, beginning in March, 1990, in which Naqvi confessed his errors and resigned from his position as CEO at BCCI. A new management team was brought in. Unfortunately, rather than constituting a strong group of banking professionals, the new team was headed by a long-time Abu Dhabi insider from BCCI itself, Zafar Iqbal, the former head of BCCI's branch in the United Arab Emirates, the Bank of Credit and Commerce Emirates, or BCCE, who had long had a close personal relationship with important members of the ruling family of Abu Dhabi arising out of his provision of intimate personal services for them in Pakistan and elsewhere. Within the bank, Iqbal was not considered to be an expert on much besides pleasing the Abu Dhabi ruling family. BCCI junior officers knew him as the man who had for years provided "singing and dancing girls" to the ruling family, and related personal services.(38) BCCI operations were moved, without objection from the Bank of England, to Abu Dhabi, along with all of BCCI's most important records. And assurances were given to Price Waterhouse that Abu Dhabi would make an open-ended financial commitment to bail out BCCI, enabling Price Waterhouse to sign off on its books. As Price Waterhouse stated to the chairman of the Abu Dhabi Finance Department on April 25, 1990:

Your representative, HE G Al Mazrui, has confirmed to use that you are fully aware of the nature and magnitude of the uncertainties and prepared to provide the necessary financial support in the event that losses arise from realisation of these loans.(39)

Price Waterhouse then duly certified BCCI's books, subject to a single caveat -- that the basis of the preparation of the certification was Abu Dhabi's intention to maintain BCCI's capital base while it reorganized and restructured.

By agreement, Price Waterhouse, Abu Dhabi, BCCI, and the Bank of England had in effect agreed upon a plan in which they would each keep the true state of affairs at BCCI secret in return for cooperation with one another in trying to restructure the bank to avoid a catastrophic multi-billion dollar collapse. Thus to some extent, from April 1990 forward, BCCI's British auditors, Abu Dhabi owners, and British regulators, had now become BCCI's partners, not in crime, but in cover-up. The goal was not to ignore BCCI's wrongdoing, but to correct it in order to keep the bank in operation, and therefore, to hide the truth from the public because the truth would force the bank to be closed.

If Abu Dhabi had honored the commitment made to Price Waterhouse and the Bank of England, when BCCI was closed globally, BCCI's innocent creditors and depositors would not have suffered a penny in losses, since Abu Dhabi had agreed to guarantee them as the price for the Price Waterhouse certification.

Coverup and Obstruction of Investigations

In April, 1990, Naqvi and the other chief officers who resigned with him from their positions in BCCI were placed under house arrest in Abu Dhabi, as Abu Dhabi took formal control of BCCI. Unfortunately, as it did so, it did not disclose to Price Waterhouse certain information that it now had about the extent of the fraud at BCCI, and it took positions that had the clear intention of seeking to sweep the true nature of BCCI's problems under the rug, and to avoid the disclosure to BCCI's regulators of what had really taken place. Essentially, Abu Dhabi was now seeking to make certain that the money it was spending on BCCI would suffice to keep secret many of the facts about the relationship between Abu Dhabi and BCCI, even, as necessary, from Price Waterhouse, the outside auditors for the bank it now owned.

In September, 1990, Price Waterhouse learned that BCCI had concealed further lending of over $500 million to its major customs by "parking" that lending with a Middle Eastern bank, namely, the National Commercial Bank of Saudi Arabia controlled by Khalid bin Mahfouz, the most powerful banker in the Middle East, who was later indicted in the United States in connection with his activities pertaining to BCCI and First American. Price Waterhouse also learned that since Naqvi's removal, the practice had continued, "with the knowledge and approval of the Board representative of the controlling shareholders" -- the government of Abu Dhabi. The auditors had begun to realize that Abu Dhabi officials were now colluding with BCCI in continuing fraudulent practices, and in hiding them from Price Waterhouse.(40)

Since March or April, 1990, Naqvi, who had personally handled in excess of $2 billion of Abu Dhabi's funds and was personally responsible for many of BCCI's frauds, had been living under house arrest in Abu Dhabi. Abu Dhabi had decided to retain Naqvi as a consultant to advise them on BCCI, and were giving him access to BCCI's documents. According to Price Waterhouse, Naqvi was maintaining some 6,000 files personally in Abu Dhabi, whose very existence had still never been disclosed to the auditors. For months, as Price Waterhouse continued its efforts to review BCCI's books, it had been lied to by BCCI and it was finding, by Abu Dhabi, kept in ignorance of the bank's most vital records, and only stumbled onto the fact of their existence in November, 1990.(41)

As Price Waterhouse described it, when they confronted Abu Dhabi with their concerns about Naqvi, and a request to review the files he controlled, they were told by Abu Dhabi authorities that the auditors could not have access to them, and that they would remain under the control of the discredited Naqvi:

Price Waterhouse's report to the directors of 3 October 1990 revealed that management may have colluded with some of BCCI's major customers to misstate or disguise the underlying purpose of significant transactions. Following this, the controlling shareholders of BCCI [Abu Dhabi], under pressure from Price Waterhouse, agreed to a full investigation of the problem accounts and to enforce the resignations of Abedi and Naqvi as directors.

An Investigative Committee comprising representatives from Price Waterhouse, E&W Middle East Firm (who were auditors of the Abu Dhabi Government interests), two firms of lawyers and the Abu Dhabi Government was established in November 1990 to supervisor the investigation into the problem accounts. Price Waterhouse were advised by senior BCCI management that Naqvi had been retained as an "advisor" to provide explanations to the Abu Dhabi Government and that they could not have access to files being used by him. Price Waterhouse made clear to the controlling shareholders that without access to Naqvi and the files he was using there could be no investigation.

Ultimately access was granted and we were shocked to find that Naqvi was holding around 6,000 files. After initial steps to secure the files, a preliminary review revealed that amongst them were details of transactions and agreements not previously disclosed to us despite management's prior assurances that they had provided all relevant information to Price Waterhouse.(42)

Abu Dhabi had placed Naqvi, a principal architect of BCCI's frauds, in charge of BCCI's most important and secret records without telling them. For the past eight months, Naqvi and Abu Dhabi had maintained exclusive control of those records, with essentially unlimited opportunities to destroy them or falsify them throughout that time. By the time Price Waterhouse finally obtained access to these records in November and December, 1990, it found massive fraud in the materials that still existed. But the auditors had no way of determining the extent to which those documents were already cleansed of any material damaging to the new owners of BCCI, along with any other material which Abu Dhabi or Naqvi wanted hidden forever.

During December, 1990, at the very time that the New York District Attorney had obtained some of the most critical of its earlier audit reports, Price Waterhouse completed its initial review of the formally hidden Naqvi files. In that review, Price Waterhouse found evidence of phony loans and hidden deposits amounting to hundreds of millions of dollars, nominee arrangements, hold harmless agreements relieving borrowers of any obligation to repay loans, and other, similarly criminal practices at the bank. Again, to Price Waterhouse's shock, Abu Dhabi had known of these practices since at least April, 1990, and never disclosed them to the auditors.(43)

The implications of these findings for BCCI's future were devastating. If there were in fact deposits that had been made to BCCI amounting to hundreds of millions that had never been recorded at the bank, how was anyone to ever determine what claims by BCCI depositors might be real, and what claims might be phony? Price Waterhouse decided that it dare not put this information in writing, and would confine itself to reporting it orally to the Bank of England, which it did in January 1991. In response, Abu Dhabi again agreed to make good any losses in connection with these unrecorded deposits.(44)

Attempt At Restructuring 1990 and 1991

The key goal of Abu Dhabi from the time it took control of BCCI in April, 1990 was to find a way to save its interest in the bank. By the account of Al Sayegh and Abu Dhabi:

In April, 1990, senior management revealed that BCCI had suffered significant losses and Price Waterhouse for the first time identified certain transactions that had been "either false or deceitful." The Price Waterhouse report was sent to the Bank of England and was discussed at a meeting between the Bank of England, the Luxembourg Monetary Institute, Price Waterhouse, and BCCI management in April, 1990. With the full support of the Bank of England, the Ruling Family purchased some 15 million outstanding BCCI shares, and the Abu Dhabi Department of Finance (which previously had owned no BCCI shares) purchased another 15 million outstanding shares and subscribed for 10 million additional shares issued by BCCI. The share issuance was intended to cover the losses which had been identified and to restore the liquidity of the BCCI subsidiary banks. As a result of these steps, and the outlay of $1.2 billion, the Abu Dhabi investors now owned 77 percent of the stock of BCCI.(45)

Abu Dhabi immediately removed Naqvi from control of BCCI and replaced him with Zafar Iqbal, then head of the Abu Dhabi operation of BCCI, the Bank of Credit and Commerce Emirates, whose qualifications for the position have been discussed above. They decided to shrink the bank, and:

with the encouragement of the College of Regulators, a decision was made to move the headquarters of BCCI to Abu Dhabi form London, so that the Majority Shareholders could begin to monitor some of the activities of BCCI management.(46)

Planning began to find a way to restructure BCCI into a three-headed entity, with separate "independent" banks based in three locations, Abu Dhabi, Hong Kong and London, in a proposal that evidently had some support if not final approval from the Bank of England and the College of Regulators through the spring of 1991. As described in a legal analysis provided to the BCCI Creditors' Committee after BCCI's collapse by the firm of Norton Rose in London, this transaction would have involved the Government of Abu Dhabi committing "some US$4 billion . . . under financial support arrangements." These arrangements were signed between BCCI and Abu Dhabi on May 22, 1991. Under their terms, most of BCCI's problem loans were transferred at book value -- far in excess of their real value -- to new companies owned directly by the Government of Abu Dhabi. In return, Abu Dhabi gave BCCI SA promissory notes denominated in US dollars and UAE dirhams, equivalent in face value to $3.061 US, with additional guarantees totalling another $750 million for a group of remaining loans with some value.(47)

The three separate and independent banks to arise out of BCCI's ashes were to have control and management of the operations of the former BCCI banks divided into Europe and Canada, for the United Kingdom bank; the Middle East and Asian subcontinent, for the Abu Dhabi bank; and the Far East, for the Hong Kong bank. Under the plan, a substantial portion of the BCCI global network would have been wound up or sold off. The banking operations of BCCI would have been transferred from Luxembourg to Abu Dhabi by the end of 1991 and from Grand Caymans to Abu Dhabi by the end of 1992.(48)

Snags developed, however, as the restructuring proposal proceeded. The first was the New York District Attorney obtaining information in the late autumn of 1990 concerning the previous Price Waterhouse audit reports, including the April, 1990 reports, that triggered Abu Dhabi's takeover of BCCI.

In November, 1990, the New York District Attorney advised the Federal Reserve that a source stated that the reports showed that there had been massive lending -- amounting to $850 million or more -- by BCCI to First American's shareholders, none of which had ever been disclosed to the Federal Reserve.

The Federal Reserve, after some significant obstacles, was permitted by BCCI in December, 1990 to view those reports in London.

On December 21, 1990, Federal Reserve attorneys met with attorneys for Abu Dhabi and BCCI from the Washington law firm of Patton, Boggs and Blow. The Federal Reserve learned from Patton Boggs for the first time about the massive restructuring of BCCI planned by Abu Dhabi to respond to unspecified capital "deficiencies" at BCCI. Patton Boggs confirmed that what the Federal Reserve already knew from the Price Waterhouse audit reports -- that BCCI had lent large sums to CCAH's shareholders which were secured by CCAH's shares. Two weeks later, the Federal Reserve opened a formal investigation. Less than three weeks later, it concluded that criminal activity had been involved in the First American purchase, referred the matter to the Justice Department, sent a proposed cease and desist order to BCCI, and widened its investigation.(49)

Thus, during the spring of 1991, Abu Dhabi faced a new problem. At any time, the Federal Reserve could, if it so desired, make it impossible for the Bank of England to proceed with the restructuring. Accordingly, Abu Dhabi found itself in the position of having to cooperate with the Federal Reserve's investigation of BCCI and First American, and provide information which could simultaneously confirm some of BCCI's frauds, and thus increase the risk that bank which it was trying to save would not survive.

The compromise reached by Abu Dhabi was to permit Federal Reserve investigators to travel to Abu Dhabi and review BCCI documents, but only those documents pertaining to transactions involving U.S. banks, and only as selected by Abu Dhabi. The Federal Reserve investigators went to Abu Dhabi, told them what categories of documents they wanted, and Abu Dhabi officials then "located them" from its BCCI document files. When investigators sought to meet with Swaleh Naqvi, access to Naqvi was granted, but only after Naqvi was provided an attorney who protested that he could not allow the investigators to speak with Naqvi until the lawyer was more familiar with the case.(50) The result was that the Federal Reserve obtained substantial, but incomplete, information concerning BCCI's activities in the United States, and very little information of any kind concerning Abu Dhabi's role, or what took place at BCCI apart from its role in purchasing U.S. banks.

After the Federal Reserve, First American, and BCCI entered into consent decrees on March 4, 1991, Subcommittee staff contacted Abu Dhabi's U.S. attorneys at Patton, Boggs and Blow in an effort to understand the ramifications of the decrees and the proposed restructuring of BCCI. In the meeting, staff expressed their concerns about the fact that BCCI's former head, Swaleh Naqvi was still in place providing advice and assistance to BCCI; that BCCI's current head, Zafar Iqbal, was to remain in control of the banks throughout the restructuring and presumably afterwards; and that a structure was to emerge out of BCCI which failed to respond to what was even the one an obvious lesson of the BCCI affair -- dividing BCCI into more than one part was dangerous to the health of the international banking system. The attorneys at Patton, Boggs and Blow, who were at the time representing both Abu Dhabi and BCCI, acknowledged that they shared the concerns about Iqbal and Naqvi, and would pass the Subcommittee's concerns on to their clients. Staff questioned the attorneys as to whether the three independent banks could do business with one another, and what protection would be in place to prevent further fraud from taking place. In response, Middleton Martin, Abu Dhabi's principal lawyer at Patton, Boggs and Blow in Washington, suggested that Abu Dhabi was a "white hat" among whomever might be the "black hats," and was doing its best to solve BCCI's many problems.(51)

At the direction of the chairman of the Subcommittee, staff met with staff of the Federal Reserve to express Senator Kerry's concerns about the proposed restructuring, and the wisdom of permitting BCCI to be restructured in three parts. The Federal Reserve took the position with staff that the decision was the Bank of England's. The Federal Reserve's principal goals were to sever BCCI's relationship with First American and to find out the nature and decree to which U.S. banking laws had been violated by BCCI, its shareholders, and officers. However, Federal Reserve investigators were also disturbed by the continued participation of BCCI directors and officers in the future of the proposed three banks, and objected especially to the continued involved of Iqbal. By the late spring of 1991, both U.S. and U.K. regulators began to insist on the removal of Iqbal as the head of BCCI. Al Mazrui, who had worked closely with Iqbal for many years, resisted, temporarily paralyzing the restructuring plan that had previously been agreed to among the various regulators, Abu Dhabi and BCCI.(52)

While tentatively assenting to Abu Dhabi's proposal for restructuring BCCI, the Bank of England, in about March, 1991, also authorized a Section 41 report by the auditors, named for the provision in British banking laws by which regulators can commission an audit report of a bank by its outside auditors for the regulators. That report was initiated at least in part in response to new information developed by Price Waterhouse in December, 1990 or January 1991 about the broad extent of BCCI's frauds. The Section 41 report was completed in late June. The fraud outlined in that report resulted in the Bank of England deciding, within days, to abandon its previous support for a restructuring and to close the bank. Just two days before BCCI was closed, Abu Dhabi had provided the British and Luxembourg regulators with the latest -- and what proved to be the final -- draft restructuring plan for BCCI.(53)

Abu Dhabi and BCCI's Closure Abu Dhabi representatives were outraged by the sudden closure of BCCI. They had not been expecting the action, had committed nearly $4 billion to keep BCCI open, and had been working closely with regulators in an effort to make the restructuring succeed. Moreover, in an effort to appease the Federal Reserve and prevent a collapse of First American, while also protecting against the loss of the value of its investment in First American, Abu Dhabi had also made a series of payments totalling about $190 million to keep First American from possible failure. The last of these payments was made only days before the final closure of BCCI, a closure which Abu Dhabi could reasonably conclude might well have been timed not to take place until the moment they had put up the final installment of cash to help prop up First American.(54)

In the wake of BCCI's collapse, any cooperation from Abu Dhabi to the Federal Reserve ceased.

Abu Dhabi's first step in response to the closure of BCCI was to set into motion legal proceedings in Abu Dhabi entitling it to seize the promissory notes it had issued to BCCI as part of the restructuring plan. As Norton Rose described it:

On Tuesday, July 16, 1991 the Government of Abu Dhabi filed Plaint No. 1560 with the Abu Dhabi Civil Court of First Insurance. . . The Court ordered such seizure and consequently that afternoon four court officers attended the head of BCCI Group . . . where they located the outstanding promissory notes and two guarantees, sealed them in yellow enveloped, and deposited them in a safe (which was marked red) at the Bank. The keys to the safe are apparently being kept in the Treasury of the Abu Dhabi Civil Court.(55)

Thus, Abu Dhabi insured that actual documents representing the additional financial obligations it entered into with BCCI -- ranging from $1.2 billion to $2.8 billion depending on how one valued the notes -- would be locked under seal and kept from BCCI's liquidators, who otherwise might be able to recover additional funds from Abu Dhabi on the basis of the notes, but now would be stymied through the notes' impoundment.(56)

Abu Dhabi spent the remainder of July, 1991 trying to avoid the liquidation of BCCI and to restart the restructuring plan. It applied to the courts in the UK and Luxembourg to adjourn the petition for liquidation to permit the consideration of the restructuring. But the effort was fruitless. Even if the courts did not ultimately reject it, within a few hours of its closure on July 5, 1991, BCCI had effectively been obliterated, leaving some 14,000 employees out of work, and some one million depositors out of luck. BCCI had lost billions of their money long ago. But it was BCCI's closure that forced the world to recognize the losses.

Abu Dhabi and the Liquidators

Shortly after BCCI's closure, liquidators were appointed by the District Court of Luxembourg, where BCCI was incorporated, to handle the winding up of BCCI and the recovery of the maximum possible amount of assets for distribution to innocent depositors and creditors of BCCI worldwide. The mandate of BCCI's liquidators was to recover funds, not necessarily to aid in investigations of BCCI. As chief liquidator Brian Smouha testified:

[O]ur responsibility is to use the resources in the liquidation estates to maximize recoveries to be made available to creditors and depositors. [A]s far as we are able consistent with that responsibility, we endeavor to cooperate with numerous investigative authorities in a number of countries.(57) [emphasis added]

Thus, to whatever extent investigative efforts might threaten to reduce the recovery of funds for BCCI's depositors, BCCI's liquidators have a responsibility under the terms of their appointment to sacrifice the investigation and uncovering the truth about what happened to the goal of maximizing funds to return to the creditors.

Following their appointment, the liquidators found two key situations they had to deal with in order to recover substantial assets for BCCI. The first was in the United States, which had more than $330 million in BCCI assets frozen unless an agreement could be reached with the Justice Department, New York District Attorney, and Federal Reserve. The second was with Abu Dhabi. Abu Dhabi had previously guaranteed BCCI's debts as of April, 1990. At the time of the liquidation of BCCI, it was BCCI's sole owner. Abu Dhabi has one of the world's deepest pockets as a result of its huge oil reservoirs, and its revenues from oil of $10 billion or more annually. There would be numerous possible theories for recovering funds from Abu Dhabi if its role were litigated by the liquidator. On the other hand, Abu Dhabi also held a number of cards were any such litigation to take place. First, it controlled BCCI's records. Second, it controlled key BCCI witnesses. Third, its wealth could easily be turned to time-consuming litigation, delaying any pay-out to innocents for a decade or more. As a result, the liquidator either had the choice of reaching an agreement with Abu Dhabi which met it interests, or of entering in a difficult, contentious, and drawn-out battle with Abu Dhabi with uncertain results.

The U.S. situation was, needless to say, far easier to resolve. The liquidators were to a remarkable degree able to integrate the goals of assisting investigators and helping depositors in the context of the plea agreements they reached in the United States on January 24, 1992. In those agreements, BCCI's liquidators entered pleas of guilty on behalf of BCCI to federal racketeering and similar New York state charges. The pleas promised full cooperation by the liquidators with U.S. law enforcement authorities and worked out a fair distribution of BCCI's assets in the United States that protected U.S. interests while facilitating the return of excess funds to BCCI's worldwide creditors. BCCI's liquidators also provided substantial assistance to the Subcommittee investigation, providing thousands of BCCI documents in the United States, waivers of the attorney-client and work-product privilege of BCCI's attorneys and investigators, and other important help.

But on the issue of BCCI and Abu Dhabi, the goals of investigating what happened, and the liquidators need to insure the maximum recovery, were not so easily aligned.

Abu Dhabi took a number of positions with the liquidators which together amounted to Abu Dhabi maintaining its ability to cover-up any information it wished the world not to know.

First, Abu Dhabi made it clear to the liquidators that they could not press for the return of BCCI's documents held in Abu Dhabi, despite the fact that under any ordinary standard of bankruptcy law outside the jurisdiction of Abu Dhabi, the liquidators have the right to control those documents, and the obligation to make them available to parties at interest in the liquidation.

Second, Abu Dhabi made it clear that the liquidators themselves would have only limited access to BCCI's documents in Abu Dhabi for the limited purpose of using them to try to litigate claims against non-Abu Dhabi borrowers from BCCI. As Smouha acknowledged:

[W]e have, after initially being denied access to those documents, since late summer [1991] had access to the Central Credit Division and other Central Office documents in Abu Dhabi for loan recovery purposes. Many of the critical documents in Abu Dhabi were put under the control of a court appointed receiver in Abu Dhabi. The receiver has not permitted us to remove documents from Abu Dhabi.

With respect to witnesses, as you know, certain key ex-employees of BCCI are under arrest in Abu Dhabi. We have asked for access to certain of those persons. We have been advised that these persons are under control of [t]he public prosecutor in Abu Dhabi and that access must be obtained through that official.(58)

As of the writing of this report, that access had yet to be obtained by anyone outside the Abu Dhabi government.

Third, Abu Dhabi insisted that it alone would have the right to reach judgments about whom to sue on BCCI's behalf from among BCCI's lawyers, accountants, and top officers, and how to proceed against them, while permitting the liquidators to share in 50 percent of any returns on such claims, with the other 50 percent to be given to Abu Dhabi itself.(59) As Michael Crystal, an attorney for the liquidators, testified:

Under the proposed arrangements . . . these claims will be managed . . . by the Government of Abu Dhabi's lawyers under a cooperation arrangement under which we have a say in the case management.(60)

In fact, the literal language of the Contribution Agreement proposed leaves this decision entirely to Abu Dhabi's discretion, regardless of whom they may consult on "case management":

[T]he claims of Principal BCCI Companies against certain specified third parties are to be assigned to the Government of Abu Dhabi [and] will be pursued by them. [This applies to] the former auditors and certain former solicitors of the Principal BCCI Companies; certain named individuals who were formerly responsible for the management of the principal BCCI Companies.(61)

The right to make decisions about how and against whom to pursue claims is a basic right of any liquidator, and one of the most important responsibilities, as the issue of who is sued, how a case is managed, and whether or not to settle such claims goes to the heart of a liquidators' ability to maximize a recovery.

Here, the interest of Abu Dhabi and the liquidators could dramatically diverge. For example, Abu Dhabi might well be more interested in insuring the silence of BCCI's professional advisors, lawyers and accountants, than in the maximum recovery of assets from them. Accordingly, if the liquidators acquiesced in Abu Dhabi's insistence on having the sole right to make this decision, Abu Dhabi could choose to settle claims against those who know the most about Abu Dhabi's participation in BCCI's improprieties, in return for their silence. Contrary to the import of Crystal's testimony, if Abu Dhabi decided to settle its claims against BCCI officers like Swaleh Naqvi, against its auditors like Price Waterhouse, and against its attorneys, in return for their agreement to say nothing further about what they had learned concerning BCCI to anyone, including government investigators, the liquidators would be bound to accept the decision.

Finally, as would be normal in any such agreement, the liquidators would release Abu Dhabi from any claims that the liquidators, on behalf of BCCI, its depositors and creditors, would have against Abu Dhabi.

In return for these key concessions by the liquidators, Abu Dhabi agreed to provide $1.7 billion to the pool to be used to repay creditors and depositors. Given Abu Dhabi's contention that it was defrauded of $6 billion, and its professions of innocence, its claims would be treated equally with those of innocent creditors and depositors, with the result that half or more of the $1.7 billion contributed by Abu Dhabi would likely be returned to Abu Dhabi itself, going from one Abu Dhabi pocket to another, leaving depositors receiving no more than 30 cents on the dollar for their losses and according to some creditors' contentions, far less.

Given the difficult choice between accepting these unusual demands from Abu Dhabi in return for Abu Dhabi's $1,7 billion contribution or of litigating Abu Dhabi's liability, the liquidators accepted to Abu Dhabi's demands and initialed agreements with Abu Dhabi on February 20, 1992, incorporating the concessions described above, subject to approval by BCCI's creditors and depositors. These agreements, which also included detailed and reasonable provisions for the pooling of BCCI assets and other important technical issues pertaining to the liquidation, were then provided to the courts for ratification, ratified by the British court, and remain pending before the Luxembourg court.

The practical consequences of the agreements reached by the liquidators with Abu Dhabi have meant that the liquidators have essentially chosen not to contest Abu Dhabi's positions concerning its innocence in the affair; have decided not to investigate any wrongdoing by Abu Dhabi in connection with BCCI; have acquiesced in Abu Dhabi's sequestration of documents that legally belong to the liquidators and witnesses to whom the liquidators legally should have access; and have even placed Abu Dhabi in the position of being able to purchase the silence of the auditors and lawyers who handled BCCI's affairs.

The secrecy, if not necessarily the real reason for the secrecy, concerning the actual nature of Abu Dhabi's possibility liabilities to the creditors, has been acknowledged by the liquidators themselves. For example, the presentation made to BCCI's creditors and depositors by the liquidators in their March 16, 1992 report describing the proposed agreement with Abu Dhabi explicitly states under the title "Disadvantages" of the agreement, that:

The Liquidators are advised by their legal advisors that it would be inappropriate to provide a detailed assessment of claims against the Majority Shareholders, because to do so might be highly prejudicial to the interests of creditors were the Majority Shareholder Agreements not to become unconditional.(62)

This remarkable sentence contains the essence of the dilemma in the liquidator-Abu Dhabi deal. If the liquidators were to tell those whom BCCI injured what Abu Dhabi might have done and what its potential liability might be, either the creditors, Abu Dhabi, or both might withdraw from the agreement, with ten years of more of difficult litigation ensuing. Those being asked to sign off on the agreement, were being required to do with full warning by the liquidators that the liquidators were already suppressing information on Abu Dhabi's liability in order to obtain the agreement.

Equally important, the practical consequences of the agreements reached by the liquidators with Abu Dhabi have been that the liquidators are as a practical matter acquiescing in Abu Dhabi's frustration of U.S. law enforcement, regulatory, and Congressional investigations concerning its activities pertaining to BCCI. This is disputed by the liquidators. As Michael Crystal testified:

The commercial situation is not intended by the court appointed fiduciaries, nor does it, touch and concern the ongoing obligations of regulators to inquire into the past, to look into history, and to consider whether there has been criminal misconduct which needs to be prosecuted. There's nothing in the plea agreement which we think cuts across those two separate interests.

The plea agreement requires us to cooperate with regulators to ensure that crime is prosecuted and we have taken assiduously our duties to provide full cooperation to the relevant regulatory authorities under the plea agreement.

So far as the commercial arrangements are concerned . . . they will not prevent regulators in jurisdictions who have access to international treaties . . . from continuing to pursue criminals and bring them to justice in a variety of jurisdictions.

The arrangements with Abu Dhabi don't prevent that. They don't prohibit it.(63)

Crystal's testimony on this point was technically correct, but as a practical matter, misleading. In giving the power of the liquidators to reach independent judgments about how to pursue those most knowledgeable about BCCI's wrongdoing -- and the extent of wrongdoing by Abu Dhabi -- the agreements with Abu Dhabi initialed by the liquidators have already had, and will continue to have, a profound negative impact on ongoing criminal investigations in the United States pertaining to BCCI.

Moreover, there is, to say the least, a very large tension between the legal commitment the liquidators made to the Justice Department and the New York District Attorney to provide BCCI's full cooperation to the United States, and the legal commitment the liquidators have now made to Abu Dhabi. In time, that tension could imperil the ability of the liquidators to recover any assets from the United States. U.S. law enforcement would be fully entitled to declare that the commitments made to Abu Dhabi have precluded the cooperation with the United States required under the plea agreement entered into by the liquidators on BCCI's behalf. With the liquidators thus declared in breach of their commitments to the Justice Department, New York District Attorney, and Federal Reserve under the plea agreements, the latter institutions and the U.S. courts could be free to take the position that BCCI's U.S. assets had been forfeited by the liquidators in the process.

Al Sayegh's Testimony And Answers to Questions

Beginning in the spring of 1991, the Subcommittee asked Abu Dhabi's and BCCI's lawyers at Patton Boggs and Blow that Abu Dhabi or BCCI provide knowledgeable witnesses to testify in public concerning the key issues pertaining to BCCI. These requests were ignored, or rejected, until the spring of 1992, when the Subcommittee advised Abu Dhabi's attorneys that they themselves could be subpoenaed to testify before the Subcommittee in their capacity as business agents for Abu Dhabi in the event that a knowledgeable Abu Dhabi witness was not produced. Recognizing that Abu Dhabi was continuing to refuse to produce the key BCCI officials, such as Swaleh Naqvi, the Subcommittee requested that Ghanim Al Mazrui be produced, or an equally knowledgeable associate.

A hearing date was set for May 14, 1992. Until a few days before the hearing, Abu Dhabi did not inform the Subcommittee of the identify of the witness who testify. Shortly before the hearing, he was identified as Ahmed Al Sayegh, a member of the steering committee, headed by Al Mazrui, responsible for handling Abu Dhabi's response to BCCI's closure, and a person with no knowledge of, or involvement in, Abu Dhabi's activities with BCCI over the previous two decades. That lack of knowledge was, unfortunately, reflected in a number of answers by Al Sayegh to important questions from the Subcommittee.

Al Sayegh was, for example, unaware that from at January 1978 through November 1990, Clark Clifford and Robert Altman represented Abu Dhabi, testifying that "I don't think they were ever our lawyers, Senator." In fact, Clifford and Altman made numerous filings with regulators on the behalf of various members of the Abu Dhabi ruling family, had extensive correspondence with representatives of Abu Dhabi, met with Abu Dhabi's representatives during the Financial General Bankshares takeover, and had signed powers of attorney, spanning more than a decade, for Sheikh Zayed personally, for the Abu Dhabi Investment Authority, for at least one of Sheikh Zayed's sons, and for Abdullah Darweish, guardian of another of Sheikh Zayed's sons.(64)

Al Sayegh was similarly unaware of who made the decision to install Zafar Iqbal as head of BCCI in April, 1990; of communications involving Bert Lance and Sheikh Zayed concerning the FGB takeover in 1978; of the structuring of the participation of Abu Dhabi ruling family members in the FGB takeover from 1978 through 1981; of the affairs of Sheikh Zayed's private department at any time; of whether or not Sheikh Zayed in any period placed all of Abu Dhabi's oil revenues in BCCI; of how much Abu Dhabi had invested in CCAH/First American. Al Sayegh further contended that Agha Hasan Abedi was never a financial advisor for Sheikh Zayed or the Abu Dhabi government.(65)

This lack of knowledge, coming in testimony ten months after BCCI's closure, reflected an obvious decision by Abu Dhabi not to send someone to testify before the Subcommittee who knew what had actually taken place between BCCI and Abu Dhabi over the previous twenty years.

Al Sayegh did, however, present Abu Dhabi's formal positions concerning its role in the BCCI affair, and its intentions of fully cooperating with the United States in investigating what happened. As he declared in his opening statement:

First, the majority shareholders had no involvement in the frauds perpetuated by BCCI which went on for some 18 years while they were passive minority shareholders.

The investment decisions they made during that time were based upon unqualified auditor's reports supplied by respected accounting firms and the knowledge that the bank was regulated in many countries. They were investors in a bank, not managers of a bank and relied on auditors and regulators to do their jobs.

Second, the majority shareholders are the single biggest victim of the fraud and probably its only intended victim . . .

[I]t must be understood that the majority shareholders do not control the prosecutions in the UAE, though they are doing everything in their power to assist in the ongoing investigation. . . We too enjoy a separation of powers which include an independent judicial system responsible for criminal proceedings. The separation of powers is respected and upheld at the highest levels of UAE government.

Third, and most importantly for our purposes here today, the Majority Shareholders have every intention of fully cooperating with competent United States authorities in pursuing their own investigations, subject only to any restrictions placed on the under UAE law and the needs of our domestic investigations. . .

[M]y appearance today renews the Majority Shareholders' commitment to cooperate with the investigative efforts of your subcommittee and other competent U.S. authorities to the extent that we are able to do so in a manner consistent with our own vital interests and the law of the United Arab Emirates.(66)

The key points made by Al Sayegh were that Abu Dhabi was innocent, victimized, and would fully cooperate with the United States on investigating and prosecuting BCCI -- to the extent permitted by the law of its country and to the extent permitted by its "vital interests."

By Al Sayegh's account, Abu Dhabi's decisions to invest in BCCI was based not on the personal relationship between Sheikh Zayed and Abedi described by everyone else familiar with what actually happened, but on Abu Dhabi's reliance on BCCI's regulators in Luxembourg, the UK and the Grand Caymans, and on Price Waterhouse and Ernst & Whinney, BCCI's accountants.

By Al Sayegh's account, the chief difficulties in making documents and witnesses available to the investigators of other countries is that the Abu Dhabi legal system does not permit it, as its legal system is based on a separation of powers that prevents the Executive Branch from exercising any influence over the judicial process. In support of this account, Abu Dhabi's attorneys provided the Subcommittee with extracts of various laws of the United Arab Emirates, most of which have no applicability whatsoever to matters in dispute, but which do contain several relevant passages:

WE ZAYED BIN SULTAN AL NAHYAN, the President of the United Arab Emirates, having examined the Provisional Constitution and in view of the proposal made by [various Abu Dhabi cabinets and councils] HAVE ISSUED THE FOLLOWING LAW: . . .

[J]udges shall be independent having no dominant control over them in the performance of their duties other than the provisions of the Islamic Doctrine, the laws in force and their conscience. No individual or authority may violate the independency of the judicial authorities or interfere in matters of justice. . .

The function of the public prosecution shall be exercised before the Federal Courts by an attorney general . . .

The appointment of the attorney general and the other members of the Public Prosecution to the grade of prosecutor shall be effected by a decree issued by the President of the State [Sheikh Zayed] following approval of the Cabinet upon the nomination of the Minister of Justice. . .

The Minister of Interior may detain an alien against whom a deportation order has been issued, for a period not exceeding two weeks. . .

Following his arrest, an accused may not be detained for more than forty-eight hours [unless there is an order by the prosecutor] to detain him provisionally pending interrogation for a period of seven days subject to renewal for further periods not exceeding fourteen days. [A judge may] extend the detention for a period not to exceed thirty days, subject to renewal . . .(67)

As Al Sayegh's prepared testimony, these final provisions were the basis for the ordering of the summary arrest of the BCCI officials suspected of being involved in the irregularities and fraudulent activities, and their detention since, as under the interpretation given the law, the phrase "subject to renewal" allows the judge to continue to hold the accused from month to month so long as the prosecution wishes, without any limit whatsoever, for years, decades, or life, if matters remain under investigation.(68) Indeed, Subcommittee staff have interviewed one knowledgeable Pakistani insider about BCCI and Abu Dhabi who spent years in prison in Abu Dhabi without trial, after being involved in a dispute with a member of the ruling family.

Similarly, Al Sayegh's prepared testimony described BCCI's bank records as under the "protective custody of the U.A.E. federal civil court," which has provided "access

to the Majority Shareholders," Abu Dhabi, to "gather evidence upon which the prosecution can proceed," while the U.A.E. prosecutor, appointed by Sheikh Zayed, "has ordered that the documents . . . remain confidential" for reasons not explained.(69)

Given the fact that Sheikh Zayed, according to his own attorneys in submissions with the Federal Reserve, owns all of Abu Dhabi's resources and land, and that the laws themselves are styled as decrees by Sheikh Zayed, in consultation with other bodies and officials who are appointed by Sheikh Zayed, not by popular vote at elections, the notion that the United Arab Emirates's justice system is somehow completely independent from the interests of the ruling family of Abu Dhabi stretches credulity.

Following the conclusion of Al Sayegh's opening statement, Senator Kerry asked him whether Abu Dhabi was now prepared to cooperate with the United States on investigating BCCI. Al Sayegh gave, in essence, a commitment to complete the process of negotiating cooperation agreements with the U.S. within weeks:

Senator Kerry. Can we understand now that Mr. Naqvi and Mr. Iqbal and others will be made available to both members of the committee staff and Justice Department personnel

Mr. Al Sayegh. Yes, Senator. We are in discussions now, ongoing discussions, with the Department of Justice on terms for an agreement to provide access to both individuals and documents . . . They started a few weeks ago, Senator. I am certain we could wrap them up quickly.(70)

These statements were widely reported in the press the following day. Contrary to Al Sayegh's assurances, as of the date of the writing of this report four months later, no access to documents or witnesses has been provided to either the Subcommittee or to federal law enforcement by Abu Dhabi.(71)

As noted above, Al Sayegh did not have the personal background and knowledge of the facts concerning Abu Dhabi's involvement with BCCI to answer a number of basic questions asked by the Subcommittee in his oral testimony. Moreover, the testimony came following some seven hours of testimony from other witnesses. Accordingly, Senator Kerry requested, and Al Sayegh agreed to provide, answers to a number of remaining questions in writing, which were sent to Abu Dhabi's lawyers on May 20, 1992, with answers received July 8, 1992.

In replying to the 65 additional questions from Senator Kerry, Al Sayegh expressed his unhappiness at the number, nature, and tone of the questions, contending that some "inquired into my own personal affairs and the personal affairs of the Majority Shareholders or their representatives that had no relation whatsoever to matters involving BCCI and CCAH" and that others "contained factual allegations that are baseless and seem designed to embarrass the Majority Shareholders and their representatives." Accordingly, Al Sayegh requested a meeting with Senator Kerry to take place before he answered the questions. Senator Kerry declined.

Senator Kerry's questions sought to clarify points left unclear during the hearing. Unfortunately, in a number of cases, Al Sayegh's answers did not provide the clarification sought.

For example, Question 6 asked whether the Abu Dhabi Investment Authority was claiming sovereign immunity from suit in the United States. In response Al Sayegh gave the uninformative answer that it "depends upon the context in which the issue arises and the relevant facts and circumstances."(72)

Question 7 asked whether the other majority shareholders of BCCI, including Sheikh Zayed and his sons, would be claiming sovereign immunity. The uninformative answer was "it depends on the context in which the issue arises."(73)

In answer to Question 11, which asked about the circumstances of a loan by the Abu Dhabi Investment Authority to finance the buy-back of BCCI shares by Sheik Khalid bin Mahfouz, who engaged in fraudulent transactions with BCCI, Al Sayegh answered, "I am not aware of the details of the loan. . . I know of no reason why ADIA would be required to disclose its loans to U.S. regulators."(74)

In answer to Question 13, which asked whether any of the Abu Dhabi shareholders placed or deposited assets in ICIC, and if so, for the dates, amounts and purchase of each such placement, Al Sayegh replied that "in excess of $2 billion" was entrusted by Sheikh Zayed and his son, Sheikh Khalifa between 1980 and 1990 which were temporarily deposited in ICIC before being invested. No details were provided, nor any suggestion of how much "in excess of $2 billion" might have been involved.

In answer to Question 14, which asked Al Sayegh to provide detailed information concerning an account maintained by Sheikh Zayed and the ruling family in ICIC, known as Account No. 20071, Al Sayegh replied that "I do not think it is appropriate to provide details of the personal, private affairs of His Highness Sheikh Zayed to the Subcommittee, nor am I privy to them. However, to assist the Subcommittee, I am able to say that funds deposited in Account No. 20071 at ICIC Overseas were Ruling Family funds, to be invested by Abedi and Naqvi pursuant to powers of attorney."(75)

In answer to Question 16, which asked whether any of the majority shareholders had ever taken loans from ICIC, Al Sayegh relied that "I am not aware of any loans by ICIC to the Majority Shareholders."(76) In fact, Price Waterhouse audits of ICIC available to the Majority Shareholders, and obtained by the Subcommittee for the first time in August 1992, demonstrate quite clearly that as of December 31, 1989, ICIC had lent $17.5 million to the Abu Dhabi group.(77)

In answer to Question 18, which asked Al Sayegh to describe the nature and extent of claims by Abu Dhabi against ICIC, Al Sayegh replied that the Ruling Family has "very substantial claims" against ICIC, but "the details of the Majority Shareholders' intentions regarding the claims are subject to legal privilege and cannot be disclosed."(78)

In answer to Question 28, which asked Al Sayegh to provide the Subcommittee with a break-down of the capital paid-in by Abu Dhabi shareholders to BCCI, Al Sayegh replied "I am unaware of the details of amounts paid for shares in particular transactions, except that I am aware that $1.2 billion was injected into BCCI in April 1990 in an effort to save the bank."(79)

In answer to Question 29, which asked Al Sayegh to provide a detailed breakdown of its losses as the biggest victim of BCCI's fraud, including the date, type, location and amount, Al Sayegh replied that the losses included misappropriated funds, equity investments in BCCI, amounts on deposit, and interest, ignoring the Subcommittee's request for any dates on the losses, where and how they occurred, and what amounts were involved in each case.(80)

In answer to Question 34, which asked Al Sayegh whether Al Mazrui, who remains chairman of the Shareholders Group in charge of handling Abu Dhabi's interests pertaining to BCCI, received financial benefits in connection with the purchase of BCCI shares, Al Sayegh replied, "I am not privy to the details of Mr. Mazrui's own private affairs."(81) In fact, Al Mazrui had confessed to receiving these benefits, according to Price Waterhouse's Section 41 report, to members of the Abu Dhabi ruling family in April, 1990.

In answer to Question 42, which asked Al Sayegh who had custody of the $1.2 to $2.8 billion in promissory notes to BCCI from Abu Dhabi, seized by Abu Dhabi authorities through court action after BCCI's closure, Al Sayegh replied, "The Majority Shareholders are not in a position to provide details or court papers on this matter because the matter is sub judice and because of the in camera nature of the proceedings."(82)

In answer to question 44, which asked Al Sayegh to specify the terms it requires to conclude a cooperation agreement with the Justice Department and the New York District Attorney, Al Sayegh replied, "I do not believe it to be appropriate to discuss the details of the cooperation program, other than to say that we believe that the U.S. authorities will be fully satisfied."(83)

In answer to question 48, which asked Al Sayegh to specify the conditions of confinement of BCCI's officers in Abu Dhabi (who are reportedly being held in an Officer's Club under comfortable conditions), Al Sayegh replied, "I do not believe the conditions under which these individuals are held in confinement is an appropriate issue for the Subcommittee to be concerned with."(84)

In answer to questions 58-61, concerning the function of the James Lake and his firm, Robinson Lake, retained by Sheikh Zayed and Abu Dhabi to handle public relations for Abu Dhabi pertaining to BCCI, Al Sayegh replied that questions about what they were doing for Abu Dhabi, how much they were being paid, and who they were communicating with, were not legitimate areas for the Subcommittee's inquiry. Al Sayegh said that he believed these basic questions about its purpose in hiring Lake were "intentionally calculated to embarrass Mr. Lake," and refused to tell the Subcommittee what he had been paid.(85)

A number of the answers to other questions were also less than illuminating.

In summary, these answers, taken together, themselves demonstrate how limited the level of scrutiny Abu Dhabi is willing to tolerate as a result of its involvement with BCCI. Basic questions concerning how much money it put into BCCI, how much money it deposited, loans it may have made in connection with BCCI share purchases and sales, improprieties involving its chief financial officer responsible for BCCI, the status of the BCCI officials held in Abu Dhabi, and even what Abu Dhabi wanted out of its negotiations on cooperation with the Justice Department and New York District Attorney, are central to understanding Abu Dhabi's role in BCCI. Instead, Al Sayegh, representing Abu Dhabi, has taken the position that these matters are, essentially, none of the Subcommittee's business. The answers provided by Al Sayegh highlight how much Abu Dhabi may have to hide.

Al Sayegh's Credibility

The day after Al Sayegh testified before the Subcommittee, Senator Kerry's office received a sworn, unsolicited letter from a constituent, who described himself as a U.S. citizen with personal knowledge of Al Sayegh.

The constituent, a Massachusetts management consultant who had worked in Abu Dhabi, advised the Subcommittee "against uncritical acceptance of Mr. Al Sayegh's statements [because] he made false statements to me in my business dealings with him and I suffered substantial damage by accepting his word as truth."

The constituent, Dr. George B. Bricker, stated that his management consultant company, had entered into contracts with the Abu Dhabi National Oil Company (ADNOC) from 1982 to 1986, during which time Bricker and his staff performed various services for ADNOC.

In mid-1986, Bricker's company, Redirection, was assigned to diagnose organizational problems relating to the ADNOC Finance Directorate, whose newly appointed manager was Al Sayegh. Bricker stated that he worked closely with Al Sayegh's staff and met twice with Al Sayegh on the project, during which Al Sayegh told him that he was satisfied with the Redirection's and Bricker's performance. However, over a period of several weeks, Redirection stopped being paid by Abu Dhabi, causing Bricker to ask Al Sayegh if there was a problem.

According to Bricker, Al Sayegh said there was merely "an insignificant hiccup in the accounts payable procedure" and that Redirection's invoices would soon be paid in full. Bricker kept his staff on the job for months more, without anyone being paid by Abu Dhabi. Eventually, Bricker told the staff to leave Abu Dhabi, at which time Al Sayegh admitted to Bricker that payments to Redirection had been withheld at Al Sayegh's direction since the beginning of the project more than six months earlier, and would not be paid until Redirection performed additional services for new work which had never before been discussed or included in the contract.

Bricker eventually learned that his situation was related to an attempt by Al Sayegh, which was successful, to replace the previous management of ADNOC entirely, with younger managers of Al Sayegh's generation and background. As Bricker had been in place under the earlier management, Al Sayegh was using the technique of not paying Bricker and his company as a way of forcing Bricker out without firing him. As Bricker summarized, "Redirection performed no further projects for ADNOC. Redirection lost an estimated US$100,0000 because of Mr. Al Sayegh's all-too-plausible false statements. Clearly, Redirection had no legal recourse; the U.S. Embassy was no help."(86)

While it is not possible to resolve the merits of the business dispute involving Al Sayegh and the Massachusetts constituent who wrote Senator Kerry, the unsolicited sworn statements made by a U.S. citizen, Dr. Bricker, concerning Al Sayegh's alleged dishonesty in doing business with him, do raise questions about the credibility of Al Sayegh.

BCCI audit reports obtained since Al Sayegh's testimony show the company he was managing, ADNOC, as itself having very substantial deposits at BCCI. These deposits were not held, as one would expect of the Abu Dhabi National Oil Company, in Abu Dhabi, or even in the Middle East, but at the BCCI bank responsible for the greatest portion of BCCI's losses and fraud, BCCI-Grand Cayman, where they amounted to some $229,277,000 as of September 30, 1988.(87)

Finally, the Peat Marwick audit investigation of BCCI's commodities affiliate and partner in money-laundering, Capcom, make reference to apparently improper transactions involving Capcom in the United Arab Emirates and individuals referred to as the Al Sayegh brothers. The Subcommittee has not been able to determine whether the reference applies to the witness.(88)

Abu Dhabi' Lawyers and PR Firms

Like BCCI itself, Abu Dhabi has made a practice of hiring in the United States as its attorneys and public relations assistants firms which are among the most politically well-connected in Washington, D.C.

From 1978 through 1990, Abu Dhabi's interests in Financial General Bankshares and in CCAH/First American were represented by former Defense Secretary Clark Clifford, Robert Altman, and the firm of Clifford & Warnke.

Through much of that period and continuing to the present, Abu Dhabi's other interests in the United States were represented by the Washington firm of Patton, Boggs & Blow. During that period, Patton Boggs has also "served as headquarters for a billion-dollar enterprise called Real Estate Operations, Inc., owned by Sheikh Zayed's Abu Dhabi government," as was described in a lengthy article on Patton Boggs' handling of Abu Dhabi's real estate investments that appeared in the Wall Street Journal May 20, 1992.

According to the Journal, Abu Dhabi's investments in the United States, much of which have been handled by Patton Boggs, total nearly $1 billion. The Journal article then described how these assets were held by Real Estate Operations, Inc., which in turn controlled 22 real estate investment companies, 10 partnerships, three shell corporations, and other entities, which in turn own millions of square feet of commercial and retail property across the United States.(89)

As a result of handling Abu Dhabi's business, Patton Boggs in addition to being attorneys for Abu Dhabi, became, in effect, their business agents, or investment managers in the United States, thus linking the firm to Abu Dhabi in a manner more intimate than a narrower, attorney-client relationship.

Ironically, at BCCI's request, Patton Boggs also handled legal work for a front-man of BCCI, Mohammed Hammoud, pertaining to a real estate investment he made in Virginia that was financed by BCCI, with a back-up letter of credit issued from BCCI's then secretly-held U.S. bank, First American.

Thus, especially for the period from November, 1990, when they became BCCI's principal lawyers in the United States, to July 5, 1991, when BCCI was closed, Patton Boggs inherited, to some extent, the problem of multiple hats previously applicable to Clifford and Altman. While Patton, Boggs partners had no role at the First American bank, apart from the interests of their clients, there was a potential conflict of interest present between the interests of Abu Dhabi as shareholders of BCCI, and the interests of BCCI's creditors and depositors. This conflict always existed, but was only highlighted after BCCI's closure, once the creditor and depositor interest became represented not by Patton Boggs, but by BCCI's liquidators.

At the same time, Abu Dhabi has since BCCI's closure retained a politically-connected public relations consultant, James Lake, and his firm of Robinson-Lake, to carry out public relations efforts on behalf of Abu Dhabi. Lake, who received $200,000 in payments from Abu Dhabi last fall in connection with this work, has simultaneously been performing -- as a volunteer, in an unpaid position -- the job of deputy manager to President Bush's re-election campaign, causing the chairman of the Subcommittee to state on March 18, 1992 that:

I do not believe that Mr. Lake should be sitting in on White House campaign strategy meetings while he is also providing strategy to Sheikh Zayed on how to deal with problems arising out of his ownership of BCCI.(90)

Senator Kerry suggested that Lake resign from representing Abu Dhabi, or from the President's campaign. In response, Lake said that there was no conflict, and he would continue to handle both matters. He also explicitly stated he would have no contact with anyone in the Executive Branch concerning Abu Dhabi matters.

SENATOR KERRY'S VIEW:

Senator Kerry continues to believe that Lake's dual representation represents a disturbing conflict of interest. In the view of the chairman of the Subcommittee, at a time when Abu Dhabi continues to refuse to prevent the Justice Department from obtaining access to documents and witnesses held in Abu Dhabi, Lake's dual role sends the wrong message to Abu Dhabi about how serious U.S. authorities are in investigating and prosecuting anyone who has committed crimes pertaining to BCCI in the United States.

1. Price Waterhouse Report Sec 41 to the Bank of England, June, 1991, Sec. 1.33.

2. See testimony of Al Sayegh, S. Hrg. 102-350 Pt. 5 p. 759.

3. S. Hrg. 102-350 Pt. 5 p. 762.

4. A key issue raised by the September 21, 1992 decision to provide access to some documents is whether the action represents real cooperation, or merely the appearance of cooperation as part of a public relations effort. On September 21, 1992, Robert M. Moregenthau, District Attorney of New York, wrote the Subcommittee stating the following: "I write at the request of Ronald S. Liebman, Esq. of Patton Boggs & Blow, counsel for certain individuals and entities in Abu Dhabi, including members of the Ruling Family. Mr. Liebman has advised me that photocopies of certain documents have been delivered to the Embassy of the United Arab Emirates in Washington, D.C. for inspection by members of the District Attorney's Office. Later today we will begin the process of reviewing these records, and will continue doing so until they have been fully reviewed. Mr. Liebman has further advised me that an Abu Dhabi court order authorizing this review was obtained yesterday. This review will not be deemed an admission or authorized representation by the Abu Dhabi parties. We will be free to use whatever leads are obtained to further our investigation." Abu Dhabi has provided no explanation of why these documents had been withheld from U.S. law enforcement prior to September 21, 1992. Abu Dhabi has also provided no explanation of why it has refused to permit law enforcement to copy these documents, or to review them outside the confines of the Embassy of the United Arab Emirates. Abu Dhabi has not provided the documents to the Subcommittee. Thus, it is impossible to determine which documents have been provided by Abu Dhabi, and which documents have continued to be withheld. It is also not possible to determine what information the BCCI officials held in Abu Dhabi could provide U.S. law enforcement if Abu Dhabi permitted U.S. officials access to them.

5. See generally detailed testimony regarding this issue of Nazir Chinoy, March 18, 1992; Akbar Bilgrami, July 30, 1992; and testimony of Abdur Sakhia October 22, 1991 and Masihur Rahman, August 8, 1991.

6. S. Hrg. 102-350 Pt. 5 p. 757.

7. Deposition of Abdullah Darweish, September 23, 1982, Financiera Avenida S.A. v. Refco, US District Court Northern District of Illinois No. 82-C-1272.

8. Staff interview, August, 1992, Pakistani national familiar with BCCI-Abu Dhabi relationship.

9. Price Waterhouse audit reports to BCCI board of directors, 1987-1989; miscellaneous BCCI loan and financial documents.

10. Deposition, Lasidi v. Financiera Avenida, New York Supreme Court County of New York, 1982.

11. S. Hrg. 102-350 Pt. 3 p. 22.

12. Id.

13. Exhibit I, OCC Report of Joseph Vaez to Robert Bench, February 15, 1978; an accounting of Abu Dhabi's interest in BCCI at this time provided to the Subcommittee on May 13, 1992 contradicts this figure, describing the Abu Dhabi holdings in 1977 as 1.28 percent of BCCI.

14. Prepared Statement of BCCI Majority Shareholders, S. Hrg. 102-350 Pt. 5 p. 747.

15. Shareholding in BCCI Holdings (Luxembourg) S.A., prepared by Abu Dhabi to Subcommittee, reprinted S. Hrg. 102-350 Pt. 5.

16. Answer of Al Sayegh to Question 28 posed by Subcommittee, reprinted in S. Hrg. 102-350 Pt. 5.

17. Price Waterhouse Section 41 Report to the Bank of England, June, 1991.

18. Price Waterhouse audit report documents, BCCI, Loans to Shareholders, Valuation of Shares BCCI Holdings & CCAH at November 30, 1987, and at December 31, 1989, obtained by Subcommittee.

19. Bailey, Federal Reserve Hearing, April 23, 1981, pp. 15-17.

20. Staff interview, Lance, October, 1991.

21. Washington Post, December 18, 1977, "Arab Investors Want Lance to Manage Funds."

22. Al Sayegh, answer to question 25 from Senator Kerry, July 8, 1992, reprinted in S. Hrg. 102-350 Pt. 5.

23. Interviews, Richard Small and Thomas Baxter, Federal Reserve, April-May, 1991; testimony of Virgil Mattingly, May 14, 1992, S. Hrg. 102-350 Pt. 5.

24. Staff interviews, Akbar Bilgrami, July 13-14, 1992; Bilgrami testimony, July 30, 1992, S. Hrg. 102-350, Pt. 6.

25. Id.

26. Id.

27. Staff interviews, former BCCI employee and Pakistani national, July, 1992.

28. Sami memorandum, January 30, 1978, id.

29. Al Sayegh, answers to question #19 from Senator Kerry, July 8, 1992, reprinted in S. Hrg. 102-350 Pt. 5.

30. Price Waterhouse Report Sec 41 to the Bank of England, June 1991.

31. Indictment, December 8, 1991, Attorney General of Abu Dhabi Sheikh Zayed v. Darweish.

32. Al Sayegh, sworn answer to Question 13 of Senator Kerry, July 8, 1992, reprinted in S. Hrg. 102-350 Pt. 5.

33. Al Sayegh, Answers to Question #33 of Senator Kerry, July 8, 1992, reprinted in S. Hrg. 102-350 Pt. 5.

34. Price Waterhouse Audit Reports, 1983, Hong Kong Deposit and Guaranty and Tetra Finance (HK).

35. Al Sayegh, Answer to Questions #31 and #35 from Senator Kerry, July 8, 1992, reprinted in S. Hrg. 102-350 Pt. 5.

36. Price Waterhouse Report Section 41 to the Bank of England, June 1991.

37. Id.

38. Staff interviews, Nazir Chinoy, Abdur Sakhia, Akbar Bilgrami, Massihur Rahman. In private, BCCI officials referred to Iqbal's chief role and principal skills to be as a procurer.

39. S. Hrg. 102-350 Pt. 1 p. 481.

40. Section 41 Report to the Bank of England, Price Waterhouse, June, 1991.

41. Memorandum submitted by Price Waterhouse in reply to Questions from the House of Commons Committee on Treasury and Civil Service, February 5, 1991.

42. Memorandum submitted by Price Waterhouse in reply to Questions from the House of Commons Committee on Treasury and Civil Service, February 5, 1991.

43. Memorandum submitted by Price Waterhouse in reply to Questions from the House of Commons Committee on Treasury and Civil Service, February 5, 1991.

44. Id. Price Waterhouse's findings of the Section 41 report are reviewed in some detail in the chapter concerning BCCI's criminality.

45. S. Hrg. 102-350 Pt 4 pp. 747-748.

46. Id.

47. Norton Rose Report to the members of the BCCI SA Creditors' Committee, May 1, 1992, pp. 3-5; reprinted in S. Hrg. 102-350 Pt. 5.

48. Norton Rose report, id p. 5.

49. S. Hrg. 102-379, testimony of Virgil Mattingly, May 23, 1991, pp. 114-121.

50. S. Hrg. 102-350 Pt. 5 p. 750, and staff interviews with Federal Reserve investigator Richard Small.

51. Winer memcom, March meeting with Patton, Boggs, and Blow.

52. Staff interview, August 26, 1992, Masihur Rahman, who was in daily contact with BCCI officials and U.S. and British regulators during the relevant period.

53. Norton Rose Report, id p. 6.

54. See testimony of Al-Sayegh, S. Hrg. 102-350 Pt. 5 pp. 760-763.

55. Norton Rose, id p. 54.

56. Norton Rose, id, pp 54-55.

57. S. Hrg. 102-350 Pt. 5 p. 325.

58. Smouha prepared testimony, S. Hrg. 102-350 Pt. 5 p. 330.

59. See Smouha's testimony, S. Hrg. 102-350 Pt 5 pp. 331-333.

60. S. Hrg. 102-350 Pt. 5 p. 335.

61. Appendix 3, Summary of the Proposed Agreements, Joint Liquidators Report, Bank of Credit and Commerce International, SA March 16, 1992, p. 16.

62. Joint Liquidators Report, March 17, 1992, id., reprinted in S. Hrg. 102-350 Pt. 5.

63. S. Hrg. 102-350 Pt. 5 p. 338.

64. S. Hrg. 102-350 Pt. 5 p. 766; documents regarding Clifford and Altman's representation of Abu Dhabi from 1978 through 1990, S. Hrg. 102-350 Pt. 4 pp. 424, 432, 437-439, 456-459.

65. Al-Sayegh testimony, S. Hrg. 102-350 Pt. 5 pp. 759-770.

66. S. Hrg. 102-350 Pt. 5 pp. 743-746.

67. Extracts, United Arab Emirates Federal No. 6 of 1973, Federal Law No. 10 of 1973, Federal Law No. 3 of 1983, reprinted in S. Hrg. 102-350 Pt. 5.

68. S. Hrg. 102-350 Pt. 5 p. 754.

69. S. Hrg. 102-350 Pt. 5 p. 754.

70. S. Hrg. 102-350 Pt. 5 pp. 756-757.

71. On September 21, 1992, Abu Dhabi began making selected documents available at its Washington embassy for viewing by the Federal Reserve and U.S. law enforcement, on the condition that no copies be made and that none of the information could be used as admissions in court. None of these documents have been made available to the Subcommittee and the value of this information, if any, cannot be evaluated.

72. Sworn statement, Ahmed Al-Sayegh, in response to question 6 of Senator Kerry, July 8, 1992, reprinted in S. Hrg. 102-350 Pt. 5.

73. Id, question 7.

74. Id., answer to Question 11.

75. Id, answer to Question 14.

76. Id, answer to question 16.

77. Valuation of Shares BCCI Holdings & CCAH at December 31, 1989 and Loans to Shareholders, Subcommittee document.

78. Sworn statement, Ahmed Al-Sayegh, in response to question 18 of Senator Kerry, July 8, 1992, reprinted in S. Hrg. 102-350 Pt. 5.

79. Id, answer to Question 28.

80. Id, response to question 29.

81. Id, answer to question 35.

82. Id, answer to question 42.

83. Id, answer to question 44.

84. Id, answer to question 48.

85. Id., answer to question 58-61.

86. Statement, Dr. George B. Bricker, to Office of Senator John Kerry, May 18, 1992, by Fax.

87. Price Waterhouse Report to the Audit Committee, BCCI Holdings (Luxembourg) SA, 10 November, 1988, Subcommittee document.

88. See S. Hrg. 102-350 Pt. 6, Peat Marwick Report.

89. "Abu Dhabi's Links With A Powerful Law Firm Present Problem For Democrats on BCCI Issue," Wall Street Journal, May 20, 1992, p. A-18.

90. S. Hrg. 102-350 t. 4 . 356.

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MOHAMMED HAMMOUD: BCCI'S FLEXIBLE FRONT-MAN

Introduction

As the BCCI scandal has unfolded, Mohammed Hammoud has emerged as a shadowy figure with close ties to a number of powerful American political and government figures.

During the 1980's, Hammoud acted as a front-man or nominee for BCCI, became an owner of BCCI and of CCAH, the holding company for First American, borrowed over $110 million from BCCI, much of which he failed to make interest payments on, and made numerous investments in the United States with funds provided him by BCCI, and in one case, backed up by guarantees from First American.

During the same period, Hammoud, a little known Lebanese merchant, also purchased the shares in First American held by Clark Clifford and Robert Altman; had his U.S. real estate investments managed by the current U.S. Ambassador to Bahrain, Charles W. Hostler; had contact with officials from the State Department concerning the release of U.S. hostages from Beirut and other issues pertaining to Lebanon, and developed a personal and business relationship with Michael Pillsbury, a former assistant Undersecretary of Defense and Senate staff assistant.

After BCCI's indictment in October, 1988 by the U.S. Attorney in Tampa, Hammoud also worked closely with BCCI's

criminal defense team in Washington to determine whether it would be possible to "reverse Tampa" by meeting with higher-level federal officials in Washington. In the fall of 1989, Hammoud actually met with high-ranking officials at Treasury and Justice concerning the BCCI case, and had ongoing contact with Senate staffer Pillsbury seeking to assist BCCI in defending itself against its criminal case.(1)

Hammoud's multiple roles in connection with BCCI continued until his sudden death on May 3, 1990, at the very time that investigations of BCCI were intensifying. After his death, press accounts raised questions as to whether his death was real or staged, and law enforcement indictments have described Hammoud's current status as "reportedly dead."(2)

Who is Mohammed Hammoud?

Little is known of Hammoud's background, although Abdur Sakhia, the former general manager for BCCI N.Y., described Hammoud as a merchant who at one time operated a stall in one of Beirut's open-air markets:

My memory goes back about 27 or 28 years when I went first to Beirut. He was a small time money changer.(3)

In interviews with Subcommittee staff, Nazir Chinoy, the BCCI general manager in Paris, remembered Hammoud as:

A short man, not a very impressive personality. . . My impression of Hammoud, to me Hammoud was not rich. Pharoan had physical power from his bearing his confidence. Hammoud was a slimey sort of a chap, not a forceful personality. Would Hammoud understand foreign policy? I do not think so. He was not a worldly man. Pharoan yes. Hammoud no.(4)

In testimony before the Subcommittee in 1991, Massihur Rahman, BCCI's former chief financial officer, described Hammoud as "a medium sized businessman." BCCI's files indicate that Hammoud's wealth grew exponentially, and inexplicably, during the 1980's, at a clip of almost $5 million a year. By 1989 he is listed as owning assets in excess of $35 million.(5) Nevertheless, according to Chinoy, Hammoud did not give "the impression of being an extremely rich man from his clothes and general behavior."(6)

At some point during the 1970's Hammoud became very close to the top management at BCCI. Naqvi had worked in Lebanon and BCCI had branches there, but the Subcommittee has been unable to determine who originally introduced Hammoud to BCCI. Hammoud is described in a 1983 BCCI memorandum as "a very good customer of the BCC Group," who "possesses large means."(7) By the time of his death in 1990, Hammoud was a major shareholder in the bank, owning 2,646,184 shares, according to a February, 1990 report by BCCI's outside auditors, Price Waterhouse.

According to Rahman, "[h]e seemed to be very close to some of our executives. And he has been used obviously for taking loans and doing things."(8) Later in his testimony Rahman characterized Hammoud as the most flexible of BCCI's nominees.

Chinoy echoed the testimony of Rahman, stating that Hammoud had "a very special relationship" with the bank. Chinoy recalled how Hammoud had borrowed about $100,000 from the Paris branch and was not servicing the loan. When Chinoy wrote Hammoud asking that the loan be repaid, Chinoy was rebuked by his superiors in London and told he "should not write abusive letters to good clients who had helped the bank." Chinoy explained that he later wrote the loan off in three separate installments.(9)

The loan to Hammoud by BCCI's Paris branch pales in comparison to the massive loans Hammoud received from BCCI elsewhere. As of April 1990, Hammoud owed over $110 million dollars to BCCI and its affiliate, ICIC, Grand Caymans, As Price Waterhouse concluded in the report, "there remain too many unanswered questions about Mr. Hammoud [including] his connection with delinquent accounts of BCCI." At the time, Price Waterhouse expressed its concern about the lack of evidence at BCCI that Hammoud owned "any of the companies" he claimed to own in connection with BCCI lending. (10)

Hammoud's Real Estate Investments

Hammoud made real estate investments in the United States through a series of companies: Linden Investments, Copperwood, N.V., Marmaris investments, N.V., Eastward, N.V. and Carlson Farms, Ltd. Ambassador Charles Hostler, who advised Hammoud on his US investments, referred to these companies as "holding companies" for the properties.

Documents obtained by the Subcommittee indicate that all of the companies were probably front companies which Hammoud established on behalf of BCCI. For instance in November, 1978, Hammoud wrote to ICIC, BCCI's "bank within a bank":

I have to request you to arrange on my behalf for the incorporation of a company in Cayman Islands with an authorized capital of US$900,000.00 and Issued and Paid-up capital of $US100,000.00. This company to be incorporated with the name and style of "Linden Investments Company Limited" is to have as its principle objects investments in immovable properties in the U.S.A. and other places, either directly or through any of its subsidiaries to be incorporated in such countries where maximum tax benefits would be available for such property investments, and with such other objects as are usable and necessary for such investment companies, including borrowing powers.

You may appoint your own nominee directors for the said Linden Investment Co. Ltd. and transfer to their names such shares as may be necessary according to the legal requirements. The remaining shares may be held by you in your name or in the name of any other company as your nominee.

I hereby authorize you to appoint any agents for the aforesaid purpose and to do, execute and perform or cause to be done, executed and performed all acts, deeds and things that may be required or necessary in a fiduciary capacity for the aforesaid purpose and to give any other authority or writing that you may require or deem necessary for this purpose.(11)

Hammoud's real estate investments include property he purchased from a church in Alexandria, Virginia, an office building in New York, a building in Boston adjacent to Boston Symphony Hall, and a development in the small town of Sherman, Connecticut. All of these investments were financed by BCCI and none of the loans was ever serviced. Carlson Farms, for instance, received a $1 million letter of credit from BCCI secured by only the guarantee of Linden Investments, which apparently held no other properties.(12)

In his Senate testimony, Sakhia described the Hammoud's real estate holdings in the US with which he was familiar. According to Sakhia:

We did a loan to him from BCCI in New York, which we were told from London to give that loan in the first place.

In the second instance, when we had acquired the property and we wanted to develop a property in Washington, he contacted us to make a construction loan-- which we refused to do because we were not equipped to handle constructions loans."(13)

Sakhia testified that he "completely refused to do the second transaction," but that the Central Credit Division in London ordered him to the first transaction, which wound up being "110% of the loan". Sakhia acknowledged that the loan did not make business sense. (14)

After Sakhia refused to do the construction loan, the Central Credit Committee in London told its New York regional manager "[W]hy don't you introduce him to First American, because the property is in Washington. First American is located in Washington and First American is big in real estate loans." First American subsequently issued a $4 million letter of credit to Hammoud.(15)

Senator Kerry was struck by the fact that Hammoud needed an introduction to First American after Hammoud had become a shareholder of First American, having purchased his shares in First American/CCAH from First American's chairman and president, Clark Clifford and Robert Altman. Sakhia testified that he too was baffled by the events:

It's [First American] not like a big corporation with hundreds of shareholders. The handful of shareholders -- [Hammmoud] directly bought the shares from the Chairman and the President. And he wants me to introduce the officers of First American. It didn't make any sense to me.(16)

In 1990, the U.S. General Manager of BCCI, in an effort to avoid the scrutiny of bank regulators, recommended "immediate transfer" of Hammoud's assets "to an off shore unit."

Holdings of CCAH Stock

Hammoud's investment in First American Bank came about as a result of his acquisition of stock throughout the 1980s through BCCI, and in fact, as a nominee for BCCI. In 1986, Hammoud first began acquiring stock at $2,200 a share as BCCI's nominee. By 1990, Hammoud had acquired 6% of the shares of the bank on BCCI's behalf.

In March 1988, Hammoud bought stock from Clifford and Altman, the Chairman and President of First American, for a whopping $6,800 a share -- the highest price ever paid for First American stock. Hammoud's $25 million purchase of First American shares was bankrolled by BCCI, although in testimony before the Subcommittee, Altman stated that:

[M]r. Hammoud was one of the individuals not listed by the Federal Reserve as a nominee in their notice of charges. He was in their category of bona fide shareholder.(17)

Altman added that after Hammoud's death in the spring of 1990, "we had been contacted by Hammoud's estate." According to Altman:

His estate believes that the stock is stock that belonged to Mr. Hammoud and now belongs to his heirs. They certainly take the position that Mr. Hammoud was no nominee. He was a bona fide shareholder. And they had asked that the stock be transferred into the names of the heirs. And we were seeking certain documentation in that regard before the transfer could be lawfully effected.(18)

Altman's representations before the Subcommittee regarding the bona fides of Mohammed Hammoud were recently challenged in the indictment of Clifford and Altman by the Manhattan District Attorney. The indictment charged that:

As part of the business of the corrupt enterprise, assets were purchased with depositors' funds, but were falsely maintained as ostensibly separate from the BCC group. These assets were purchased in the names of, among others ....Mohammed M. Hammoud, a Lebanese businessman who reportedly died in 1990.

Moreover, Masihur Rahman, BCCI's chief financial officer, provided detail on the mechanism that Hammoud employed to mask the sham transactions involving CCAH stock. Rahman testified that Hammoud used two front companies, Mid-Gulf and Rubstone, to purchase the shares. According to Rahman, after Price Waterhouse raised concerns about BCCI and the bank began an internal investigation, Rahman confronted Hammoud: "He [Hammoud] was first denying, but finally it was accepted that both of them belonged to Hammoud."(19) Rahman did not know what the companies did, "except that they had some loans [from BCCI] for CCAH." According to Rahman, the amount loaned to Rubstone to purchase First American shares was around $14 million and the amount loaned to Mid-Gulf to purchase First American shares was $44 million."(20)

The Subcommittee has obtained an undated letter of instruction from Hammoud to the Manager of BCCI, Overseas, Grand Cayman, which support Rahman's testimony. The letter specifically states:

With reference to the loan advanced by you on my recommendation to Mssrs. Rubstone Trading, of amount up to $US 12 million, I hereby authorize you to hold my shares in Credit and Commerce American Holdings N.V., as security to cover the outstanding balance of the loan.(21)

By April 1990, as the auditors scrutinized BCCI and its CCAH loans, Hammoud informed BCCI that he did "not hold any shares" in either Midgulf or Rubstone.(22) Apparently, both Hammoud and BCCI had decided that it was not in their interest to have Hammoud seen as a nominee for BCCI holding CCAH shares. This, of course, was during the period that Price Waterhouse was uncovering massive fraud and deception at BCCI, and just weeks before Hammoud's sudden death.

Altman and Hammoud

Documents obtained by the Subcommittee from BCCI's liquidators show that Robert Altman, who was also BCCI's U.S. attorney, held a power of attorney for Hammoud, giving Altman the right to dispose of Hammoud's stock in CCAH at any time as Hammoud's agent. Altman testified he was unaware that he had such a power of attorney and when shown the document by Senator Kerry, he expressed profound shock:

[T]his gives an authority to sell shares, and that is something that to the best of my recollection, I'd never seen before. I do not know how to explain it. I don't know where it came from, but I don't believe it was ever in our files.(23)

Thus, Altman, who sold his stock to Hammoud for three times what Altman paid for the stock, had the ability through the power of attorney also to buy and sell shares of CCAH to and from Hammoud in any case.

Altman testified that he never met Hammoud. This statement seems odd given that Hammoud was in Washington on a number of occasions, and was ostensibly a major shareholder of First American, on whose behalf Altman was running the bank. On the other hand, there was really no reason for Altman to have met Hammoud if Hammoud was the flexible front man that he has been portrayed to have been. It is entirely possible that Hammoud was not even aware of his holdings in First American: the loans were arranged by BCCI; the purchase and sale may have been arranged by Altman using the power of attorney.

Hammoud and Ambassador Hostler

Hammoud also had contacts with US Ambassador to Bahrain Charles Hostler. As a businessman in Beirut in the 1960's, Hammoud met Hostler when Hostler was a young U.S. Air Force officer, attached to Lebanon, Jordan and Cyprus, and based in Beirut, Lebanon. Hammoud's wife taught Arabic to the young Mr. Hostler, and the Hammouds and Hostler became good friends. (24) Later, Hostler returned to Beirut as the manager of the Douglas Aircraft Company in Lebanon from 1965 to 1967, before accepting a position with McDonnell Douglas in the U.S. As the report to the Foreign Relations Committee on Hostler described his career:

Mr. Hostler served at the United States Department of Commerce as Deputy Assistant Secretary of International Commerce from 1974 to 1976, where he was responsible for establishing and managing the nation's export expansion program. From 1963 to 1969 he worked in numerous capacities for McDonnell Douglas Corporation including Director of International Operations for the Middle East and North Africa. . . and Manager of International Marketing for Missiles and Space.(25)

According to the Wall Street Journal, Ambassador Hostler stated that he has from time to time given financial advice to Hammoud. Hostler told the Subcommittee that he advised Hammoud on three properties: "vacant land" in Sherman Connecticut, an "old building" in Boston, Massachusetts and a "tear-down" in New York City.(26)

Curtis Hagen, a real estate broker, also worked with Hammoud on the three properties referenced by the Ambassador in his affidavit.

Concerning the tear-down in New York City, Hagen told the Subcommittee:

In NYC I engineered a joint venture between BCCI and Skanska with an agreed to land evaluation of 5 million (BCCI purchased it at $1.1 million) In the midst of contract negotiation between the two law firms representing each entity. In the meantime I turned down an offer of 4 million in cash by Paul Milstein, because the tax burden was too severe. However, he eventually built the project, although the chain of title after Hammoud came on the scene with Hostler is unclear to me.(27)

Concerning the "old building" in Boston, Hagen told the Subcommittee:

I arranged a zoning change from a two story Taxpayer to a 17 story and lower condominium residential & commercial building with on-parking premises. This process, as you know, was extremely complex and took 2 and 1/2 years to bring to a point, where only a very routine submission of a detail was needed to finalize. BSO now has ownership. Hostler arranged the sale to BSO for Hammoud, however I do not know what consideration BSO gave to Hammoud/Hostler.(28)

Concerning the "vacant land" in Sherman, Connecticut, Hagen told the Subcommittee:

After 6 tons of papers, maps, demographics, etc. the final subdivision was approved and I negotiated the required road bond.(29)

In short, the vacant land, the old building and the tear down were substantial properties with real value.

In his affidavit to the Subcommittee, Ambassador Hostler stated that "He [Hammoud] considered me expert in real estate matters, since he lived abroad and was then largely unacquainted with US real estate practices."(30) However, Hagen, the New York real estate broker, didn't think Hostler knew much about real estate: "[H]ostler, the real estate typhoon, knew as much about real estate as my Aunt Matilda knew in 1860 about building a space shuttle."(31)

It appears that Hagen did the lion's share of work to make Hammoud's various real estate investments marketable and saleable. The question arises as to what Hostler's role was and what compensation he was received.

According to the Ambassador:

"His inquiries and my advisory activities for him were intermittent and limited. I would estimate that they involved perhaps an average of several hours a month in the period between 1982 and 1988."(32)

Hostler claims that he "received no salary, gifts or other gratuities or compensation from Hammoud, though I was reimbursed for my direct, nominal, actual receipted expenses."(33)

Hagen, however, recalls a meeting at the Pierre Hotel in Hammoud's suite on July 16, 1982 between Hammoud, Hostler, Pisani [an architect] Milne [a Utah real estate developer] and Hagen and his daughter. According to Hagen, "It was either at that meeting or a few days before wherein Hammoud placed both hands on Hostler's shoulders and said: "there will be a Cadillac in your driveway, tomorrow morning."(34)

The Subcommittee has been unable to ascertain whether or not Ambassador Hostler received the Cadillac. However, it is certainly unusual for anyone to provide business services to someone else for several hours a month for six years without receiving any form of compensation for it in return. Hence, Ambassador Hostler's described willingness to work for Hammoud for nothing for this lengthy period raises the question of why Ambassador Hostler did perform these services.

Hammoud and Pillsbury

Michael Pillsbury is a former Senate staffer. He was formerly an Assistant Secretary of Defense. According to the Washington Post, Pillsbury was "a member of the top-secret "208 Committee," the interagency group that oversees Central Intelligence Agency covert operations for the President and meets in the situation room and room 208 of the Old Executive Office Building."

Pillsbury has told Subcommittee staff that he initially met Hammoud in the context of his work in the Senate when a real estate developer, Earl Milne, introduced him in 1981 or 1982. According to Pillsbury, Hammoud was "unusual" because he was a wealthy, Lebanese shi'ite. Pillsbury subsequently developed a personal relationship with Hammoud and over the course of the decade met him "ten to twenty" times in several cities around the world, including Washington, London, Geneva, Beirut, Damascus and "possibly Paris". According to Pillsbury, Hammoud provided him with intelligence related information concerning U.S. hostages held in Lebanon, which Pillsbury then passed on to US government agencies. As a letter to Subcommittee staff from Pillsbury's attorney, former Watergate prosecutor Seymour Glanzer, states:

Mr. Pillsbury has never said that he is "withholding important information" [from the Subcommittee]. What he did say was that he was reticent about disclosing inflrmation that might be needed about Mr. Hammoud's purported assistance to the United States Government. That was because he was alluding to two State Depeartment communications which may be "classified" and which can be obtained from the State Department. Thus, he does not believe he is at liberty to disclose their contents. One of these communications is a cable from the American Ambassador in Beirut in approximately November 1983, and the other is a cable from the American Ambassador in Damascus in approximately April 1989. Therefore, Mr. Pillsbury believes it is appropriate that disclosure be taken up with the State Department.(35)

Following receipt of the letter from Glanzer, Senator Kerry asked the State Department to retrieve the documents described. Unfortunately, the State Department was not able to locate the 1983 cable. It was able to locate the second cable and that cable remains classified. At the time of the second cable, Edward Derejian was U.S. Ambassador to Syria, and since that time has been appointed Assistant Secretary of State for Middle Eastern Affairs. Contemporaneous notes from BCCI's attorneys show that Pillsbury was contending that Hammoud was directly involved in assisting the U.S. on negotiations concerning the release of the U.S. hostages held in Lebanon as of the fall of 1989.(36)

In the early-1980's Pillsbury moved from the Senate to become the assistant undersecretary for Defense. In that position he championed the provision of advanced weapon systems, notably stinger missiles, to anti-communist insurgencies around the world, including Savimbi's UNITA forces in Angola and the Mujahadin in Afghanistan. Pillsbury is known to have made frequent trips to both countries.

The Task Force on Terrorism and Unconventional Warfare -- House Republican Research Committee claims that Hammoud was an arms merchant:

In order to insert large quantities of explosive and related equipment into target countries, the Hizballah established a web of import-export companies in Western Europe as part of its dormant network. Lebanon's leading shi'ite businessmen, including Mohammed Hammoud, who would later become a key financier of BCCI, provided crucial expertise, organizational and financial assistance without which projects could not have been undertaken.

Pillsbury has denied that he ever used Hammoud or BCCI either to arrange or to finance the provision of sophisticated weapons to anti-communist insurgencies.

In fact, Pillsbury has stated that his contact with Hammoud, aside from the information he provided on the US hostages held in Lebanon, was in the context of a book that they were writing together about the Shi'ites of Lebanon.

According to Pillsbury, Hammoud paid him an advance to coauthor a scholarly text about the Shi'ites and Pillsbury had completed some 200 pages of this book by the time of Hammoud's death. Pillsbury told the Subcommittee that he disclosed the book deal to the Senate Ethics Committee. However, Pillsbury refused to disclose the amount he had been paid by Hammoud, and when the payment was made. Pillsbury argued that these facts were irrelevant since he ultimately returned the money, although he refused to specify when that occurred. Pillsbury stated that his expenses had never been paid by either Hammoud or BCCI. However, these statements are contradicted by notes taken by BCCI's lawyers in October, l989 state that Pillsbury travelled to Europe on several occasions on tips paid for by Hammoud, raising in their minds concerns about whether Pillsbury's trips were actually being paid for by BCCI. Both BCCI officials and Pillsbury denied BCCI's involvement in the payments. However, given Hammoud's $110 million debt to BCCI at the time, and his frequent front-man status for BCCI, the distinction between Hammoud's activities and BCCI's activities does not seem to be very clear.(37)

Subcommittee staff have seen a law enforcement document which alleges that after Hammoud's death, Pillsbury travelled to Geneva to identify the body. Pillsbury denies the allegation. Pillsbury may or may not have identified the body, but after Hammoud's alleged death Pillsbury maintained a close relationship with Hammoud's family. The Subcommittee has been provided a document which appears to show that after the death of Hammoud, Pillsbury met in New York with Robert Altman, one of BCCI's lawyers, and with Hammoud's son, to discuss settlement of the elder Hammoud's estate. Pillsbury has told the Subcommittee that he only met Altman only twice -- both times in the context of Senate business.

Hammoud and BCCI's Criminal Defense

In the fall of 1989, Hammoud began to take an active interest in BCCI's legal problems in the United States as a result of its indictment for drug money laundering in Tampa, Florida. He met with Pillsbury on a number of occasions concerning these problems. Pillsbury in turn identified key Treasury and Justice Department officials in Washington who in Pillsbury's view would be key to assisting BCCI if they determined that the sting operation against BCCI were improper. Hammoud met with some, unidentified, officials from both Treasury and Justice, as well as with BCCI's criminal defense team in Washington. Available documentation concerning Hammoud's activities in this period suggests he may have undertaken other steps in connection with assisting BCCI with its criminal defense, but information on this point is, unfortunately, inadequate to determine precisely what.(38)

Hammoud's Death Hammoud, unfortunately, cannot shed any light on his political or government connections because he is, as prosecutors describe his status, "reportedly dead."(39) He allegedly died in Geneva in 1990 while visiting his doctor and he is buried in Beirut. However, insurance companies have reportedly refused to pay out on the life policy because Hammoud's corpse was found to be several inches shorter than the height recorded at his last medical examination. Several former BCCI officials who have testified before the Subcommittee have testified that they do not believe Hammoud is dead.

Hammoud was reportedly buried in Beirut and his family provided his London lawyers with a video of the funeral which allegedly shows high ranking Syrian intelligence officials in attendance. In its August 10, 1992 edition, Newsweek reports:

Intelligence officials now say that Mohammed Hammoud, an alleged BCCI front man, was taped saying over the telephone, "If anybody knew how dirty the Americans are in this BCCI business, they'd be surprised -- they're dirtier than the Pakistanis." He then said he was about to tell someone about the American role. Eight hours later he was found dead.(40)

Much about Mohammed Hammoud's life, business with BCCI, and alleged death remains a mystery to the Subcommittee. He clearly had very close ties not only to BCCI, but also to several US political and government officials as well as to various intelligence agencies.

1. An account of these meetings is contained in the chapter concerning BCCI's lawyers and their contacts with Hammoud and Michael Pillsbury.

2. See e.g. indictment, People v. Abedi, New York Supreme Court, County of New York, July 29, 1992.

3. S. Hrg. 102-350. pt. 2, p.612. In an interview with staff prior to his testimony Sakhia stated, "I went to Beirut to a seminar at American University in 1960. Hammoud used to have an office, a storefront the size of this sofa. His store was three feet deep and eight feet wide."

4. Staff interview, Nazir Chinoy, March 9, 1992.

5. BCCI memorandum, Central Credit Division, re:Congressional Place Ltd./M M Hammoud. March 30, 1989.

6. S. Hrg. 102-350, Pt.4 p. 374.

7. BCCI memorandum, reprinted in S. Hrg. 102-350, pt.4, p.762.

8. S. Hrg. 102-350. Pt.1, p.534.

9. Id. p.374.

10. See documents at S. Hrg. 102-350, Pt. 1 pp. 356-358.

11. Letter to ICIC from Mohammed Hammoud, November 1, 1978, reprinted in S. Hrg. 102-350, pt. 4. p.740.

12. BCCI Memorandum, reprinted in S. Hrg. 102-350, pt.4, p.762.

13. pt. 2, p.612.

14. Id.

15. Id. Sakhia explained in his interview with staff, "This transaction was done by First American not directly secured by the assets of Hammoud, but by a counter guarantee of First American. BCCI issued the guarantee which was confirmed by First American."

16. Id. p.614. In his interview with staff prior to his testimony Sakhia asked rhetorically, "If he had bought and sold shares from Clifford & Altman, why would he want my introduction? -- Since he didn't put a cent of his own into First American, he didn't feel like he owned it."

17. Id. p.176.

18. Id. p.176

19. pt. 1, p.534.

20. Id. p. 535.

21. Letter to "the Manager" from Mohammad M. Hammoud, reprinted in S. Hrg. 102-350, pt. 4.p 782.

22. Letter to BCCI, London, from i.H. Ansari, dated 4.4.90.

23. S. Hrg. pt.3, p.195.

24. See Hostler Affidavit, S. Hrg. 102-350 Pt. 4 p. 768, Hostler Resume, submitted to Foreign Relations Committee as part of confirmation process.

25. Report for the Committee on Foreign Relations, U.S. Senate, Ambassadorial Nomination for State of Bahrain, Charles Warren Hostler.

26. S. Hrg. 102-350 Pt. 4 pp. 769-771.

27. Letter to Jonathan Winer from Curtis Hagen, February 10, 1992, reprinted in S. Hrg. 102-350, pt. 4, p.765.

28. Id.

29. Id.

30. Id. pt.4., p.770.

31. Id.

32. Affidavit of Ambassador Hostler, reprinted in S. Hrg. 102-350, Pt.4, p.771.

33. Id. p.771.

34. Id. 766.

35. Seymour Glanzer to David S. McKean, July 31, 1992, concerning Michael Pillsbury.

36. Staff interviews with Pillsbury, March-July, 1992; see also attorney notes of interviews with Pillsbury, October, l989, provided to Subcommittee by BCCI attorney Raymond Banoun on September 3, l992.

37. Documentation on this issues is provided in a series of memoranda created by BCCI's criminal defense team and provided to the Subcommittee on September 3, 1992 by former BCCI lawyer Raymond Banoun and by the law firm of Janis, Schuelke and Wechsler on behalf of Lawrence Wechsler.

38. The fullest account of Hammoud's activities on BCCI's behalf in connection with its criminal defense appears in notes taken by BCCI's lawyers in the U.S. and provided to the Subcommittee on September 3, 1992 by Raymond Banoun and Lawrence Wechsler. These documents form the basis for the information set forth concerning this section.

39. People v. Abedi, New York Supreme Court, New York County, July 29, 1992.

40. Newsweek, August 10, 1992,

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BCCI And Georgia Politicians

Introduction When BCCI began its surreptitious takeover of First American, Jimmy Carter was President of the United States. The point man for that takeover, of course, was the President's close personal friend and former Director of the Office of Management and Budget, T. Bertram Lance.

Lance ultimately was forced to abandon his role in the takeover, but he maintained his contacts with BCCI for another decade. During that time, Lance introduced BCCI, and its president, Agha Hasan Abedi, to former President Carter and to the President's friend and former UN Ambassador, Andrew Young. During the 1980's these three former powerful government officials used, and were used, by BCCI, to varying degrees and for various purposes.

Of the three, Lance was far and away the most visibly involved with BCCI. In 1977, when Lance became Director of the Office of Management and Budget, he had serious financial problems. After resigning later that year amid accusations that he had mismanaged corporate and personal financial matters, Lance went to work for BCCI as a consultant. He appears to have traded on his access to the President for BCCI's ability to bail him out of his crushing debt. After getting millions from BCCI, Lance provided services to the bank for the next decade.

BCCI courted the rich and powerful all over the world and so it was natural that President Carter should be approached with an eye towards using him to give credibility to the bank. The President apparently did not establish a relationship with BCCI or Abedi, until after he left office. However, throughout the 1980's, Abedi used President Carter as a means of gaining stature for himself and for BCCI in a number of third world countries. The President, in return, received millions of dollars for his charities.(1)

Andrew Young is one of the most famous black politicians, not only in this country, but all over the world. A former Congressman, Young is also a past Mayor of Atlanta. Perhaps most significant for BCCI, Young was the first black US Ambassador to the United Nations under President Carter. In that position he often championed Third World causes. BCCI used Young in much the same way as it used Carter -- for introductions and access to government leaders in developing countries. Young, in return received a salary and loans, although his financial relationship never amounted to that of his colleague Lance.

It is no coincidence that at the time the bank closed, BCCI had established its presence in Georgia in many different ways ranging from the ownership of the National Bank of Georgia to the headquarters for BCCI front man Ghaith Pharaon's U.S. corporate headquarters.

Bert Lance

Lance Meets Abedi Bert Lance, who provided testimony to the Subcommittee on October 23, 1991 about his role in the BCCI affair, told the Subcommittee that he is "mystified" by the "whole developing scandal."(2)

Lance was the Director of the Office of Management and Budget under President Carter from January 20, 1977 until September 21, 1977. He was forced to resign after it was alleged that he engaged in questionable financial dealings at the National Bank of Georgia where he was chairman for two years, and, earlier, at the Calhoun National Bank where he was also chairman.(3)

Lance has stated on many occasions that he first met Agha Hasan Abedi, the President of BCCI, in October, 1977 when he was introduced by a member of the Georgia state assembly, an oil man named Eugene Holley. According to Lance, Holley:

had some conversations with Mr. Abedi about me and whatever few abilities I might have and things of that nature; and that he thought it would be worthwhile if I had occasion to meet Mr. Abedi and discuss with him what his interest might or may not have been in regard to the United States, in regard to investments, in regarding to banking generally, and so on.(4)

Holley was the Chairman of the Georgia state Senate Banking and Finance Committee. According to press reports Holley "had sought aid from Middle Eastern sources for his petroleum and real estate ventures."(5) According to the Washington Post, "Several Georgia banks that lent money for his [Holley's] ventures have suffered grave losses," noting that "NBG, under Lance's direction, was among the lenders."(6)

In September 1977, Lance met with Holley, Abedi and Naqvi at the Waldorf Astoria hotel in New York. Lance testified that Abedi told him:

I am building a bank headquarters in London that has a deep and abiding interest in the problems of health, hunger, economic development, things primarily in the Third World, problems that we are all familiar with and problems that we all want to see resolved in one form or another.(7)

According to Lance, who was in serious financial trouble at the time, "I shared that concern."(8)

Lance told the Subcommittee that he subsequently met with Abedi and told him that "I am not about to get involved in situation whereby the relationships that I establish after having resigned would create any problem of embarrassment, concern, or anything else for the President of the United States."(9) Lance ultimately did introduce Abedi to Carter, which ultimately caused substantial embarrassment and concern for the former President, but this was until 1981 after Carter had left the Presidency.

In October 1977, Lance decided that he should "do due diligence about Mr. Abedi and BCCI" before getting involved with them. To handle this task, he chose Clifford and Altman, who had represented him before the Senate.(10) Lance told the Subcommittee that Clifford "told me . . . Mr. Abedi was a man of integrity and character, that BCCI . . . they were people of integrity and character."(11)

With assurances from Clifford and Altman that BCCI was a reputable institution, Lance began to advise Abedi on gaining a foothold in the United States. He testified to the Subcommittee his advice to Abedi was:

very clear and precise, as I recall, that you need to acquainted, you need to go through the regulatory process in the United States; that, obviously, despite my difficulty sometimes in dealing with them, that I thought it to be the best process in the world; that banks who were regulated in the United States offered their depositors safety; that it was the kind of climate that was appropriate and proper, and that it was they ought to do.(12)

Lance and the Initial Takeover of FGB In line with this sage advice, in late 1977 Lance led a group of Middle-eastern investors, including Abedi, in an attempt to take over Washington D.C. based Financial General Bankshares. The effort was blocked when the SEC discovered that the investors had secretly acquired a 19% holding in the bank and had to divest it.(13) Lance was forced to sign a consent decree by the SEC.(14)

Lance explained to the Subcommittee that he had recommended the purchase of Financial General to Abedi. He told the Subcommittee that he "happened to know about Financial General because when I was at the National Bank of Georgia, they were owned by Financial General." Lance also testified that he "happened to have an awareness of ...other stockholders in Financial General at that point in time... [who] had [not] been very happy about their investment."(15) Indeed, Lance was accused by the SEC of having been involved in the struggle for control of FGB while he was still director for the office of management and budget.(16)

At the same time that Lance was assisting Abedi in the takeover of Financial General, Ghaith Pharaon, a BCCI front man, offered to buy 60% of the former budget director's stock in the National Bank of Georgia stock for $20 a share, $3 more than Lance had originally paid for it. At the time Lance held 12% of the bank's stock and his sale of some 120,000 shares provided him with a gross gain of approximately $2.4 million. According to press reports, the stock had been trading for about $10.50 to $11.25 before the sale became imminent.(17)

In testimony before the Subcommittee, Lance explained that Abedi told him that he "had an investor who, by the name of Gaith Pharaon, who has acquired banks in the United States previously. . . And he said to that would appear to make a lot of sense." (18) Indeed, it did make sense for Lance, who had previously listed liabilities in excess of $5 million, including a $3.4 million loan form the National bank of Chicago.(19)

At the time the transaction raised concern that Pharaon may have been paying an inflated price in order to help Lance, save President Carter further embarrassment from his association with Lance, and gain influence with the administration. However, Lance stated publicly that "I'm not for sale; I've never been for sale, and that stands on its own."(20) Pharaon also disputed any claims that he was trying to buy influence: "Why should I buy influence? We have many ways of reaching your President through our channels. We have a great deal of influence already."(21)

Lance also testified about Clifford and Altman's role in the Pharaon's purchase of his shares: "Mr. Clifford and Bob Altman represented me at that point in time ...They were very aware of what I was trying to do and were very helpful to me in trying to do that."(22)

In summary, Lance explained:

[T]here were two groups of investors there that Abedi said he was representing. One happened to be the investors that subsequently ended up as the individual shareholders in Financial General, and, Gaith Pharaon, who ended up as the sole investor in the National Bank of Georgia...

And during November and December 1977, it pretty well took place in the broad beginnings of the purchase of Financial General on the one hand and, obviously, the acquisition of the National bank of Georgia on the other.

[T]here were two different entities, is what I'm trying to say to you, that were involved. I guess I was central to both of them. Mr. Clifford and Bob Altman were central to both of them. Mr. Clifford and Bob Altman were central to both of them. And, in fact, Mr. Clifford and Bob Altman represented me in a legal sense.(23)

While Lance took pains to separate the two transactions -- the purchase of his NBG stock and the acquisition of Financial General -- for the Subcommittee, he testified that at a meeting in Atlanta over Thanksgiving weekend in 1977, "there was basic discussion and negotiation about the purchase of NBG. But there was also negotiation -- not "negotiation" as such, but conversation -- about the purchase of Financial General." Pharaon, the purchaser of NBG, was not present, but Abedi, Naqvi, Abdus Sami and Dildar Rizvi, the elite of BCCI, were all present.(24) In fact, Lance never met Pharaon until the night of the closing on the sale of NBG in January, 1978. Nevertheless, he testified that it was his "impression" that "he [Pharaon] was obviously a person who comes across as being in charge of whatever he's doing, and makes decisions and that sort of thing."(25)

Lance Advises BCCI; The Second Takeover Attempt After the sale of NBG stock to Pharaon and the failed takeover of Financial General, Lance continued as an advisor to Abedi and BCCI. Lance described his role as offering advice on "investments in the United States" and "economic development around the world." For these services Lance was paid by BCCI through ICIC, the "bank within a bank", which Lance understood to be a kind of "commercial finance operation."(26) When asked by Senator Pressler what ICIC paid him, Lance responded that he had been asked the same question recently by the SEC and he had refused to answer and he therefore would not answer the Senator. Lance added that "All of that is matter of public record."(27) The Washington Post reported in March, 1978 that:

The president of an Arab-controlled bank paid off a $3.5 million loan for Bert Lance without even asking Lance to sign a note, an attorney claimed yesterday at a court hearing in the Financial General Bankshares case.

Lance's $3.5 million loan from First National Bank of Chicago was repaid in January by Agha Hasan Abedi, president of Bank of Credit and Commerce international, said Edward McAmis, attorney for Financial General in a civil lawsuit against Lance, Abedi, BCCI and others accused of using illegal methods in seeking control of Financial General.

McAmis said Lance told him in a sworn statement made on Monday that Abedi repaid the loan directly, without any discussion of the interest rate or how and when Lance would repay Abedi. The multi-million loan made with only an oral promise to repay showed Lance's close ties and obligation to Abedi and BCCI, McAmis argued.

Lance's attorney, Robert Altman, accused McAmis of deliberately misconstructing the loan as part of a campaign to smear Lance.

"It wasn't like that at all," Altman said. he said formal loan documents were being drawn up, but had not been completed because of the lawsuit and other complications.

The article continues:

The revelation that Abedi repaid the Chicago loan came as a surprise. It had been reported earlier that Lance had sold his NBG stock for $2.4 million and used the money to pay off some of his debts, including the Chicago loan.

Court records in Georgia showed the Chicago loan was repaid on January 4, the same day lance completed the sale of his NBG stock to Gaith R. Pharaon, a Saudi Arabian financier who has business ties to Abedi. That same day Lance paid back a $443,000 loan to a Tennessee bank, raising questions about how he paid nearly $4 million in debts with $2.4 million in cash.

Yesterdays's assertions suggest Lance got money from two Arab sources in January, when he moved to extricate himself from past debts -- the sale of stock to Pharaon plus the loan from Abedi.(28)

Although no longer personally involved in the takeover of Financial General Bankshares, Lance continued to provide advice on the acquisition of the bank. He testified, for instance, that in 1978, at the suggestion of Abedi, he met separately with two of the potential shareholders, Sheik Kamal Adham and Sheik Zayed, the ruler of the United Arab Emirates. Lance told the Subcommittee that he met Zayed in Lahore, Pakistan in "February or March, 1978."(29) According to a February 12, 1978 story in the Washington Post, "In recent weeks, Lance was in Karachi, Pakistan, and sources say the trip was in connection with his dealings with Abedi."(30) Despite the fact that he no longer worked for the government, Lance made the trip on an official, US diplomatic passport.(31)

A meeting during this period would have followed the memorandum written by Abdus Sami to Mr. Abedi on January 30, 1978

in which Mr. Sami discusses the strategy for the takeover of Financial General Bankshares. Sami expresses the need "to keep individual ownership to below 5 percent" and he states that "we want two other names immediately." The two names who ultimately were submitted as investors were those of Sheik Zayed's son's Khalifa and Mohammad. When Senator Kerry asked Lance if he travelled to Pakistan in order to solicit the use of the names of investors from Sheik Zayed, Lance responded, "That's not my understanding of what actually took place."(32) Lance then told the Subcommittee, "Mr. Sami and I never and a conversation along these lines."(33) The Sami memorandum, however, contains a provocative reference to "our friend" involved in the FGB negotiations.

Lance admitted to the Subcommittee that the reference was to him, but testified:

[T]he acquisition of shares were basically handled by Mr. Sami, and he was the man who was responsible. I was not involved in that.(34)

As a new strategy for acquisition of Financial General Bankshares progressed, Lance told the Subcommittee that he reiterated to Abedi the need to "go through the regulatory process." He further advised:

[t]hat you take an outstanding American citizen who has no blemish in regard to anything in a public sense, and you take the stock that these individual investors are going to own, and then you put that together in some sort of trust and give that trustee irrevocable voting rights about that stock, and you will have taken a major step in dealing with some of the perception problems that you may have about individual investors.(35)

Abedi followed Lance's advice almost to the letter. Clifford and Altman created a shell corporation, in a form of a trust, to hold the FGB stock. Clifford, who became Chairman of First American was essentially a trustee since his associate, Robert Altman, the President of First American, held a power of attorney for virtually every shareholder. And perhaps most importantly, Clifford had the reputation as being "an outstanding American citizen." Clifford helped to alleviate some of the "perception problems" not only in the acquisition stage, but also throughout the 1980's.

Lance Theorizes About the CIA and BCCI Lance's relationship with Abedi and BCCI was interrupted in May, 1979 when he was indicted in the northern district of Georgia. After a sixteen week trial, he was acquitted.(36) Lance testified, "[B]asically, in all of 1979, I was out of the picture as it related to BCCI, as it related to Financial General, and so on."(37) According to Lance, Clifford, Altman and Abedi decided that he was "too controversial" and that he "would bring down the wrath of the regulators."

Despite the fact that he was no longer involved in the takeover of Financial General, Lance testified "my relationship with Mr. Abedi, from the standpoint of personal relationships, moved forward from that point on."(38) Lance said that he did "continue to have conversations and visits with Mr. Abedi."(39)

Lance described one of those conversation with Mr. Abedi to the Subcommittee. In 1983 Lance and Abedi attended a symposium at Emory University. In a car ride to Abedi's hotel from the University, Abedi, according to Lance, explained how he had been he had been placed on a CIA watch list in 1980 because he was a "Third World liberal." Lance testified that "subsequently, beginning in 1984, I would say, I sensed a change in Mr. Abedi, that he no longer had any concerns about visits to the United States." Lance concluded that in 1984 there was an attempt by the CIA to "co-opt" Abedi, although he could offer no proof.(40)

Lance also believed that the CIA Director Casey may have used wealthy businessman Bruce Rappaport to "spy" on Lance to see what he may have known about Abedi and the Agency's involvement with the bank. According to Lance, Rappaport befriended him for no apparent reason, but "He made it very clear to me that he had a very close and definitive relationship with Mr. Casey; the Director of the CIA." Lance said that Rappaport maintained contact with him for a period of years until the death of Director Casey.(41) Again, Lance offered no proof of his theory, and, in fact, he failed to mention in his testimony that despite his suspicions of Rappaport, he arranged with him to have one of his sons work in the financier's New York bank.

Lance and BCCI During the 1980's Besides advising Abedi and BCCI, Lance, during the 1980's pursued financial investments with BCCI-related individuals such as P.S. Prasad, an Indian who was BCCI's largest individual borrower in the United States with over $30 million in outstanding loans. At the time of BCCI's collapse in 1991 Prasad fled the country and returned to India.

Lance served on the board of McDowell Industries, a construction company. In 1984, using various holding companies, Prasad bought out McDowell and merged it with Maxpharma, a publicly traded company owned by Prasad which manufactured generic over-the-counter and prescription drug products. The buy out was handled by the investment banking firm of Drexel Burnham Lambert Inc. According to Lance, he personally met Dennis Levine, the investment banker who put the deal together. Levine does not recall having ever met Lance or Prasad. Lance continued to serve on the Board of directors of McDowell until approximately 1986. In 1988, Maxpharma was delisted from the American stock exchange after having multimillion dollar losses for the prior seven years, including a nearly eight million dollar loss in 1988.(42) It is unclear exactly what Lance's role was in Prasad's shuffling of companies, but one source close to the negotiations has alleged that "Lance was released of a multimillion loan he had guaranteed (either personally or through National bank of Georgia) for Maxpharma."(43)

Lance's involvement in another Prasad venture is clearly documented. Dr. Prasad borrowed $450,000 from "a bank" to purchase a small business investment company (SBIC) in 1983 called Falcon Capital Corporation.(44) The purpose of SBICs are to provide financing for venture capitalists, provided or guaranteed by the US Government, with the goal of creating new jobs. On September 15, 1986 Prasad's Falcon Capital made an unsecured loan of $75,000 to Bert Lance at an interest rate of 14 percent per annum for a period of five years. The ostensible purpose of the loan was to set up a consulting business in mergers and acquisitions. According to the SBA Assistant Inspector General for Audit, "[I]n 1988, review did not disclose that T. Bert Lance used the proceeds of the loan in a regular and continuous business operation."(45) Moreover, as of September 30, 1987 principal of $9,738.40 and interest of $8,990.27 were delinquent on the loan. Lance has told the Subcommittee that he eventually paid off the entire loan, but the Subcommittee has been unable to independently verify his claim.

1988 -- Lance emerges again In June 1988, Forbes Magazine reported that Lance was being considered by BCCI shareholders and management to run the bank in the absence of Aga Hasan Abedi who had suffered a debilitating heart attack. According to Forbes, "An Arab investor group suggested a compromise candidate to run things, a man who could keep the Saudi and Pakistani factions within the bank at bay. That man: Bert Lance."(46)

Also in 1988, Lance was an unofficial advisor to Presidential candidate Jesse Jackson, who Lance also introduced to Abedi. Nazir Chinoy, former branch manager of BCCI Paris, testified that when Jackson stayed in Paris, all of his expenses were paid by BCCI.

Finally, after the indictment in Florida of BCCI and BCCI personnel, Lance reportedly flew to London with former Chairman of the Democratic Party John White to meet with Naqvi and to advise BCCI on the best strategy for fighting the indictment.

The Lance Relationship The full story of Bert Lance's involvement with BCCI remains to be told. Lance was intimately involved with the bank between late 1977 and his indictment in 1979 during which time he provided advice to BCCI in exchange for being relieved his financial burdens. During the 1980's Lance continued his relationship with BCCI, offering advice and providing important introductions, most notably to former President Carter. While Lance's relationship spanned the decade, there are many gaps in the public record as to exactly what services Lance performed for the bank and what compensation he received. This merits further investigation.

Jimmy Carter

Introduction Former President Carter has enormous respect and admiration throughout the world, but particularly in the Third World where he focused much of human rights policy while he was President. The President's focus on "Third World" issues, combined with BCCI's need for rapid worldwide expansion led the bank, and its president, Aga Hasan Abedi, to court President Carter after he left office. BCCI, which styled itself as a "Third World", bank successfully exploited the President's reputation and access by providing large amounts of funding to the his charitable organizations. In turn, the President became an unwitting pawn of BCCI, failing to acknowledge, even when it became obvious, that the bank was a criminal institution.

The President and Saudi Front Men There is nothing to suggest that Jimmy Carter was even aware of BCCI or Aga Hasan Abedi while he was President of the United States. However, the president would have known of at least two important BCCI front men, Kamal Adham and Gaith Pharaon. President Carter undoubtedly met Kamal Adham in the negotiations over the Camp David Accords as Adham, the chief of Saudi intelligence, acted as an important liaison for Anwar Sadat. This is discussed in more detail in the chapter on BCCI's contacts with the CIA and foreign intelligence.

President Carter would have known of Gaith Pharaon because Pharaon bought the National Bank of Georgia where the President's good friend Bert Lance had been chairman and where the President had business loans. According to a 1980 Jack Anderson story, Senator Orrin Hatch, a member of the Senate Judiciary Committee, investigated the Carter loans at NBG. In his story Anderson quotes from a confidential, investigative memorandum to Senator Hatch:

The assumption in financial circles is that Pharaon acted for the Saudi royal family in purchasing the national bank of Georgia. The bank's biggest borrower just happened to be Jimmy Carter. Thus the President of the United States found himself to be deeply in hock to a Saudi Arabian financier with close ties to the Saudi royal family.(47)

The memorandum to Senator Hatch continues:

[T]he bank's confidential files contained embarrassing information about the president's financial affairs. The files revealed that the Carter peanut business wrote $3 million in overdrafts and unprocessed checks to repay peanut commodity loans during the 1975-1977 period.

While Carter was scrounging for money in his 1976 presidential campaign, the business borrowed $1.15 from the bank to buy peanuts, without a single peanut in bonded storage to secure the loan, in violation of the loan agreement. By September 1, 1977 , the business was insolvent to the tune of $410,000.

Of course, the Saudis remained discretely silent. The friendly Pharaon not only kept quiet about Carter's irregularities, but renegotiated the loan to Carter's advantage.

According to a memo in the bank files, the bank renegotiated the repayment terms. This resulted in a savings of $60,000 for the Carter family in 1987. The President owned 62% of the business and therefore was the largest beneficiary.(48)

The memorandum concludes:

The press and public have been conditioned by Watergate to expect a smoking gun -- a taped conversation, a full confession by one of the conspirators or some other dramatic evidence... Perhaps the American people need to be reeducated about scandal.(49)

The Subcommittee has not been able to verify the accuracy of the information supplied by Senator Hatch's investigator.

After the White House: Carter and Abedi Since leaving the White House and the office of he Presidency in 1980, Jimmy Carter has devoted himself to several charities, including providing assistance to several organizations for fighting disease in the Third World. In this capacity the former President developed a friendship and working relationship with the founder and President of BCCI, Aga Hasan Abedi.

President Carter was introduced to Abedi in 1982 by Bert Lance who brought the banker to Plains, Georgia . Lance remembers, "There was an immediate relationship that developed between the two of them. You could sense it as they talked there in the living room of the Carter residence."(50)

According to Carter, Abedi approached him to undertake charity work on the third world:

The foundation or the bank, I never did know which, had a massive program in the third world called South. They published a monthly magazine that had major conferences in different cities around -- in the developing nations. Mr. Abedi, when he came to see me, said that they were just holding conferences, they were issuing publications, they were doing scholarly work, but they'd never actually planted a seek, or immunized a child or did anything of a specific nature. And he knew that our relationship with the Center for Disease Control let us have access to health care programs, and we were already embarked on those. So his relationship with us was one of "I want to do something practical to help people who are suffering, and we will help you."(51)

During the 1980's Carter and Abedi met over a dozen times and established a very warm, personal relationship. In 1983, for instance, when Carter and former President Ford held a joint symposium on conflict resolution at Emory University, Mr. Abedi was in attendance. (52) When Abedi suffered a heart attack in February 1988, Carter contacted heart specialist Norman Shumway who, at the former President's request, flew to London to examine Abedi, and oversaw a heart transplant operation for the BCCI president. Carter even visited Abedi during his hospitalization and was quoted as calling Mr. Abedi "one of the most unusual men I have met."(53)

Carter's Travels With Abedi The President travelled several thousand miles together with Abedi on the BCCI corporate jet and they visited at least seven countries together. Abedi has stated publicly that he has been "to every country...All the top politicians and heads of state were my friends, Jimmy Carter, James Callahan, I knew them all."(54) Callahan, the former British Prime Minister, has claimed that Carter introduced him to Abedi in 1981 at a charity dinner for the Cambridge Commonwealth Trust in London.(55)

In October 1986 the Carter Center opened in Atlanta. The center was created to study third world issues among the guests was Abedi, who had contributed over $500,000 to the center.(56) Moreover, Abedi and BCCI donated $8 million Carter's Global 2,000 project, helping to fund programs in Asia and Africa. Abedi was appointed the co-chairman of Global 2,000.

Less than one month after the Carter Center opened, the former President travelled with Abedi to Pakistan and to Bangladesh to sign agreements with government officials starting Global 2,000 health care programs in those countries. According to a Global 2,000 statement at the time, the programs sponsored by Carter focused on control of polio, measles, tetanus and diarrheal diseases.(57) BCCI either had, or was to develop corrupt relationships with several of the countries visited by Carter and Abedi, including Bangladesh and Suriname. In 1986 Carter also travelled to the United Arab Emirates, again accompanied by Abedi, for a three day visit during which time he met Sheik Zayed.(58)

In 1987, they met in Bangkok with the King of Thailand before flying on to Hong Kong and back to China.(59) In Beijing they attended a state dinner with Chinese leader Deng Xiaoping where they shared a toast with Premier Zhao Ziyang. President Carter has acknowledged that his travels with Abedi helped the BCCI president in his business:

[I] don't think there's any doubt that when a former President of the United States goes to a country and has anybody in his entourage, that person has some advantage to be derived.(60)

Indeed, the countries to which President Carter travelled with Abedi became important banking centers for BCCI. In China, for instance, BCCI opened the first foreign branch and reportedly conducted weapons transactions involving the Chinese government.

What the US Government Didn't Tell Carter By 1986, of course, several US government agencies, including the Central intelligence Agency, the Justice Department and the Treasury were aware of BCCI's criminal connections. The CIA, for instance, knew that BCCI had secretly -- and illegally -- acquired First American Bankshares, Washington D.C.'s largest financial institution. The State Department knew that the terrorist Abu Nidal was using the bank to finance his operations in Europe. And the Customs Agency was working with the US Attorney's office in Tampa in Operation C-Chase, an undercover sting operation designed to expose drug money laundering in South Florida, which ultimately targeted BCCI.

During this entire period, President Carter was never briefed by any agency of the US government concerning BCCI.

This seems all the more extraordinary given that during several of his trips with Abedi the State Department asked the former President to raise particular issues with the governments of those countries.(61) However, the former President has said that neither did he ever ask for a briefing, nor did he ever feel the need to request one. Carter has said that he does not feel either "betrayed or deceived". According to the former President he did not become concerned about his association with the bank until the revelations that BCCI had been General Noriega's banker. At that point, the President stated:

[W]e were quite concerned , but the public news media reports -- I believe including statements from the Justice Department -- was that this was a problem that was apparently confined to the one bank operation in Panama dealing with Noriega. We had no information that it was broader.(62)

In point of fact, the indictment in Tampa charged BCCI with having a "corporate policy" of soliciting narcotics proceeds which clearly suggests that knowledge of BCCI's criminal activity was broader than President Carter has suggested was publicly available.

Carter's Other BCCI-related Benefactors In 1987 President Carter invited BCCI's most famous Georgia resident, Gaith Pharaon to have lunch at the Carter center. According to published reports, Pharaon brought David Paul, the President of Centrust with him.(63) Although Pharaon never contributed any funds to President Carter's charities, Centrust made a corporate contribution of $100,000, which arrived with a note instructing Carter fundraisers to "credit it to Gaith Pharaon."(64)

In 1991 after the Federal Reserve issued a cease and desist order concerning BCCI's ownership of First American, the President began to disassociate himself from Abedi and the bank. On April 15, 1991 President Carter said:

We have, at the Carter Center, about 20,000 contributors to our programs, and we appreciate very much what BCCI did at the beginning to get this project started. But now, one of our major contributors is Sheik Zayed, in Abu Dhabi.(65)

Sheik Zayed, of course, was a major shareholder in BCCI from its inception and at the time that President Carter made his remarks, actually controlled the bank. According to the Atlanta Constitution, President Carter was aware of this: [W]hen BCCI changed owners and stopped payments on its Global 2,000 commitments, Mr. Carter asked the new owner, the President of the United Arab Emirates, to pay the $2.5 million balance due."(66)

Carter Aide Used BCCI To Defraud Former President On August 26, 1992, George G. Schira, the first executive director of the Carter Presidential Center, was indicted on charges that he impersonated former President Jimmy Carter and defrauded the center and one of its financial contributors out of $650,000.(67)

In committing this fraud on the former President, Schira used BCCI to receive some $650,000 from a shipping magnate through impersonating President Carter and Prince Bandar Bin Sultan, the Saudi Arabian ambassador to the United States, and calling on the magnate for help.

The funds were first transferred to BCCI in London, and then to BCCI's secretly owned U.S. subsidiary, the First American Bank of Georga, and to BCCI's secretly owned Swiss subsidiary, the Banque de Commerce et Placements.

The Relationship Between Jimmy Carter and BCCI President Carter was used by BCCI to enhance its credibility around the world and particularly in developing countries. President Carter travelled to a number of these countries with BCCI's president, Abedi, increasing Abedi's status and helping Abedi gain access and entry to political leaders from those countries. At the same time, the former President became beholden to the bank for its generous contributions to his charities. While President Carter did not show sufficient interest in establishing the bona fides of the bank, the CIA, which had substantial negative information on BCCI, failed to provide him with that information. When a President of the United States becomes a private citizen, it is obviously his choice with whom he associates. Nevertheless, former Presidents are afforded physical protection, and should be afforded, to the extent possible, protection of their reputation. As a result of his own lack of diligence in seeking information on BCCI's poor reputation, and the CIA's lack of diligence in telling President Carter what they knew, President Carter became closely associated for a decade with a bank that constituted organized crime. This outcome was not in the interests of the United States.

Andy Young

Introduction Andrew Young is one of the most prominent Black Americans in the country and has a record of high achievement in public service. However, The Subcommittee finds that Young's relationship with BCCI was inappropriate, particularly during the period that Young served as the Mayor of Atlanta. While he may technically have violated no ethical rules of his office, his financial relationship with BCCI has the appearance of influence-peddling.

Young Meets Abedi Former UN Ambassador and Mayor of Atlanta Andrew Young represented BCCI as a consultant. Young has said that he learned about BCCI after leaving his position as UN Ambassador in 1979. While he does not recollect who introduced him to Aga Hasan Abedi, BCCI's president, he believes it may have been Gaith Pharaon, the man who purchased Bert Lance's holdings in the National Bank of Georgia.(68)

While he was Mayor, Young made at least four international trips on which he made key introductions for BCCI. According to Young, BCCI officials were occasionally involved during trips that he made with the Atlanta Chamber of Commerce. He has explained that he performed services for the bank or met with officials in Tunisia, Nicaragua, Zimbabwe and several Persian Gulf states.(69)

In recent indictments issued by the Manhattan District Attorney, Robert Morgenthau, Tunisia and Zimbabwe were described as countries where government officials were bribed by BCCI officials. There is no information that Mayor Young had any knowledge of any impropriety committed by BCCI officials in either of these countries.

A Financial Relationship With BCCI While serving as the Mayor of Atlanta, Young, like Lance, provided services for BCCI in return for financial benefits. Young had a $50,000 annual retainer with the bank, and has claimed that he only became a paid consultant in 1986 after he travelled with former President Carter to Africa on a BCCI jet. Young's fees were paid to his consulting firm, Andrew Young Associates. The relationship between Andrew Young Associates and BCCI lasted for eight years until 1989. During most of that period, the BCCI's loans were booked, and according to BCCI's records, "parked," at its offices in Panama.(70)

According to a loan review document from the National Bank of Georgia, AYA had "initially served as a vehicle for Andrew Young's lecture and occasional consulting fee income," but that following his election as Mayor, the firm "was reorganized to focus primarily on offering consulting services to domestic businesses working to achieve sales to various third world countries."(71) According to the memorandum, AYA relies "largely upon name recognition and third world political contacts."(72)

The document described characterized the company as "small, illiquid, unprofitable, and infinitely leveraged."(73)

According to Stony Cooks, Young's business and political associate, expenses incurred from Mr. Young's travels on behalf of BCCI were used to reduce the balance on the credit line. Cooks has claimed, the "offset" arrangement was worked out between himself and Swaleh Naqvi, the chief operating officer of BCCI without specifying the date of the arrangement.(74)

As of October 10, 1989, the outstanding loan to AYA (Andrew Young Associates) was $197,000 and while interest on the loan had been paid, the principal had not paid down. (75) In a letter from Asif Mujtaba, the Group Vice-President of First American Bank in Georgia to Bande Hasan, BCCI Miami, Mujtaba wrote "This loan matured on October 6, 1986 and I have written to the borrower demanding payment."(76) Cook's assertion following BCCI's global closure that payment of the principal, nearly $200,000, was offset by Young's travel expenses, is difficult to believe. Young would have had to have a large number of trips on BCCI's behalf in order to accumulate $200,000 in expenses, and there is evidence, as discussed below, that when he made trips on behalf of BCCI, he immediately sought cash reimbursement from the bank.

Documents show that Andrew Young Associates received its line of credit from the National Bank of Georgia beginning in 1980 which was transferred to BCCI Panama sometime after June 1985, the year Young was re-elected Mayor of Atlanta. (that same year the National Bank of Georgia donated at least $10,000 to Young's successful candidacy for Mayor of Atlanta in 1985.) (77) There is no explanation for why the loans were transferred. Documents do show that while AYA was paying down interest, Young's brother, Walter Young was not servicing the loan. In 1988, after several years of non-payment BCCI's Tariq Jamil wrote S.M. Shafi: "I understand that this loan is also guaranteed by Mayor Young, and therefore I would submit that the collection should be handled delicately as we would like to preserve the relationship between the BCC group and Mayor Young."(78)

Young's Travels For BCCI According to published reports, Young travelled extensively on behalf of BCCI. The Subcommittee has obtained documents showing one trip which Young made to Nicaragua. In a May, 1987 memorandum written by S.S. Shafi to Ameer Siddiki, BCCI London, Shafi recounts a meeting with government officials in Managua, Nicaragua that had been arranged by Young:

Our first meeting with the Cabinet Ministers and other important personalities of Nicaragua was arranged by Mr. Andrew Young, Mayor of Atlanta who had travelled there for this purpose. Most of the Cabinet Ministers attended the dinner and after some time we were joined by the President of the Republic, Mr. Daniel Ortega. He explained to us at great length the great recession and losses and the widening of the trade gap in his country. The idea behind was to impress on us that BCCI primary concern being the promotion of economic growth in Third World countries we should arrange for credit lines for their pre-export financing of their coffee, sugar, bananas and other items.(79)

In the same memo Shafi reports that "The Minister [of Foreign Trade] added that a delegation headed by him would visit London to meet Mr. Abedi within a few days through good offices of Mr. Andrew Young."(80)

In September, 1987, Tariq Jamil, BCCI London, who had previously worked at the National Bank of Georgia, wrote to Saheb Shafi, BCC LACRO, requesting that Young be reimbursed for his travel expenses to Nicaragua, noting:

Needless to say, we shall continue to receive patronage and help from the Mayor in any of our endeavors in Central America for developing contacts and business for Latin American Region.(81)

The request for $2,345.17 reimbursement was accompanied by a July 15, 1987 letter from Young's assistant Stony Cooks stating that "[p]resently, Mayor Andrew Young's anticipated dates for his visit to Guatemala are August 12-6, 1987."(82) Cooks has told the press, as noted earlier, that Young's travel expenses were used to pay down his loan. The Subcommittee has been unable to verify that assertion, but finds the account -- that Young's travel expenses on behalf of BCCI amounted to nearly $200,000, and were used to offset the loan -- difficult to believe, especially given the reimbursement request in the case of the Nicaragua trip.

An NBG Loan memorandum also shows that Young proposed a joint venture in the country of Nigeria:

[T]o establish a joint venture agreement between A.I.C. and a Nigerian partner, former Head of State, General O. Obasanjo, is being negotiated. The joint venture company would cooperate in the assembly, manufacture and sale of farm equipment in Nigeria and throughout Africa.

Andrew Young Associates will consult with A.I.C. to provide advice and information about the business environment and business development opportunities in the developing nations.(83)

The significance of the Nigerian proposal is simply that it involves a former head of state of the Nigerian government, which was pervasively involved in receiving corrupt payments from BCCI in the form of bribes, kick-backs, money laundering, and other services specified in the chapter on BCCI's activities in foreign countries.

Other Georgia Contacts Consistent with its strategy of buying political influence, BCCI used Georgia lawyer and political operative Charlie Jones to court powerful government officials. For example, Jones was hired by Clifford and Warnke to lobby the Georgia state legislature during the takeover of National Bank of Georgia by First American. In order for the takeover to have proceeded, a technicality in the banking law had to be changed. According to Roy Carlson, Jones was paid "the vicinity of $1 million" for successfully lobbying the legislature.(84) NBC reported in February 1991 that members of the legislature had flown to a resort at the expense of BCCI.

Jones also arranged to have Senator Sam Nunn invited to lunch by the Egyptian Ambassador to the United States where Jones introduced the Senator to Gaith Pharaon. Nunn subsequently met with Pharaon on three occasions -- each meeting was arranged by Charlie Jones. There is nothing to suggest, however, that Senator Nunn had any relationship with BCCI or knowledge of Pharaon's ties to the bank.

According to Senator Hatch, Jones also used the offices of Senator Wyche Fowler to set us a meeting between himself, Amir Lohdi, a BCCI employee and aide to Gaith Pharaon, and Danny Wall, the nation's top savings and loan operator. According to a report released by Senator Hatch in 1991, at the time, Centrust was seeking US authority to sell $200 million in bonds to stave off its failure. Senator Fowler has denied that he or anyone in his office played any role in setting up the meeting.(85)

Conclusion Beginning in the late 1970's BCCI made a concerted effort to court important members of the Carter administration, including the President himself. Bert Lance, for example, appears to have been relieved of substantial debt by the bank. While Mr. Lance's financial dealings have been thoroughly investigated and he has to date been convicted of no crime, the Subcommittee has concluded that from the beginning Lance traded on his time in public office for personal gain. In short, while his dealings with BCCI may not have been criminal, they can only be characterized as corrupt.

Former President Carter demonstrated an astounding lack of curiosity about a man with whom he travelled around the world and who funded his charities. While someone in the US government should have alerted the former President to the criminal nature of BCCI before 1986, President Carter never asked. Moreover, the former President demonstrated some insensitivity to the appearances of impropriety in accepting money from Sheik Zayed, the owner of BCCI, after the 1988 indictment, even though BCCI had been identified as having a corporate policy of soliciting drug money.

Andrew Young did not have as extensive relationship with BCCI as his former colleague Bert Lance, but he seems to have been equally willing to profit by that relationship. While Young may not have broken any criminal laws, he showed poor ethical judgment in performing services for a foreign bank while he was Mayor of Atlanta. Mayor Young's actions could be more easily characterized as business and economic development were it not for the $50,000 he received in consulting fees and the nearly $200,000 his consulting firm borrowed.

What is perhaps most surprising about the actions of former President Carter and former Mayor Young is that they established a relationship with BCCI or Abedi at all given that they knew Bert Lance was intimately involved with the bank and had, in fact, been bailed out by the bank. Lance has a history of showing poor judgment concerning his personal and business finances and his recommendation of BCCI, instead of providing comfort, should have raised red flags.

1. It is important to note that President Carter never personally profited from his relationship with either Abedi or BCCI.

2. S. Hrg. 102-350. Pt.3, p.16.

3. "Saudi to Acquire Lance Stock," by John Berry and Art Harris, The Washington Post, December 21, 1977.

4. S. Hrg. 102-350, pt. 3, p.5.

5. "Arab Investors Want Lance to Manage Funds," by Art Harris and John Berry, The Washington Post, December 18, 1977. p.A1.

6. Id. In 1979 the Justice Department brought a civil suit against Holly and an associate in 1979 claiming that they had sought to bribe an official of Quatar with a $1.5 million cash payment in order to get renewal of oil concessions that were worth millions of dollars. The department also said that Lance was instrumental in arranging the meeting between the businessmen and a State Department official in 1978, after he had left government, that were intended to pave the way for a bribe offer to an official of Qatar. Holly entered a consent order in which he agreed no to bribe officials in the officials. The Associated Press, by James Rubin, April 9, 1979.

7. Id.

8. Id.

9. Id. p.6.

10. Id.

11. Id. p.7

12. Id. p.7

13. "Is Bert Lance Back," By Gretchen Morgenson, Forbes Magazine, june 13, 1988, p.12.

14. Id. p.17.

15. S. Hrg. 102-350. pt.3, p.8.

16. "SEC Charges Lance," by John F. Berry and Jerry Knight, The Washington Post, March 18, 1978, p. A1.

17. Lance Sells Stock, by Michael Doan, Associated Press, December 20, 1977.

18. Id. p. 11.

19. Berry and Harris, Id. p.3.

20. Lance Stock Sale, by Robert Furlow, The Associated Press, December 27, 1977.

21. Id.

22. S. Hrg. 102-350, Pt. 3, p.11.

23. Id. p.12.

24. Id. p.13.

25. Id. p.16.

26. Id. p.15.

27. Id. p.37

28. "$3.5 Million Lance Loan An Issue In Takeover Suit," by Jerry Knight and John F. Berry, The Washington Post, March 23, 1978.

29. Id. p.20.

30. "Lance Tied to Bank's Takeover," By John Berry, The Washington Post, February 12, 1978.

31. By Michael Sniffen, The Associated Press, March 27, 1978.

32. Id. p.28.

33. see Sami memo, Id. p.25.

34. Id. p.28.

35. Id. p.19.

36. Id. p. 33.

37. Id. p.34.

38. Id. p.34.

39. Id.

40. Id. p.40

41. Id. p.43.

42. Memorandum, Application to Strike from Listing and Registration, "In the matter of Maxpharma, February 8, 1989, The American Stock Exchange.

43. Letter from Subcommittee source, August 14, 1991.

44. On April 18, 1984, Presad wrote to Marvin Klapp, the southeast regional chief for the SBA, and thanked him for his assistance. He also wrote:

I should also like to take this opportunity to apologize for any inconvenience caused as a result of Congressman Walter Jones, Sr. calling on our behalf. He may have been over zealous in his attempt to help us since he feels that as a minority owned SBIC we required extra help and guidance. 45. memorandum from Assistant Inspector general for Audit to the Associate Administrator for Finance and Investment, US Small Business Administration, March 8, 1988, p5-6.

46. Morgenson, p.12.

47. "The President's Saudi Windmill," by Jack Anderson, The Washington Post, July 29, 1980.

48. Id.

49. Id.

50. S. Hrg. 102-350, Pt.3, p.38.

51. "Jimmy Carter's Relationship With BCCI," ABC News Nightline, show #2664, August 8, 1991.

52. Id. p.38.

53. Fritz, p.1.

54. Id.

55. "BCCI Adept at Courting the Powerful and Rich," by Stuart Auerbach, The Washington Post, August 7, 1991, p.A1.

56. According to U.S. News and World Report, "Most of the Abedi money -- representing less than 3 percent of the 350 million the nonprofit Carter center has raised since its founding in 1982 -- went for eradication of Guinea worm disease, an intestinal disorder affecting millions in Asia and Africa." se "the Atlanta Connection," by Gloria Borger and Matthew Cooper, August 12, 1991, p.30.

57. "Carter Travels to Sudan to visit Grain Experiments," by Carolyn S. Carlson, the Associated Press, October 26, 1986

58. Carter also travelled to Ghana and Nigeria with Abedi where he attended conferences on eradication of Guinea worm disease. see "Nigeria:New Efforts to Eliminate Guinea Worm Disease," Inter Press Service, March 14, 1988.

59. The Los Angeles Times reported, "On June 21, 1987, former President Jimmy Carter was the star attraction at a ceremony dedicating a rehabilitation center for former prostitutes near Bangkok. By his side was Aga Hasan Abedi..." "How the BCCI Gained Friends in High Places," by Sarah Fritz, the Los Angeles Times, July 28, 1991, p.1.

Ironically, Nazir Chinoy testified that BCCI provided prostitutes to its best customers in the Middle East.

60. Nightline, Id.

61. Fritz, p.1. The article indicates that Abedi was excluded during these meetings.

62. Id.

63. Pharaon acquired 20% of Centrust in 1987.

64. Fritz, p.1.

65. Id.

66. "Carter Donors: Questionable Givers?" by Elizabeth Kurylo, The Atlanta Constitution, April 14, 1991, p.1.

67. Atlanta Constitution, August 26, 1992, "Former Carter Center chief indicted in fraud."

68. "Young Disturbed by Charges Against BCCI," by Elizabeth Kurylo, The Atlanta Constitution, July 20, 1991, p.1.

69. Id.

70. Id.

71. NBG Loan Review Memorandum, Andrew Young Associates, 10/17/83.

72. Id.

73. NBG Loan Review Document, p.2.

74. "Seized Bank Helped Atlanta's Ex-Mayor and Carter Charities," by Ronald Smothers, The New York Times, July 15, 1992, p.1.

75. In a memorandum, dated March 25, 1988, from SM Shafi, BCCI LACRO to Akbar Bilgrami, BCCI Panama, Shafi writes, "We have been advised that Mr. Andrew Young will repay the loan of the company by December 31, 1988."

76. letter to Bande Hasan from Asif Mujtaba, October 10, 1989.

77. Smothers, p.1.

78. letter from Tariq Jamil to S.M. Shafi, February 24, 1988.

79. memorandum from S.M. Shafi to Ameer Siddiki, BCCI London, May 1(3?)m 1987. p.1.

80. Id.

81. letter from Tariq Jamil, BCCI London to S.M. Shafi, BCCI, LACRO, September 18, 1987

82. letter from Stony Cooks to Tariq Jamil, BCCI London, July 15, 1987.

83. National bank of Georgia, Loan Memorandum, Andrew Young Associates Inc., 8/9/84.

84. staff telephone interview with R.P. Carlson, July 10, 1991.

85. "Hatch Adds Partisan Spice to BCCI Stew," by Edward T. Pound, The Wall Street Journal, August 6, 1991, p.A8.

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BCCI's Lawyers and Lobbyists In hiring lawyers and lobbyists in the United States to help it deal with its problems, BCCI did not think small. BCCI's cadre of professional help in Washington, D.C. alone included, at various times a former Secretary of Defense (Clark Clifford), former Senators and Congressmen (John Culver and Michael Barnes), former federal prosecutors (Raymond Banoun, Lawrence Barcella and Lawrence Wechsler), and former Federal Reserve attorneys (Baldwin Tuttle and Jerry Hawke).

Still other prominent figures were recruited for BCCI's secretly-held American subsidiary, First American, such as former Senator and Democratic presidential candidate Stuart Symington and former Republican Senator from Maryland Charles Mac Mathias, who each sat on First American's board of director.

Other firms consisting of important former officials -- such as Kissinger Associates, then home to former Secretary of State Henry Kissinger, current Under Secretary of State Lawrence Eagleburger and current National Security Advisor Brent Scowcroft -- were recruited by BCCI, but refused to accept BCCI's business following its indictment on drug money laundering charges.

The revolving door between government and the private sector made it possible for BCCI to retain former government officials with intimate knowledge of how the U.S. government operates to aid BCCI's agenda. Ironically, BCCI used these former officials against the agencies they once served as instruments of its violations of U.S. laws and its attempts to slow or stop investigations of its wrongdoing.

Much of the activity of BCCI's lawyers in the United States was normal representation, often extremely aggressive, but within the borders of the kind of work the firms involved did for other clients. At other times, however, lawyers for BCCI participated in decisions to hire private investigators to investigate the private lives of government investigators pursuing BCCI; sought to use "political chits" to shut down Congressional investigations of BCCI; threatened publications considering publishing articles about BCCI with libel suits; and refused to refer BCCI foreign branches to federal law enforcement when BCCI's own employees in the U.S. believed such referrals were legally required because of the degree of the branch's involvement in money laundering.

The most aggressive activity by BCC's lawyers and lobbyists took place at the beginning and at the end of BCCI's

Two periods of activity by BCCI's lawyers in the U.S. illustrate how BCCI accomplished illegal or improper objectives were:

** Assisting BCCI and its nominees in restructuring the takeover attempt of Financial General Bankshares after the initial attempt was stopped by the Securities and Exchanges Commission (SEC), on the ground that BCCI had secretly colluded with other shareholders by purchasing 4.9% of the FGB stock each to evade securities laws requiring the reporting of their purchases at 5% or more. Among the key attorneys involved in the restructuring of the BCCI takeover were Clifford, Altman, and former Federal Reserve lawyer Baldwin Tuttle. (1978-1981)

** Structuring the purchase of National Bank of Georgia by First American from BCCI's nominee, Ghaith Pharoan. (1985-1986)

Response to Senate

Joint Defense Agreement

BCCI's Lawyers and Lobbyists In hiring lawyers and lobbyists in the United States to help it deal with its problems vis a vis the government, BCCI pursued a strategy that it had practiced successfully around the world: the hiring of former government officials.

BCCI's cadre of professional help in Washington D.C. included, at various times, a former Secretary of Defense (Clark Clifford), former Senators and Congressmen (John Culver, Mike Barnes), and former federal prosecutors (Larry Wechsler, Raymond Banoun, and Larry Barcella), and former Federal Reserve Attorneys (Baldwin Tuttle, Jerry Hawke, and Michael Bradfield). Their involvement in representing BCCI, following their government employment, illustrates the perils of the revolving door, and the danger of former government officials using the expertise they gained in government at the service of private clients. Often, such former officials have no idea of the real agenda or problems their clients may be hiding. And yet their actions can, and in the case of BCCI, did, substantially impede the ability of government to do its work.

Apart from Clifford and Tuttle, this team was brou

ght in only after BCCI's indictment on drug money laundering charges in October 1988. Since the indictment, at various times, these former officials were used by BCCI to stall investigations, prevent the bank from being closed by regulators, and to stop legislation that would have mandated BCCI's closure.

Some of the questionable tactics employed by BCCI's team of former government officials included:

** Investigating government agents.

** Working outside the normal law enforcement channels to keep the bank open in Florida.

** Lobbying Senators as registered foreign agents in pursuit of their criminal defense work, in order to stop BCCI from being closed.

** Delaying and impeding an authorized U.S. Senate investigation of the bank.

** Refusing to refer BCCI customers and accounts for criminal investigation even after being advised by BCCI's own offiers that the customers and the accounts raised serious questions.

** In the case of Clifford and Altman, using the attorney work product and attorney client privileges as shields to protect their own potential cupability.

Larry Barcella Larry Barcella is a former Assistant US Attorney who gained national prominence for his successful prosecution of Edwin Wilson, the American convicted of selling secrets to Lybia. Barcella was brought onto the BCCI case shortly after the October 1988 indictment of BCCI in Tampa, Florida. Larry Wechsler, with whom Barcella had practiced law in the US Justice Department recruited him to coordinate the bank's defense.

Although the full extent of Barcella's activities on behalf of BCCI remains unknown, he did engage in the following:

-- In 1988 Barcella tried to persuade his firm's lead partner, former US Senator Paul Laxalt, meet with Swaleh Naqvi, BCCI's CEO, in London, and to engage in lobbying on behalf of the bank on Capitol Hill. The Subcommittee has been unable to determine what, if any, services Senator Laxalt performed on behalf of BCCI.

-- In 1989 and 1990 Barcella joined John Vardaman, a partner at Williams and Conolly and Robert Altman in warning Larry Gurwin, a freelance journalist writing an article about BCCI and First American Bank for Regardie's magazine, that it would be improper to write anything that linked the two institutions. Barcella has called Gurwin's allegations "absurd".(1)

- In early 1990, after BCCI pleaded guilty to money laundering charges in Tampa, Florida, several members of the US Congress criticized the plea bargain as to lenient on the bank. Documents obtained by the Subcommittee show that Barcella met with Senator Dennis Deconcini, one of the critics of the plea bargain, in an effort to persuade him that BCCI was not the corrupt institution that he and others had claimed.

Most recently, of course, Barcella has been hired by the House Foreign Affairs Committee to investigate the "October Surprise", the allegations surrounding a political deal for release of the US hostages held in Iran in 1980. On leave from the Justice Department to assist Barcella in his investigation is Greg Kehoe -- the Justice Department official with whom BCCi lawyers, including Barcella, negotiated the bank's plea agreement in Tampa.

Ray Banoun Raymond Banoun is also a former federal prosecutor who was brought into the BCCI case by Robert Altman to assist in the bank's defense. At the time Banoun was with the law of Arent Fox; he is currently the head of the white collar criminal defense team in the Washington office of Caldawater, Wickersham and Taft.

Aside from Altman, the lawyer who had the most contact with the Subcommittee concerning BCCI was Banoun. In reviewing the record, the Subcommittee has concluded that Banoun may have acted unethically by willfully misleading it in an attempt to impede the investigation.

Banoun was initially charged by Altman to oversee the production of documents respondent to the series of subpoenas issued by the Subcommittee to BCCI in the summer of 1988. Among the documents under subpoena were all records relating to General Noriega's accounts in the United States. While the Subcommittee did receive some information from BCCI, it was clearly incomplete and Senator Kerry has stated publicly on several occasions that he does not believe the Subcommittee received full cooperation. In response, Banoun has made the following extraordinary comments to the press:

-- Banoun told Newsweek that he fully cooperated with the Subcommittee, but that "lawyers don't go around searching for documents for clients."(2)

-- Banoun told the National Journal that the Subcommittee had been "outlawyered." He added that "We don't allow our clients to get pushed around. This is an adversary system, not a roll-over system." (3)

-- Banoun also complained to the Legal Times that "more and more these days the government [is] wanting information obtained under the attorney-client privilege and attorney work product." Banoun stated,"It's an unfortunate and frightening sign because it erodes very seriously the ability of a lawyer to represent a client." BCCI, of course, waived it attorney client privilege.(4)

Taken together these comments suggest that Banoun's approach to the subpoenas was to advise BCCI to turn over all relevant documents, but to take no steps to ascertain whether, indeed, that had been accomplished.

The Subcommittee is also disturbed by a memo written by Roma Theus, a partner in the Florida law firm of Holland Knight, which states that Altman and Banoun "were doing everything within their power to call in political markers."(5) Banoun has called the author of the memo a misinformed "fruitcake."(6) But Theus, a highly respected lawyer, told the Subcommittee that his information came from private investigator Phillip Manuel, who had worked for Banoun's colleague, Larry Barcella. Manuel told the Subcommittee he had no idea why Theus would write such a thing and that his only information about the Subcommittee's investigation came from "journalists with who he played poker."

In the fall of 1988 Banoun was also charged with reviewing all the accounts for BCCI in Florida to determine whether criminal referrals should be made. The Subcommittee has obtained documents that suggest that despite evidence of criminal activity produced by the manager of one of BCCI Florida offices (one of BCCI's few honest officers) Banoun made no criminal referrals.

Larry Wechsler Larry Wechsler is a former government prosecutor in the Washington D.C. US Attorney's office who now practices with the Washington D.C. firm of Janis, Shuelke and Wechsler. Wechsler previously represented Albert Hakim in the Iran Contra affair

and was brought in by his close friend Robert Altman to put together a legal defense team for BCCI in Florida. Wechsler recruited Barcella and bevy of other top lawyers.

Wechsler has refused to meet with Subcommittee staff, but documents show that he and Banoun lobbied the US Senate on behalf of BCCI.

the congressmen Many who serve in Congress come to public service from other professions, frequently the legal profession. So it is natural that once out of office, those with law degreees return to the practice of law.

While former public servants are entitled to pursue careers once they return to private life, all too often they remain in Washington and pursue legal careers that entail lobbying. Again, while there is nothing improper as long as ethical rules are followed, the BCCI case points out how easily it is for former lawmakers to have their reputations, and therefore the reputation of the government they served, tarnished by representation of unsavory clients.

The Subcommittee has no solution to this sticky problem, except to note that those who develop influence within the Congress, need be cautious in the exercise of that influence at all times, but especially when they leave the Congress.

Senator Culver John Culver, a former US Senator, was another partner at the law firm of Arent Fox who did work on behalf of BCCI. While Culver's involvement was relatively limited, he did contact the Subcommittee in the winter of 1989 in an attempt to gain an advance copy of the Subcommittee's report on narcotics trafficking, which included references to BCCI. He also lobbied the Subcommittee with Banoun, Weschler and Altman, assuring Subccommittee staff that the bank was fully cooperating, and that, save events in Florida, a sound and honorable institution.

Senator Mathias Senator Mathias became a director of First American holding company after leaving the Senate in 1986. Mathias also became chairman of the board of directors audit committee.

On August 2, 1991, mathias wrote to lark Clifford and urged him and Robert Altman to resign. According to the Wall Street Journal, Mathias told Clifford, "In recent weeks, there has been a worrisome outflow of deposits which continues to this day." He added, "you and Bob are perceived as the link between BCCI ...and First American."(7)

Michael Barnes Barnes, a former US Congressman from Maryland, is a partner in the Washington D.C. law firm of Arent Fox. In the spring of 1990, Barnes was called in by his colleague Ray Banoun, who was concerned about the impact of a pending article on First American bank by freelance journalist, Larry Gurwin for Regardies Magazine. Barnes called William A. Regardies to complain about the article. Regardies published Gurwin's work anyway.

the Fed officials The Federal Reserve is a quasi independent government insitution which has enormous power in setting the economic agenda for the country. Because of its unique status, it is somewhat insulated form direct accountbility to the legislative and executive branches of government. While government ethics laws apply to the Fed in a similar fashion as to other government agencies, the BCCI case suggests the Fed has become too much of a club where former employees are able to lobby current employees on critical banking issues.

Baldwin Tuttle Balwdin Tuttle served as the deputy general counsel at the Federal Reserve during the mid- 1970's. After leaving the Federal Reserve Tuttle moved to private practice where he became the outside counsel to Clifford and Altman for their BCCI related work. He is currently a resident partner in the Washington D.C. office of Milbank, Tweed, Hadley and McCloy.

Tuttle represented the middle eastern investors along with Clifford and Altman at the 1981 Federal Reserve hearing on the takeover of Financial General Bankshares. That hearing was chaired by Robert E. Manion, now at the law firm of Arnold and Porter. Manion had been one of Tuttle's former subordinates and replaced Tuttle when he left as the Fed's deputy general counsel.

Besides Manion, Tuttle knew Jack Ryan, the director of the division of banking supervision and regulation. Tuttle fielded most of the tough questions at the hearing and it is clear that his representation impressed his former colleagues at the Federal Reserve.

Tuttle also filed the investors application to the Federal Reserve. In that application, he represented that BCCI "neither is it a lender, nor will it be" to First American's Middle-eastern purchasers. That, of course, has been shown to have been completely untrue.

Tuttle provided legal advice to BCCI and the Middle-Eastern investors throughout the 1980's. The Federal Reserve, in its civil complaint against Clifford and Altman, noted Tuttle's involvement in the NBG takeover in 1986. In a "brief and hostile" meeting, Altman castigated Tuttle for questioning the proprietary of the takeover and warned him that he if he ever raised the issue again, he would be fired. Apparently Tuttle heeded Altman's advice, and never made his concerns known to bank regulators.

Jerry Hawke Jerry Hawke, a former general counsel to the Federal Reserve, is currently a partner with the Washington D.C. law firm of Arnold and Porter where he specializes in banking law.

Hawke was hired by First American Bank to lobby the federal reserve against the creation of a trust for the bank to facilitate its sale. Apparently, the management at First American Bank believed that they and not an independent trustee should handle the sale. As the Washington Post reported, "That means Virgil Mattingly, general counsel at the Fed who is personally handling the trust issue, is being lobbied by the man he once worked for."(8)

Michael Bradfield Michael Bradfield, a former counsel at the Federal Reserve, is with the law firm of Jones, Day, Reavis and Pogue in their Washington D.C. office. During the 1980's Bradfield responsibilities at the Federal Reserve included monitoring First American bank. In 1989 he became a partner in Jones, Day where he does work for First American pertaining to BCCI's interest in the bank holding company. His firm has also done work for the bank's oversight committee.

1. Clark Clifford and a Legal Armada Gave BCCI a Patina of respectability," by Jill Abramson, the Wall Street Journal, August 1, 1991. Also, BCCI's British solicitors wrote Gurwin about an article he did for the Economist. British solicitors threatened to sue and based their charges on information they had received from the Washington lawyers who had spoken to Gurwin. At this point Gurwin had only spoken to Wechsler and Barcella.

2. "The Influence Game," Newsweek, August 26, 1991, p.20.

3. "BCCI's Washington Web," by Paul Starobin, The National Journal, 9/7/91, p.2131.

4. "Top Lawyers are Subpoenaed in BCCI Probe," by Linda Himelstein, The Legal Times, April 27, 1992, p.1.

5. Memo to the files, Roma Theus, August, 1990.

6. Starobin, p.2131.

7. "Revolving Door between Fed and First American," by Peter Truell, The Wall Street Journal, September 6, 1991, p.A10.

8. "First American: Drop Trustee Idea," by Sharon Walsh, the Washington Post, April 14, 1992, p.D1.

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HILL AND KNOWLTON AND BCCI'S PR CAMPAIGN

Introduction

Two days following its indictment in Tampa in October, 1988 as a result of the Operation C-Chase sting, BCCI did what many businesses in trouble do under such circumstances -- it hired a public relations firm to help it reduce the bad publicity surrounding the indictment. The firm selected by BCCI was, consistent with BCCI's usual strategy, unusually well-connected politically: Hill and Knowlton, home to Republican Robert Gray and Democrat Frank Mankiewicz, and generally considered the most politically prominent public relations firm in Washington.(1) During the following two years, Hill and Knowlton provided various services to BCCI and to its secretly-held affiliate, First American.(2)

On August 1, 1991, former Customs Service Commissioner William von Raab, in testimony before the Subcommittee, criticized the public relations firm, implicating its activities as a factor in BCCI's success in staying open following its indictment, and suggesting that the January, 1990 plea agreement between BCCI and the U.S. Attorney in Tampa was "a tribute to the influence team that was marching up and down the Eastern seaboard helping BCCI keep its neck off the block."(3)

In response to the Von Raab testimony, Hill and Knowlton's Vice Chairman, Frank Mankiewicz, immediately issued the following statement on the PR Newswire, which is set forth in full:

Mr. Von Raab's testimony as to Hill and Knowlton is incredibly irresponsible and totally false. Neither I, nor Robert Gray, nor anyone else from Hill and Knowlton ever contacted, on behalf of BCCI, anyone in the Department of Justice or anywhere else in the Executive Branch, or for that matter, on Capitol Hill.(4)

The import of Hill and Knowlton's release was that whatever it did for BCCI, its work had not involved lobbying.

But Mankiewicz's strong statements concerning what Hill and Knowlton did not do for BCCI failed to explain exactly what Hill and Knowlton did do.

In fact, Hill and Knowlton had represented BCCI at a critical time in its history, following the Tampa drug-money laundering indictment.(5) Moreover, according to statements made by former Hill and Knowlton partners to the press, Hill and Knowlton partners did know BCCI was "sleazy," and at least one partner did leave the firm in part as a result of disagreements over the BCCI account.(6)

Moreover, Hill and Knowlton did have contact with Capitol Hill on behalf of First American, Clark Clifford and Robert Altman, on BCCI related matters, in the period when BCCI still secretly-held First American, and after BCCI's ownership of First American was a matter of public record and established fact.(7)

Finally, Hill and Knowlton did have contact with at least one Congressional staffer, Michael Pillsbury, on behalf of BCCI itself, in January, 1990. At that time, Senate staffer Pillsbury wrote Karna Small at Hill and Knowlton, soliciting information from Hill and Knowlton concerning what it was doing for BCCI, and offering to be of assistance to BCCI in its public relations efforts.

Small's involvement provides further evidence of the fact that Hill and Knowlton assigned politically-connected staff to the BCCI account. Small's previous work had included being assistant press secretary to James Brady under President Reagan, press spokesperson for National Security Advisor Robert McFarlane, and an assistant to the National Security Counsel during the period in which McFarlane and Admiral John Poindexter were in charge of the NSC.(8)

The record before the Subcommittee suggests that the contact between Small at Hill and Knowlton and Capitol Hill was initiated by Pillsbury, rather than Small or Hill and Knowlton. Hence, Mankiewicz's statement was technically correct, if incomplete, on this point.(9)

Hill and Knowlton's activities on behalf of BCCI, First American, Clifford and Altman resulted in Hill and Knowlton making statements that in the end proved to be materially misleading, and attacking individuals who were making accurate, but damaging statements about their clients. While there is no evidence that any Hill and Knowlton partner knew that the information it was disseminating was false, BCCI's use of Hill and Knowlton raises questions about the role of public relations firms in our political system.

When a public relations firm disseminates information, does it have any independent responsibility to the public to make sure that the information disseminated is accurate?

Are there other issues of public policy at stake when a public relations firm that is politically well-connected, on behalf of a client who has been indicted for illegal acts, disseminates materials attacking and discrediting people who are making accurate statements? Is corrective industry or legislative action warranted?

Findings

** Hill and Knowlton partners knew of BCCI's reputation as a "sleazy" bank at the time it accepted the account in October, 1988. Some of this information came from then Commissioner of Customs William von Raab, in response to questions from a friend who was a partner at Hill and Knowlton.

** Hill and Knowlton made contacts with Capitol Hill on behalf of First American, and BCCI's lawyers, Clark Clifford and Robert Altman, on issues pertaining to BCCI. Materials prepared in part by Hill and Knowlton and provided to Capitol Hill were provided to federal bank regulators in the spring of 1990 in an effort to discourage those regulators from crediting allegations in the media that BCCI secretly owned First American.

** In 1988 and 1989, Hill and Knowlton assisted BCCI with an aggressive public relations campaign designed to demonstrate that BCCI was not a criminal enterprise, and to put the best face possible on the Tampa drug money laundering indictments. In so doing, it disseminated materials discrediting persons and publications whose statements were later proved accurate about BCCI's criminality.

** Important information provided by Hill and Knowlton to Capitol Hill and provided by First American to regulators concerning the relationship between BCCI and First American in April, 1990 proved to be incorrect. The misleading material represented the position of BCCI, First American, Clifford and Altman concerning the relationship, and was contrary to facts known by BCCI, Clifford and Altman. There is no evidence that Hill and Knowlton partners knew the information to be inaccurate, or reason to believe that their clients' account was correct.

Retention and Initial Services to BCCI of Hill and Knowlton

On October 10, 1988, BCCI was indicted in Tampa on drug money laundering, sparking an immediate need by BCCI to respond by every means possible. As Abdur Sakhia, one of BCCI's senior officers in the United States, recommended Hill and Knowlton.

I started the Hill and Knowlton connection. The day we were indicted we were inundated by everyone. I said we have to tell our side of the story. I am not capable of telling it. You need to have a PR firm to handle this. To me, BCCI's problems here were like Johnson and Johnson's Tylenol crisis, or the indictment of Drexel for insider trading.(10)

Hill and Knowlton had been purchased by a London advertising and public relations conglomerate, the WPP group and now had offices in London. A British BCCI director, John Hilbery, who lived in London, had contacts there, and BCCI's main offices in London hired the firm, at a rate of $50,000 per month.

At the outset of the retention of Hill and Knowlton by BCCI, some Hill and Knowlton partners in Washington expressed concern about the account.

As former Commissioner Von Raab testified:

I was in my office when a friend of mine from Hill & Knowlton came to me and he said, Willie, he said, BCCI wants to hire Hill & Knowlton and they want me to work on it.

And he said, what should I do? And I said, don't work on it, it is a sleazy operation. Well, the result was, Bob Gray and Frank Mankiewicz worked on it. My friend left Hill & Knowlton.(11)

Before the month of October was over, Hill and Knowlton had deployed a team of six of its public relations professionals in New York, Tampa, and Washington, D.C., as well as 16 additional Hill and Knowlton staff in ten other countries. The firm's initial work included such standard public relations tasks as handling BCCI's press strategy, developing various BCCI officials as press spokesmen, creating a public relations history of BCCI and a public relations position paper to be used to rebut the Florida indictments, and developing a recommended advertising campaign for BCCI in major newspapers around the world.(12)

Hill and Knowlton documents found by the Subcommittee at BCCI's document repository in Florida describe this work in some detail.

A document evidently generated by Hill and Knowlton in London in October, 1988, entitled, "BCCI Worldwide Action Program," carried recommendations for generating positive press for BCCI through interviews between BCCI officials trained by Hill and Knowlton on what to say with influential journalists such as Lou Dobbs at CNN, Louis Rukeyser at PBS, and James Stewart of the Wall Street Journal.

A second Hill and Knowlton document dated October 27, 1988, described as "Background on the Tampa Indictments And BCC Position on Compliance," described the approach to be taken by BCCI officers in these interviews:

Management of BCCI was surprised and shocked to learn in news reports that the bank and nine of its employees had been indicted in Tampa, Florida on charges of laundering drug money. The bank had no warning that it or any of its people were under investigation, nor is its management aware that any employee anywhere had violated long-standing bank policies to do business in a manner fully consistent with the laws and regulations of every jurisdiction in which it operates.

The specific facts of the charges are not known to BCCI at this time; the bank has, however, reaffirmed its commitment to legal integrity and pledged to cooperate with all legal authorities in the resolution of these troubling developments. BCC has taken the further step of launching an extensive internal review under the direction of a special committee of outside directors to review the allegations.(13)

Senior BCCI officials to whom the document was being distributed knew at the time that many of these statements were inaccurate. Even mid-level BCCI officials knew that some of these statements were inaccurate. For example, according to BCCI officers such as Amjad Awan and Akbar Bilgrami, both convicted of money laundering, BCCI had never, even on paper, created a package of "long-standing bank policies" against committing any kind of criminal act, let again directed against laundering money.(14)

Creating an anti money-laundering policy after the fact was one of the urgent tasks management was about to engage in as part of BCCI's damage control operation. BCCI official Akbar Bilgrami was in this period told to write a memorandum concerning a meeting which he had not attended in which BCCI had supposedly reiterated its policies against money laundering with BCCI's banking staff in Miami. According to Bilgrami, he declined the request to write the memorandum for two reasons. First, its substance was misleading. Second, he felt ridiculous trying to write an account of an event at which he was not even present.(15) Bilgrami made clear his understanding that the notion that BCCI had an anti-money laundering policy in place prior to his indictment was absurd.(16)

The backgrounder on BCCI prepared by Hill and Knowlton at the time for use with the press stressed BCCI's total institutional commitment to conservative and ethical practices:

BCC draws upon Eastern traditions of trust, confidentiality, hospitality and cordiality in business dealings. The bank has an unusually egalitarian management structure with many functional, as opposed to ceremonial, titles for managers . . .It stresses conservativism, prudence and liquidity in its deposit taking and lending activities. . . Although it has never publicized the fact, BCC is a major participating in recognized charitable and philanthropic programs around the world . . . The BCC Group as a matter of corporate policy adheres strictly to the rules and regulations of all countries in which it does business . . . Financial transactions of the bank are subject to four levels of review by regional auditors, by central auditors, external auditors (Price Waterhouse is the bank's outside audit firm) and by the auditors of various state banking authorities.(17)

The truth, of course, was at the time the words were written, BCCI's top officials had engaged in massive fraud for over a decade and was billions of dollars in the hole, and had survived, to date, through phony bookkeeping designed to hide practices that were neither conservative nor prudent. The material created by Hill and Knowlton was thus unrelated to the facts, and merely an articulated form of what BCCI wanted the world to believe.

On October 21, 1988, Hill and Knowlton released a press statement on BCCI's behalf stating that "BCCI has never knowingly violated the laws of any country," and "would not countenance any such violation or activity." At that time, BCCI had been cited for regulatory violations in numerous countries around the world, despite its practice -- well-known within BCCI -- of bribing public officials around the world in an effort to limit the number of citations for such violations.(18)

In November and December, 1988, Hill and Knowlton coordinated briefings of BCCI employees on how to handle themselves as press representatives, including "media training" classes, and a seminar by BCCI's lawyers to BCCI employees to discuss the implications of the Tampa indictments for the bank and for unindicted bank officials.

On December 8, 1988, Hill and Knowlton registered with the Justice Department as a foreign agent for BCCI in preparation for engaging in lobbying efforts on behalf of BCCI in Washington.

In December, 1988, the Subcommittee deposed a former BCCI official, Aziz Rehman, who testified under oath that BCCI had engaged in wrongdoing beyond the actions for which BCCI was indicted in Tampa. According to Rehman these included maintaining a "Nassau" branch of BCCI in Miami at a time that the bank did not have an office in Nassau, and which it was using to assist clients in tax evasion. According to Rehman, customers were able to make deposits in the Nassau branch in Miami which earned interest "outside" the United States, were not reported by BCCI to the IRS, and thus permitting the customer to evade paying

taxes. Rehman's statements were later supported by two other BCCI officers, Akbar Bilgrami and Amjad Awan, in statements to the Subcommittee, as well as by BCCI records stored in Miami.

In a press release from Hill and Knowlton in New York, BCCI defended itself by attacking Rehman and calling his charges, which were accurate, wild lies. The December 22, 1988 press release, issued on Hill and Knowlton New York letterhead, with two Hill and Knowlton account executives listed as press contacts stated:

The allegations made about the Bank of Credit and Commerce International S.A. by Mr. Aziz Rehman before hearings of the U.S. Senate Subcommittee on Terrorism, Narcotics and International Communications [sic] in October, 1988 [sic] have absolutely no basis in fact.

Mr. Rehman was fired from BCCI in 1984. Whether this influenced his sworn Senate testimony in any way we do not know. At no time has BCCI operated any "fictitious" branches in the Bahamas or elsewhere. Nor has the Bank chartered aircraft to transport cash illegally.

Mr. Rehman's statements are fantastic and erroneous interpretations of routine and legitimate banking transactions.(19)

The activities described by Rehman were neither routine nor legitimate; his statements neither fantastic nor erroneous. Rehman's statements were even possibly verifiable at the time they were made. Numerous BCCI employees in Miami knew that Rehman was telling the truth, and that BCCI had maintained its Nassau books in Miami at a desk labelled "Nassau" opposite a desk that handled Miami's transactions. As BCCI officials interviewed by the Subcommittee acknowledged, the Nassau account of BCCI was for years nothing more than a separate set of books kept in BCCI's Miami office and labelled "Nassau."(20)

As these officials later told the Subcommittee in confirming Rehman's account, the Nassau branch of BCCI in Miami was used by BCCI clients for the purpose of shielding assets from U.S. taxation. The Nassau branch was established in Miami at a time when BCCI had no operation in Nassau -- even a post office box. Officers at the "Nassau" branch of BCCI sat across the table at BCCI's office in Miami from the "Miami" branch of BCCI in Miami, so that customers of BCCI could "shift" funds from the on-shore branch of BCCI to the off-shore branch. Moreover, since BCCI, as a foreign bank outside of the Federal Deposit Insurance Corporation (FDIC) system, could not accept deposits from U.S. citizens in the United States, its "Nassau" branch was used to allow U.S. citizens to make deposits "offshore."(21)

There is no indication in BCCI records that any independent fact-checking was done by the firm. Apart from blind acceptance of whatever BCCI told them, Hill and Knowlton also had no reason to believe that Rehman's statements were either true or false. The public relations firm did nothing more, and nothing less, then peddle BCCI's position without regard to the damage to the reputation of the person its client hired it to disparage.

Attacking The Press

In May, 1990, Regardie's Magazine published a cover story concerning the relationship between BCCI and First American by financial journalist Larry Gurwin. The story was entitled, "Who Really Owns First American Bank?" It provided detailed information concerning that issue, suggesting that one very possible answer was BCCI. The article also contained a comprehensive and detailed history of BCCI's takeover of Financial General Bankshares, BCCI's previous run-ins with regulators and law enforcement, the role played in First American and in BCCI by Clark Clifford and Robert Altman, and questions concerning BCCI's shareholders. The Gurwin article in Regardie's made available in public significant material concerning these issues not previously known. As a consequence, it has been justifiably credited by many as substantially advancing knowledge of BCCI's activities in the United States, and helping prompt the investigative work that led to the unravelling of BCCI's ownership of First American.

When the Regardie's article appeared, on behalf of "First American," Hill and Knowlton created a "Fact Sheet" on the article which consisted of an attack on the story, the magazine itself, and the reporter who wrote it. The "Fact Sheet" was not released generally to the press, but to specific persons who might have a special interest in whether the article was true -- people like the chairman of the Subcommittee, Senator Kerry, and the Comptroller of the Currency, Robert L. Clarke, each of whom received a seven page fact sheet rebutting the allegations in Regardies in late April, 1990. The "Fact Sheet" was provided to Senator Kerry by Mankiewicz, in his capacity as Vice Chairman of Hill and Knowlton.

The Hill and Knowlton "Fact Sheet" began with the following assessment of the Regardie's article:

The May 1990 issue of Regardie's magazine carries a cover story on First American Bankshares which is full of inaccuracies and outright falsehoods, utilizing a sensationalist approach to yesterday's news. It has been published with the clear intent of denigrating and injuring the company, its officers, and directors, and its shareholders. With glaring bias and distortion, Regardie's fails to report fairly the story of First American. . .(22)

According to the Hill and Knowlton release, the Regardie's article consisted of a:

rehash of stale allegations and charges . . . rejected by the Federal Reserve and other regulators . . . seeks to prove First American may somehow be controlled by the Bank of Credit and Commerce International (BCCI).(23)

Hill and Knowlton then made the following representations of fact concerning the relationship between BCCI and First American, which proved to be untrue:

** BCCI's management is not involved in any respect in the policy or affairs of First American, a point that is easily checked.

** BCCI has never owned any stock in First American.

** First American is not controlled by BCCI in any sense and all dealings between the two institutions (which have actually been quite limited) have been proper and on an arms-length basis.(24)

Again, Hill and Knowlton had no particular knowledge of the true state of affairs. It acted merely as a conduit for the position of its clients. That position, however, was misleading and false.

Hill and Knowlton then made the following representations of fact concerning the use of First American by General Manuel Noriega:

First American has never had any banking relationship of any kind with Manuel Noriega, nor has it ever knowingly handled any funds of Manuel Noriega . . . Nor is there any indication in First American's bank documents [that] any deposit contained funds belonging to Manuel Noriega.(25)

In fact, dozens of documents at First American's offices in Washington showed, quite clearly, the handling of Noriega assets by First American through the bank account maintained by BCCI at First American in Washington. Thus, Hill and Knowlton's client, First American, or its officers, were again providing untrue information to the PR firm on this point, which the firm in turn was disseminating on First American's behalf.

The "Fact Sheet" distributed by Hill and Knowlton made similarly erroneous statements concerning the relationship between Clifford and Altman and BCCI.(26)

Once again, there is no evidence to demonstrate that Hill and Knowlton had conducted any independent investigation of the facts that they were distributing.

To the contrary, their presentation was identical with the position that was being taken then and to this day, by BCCI, Clifford and Altman concerning these issues. Untrue statements by BCCI, Clifford and Altman concerning these issues are among the central matters on which each has been indicted by law enforcement and cited by regulators.

Once again, Hill and Knowlton acted merely as a conduit for the version of events being promoted by their clients. Once again, the materials it disseminated contained numerous statements that proved to be false. Once again, its attacks -- this time on investigative reporter Larry Gurwin and on Regardie's magazine by Hill and Knowlton in its capacity as public relations firm for First American, Clifford and Altman -- served to discredit people who were telling the truth.

In May, 1991, Hill and Knowlton disseminated another memorandum pertaining to First American and BCCI. This memorandum was written in response to a May 5, 1991 article in the Washington Post concerning Clifford and Altman's purchase of stock in First American through secret lending from BCCI.

A cover page to the Memorandum written by Frank Mankiewicz stated the following:

I would like to stress a few points:

- The fundamental contention of the Washington Post story of May 5, indeed its lead sentence - is untrue, and worse, never supported in the article. The Post says regulators were told "that BCCI would have no financial relationship with First American and its senior management." No such statement was ever made. In fact, First American was free to have financial dealings with BCCI on an arms-length basis - as it did with many banks - and audits have confirmed that no impropriety occurred. As to financial dealings with senior management, I have no idea what representation or discussion the Post is talking about.

- These investments were not secretive ownership; rather, the Directors had full knowledge of both the purchases, and approved them. They were also encouraged by shareholders, and the ownership was timely reported to regulators, as required.

- The loan from BCCI was made with the advice of New York counsel . . . none, then or now, believes the loan contravened any commitment to the Federal Reserve . . .(27)

Mankiewicz then enclosed a memorandum, on Hill and Knowlton stationery, which further stated that "there was no reason at the time of these transactions for any one to consider the role played by BCCI [in lending funds to Clifford and Altman] to be remarkable or inappropriate."(28)

The positions taken, identical to those taken by Clifford and Altman, were at best, gross simplifications and distortions of the truth, as the public record at the time, available to Hill and Knowlton, demonstrated. Specific representations had indeed been made to the Office of the Comptroller of the Currency that BCCI would not be involved in any aspect of financing First American's ownership either at the time of the FGB takeover, or later. These representations were part of the record on which the Federal Reserve agreed to permit the takeover of First American by the group linked with BCCI. While Clifford and Altman's ownership of BCCI stock had been disclosed to and approved by First American directors, their loans from BCCI had not. While Clifford and Altman's ownership of BCCI stock had been disclosed to regulators, their loans from BCCI had not. Clifford and Altman's personal attorneys may not have believed the loans contravened any commitment to the Federal Reserve. But that has not been the position of the regulators themselves. Indeed, the Federal Reserve has formally charged Clifford and Altman with conflict of interest, breach of fiduciary duty, and other violations of their statutory responsibilities in connection with these very transactions. In fact, the Federal Reserve has viewed these transactions to be sufficiently improper to justify banning Clifford and Altman from banking for life.(29)

Again, there is no evidence to demonstrate that Hill and Knowlton had conducted any independent investigation of the facts that they were distributing. The firm acted as a conduit for a position, which contained numerous statements that proved to be misleading at best.

Should Hill and Knowlton Have Known Better?

According to press accounts, some Hill and Knowlton executives from the beginning raised ethical questions concerning the firm's representation of BCCI and refused to work on the account -- suggesting that sufficient information had always been available to Hill and Knowlton to reject the account on the ground that BCCI had in fact engaged in sleazy practices, and that if Hill and Knowlton accepted BCCI's account, it might end up tarnished.(30)

According to an August 17, 1991 account in the National Journal, in October, 1988, Lawrence J. Brady, an ex-senior vice president in Hill and Knowlton's Washington office and two other Hill and Knowlton executives had told Mankiewicz in a conversation involving all four officials that BCCI was, to use Brady's word, a "sleazy" bank, after Brady discussed the possible representation with Von Raab. The National Journal article quoted another former Hill and Knowlton official as saying "the smell test was used, and [BCCI] did not seem to pass the muster."(31)

Regardless of such concerns, Hill and Knowlton kept the account for 18 months, and represented BCCI's secretly-held U.S. subsidiary, First American, another 15 months beyond that, until Clifford and Altman's resignation in August 1991.

What is the responsibility, if any, of a public relations firm to ensure that it does not assist clients in misleading the public, the Congress, or the Executive Branch, through the dissemination of false information?

The baseline standard is one defined by the Code of Professional Standards of the Public Relations Society of America, which states that "a member shall adhere to the highest standards of accuracy and truth" and "shall not knowingly disseminate false or misleading information."

In the case of Hill and Knowlton, BCCI, and First American, there is no evidence that Hill and Knowlton executives actually knew that the specific information they were disseminating was false. But there were obvious warning signs present from the beginning that served as cautions to some Hill and Knowlton partners, who did not want the firm to keep the account because of these warnings. These warnings initially consisted of a lengthy number of press accounts detailing BCCI's past bad behavior; the various filings made with regulators by various parties in connection with the FGB litigation; the Operation C-Chase drug money laundering indictment in Tampa itself. In December, 1988, they also included the Aziz Rehman deposition before the Subcommittee; the information provided Hill and Knowlton executives who refused to work on the account by Customs Commissioner Von Raab and others. By 1990, they included serious allegations being raised by the press in 1990.

Conclusion

Hill and Knowlton's representation of BCCI was not an unusual event. Institutions charged with wrongdoing hire public relations help all the time to ensure that their side of the story is told.

The result in the case of BCCI was that Hill and Knowlton ended up providing information to the Congress and to the press and public that was not merely misleading or distorted, but actually false. Hill and Knowlton assisted in discrediting people who were providing accurate information about the underlying situation, including a former BCCI officer, an investigative journalist and his publisher. Given Hill and Knowlton's close ties to both political parties, and its influence in Washington, this was especially unfortunate. Hill and Knowlton did not violate any laws. It may not have violated any of the standards of the public relations industry. But its actions raise questions concerning an apparent conflict in this case between the role played by Hill and Knowlton as BCCI's public relations firm, and the public interest.

As former Commissioner Von Raab testified concerning this issue:

So, it should not happen . . . [but] it happens all the time. It should not happen and maybe the BCCI case will be the example that will cause someone to change this influence peddling culture, to try to ask some reasonable questions of the integrity of the people that they are going to be representing.(32)

The public relations industry needs to consider whether additional internal standards may be appropriate to discourage the kind of representation provided BCCI by Hill and Knowlton. Such standards, could, at a minimum, require firms to conduct due diligence before agreeing to represent a client on any matter, backed up by the possibility of some form of sanction for gross violations of the standard.

SENATOR BROWN'S VIEW:

Clearly, Hill and Knowlton's representation of BCCI during the Chairman's investigaiton increased the pressure to cease the Subcommittee's efforts to make public the bank's nefarious methods. As the report itself concedes, no laws were violated. No ethical standards were breached. Neither my office nor my staff were approached or lobbied by Hill and Knowlton on this subject, nor felt that Hill and Knowlton went beyond their ethical mandate as they presented BCCI's "side of the story" to the public. The experience of Senator Kerry and his staff was quite different. Our comments in this section are especially critical of Hill and Knowlton, and should be evaluated in light of these facts.

1. See lengthy descriptions of Hill and Knowlton's political contacts in The Power House, Robert Keith Gray and the Selling of Access and Influence in Washington, Susan B. Trento, St. Martin's Press, 1992. The book also contains interviews with former Hill and Knowlton executives concerning the discussions within Hill and Knowlton about the BCCI account.

2. Subcommittee documents on Hill and Knowlton stationery obtained from BCCI New York and BCCI Miami; letters and memoranda from Frank Mankiewicz to Senator Kerry on behalf of First American; See Hill and Knowlton's "BCCI Worldwide Action Program" memorandum, October, 1988.

3. S. Hrg. 102-350 PT. 1 p. 51.

4. Hill and Knowlton press release to PR Newswire, August 1, 1991, "To National and Business Editors."

5. Documents on Hill and Knowlton stationery concerning representation of BCCI, October-December, 1988; BCCI internal memoranda concerning Hill and Knowlton, October, 1988-January, 1990; BCCI lawyers notes produced by Raymond Banoun to Subcommittee on September 3, 1992 concerning Hill and Knowlton; correspondence, Michael Pillsbury to Hill and Knowlton, January, 1990.

6. See chapter on BCCI in The Power House, Trento, id.

7. See letter and memorandum from Frank Mankiewicz to Senator John Kerry, May 6, 1991.

8. Numerous press accounts chronicle Small's career. See e.g. UPI, October 15, 1985, Washington Post, November 5, 1985, and some 165 other citations in Nexis database prior to 1991.

9. Letter, Michael Pillsbury, on Senate stationery, to Karna Small, Hill and Knowlton, January 11, 1990, regarding Hill and Knowlton's media strategy for BCCI.

10. Staff interview, Abdur Sakhia, October 7, 1991.

11. Id. p. 52.

12. Neither Frank Mankiewicz nor Robert Gray were among the team of Hill and Knowlton professionals hired by BCCI in this period, nor do any documents in the possession of the Subcommittee show them to have worked on BCCI matters at all. Mankiewicz, however, along with others at Hill and Knowlton, did provide assistance to First American on the charges that it was secretly owned by BCCI, after the handling of the Hill and Knowlton retention by BCCI in the U.S. was switched from BCCI-London to Clifford and Altman in the spring of 1989.

13. Draft Appendix A to White Paper, October 27, 1988, Hill and Knowlton.

14. Staff interviews, July, 1992, Amjad Awan and Akbar Bilgrami. BCCI Miami documents provide ample evidence for the proposition that money laundering at BCCI was systematic, as do the various indictments of BCCI by federal and local U.S. law enforcement. See indictment, U.S. v. Awan, BCCI et al, Middle District of Florida, 1988, 88-330-Cr.-T-13(B), "BCCI . . . would and did formulate and implement a corporate strategy for increasing BCCI's deposits by encouraging placements of funds from whatever sources, specifically including "flight capital," "black market capital," and the proceeds of drug sales, in conscious disregard of the currency regulations, tax laws and anti-drug laws of the United States and of other nations. Paragraph 7.

15. Staff interview, Bilgrami, July 20-29, 1992.

16. Bilgrami, staff interviews, July 20-28, 1992.

17. October 26, 1988, Hill and Knowlton, "Background: The Bank of Credit and Commerce."

18. Among the foreign countries which had cited BCCI for various infractions prior to Hill and Knowlton's representation of BCCI were France, Kenya, Nigeria, and Sudan, as reported in press accounts available to Hill and Knowlton on the Lexis database. See Reuters, November 11, 1987. As BCCI officer Abdur Sakhia testified before the Subcommittee, "BCCI officers were indicted and jailed in other countries, like Sudan, Kenya, India, and in each case there was a terror in the bank that, you know, this has happened, that has happened. And somehow then some deal would be struck. People would be freed, BCCI would start doing business all over again." S. Hrg. 102-350 Pt. 2.

19. News Release, Hill and Knowlton, For: Bank of Credit and Commerce International, December 22, 1988.

20. Staff interviews, Amjad Awan and Akbar Bilgrami, July, 1992.

21. Staff interviews, Akbar Bilgrami, July 20-28, 1992; see also staff interviews with Nazir Chinoy, March 9, 1992.

22. "FACT SHEET," Re: Regardie's Article, provided to Senator John Kerry on April 30, 1990 by Hill and Knowlton.

23. Id.

24. Id.

25. Id.

26. Id.

27. Memorandum, From Frank Mankiewicz, Hill and Knowlton, May 6, 1991.

28. Id.

29. Board of Governors of the Federal Reserve, Summary of Charges, In the matter of Clifford, July 29, 1992.

30. A lengthy treatment of this question is contained in The Power House by Susan Trento, id. The book describes meetings about BCCI by Hill and Knowlton executives who wanted the firm to reject the account as a consequence of its poor reputation, but were rebuffed by firm management.

31. National Journal, August 17, 1991, "BCCI Passed PR Firm's Smell Test."

32. S. Hrg. 102-350 Pt. 1 p. 52.

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ED ROGERS AND KAMAL ADHAM Introduction In the view of the Subcommittee, the real story of Ed Rogers' involvement in the BCCI scandal has yet to be fully revealed. Rogers, a former White House Political Director, left his position at the White House in early August 1991 to start the political consulting firm of Rogers and Barbour in Washington D.C. By the end of August Rogers, who had only briefly practiced law, was offered a $600,000 contract with Kamal Adham.

Rogers was deposed by the Subcommittee in March 1992. His account of how he received the contract with Adham, who he consulted before accepting Adham as a client, and his relationship to Adham after withdrawing from the contract, are all called into question by his telephone logs, documents provided to the Subcommittee and interviews conducted by the Subcommittee.

Initial Contacts Rogers described to the Subcommittee the events leading up to his representation of Kamal Adham. According to Rogers, in mid-August after he left the White House, a friend of his, the General Manager at the Grand Hotel, Samir Darwisch, called him to tell him that "his friend Moussa Raphael was in town looking for lawyers and asked me if I would please come by the hotel and meet him."(1) Rogers stated that he knew Darwish from "being around the hotel and events at the hotel."(2) Rogers said while at the White House he went to the hotel "once every couple of weeks." He also explained that the Hotel's owner, Joe Yazbek, had been to the White House, to discuss "events in Lebanon" with then White House Chief of Staff, John Sununu. At some point Rogers learned that Moussa Raphael was the lawyer for the Mr. Yazbek's business interests.

Rogers says that when Darwish first called him he did not mention the name Kamal Adham, but Rogers was nonetheless sufficiently interested by Darwish's invitation that he met with Raphael that same night at the Grand Hotel. According to Rogers, Raphael "provided a general overview of what was doing here on behalf of the sheik, in order to organize the sheik's legal affairs." The general overview included "the problems that were relevant to the sheik, or First American, BCCI," and, testified Rogers, at some point Raphael "must have" identified Plato Cacheris as the criminal defense lawyer for Adham.(3) In his testimony Rogers did not indicate whether Raphael discussed the Sheik's financial affairs in the United States.

After meeting with Raphael, Rogers discussed the possibility of representing Adham with his partner, former political director of the Reagan White House, Haley Barbour. They decided, however, that before accepting the account, Rogers should get more information on Adham.

Rogers has provided at least three different accounts of whom he consulted before accepting the Adham account. In his letter to White House Counsel Boyden Gray on October 28, Rogers stated, "Prior to agreeing to represent Mr. Adham, I made inquiries about him among former government officials and people in the private sector who have had dealings in Saudi Arabia. Invariably those who knew or knew of Mr. Adham said he was a man of stature and prestige in the region and that he had the respect of Americans who had dealt with him in the past."(4)

On December 18, 1991, Rogers was contacted by Subcommittee staff concerning prospective testimony to the Subcommittee. During the conversation, Rogers indicated that he "checked out Adham with a guy who does business in the Middle East, checked him out with a widely respected former government official, and finally talked to two other former government officials." Rogers claimed that each of these contacts urged him to take the account, noting that with his experience he would not be getting offers from non-controversial entities like "Quaker Oats."(5)

In his deposition with the Subcommittee, Rogers indicated that he only contacted Sam Bamieh, a businessman and Sandra Charles, a mid-level former NSC and Defense Department staffer. Rogers explained the discrepancies in the following way: "Perhaps as I prepared that [his letter to Boyden Gray] I used those two people as plural, but I don't have any recollection of talking to other people."(6)

Sam Bamieh Although there is some difference of opinion between Rogers and White House Counsel Boyden Gray as to exactly when in early August Rogers left the White House, Rogers' office phone logs at Rogers and Barbour indicate that on August 5th, he placed a phone call to Mr. Sam Bamieh at Intertrade Group in San Mateo, California. According to Mr. Gray, Rogers officially left the White House on August 6, the day after phone records show Rogers called Bamieh.

Sam Bamieh is someone whom Rogers has indicated that he spoke with concerning the advisability of taking on the Adham account. Bamieh is a well know Palestinian-American businessman with strong ties to the Republican party and to various individuals in the Middle East, including the Saudi Royal family. According to press reports, in the late 1970's Bamieh financed the trip of Ruth Carter Stapleton, President Carter's sister, to the Middle East. During the 1980's Bamieh testified on several occasions before the US Congress on issues related to the Middle East.(7)

According to Rogers he met Bamieh during the 1988 campaign because "he was a friend of Lee Atwater's who I worked for."(8) Rogers told subcommittee staff that while he was at the White House he spoke on the telephone to Bamieh on a regular basis, indicating "There was no pattern to it, but monthly."(9)

However, shortly after he left the White House, Rogers was in frequent contact in with Bamieh placing calls to him on August 5,13,14,15,16,26,28 and attending a party at his house in San Mateo, California on August 27 which Bamieh hosted for Adnan Khashoggi.

Rogers could not explain his frequent contact with Bamieh, other than to say that he and Bamieh were friends and "It would not be unusual for him to call."(10) Rogers did not say why he was calling Bamieh on such a regular basis. According to Bamieh, who was interviewed on the telephone by staff on two separate occasions, he wanted Rogers to come to work for him. But in his deposition, Rogers stated that he could not recall discussing possible representation of Bamieh and said that neither was he "soliciting business."

Rogers meeting with Khashoggi at a party hosted by Bamieh is of particular interest to the Subcommittee because of Khashoggi's ties in the Middle East, including reported business dealings with Adham, and his role in BCCI. Khashoggi had accounts with BCCI in France and used those accounts to move millions of dollars for financing US arms sales to Iran.

The Subcommittee learned of the Bamieh party for Khashoggi from Bamieh: Mr Rogers did not offer this information at his pre-deposition interview by Subcommittee staff. When asked under oath, Rogers told the Subcommittee that at Bamieh's party he only engaged in "social chit-chat" with Khashoggi and did not discuss Adham.(11) He described his conversation as "just a few polite moments -- a couple of minutes at the most."(12) Rogers testified that "there were several other people" at the party.(13) In fact, besides Rogers and his wife, Bamieh invited only a dozen people to meet Khashoggi.(14) Bamieh also contradicted Rogers when he told Subcommittee staff that Rogers did discuss Adham with Khashoggi. Moreover, Bamieh claims that when Rogers first called him to discuss Adham, Bamieh told him that representing Adham "would be a political mistake", but he promised to find out more about the Sheik. When asked with whom he checked, Bamieh said "Khashoggi."(15)

Sandra Charles The other person with whom Rogers claims to have discussed Kamal Adham was Sandra Charles, a former staffer on the National Security Council who left the White House at approximately the same time Rogers did in order to work for the International Planing and Analysis Center, a consulting firm headed by Frank Carlucci, the former Deputy Director of the CIA and Secretary of Defense. Like Bamieh, Charles had a background in the Middle East.(16)

Charles checked her calendars and told the Subcommittee that she first talked to Rogers on August 26 when he indicated that he was being considered as one of a team of advisors to Sheik Kamal Adham. She told Subcommittee staff that Rogers identified Adham to her as a "former chief of Saudi intelligence."(17) (Rogers can not remember from whom or when he learned that Adham was a former chief of Saudi intelligence) Charles told Rogers that she didn't know much about Adham, but that she would try to gather information and report back to him. According to Charles, she then called "a Saudi diplomatic source at the embassy" who confirmed that Adham was a former head of Saudi intelligence, that he was related by marriage to the former king, and that he was a wealthy businessman. (18) Her source also told her that Adham had a very close relationship to Sadat and that he was man of great status in the Middle East.(19)

According to Rogers, he later asked Charles to set up a meeting for him with Frank Carlucci to discuss whether or not Mr. Carlucci's firm could act as "financial advisors" to Sheik Adham. The meeting took place on October 7, 1991 and, according to Rogers, Carlucci told him "[w]e don't manage finances. We don't manage people's money. We do things on a deal-by-deal basis."(20) That, testified Rogers, was the extent of the meeting.

Rogers' Trips To the Middle East Rogers did not ultimately decide to accept the Adham account until he and Haley Barbour actually met with Adham. On August 31, the two political operatives flew to Jeddah where, according to Rogers, they had three days of meetings with the Sheik's legal and financial advisors. Although he had dinner with Adham one evening, Rogers implied to the Subcommittee that the trip was all work: he never discussed his friend Sam Bamieh or his acquaintance Adnan Khashoggi with the Sheik. According to Rogers, near the end of their three day stay, Adham made him an offer. In his deposition, Rogers explained why he believes he was hired:

Mr. Pilcher. [Office of Senator Brown] When you go to talk to somebody ....How do you sell yourself. What is it that you say about your firm that is interesting?

Mr. Rogers. That we are two lawyers. I am of counsel to a 120 person firm that provides a broad array of experience.

Mr. Pilcher. What do you consider your personal specialty? When you say broad array of experience, what expertise in particular o you have?

Mr. Rogers. Managing other people's affairs. Managing other people's problems, managing other people's business.

Mr. Pilcher. My mother-in-law is like that, but what do you mean exactly by it?

Mr. Rogers. When people present me with a problem, I like to think that they can turn their back on it. They can tell me what the problem is and they'll know that I'll know how to go about my business to organize their affairs and do things on their behalf.

Mr. Pilcher. When this particular case was brought to you, what specific problem did you see that you thought you might be able to solve?

Mr. Rogers. An organizational problem. A large business concern that needed a lot of different kinds of representation.

Mr. Pilcher. Meaning BCCI?

Mr. Rogers. Meaning Sheik Adham, not BCCI.

Rogers' counsel in the deposition explained to Subcommittee staff that "[i]t's hard for him to say what he was doing since it had a very short life."(21) Nevertheless, the Subcommittee finds it odd that Mr. Rogers who represented Sheik Adham for over two months and met with him and his advisors for several days at a time in the Middle East, could be so vague about his duties.

After Rogers returned to the United States, he wrote Sheik Adham thanking him for the opportunity to join his legal team. One week later he received a $136,000 down payment on his $600,000 contract. And ten days later he registered with the Justice Department as a foreign agent, indicating that his work on behalf of Adham might "border on political." In his deposition, Rogers acknowledged that his representation of Sheik Adham related to "the Sheik's problems with the Feds."(22) Moreover, Rogers provided the Subcommittee with copies of letters written by Cacheris concerning the investigations being conducted by the US Federal Reserve and the Manhattan District Attorney's Office.(23) Rogers received these letters only days before flying to Cairo to meet with the Sheik. These events appear to contradict other Rogers testimony that his agreement with Sheik Adham specified that "matters regarding criminal investigations didn't come to me for any type of management participation."(24)

Rogers had two more meetings with the Adham legal and financial team. At the end of September he flew to Cairo, stopping over in London at the Four Seasons --Inn on the Park, where BCCI regularly hosted important clients. Rogers would not discuss with the Subcommittee the substance of any of his meetings in Cairo with Adham or his "legal or financial advisors" citing attorney-client privilege.

Rogers flew to Cairo with Plato Cacheris, the prominent Washington criminal defense attorney for Sheik Adham. By this time, of course, both the Justice Department and the Manhattan District Attorney had communicated with Adham their concern over his involvement with BCCI, particularly as it related to the Sheik's "holdings" in First American Bank. With no background in business, in criminal law, or in any facet of the law for that matter, the 33 year old Rogers must have accompanied Cacheris for one reason only: his political skills and access.

Rogers returned to the Middle East one more time to meet with the Sheik in mid-October in Jeddah. On this trip, Rogers met briefly on two occasions with David Eisenberg of the Justice Department. According to Rogers, "[h]e [Eisenberg] came into the room to meet with the Sheik. I walked out and we shook hands."(25) Rogers testified that he met Eisenberg the next morning in a "virtual identical encounter."(26) Robert Mueller, the Assistant Attorney General, provided a similar account of events several months earlier in testimony before the Subcommittee.(27)

Rogers Resigns Account -- The White House Investigates On October 23, the story of Rogers's representation of Adham was reported in the press. Two days later, President Bush, in a press conference, said that he didn't know what Ed Rogers "is selling," and that "he didn't know anything about the man."(28) From the President's comments it was unclear whether or not he was referring to Rogers or Adham, but, in fact, he appears to know both men reasonably well. In his deposition, Rogers testified that he sat in on meetings with the President "on numerous occasions."(29) In an interview with the Middle East News Network, Kamal Adham, who was head of Saudi intelligence during the same years that President Bush headed the CIA, stated:

[t]here was a period of overlap, but whatever the case it is not possible for a President to say that. The next day, nobody mentioned the White House spokesman came out and said that the President knows Mr. Adham and he did not like what was written in the papers..."(30) Shortly thereafter Rogers reportedly resigned the Adham account, writing to Boyden Gray:

I registered [with the Justice Department] out of an abundance of caution. The ethics atmosphere at the Bush White House was to go the extra mile to assure that no one could ever say any ethics requirement was violated or avoided. I followed this philosophy and registered, as I did not want anyone to say that I should have registered but did not do so. Unfortunately, going beyond the requirements of the law has resulted in an embarrassing spate of stories for my client, the Administration and me.(31)

Responding to Congressman's Charles Schumer's call for an investigation of the matter, Counsel Gray purported to mount an inquiry. However, Gray never met with Rogers. Instead, two of Grays's assistants, with whom Rogers was "friendly" called him on the telephone two times each to discuss the matter.(32) According to Rogers, the conversations lasted ten to fifteen minutes each. On November 1, 1991, Gray wrote Congressman Schumer that "Mr. Rogers was not responsible for and did not participate in any matters concerning to BCCI at the White House."(33)

The question, however, is not only whether Rogers had access to information on BCCI at the White House, but whether or not he began the process of negotiating his contract with Adham while he was at the White House. On this point, Rogers provided conflicting and confusing testimony:

Mr. McKean. [staff of Senator John Kerry] He [Moussa Raphael] was here in March. Did you meet with him then?

Mr. Rogers. Mr. Raphael?

Mr. McKean. Yes.

Mr. Rogers. Yes.

Mr. McKean. You met with in March of 1991?

Mr. Rogers. Oh,no, I'm sorry. I thought you meant --

this is March now.

Mr. McKean. Right.

Mr. Rogers. No, I thought you meant -- I have met with him since this whole thing blew up.(34)

Later in the deposition Rogers also denied having met with Raphael in March, 1992 and after the deposition his counsel wrote the Subcommittee indicating that "Mr. Rogers did not meet with Mr. Raphael in March 1991 or in March 1992."(35) Hotel records indicate that Raphael stayed at the Grand Hotel in March 1991, but not in March 1992. It seems plausible that Rogers could have met Raphael in March 1991: Rogers told the Subcommittee that he gave his notice to the White House in January and Adham needed help as the Federal Reserve Board had just issued a cease and desist order to First American concerning its status vis a vis BCCI. The most logical time for Adham to have sought political influence and access was March 1991.(36)

Continued Contacts Rogers ostensibly resigned the Adham account in October, although he will not reveal whether or not he returned his retainer to Sheik Adham. Rogers' counsel has told the Subcommittee that Rogers' fees are a confidential matter.(37)

During the month of November 1991 Rogers continued to work on the Adham account in so far as he provided assistance to other lawyers for Adham who assumed his responsibilities. He also continued to meet with Moussa Raphael. According to Rogers:

"I met with him to finalize and hand over matters we were working on, specifically on the trust, then I met with him one more time subsequently to that, just -- I dropped by the Grand Hotel to say hello. He asked me to. He was worried about me."(38)

Subsequent to Rogers' deposition, his lawyer wrote the Subcommittee that the last time his client met with Mr. Raphael was in December 1991, or January of this year. However, as recently as April, the Subcommittee has learned that Raphael was calling Rogers' office.(39)

Conclusion Ed Rogers is not a major player in the BCCI scandal, but his involvement with Sheik Adham is illustrative of how the bank tried to buy influence in order to ameliorate its problems. Rogers is neither an experienced businessman nor a prominent lawyer: rather, he is political operative who achieved significant political influence and access by the age of 33, and who sought to "cash in" on those political skills. The story he provided to the Subcommittee of how he came to represent one the most important figures in the BCCI scandal is shallow and unconvincing, but the greater failing and more worrisome aspect in the Rogers affair may be that of the White House inquiry. The columnist William Saffire predicted in November 1991 that the Boyden Gray, charged by the President to investigate the Rogers affair, would "pass along the denials and the White House whitewash will continue."(40) There is nothing in the record that suggests Mr. Saffire's assessment was inaccurate. 1. S. Hrg. 102-350 Pt.4, p.935. Subcommittee staff met with Darwish and talked to him on the telephone. His account of how Moussa Raphael met Rogers is essentiaally the same as Rogers' account. According to Darwish, Raphael asked the hotel executive if he knew any good lawyers," and Darwish recommended Rogers. Despite the similarlity of accounts, the Subcommittee is skeptical of his story: Rogers had virtually no legal experience and Moussa Raphael was well acquainted with Adham's criminal lawyer, Plato Cacheris, who presumedly had better contacts in Washington's legal establishment than the general manager of the Grand Hotel.

2. Rogers told the Subcommittee that there Republican political events at the Grand Hotel.

Darwish told the Subcommittee that he knew Senate Majority leader George Mitchell well (Senator Mitchell is of Lebanese extraction), but that he did not know and, in fact, had never even met Governor Sununu (also of Lebanese extraction).

3. Id. p.935.

4. Letter to C. Boyden Gray, Counsel to the President, from Ed Rogers, October 28, 1991.

5. Memo to Files, From Jonathan M Winer, Conversation with Ed Rogers, December 18, 1991.

6. S. Hrg. 102-350, pt. 5,p.944.

7. According to press reports, in 1987, Bamieh told the House Foreign Affairs Subcommittee on Africa the following:

-- In November 1981, prince Fahd, who later became the king, told Bamieh that he was pleased Congress had agreed to sell AWACS surveillance planes to the kingdom. In exchange for AWACS, Fahd said, "We will help you guys fight anti-communist movements," according to Bamieh.

--In 1983 [Prince] Bandar asked Bamieh if he would go into business with Richard V. Secord and Albert Hakim to bid on a security project at a Saudi airport. Secord and Hakim were key figures in the plan to channel money from the sale of US weapons to Iran to the Contra rebels fighting Nicaragua's leftist government. The business relationship was never cemented because the three never got the contract.

-- In 1983, Saudi officials asked Bamieh to funnel money to Morocco for the training of UNITA guerrillas. The Saudis said former CIA Director William Casey was aware of the plan, Bamieh said.

-- In February 1984, Bandar approached Bamieh in Cannes, France, asking him to set up an offshore company that would supply goods and services to anti-communist movements and oil to South Africa. Bandar aid he declined, even though Bandar said, "Don't worry about the legalities" because Casey was discussing the matter with King Fahd.

Another newspaper article reported on Bamieh's statements about the Iran Contra affair:

An American businessman with extensive ties to Saudi Arabia's royal family contends King Fahd was the chief financier of Iran's secret US weapons purchases in 1985 and 1986.

Sam Bamieh, a naturalized American citizen, said in an interview with United Press International Tuesday that Fahd was hoping to gain favor with Ayatollah Ruhollah Khomeini to ward off possible threats to Saudi security. Investigators of the Iran-Contra scandal have concluded Iran paid about $30 million for the arms, at prices double or triple the Pentagon's cost, and about $3.5 million of the profits were diverted to the Nicaraguan Contra rebels.

The reason they paid those high prices was because the money wasn't theirs," he said of the Iranians.

Bamieh, of San Mateo, California, said he based his assertion that Fahd paid for the arms on statements made to him by confidants of Fahd and international arms dealer Adnan Khashoggi and on dealings and on dealings made in his presence by Khashoggi.

Khashoggi, a Saudi Arabian who investigators have found played a significant role in financing the early US arms shipments to Iran, was serving as Fahd's emissary in the deals, Bamieh said.

Finally, Bamieh is quoted in the press on the CIA's involvement in an assassination attempt of a high ranking Lebanese official:

Top secret CIA reports in 1985, conflicting with author Bob Woodward's recent assertions, said Syria masterminded an assassination attempt against a radical Moslem leader without agency cooperation, U.S. intelligence officials say.

But California businessman Sam Bamieh, who describes himself as a former close friend of Saudi King Fahd, said he has evidence of reports of Syria's involvement were part of a Saudi cover story and that Woodward's report in his new book is largely correct.

Woodward, an assistant managing editor at the Washington Post, described the unsuccessful attempt to kill Hezbolah leader Sheik Fadahllah, whose organization bombed several American facilities in Lebanon in his book, "Veil: The Secret Wars of the CIA in 1981-1987."

8. S. Hrg. 102-350, pt. 5. p.937.

9. Id. p.938.

10. Id. p.941.

11. Id. p.939.

12. Id. p.945.

13. Id. p.939.

14. Invitation list. 8/27/91. Provided by Sam Bamieh.

15. telephone interview with Mr. Bamieh, 2/10/92. Bamieh also told staff that he had met Adham on two occassions: once in 1975 for about ten minutes and then again in December, 1991. According to Bamieh he was staying at the Hilton in Cairo when Adham called and asked for a meeting. According to Bamieh, Adham "wanted to get things off his chest."

16. According to a recent article in the New York Times:

The Bush Administration today confirmed reports that Saudi Arabia engaged in unauthorized transfers of American made military equipment to Iraq, Syria and Bangladesh.

Administration officials said, however, that they had brought these unauthorized transfers to the attention of both Saudi Arabia and the Congress, as required by law, and had been told by the Saudis that the shipments were "inadvertent."

Sandra Charles, the former director of Middle East and South Asia affairs at the Defense Department in 1986, and she recalled that the Saudis had gone out of their way to alert Washington about the inadvertent. Other officials, though, say it was American military officials in Saudi Arabia who first detected the transfer.

"It was a small number," Miss Charles said. "It was not considered significant. The bombs were in a warehouse with equipment for other countries."

She said she not recall whether Washington pressed Riyadh to get the bombs back, adding, "It just didn't seem very consequential at the time.

17. telephone conversation with Sandra Charles, 2/10/92.

18. Id.

19. telephone conversation with Sandy Charles, 1/29/9.

20. S. Hrg. 102-250, pt. 5. p.943.

21. Id. p.950.

22. Id. p.942. When asked if he was discussing his representation of Sheik Adham with Mr. Bamieh, Rogers replied, "Never, I wouldn't have discussed any matters relating to the Sheik's problems with the Feds."

23. see letter to John Moscow, Deputy Chief Investigations, New York Country District Attorney's Office, from Plato Cacheris, September 25, 1991 and letter to J. Virgil Mattingly, General Counsel, Federal Reserve from Plato Cacheris, September 26, 1991.

24. S. Hrg. 102-250. pt. 5. p. 950.

25. Id. p.943.

26. Id.

27. S. Hrg. 102-350. pt.3. p.800.

28. Transcript, White House Press Conference, President Bush, 10/25/91.

29. S. Hrg. 102-350. pt. 5. p.933.

30. "A Victim of Operation Overkill by West, Says Adham." Middle East News Network, 1/18/92.

31. letter to C. Boyden Gray, Counsel to the President, from Ed Rogers, October 28, 1991.

32. Id. p.946.

33. letter to Congressman Charles Schumer from C. Boyden Gray, Counsel to the President, November 1, 1991.

34. Id. p. 941.

35. Id. p.931.

36. William Safire, columnist for the New York Times, speculated that the relationship arose in another context:

This same Sununu toady helped organize the meeting on May 23 that founded the Arab American Council, an oil backed elite lobbying group scorns broader-based Arab-American organizations. Mr. Sununu and the Syrian Ambassador were stars of the gathering; out of Lebanese contacts made there or later, I presume, came Mr. Roger's huge contact.

see "BCCI and Sununu", by William Safire, The New York Times, November 28, 1991, p.25.

It is worth noting that Sam Bamieh is a member of the Arab-American Council and that Mr. Bamieh acknowledges contacts with Mr. Sununu when Sununu was Chief of Staff at the White House and afterwards.

37. staff conversation with Jonathan Schiller, 8/20/92.

38. Id. p. 941.

39. phone records of Moussa Raphael at The Grand Hotel, subpoenaed by the Subcommittee.

40. Safire, p.25.

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BCCI AND KISSINGER ASSOCIATES Introduction Beginning in the fall of 1986, and continuing through early 1989, BCCI initiated a series of contacts with perhaps the most politically prominent international and business consulting firm in the United States -- Kissinger Associates.

At the time, Kissinger Associates had five partners: former Secretary of State Henry Kissinger, former Assistant and current National Security Advisor Brent Scowcroft, former Under Secretary and current Acting Secretary of State Lawrence Eagleburger, international economist Alan Stoga, and investment bank T. Jefferson Cunningham III.

Ultimately both Stoga and a retired Brazilian Ambassador working as a consultant to Kissinger Associates, Sergio Correa da Costa, seriously explored finding ways to link BCCI's global network of banks with the services being offered by Kissinger Associates. Discussions between representatives of BCCI and representatives of Kissinger Associates took place over an 18 month period concerning the possibility of merging the capabilities of BCCI and Kissinger Associates on various, mostly unspecified, projects. Following BCCI's indictment, discussions continued as to whether Kissinger Associates could help BCCI respond to the ramifications of that indictment. These discussions ended in early 1989 at Henry Kissinger's personal insistence.

During the discussions, Stoga provided advice to BCCI on a possible public relations campaign. At their conclusion, Kissinger Associates referred BCCI to one its own directors, former Assistant Secretary of State William Rogers, and his firm, Arnold & Porter, who already represented Kissinger Associates on its own legal work. Rogers and Arnold & Porter in turn agreed to provide BCCI with legal services arising out of its indictment, although few services were provided as a consequence of the opposition of Clark Clifford and Robert Altman to the firm's involvement.

Although discussions concerning a broader relationship were cut short by the indictment, the BCCI-Kissinger Associates correspondence reveals much about BCCI's approach to seeking political influence in the United States. The correspondence also highlights BCCI's focus on doing business with, and ability, given its $23 billion in reported assets and 73 countries of operation, to attract interest from, some of the most politically well-connected people in the United States.

Genesis of Interest in BCCI-Kissinger Relationship And Position Of Kissinger Associates Concerning BCCI In late July, 1991, the Subcommittee received documents from BCCI's liquidators describing BCCI's use of a retired Brazilian Ambassador, Sergio da Costa, as a front-man for its purchase of a bank in Brazil while da Costa was also working -- according to the BCCI documents -- as a partner in Kissinger Associates.

In September, 1991, staff was advised by press that there were a number of documents at BCCI's document depositories concerning its relationship with Kissinger Associates. Staff were provided some of these documents by reporters, and found others in subsequent reviews of BCCI documents at its former offices in New York. These documents, on both Kissinger Associates and BCCI stationery, discussed in general terms the services Kissinger Associates might perform for BCCI, and were dated both before and after BCCI's indictment on drug money laundering charges in Tampa. Accordingly, they raised the question of whether Kissinger Associates had ever been retained by BCCI.

In November, 1991, the Committee on Foreign Relations authorized a subpoena for all documents to Kissinger Associates and related entities, for all documents pertaining to BCCI, and for its client lists.

In response, Kissinger Associates promised to cooperate with the Subcommittee investigation and to provide all documents pertaining to BCCI, under an agreement that the subpoena not be served. Kissinger Associates refused, however, to provide the client list, arguing that the list was beyond the parameters of the investigation into BCCI by the Subcommittee, and advising the Subcommittee that if it pursued the list, Kissinger Associates would litigate the matter, if necessary, through an extensive appellate process to the Supreme Court.

In providing several dozen documents material to the Subcommittee investigation on January 30, 1992, Kissinger Associates, represented by its attorney, former Presidential counsel Lloyd Cutler, made the following representations:

At the outset, it should be made clear that Kissinger Associates, Kent Associates, and China Joint Ventures (collectively referred to hereinafter as "Kissinger Associates") have never represented or provided any services for BCCI, ICIC, or any BCCI shareholder. Neither BCCI or ICIC nor any person known to be a BCCI shareholder has ever been a client of Kissinger Associates.

The only substantive contact between Kissinger Associates and BCCI occurred in late 1988-early 1989, when [BCCI officer] Abol Helmy met several times with Alan Stoga of Kissinger Associates to discuss a possible consulting arrangement for BCCI . . . In December, 1988, Mr. Stoga advised Mr. Helmy that Kissinger Associates was not interested in a consulting relationship with BCCI. At Mr. Helmy's request, Mr. Stoga met with Mr. Helmy again in January, 1989, at which time in response to a further inquiry from Mr. Helmy he again advised Mr. Helmy that Kissinger Associates did not want to proceed with a relationship. In February 1989, in response to Mr. Helmy's request for a recommendation for Washington-based legal counsel, Mr. Stoga recommended Arnold & Porter. Mr. Stoga has had a number of other meetings with Mr. Helmy since February, 1989, but these meetings have been of a purely social nature.(1)

While this account of the relationship is not untrue, it does fail to characterize the full extent of the contacts between BCCI and Kissinger Associates and the series of meetings and contacts between representatives of the two organizations. In fact, both Stoga, as a partner of Kissinger Associates, as well as its consultant, da Costa, worked over an extended period to bring the two organizations together, and such a relationship could well have developed but for BCCI's drug money laundering indictment. The following account, while not necessarily complete, is intended to provide a fuller picture of the contacts between BCCI and Kissinger Associates, of BCCI's goals and intentions in soliciting the relationship with Kissinger Associates, and of the assistance, albeit limited, provided to BCCI by Kissinger Associates in BCCI's time of trouble.

Background: BCCI and Ambassador Sergio da Costa In the fall of 1986, Sergio da Costa, the most senior member of the Brazilian diplomatic corps and a close associate of then Brazilian president Jose Sarney, decided to retire at the age of 67 after four decades of serving Brazil as its Ambassador to such significant postings as England, Canada, the United Nations, and the United States. Da Costa was anxious to enter the private sector, and ultimately accepted offers from three organizations. Da Costa would move to Paris and set up an office there as a consultant to an international law firm, Coudert Brothers. He would simultaneously also work for BCCI, on a monthly retainer. And he would become a consultant to Kissinger Associates, for a third monthly retainer.

At the time, BCCI already knew Ambassador da Costa well. Months earlier, he had provided BCCI with advice on selecting possible front-men for BCCI's intended acquisition of a bank in Brazil. Under Brazilian law, foreign banks were not permitted to own a majority interest in any Brazilian bank. Accordingly, BCCI had decided to buy a Brazilian bank, purchase a minority interest in the bank openly, and hold additional shares to guarantee BCCI's control of the bank through cooperating Brazilian nominees, in what was essentially a conspiracy to circumvent Brazilian banking laws.

Da Costa was extremely politically well-connected in Brazil. He had been brought to BCCI by BCCI shareholder and front-man Ghaith Pharaon, who in late April, 1986 had met with Da Costa in Miami to seek Da Costa's help in responding to the problems posed for BCCI in circumventing the Brazilian bank laws. A telex from Miami branch manager Abdur Sakhia to BCCI-London on May 6, 1986 described the meeting having ended positively for BCCI:

Ambassador Da Costa has promised Dr. Pharaon to assist the Bank in any way he can and he also had asked Mr. Ferreira [a prominent Brazilian businessman close to President Sarney] to use his association with the President of the Republic to assist BCC.(2)

By September of 1986, da Costa had agreed to himself become a front-man for BCCI in Brazil. In return, BCCI agreed to pay him $150,000 a year, with no further responsibilities beyond being a front-man and using his influence to help BCCI with Brazilian authorities in Brasilia, the capital city.

Under the terms of the arrangement, da Costa agreed to be a director and shareholder, secretly acting as BCCI's nominee, of the bank BCCI was purchasing in Brazil, in a transaction structured by BCCI officer Abol Helmy, who later himself had a series of contacts with Kissinger Associates.

Helmy drafted a memorandum, "Strictly Private and Confidential," regarding "Brazil," on September 2, 1986, under which da Costa and a second prominent Brazilian would each own 50 percent of a Brazilian company that would buy 12,622,500 voting ordinary shares in BCCI Brazil, pledge those shares to BCCI, give BCCI the right to vote its shares, and give BCCI the right to buy those shares. Da Costa would agree to serve on the three man board of directors as BCCI's front-man, to guarantee BCCI control of the bank. He would 'pay' $1,233,580 for his 'share' of BCCI Brazil's stock, and BCCI would reimburse him that amount in New York. The internal BCCI memorandum drafted by Helmy makes explicit the fact that these arrangements were designed to deceive Brazilian authorities:

It must be emphasized that the Brazilian economy and bureaucracy are highly sophisticated. As such any payments made by Brazilians must have the appropriate ORIGINATION OF FUNDS. That is, the Brazilian 'investors' must have the necessary net worth for Brazilian taxation authorities' purposes to support any investments made. . .

Messrs. Da Costa and Leoni to ensure that the transaction is fully acceptable to the Central Bank and to ensure that there are no adverse public consequences will be purchasing their shares in cash. . .

Both Ambassador Da Costa and Mr. Leoni are reluctant to take loans from any bank to finance the transaction for Central Bank and public image purposes . . . I have negotiated, subject to BCC management approval, an interest free loan to the individuals concerned . . . to enable them to complete the transaction.(3) (emphasis in original)

The memorandum demonstrated that BCCI would provide da Costa with $2,467,160 for the purchase of his stock in BCCI Brazil, every penny the stock would cost. In a staff interview, Helmy acknowledged that da Costa was not at risk and that the transaction was a standard nominee arrangement by which BCCI circumvented local laws and that this approached had been used a numerous of times previously by BCCI. Helmy also said it was BCCI's understanding that da Costa would take care of arrangements with Brazil's central bank and other Brazilian officials to make sure that they acquiesced in the transaction as structured.(4) Thus, in essence, Helmy at BCCI and da Costa, while still Brazil's Ambassador to the United States, had with other BCCI officials and other prominent Brazilians, created a plan by which they would together make possible BCCI's purchase of a bank in Brazil to circumvent Brazilian law.

BCCI officials were ecstatic at da Costa's participation in their plan for Brazil, and his agreement to be a Senior Advisor to BCCI. On October 28, 1986, while da Costa was still Brazil's Ambassador to the United States, the head of BCCI's Miami office, S. M. Shafi, sent him a congratulatory telex at the Embassy:

congratulations from myself and my colleagues on your joing [sic] our Brazilian project. We welcome you to the fold BCC family. I am very certain your experience, qualifications and contacts not only in Brazil but also internationally will go a long way in turning our subsidiary in Brazil into one of the most successful units of BCCI.(5)

Da Costa signed a three-year consultancy agreement with BCCI on November 3, 1986, under which he committed to acting as "Director of [BCCI's] investment bank in Brazil," and a front-man for BCCI there.(6) Da Costa then followed through in participating in the plan developed by Helmy under which BCCI would secretly purchase a majority interest in BCCI Brazil through nominees. He received his 'loans,' from BCCI, and purchased his 'stock' in the Brazilian bank. BCCI duly reported its loans to him on its books in Panama, characterized as "International Loans," as if they were normal loans that BCCI anticipated would be repaid. By April 30, 1988, da Costa's 'loans,' from BCCI amounted to $1,563,723.85. In fact, da Costa did not pay interest or principal on the loans, which were shams to mask BCCI's ownership of the 'da Costa' shares of the bank.

Among themselves, BCCI officials were also pleased about another aspect of being connected to da Costa. As he entered his agreement with BCCI to circumvent Brazilian banking laws, he had told them that he was also joining Kissinger Associates. A BCCI telex that circulated in New York and London in early December, 1986 described da Costa's principal work to now be as a partner in Kissinger Associates, with BCCI understanding the Coudert Brothers work, by comparison, as merely a consultancy.

Da Costa and Kissinger Associates In September, 1986, while da Costa was negotiating the terms of his consultancy with BCCI, he also reached out to determine if he could reach a similar relationship with Henry Kissinger. In early September, he sent Kissinger a copy of a biography he had written, "Every Inch a King," concerning Brazilian emperor Dom Pedro I.

In November, 1986, da Costa and Kissinger concluded their discussions concerning the services da Costa would provide Kissinger Associates. Letters between da Costa and Kissinger, dated November 3, 1986, set forth the terms of their agreement, under which da Costa would be paid $40,000 a year as a consultant to Kissinger Associates, plus a 10 percent to 20 percent fee for putting together transactions for Kissinger Associates. The letters show that Kissinger sought an agreement from da Costa that he would work only for Kissinger Associates and for Coudert Brothers, and that da Costa told Kissinger in return that he would also be working for BCCI, as he and Kissinger had previously discussed. As da Costa wrote Kissinger:

From our brief conversation, I gathered that you had in mind, basically, the Brazilian "market", i.e. you would expect me to channel through Kissinger Associates whatever Brazil-related project is secured by me. . . What concerns me is the case of companies that have already indicated their firm intention of retaining my services as consultant under a permanent retainer agreement soon after November 1st . . . There is particularly the case of B.C.C.I., mentioned to you when we first discussed our association. They not only wish to retain me as a permanent consultant, but insist that I become member of the Board and shareholder of their Brazilian operation, obviously seeking to benefit from my standing in the country. . . In short, since we are both acting in good faith and are reasonable men, I cannot even visualize a possibility of discomfort in our business relationship. I am convinced that a simple reflection in a side letter like this would be far better than any attempt at spelling out a paragraph on the exact meaning of "exclusivity."(7)

Kissinger accepted da Costa's simultaneous involvement in acting as a consultant to Kissinger Associates and BCCI, and da Costa signed up for a two-year commitment.

On December 8, 1986, da Costa received the first of a series of payments of $12,500 a month from BCCI Grand Caymans to his account at BCCI's agency in New York for his consultancy to BCCI. In the same period, he received the first of a series of payments from Kissinger Associates of $10,000 a quarter.

Beginning in early 1987, da Costa began to act as a business agent for Kissinger Associates in Brazil on projects involving purchases of companies, plants, or assets in Brazil by foreign companies. During 1987, he made several trips to Brazil on behalf of Kissinger Associates, and attended in the summer of 1987 what he described in a letter to Kissinger Associates as "that amusing luncheon with the BNL crowd," referring to a meeting with people involved in the Banco Nationale del Lavaro, an Italian bank from whom Kissinger was a consultant, and which has recently been under investigation by the House Committee on Banking, Finance and Urban Affairs for its role in the illegal arming of Iraq using U.S. commodity credits.(8)

Da Costa, Kissinger and Ghaith Pharaon On September 20, 1987, da Costa wrote Kissinger to invite him to a party hosted by BCCI front-man Ghaith Pharaon, suggesting that Kissinger might want to obtain Pharaon as a client for Kissinger Associates:

I was asked to convey an invitation of Dr. Gaith Pharaon to a dinner at his plantation at Richmond Hill, Georgia, Saturday October 31st.

Although with residences in Paris and in Saudi Arabia, his real "home" seems to be the River Oaks Plantation, which once belonged to Henry Ford. His main local asset was the National Bank of Georgia, which he recently agreed to sell to First American Bankshare Inc of Washington DC for some $230 million. I believe that the latter bank is owned by the main shareholders of BCCI, of which Pharaon was or still is a shareholder . . .

As [Pharaon] admires you intensely and has a wide range of business interests in the US, I have thought of him for some time as a potential client. Hence my acquiescence to forward the invitation.(9)

In October, 1987, while da Costa was seeking to put together an acquisition of a plant in Brazil involving the New York firm of Kohlberg Kravis Roberts & Co., ("KKR") on behalf of Kissinger Associates, he wrote Lawrence Eagleburger and Alan Stoga, again referencing his invitation to Kissinger to attend the Pharaon dinner with da Costa.(10) However, Kissinger declined the invitation.

Da Costa Introduces BCCI to Kissinger Associates On May 28, 1987, da Costa decided to introduce BCCI acquisitions officer Abol Helmy, who had crafted BCCI's purchase of the bank in Brazil, and da Costa's participation as a BCCI front man, to Kissinger Associates partner Alan Stoga. A chronology provided the Subcommittee by Kissinger Associates' attorneys, and apparently prepared by Stoga in November, 1991, describes the meeting as follows:

Da Costa introduces Abol Helmy to Stoga without any specific purpose. Helmy is described as responsible for BCCI's acquisitions in Latin America.(11)

According to the Stoga chronology, on June 10, 1987, Stoga met Helmy again to discuss the possibility of a relationship between Kissinger Associates and BCCI. According to the Stoga chronology, no specifics of the relationship were discussed.(12)

On August 26, 1987, Pakistan's former Ambassador to the United States, Sultan M. Khan, who now worked at BCCI's representative office in Washington, D.C., wrote Kissinger, on BCCI stationery, to invite Kissinger to attend a dinner he and BCCI were hosting, honoring the leader of the Chinese delegation to the annual International Monetary Fund dinner. Although Khan had worked closely with Kissinger when he was U.S. Secretary of State and Khan was Pakistan's foreign minister, Kissinger declined the invitation.(13)

The Stoga chronology shows no further meetings between Stoga and Helmy until September, 1988. However, Helmy told Subcommittee staff that he had a series of meetings in this period with Stoga regarding possible links between BCCI and Kissinger Associates. Moreover, a November 2, 1988 letter on Kissinger Associates letterhead from Stoga to da Costa states, "I have been in regular contact with Abol Helmy for more than two years and, during that time, we have discussed the possibility of a consulting relationship [by Kissinger Associates for BCCI] several times."(14)

Helmy and Stoga's Attempts to Develop

Business Between Kissinger Associates and BCCI Helmy viewed his meetings with Stoga as a means to engage in business development for BCCI, and believed that Stoga also believed that it could be to both of their benefits within their respective organizations to provide one another with business.(15)

This process moved forward slowly, and it was not until October 7, 1988 that Stoga sent Helmy and BCCI written material from Kissinger Associates describing the nature of their business and the possible benefits to both organizations of a relationship. As Stoga wrote Helmy:

I enjoyed lunch yesterday and, even more, your suggestion that BCCI might be interested in developing a relationship with Kissinger Associates.

As you suggested, I am enclosing a brief explanation of our firm and biographical sketches of our principals. I am not sure the former really does us justice, but I am reluctant to be more specific, at least on paper, about the kinds of consulting projects we undertake for clients. . .

I agree that a next step should be for me to meet your [BCCI's] management in London or in New York.(16)

The materials enclosed by Helmy, and retrieved later by Subcommittee staff at BCCI's offices in New York, consisted of a six paragraph summary of Kissinger Associates approach to its business, and a two page biographical summary of its partners' credentials. According to the summary:

Kissinger Associates' purpose is to utilize the diverse backgrounds, experiences, contacts, and relationships of its senior personnel to assist client companies in sorting through and coming to terms with the increasingly complicated international environment. . . The firm does not provide detailed written materials to clients, in large part to assure the confidentiality and the frankness of communications.(17) (emphasis in original)

Less than one week later, BCCI was indicted in Tampa, prompting an immediate memorandum from Helmy to Swaleh Naqvi, then BCCI's chief:

Further to our recent conversation in London, I met with Mr. Alan Stoga who is one of the 3 partners of Kissinger Associates, Inc. Subsequently, the developments in the United States took place. Judging by the high level of adverse publicity that is being generated by the media, it is imperative that a firm response be made.

I received a call today from Mr. Stoga who informed me that Dr. Kissinger recommends that a public relations offensive be made by us and in that context has suggested using Burson-Marstellar, a highly reputable public relations firm that successfully dealt with 1st Chicago crises last year. Kissinger Associates, Inc. have indicated that they shall be happy to use their personal contacts with the firm and make the necessary recommendations. I shall, of course, not proceed in any way without explicit instructions from you.(18)

The next day, Helmy sent another memorandum to Naqvi, enclosing the materials he had received from Stoga concerning Kissinger Associates and advising Naqvi that he would meet with Stoga on October 14. Helmy and Naqvi then discussed the overture to Kissinger Associates by telephone, evidently to discuss the qualms that Kissinger Associates might have to working with BCCI now that it had been indicted. Following Helmy and Stoga's next meeting, Helmy reported back to BCCI London as follows:

I just met with Mr. Alan Stoga, Dr. Kissinger's partner, and discussed the relevant matters as per our phone conversation of yesterday.

I emphasized to Mr. Stoga that our conversations in getting our two respective organizations together have been going on for over a year and hence, have not been generated as result of the present circumstances.

I feel that a relationship could be established in the near future depending on how fast the present publicity ends.

I shall keep you duly informed of my next meeting with Dr. Kissinger himself which should be sometime next week.(19)

The correspondence makes clear Helmy's desire to secure this important relationship for BCCI as a means of helping BCCI reduce its current problems in the United States, and as a means for Helmy himself to increase his power within the BCCI organization.

While Helmy pursued the relationship from his office at BCCI New York, da Costa in the meantime also tried to push a relationship forward. Kissinger Associates had decided to end his consultancy in September as a consequence of his not having developed enough business in Brazil to justify his $40,000 a year stipend, and sent da Costa a letter to that effect which he evidently did not receive. In the meantime, Helmy had contacted da Costa to seek da Costa's assistance in reassuring Kissinger Associates that BCCI was truly an ethical institution.

On October 25, 1988, da Costa wrote Eagleburger and Stoga to remind them that the discussions to link the two organizations went back many months and were not prompted by the indictments:

On two or three different occasions last year and early this year, I suggested to BCCI to seek the assistance of K.A. [Kissinger Associates] to obtain their assessments worldwide and particularly regarding the Untied States. The suggestion was well received and matter virtually cleared six months ago. However, the situation created by the serious heart condition which stroke [sic] BCCI's president and founding father delayed the implementation until September 29th when I was asked to a meeting in London.

During the meeting, a few questions were put to me as to the type of work that KA did normally for their clients and the Deputy Chairman [Naqvi] indicated that instructions would be promptly sent to Mr. Abol Helmy in new York to approach KA and negotiate a contract.

That was Thursday September 29th. Thirteen days later, October 12th., the blow of the accusation for money-laundering, of which the bank expects to be entirely cleared, having offered the fullest cooperation with the investigators.

Mr. Abol Helmy has already contacted Alan Stoga last week and asked me to refer to the early conversations held at the bank about my recommendation, not to appear that he is seeking support in a moment of distress. . .

Perhaps you could start talking to Mr. Helmy in the clear understanding that a contract would be signed only after you had the opportunity to ascertain - to your satisfaction - that the procedures adopted by the bank to defend itself from the allegations are adequate enough.(20)

In response, Stoga wrote da Costa November 2, 1988. The letter from Stoga to da Costa was not to advise him that Kissinger Associates was sufficiently concerned about BCCI's drug money laundering indictments to preclude a relationship. The letter instead politely advised da Costa that as far as Stoga was concerned, the prospective relationship was Stoga's, not da Costa's, and that da Costa was not welcome to participate in further discussions between BCCI and Kissinger Associates. As Stoga wrote da Costa:

Thank you for your fax regarding BCC. After your kind introduction, I have been in regular contact with Abol Helmy for more than two years and, during that time, we have discussed the possibility of a consulting relationship several times. Abol raised this issue again in September saying that he was urging Mr. Naqvi to consider hiring us. Helmy did not mention your involvement during any of these discussions and said he, too, was surprised by your fax.

I am not sure how we will proceed with respect to BCC, but I will remain directly in contact with Abol.(21)

Da Costa acknowledged Stoga's position and had no further involvement with Kissinger Associates until December, when he wrote to remind the firm that he had not received his quarterly stipend, and was told that his consultancy was at an end, other than on a case-by-case basis should da Costa generate transactions for Kissinger Associates. Da Costa replied with a fax transmission to Kissinger, thanking him for being welcomed to Kissinger Associates "at that precise moment when I was leaving a life-long protected life to explore on my own the other side of the fence," and promising to do his best to generate more business in Brazil on a case-by-case basis in the future.(22)

Kissinger Associates Says No to BCCI, Provides Legal Referral Kissinger Associates determined to take its time in considering the risks and benefits of any relationship with BCCI, with Kissinger himself apparently taking the view throughout that the relationship was not worth having, while Stoga sought to continue to explore it.

The chronology provided the Subcommittee by Kissinger Associates states that Stoga telephoned Helmy in December to advise him that Kissinger Associates would not be interested in any relationship with BCCI, but that Helmy requested another meeting with Stoga "after holidays to discuss."(23)

BCCI files tell a different story. According to a December 19, 1988 memorandum from Helmy to Naqvi, he continued to be in communication with Stoga about the proposed relationship, and continued to anticipate that they would work something out despite the drug money laundering indictment:

I am in communication with Mr. Alan Stoga, Partner of Kissinger Associates, Inc. Their response was they are interested in principal but would like to wait a bit longer. I will be meeting Mr. Stoga in the first week of January, 1989 and will be discussing the issue further. It would be of interest for you to know that Mr. Scowcroft is now the National Security Advisor Designate in the Bush Administration and another Partner of Kissinger Associates is being tapped for Assistant Secretary of State in the Bush Administration. I shall keep you informed of my next meeting. You may agree that this association with Kissinger Associates, Inc. needs time to be cultivated. I am working in that direction.(24)

Evidence of what Helmy was referring to is a proposal which Kissinger Associates found in its files from Helmy to Stoga, dated January 9, 1989.

The proposal refers to a California bank known by Stoga to be available for a price of $76 million, a price which he estimated was less than 10 times the bank's expected earnings. The bank was for sale, and if Kissinger Associates could find a buyer, there was an opportunity for everyone to make money. Helmy provided Stoga with a 17 page outline for the proposal transaction, and asked him to consider it.

The proposal revealed that the bank involved was the Independence Bank of Encino, held by BCCI shareholder and front-man Ghaith Pharaon.

There is no record that Helmy advised Stoga or Kissinger Associates of what he also knew about Independence Bank -- that the bank was secretly owned by BCCI, in arrangements similar to the nominee arrangements Helmy had personally crafted for da Costa in Brazil. Helmy himself may not have known Independence Bank's other secret -- that at the time, it was already in the deep financial trouble that three years later lead to a $150 million bailout of Independence Bank, with funds lent by the U.S. Treasury, of the Bank Insurance Fund.

At about this time, in January, 1989, according to the Stoga chronology, Stoga again met with Helmy to repeat that Kissinger Associates would not proceed with a relationship with BCCI. The Stoga chronology states that Helmy said he understood that the time was not right and he hoped if circumstances changed, the firm would reconsider.

The Stoga chronology is again contradicted by BCCI files. A memorandum written January 11, 1989 from Helmy to Naqvi, found in BCCI's Kissinger Associate files in New York, presents an entirely different picture of the relationship at this stage:

I had a lunch meeting with the gentleman in January 5, 1989 and a follow up telephone conversation on January 10, 1989. It was established that it is in our interest for both parties to continue with the conversations. As such, the door for an eventual relationship remains open.

They were far more knowledgeable of the details of our situation during this meeting and made certain "unofficial" general recommendations which I shall convey to you at our next meeting. I am meeting my contacts senior partner by the end of January with a view of discussing our overall worldwide activities.(25)

In staff interviews, Helmy later confirmed that the memorandum referred to Stoga and to the "senior partner" to an intended meeting with Kissinger.

There are four possible explanations of the difference between Helmy's understanding and the Kissinger Associates chronology.

First, Helmy could have been wilfully misleading his superiors at BCCI about the relationship, although it is hard to understand why he would do this, persistently, for months, unless he had in fact received some encouragement from Stoga. Moreover, Stoga had in fact continued to meet month after month with Helmy.

Second, Helmy could have misunderstood what Stoga was telling him. Again, this would fail to explain why Stoga continued meeting with him to discuss these matters.

Third, Stoga could himself have been trying to keep the door open, despite instructions from Kissinger to the contrary. There is some evidence for this from the various memoranda, including Stoga's later representations as to what happened. It would be plausible that Stoga as the most junior member of the partnership would at the time have had a greater need than Kissinger himself to take advantage of BCCI's 73 nation financial network and reported $23 billion in assets to generate new business,

Finally, Kissinger Associates as an organization might at the time have been seeking to keep its options open concerning a possible relationship with BCCI, and rewritten history once BCCI had become notorious. The documents provided do not either preclude such a possibility, or prove it.

It is impossible to make a definitive judgment on this issue because of the remarkable absence of any contemporaneous documents concerning Kissinger Associates' rejection of the relationship with BCCI, at least among the documents provided the Subcommittee by Kissinger Associates. While Kissinger Associates did provide the Subcommittee with Stoga's November, 1991 reconstruction of what took place, for better or worse, the only contemporaneous documents available to the Subcommittee concerning this issue were those created by Helmy while he was at BCCI.

However, there is no evidence from any source that Helmy ever met with Kissinger, as Helmy had implied he would do in two of his memoranda to Naqvi. Moreover, there is no evidence that Stoga took any action to follow up on Helmy's business suggestions.

It is not contested, however, that Kissinger Associates did make "certain 'unofficial' general recommendations" to BCCI, just as Helmy's January 11, 1989 memorandum stated.

The Stoga chronology shows that Stoga did stay in contact with Helmy through January, 1989. The chronology states that Helmy asked to meet with Stoga, and did so on January 25, 1989, when Helmy told Stoga that he was now in charge of the Tampa legal case, and would appreciate Stoga recommending new lawyers for BCCI in Washington.

As Helmy later explained, he, among others at BCCI, felt that Clark Clifford and Robert Altman had their own agenda and own problems, and were not ideally situated to manage the overall handling of the Tampa case. He had received authority to try to go around Clifford and Altman, and was using the best contacts he had to develop an alternative.(26)

According to the Stoga chronology, Stoga reported the request for assistance to Kissinger, and after consulting with Kissinger, told Helmy he could recommend William Rogers and a team of lawyers at Arnold and Porter, which Kissinger Associates had long used to handle legal matters pertaining to the firm and its principals. According to the Stoga chronology, this was "without reference to HAK," that is, Henry Kissinger. At the time, Rogers was also on the Board of Directors of Kissinger Associates.(27)

Referral to William Rogers and Arnold and Porter BCCI's records in New York first alerted the Subcommittee to the possibility that BCCI had been represented by Arnold & Porter and former Assistant Secretary of State William D. Rogers. An undated document maintained in the Kissinger Associates file at BCCI listed as BCCI's team of representatives:

FIRM: ARNOLD & PORTER

1. Mr. William D. Rogers

(Formerly Assistant Secretary of State)

2. Mr. Jerry Hawke

(Formerly General Counsel Federal Reserve Board)

3. Mr. Irv Nathan

(Formerly Deputy Attorney General of the US)

FIRM: Kissinger Associates

1. Dr. Henry Kissinger

2. General Scowcroft

(Presently: National Security Counsel Chief)

3. Mr Eagleburger

(Presently: Assistant Secretary of State (Designate)

4. Mr. Alan Stoga(28)

The listing of the present and former government titles of the "team" BCCI was seeking to assemble gives a clue as to BCCI's intentions. Consistent with BCCI's historic approach to responding to its problems, it was seeking to retain people as close to the heart of the U.S. government as it could find to fix its problems, and in its view, this appropriately included people who worked for the Justice Department, State Department, and Federal Reserve.

In fact, while Kissinger Associates did not perform any services for BCCI apart from its referral of Arnold & Porter, Arnold & Porter did agree to represent BCCI, although that representation never developed into any substantial activity on the part of the firm. According to BCCI officers Abol Helmy and Abdur Sakhia, the principal reason the representation did not ultimately take hold was that Clifford and Altman did not want BCCI to develop any independent representation in Washington, and squelched the Arnold & Porter representation. As Sakhia recollected, in the period after BCCI's indictment:

We had a longish meeting about Kissinger representing us. I came in late in the meeting, and the upshot of it was they referred him to William Rogers. Then Rogers met with Naqvi and Abedi, but Clifford did not want Rogers involved.(29)

As Rogers described the representation:

Our relationship with BCCI consisted of about 10 meetings and telephone calls with BCCI people, one meeting with Messrs. Clifford and Altman and related office work. The purpose of the discussions was to explore legal services that Arnold & Porter might render BCCI. We geared up to provide services with background reading and the like. But we did not communicate on behalf of BCCI with any public official in connection with any BCCI matter, either orally or in writing. We made no appearances on behalf of BCCI in any judicial proceedings or in any administrative matter. We did not lobby on behalf of BCCI. And we did not communicate with any Senator, Representative or Hill staff.(30)

In all, four Arnold & Porter partners worked on BCCI matters between June 12, 1989, the date Arnold & Porter agreed to "provide legal advice from time to time to BCCI and its affiliates as and when requested to do so by BCCI," and January, 1990, including the three referred to in the BCCI memorandum concerning Arnold & Porter and Kissinger Associates. The firm did about $16,000 in legal work for BCCI in all, a fraction compared with the $20 million BCCI paid the various attorneys whose services were managed on BCCI's behalf by Clifford and Altman.(31)

Further Contacts Between Stoga and Helmy During the spring of 1989, Abol Helmy, frustrated in his attempts to wrest control of BCCI's legal strategy in the U.S. from Clifford and Altman, and BCCI's unwillingness to take advantage of the Arnold & Porter representation he had arranged, decided to leave BCCI and form his own company, Equicap.

During this period, Helmy had several meetings with Stoga which the Kissinger Associates chronology characterized as "social." Helmy also provided Stoga with copies of detailed proposals he was working on for a Brazilian investment fund, which appears to be a suggestion to Stoga that Stoga help him solicit possible investors for the fund.

Response to Press and Congressional Inquiries In November 1991, after BCCI's global closure, Kissinger Associates began to receive queries from the press concerning its contacts with BCCI. In response to those queries, Kissinger asked Stoga to reconstruct his contacts with BCCI. Stoga reviewed the documents concerning BCCI contained at Kissinger Associates files that were later provided the Subcommittee, and prepared a memorandum to Kissinger on November 11, 1991 that described the contacts as follows:

The most titillating passage in Helmy's memos claim I passed along a recommendation from you about a public relations offensive involving Burson Marstellar which we would help facilitate. Another memo implies that he met you. And another says that we had been discussing a client relationship for over a year.

To the best of my collection, I did not talk to Helmy about Burson (which had not been a client for almost two years at that point), in particular, or about public relations in general. The only "advice" I do recall giving is telling him in an aside that, based on what I read in the papers, BCCI would be lucky to survive as a bank in the U.S. unless there was a thorough house cleaning. And, of course, when Helmy in February, 1989, asked for the name of a good lawyer, we referred him to Bill [Rogers].

With regard to meeting you, as you know, there is no reference on your calendars, you have no recollection, and da Costa says it did not happen. Additionally, I asked Helmy (with whom I developed a social relationship after he left BCCI) and he says he did not meet with you.

Finally, I remember that Helmy said when he approached us in September, 1988 that after meeting me a year earlier he had begun thinking about proposing a relationship. He was concerned that we would think his 1988 overture was a product of the indictment, but insisted that it was not. At the same time da Costa -- whose contract had not been renewed -- sent us a memo which said he had been having conversations with BCCI about a relationship with us for some time. If so, he did not tell us about them until the moment it looked like a contract might be in the offing. Then da Costa tried to prove he would deserve a fee.(32)

Stoga offers no explanation in the memorandum to Kissinger as to how Helmy could have set forth the supposed recommendation to BCCI of Burson Marstellar from Stoga and Kissinger himself if Stoga had said nothing concerning the firm. But it seems less than likely that Helmy would as a matter of sheer coincidence fabricate the supposed recommendation by Stoga and Kissinger of a firm who had indeed been a client. An alternative theory might be simply that Stoga did make the recommendation, represented it as Kissinger's, and failed to recollect it three years later. A third possibility is that Stoga chose not to remember the recommendation, or whether it actually came from Kissinger himself, given its "titillating" quality.

Helmy was by his own account distraught to find out that his overtures to Stoga and Kissinger Associates were about to become public. As he later told Subcommittee staff, he had sought to nurture his relationship with Stoga before while he was at BCCI and since he had left, considered him a personal friend, and feared the exposure would damage a relationship of some personal importance to Helmy. Helmy understood that exposure of the BCCI-Kissinger Associates letters could potentially injure Stoga's standing with Kissinger himself, and wished to help Stoga out of a situation which Helmy felt Helmy had created. Accordingly, after talking with Stoga, Helmy drafted a letter, dated November 13, 1991, to describe his current view of what had taken place.

In the letter, Helmy wrote Stoga as follows:

Obviously both you and I are distressed by the recent articles in The Boston Globe and the New York Times which discuss my 1988 recommendation to BCC that I retain the services of Kissinger Associates after BCCI was indicted in Tampa, Florida.

I am, of course, surprised that a recommendation that BCCI retain the services of an organization enjoying the fine reputation held by Kissinger Associates warrants publicity, but I suppose that in the current milieu this kind of thing makes the news too. . .

On the merits, while we were discussing the possibility of BCCI's retention of Kissinger Associates, the fact is that you never told me or led me to believe that Dr. Kissinger himself actually made any recommendation. Only my enthusiasm to encourage Mr. Naqvi and BCC inadvertently resulted in my memorandum suggesting otherwise. Also, as you told The New York Times, and to the best of my knowledge, Kissinger Associates was never actually retained by BCCI in any kind of professional, advisory, or any other relationship. . .

Since no good deed goes unpunished, my efforts to assist BCCI in gaining the valuable services of Kissinger Associates, seem, now, to have caused both Kissinger Associates and myself a degree of harm for which I apologize to you and your organization.(33)

Thus, Helmy sought to make clear that Henry Kissinger himself had never to Helmy's knowledge been involved in his attempts to link the two organizations. His letter did not refer to the one thing that definitely happened during the course of his discussions with Stoga -- the initially successful referral of BCCI to William D. Rogers and Arnold & Porter.

Conclusion The solicitation by BCCI of a relationship with Kissinger Associates was largely based on personal contacts. It began with overtures by Ambassador da Costa, a man Kissinger knew was simultaneously a consultant to Kissinger Associates and to BCCI. The solicitation then developed through the burgeoning personal relationship between BCCI officer Helmy and Kissinger Associates partner Stoga.

Although Henry Kissinger was never himself especially interested in this potential client, BCCI become aggressively interested in Kissinger Associates because of its political connections, at a time when BCCI was struggling for survival.

Following the Tampa indictments, Kissinger himself recognized the potential risk to the reputation of his firm should it perform services for BCCI, and by December or January instructed Stoga to advise BCCI that no relationship was possible. Unable to respond to Helmy's overtures directly, Stoga, with Kissinger's participation, eventually agreed to pass BCCI on to William Rogers at Arnold & Porter as a means of helping Helmy and BCCI, while protecting Kissinger Associates.

The result was that through the Kissinger Associates connection, BCCI retained lawyers who had previously represented the Justice Department, State Department, and Federal Reserve, agencies of some relevance to BCCI's predicament. That relationship failed to develop not because of any lack of willingness by Arnold & Porter or Helmy at BCCI, but as the direct result of Clifford and Altman's need to maintain control over BCCI's affairs in the United States.

This story highlights once again BCCI's consistent strategy of responding to problems through reaching out to prominent political figures and retired government officials in hopes that it could use political influence to solve its problems. The failure of this strategy was a reflection of BCCI's own naivete about how to do business in the United States, the care which Kissinger himself took to protect his own reputation in dealing with clients, and Clifford and Altman's role of primacy in BCCI's U.S. affairs. BCCI's ability to get its foot in the door at such politically well-connected institutions, does, however, raise questions about the general vulnerability of such politically well-connected firms to providing services that advance the secret agendas of other clients who may be less notorious than, but equally noxious as, BCCI.

1. Letter, Lloyd N. Cutler to Senator Kerry, January 30, 1992.

2. Memorandum/telex, Sakhia to Siddiki, May 6, 1986, Senate document.

3. BCCI internal memorandum, Helmy to Ameer Saddiki, September 2, 1986, Senate document 000653.

4. Staff interview, Abol Helmy, January 12, 1992.

5. Telex, Shafi to da Costa, October 28, 1986, BCCI Senate Document 000645.

6. BCCI Luxembourg Letter of Appointment, Ameer H. Siddiki to Ambassador Correa da Costa, October 28, 1986, Senate document.

7. Letter, November 3, 1987, da Costa to Kissinger.

8. Letter, Sergio Correa da Costa to Chris Vicks, Kissinger Associates, August 13, 1987.

9. Letter, Da Costa to Kissinger, September 20, 1987.

10. Da Costa Memorandum to L. Eagleburger and A. Stoga Re: Kohlberg Kravis Robert & Co -- KKR; October 6, 1987.

11. BCCI Chronology, January 30, 1992, provided to Subcommittee by attorneys for Kissinger Associates.

12. Id.

13. Letter, Khan to Kissinger, August 26, 1987.

14. Letter, Stoga to da Costa, November 2, 1988.

15. Helmy staff interview, January 12, 1992.

16. Letter, Stoga to Helmy, October 7, 1988.

17. Attachment, KISSINGER ASSOCIATES, INC., to Stoga letter to Helmy, October 7, 1988.

18. Letter, BCCI New York, from Abol Fazl Helmy to Swaleh Naqvi, October 12, 1988.

19. Memorandum, BCCI New York, Helmy to Naqvi, October 14, 1988.

20. Memorandum, Sergio Correa da Costa, to Kissinger Associates, October 25, 1988, Ref. BCCI as client of KA, Attention: Mr. L. Eagleburger, Mr. Alan Stoga.

21. Letter, Stoga to da Costa, November 2, 1988.

22. Letters, Cunningham to da Costa, December 12, 1988; da Costa to Kissinger, December 13, 1988.

23. BCCI Chronology, provided to Subcommittee by Kissinger Associates.

24. Letter, BCCI New York, Helmy to Naqvi, December 19, 1991.

25. Memorandum, BCCI New York, Helmy to Naqvi, January 11, 1989.

26. Helmy staff interview, January 12, 1992.

27. BCCI Chronology provided by Kissinger Associates to Subcommittee.

28. BCCI Document in Kissinger Associates file, BCCI New York.

29. Staff interview, Abdur Sakhia, October, 1991.

30. Letter, Rogers to Winer, March 3, 1992.

31. Id and attachments.

32. Stoga to Kissinger, November 11, 1991, RE: BCCI.

33. Letter, Abol F. Helmy to Alan Stoga, November 13, 1991.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

CAPCOM

Introduction

In the entire BCCI affair, perhaps no entity is more mysterious and yet more central to BCCI's collapse and criminality than Capcom, a London and Chicago based commodities futures firm which operated between 1984 and 1988. Capcom is vital to understanding BCCI because BCCI's top management and most important Saudi shareholders were involved with the firm. Moreover, Capcom moved huge amounts of money -- billions of dollars -- which passed through the future's markets in a largely anonymous fashion.

Capcom was created by the former head of BCCI's Treasury Department, Ziauddin Ali Akbar, who capitalized it with funds from BCCI and BCCI customers. The company was staffed, primarily, by former BCCI bankers, many of whom had worked with Akbar in Oman and few of whom had any experience in the commodities markets. The major investors in the company were almost exclusively Saudi and were largely controlled by Sheik AR Khalil, the chief of Saudi intelligence. Additionally, the company employed many of the same practices as BCCI, especially the use of nominees and front companies to disguise ownership and the movement of money. Four Americans, Larry Romrell, Robert Magness, Kerry Fox and Robert Powell -- none of whom had any experience or expertise in the commodities markets -- played important and varied roles as frontmen.

While the Subcommittee has been able to piece together the history of Capcom and can point to many unusual and even criminal acts committed by the firm, it still has not been able to determine satisfactorily the reason Capcom was created and the purposes it served for the various parties connected to the BCCI scandal. It appears from the available evidence that Akbar, BCCI, and the Saudis all may have pursued different goals through Capcom, including:

-- misappropriation of BCCI assets for personal enrichment.

-- laundering billions of dollars from the Middle East to the US and other parts of the world.

-- siphoning off assets from BCCI to create a safe haven for them outside of the official BCCI empire.

Conditions At BCCI Which Spawned Capcom

By early 1985, BCCI was on the verge of financial collapse as the result of losses in the commodities markets executed by the head of the bank's Treasury Department, Mr. Z.A. Akbar.(1) Akbar, a young Pakistani and protege of Swaleh Naqvi, the bank's Chief Executive Officer, had been plucked from his job at National Bank of Oman in 1981 to manage BCCI's investments from its headquarters in London. Despite the fact that Akbar had no apparent experience in the commodities, foreign exchange or securities markets, by 1984 he was managing over $5.5 billion at BCCI Treasury.(2)

As Akbar invested heavily in the futures' markets, losses at BCCI treasury began to mount. According to Masihur Rahman, BCCI's former chief financial officer, Akbar made highly unusual investments based on unsound assumptions:

He [Akbar] was taking positions on silver and 20 year bonds, suggesting that 20 year bonds would be 7% or 6.8%, and things like that,, which anybody who understands treasury knows how deeply discounted it would be if you project that sort of thing for 20 years. And he was taking those sorts of positions for a premium.(3)

As the losses increased to staggering levels, Akbar created a maze of artificial accounting. According to a 1991 Price Waterhouse report, Akbar split the department's functions into normal Treasury activities and 'Number Two' account activities" . . . outside the scope of external audit . . . in the name of private clients but for [BCCI]. . ."(4) The report explained that the "Number Two" accounts derived from :

"misappropriation of external funds deposited under trust with [BCCI] to be managed on behalf of a few prominent people who are also shareholders of Holdings, and maintaining a pool of funds in the private named accounts of A. R. Khalil which were used freely by Z. Akbar to fund adjustments. . ."(5)

In other words, Akbar inflated BCCI Treasury profits through the use of unrecorded deposits in the accounts of important BCCI "customers", such as Khalil.

By 1985, Akbar's treasury department had accumulated losses approaching $1 billion, leading to a near collapse of the bank.(6) Akbar and, presumably Naqvi, recognized that the off-balance sheet accounting in the "Number Two" accounts could no longer adequately hide the massive losses. Accordingly, "out-of-book" or unrecorded deposits were moved "out-of-bank" to a new financial entity -- Capcom Financial Services, Ltd.

At Capcom, Akbar and Naqvi reasoned, the phony BCCI accounts could be further disguised and placed beyond the reach of bank auditors. In short, Capcom afforded BCCI a wider scope of options for the manipulation of accounts, the continuation of frauds and, perhaps, a last ditch attempt at fiscal recovery.

Creation of Capcom 1984-1985 On April 26, 1984 Akbar registered an obscure company named Hourcharm, Ltd, at his home address in London. On May 22, 1984, Hourcharm was renamed Capital Commodity Dealers, Ltd., and then in July, Capcom Financial Services. Capcom was funded with a capital of 1 million which during the first year was augmented to 10,00,000 pounds and then increased to 25,000,000 pounds (approximately $37,000,000).

Capcom commenced trading in London on September 17, 1984. According to the June 22, 1991 Price Waterhouse Report to the Bank of England, "Capcom ... rapidly became one of the most significant of the brokers used by Treasury [BCCI]."(7) Indeed, within the first year customer accounts bulged to over 100,000,000 (approximately $160,000,000), inordinately large sums for a fledgling commodities brokerage company.(8) According to Masihur Rahman, "Capcom was given an official credit line" by BCCI.(9)

A 1991 documentary on BCCI, produced in London, featured Jehangir Masud, a former employee of the Abu Dhabi Investment Authority, and Shahid Suleri, a former BCCI employee, commenting on the connections between Capcom and BCCI. Masud claimed, "the [BCCI] Treasury put huge volumes of business through generating large brokerage fees for Capcom." Suleri recounted that Capcom allocated profits to their own account, losses to BCCI, using BCCI funds as margin deposits.(10) In testimony to the Subcommittee, Rahman concurred, noting that "many of the transactions that the bank was doing [were] being routed through Capcom, who obviously was scaling out the differentials ....and passing on the heavy losses and things to the bank."(11)

Capcom Operations

Capcom operated as a broker in the London and Chicago commodities markets. Commodities markets should be distinguished from the stock markets, which are more or less "cash markets" designed for "direct investment." As author Martin Mayer has explained, "you own what you buy and your success is a function of the success of the company in which you have purchased shares."(12) According to Mayer, futures markets, in contrast to cash markets, do not offer the investor the "commodity that underlies the activity." Mayer has written that futures investors:

"trade contracts to purchase or sell that commodity on a future date. The contract is inescapable. Those who purchase must stand ready to receive the commodity at a specified delivery point at this price on a specified date (or to buy an offsetting obligation from someone who has a contract to deliver to that point on that date, thus permitting the "clearing corporation" that serves the exchange to extinguish both contracts.) Those who sell futures contracts must stand ready to deliver the commodity to the delivery point for this price on the specified date (or buy in someone else's contract to accept delivery.) As a result future's markets are not situations where everyone can win.(13)

The commodities markets in the U.K. and the U.S. are not restricted, regulated or supervised as stringently as the banking industry or the securities markets.(14)

Moreover, the commodities markets can sustain almost limitless volume, a necessary prerequisite for crime on the scale of that contemplated by BCCI since fraudulent transactions may be hidden in a multitude of legitimate ones. In a letter to the directors, the Chairman of Capcom, Larry Romrell, reported that 165 million in trading during the first four months of operation, and profits of 883,393. That trend continued until 1988 leading Akbar to boast to agent Mazur: "We have contracted 165,000 contracts totalling $53 billion with Drexel Burnham," and later, "we have done over $90 billion total in 1988."(15)

While the number of contracts and dollar volume seems unbelievable, a commodities company can artificially create massive volume by many small or no-risk trading methods. Indeed, the volume generated by Capcom helped it to generate respectability and acceptance with reputable banks and brokers.(16) For example, listed under "Auditors and Advisers" in Capcom's 1987 Annual Report were the following major international banks: Manufacturers Hanover Trust Company, London, National Westminster Bank Plc, Manufacturers Hanover Trust Company, New York, Deutsche Westminster Bank, A.G., and National Westminster Bank, plc. Elsewhere, Capcom noted its ties to Dean Witter Reynolds, American Express Bank, Refco, Prudential Bache Trading Corp., and Sumitomo Trust and Banking, Ltd.(17) Like BCCI, Capcom attempted to buy legitimacy to assist its rapid expansion.

Capcom's expansion took it to the United States where it opened Capcom Futures in late 1984.(18) Mohammed Saghir, born in the same town in India as Abedi, and a former cohort of Akbar's at the National Bank of Oman, was brought in to run the Chicago operations. The American Board of Directors mirrored that of London with Larry Romrell serving as the Chairman.

In testimony before the Subcommittee, Wendy Gramm, the Chairperson of the Commodities Futures Trading Association (CFTC) described the relationship between Capcom US and Capcom UK:

Capcom UK and Capcom US were intertwined. Both companies had common directors and shareholders. Capcom UK owned 82% of Capcom US from May 1985 until June 30, 1987.

BCCI Pulls Out

In July, 1985 the BCCI accounts were ostensibly withdrawn from Capcom, apparently on the advice of the firm's auditors who counseled that the bank should not be engaged in the kind of speculation intrinsic to the commodities markets.(19) With all visible BCCI accounts closed, Chairman Larry Romrell observed in Capcom's annual report: "The cessation of BCCI business obviously had an impact upon our volume."(20)

However, according to the 1991 Price Waterhouse report, at the same time that BCCI withdrew from Capcom an amount of $68 million was paid by BCCI Treasury to Brenchase, Ltd, a subsidiary of Capcom, controlled by Akbar, raising the question of whether or not BCCI had really withdrawn from the firm.(21) Moreover, the Price Waterhouse report notes that, "...despite an apparent cessation of trading links with Capcom ...two payments of $50 million were made to Capcom in March, 1986 out of external funds for which no liability for repayment was recorded."(22) These and other comparable payments clearly suggest that Naqvi and Akbar continued to use Capcom to shield BCCI funds and perhaps to move money.

Moreover, as late as 1989 the client list for Capcom Futures, the US subsidiary of London-based Capcom Financial Services, consists of several apparent BCCI accounts in the names of BCCI employees controlled by Z.A. Akbar.

It is not clear why Naqvi and Akbar chose to maintain the public facade of a split between Capcom and BCCI. One possible explanation is that Naqvi and Akbar profited from BCCI losses both at BCCI treasury and later at Capcom. When Senator Kerry asked Mr. Rahman if Mr. Naqvi had profited from the BCCI losses, the former BCCI manager responded, "since only two, three people are involved ...somebody has profited a lot."(23)

Akbar and Capcom

In 1986, after the discovery of BCCI losses on cotton trading, Akbar left the BCCI Treasury to join Capcom. According to Masihur Rahman, Akbar "was released" from BCCI, taking "his company car and other benefits."(24)

Upon moving to Capcom, Akbar formed Financial Advisory Services (FAS), an introducing broker, or marketing arm for Capcom. FAS was owned by Akbar's Panamanian-registered, Liechtenstein operated nominee company, ZASK Trading and Investments, Ltd.

Akbar did not immediately become a Director of Capcom, sitting instead in the FAS offices which adjoined Capcom. Akbar explained to Mazur his reasons for not joining Capcom's Board of Directors:

when I left the bank, BCCI people, they said 'Mr. Akbar, for, for at least a couple of years you don't go and sit in the office...it doesn't look nice that you leave the bank...and establish your own company'... they said 'please keep away'...(25)

But it was Akbar, nevertheless, who directed operations at Capcom. With the freedom of singular control over a vast pool of BCCI's "out-of-book", "Number Two" Treasury funds deposited at Capcom, Akbar manipulated to enrich himself. The Subcommittee has concluded that with Akbar at the helm, Capcom engaged in blackmail, bogus loans, "bucket shop" trading, use of nominee frontmen, artificial mirror-image trades, co-mingling of funds, money-laundering, theft, skimming of accounts, and kickbacks to insiders.

For example, Akbar arranged for kickbacks to Peniel Investments, a Liechtenstein-based, Panamanian-registered company that he owned. This arrangement, and others, specified commissions that he paid to himself of between $5.00 and $12.00 per contract on business he had introduced to Capcom, specifying "BCCI Overseas" as a qualifying account. In the months during which BCCI lost $430 million at Capcom, Akbar paid himself a total kickback of 4,671,579.86 (approximately $7,000,000).(26) It is not clear whether Naqvi and anyone else at BCCI knew about or participated in these kickback schemes.

Capcom and Money Laundering

There is evidence that Capcom engaged in money laundering for a variety of clients both in the United States and in London. For example, some 50 transactions were identified in the Futures, Inc. accounts with insufficient or no supporting documentation regarding the source or disposition of funds. These transactions totalled more than $125,000,000.(27)

In testimony to the Subcommittee, Customs agent Robert Mazur testified how Akbar used "mirror-image" trading to launder huge sums of money. Mirror image trading involves buying contracts for one account while selling an equal number from another account. Since both accounts are controlled by the same individual any profit or loss is effectively netted. According to Mazur, Akbar explained that because these "mirror image" transactions can be lost among many millions of dollars worth of legitimate transactions "it would take forever for anyone to ever find it."(28)

Using mirror-image trading, Akbar bilked the BCCI Treasury accounts and laundered money for one of Capcom's most notorious clients, General Manuel Antonio Noriega.(29) Although complex, the series of transactions involving Noriega, BCCI and Capcom provide an illustration of textbook money laundering.

Capcom, BCCI and Noriega

From 1982 through 1986 Noriega opened accounts with BCCI for the "placement of secret funds of the [Panama] National Guard -- money which Noriega was using for his personal use and that of his family."(30) Despite the fact that the accounts were "no correspondence" accounts in countries with strict bank secrecy laws, Noriega was not completely free from risk in his use of the public funds because the accounts were opened in his name and with his signature.(31)

As of 1986, Noriega had placed approximately $23 million in BCCI accounts in Luxembourg and London. In July of that year, BCCI and Noriega began to shuffle these funds. On 26 July 1986, two Noriega accounts containing $8.1 million and $3 million were transferred from BCCI, Luxembourg, to the account of the Banco Nacionale de Panama at the Union Bank of Switzerland in Zurich(32) in the name of a company called [sic] "Finlay International."(33)

On this same day, other Noriega accounts at BCCI totalling $11.8 million were transferred into the accounts of Banco Nacionale de Panama at Deutsche Sudamerikanische Bank in Hamburg, Germany, also in the name of [sic] "Finlay International."(34) Thus, in a complicated set of transactions, the entire sum of Noriega's BCCI accounts was transferred to banks other than BCCI, held in accounts not opened by Noriega, and held in the name of an entity other than Noriega.

The transfers became even more convoluted over the next two years. On 8 September 1988, the entire $23 million was transferred to the Banco Nacionale de Panama account at the Middle Eastern Bank in London in the name of [sic] "Findlays."(35) This transfer served to consolidate the funds in a single account. Despite the fact that the funds were nominally held in the account of the Banco Nacionale de Panama, the accounts themselves had been opened by Noriega (who personally signed the account opening documents) and remained in his control.(36)

On 13 September 1988, the Chief of the Private and Investment Banking Division of the Nacionale Banco de Panama instructed Middle East Bank to transfer the money from its account to the account of [sic] "Finleys International Ltd."(37) This transfer thus served to remove Banco Nacionale de Panama from the transaction altogether.

From 15 September 1988 through 19 September 1988, Finley instructed Middle East Bank to disburse almost the entire balance which had been amassed in Finley's account. The letters from Finley were signed by Capcom's President, Z.A. Akbar.(38) Three of these payments totalling $20.5 million were made to Capcom and credited to the GESS and GOOD Capcom customer accounts.(39)

Another $2.6 million was paid to a coded account at the Trade Development Bank in Geneva, Switzerland.

The transfers between Finley and Capcom effectively laundered the funds originally deposited in BCCI by Noriega. The transactions constituted "mirror image" trading; in effect, the same person -- Akbar -- stood on both sides of the transaction. Akbar was the managing director of Capcom and almost certainly possessed the controlling interest in the majority of the company's shares.(40) He also was the chairman and director of Finley. Moreover, he possessed a Power of Attorney for the GESS account and his brother was a director of the company behind the GESS account.(41)

In the entire set of transfers between Capcom, Finley, and the Capcom Accounts, the funds were under Akbar's control and subject to his direction. In order to disguise the transactions, Akbar continually sought to inject other parties into the scenario and to portray the transfers as legitimate business transactions between non-identical parties.(42) However, the documents indicate that Akbar moved funds from a bank account under his control to a company of which he was the managing director and then into Capcom customer accounts under his control.(43) What appeared to be transactions between different entities were merely transfers of funds between nominally different accounts under the control of the same individual. Akbar used Capcom and its accounts to conceal the source of the funds and "transform" them into facially legitimate business capital, brokerage fees, and bank account deposits.

Capcom and Shakarchi

Capcom may also have laundered money in the so-called "Lebanese connection" case. According to the Peat, Marwick report, on February 10th, 1988, Capcom received a telex from Ahmed Tawfik giving instructions to make a payment of $150,000 to Shakarchi Trading. Shakarchi trading was a Zurich-based currency trading firm, principally involved in gold bullion trading. Reportedly, a number of wealthy Egyptians had accounts with the firm which was owned by Mohammed Shakarchi.

In February, 1989 Shakarchi was linked by U.S. and Swiss investigators to two Lebanese brothers, Jean and Barkev Magharian, who admitted that some of the two billion swiss francs they channeled into Swiss banks and trading houses between 1985 and 1988 derived from drug transactions. The Magharian brothers told investigators that $36 million the couriers brought to them in Switzerland from Los Angeles came from cocaine profits.

The case gained notoriety when Swiss Minister of Justice was forced to resign in January 1989 after admitting that she told her husband, who worked for Shakarchi, that the firm was about to be implicated in Switzerland's biggest financial scandal.

Capcom and AMBROS Yet another suspicious relationship maintained by Capcom was with a German trading company, Ambros Holdings. Approximately 44% of the Capcom U.S. client base consisted of West German individual and corporate accounts controlled by a handful of Western German companies such as "A and G management", SFS GmbH management" and "Ralf Ltd." For example, Metzler SFS controlled 37 of the accounts, or 39% of the total. The most important of the German clients was Ambros holdings which accounted for 50% to 70% of Capcom Future's gross commissions and revenues in the period September/October 1988. According to Capcom's records, the ledger balance was $40 million.

Ambros was a Panama registered company with offices in both Germany and Liechtenstein. The company's President and Secretary was Richard Sax, who traded for Ambros through Capcom Futures, and elsewhere in Chicago, under the alias of Richard Wagner.

Ambros declared bankruptcy in Germany in 1991. German prosecutors have been investigating the collapse of the firm which may have lost as much DM 500m in the commodity futures markets. According to press reports, German investigators believe that Ambros operated as a giant Ponzi scheme.(44)

Majority Shareholder of

Kamal Adham and A.R. Khalil

The June, 1991 Price Waterhouse Report noted the overlap of shareholders between BCCI and Capcom: "[Capcom's]...initial shareholders were dominated by major shareholders of [BCCI]."(45) A.R. Khalil, Minister of Communications for Saudi Arabia and Deputy Chief of Intelligence -- and a major BCCI shareholder -- was the dominant shareholder and director of Capcom from its foundation until its termination. Besides Khalil, the "Saudi Group", included, Kamal Adham, Khalil's former boss and the lead investor in the FGB takeover; J.J. Uddin, who acted as a substitute for Khalil; El Sayed E. El Jawhary, an associate of Adham and Khalil; and Robert E. Powell, an American with long-standing ties to Adham and Khalil.

Although little is known about Mr. Khalil, the Subcommittee has learned that in 1976 he became Director General of Ministry of Communications of Saudi Arabia . The Subcommittee has also obtained a brief description of Khalil's background which he provided to officials of the Federal Reserve on April 23, 1981 in connection with the proposed acquisition of Financial General Bankshares:

My career has been devoted to business and I presently hold interests in real estate, mechanical and electrical maintenance projects, and commodities. In addition, I have been involved in some business ventures with American and British manufacturers for the installation of electronic and computer equipment in Saudi Arabia.(46)

In a document entitled "A Brief Resume of the Company and Its Directors, Capital Commodities Dealers, Ltd.", Khalil is identified as a prominent Saudi Businessman, involved in real estate and construction, mainly in Saudi Arabia, U.A.E. and Oman. He is also listed as the owner or director of the following companies: Arabian Electronic Project Establishment, Global Chemical and Maintenance Systems (where Robert E. Powell was CEO), and Rockwell International, USA (where Kerry Fox worked). The resume estimated Khalil's net worth to be "US $300,000,000."

It is noteworthy that during the same years that the Chief of Saudi Intelligence, Kamal Adham, is entering the American banking industry through the purchase of First American, his successor in Saudi intelligence, Mr. Khalil, is quietly purchasing three houses in the United States with the assistance of Americans Kerry Fox and Larry Romrell -- key players in Capcom.

U.S. Connection: Romrell, Magness and Fox The investor relationships in Capcom represent the culmination of a long relationship between members of Saudi intelligence and important figures in the US communications industry. The record establishes the relationship between Khalil and the Americans, Romrell, Magness, and Fox had its genesis in the communications industry prior to the creation of Capcom.(47) First, Kerry Fox had a long relationship with Khalil through his work in the electronics business for Martin Marietta and Rockwell International with the Saudi government dating five to ten years prior to the creation of Capcom.

Second, Romrell and Magness proposed numerous ventures in communications to BCCI and Khalil in the three years prior to the formation of Capcom, 1982-1985. The proposals included the installation of state-of-the-art electronics and communications in the Saudi military command center. In October, 1982 Romrell expressed interest to Akbar in "working with the bank [BCCI] and managing any interests they may have in our area."

US Investments Proposed By Romrell/Magness

Larry Romrell has told the Subcommittee that he met Khalil in 1981. The timing of the meeting appears to have been just subsequent to Khalil's appearance at the Federal Reserve in Washington D.C. in connection with the takeover of Financial General Bankshares.(48)

After entering into a real estate venture with Khalil, Romrell moved quickly to solidify his relationship with Akbar, BCCI and Khalil. The Subcommittee has compiled a log of business proposals by Romrell for BCCI. (see Appendix I) Mr. Romrell explained the various propositions in a response to written questions from the Subcommittee:

Mr. Akbar had indicated to me that his clients or BCCI -- I always had difficulty distinguishing between Mr. Akbar's actions on behalf of his Mid-East investment client and his actions on behalf of BCCi -- might be interested in investing in the United States, principally in "bricks and mortar" office buildings. I suggested some possible investments to Mr. Akbar. I never sought or received any compensation from BCCI or Mr. Akbar for managing properties or anything else.(49)

While there is insufficient evidence to determine whether or not any of these proposals were consummated between the parties, the heavy traffic of proposals in 1983 to 1985 raises many serious questions about Romrell's and Magness' involvement with BCCI. Moreover, documents suggest that during this period BCCI credit was an important vehicle for Mr. Romrell and Mr. Magness in their personal affairs.

BCCI and TCI

Documents provided to the Subcommittee also indicate that BCCI may have been a shareholder in TCI, the largest cable company in the United States.(50) All TCI shareholders were issued WTCI stock when the latter was spun-off from TCI as a separate company. The WTCI stock was then listed independently and was publicly traded on its own. In a letter to Akbar, Romrell wrote:

"I am enclosing an Information Statement which has just become available this morning covering the distribution to the TCI shareholders of all the outstanding shares of WTCI...the stock will be distributed by today by mail along with the enclosed Information Statement to all TCI shareholders...there is a possibility that the WTCI stock price will sell for a price upwards from $8.00. I still intend to buy for our accounts at the best possible price somewhere between $2 to $4.50. If you have any comments or require any additional information, please give me a call."(51)

Six months later, Romrell wrote Akbar about an apparent agreement:

"I understand the WTCI stock will officially start trading at opening of business tomorrow, March 20. I want to confirm my understanding that I have established pursuant to my conversation with you a $100,000 credit line with which to purchase stock and, in addition, that you have authorized me to purchase stock in your behalf up to a $100,000 limit. The combined credit line would then be $200,000, except that I would reduce my credit line within 30 days from $100,000 to $85,000. If this is not your understanding or does not meet with your approval, please contact me immediately.(52)

Romrell has told the Subcommittee that, in fact, there was no agreement and no combined credit line. He acknowledged that the wording of the letter "did not sound good".(53)

Perhaps the most provocative document suggests that Romrell was seeking a $200 million credit line from BCCI for TCI:

"...the TCI finance group that they are interested in obtaining a loan facility...I asked Bob Magness...he asked me to determine whether there would be any interest ion the part of BCCI...I believe the credit facility that TCI is looking for is around $200,000,000...as a separate matter, WTCI will soon be looking for approximately $50,000,000 to construct a new microwave route...there may be an opportunity to put this deal together with BCCI if you are interested."(54)

According to TCI's lawyers, the company has never had any relationship of any kind with BCCI:

[There is] no evidence that the TCI or the Related companies had any business dealings with Capcom, BCCI, or any currently identified related entity or person... (55)

Romrell, Magness and Capcom

During the period that Romrell is passing on WTCI information to Akbar, he is also contemplating an investment in Capcom: "Magness and I have discussed your proposal to invest in a U.S. brokerage firm in Chicago or New York and to participate in the ownership and operation to the mutual benefit of BCCI and ourselves."(56) To entice the participation of Romrell and Magness in Capcom, Akbar represented to the Americans that the firm would earn a minimum of $4 million per year, and potentially as much as $10 to $15 million.(57)

Despite the fact that neither of them had any experience or expertise in the futures markets, Magness and Romrell agreed to become directors on May 27, 1984.(58) They also decided to make a financial investment in the firm. Magness, in a notarized statement dated May 12, 1992, explained to the Subcommittee:

"...I agreed to buy a 1 percent interest for approximately $15,000."(59)

"I was not offered anything for my investment beyond the [above stated 1 percent] interest in Capcom. Nor was I offered anything as an inducement to become a member of Capcom's board of directors."(60)

However, Magness and Romrell also purchased a stake in Capcom with funds provided by BCCI. In a "Note for file" written November 9, 1984, Romrell scribbled:

"Bob and I" funded our share capital and loan stock as follows: "We agreed to fund $14,744(61)

and borrow $75,000 each from BCCI London...Balance of current amount due was funded from our Credit Lines at BCCI, London."(62)

The Subcommittee has obtained documents which appear to show that, in fact there were other loans beyond those provided by BCCI. Magness and Romrell executed no-risk loans to purchase Capcom stock in a September 17, 1984 agreement with a Panamanian company secretly owned by Akbar, managed in Liechtenstein by a Dr. Franz Pucher. The company was named "Peniel Investments, Inc."(63) Akbar provided Romrell and Magness with subordinated Loan Stock in the amounts of 330,000 (approximately $450,000) for Romrell and 69,300 (approximately $90,000) for Magness.(64) A very unusual aspect of the loans is that they were self-liquidating: funds paid into Romrell's and Magness' loan accounts from profits in their "managed investment" accounts would be used to pay down the loan principal. (65) In other words, these loans resembled the standard issue BCCI no-risk loans provided to those who acted as nominees for the bank.

Another set of documents dating some months later shows additional loans to Magness and Romrell from Paten Holdings, Inc., a different Panamanian company, operated out of Geneva by Mme. Cecile Ringenberg, and again, secretly owned by Akbar. (66)

Romrell has told the Subcommittee that "at the time I understood Paten Holdings to be a Swiss bank."(67)

On May 23, 1985, the Capcom directors used Paten Holdings to increase the capital base in Capcom from L10,000,000 to L25,000,000. By increasing the capital base of the firm, Romrell's and Magness' overall holdings were also increased. Romrell, who had placed only $15,000 of his own money into the firm, found himself with holdings valued in excess of $2 million.(68)

The Loan Agreement, dated June 17, 1985, between Paten Holdings, Inc. and Romrell and Magness provides both men with 169,500 (approx. $250,000). The terms require payment no later than June 17, 1987. The collateral for the loans was the shares secured by an attached memorandum of deposit and dividends and interest were to be retained in order to reduce the outstanding balance of the loans. As Romrell explained: "...with regard to Paten Holdings, Inc...we had originally planned to reduce that loan with dividends from Capcom."(69)

Indeed two years later, in July 1987, Romrell proposed a 30 percent dividend in a letter to Khalil, Adham, and Jawhary.(70) However, upset from the events surrounding the CBOT investigation, the Saudi Group refused to allow the dividends. In order to accommodate the Americans, Akbar arranged for Romrell and Magness to enter into replacement loan agreements with Paten Holdings, Inc. The new loans were for an increased amount, 221,157.93 (approx. $330,000) and were secured by the Capcom shares. (71)

The year-end 1987 audit of Capcom in London by Arthur Anderson raised the issue of disclosure of the Paten and Peniel loans:

"All transactions with related or associated parties have, where material and appropriate for the presentation of a true and fair view...There are no agreements whereby the directors could receive benefit from dealing transactions either directly or indirectly through agency agreements...In respect of the agency agreements between Capcom Financial Services, Ltd and the following companies: a) Peniel Investments, Ltd, and b) Paten Holdings, Inc. ...In addition, we confirm that the agreements were entered into at arms length and that no director or shareholder has an interest in either agent company. The company and its subsidiaries have at no time during the period entered into any arrangement, transaction or agreement to provide credit facilities (including loans, quasi-loans, credit transactions, mutually beneficial arrangements or guarantees or security for liabilities for any directors, shadow directors, officers or their connected persons (except as permitted by the Companies Act 1985 and as disclosed in the accounts.)(72)

The Paten and Peniel loan documents show this statement by the auditors to be completely false. Either the auditors colluded with Capcom management, or more likely, they were misled as to Paten and Peniel by the management of Capcom.

Ultimately, Romrell tried to sever his connection to Paten. According to Cecile Ringenberg, an emergency meeting was called in London by Sheik Khalil. At that meeting, control of Paten passed from Romrell to Akbar. Romrell has indicated to the Subcommittee that he has never met Cecile Ringenberg, although a xerox of her calling card was provided by him to the Subcommittee.(73)

Capcom Nominees

The Subcommittee has uncovered documents which show that Romrell and Magness clearly understood that they were acting as nominees on behalf of Capcom. In a 1987 letter to Khalil, Romrell wrote:

"it was my understanding that the majority shareholders were not willing to sign these guarantees ...As far as I personally am concerned, except for my paid-up stock and notes, I have acted as nominee for one or more of the original shareholders."(74)

Five days later, Romrell reiterated this point in another letter:

"...It was my understanding at that time the majority shareholders representing yourself, Sheikh Kamal, and Mr. Jawhary...but it was the only one [plan] we could see that would retain the original shareholders through voting trusts and nominees and meet the needs of the Chicago Board of Trade. It was understood by the reorganized shareholders that they were nominees for the original shareholders. Thus, the actual beneficial ownership did not change."(75)

The reason for using American nominees by Capcom was clearly stated by Akbar in his taped conversation with undercover U.S. Customs agent Robert Mazur: "...it's better if we use some other people as our nominees, instead of showing [Capcom] as BCC subsidiary"(76) This is the identical strategy to that pursued by BCCI in its acquisition of First American Bank in Washington D.C.

Robert Powell

Robert Powell, a California businessman with interests in the Middle East, was also a director of Capcom, and, he claims, unbeknownst to him, a nominee for the company. Powell, like so many others involved in the BCCI affair, claims to feel "deceived, duped, humiliated ...etc...etc."(77)

Powell has a background in infrastructure and aircraft maintenance for the U.S. military, having provided "contract services to the United States Air Force, Military Airlift command, for the operation and maintenance of United States Air Force facilities located at Wake-Island, Mid Pacific."(78) Despite his close relationship to the U.S. military during the Vietnam War, Powell claims to have no background in, or affiliation with, military intelligence. Rather, he told Subcommittee staff that he simply follows the military "where they go."

According to Powell, in 1968 he was contacted by an assistant to Sheik Kamal Adham named Mamoud Arabe who met with him in Washington D.C. and subsequently set up meetings for him with Adham, then chief of Saudi Intelligence, and A.R. Khalil, the Deputy Chief of Saudi Intelligence, in New York. According to Powell, he believed that Adham and Khalil were simply "advisor(s)" to the King of Saudi Arabia and that during their meeting they only discussed "differences between Democratic and Residential candidates [with] a little bit of talk about the company and the services we offer."(79) Nevertheless, at some point thereafter, Powell settled in Saudi Arabia where he became the managing director for Global Chemical and Maintenance Systems, a company owned by A.R. Khalil. When Global Chemical opened an office in Oman in 1976 Powell met Z.A. Akbar who was then working at the National Bank of Oman, which was partially owned by BCCI. The next year Powell established a banking relationship for Global Chemical with BCCI, and while he lists BCCI as Global's bank in its annual report, he claims under oath that "no Global entity or myself borrowed any money from BCCI."(80)

Powell became involved with Capcom in 1984 at the suggestion of Akbar.(81) According to Powell he invested 80,000 Pounds Sterling in Capcom, money which was financed, although as of June 21, 1992, Powell was uncertain the nature or source of the financing.(82) Powell told the Subcommittee that he believed his initial investment represented the extent of his holdings. In July, 1992, however, prompted by questions from the Subcommittee, Powell contacted Capcom in London which advised him that by July 1985 he had accumulated 3,500,000 shares of stock -- 15% of the firm's holdings. Most of that stock was transferred from his account in 1987 but as of July 1992 he still owned 250,000 shares of stock. According to Powell, "When or how I became the owner of a 250,000 shares is not explained by the record nor do I have any knowledge about the activities that created this apparent paper increase." Powell wrote the Subcommittee "[I]t is obvious that the company can do anything it pleases with its shares without informing the affected parties. Is not hindsight beautiful?"(83)

Powell's account of Akbar's deception and of his relationship with BCCI, however, require further investigation. By his own admission, Powell met with Akbar "once or twice a year" in London to review Capcom and his stock holdings.(84) Moreover, he acknowledges having met Abedi on at least one occasion and Naqvi on at least a half dozen occasions.(85) These meetings with BCCI's top management strike the Subcommittee as strange given Powell's claim that he had such a limited relationship with BCCI as an institution.

Kerry Fox

As mentioned earlier, the genesis of Capcom's links to the U.S. lies in the relationship between Kerry Fox and A.R. Khalil. Fox had been Vice-President and General Manager of communications and electronics at Martin Marietta and President of two of Rockwell International's major divisions when he met A.R. Khalil while doing business with the Saudi government.(86)

Correspondence between Fox and Khalil suggests that they maintained a close relationship: "A.R. Khalil was and is a good friend of mine."(87) According to Fox, "I had known Sheikh Khalil for several years prior to that through business relationships with the Saudi government...(prior to 1982.)"(88) Moreover, Fox and Khalil owned neighboring homes in Texas and in Florida.(89)

During the early 1980's Fox went to work for U.S. Telephone Communications, which by 1982, had experienced "phenomenal growth and revenues of $90 million annually." In 1985 Fox founded his own company in the telecommunications industry -- American Telecommunications Inc. He also invested in a number of real estate projects with his partner, Larry E. Romrell.(90)

In an affidavit, Fox described his relationship with Akbar who "at that time... was personally handling many of Sheikh Khalil's world-wide financial transactions."(91) According to Fox, "I worked closely with Mr. Akbar both as managing director of the Capital Fund, but more importantly for me when he served as a Director of American Telecommunications Corporation."(92) Fox described Akbar's role with ATC: "I worked closely with him by telephone to assist our company through some very difficult start-up and financial problems. Mr. Akbar provided badly needed financial resources to the company, first as equity and later as debt, which was instrumental to the company's survival."(93) Indeed, Capcom and related entities purchased in excess of 350,000 shares of ATC stock, over 100,000 ATC warrants and loaned the company hundreds of thousands of dollars. In the affidavit, Fox defended Akbar as: "absolutely honest, trustworthy, and very honorable. He is a man of the highest integrity, having a strict code of high morals and business ethics."(94)

After Akbar was indicted for money laundering by the US Attorney's office in Tampa Florida, he resigned from the board of ATC. Akbar was replaced by Larry Romrell on the board, even though Romrell told the Subcommittee that "by the late 1980's he and Fox had a personal falling-out."(95)

This background raises questions about Fox, who along with Romrell acted on behalf of Khalil in 1981 and 1982 to purchase three residences in the U.S. and manage them. The Subcommittee has learned that the three properties located in New Smyrna Beach, Florida; Dallas, Texas; and Vail, Colorado were each financed by BCCI and managed by Akbar.(96) Second, while Fox and Romrell "used the houses from time to time", the property deals may have been used to financially benefit the two Americans who at the time were salaried employees. (97)

The Subcommittee invited Fox to testify on these matters at its July 30, 1992 hearing, but Fox, though his attorneys, invoked his fifth amendment privilege not to incriminate himself.(98)

The Capital Fund

Kerry Fox, although not a director of Capcom, was a director of The Capital Fund, an open-ended public investment fund launched by Capcom. The stated purpose of the FUND was investment in stocks, bonds, metals, options, and commodities. Control of the FUND resided in the "Manager", Capital Management Services, which had its operating base in Muttra, Oman. The original Directors were Paten Holdings and Zask Trading and Investment, Ltd, Akbar's secretly held Panamanian companies operated out of Liechtenstein. These entities were replaced as directors by Kerry Fox in October, 1985, indicating that Akbar had complete confidence in his ability to control Fox.(99)

By January 1, 1986 the initial L10,000,000 share capital had been fully subscribed, making it appear that the general public had invested in the Capital Fund.(100) In fact, however, Akbar controlled almost everything behind the FUND, including Zask Investment, Paten Holdings, his brother and Dr. Franz Pucher, the Liechtenstein lawyer. Akbar secretly contributed $8,145,000 (81 percent) of the $10,000,000 deposited in the FUND with the remaining 19 percent coming from BCCI/Capcom insiders, including Kamal Adham and Mr. E. El Jawhary.

The first year of investments by the Capital Fund resulted in an impressive profit, $2,278,708, and, in fact, the FUND produced profits in every other year until its termination in 1988. However, Ian Watt of Peat Marwick McLintock, characterized the profits as "artificial" and explained that through "matched" and "back to back" transactions, money from at least 17 accounts was transferred into Fund, totalling an estimated $3,334,480.(101) Watt concluded that the FUND played a significant role in Capcom's operations: "In all, save a number of insignificant cases, the client account in which profit was created was FUND."(102)

The Capital Fund continued to increase and prosper until Akbar's indictment for drug money-laundering on October 10, 1988. After the indictments, Kerry Fox met A.J. Puri in December, 1988 at the Dallas-Ft. Worth airport and was advised that the Capital Fund would be wound up.(103) However, it was not until September 18, 1990 that Capital Management Services ceased trading and was liquidated.(104)

The 1987 Chicago Investigation

In early 1987 the Chicago Board of Trade (CBOT) clearing corporation imposed a requirement that the owner of 5% or more of a clearing member guarantee the house obligations of such member. Accordingly, in June, 1987 the ownership of Capcom UK in Capcom US was reduced from 82% to 4%. The individuals who purchased Capcom UK shares in Capcom-U.S. did so with a loan from Capcom UK. One month later, in July 1987, Capcom US loaned Capcom UK nearly $3 million. That loan was never serviced and the Subcommittee has concluded that Capcom was involved in nothing more than a shell game to restructure its US operations.

At the same time that the restructuring was taking place, an investigation of Capcom had been undertaken by the CBOT to determine the identities of the individuals and entities which had an ownership interest in Capcom. In response to the investigation, A.R. Khalil wrote to Capcom's chairman, Larry Romrell, demanding that all the directors be fully advised of the true owners of Zask Investment and Trading, Akbar's company, which had surreptitiously increased its ownership in various Capcom entities. Ironically, Khalil ask that Romrell keep "my advisor, Mr. Z. Akbar, fully informed."

The issue was resolved when the secretly held Akbar-controlled interests in Capcom declined and the Saudi Group re-established its majority position using relatives and associates of Adham and Khalil on the Boards to escape the disclosure requirements of the US regulators. For instance, Mr. Wadia Sayed Khalil acquired a 39 percent ownership, and Mr. Robert E. Powell a 1 percent ownership, which combined with others in the "Saudi Group" totals 52 percent.(105)

In its investigation of Capcom the CBOT also disclosed that Capcom had engaged in numerous serious violations. Stephen Early, General Counsel to the CBOT testified before the Subcommittee:

[O]ne of the violations was that Capcom London was acting as a principal rather than an agent in transactions entered into on behalf of its customers. Now in essence, what that means, if I can put it in simplest terms, is that Capcom London was selling to its customers out of its inventory of positions of contracts traded at the board of trade....It is illegal in the United States...What we require is that the customer gets is the trade that was transacted in the public auction on the floor of the exchange and nothing else.(106)

Early concluded that "a trading practice such as this ...may be a means to further cloud what you have already encountered as the disarray of records, which is typical of Capcom and BCCI." Capcom settled with the CBOT and agreed to "cease and desist" from further violations and to pay a $124,000 fine.(107)

Early also testified that at the time "[W]e had no direct evidence of money laundering on behalf of Capcom."(108) However, during the same period, undercover Customs agent Robert Mazur was learning from BCCI insiders that Capcom was, in fact, being used to launder money. Mazur's undercover tapes formed the basis for the October, 1988 indictment of the trading firm.

Akbar Blackmails BCCI

In the summer of 1988, just months before the indictment in Tampa, Akbar contacted the Special Counsel to the Foreign Relations Committee, Jack Blum, and during a luncheon meeting in New York, claimed that he could lay out in detail the criminality of BCCI. Akbar boasts were real: according to the 1991 Price Waterhouse Report, "...Akbar took certain documents with him when he left [BCCI]. In 1988 he used this information to blackmail [BCCI], which paid $32 million to prevent him disclosing the true nature of the activities of Treasury..."(109) Akbar may have been using his meeting Blum to threaten BCCI. In testimony to the Subcommittee, Blum characterized his meeting with Akbar as "a $30 million lunch."(110)

The alleged bribes from BCCI to Akbar were paid into the TWOY account at Capcom. According to the Ian Watt audit, "TWOY and TWOY2 are both controlled by Akbar's brother, Mr. R. Akbar. The beneficial owners are not known..."(111) But Watt notes, "Akbar possessed a power of attorney over both TWOY accounts."(112)

In a secretly taped conversation Akbar explained to agent Bob Mazur the use of coded accounts to disguise ownership. Akbar used the example of TWOY, which he described as his account, and explained that "TWOY" was a translation, presumably from his native language, of the word "who":

"But if somebody asks, who's that person. Number two, it means who? For my account and Tawoy. It is called Tawoye. Tawoy. My account is Tawoye. Tawoye means who. No one asks who's Tawoye. We are not supposed to. (113)

The auditors noted the booking of a $31 million loss in the TWOY account in March 1987 from Standard and Poors Index futures trades.(114) In short, Akbar may have used the Twoy account to launder money that he had extorted from BCCI.

The 1988 Indictment Capcom Financial Services, Ltd., the British parent company of the Chicago-based Capcom Futures, Inc., was indicted by a grand jury in Tampa, Florida on October 10, 1988.(115) S.Z.A. Akbar and BCCI were also named in the indictment.

The indictment charged that Capcom had participated in a conspiracy to launder money and to violate federal narcotics laws.(116) The indictment specifically charged that Capcom had used its bank and customer accounts to launder drug money for the Medellin cartel and other Latin American sources.(117)

Just as BCCI mounted a full scale public relations assault following the October 1988 indictment, so it appears did those with ties to Capcom contemplate a similar campaign. In his January office diary, Romrell noted "talked to Magness about CNN report and Capcom... waiting to know the source of the misinformation."(118) TCI, which Magness is chairman of, owns 20% of CNN. During the same period, Romrell also scribbled in his diary "Ramsey Clark/Lyndon Johnson/ Atty Gen is talking to people in Wash D.C. ... Drug charges may be lifted against Capcom."(119)

But the charges were not dropped and, in fact, a second, superseding indictment against BCCI was issued in 1989.(120) This second indictment added 14 additional defendants but it neither deleted Akbar or Capcom as defendants nor did it alter the legal claims made against them.(121)

Akbar was arrested in the UK where he had also been indicted. He was found guilty and sentenced to 18 months in prison. After his release, he fled to Paris where he was again arrested. Akbar is currently awaiting extradition to the United States. While Capcom Financial Services, Ltd., the UK parent, has been indicted, Capcom Futures, the U.S. subsidiary, has never been indicted.

The day after Akbar and Capcom were indicted in the U.S. for drug money-laundering, a memorandum was written by Romrell and John Parry, which revealed that Romrell had working knowledge of some of the "sensitive" accounts at Capcom, and that a joint agreement existed between Romrell and Capcom to make investments:

"On Tuesday 11th October 1986 it was decided by mutual agreement between John Parry and Larry Romrell that it would be in the best interests of the company to liquidate the open positions in the account GESS (General Securities). This decision was taken in light of the sensitive nature of the account pertaining at the time...

"It was decided to close the account slowly over a matter of days, if necessary, so as to preclude any market comment concerning unnatural activity at Capcom.

For all of the above reasons it was also decided to liquidate any open positions in the accounts of Little and Large."(122)

1989 Chicago Investigation

Following the announcements in October 1988 of the Florida indictments of Capcom UK for money laundering and drug trafficking, the futures markets activities of Capcom US, according to CFTC Chairperson Gramm, "became of great concern" to the CFTC.(123)

Indeed, the CFTC and the Chicago Mercantile Exchange commenced an inquiry into Capcom. According to Chairperson Gramm:

We were also interested in examining the Capcom US records to identify potential evidence that might suggest money laundering. Although money laundering is not a violation of the Commodity Exchange Act, the commission staff wanted to be sure all relevant information was available to the authorities who could best use it.(124)

On August 15, 1989, the CME Clearing House Finance Subcommittee reviewed the staff report of the activities of Capcom Futures from January, 1986 through May, 1989 and concluded that there was a reasonable basis to charge Capcom U.S. with the following violations: "Act of bad faith" (commingling customer funds with house funds); Permitting the Misuse of facilities; Detrimental Act; Uncommercial conduct; Accepting new trades when account undermargined; Transfers of positions with no change in ownership; notification of reduction in capital in excess of 20%; and non-compliance with financial requirements.

The CME found that trading at Capcom was often done on the basis of oral instructions received from customers which were then confirmed in writing. In some instances, according to the CME, "the files showed no confirmations." Moreover, the CME's internal investigation found that:

There were several transfers of funds from unaffiliated Capcom-U.S. customer accounts into the Ixora account, an account owned and controlled by Z.A. Akbar. According to the CME, no written authorizations were obtained prior to the transfer of the funds.

According to the CME, Akbar, the owner of the Ixora account, told the firm "he intended to use the account for trading and the firm anticipated significant trading volume."(125) The Ixora account actively traded from December, 1986 until May, 1987. From November, 1987 through October, 1988, there were twelve receipts into the account totaling $9.84 million and twenty-five disbursements totaling $9.82 million. CFTC Chairperson Gramm testified that IXORA was also "involved in a complicated $2 million transaction involving Finley International, Ltd. and Capcom UK."(126) Finley, as noted earlier, was the account used to launder General Noriega's money.

Certain of the trades in the Ixora account were clearly BCCI-related. For instance, a confirmation letter, dated April 27, 1987 is addressed to Mustafa Kamal c/o Bande Hasan. Mr. Hasan was an employee of BCCI in Miami. Moreover, CFTC Chairperson Gramm told the Subcommittee that:

Information developed in our inquiry with respect to the Ixora account at Capcom US, however, indicated that certain disbursements were made to persons apparently unrelated to the purported account owners, including Akbar Bilgrami, who may be the same Akbar Bilgrami identified as the Director of Latin American Overseas by the October 1988 indictment.(127)

The Subcommittee has obtained documents which show that Romrell is the individual named on the IXORA account at First National Bank of Chicago. Moreover, Ixora account statements and bank statements were sent to him at his Western Telecommunications offices. CFTC Chairperson Gramm testified to the Subcommittee that "In February of 1988 S.Z.A. Akbar instructed that a cash disbursement of $100,000 be made the IXORA account ... to Mr. Romrell's account." (128) Concerning the IXORA account, Romrell told the Subcommittee:

[I] learned from the Subcommittee that Ixora also had an account at Capcom, but I have no knowledge of that account.

Ixora was a Cayman Islands corporation that was owned by Mr. Akbar. Mr. Akbar asked me to find the name of a Cayman Islands lawyer to handle this matter....To my knowledge, Ixora never conducted any business whatsoever.(129)

According to Chairperson Gramm, investigators were unable to learn anything more about the IXORA account because "Mr. Saghir exercised his fifth amendment rights with respect to all questions concerning this account when his investigative testimony was taken by the CFTC.(130)

The CME also found that there were multiple transfers of funds between Mohammed Zaheer, the brother of Capcom Futures' President, M. Saghir and two unaffiliated customer accounts.

On October 29 1987 there were six receipts in the Zaheer account totaling $4.84 million and the next day there were two disbursements totaling $4.80 million. The CME noted that "from the period December 31, 1986 through May 31, 1989, the ledger balance of the account was usually less than $150,000." These transfers are particularly suspect because an investigative firm retained by the CME discovered that Mr. Zaheer worked in a service station in Karachi, Pakistan and his position at this service station is described as "not very high."(131)

After reviewing the Saghir/Zaheer transactions, Gerald Beyer, Vice President for the CME, told the Subcommittee that "On a person level, when I was involved in this investigation, I was certain that it involved drug money and laundering of money.

But there was no way we could prove that. We discussed that in our committee; we discussed that among ourselves."(132)

Despite suspicions about highly unusual transactions, CFTC Chairperson Wendy Gramm told the Subcommittee:

In terms of finding trading violations or Commodity Exchange Act violations that perhaps could support money laundering, we did not find any discernible pattern...[N]o one has ben able to --at least other law enforcement officials have not been able to find money laundering in Capcom US, to our knowledge, as of now.(133)

Money laundering, as Chairperson Gramm testified, is not even a violation of the Commodities Futures Trading Act. Incredibly, it appears that the CFTC and the self-regulatory organizations have never even made a criminal referral for possible money laundering:

Senator Kerry. [H]ave you ever specifically referred, or have any of the exchanges ever made a criminal referral for money laundering?

Dr. Gramm. We have raised concerns.

Senator Kerry. Have you made a criminal referral for money laundering?

Dr. Gramm. No. Not-- not specifically in that regard...

Capcom Today

Chairperson Gramm told the Subcommittee that the results of the inquiry by the CFTC "contributed to the removal of Capcom US from US financial markets."(134) According to Gramm:

The Chicago Mercantile Exchange, CME, immediately restricted the trading activities of Akbar and subsequently made specific findings in October of 1989 that Capcom US had violated CME rules, including accepting new trades in an undermargined account and improperly transferring positions between accounts. Capcom US paid a fine of $500,000 and agreed to withdraw as a CME clearing member.

Early in 1989 the Chicago Board of Trade, the only US exchange for which Capcom UK was a member, suspended Capcom UK indefinitely and Capcom UK was subsequently expelled on August 24, 1989. Also, on June 30, 1989 they allowed Capcom US to withdraw from CBOT membership. In accepting the Capcom UK settlement, the Board of Trade had reason to believe that Capcom UK had entered into reckless and unbusinesslike dealings, was unable to demonstrate capital compliance, and engaged in fraud and dishonorable conduct in its dealings with the exchanges, among other things.

In October of 1990 the NFA, the National Futures Association, found Capcom US to have violated NFA rules by making misrepresentations to a customer and making unauthorized trades, failing to collect proper margin from a customer, and failing to supervise employees and agents. As a consequence NFA ordered Capcom US to relinquish its FCM registration and NFA membership and never to reapply, and to dissolve its corporate status at the earliest possible date.

Ms. Gramm also stated that "all of the information developed by the commission [including that developed by the exchanges]....was made available to the prosecutors in charge of the criminal case pending in Tampa."

While Capcom UK was indicted in the US, it has never been tried and has successfully avoided service of process. More amazingly, Capcom UK continues to operate in London to this day. In fact, it has developed new European clients. While ZA Akbar is in jail in France, his legal defense bills, in excess of $100,000 a year are being picked up by Capcom. Moreover, Akbar's brother and Mrs. Puri, until recently, served on the board of Capcom.

Conclusion

Turmoil in the Persian Gulf after the fall of the Shah of Iran in 1979 left a vacuum in the CIA's capability to gather information. The huge CIA operation in Iran was lost, including its most important listening stations to monitor the Soviet Union and China. With Iran and Iraq locked in a land war, options remaining were limited to several friendly nations: Saudi Arabia, U.A.E., Oman, and Kuwait. With the revolutionary changes in technology that spawned the modern communications industry in the 1980's came the need for the proper U.S. agencies to employ it, and, conversely, for our allies to gain access to it.

It was in this climate that majority shareholders in BCCI approached U.S. executives in the communications industry to serve on the board of Capcom. The Americans, Larry Romrell, Robert Magness, both of Telecommunications Inc., and Kerry Fox of American Telecommunications Company, had no knowledge or background in commodities trading, and evidently were never involved in the management of the firm.

The evidence of the role of Saudi Intelligence officials, Adham and Khalil, who are the principle liaisons with the CIA over two decades, owning and controlling Capcom, is disturbing to the Subcommittee for two reasons. First, the Subcommittee is concerned by the possibility of a foreign intelligence service promoting a policy agenda in the U.S. Secondly, the close relationship of Saudi Intelligence to the CIA leads to the question of whether or not the CIA was aware of Saudi activities in the U.S.. The CIA has unequivocally told the Subcommittee that it did not use and has no knowledge of Capcom, and that it was unaware of the investments in Capcom by Sheik Adham and Sheik Khalil.

Unfortunately, it will be increasingly difficult to ascertain the purposes for which Capcom was used. In a December, 1990 letter, it was noted that Mrs. Puri, wife of A.J. Puri, was handling the "final details" of the Capital Fund wind-up. Although the meaning of final details is ambiguous, the London Independent reported in August, 1991 that "more than 100 boxes of files and other papers belonging to BCCI-linked Capcom Financial Services...were destroyed on the orders of a senior Capcom official...The request to destroy the documents was made by Sushma Puri...Ms. Puri is also co-director along with Capcom's founder, S.Z.A. Akbar, of Futures Advisory Services."(135)

Documents do still exist in the United States. Andrea Cocoran of the CFTC told the Subcommittee that the CFTC has all the records. Chairperson Gramm added that "We do have an investigation that continues regarding Capcom US."(136)

While it is encouraging to learn that the CFTC is continuing to investigate Capcom, four years have lapsed since Capcom was originally indicted. Counsel for Larry Romrell, the Chairman of Capcom, told the Subcommittee in the spring of 1992 that his client had not been interviewed nor had his records been subpoenaed by any law enforcement agency: the Subcommittee was the first government entity to show interest in Mr. Romrell's role in the entire Capcom affair. Clearly, in the United States, a much greater investigative effort needs to be devoted to Capcom. It is hard to understand why British regulators -- in light of the Peat Marwick report -- have allowed Capcom UK to continue operations. Subcommittee staff have been advised that Lord Justice Bingham has looked into the irregularities surrounding Capcom in the United Kingdom. His findings regarding Capcom's activities in the UK will, it is hoped, expose more of the facts concerning its extensive activities in the UK than the US investigations have been able to uncover.

In terms of the broader lessons of Capcom, regulation of the futures markets need to be greatly strengthened. Even a cursory background check on Akbar would have revealed that he had managed the Treasury accounts at BCCI which lost $400 million in the futures markets in the early eighties. Moreover, regulators who appeared before the Subcommittee testified on the one hand that annual audits of Capcom US turned up nothing irregular, but that Capcom's books and records were a mess. That such a contradiction was allowed to continue for four years indicates that the CFTC needs to critically review the effectiveness of the various exchange audits. Finally, money laundering should be made a crime under the Commodities Futures Trading Act.

APPENDIX 1

Romrell Proposals To Akbar

1. Installation of a subscription T.V. service in Saudi Arabia: "...I would rather work with you and Mr. Khalil on this venture."(137) (Khalil was the Minister of Communications in Saudi Arabia.)

2. "...Mr. Khalil, the Saudi Sheikh...I will go over the material with him and I feel confident he will be interested..."(138)

3. Advice on how to proceed on TCI's bid to the Saudi Arabian government for cable television distribution system located at the Royal Saudi Air Defense Command School, Jeddah.(139)

4. Advice on proposal to TCI to install a cable system for the Ministry of Defense and Aviation Army Air Defense Command.(140)

5. $90,000,000 investment in a hospital in Houston, Northwest Medical Center. Proposal that Magness and Romrell take 25 percent, BCCI 50 percent, doctors 25 percent.(141)

6. $22,000,000 joint purchase of Stouffers Inn, Denver.(142)

7. BCCI loan proposed for $2,600,000 for a related investor group to purchase 30 percent in cattle feedlots owned partly by Magness and Romrell.(143)

8. Purchase proposal of Winterwood Townhomes, Steamboat Springs, using BCCI loan of $2,500,000 arranged by Romrell.(144)

9. Proposal of an investment of $3,100,000 in Marina Del Rey, California.(145)

10. $300,000 credit line from BCCI for operation of Amigo Farms. (April 18, 1984)(146)

11. $50,000 credit line for Romrell and Magness from BCCI. (June 5, 1984)

12. Beehive International building in Salt Lake City, Utah; Corporate Secretary and General Counsel is Romrell's brother; "with his inside information we could make a good deal."(147)

13. Oil and gas investment in Windsor Reservoir.(148)

14. "$6 million of credit on real estate to a friend of Romrell.(149)

15. "Duds 'n Suds" share offering purchase proposal before public issue proposed by Romrell to Akbar.(150)

16. Proposal for BCCI to be a partner in a land deal in Phoenix with Mr. Noel Cullison, who Romrell had arranged to borrow $525,000 from Capcom.(151)

17. $2,635,899 balance in loan credit from BCCI to Winterwood.(152)

18. "I scheduled a meeting with Mr. Shoaib and Mr. Nazarian with myself and Mr. Magness."(153)

19. "Also, I am enclosing another letter from Tony Coelho. Tony Coelho would be the third most important man in the U.S. Government, with the President and the Speaker of the House being first and second most important."(154)

APPENDIX II

Money Flow From BCCI to Capcom and Related Individuals

The following transactions are an indication of the dimension of the relationship between the BCCI group and Capcom and related individuals, transactions which occurred in Capcom, and other financial details which have been found on documents produced to the Subcommittee. In some instances, this information resolves and explains questions regarding Capcom, but in others it raises questions.

The itemization of these transactions is presented here only as a log to put on public record in some consolidated order the evidence of financial events which relate to Capcom.

A. ATC / FOX / Akbar et al.

Akbar and entities which be controlled issued credit and purchased equity in American Telecommunications, Inc (ATC). The Chairman and CEO of ATC is Mr. Kerry Fox. Mr. Larry E. Romrell is a Director of ATC. Mr. Fox was a Director of Capital Fund, a Capcom public investment fund which was the recipient of large amounts of moneys skimmed or laundered by Capcom, as described later in this report.

The following transactions occurred between Mr. Kerry Fox, ATC, Akbar, Capcom, Financial Advisory Services, and BCCI:

1. 150,000 shares of ATC purchased by Zask Investments and Trading, owned by Akbar, operated out of Liechtenstein.

2. 30,000 shares purchased as in 1 above.

3. 177,102 shares purchased by Financial Advisory Services (FAS), owned and controlled by Akbar, linked to Capcom as an "introducing agent".

April 20, 1988.

4. $100,000 borrowed by ATC from Zask, June 1, 1989.

5. 50,000 warrants of ATC stock purchased by FAS.

6. 50,000 warrants of ATC stock purchased by Zask.

7. 25,000 warrants of ATC stock (not purchased) owned by Akbar.

8. June 11, 1991 letter from Fox to Akbar offers ATC warrants to Capital Fund, referring to the February 12, 1987 and August 5, 1988 grants of warrants.

9. September 30, 1988 letter from Fox to Akbar solicited Akbar's support in arranging receivables financing in the amount of $1.5 million.

10. $100,000 loaned to ATC June 15, 1988 by Akbar. Fox refers to ATC making losses and asks Akbar to consider making another $100,000 credit.

11. Request from Fox to Akbar May 3, 1988, stating that Fox had "nowhere else to turn" and was in a "near term but critical cash flow problem" (emphasis added), for "another" immediate loan of $250,000 and longer term $2-3,000,000 financing package.

NOTE: Akbar was a Director of ATC to November 4, 1988, when he resigned subsequent to his and Capcom's October 10, 1988 indictments for drug money-laundering. Some of the above transactions occurred after the indictment and conviction of Akbar.

B. BCCI / Fox, Romrell / Khalil / Adham

Fox and Romrell acted as a front for A.R. Khalil for the purchase of three real estate assets in the U.S., as described later in this report. Akbar was the BCCI officer who arranged the financing.

1. $530,000 loan from BCCI to Fox/Romrell for construction of "Potato Patch" house, Vail, Colorado.

2. $908,625 loan from BCCI as of February 7, 1983, apparently for Vail Associates apartments.(155)

3. $2,000,000 loan BCCI to Dr. Charles Howard, Houston for sale of "Potato Patch" house by Romrell/Fox, who arranged loan and received part of proceeds.

4. November 8, 1982 letter from BCCI, Cayman to Fox/Romrell confirming loans outstanding:

$754,619 (Potato Patch, Vail)

$108,742

$532,003 (collateral: 1st mortgage on Khalil's Vail house)

5. Payments of $15,000, $34,995, and $20,000 were paid by Khalil to Fox/Romrell in March, April 1981, apparently to find costs of a real estate construction project.

6. Fox/Romrell had an account at BCCI, Cayman, #03002241, which had a balance of $388,486.33 on December 1, 1981.

7. $2,635,899 balance in loan accounts at BCCI for Magness, Romrell properties (Amigo Farms).(156)

8. $2,000,000 loan request by Romrell from BCCI, Cayman for IXORA Investments, Ltd, a company owned by Akbar cited by the CME in 1987 for 53 irregular transactions which imply money-laundering, although the Audit Report stated "We cannot speculate on the reasons, known only to them." The CME required total financial disclosures against the threat of expulsion, which caused ownership and directorship changes in 1987/88.

The transfers into the account came from A. Bilgrami, the BCCI officer convicted of drug money-laundering and presently serving prison sentence in Florida.

$1,950,000 was dispersed from the IXORA account at Capcom U.S. to Capcom U.K. on September 23, 1988.

A letter of January 1990 from First Chicago indicates that IXORA is an account owned by Akbar c/o Romrell, who had apparently acted for the company IXORA for many years.

9. A British accountant investigating for the Serious Fraud Office, London, noted:

"...a series of transfers made out of and back to the Winterwood Associates [Romrell/Magness] funding around year end 1985. Two amounts of $1,000,000 were credited to this account from Bank America Int'l, N.Y. prior to Dec. 31, 1985. Subsequently, on 2 Jan. 1986, one amount of $1,000,000 was transferred to 1st Interstate Bank favoring Larry Romrell and another of $1,018,750 transferred to Account No. 01024628 of Mr. A.R. Khalil with BCCI. Ziauddin Akbar and K. Muneer were involved in authorizing both transfers." "The 01024628 account has been identified from our investigation into treasury operations as a London treasury pool account."

This suggests that the Winterwood Associates account of Romrell/Magness and/or Romrell may have been connected to the "routing of funds" by BCCI.

10. Kamal Adham, majority shareholder of Capcom, was responsible for estimated losses at BCCI of $199 million as of December 29, 1990.(157)

11. A "Note for File 11.9.84" indicates that BCCI loaned Magness and Romrell $75,000 each to buy shares in Capcom.

C. Capital Fund (Capcom) / Kerry Fox

This was a public investment fund organized by Akbar/Capcom with Kerry Fox as Director. It was the recipient of funds from skimming and money-laundering.

1. October 14, 1985 share capital of $900,000 was authorized and by January 1, 1986, $10,000,000 was fully subscribed by investors.(158)

2. Akbar controlled entities, Notan Trading and Investment, Zask Investments and Trading, Pate Holdings, Riziaudden Akbar contributed $8,145,000 of the $10,000,000 to capital fund, thereby benefiting of 80 percent of the funds skimmed or laundered into Capital Fund.

3. October 31, 1988 Special Audit identified $2,900,000 of funds artificially "processed" between certain accounts of which Capital Fund was the recipient.

4. $734,158 was skimmed into Capital Fund from 16 customer accounts by "internal matching."(159)

D. Capcom Financial Information

1. Audit as at October 31, 1988 for Capcom: 1988 showed Brokerage Commission Income 7,156,692 and loss on ordinary activities 8,514,936. Stock ownership at this date by Directors was as follows:

a. Romrell: 250,000 shares, down from 2,750,000 shares in 1987

b. A.R. Khalil: 8,250,000 shares (1/3 of outstanding)

c. A.K. Puri: 3,620,000 shares

d. B. Magness: 250,000 shares

e. S.Z.A. Akbar: 6,000,000 shares

2. February 3, 1988 Khalil "sold" 8,250,000 shares to Akbar for 8,250,000. However, 4,000,000 cash was debited to a Capcom account which did not have sufficient funds and the balance of 4,250,000 was offset of "other obligations." The transaction appears to be only a camouflage of Khalil's interest to circumvent disclosure requirements imposed by regulatory authorities in late 1987.(160)

3. October 31, 1988 Special Audit revealed a total of $3,600,000 of artificially processed transactions between accounts at Capcom.

4. October 31, 1988 Special Audit detailed 11,518,360 provision against "doubtful customer balances."

5. Auditors noted an unexplained deposit in Capcom of 8.6 million by an Egyptian Dr. Attia with no trading having taken place.

6. $53,000,000 schedule of "profits" for the ARKY account at Capcom found in Akbar's desk. Presumably this is the account of A.R. Khalil. These "profits were made from October, 1984 to September, 1985, the period in which BCCI lost $430 million at Capcom. This is the clearest evidence that the shareholders of Capcom and/or Akbar stole funds from BCCI through artificial market transactions.(161)

7. $525,000 loan to Mr. Noel Cullison for a real estate development in Phoenix, arranged and managed by Romrell.(162)

8. Romrell borrowed $400,000 from Mideast Finances, Ltd., P.O. Box 211, Port Vila, Vanuatu for the purchase of his shares in Capcom Futures, Chicago. the credit was strictly limited to the value of his Capcom Futures shares, with no other liability. The document is dated September 30, 1988, but is not signed, leaving open the issue of whether this was the actual form of financing for his share purchase.

9. Magness entered into the same financing arrangement with Mideast Finances, Ltd, Vanuatu as in (8) above, dated September 30, 1988. The document in file is not a signed copy either.

10. A Resolution of the Board October 3, 1988 Authorized Share Capital Increase of Capcom Financial Services, Ltd, London to 100,000,000 (approximately $150,000,000). The intent evidenced by this document evidences the large scope of business contemplated by Capcom. Such a capitalization would have placed it among the largest brokerage houses in the world within three years from start-up.

11. May 11, 1989 letter from Parry to Romrell requiring confirmation of the debt of Romrell ($400,000) and Magness ($100,000) to Capcom Financial Services, Ltd, requesting repayment and confirmation that Capcom Futures, Inc shares are the security for this indebtedness.

This document suggests that the financing of Romrell's and Magness' shares was not done through Mideast Finances Ltd, Vanuatu, or that Capcom Financial Services, Ltd owns Mideast Finances, Ltd and assigned the debt.

It should be noted that in the Capcom group was a company called Capcom Bankers, Ltd, Suite 11, Melitco House, Rue Pastenn, port Vila, Vanuatu.

12. August 14, 1986 letter from Akbar, Capcom Financial Services to Romrell, Western Telecommunications states that Romrell's balances on July 18, 1986 at Capcom were as follows:

Investment Account $48,670 CR

Loan Account 53,250 DR

The loan account had been paid down with profits from the Investment Account leading to a new balance as follows:

Investment Account $14,260 CR

Loan Account 30,000 DR

This implies that the Capcom share financing was "self-liquidating" from internal Capcom transactions, so that Romrell would finally own the shares without paying for them.

13. It is reported that BCCI lost $430,000,000 in the Capcom affair.(163) This allegedly occurred from September, 1984 to July, 1985.

14. An internal Capcom account GESS (General Securities Corp) loaned FAS (Financial Advisory Services, Ltd, owned by Akbar) 1,627,812.03 to purchase its office building at 107 Grays Inn Road, London on September 1, 1986.

The repayment of the loan does not connect to its funding, having come from the following. Sources: Sheikh Nooruddin, Middle East Bank, with funds which should have gone to GESS, instead going to GOOD (195,000), TWOY (350,000), GESS (1,209), totalling 1,754,000.

15. A snapshot of internal account management at Capcom is provided by an audit review revealing the following:

Finley International (presumably the company through which Noriega's money passed) sent $1,000,000 on September 16, 1988 and $10,000,000 on September 19, 1988. Akbar's explanation to the auditors was that "funds were to cover losses made by GESS when covering GOOD's position in silver in 1987."

16. The audit report stated that Predelict Investments, Ltd, owned by the Nigerian National Petroleum Corporation, loaned Capcom $10,000,000 from its Capcom Sub-account 134-170-054/52/200, with a two percent fee paid to Predelict, as noted on a letter October 4, 1988. The funds were returned to Predelict 12/10/88.

17. "The owner of the GOOD account is El Rayan, an Islamic Investment company based in Cairo...one of the largest in Egypt in import/export and real estate and funds management...Egyptian authorities closed El Rayan in November 1988." It was described as "Capcom's biggest account" and may have "lost" up to $90,000,000.(164)

It should be noted that the code used on all telexes from Romrell to A.R. Khalil at the Kamal Adham office in Jeddah is "GOOD".

18. A total of $47,500,000 in nine separate transfers was paid to Capcom from Credit and Finance Corp, Cayman; BCCI Overseas, Cayman; Bank of New York. These transactions relate to Blackmail, Akbar, $32 million as discussed later.(165)

19. $150,000 payment February 10, 1988 through Capcom from Ahmed Tawfick to Shakarchi Trading, A.G., the Zürich-based company recently identified in a $1 billion money-laundering scandal in Switzerland.(166)

20. $68,000,000 was paid from Treasury at BCCI to Brenchase, Ltd, a wholly owned Capcom subsidiary, on June 25, 1985, "for an unknown purpose."(167)

21. "Two payments of $50,000,000 were made to Capcom in March, 1986 out of external funds [BCCI Treasury] for which no liability for repayment was recorded."(168)

22. Capcom Financial Services, Ltd loaned $10,000,000 originally to Capcom Futures, Inc, Chicago, then replaced that loan with a $12,500,000 loan.(169)

23. Romrell had a series of payments to and from Capcom in London around July 1, 1987 for his personal account at Capcom: $25,000, $148,000, $22,000, $50,000.

1. According to Akbar Bilgrami, the losses at BCCI were accumulating long before Akbar assumed his responsibilities at BCCI's Treasury. According to Bilgrami, the "hole" in BCCI dated from the mid-seventies and increased until the early 1980's when the accountants began to suspect that BCCI was in financial difficulty. BCCI's Treasury losses were nothing more than a convenient means for explaining the actual financial condition of the bank.

2. Tape 150N, 9/2/88, 11:20 a.m., London, from U.S. v. BCCI, et al in Tampa.

3. S. Hrg. 102-305, Pt.1, p.513.

4. Price Waterhouse, 1991 Report, Section 4, Treasury, p.16.

5. Id at 17.

6. Price Waterhouse, 1991 Report, p.2.

7. Id. p.21.

8. By October 3, 1988, a Resolution of the Board of Directors authorized an increase in share capital to 100,000,000, a staggering amount, raising the question as to how the firm planned to grow so quickly.

9. S. Hrg. 102-350, Pt. 1, p.513.

10. Bandung Productions, transcript, "The Fraud of the Century", September 11, 1991, pp. 53-59.

11. S. Hrg. 102-350, Pt. 1, p.513.

12. Markets, by Martin Mayer, Norton Publishing, 1988, p.xxi.

13. Id. p. xxiv.

14. According to the Chairperson of the Commodities Futures Trading Commission, Wendy Gramm, the futures markets operate on the same principle of "know your customer" as banks. According to Gramm:

The futures broker, the futures commission merchant, does have responsibilities with regard to its customer accounts, including knowing its customers. The self-regulatory organizations have an obligation to ensure that they are meeting those responsibilities, and also do audits concerning brokers' activities with regard to their customers.

see Gramm testimony, S. Hrg. 102-350, Pt. 6, p.647.

15. Price Waterhouse Report, June 22, 1991, p.21, Reprinted in S. Hrg. 102-350, Pt.5.

16. According to the Chairperson of the Commodities Futures Trading Commission, Wendy Gramm, Capcom US "was a relatively small, smaller than average company, with not many customer accounts and unremarkable in its trading." see Gramm testimony, S. Hrg. 102 -350, Pt.6, p. 647.

17. Capcom 1987 Annual Report. In testimony before the Subcommittee, Andrea Cocoran, Director of Planning and Supervision at the CFTC, confirmed that Capcom UK realized a net loss on futures trading of $76,206,064 to Refco. see testimony, Andrea Cocoran, S. Hrg. Pt.6, p.651.

18. In her testimony to the Subcommittee on July 30, 1992, Wendy Gramm, the Chairperson of the Commodities Futures Exchange Commission (CFTC), noted that "we found that certain principals of Capcom US, specifically S.Z.A. Akbar, Sushma Puri, and Mohammed Saghir, had previously worked at BCCI. S. Hrg. Pt. 6, p.7.

19. Price Waterhouse Report, June 22, 1991, p.21, emphasis added

20. Id.

21. Price Waterhouse Report, July 22, 1991, p.20. Reprinted in S. Hrg. Pt. 5.

22. Id. p.21

23. S. Hrg. 102-350, Pt. 1, p.513.

24. Id. p. 513.

25. Mazur tapes 150N, 9/20/88, 11:20 p.m., p.73, line 22-23, p.74, line 15

26. Handwritten Consolidated Profit and Loss Statement, Capcom, October 31, 1985.

27. February 17, 1989 Audit, Coopers and Lybrand Investigation of Capcom, p. 2.

28. Wall Street Journal, Peter Truell, 11/22/91, p.A1.

29. According to the 1991 Price Waterhouse report, "the adjustments in 1985 occurred in the period 25-28 June when amounts totalling $191 million were drawn down in the names of Khalil [and others]" and were paid to "Z.A.Akbar ($142 million) to adjust various Treasury pool accounts." Price Waterhouse Report, June 22, 1991, p.30.

30. For example, the account was to be in his name; accounts were opened in the name of his wife; BCCI Visa cards were issued to him, his wife and their children, and the bills were paid from the BCCI accounts.

31. Account Opening Forms, dated 24 August 1982. Correspondence was to be sent to Amjad Awan, BCCI Branch Manager in Panama.

32. 158626 July 1988 Letter from Subhan Siddiqui to BCCI Luxembourg.

33. Throughout the course of these events, "Finley International Ltd." is alternatively spelled "Findlays," "Finlay," "Finley International Co.," or "Finleys International Ltd." The account numbers and transfer letters of the various banks leave no doubt that all the names refer to Finley International Ltd., a Capcom customer. Finley International Ltd. is a company registered in Liberia whose only two officers are S. Z. Akbar and G. R. Khan. Akbar served as its chairman and treasurer.

34. 26 July 1988 Letter from Noriega to the manager of BCCI Luxembourg.

35. 8 September 1988 Letter from Eva de Teran of Banco Nacionale de Panama to Middle East Bank (to the attention of Amanullah Khan).

36. Complaint, Republic of Panama v. BCCI Holdings, et al., Case No. 90-2913-CIV-RYSKAMP (D.C. Fla.), dated 18 January 1991, at 6.

37. 13 September 1988 Letter from Eva de Teran of Banco Nacionale de Panama to Middle East Bank (to the attention of Amanullah Khan).

38. Akbar claimed that the $23 million received by Finley were remitted by a real estate investor named Al Fathi Tawfik who died in 1988. Akbar denied that any connection existed between the Finley deposits and Noriega. Ian Glendinning Watt, a Chartered Accountant of Peat, Marwick appointed to investigate Capcom's trading, found Akbar's explanations on this and every other matter to be "unsatisfactory," Affidavit of Ian Glendinning Watt dated 20 January 1989, at 44, "deficien[t]," id. at 45, "most curious," "illogical," and "not capable of corroboration." Id. at 46.

39. Among various papers in Mr. Akbar's desk at the time of his arrest was a schedule indicating that an account with the code name ARKY [presumed to be A.R. Khalil] earned profits of $53 million between October 1984 and September 1985." "The owner of account GOOD is El Rayan, an Islamic Investment Company based in Cairo...Egyptian authorities closed El Rayan in November,s 1988." "...it may have lost $90,000,000." The closing of El Rayan was the month following Akbar's indictment for drug money-laundering, October 19, 1988. Numerous fax transmissions from Romrell to Khalil at the "Kamal Adham Office" in Jeddah are inscribed "Code: GOOD".

40. Watt Affidavit, p 18. Reprinted in S. Hrg. 102-350, Pt. 6.

41. The company behind the GESS account is General Securities, registered in Panama. Watt Affidavit at 20.

42. See, e.g., Watt Affidavit, at 38, 40, and 42.

43. The Finley account at Middle East Bank. See 13 September 1988 Letter from Akbar and Khan (on Finley letterhead) to Middle East Bank. Akbar admitted that he controlled the GESS account, see Watt Affidavit at 20, denied having any control over the GOOD account, id. at 38, and offered no explanation for the $2.5 million transfer to the Red Roses Account at the Trade Development Bank in Zurich. Id. at 42.

44. Staff Review of Capcom client list, provided by the Commodities Futures Exchange Commission. The Subcommittee would like to thank the staff of the Commodities Futures Exchange Commission which has provided important assistance to the Subcommittee.

45. The Price Waterhouse Report stated that Adham's exposure of losses at BCCI as of December 29, 1990, was $249,000,000; estimated losses were $199,000,000. Price Waterhouse Report, June 22, 1991, p.6

46. Transcript, Federal Reserve Board Hearing, April 23, 1981, p.65.

47. Khalil also had known Powell for several years prior to the creation of Capcom, although Powell was not connected, as far as the Subcommittee knows, to any communications business.

48. Letter, Romrell to Akbar, November 17, 1981.

49. Answers of Larry Romrell to questions from Subcommittee, July 3, 1992, questions 28.

50. "89225 1 BCCLNA G.

TCI ENGL

6/9/83

Attn. Mr. Akbar

At the TCI Stockholders meeting this morning it was announced there would be a one for one stock split of TCI stock, effective date 6/24/83.

Best regards,

Larry Romrell. (Telex, 6/9/83)

51. Letter, Romrell to Akbar, April 2, 1984, WTCI letterhead

Further in the same letter:Magness and I are most anxious to visit with you with regard to the business opportunity we discussed in Chicago or New York." The opportunity referred to in the letter appears to be the founding of Capcom.

52. Letter, March 19, 1984, draft of Telex to Akbar.

53. staff interview with Romrell, 6/16/92. In his written response, provided under oath, Romrell stated: "In 1984 following the spin-off of WTCI, the stock might become available on the market. I contacted Mr. Akbar to inquire whether BCCI would lend money with which I could purchase shares. In that conversation, I understood that Mr. Akbar agreed to establish a line of credit for me, and that he was also interested in purchasing stock. There was no discussion of any joint line of credit, or even of how Mr, Akbar might finance his purchase. The March 19, 1984 reflects that understanding. However, I never received a response from Mr. Akbar. I never received the line of credit mentioned, I never put Akbar in touch with my broker, and, to my knowledge, Mr. Akbar never invested in TCI or WTCI." Affidavit, Larry Romrell, July 3, 1992, answer 40.

54. Letter, November 14, 1984, Romrell to Akbar at BCCI, London.

55. Letter, Betram Perkel, Law Offices of Jerome Kern, February 11, 1992. p.2, Reprinted in S. Hrg. 102-350. Pt.6.

56. Letter, February 27, 1984

57. Undated note on Western TCI note paper, styled Romrell.

Akbar's representation, as recorded by Romrell, is further evidence that from the beginning Akbar contemplated a BCCI link since there could not possibly be any other means for earning such commissions in a start-up company.

58. Telex, May 27, 1984.

59. Magness Affidavit, 5/19/92, p.3.

60. Id, p.3.

61. While Magness was already a wealthy man, this must be considered a significant investment on the part of Romrell who was at that time a salaried employee making $38,000.00.

62. Note for file, 11.9.84, hand-written.

63. Letter, February 6, 1985, Romrell to Mr. Ajay Puri, Capcom, London.

64. Letter, November 7, 1984, Larry Romrell to Mr. Ajay Puri, Capital Commodities Dealers, Ltd, London, attached.

65. Letter, November 7, 1984, Larry Romrell to Mr. Ajay Puri, Capital Commodities Dealers, Ltd, London.

66. Letter and loan documents attached, June 11, 1985, Letter from Romrell to Mr. Ajay Puri, Capcom.

67. Written responses from Larry Romrell, July 3, 1992, answer 53.

68. Staff interview with Larry Romrell, June 5, 1992.

69. Letter, August 22, 1986, Romrell to Akbar.

70. Letter, Romrell to Khalil, Adham, July 27, 1987.

71. The loan documents specified: "(a) that the total liability of the borrower in the repayment of the loan and all its accrued interests is strictly limited to the value of his shares in Capcom Financial Services, Ltd..." Paten loan agreement ("old and new loans"), signed, Romrell, June 30 1987.

72. Signed Larry Romrell et al, letter March 28, 1988, Capcom to Arthur Anderson, London, emphasis added.

73. Written responses from Larry Romrell, July 3, 1992, answer 58.

74. Letter, July 20, 1987, L.E. Romrell to Sheik Abdul Raouf H. Khalil, Sheik Kamal Adham, Mr. El Ghary, emphasis added.

75. Letter, July 25, 1987, L.E. Romrell to Sheikh Abdul Raouf H. Khalil, H.E. Sheikh Kamal Adham, El Sayed E. El Jawhary.

76. Mazur tape 150N, 9/20/88, p.9, line 1.

77. Affidavit, Robert E. Powell, July 8, 1992, p.5. Reprinted in S. Hrg. 102-350, Pt. 6.

78. Letter, Harry H. Schneider, Department of the Air Force, "To Whom it may Concern," January 3, 1977.

79. Affidavit, Robert E. Powell, July 8, 1992, p. 1. Reprinted in S. Hrg. 102-350, Pt. 6.

80. Affidavit, Robert E. Powell, August 2, 1992, p.1. Reprinted in S. Hrg. 102-350, Pt.6.

81. Affidavit, Robert E. Powell, June 21, 1992, answer to question 17. Reprinted in S. Hrg. 102 -350, Pt. 6.

82. Id., answer to question 19.

83. Affidavit, Robert E. Powell, August 2, 1992, p.2. Reprinted in S. Hrg. 102- 350, Pt. 6.

84. Affidavit, Robert E. Powell, June 21, 1992 answer to question 23. Reprinted in S. Hrg. 102- 350., Pt.6.

85. Id. answer to question 24.

86. Fox has acknowledged to the Subcommittee that he maintained a top secret clearance during this period because he worked with sophisticated electronics components in Saudi Arabia for Martin Marietta and Rockwell International.

Romrell told the Subcommittee that Fox once worked for ARAMCO -- the middle east oil concern. Staff interview with Romrell, June 5, 1992.

87. Letter, Fox to Jamil Khan, BCCI Overseas, Cayman Islands, April 22, 1987.

88. Statement of Witness, Kerry Fox, September 19, 1990

89. Interview with Larry Romrell, June 5, 1992.

90. Letter, June 28, 1982, Fox to Richard Bowman and Statement of Witness, September 19, 1990.

91. Id.

92. Id.

93. Id, p.2.

94. Statement of Witness, Kerry Fox, September 19, 1990.

95. Staff interview with Larry Romrell, June 5, 1992.

96. Documents show that "the Lake House", Rockwall, Texas, was purchased "with or through BCCI...Khalil bought the house in 1981, but immediately conveyed the property to BCCI in full satisfaction of debt to Khalil Investment and Trading Co., Panama. Letter, Fox to Khan, August 23, 1989.

97. Letter, Fox to Akbar, February 2, 1982. In 1984, Romrell's annual salary was approximately $38,000.00. Staff interview with Larry Romrell, June 5, 1992.

98. Letter, Lynn H. Cole, lawyer for Kerry Fox, to David McKean, July 27, 1992.

99. Letter from S. Walker and Co., October 4, 1985.

The "Advisor" to the Fund was Futures Advisory Services, an Akbar controlled company. The Administrator for the Fund was Cayhaven Corporate Services, Cayman Islands. The broker for the Fund was Capcom, London. Letter attached to Capital Fund prospectus, October 11, 1985. he main U.S. bank for the FUND was Bank of America International, New York. Authorized share capital in October, 1985 was $900,000. Account 2-04-19489 / BOA, Cayman Islands.

100. Letter, Puri to Fox, December 4, 1985.

101. Watt Affidavit, p.25. Reprinted in S. Hrg. 102- 350, Pt.6.

102. Id.

103. Note to File, Fox, December, 1988.

104. Fox affidavit, September 18, 1990.

105. Resolution of Board of Directors of Capcom Financial Services, Ltd, July 30, 1987; letter, December 22, 1987, Saghir to Romrell.

106. S. Hrg. 102-350, Pt.6, p.15.

107. Id.

108. Id.

109. Price Waterhouse Report, June 22, 1991, p.18.

110. S. Hrg. 102- 305, Pt. 1, p.30.

111. Peat Marwick McLintock Audit of Capcom for CBOT, May 4, 1989, p.21(b).

112. Id p. 21(b).

113. Mazur tape, 150N, 9/20/88, 11:20 a.m., p.57, lines 6-18.

114. Peat Marwick McLintock audit for CBOT, May 4, 1989.

115. Capcom Futures Inc. was not named in the original indictment. See 11/23/88 letter from Robert E. Powis of Interpass, Ltd., to Gerald E. Beyer of the Chicago Mercantile Exchange. Nor was it named in the second superseding indictment. See Second Superseding Indictment, United States District Court, Middle District of Florida, case no. 88-330-Cr-T-13(B).

116. Specifically, the indictment charged that the defendants had violated the following provisions of the United States Code: 21 U.S.C. s.846, the Attempt and Conspiracy section of the Drug Abuse Prevention Act; 18 U.S.C. s.371, the general provision regarding criminal conspiracy, and 18 U.S.C. s.1956, regarding the laundering of monetary instruments.

117. See, e.g., the Affidavit of Ian Glendinning Watt, dated 01/20/89, at 1.

118. Romrell office diary. To January 18, 1889. p. 6.

119. Id.

120. See Second Superseding Indictment, dated _______, United States District Court, Middle District of Florida, case no. 88-330-Cr-T-13(B).

121. See "Superseding Indictment Still Names Capcom Financial Services," Securities Week, 05/15/89, at 6.

122. Memorandum, 11 October 1988, signed by L. Romrell and J.C.F. Parry.

123. S. Hrg. 102-350, Pt.6, p.7.

124. S. Hrg. 102-350, Pt.6,p.8.

125. CFTC Chairperson Wendy Gramm did not indicate who the owner of the account was, but rather testified that "S.Z.A. Akbar had a power of attorney to direct trading in this account." S. Hrg. 102-350, Pt. 6, p.11.

126. S. Hrg. 102-350, Pt.6, p.12.

127. Id.

128. S. Hrg. 1-2-350. Pt.6, p.11.

129. Affidavit, Larry Romrell, July 3, 1992. Answer to question 61.

130. S. Hrg. 102-350, Pt. 6, p12.

131. In response to questions from the CME staff, Capcom characterized Mr. Zaheer as "a self-employed auto dealer with a dealership in Karachi, Pakistan."

132. S. Hrg. 102-350, Pt.6, p.658.

133. S. Hrg. 102-350, Pt.6, p.647.

134. S. Hrg. 102-350. Pt.6, p.7.

135. Independent, 18.8.91, p.6.

136. S. Hrg. 102-350, Pt.6, p.660.

137. Letter, Romrell to Akbar, October 27, 1982.

138. Letter, Mr. J. Barnathan, ABC, N.Y., April 29, 1982.

139. Letter, Romrell to Akbar, January 6, 1983.

140. Telex, Romrell to Akbar, December 17, 1982

141. Telex, Romrell to Akbar.

142. Letter, Romrell to Akbar, March 30, 1983.

143. Memo, Bob Saffel, August 17, 1983.

144. Letter, Romrell to Akbar, December 16, 1983.

145. Romrell to Puri, January 5, 1984.

146. Letter, Romrell to Akbar, [Personal guarantees given by Magness, Romrell to BCCI], April 18, 1984.

147. Letter, June 8, 1984, Romrell to Akbar.

148. Letter, Romrell to Akbar, December 18, 1984.

149. Letter, June 4, 1985, Romrell to Akbar.

150. Letter, January 17, 1986, Romrell to Akbar.

151. Letter, January 17, 1986, Romrell to Akbar.

152. Letter, July 7, 1987.

153. Letter, April 13, 1988, Romrell to Akbar, while at FAS, Ltd, after he left BCCI indicating continued interaction.

154. Letter, July 27, 1987, Romrell to Puri, emphasis added.

155. Letter, February 10, 1983 from Romrell to Fox.

156. Letter, July 7, 1987, Romrell to Ehrlich

157. Price Waterhouse Report, June 22, 1991

158. ' 1712Letter, December 4, 1985, Puri to Fox.

159. Watt Affidavit, p.25.

160. Arthur Anderson Special Audit Prepared for Counsel of Association of Futures Brokers and Dealers, Ltd, London, 5/10/89, p.22.

161. Watt Affidavit, p.22.

162. Letter, January 17, 1986, Romrell to Akbar.

163. September 11, 1991, "The Fraud of the Century", Bandung Productions, 53-79 highgate Road, London.

164. Peat Marwick McLintock audit of Capcom for CBOT, May 4, 1989, p.22(c).

165. Peat Marwick McLintock audit of Capcom for CBOT, May 4, 1989.

166. WATT Affidavit, supporting documents, Exhibit 20 (iii).

167. Price Waterhouse Report, June 22, 1991, p.20.

168. Price Waterhouse Report, June 22, 1991, p.21.

169. April 16, 1987, Joint Unanimous Resolution of Capcom Futures, Inc, Board of Directors.

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LEGISLATIVE RECOMMENDATIONS 1. THE SUBCOMMITTEE RECOMMENDS THAT THE UNITED STATES DEVELOP A MORE AGGRESSIVE AND COORDINATED APPROACH TO COMBAT INTERNATIONAL FINANCIAL CRIME. THE U.S. NEEDS TO TAKE FIRM ACTION AGAINST NATIONS WHO PERMIT THEIR PRIVACY AND CONFIDENTIALITY LAWS TO PROTECT CRIMINALS FROM U.S. REGULATORS AND LAW ENFORCEMENT.

Both BCCI and its customers used foreign bank secrecy and confidentiality laws to commit crimes, to prevent the detection of those crimes, and to obstruct law enforcement efforts to investigate and prosecute crimes once they were discovered.

The traditional approach of smaller nations such as the Cayman Islands and Luxembourg of offering strict bank secrecy as an inducement to attract foreign deposits has is poor international public policy, and threatens vital interests of the United States.

Current practices of major financial centers such as the United Kingdom and Switzerland, while providing for the exchange of information among regulators, and some mechanisms for the exchange of information among federal law enforcement, after criminal activity is uncovered, still impede an adequate flow of financial information concerning such activity in the earlier, investigative phase.

The United States needs to take a more aggressive and coordinated approach to developing an international regime for the sharing of financial information among governmental entities, and a substantial loosening in financial confidentiality and privacy laws to insure that government investigators in the U.S. can gain adequate access to and information about, financial transactions that cross international boundaries, but impact the U.S.

While the U.S. has become more focused in fighting drug money laundering through international cooperation in recent years, it has continued to take the position that the process of sharing on applications between law enforcement agencies is sufficient to protect U.S. interests, and no broad-scale changes in foreign bank secrecy laws are necessary. As Federal Reserve counsel Virgil Mattingly testified, sixteen months after the Federal Reserve began its formal investigation of BCCI, Swiss and French authorities were still denying it critical information as a consequence of their secrecy laws.(1) A much more aggressive approach by the United States to changing attitudes among the G-10 nations on this issue is essential.

Current toleration by the United States of bank secrecy and regulatory havens such as the Grand Caymans, Liechtenstein, the Bahamas, the Channel Islands, Vanuatu, Hong Kong, Aruba, and the Netherlands Antilles needs to be replaced by a policy that threatens to withhold access to the U.S. market for banks doing business in any nation that does not meet minimum standards for regulation and the sharing of information with the United States.

The Treasury, as the lead agency for handling U.S. policies concerning international financial crime, needs to be much more aggressive on these issues, to place substantial limits on the ability of criminals to use confidentiality and privacy laws as a shield against law enforcement.

2. THE SUBCOMMITTEE RECOMMENDS THAT THE INSPECTOR GENERAL OF THE JUSTICE DEPARTMENT INVESTIGATE THE POLICIES AND PRACTICES THAT LED TO THE JUSTICE DEPARTMENT'S INEFFECTIVENESS IN INVESTIGATING AND PROSECUTING BCCI, AND IMPAIRED ITS ABILITY TO COOPERATE WITH OTHER INVESTIGATIONS OF BCCI. THE JUSTICE DEPARTMENT NEEDS FUNDAMENTALLY TO RECONSIDER ITS POLICIES IN DEALING WITH COMPLEX FINANCIAL CASES. FUNDAMENTAL CHANGE IN HOW THE JUSTICE DEPARTMENT HANDLES INQUIRIES FROM OTHER GOVERNMENT AGENCIES AND THE CONGRESS IS ALSO ESSENTIAL.

The problems encountered by the Justice Department in investigating and prosecuting BCCI are familiar ones. As a consequence of a lack of understanding of the significance of the case, requests for additional resources from the Customs Agents and prosecutors involved were ignored, broader investigated leads were abandoned, and ultimately, BCCI was permitted to plead guilty and thereby avoid a trial that could have helped bring down the bank entirely.

Other problems compounded these original problems. Most significant was the Justice Department's unwillingness to share information with other ongoing governmental investigations, including those of the Federal Reserve, the New York District Attorney and the Senate. Instead, the Justice Department appeared on numerous occasions to be more concerned with protecting its ability to control information about BCCI, than with assisting the investigative efforts of others. Related to this problem was the lack of candor demonstrated by individual Justice Department employees in responding to inquiries of the Federal Reserve, New York District Attorney, and Senate. In addition, there were substantial problems of coordination between the Justice Department in Washington and its U.S. Attorneys office, as was especially demonstrated by the breakdown in communication between the U.S. Attorney in Miami and the Criminal Division of the Justice Department in Washington in 1991.

In response to the resource and coordination issues arising in BCCI, consideration needs to be given within the Justice Department to the recreation of the strike force concept, abandoned during the early years of the Reagan Administration, and used to devote substantial resources to major cases.

In response to the cooperation issues pertaining the Federal Reserve, New York District Attorney and Senate, consideration needs to be given by the Attorney General to adopting a new set of procedures and regulations governing such contacts, to direct Justice Department personnel to give a far higher priority to providing assistance in response to the legitimate requests of other governmental entities, limited only by such legal requirements as the withholding of documents placed before a grand jury.

3. THE SUBCOMMITTEE RECOMMENDS THAT THE CENTRAL INTELLIGENCE AGENCY AND STATE DEPARTMENT TARGET FOREIGN FINANCIAL INSTITUTIONS AS SUBJECTS FOR INTELLIGENCE GATHERING AND ANALYSIS.

Prior to BCCI's collapse, the CIA had disseminated only three analytic reports on BCCI itself, one of which was lost and of which no original remains. While the reports demonstrate the Agency's early recognition of BCCI's systematic engagement in money laundering and other criminality, they are also oddly limited in detail and scope, given the serious nature of the allegations discussed, and there was little follow up by the CIA to any of them. Moreover, these reports were not provided to the users, the Federal Reserve and the Justice Department, who most required them. Finally, these reports contained no information concerning several individuals who were affiliated with or owned BCCI, and with whom the CIA had had or was still having substantial contact. These gaps would suggest a remarkable lack of information at the CIA about the basic business dealings of important CIA contacts in the Middle East.

The State Department, by contrast to the CIA, knew almost nothing about BCCI prior to its collapse, and seemed to view the collection of information on foreign financial institutions as largely beyond its scope of responsibilities.

Given the risk to the United States from international financial crime, both agencies need to upgrade their capabilities to understand the strategies being employed by foreign financial institutions that may impact on vital U.S. interests, and to begin to include such entities as targets for collection and analysis.

4. THE SUBCOMMITTEE RECOMMENDS THAT THE CONGRESS CONSIDER ADOPTING ADDITIONAL OVERSIGHT MECHANISMS TO ENSURE THE CIA'S ACCOUNTABILITY ON THE PROVISION OF INFORMATION.

At various times, the Central Intelligence Agency provided information to the Subcommittee during the course of its investigation that was both misleading and untrue. Documents that existed were characterized as not existing. Information that was provided was incomplete. It required repeated efforts by the Subcommittee, extending over a year, to obtain more complete information, which was provided only following a meeting in February, 1992 between the Subcommittee chairman and Director Gates. Even then, as the CIA purported to provide a full account of its knowledge of BCCI, it cautioned the Subcommittee that its system of record-keeping could not guarantee that all information had in fact been provided. Moreover, information regarding certain persons who were shareholders, nominees, officers, or affiliates of BCCI, was provided solely in a summary form, containing relatively limited information and far less than is clearly in the CIA's possession.

Staff of the officer of the Inspector General of the Central Intelligence Agency has recently requested meetings with Subcommittee staff to discuss these issues.

It is recommended that the House and Senate Select Committees on Intelligence consider whether the current procedures and mechanisms are adequate to ensure accountability by the CIA in its responses to Congressional requests. Of particular concern is the lack of any practical mechanism for members who do not serve on the Committees to insure the CIA's responsiveness to their legitimate requests, as well as the difficulties of establishing whether or not the CIA's responses to inquiries are forthright and accurate.

5. THE SUBCOMMITTEE RECOMMENDS THAT FEDERAL AGENCIES IMPOSE NEW REQUIREMENTS ON FOREIGN AUDITORS TO PROTECT U.S. INTERESTS IN ANY CASE IN WHICH ANY SUCH AGENCY IS RELYING ON AN AUDIT CERTIFIED BY A FOREIGN AUDITOR. AT MINIMUM, THIS SHOULD REQUIRE FOREIGN AUDITORS WHOSE CERTIFICATIONS ARE USED BY INSTITUTIONS DOING BUSINESS IN THE U.S. AGREE TO SUBMIT THEMSELVES TO U.S. LAWS.

As the Subcommittee discovered during the course of investigating BCCI, the major accounting firms, such as Price Waterhouse, while operating globally, are structured to be independent partnerships in which no national partnership has financial obligations or ties to any other. As a consequence, when a foreign auditor certifies the audit of an entity doing business in the United States, the domestic auditor views itself to be not legally responsible for any of the actions taken by the foreign auditor, nor for providing any information to U.S. regulators and law enforcement personnel that may be in the possession of the foreign auditor. In the case of BCCI, this meant that Price Waterhouse in the United States was able to take the position that it could not answer any questions or provide the information requested by investigators, while Price Waterhouse in the United Kingdom -- which certified BCCI's books -- was able to take the position that it did not do business the United States, was not subject to service of process in the United States, and was not responsible to provide information to the United States, although BCCI was licensed as a foreign bank in several states.

The inability of U.S. regulators and law enforcement to gain access to foreign auditors who may have certified the accounts of entities doing business in the United States substantially impeded investigations and prosecutions of BCCI. It is recommended that the Congress develop a statutory mechanism to require all U.S. agencies to develop regulations imposing the requirement that any entity certifying the audit of an entity which is provided to any U.S. agency in so doing submit itself to U.S. jurisdiction and agree to the provision of documents and records as required by U.S. law. Additional mechanisms to insure accountability by auditors to government regulators and investigators should also be explored.

6. THE SUBCOMMITTEE RECOMMENDS THAT THE PRESIDENT AND THE SECRETARY OF STATE ADVISE THE GOVERNMENT OF ABU DHABI THAT ITS WITHHOLDING OF DOCUMENTS AND WITNESSES PERTAINING TO BCCI FROM U.S. FEDERAL LAW ENFORCEMENT INVESTIGATORS, THE FEDERAL RESERVE, THE NEW YORK DISTRICT ATTORNEY AND THE CONGRESS THREATENS VITAL U.S. INTERESTS AND WILL NOT BE TOLERATED.

As of the writing of this report, the most important remaining impediment to investigating and prosecuting the BCCI case is the withholding of critical documents and witnesses from U.S. law enforcement and regulators by the Abu Dhabi authorities. Given the ownership of BCCI by Abu Dhabi, and Abu Dhabi's controlling interest, through BCCI and its own shares, in CCAH, holding company for the First American Banks, the Abu Dhabi government has engaged in substantial non-sovereign activities in the United States. Its continued suppression of evidence in the case is so serious that it should raise some questions about the previously friendly relationship between the two nations. To date, neither the White House nor the State Department has made any statement criticizing the Abu Dhabi government for its refusal to cooperate adequately with the United States on this matter. The United States needs to express its deep concern over this matter, and its intention to take further steps if the failure to provide access to the witnesses and documents is not rectified immediately.

7. FURTHER ATTENTION NEEDS TO BE GIVEN TO THE PROBLEM OF THE REVOLVING DOOR IN WASHINGTON, AND THE IMPACT ON THE REGULATORY PROCESS AND ON LAW ENFORCEMENT OF POLITICAL INFLUENCE IN WASHINGTON. THE SUBCOMMITTEE RECOMMENDS THE CONSIDERATION OF LEGISLATING A FEDERAL STATUTORY CODE OF CONDUCT FOR ATTORNEYS WHO PRACTICE BEFORE FEDERAL AGENCIES.

BCCI's political connections in Washington had a material impact on its ability to accomplish its goals in the United States. In hiring lawyers, lobbyists and public relations firms in the United States to help it deal with its problems vis a vis the government, BCCI pursued a strategy that it had practiced successfully around the world: the hiring of former government officials. These former government officials played a major role both in making it possible for BCCI secretly to purchase Financial General Bankshares, and then to evade detection and impede investigative efforts to expose what it had done.

There is something fundamentally wrong with a political system in which former government officials, as in the case of BCCI, too frequently appear to be willing to provide assistance

in circumventing U.S. laws and regulations to anyone who is willing to pay their fee.

In theory, ethical considerations would discourage former high public officials, government prosecutors, and regulators from using the skills and knowledge they obtained in government to assist clients who wish to circumvent, or at least, bend, the obvious import of the laws. However, in the highly competitive day-to-day practice of law and lobbying in Washington, D.C., it appears that such considerations are too often thrown aside to the need of the former officials to generate fees.

The problem of the revolving door and influence-peddling is serious enough when applied to domestic clients looking to influence the legislative, regulatory, or law enforcement process. However, as with BCCI, when former government officials provide put their expertise to use for foreign clients, even deeper problems emerge. First, the foreign clients have little stake in our society beyond their own self-interest, and thus, there is less incentive for them to adhere to U.S. laws apart from the threat of sanctions if they are caught breaking them. Second, some foreign clients may be accustomed to political influence and corruption within their own countries, and therefore pay for and expect such services to circumvent laws in the United States. Third, as in BCCI, foreign clients are less susceptible to being investigated, and prosecuted or held liable in the United States, if something goes wrong. Fourth, it is more difficult to determine the ultimate agenda of an entity which is based outside the United States.

Foreign investment in the United States may in some respects be an essential component of long-term prosperity, and in any case inevitable. Yet the continued willingness of so many attorneys and lobbyists in Washington to represent foreign clients without regard to the special problems they pose, suggests that consideration needs to be given to legislation that would force lawyers and lobbyists who represent foreign interests to adhere to a higher standard of practice, adequate to protect U.S. interests.

At present, essentially no mechanism exists whereby sanctions can be imposed on attorneys who fail to meet basic ethical obligations to regulatory bodies. Serious attention needs to be given to the development of a federal code of professional conduct, that would supplement the industry code adopted by the American Bar Association. Such a code would set forth minimum ethical standards for the practice of law before federal regulatory bodies, including requiring certain disclosures to the government by the attorney in cases in which the attorney has reason to believe the client may have made false statements to the government. The code would allow for any party, including the regulators themselves, to seek revocation of a lawyer's right to practice before that regulatory body for an infraction of the code, or before any federal regulatory body for a serious such infraction.

8. THE SELF-REGULATION OF THE U.S COMMODITIES MARKETS BY THE COMMODITIES FUTURES TRADING COMMISSION, THE CHICAGO BOARD OF TRADE, AND THE CHICAGO MERCANTILE EXCHANGE IS INADEQUATE TO PROTECT THOSE MARKETS AGAINST MONEY LAUNDERING INVOLVING TRADES

FROM ABROAD. THE SUBCOMMITTEE RECOMMENDS THAT THE EXCHANGES MAKE MONEY LAUNDERING ILLEGAL, AND DEMAND THAT THIS REQUIREMENT BE ACCEPTED BY FOREIGN COMMODITIES EXCHANGES WITH WHOM THEY DO BUSINESS, AS A CONDITION OF ACCESS TO US EXCHANGES.

As the Subcommittee investigation found, commodities regulators with the responsibility for investigating Capcom showed little interest in conducting a thorough investigation of its activities, and in 1989 allowed Capcom to avoid such an investigation through agreeing to cease doing business in the United States. While the exchanges have developed sophisticated mechanisms for detecting money laundering that takes place within the U.S. markets, those markets interact with foreign commodities markets in a manner that makes detection of money-laundering that crosses international boundaries very difficult.

At present, the laundering of money, in and of itself, does not violate commodities regulations, and is not grounds for expulsion from the exchanges.

Commodities regulators in the U.S. need to push for the definition and criminalization of money laundering in all commodities exchanges with whom they deal, including those in foreign countries, and develop procedures for "spot" checks of various investment houses to detect money laundering. They also need to develop mechanisms with foreign commodities regulators to insure that mirror imaging and similar techniques for money laundering are not tolerated simply because the mirror images are separated by national borders.

9. THE SUBCOMMITTEE RECOMMENDS THAT FURTHER STEPS BE TAKEN TO INSURE ADEQUATE ACCOUNTABILITY OF FOREIGN FINANCIAL INSTITUTIONS DOING BUSINESS IN THE UNITED STATES, INCLUDING REQUIRING THAT FOREIGN BANKS FORM SEPARATELY CAPITALIZED HOLDING COMPANIES IN THE UNITED STATES AS A CONDITION OF LICENSE AND THE ESTABLISHMENT BY THE FEDERAL RESERVE OF A MINIMUM STANDARD FOR CONSOLIDATED REGULATION THAT EXCLUDES BANK REGULATORY HAVENS.

While foreign bank regulation in the United States has already been substantially strengthened as a result of the BCCI affair, foreign banks doing business in the United States are still treated differently from domestic banks, and to the competitive detriment of domestic banks. Under the changes in law implemented last year through the passage of the Foreign Bank Supervisory Enhancement Act as part of the banking reform bill, foreign banks are now effectively regulated, supervised, and examined at a level equivalent to U.S. banks. However, they are not separately capitalized within the United States, and are merely required to maintain certain levels of reserves here as a means of protecting U.S. creditors.

The result is that U.S. regulators have no means for determining the nature, source, and backing of these reserves, or the real ability to keep such reserves in the U.S. in the event of a crisis involving the foreign bank. The Treasury has already recommended that foreign banks engaging in the sale of securities and other expanded-banking activities be required to establish separately capitalized holding companies in the U.S. This approach should be adopted for all foreign banks as a matter of enhancing overall accountability.

In addition, the Federal Reserve needs to move forward with a certification process which reaches a determination as to whether the home country supervision of a foreign bank meets a base-line standard sufficient to justify granting banks regulated by that country the right to operate in the United States.

Under current law, any foreign bank operating on a consolidated basis regulated by any home country bank regulator is on an equal footing with all other foreign banks similarly regulated in seeking permission to operate in the United States. With the passage of the Foreign Bank Supervisory Enhancement Act last year, the Congress has implemented a number of suggestions made by the Federal Reserve to strengthen U.S. regulatory oversight of such institutions, which includes the ability of the Federal Reserve to differentiate among such institutions based on the quality or extent of regulation by the home state regulator. The Federal Reserve needs to make use of the authority granted in the Foreign Bank Supervisory Enhancement Act to specify what the baseline requirements for consolidated regulation are, and which jurisdictions do and which do not meet these requirements.

As BCCI demonstrated, lax regulation in such jurisdictions as Luxembourg and the Grand Caymans can enable an institution bent on fraud to engage in manipulation of accounts and assets at a significant level as a means of securing legitimate deposits. The U.S. remains a key market for foreign banks, and few nations would be willing to give up the right for their banks to operate in the United States. A certification process under which the Federal Reserve sets criteria under which home country regulation is deemed adequate, and excludes banks regulated by "havens" which fail to meet those standards, would have no impact on banks regulated by countries that met basic standards for such regulation. The adoption of such a process, including the creation of an approve and non-approved list of country regulators, is essential to protect U.S. banking from being infiltrated by criminals.

10. THE SUBCOMMITTEE RECOMMENDS THAT FOREIGN INVESTORS WHO PURCHASE SUBSTANTIAL SHARES OF U.S. BUSINESSES BE REQUIRED TO APPEAR PERSONALLY IN THE UNITED STATES AS INSURANCE THAT THE FOREIGN INVESTOR IS NOT ACTING AS A NOMINEE FOR SOMEONE ELSE.

Currently, U.S. lawyers are allowed to establish a nominee company on behalf of foreign investors. While there are certain disclosure requirements for investors who purchase over 5% of a company, there exists no requirement that the individual appear in the United States. Nominees whose names are used to purchase businesses on behalf of others is a common practice in much of the world, especially Latin America and the Middle East.

A requirement that any foreign investor who purchase more than 5% of a U.S. company, business, bank or financial entity, appear personally before the appropriate regulatory authority, with a waiver for investors who met certain defined criteria, such as showing adequate assets in the United States to meet judgments against them personally, would help to curtail the practice, as illustrated in the BCCI case, of nominee shareholders.

If the investor refuses to be present at a hearing, the legislation could required that the investment be made provided the U.S. attorney is willing to waive the attorney/client privilege and incur liability should the investment subsequently prove to be fraudulent in any way.

11. TURF WARS CONTINUE TO SEVERELY DAMAGE THE ABILITY OF LAW-ENFORCEMENT AGENCIES IN THE UNITED STATES TO DO THEIR JOB. THE SUBCOMMITTEE RECOMMENDS THE ESTABLISHMENT OF A COMMITTEE OF LAW ENFORCEMENT OFFICIALS WHOSE JOB IT IS TO CONDUCT OVERSIGHT OF, PREVENT, AND RESPOND TO FAILURES OF COOPERATION IN LAW ENFORCEMENT.

Turf wars in the BCCI case were evident everywhere, including within the U.S. Customs Service itself, among competing federal law enforcement agencies, within the Justice Department and U.S. Attorneys' Offices, and between federal law enforcement, the Federal Reserve, the New York District Attorney, and the Congress. These bureaucratic battles had a substantial and negative impact on investigating and prosecuting BCCI. They are not unique to the BCCI case, but endemic, and some structural response is essential.

This Subcommittee previously encountered this problem during the course of its investigations in 1987 and 1988. Since that time, the problem has not improved, and the Subcommittee has seen no signs that it is effectively being responded to by federal law enforcement.

It is recommended that the Congress establish, by statute, a law enforcement committee, reporting annually to the Justice Department and the Congress, which focuses on developing solutions to the continuing "turf wars" in the sharing of information and coordination of prosecutions among law enforcement entities in the U.S. The committee would consist of a representative from the Justice Department, a U.S. Attorney, a state Attorney General and a District Attorney, all appointed by the President and each subject to confirmation by the Senate.

12. THE SUBCOMMITTEE RECOMMENDS THAT A STATUTORY MECHANISM FOR THE RECEIPT BY CONGRESS OF FOREIGN FINANCIAL INFORMATION BE ESTABLISHED.

The Justice Department has for a number of years taken the position that U.S. treaties with foreign jurisdictions for the sharing of information in criminal, regulatory and investigative matters does not encompass the Congress, even when Mutual Legal Assistance Treaties (MLATs) have been entered into with those countries which do not by their language exclude the Congress. Accordingly, the Justice Department refused to assist the Subcommittee, and will not in general assist Congressional requests for information, including the enforcement of Congressional subpoenas, to the extent that they seek information that is held abroad. This position has recently been modified so that the Justice Department will cooperate in such assistance in cases in which the Foreign Country has already explicitly agreed to provide it to the Congress.

As the Iran-Contra Committees found in 1987, and as this Subcommittee has found during its work from 1988 through 1992, the inability of the Congress to obtain information from abroad either directly or through the Executive Branch due to the lack of procedures has substantially impeded the Congress' constitutional responsibilities in fact-finding and oversight of U.S. foreign policy and other extra-territorial activities.

Two possible legislative solutions would be a statute explicitly adding the enforcement of legislative branch subpoenas as a matter of U.S. domestic law to the mutual enforcement responsibilities of the Executive Branch under mutual legal assistance treaties with foreign countries; and a statute providing for direct application by the Congress to the foreign government for enforcement of the subpoena, backed by some form of limitation on Executive Branch cooperation with that foreign government in the event of non-compliance.

1. S. Hrg. 102-350 Pt. 5 p. 153.

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APPENDICES

Matters For Further Investigation

There have been a number of matters which the Subcommittee has received some information on, but has not been able to investigate adequately, due such factors as lack of resources, lack of time, documents being withheld by foreign governments, and limited evidentiary sources or witnesses. Some of the main areas which deserve further investigation include:

1. The extent of BCCI's involvement in Pakistan's nuclear program. As set forth in the chapter on BCCI in foreign countries, there is good reason to conclude that BCCI did finance Pakistan's nuclear program through the BCCI Foundation in Pakistan, as well as through BCCI-Canada in the Parvez case. However, details on BCCI's involvement remain unavailable. Further investigation is needed to understand the extent to which BCCI and Pakistan were able to evade U.S. and international nuclear non-proliferation regimes to acquire nuclear technologies.

2. BCCI's manipulation of commodities and securities markets in Europe and Canada. The Subcommittee has received information that remains not fully substantiated that BCCI defrauded investors, as well as some major U.S. and European financial firms, through manipulating commodities and securities markets, especially in Canada, the Netherlands, and Luxembourg. This alleged fraud requires further investigation in those countries.

3. BCCI's activities in India, including its relationship with the business empire of the Hinduja family. The Subcommittee has not had access to BCCI records regarding India. The substantial lending by BCCI to the Indian industrialist family, the Hindujas, reported in press accounts, deserves further scrutiny, as do the press reports concerning alleged kick-backs and bribes to Indian officials.

4. BCCI's relationships with convicted Iraqi arms dealer Sarkis Soghanalian, Syrian drug trafficker, terrorist, and arms trafficker Monzer Al-Kassar, and other major arms dealers. Sarkenalian was a principal seller of arms to Iraq. Monzer Al-Kassar has been implicated in terrorist bombings in connection with terrorist organizations such as the Popular Front for the Liberation of Palestine. Other arms dealers, including some who provided machine guns and trained Medellin cartel death squads, also used BCCI. Tracing their assets through the bank would likely lead to important information concerning international terrorist and arms trafficker networks.

5. The use of BCCI by central figures in arms sales to Iran during the 1980's. The late Cyrus Hashemi, a key figure in allegations concerning an alleged deal involving the return of U.S. hostages from Iran in 1980, banked at BCCI London. His records have been withheld from disclosure to the Subcommittee by a British judge. Their release might aid in reaching judgments concerning Hashemi's activities in 1980, with the CIA under President Carter and allegedly with William Casey.

6. BCCI's activities with the Central Bank of Syria and with the Foreign Trade Mission of the Soviet Union in London. BCCI was used by both the Syrian and Soviet governments in the period in which each was involved in supporting activities hostile to the United States. Obtaining the records of those financial transactions would be critical to understanding what the Soviet Union under Brezhnev, Chernenko, and Andropov was doing in the West; and might document the nature and extent of Syria's support for international terrorism.

7. BCCI's involvement with foreign intelligence agencies. A British source has told the Bank of England and British investigators that BCCI was used by numerous foreign intelligence agencies in the United Kingdom. The British intelligence service, the MI-5, has sealed documents from BCCI's records in the UK which could shed light on this allegation.

8. The financial dealings of BCCI directors with Charles Keating and several Keating affiliates and front-companies, including the possibility that BCCI related entities may have laundered funds for Keating to move them outside the United States. The Subcommittee found numerous connections among Keating and BCCI-related persons and entities, such as BCCI director Alfred Hartman; CenTrust chief David Paul and CenTrust itself; Capcom front-man Lawrence Romrell; BCCI shipping affiliate, the Gokal group and the Gokal family; and possibly Ghaith Pharaon. The ties between BCCI and Keating's financial empire require further investigation.

9. BCCI's financing of commodities and other business dealings of international criminal financier Marc Rich. Marc Rich remains the most important figure in the international commodities markets, and remains a fugitive from the United States following his indictment on securities fraud. BCCI lending to Rich in the 1980's amounted to tens of millions of dollars. Moreover, Rich's commodities firms were used by BCCI in connection with BCCI's involving in U.S. guarantee programs through the Department of Agriculture. The nature and extent of Rich's relationship with BCCI requires further investigation.

10. The nature, extent and meaning of the ownership of shares of other U.S. financial institutions by Middle Eastern political figures. Political figures and members of the ruling family of various Middle Eastern countries have very substantial investments in the United States, in some cases, owning substantial shares of major U.S. banks. Given BCCI's routine use of nominees from the Middle East, and the pervasive practice of using nominees within the Middle East, further investigation may be warranted of Middle Eastern ownership of domestic U.S. financial institutions.

11. The nature, extent, and meaning of real estate and financial investments in the United States by major shareholders of BCCI. BCCI's shareholders and front-men have made substantial investments in real estate throughout the United States, owning major office buildings in such key cities as New York and Washington, D.C. Given BCCI's pervasiveness criminality, and the role of these shareholders and front-men in the BCCI affair, a complete review of their holdings in the United States is warranted.

12. BCCI's collusion in Savings & Loan fraud in the U.S. The Subcommittee found ties between BCCI and two failed Savings and Loan institutions, CenTrust, which BCCI came to have a controlling interest in, and Caprock Savings and Loan in Texas, and as noted above, the involvement of BCCI figures with Charles Keating and his business empire. In each case, BCCI's involvement cost the U. S. taxpayers money. A comprehensive review of BCCI's account holders in the U.S. and globally might well reveal additional such cases. In addition, the issue of whether David Paul and CenTrust's political relationships were used by Paul on behalf of BCCI merits further investigation.

13. The sale of BCCI affiliate Banque de Commerce et de Placements (BCP) in Geneva, to the Cukorova Group of Turkey, which owned an entity involved in the BNL Iraqi arms sales, among others. Given BNL's links to BCCI, and Cukorova Groups' involvement through its subsidiary, Entrade, with BNL in the sales to Iraq, the swift sale of BCP to Cukorova just weeks after BCCI's closure -- prior to due diligence being conducted -- raises questions as to whether a prior relationship existed between BCCI and Cukorova, and Cukorova's intentions in making the purchase. Within the past year, Cukorova also applied to purchase a New York bank. Cukorova's actions pertaining to BCP require further investigation in Switzerland by Swiss authorities, and by the Federal Reserve New York.

14. BCCI's role in China. As noted in the chapter on BCCI's activities in foreign countries, BCCI had extensive activity in China, and the Chinese government allegedly lost $500 million when BCCI closed, mostly from government accounts. While there have been allegations that bribes and pay-offs were involved, these allegations require further investigation and detail to determine what actually happened, and who was involved.

15. The relationship between Capcom and BCCI, between Capcom and the intelligence community, and between Capcom's shareholders and U.S. telecommunications industry figures. The Subcommittee was able to interview people and review documents concerning Capcom that no other investigators had to date interviewed or reviewed. Much more needs to be done to understand what Capcom was doing in the United States, the United Kingdom, Egypt, Oman, and the Middle East, including whether the firm was, as has been alleged but not proven, used by the intelligence community to move funds for intelligence operations; and whether any person involved with Capcom was seeking secretly to acquire interests in the U.S. telecommunications industry.

16. The relationship of important BCCI figures and important intelligence figures to the collapse of the Hong Kong Deposit and Guaranty Bank and Tetra Finance (HK) in 1983. The circumstances surrounding the collpase of these two Hong Kong banks; the Hong Kong banks' practices of using nominees, front-companies, and back-to-back financial transactions; the Hong Banks' directors having included several important BCCI figures, including Ghanim Al Mazrui, and a close associate of then CIA director William Casey; all raise the question of whether there was a relationship between these two institutions and BCCI-Hong Kong, and whether the two Hong Kong institutions were used for domestic or foreign intelligence operations.

17. BCCI's activities in Atlanta and its acquisition of the National Bank of Georgia through First American. Although the Justice Department indictments of Clark Clifford and Robert Altman cover portions of how BCCI acquired National Bank of Georgia, other important allegations regarding the possible involvement of political figures in Georgia in BCCI's activities there remain outside the indictment. These allegations, as well as the underlying facts regarding BCCI's activities in Georgia, require further investigation.

18. The relationship between BCCI and the Banca Nazionale del Lavoro. BCCI and the Atlanta Branch of BNL had an extensive relationship in the United States, with the Atlanta Branch of BNL having a substantial number of accounts in BCCI's Miami offices. BNL was, according to federal indictments, a significant financial conduit for weapons to Iraq. BCCI also made loans to Iraq, although of a substantially smaller nature. Given the criminality of both institutions, and their interlocking activities, further investigation of the relationship could produce further understanding of Saddam Hussein's international network for acquiring weapons, and how Iraq evaded governmental restrictions on such weapons acquisitions.

19. The alleged relationship between the late CIA director William Casey and BCCI. As set forth in the chapter on intelligence, numerous trails lead from BCCI to Casey, and from Casey to BCCI, and the investigation has been unable to follow any of them to the end to determine whether there was indeed a relationship, and if there was, its nature and extent. If any such relationship existed, it could have a significant impact on the findings and conclusions concerning the CIA and BCCI's role in U.S. foreign policy and intelligence operations during the Casey era. The investigation's work detailing the ties of BCCI to the intelligence community generally also remains far from complete, and much about these ties remains obscure and in need of further investigation.

20. Money laundering by other major international banks. Numerous BCCI officials told the Subcommittee that BCCI's money laundering was no different from activities they observed at other international banks, and provided the names of a number of prominent U.S. and European banks which they alleged engaged in money laundering. There is no question that BCCI's laundering of drug money, while pervading the institution, constituted a small component of the total money laundering taking place in international banking. Further investigation to determine which international banks are soliciting and handling drug money should be undertaken.

WITNESSES

(All witnesses testified in public session or in published depositions printed by the Subcommittee, except witnesses with *, who testified at hearing conducted within Subcommittee on Consumer and Regulatory Affairs of Senate Committee on Banking, Housing and Urban Affairs in coordination with this investigation, May 23, 1991.)

Robert A. Altman, former president, First American Bankshares and attorney for BCCI.

Fausto Alvarado, Member, Peruvian House of Deputies.

Fernando Ramon Marin Amaya. Investigator retained by Attorney General of Guatemala to investigate BCCI's activities in Guatemala.

Amjad Awan, federal prisoner, former BCCI official who handled accounts of Panamanian General Manuel Noriega.

Sidney Bailey, Virginia Commissioner of Financial Institutions, Richmond, Virginia.*

Robert R. Bench, Partner, Price Waterhouse, Former Deputy Comptroller for International Relations and Financial Evaluation.

Gerald Beyer, Executive Vice President, Chicago Merchantile Exchange.

Akbar Bilgrami, federal prisoner, former head of Latin American and Caribbean Regional Office, BCCI, Miami.

Jack Blum. A private attorney at the firm of Novins, Lamont & Flug. Formerly special counsel to the Foreign Relations Committee for the investigation of the Subcommittee on Narcotics, Terrorism, and International Operations into Drugs, Law Enforcement, and Foreign Policy, 1987-1988.

Parker W. Borg. Deputy Assistant Secretary of the Bureau of International Narcotics Matters at the Department of State.

James Bruton, Acting Assistant Attorney General, Tax Divisin, Department of Justice.

A. Peter Burleigh, Coordinator for Counter-Terrorism at the Department of State.

Jorge Del Castillo, Member, Peruvian House of Delegates.

Pedro Cateriano, Member, Peruvian House of Deputies.

Nazir Chinoy, federal prisoner, former General Manager, BCCI Paris.

Clark M. Clifford, formerly, chairman of First American Bankshares and attorney for BCCI.

Andrea Cocoran, Director of Planning and Compliance, Commodities Futures Trading Commission.

Michael Crystal, Queen's Counsel, representing English court-appointed liquidators of BCCI.

George Davis, President and CEO, First American Bankshares, Washington, D.C.

James F. Dougherty, Attorney, Miami Florida. Representing Lloyds of London in litigation concerning alleged fraud involving BCCI.

Scott M. Early, General Counsel, Chicago Board of Trade.

Lourdes Flores, Member, Peruvian House of Deputies.

Robert Genzman, U.S. Attorney for the Middle District of Florida.

Wendy Gramm, Commissioner, Commodities Futures Trading Commission.

John Heimann, former New York State Bank Supervisor and Comptroller of the Currency.*

Mark Jackowski, Assistant U.S. Attorney for the Middle District of Florida.

Nicholas de B. Katzenbach, Chairman, First American Bankshares, Washington, D.C.

Gregory Kehoe, First Assistant U.S. Attorney, Criminal Division, for the Middle District of Florida.

Richard Kerr, Acting Director, Central Intelligence Agency.

Alan J. Kreczko. Deputy Legal Advisor at the U.S. Department of State.

T. Bertram Lance, Former Director of the Office of Management and Budget.

Dexter Lehtinen, Former U.S. Attorney, Southern District of Miami, Florida.

Richard A. Lehrman, Esq., attorney, Miami, Florida. Represented Lloyds of London in case involving BCCI commmodities fraud.

Ricardo Llaque, Deputy Director of Exchange Operations, Federal Reserve Bank of Peru.

Paul Maloney, Deputy Assistant Attorney General for Criminal Division, U.S. Department of Justice, Washington, D.C.*

Virgil Mattingly, General Counsel, Board of Governors, Federal Reserve System.

Robert Mazur, Undercover Agent for Operation C-Chase, Drug Enforcement Administration.

Douglas P. Mulholland, Assistant Secretary for Intelligence and Research, Department of State.

Robert Morgenthau, District Attorney, County of New York, New York.*

Robert S. Mueller, III, Assistant Attorney General, Department of Justice, Washington, D.C.

Fernando Olivera, Member, Peruvian House of Deputies.

Laurence Pope, Associate Coordinator for Counter-Terrorism, Department of State.

William Von Raab. An attorney at the firm of William H. Bode Associates. Formerly Commissioner of the United States Customs Service, 1985-1989, oversaw Customs' handling of the sting operation that targeted BCCI, Operation C-Chase.

Masihur Rahman, Former Chief Financial Officer, BCCI London.

Mark Richard, Deputy Assistant Attorney General, Criminal Division, Department of Justice.

Edward M. Rogers, Jr., former White House aide.

Jesus Rodriguez, Member, Chamber of Deputies, Argentina.

Abdur Sakhia, former head, BCCI Miami.

Ahmed Al Sayegh, Director, Abu Dhabi National Oil Company.

Raul Alconada Sempe, former Secretary of Defense and former Secretary for Special Projects, Foreign Ministry, Argentina.

Grant Smith, Deputy Assistant Secretary, International Narcotics Matters, Department of State.

Brian Smouha, Court Appointed Fiduciary for BCCI Holdings (Luxembourg) SA and Bank of Credit and Commerce International, S.A., London, England.

John W. Stone, Chief of Enforcement, Federal Deposit Insurance Corporation.

William Taylor, Staff Director, Division of Banking Supervision and Regulation, Federal Reserve, Washington, D.C.

WRITS AND SUBPOENAS AUTHORIZED DURING INVESTIGATION

WRITS AUTHORIZED (4)

Amjad Awan

Akbar Bilgrami

Nazir Chinoy

Ian Howard

SUBPOENAS AUTHORIZED (17)

Sani Ahmed

BCCI

Roy Carlson

Kerry Fox

Grand Hotel, Washington DC

Abol Helmy

Kissinger Associates

Office of the Comptroller of the Currency

Price Waterhouse (US)

Price Waterhouse (UK)

First American

First American Georgia

Robert Magness

David Paul

Robert Powell

Ed Rogers

Larry Romrell

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Thierry Meyssan Journalist and writer, president of the Voltaire Network
The most expensive battle in English legal history ended on Wednesday when a £850m lawsuit brought by liquidators of Bank of Credit and Commerce International (known by many as the Bank of Crooks and Crime International) against the Bank of England was withdrawn leaving a £100m legal bill in its wake.

Lawyers for Deloitte, BCCI's liquidator, said the action was being ended after one of the High Court's most senior judges ruled that it was “no longer in the best interests of the creditors for the litigation to continue”.

A US Senate Committee on Foreign Relations investigation headed by Senator John Kerry reported that: BCCI's unique criminal structure -- an elaborate corporate spider-web with BCCI's founder, Agha Hasan Abedi and his assistant, Swaleh Naqvi, in the middle -- was an essential component of its spectacular growth, and a guarantee of its eventual collapse. The structure was conceived by Abedi and managed by Naqvi for the specific purpose of evading regulation or control by governments. It functioned to frustrate the full understanding of BCCI's operations by anyone. Regardless of what might be shown in the missing material, the remainder is more than adequate to document BCCI's criminality, including fraud by BCCI and BCCI customers involving billions of dollars; money laundering in Europe, Africa, Asia, and the America; BCCI's bribery of officials in most of those locations; its support of terrorism, arms trafficking, and the sale of nuclear technologies; its management of prostitution; its commission and facilitation of income tax evasion, smuggling, and illegal immigration; its illicit purchases of banks and real estate; and a panoply of financial crimes limited only by the imagination of its officers and customers. In the words of former Senate investigator Jack Blum: The problem that we are all having in dealing with this bank is that . . . it had 3,000 criminal customers and every one of those 3,000 criminal customers is a page 1 story. So if you pick up an one of [BCCI's] accounts you could find financing from nuclear weapons, gun running, narcotics dealing, and you will find all manner and means of crime around the world in the records of this bank.

BCCI collapsed in 1991 owing £10bn. The misfeasance claim, which was brought against the Bank of England in 1993, had accused senior officials of acting in bad faith and with deliberate disregard for depositors' interests over the supervision of BCCI.

Wednesday's ruling, was made in private by the judge who heads the Chancery Division and is understood to have followed a decision two months ago by BCCI's English creditors' committee that the costly litigation was no longer in the interest of all creditors.

Mervyn King, the Bank of England governor who had refused to consider settling the case, said: “There has never been a shred of evidence to support these disgraceful allegations, and the case has collapsed as we always expected it would.”

“The foolish determination to pursue a hopeless case for so long has also led to a huge waste of creditors' and taxpayers' money, and I hope everyone concerned will take a close look at how and why such a very weak case took years to come to an end,” he continued. The Bank, the governor said, would be seeking “the largest possible compensation for its costs”.

The Bank's legal bill is understood to exceed £70m, while the liquidators' is put at about £38m. In the English legal system, a loser pays a winner's costs, which means the bill is likely to end up with the creditors, who range from local authority funds to small stallholders. The Bank has made clear that it would seek costs based on the highest possible assessment.

BCCI collapsed in 1991 when evidence of a massive fraud came to light after a decade of rumours about its dubious practices. At that stage, BCCI owed depositors and creditors more than £10bn, making it the world's biggest banking collapse.

BCCI was founded by a Pakistani national and became known as the Bank of Crooks and Crime International. At the time of its collapse, it was owned by the ruler of Gulf emirate Abu Dhabi and many in the Muslim world viewed it as a conspiracy destroy an international symbol of the Islamic world.

The Bank of England was subsequently criticised in a 1992 report into the scandal by Lord Bingham then Lord Justice Bingham who said it had not pursued “the truth about BCCI with the rigour which BCCI's market reputation justified”.

The bank has statutory immunity against negligence claims and the only option for the liquidators was a more ambitious claim of “misfeasance in public office”. Under this, they sought up to £850m in damages.

On Wednesday, Deloitte said that the BCCI liquidators said a further dividend payout to creditors, due in December, would be unaffected by the collapse of the case. This will bring the recovery to creditors of 81 per cent from 75 per cent at present, or just under $6bn (£3.4bn) - more than fourteen years after the collapse.

The largest case of organized crime in history

A Report to the Committee on Foreign Relations of the United States Senate in 1992, by Senator John Kerry and Senator Hank Brown said that BCCI created its elaborate corporate structure for the purpose of deceiving and defrauding those outside BCCI, within BCCI, BCCI's various entities were largely disregarded, and treated interchangably. As BCCI's liquidators concluded one year after the bank's closure in a report to the bank's creditors committee, "in a number of respects, the BCCI Group appears to have conducted its affairs as a single entity, witout clearly identifying which company or entity within the BCCI Group was responsible for any particular transaction."

1. BCCI CONSTITUTED INTERNATIONAL FINANCIAL CRIME ON A MASSIVE AND GLOBAL SCALE.

BCCI's unique criminal structure -- an elaborate corporate spider-web with BCCI's founder, Agha Hasan Abedi and his assistant, Swaleh Naqvi, in the middle -- was an essential component of its spectacular growth, and a guarantee of its eventual collapse. The structure was conceived by Abedi and managed by Naqvi for the specific purpose of evading regulation or control by governments. It functioned to frustrate the full understanding of BCCI's operations by anyone.

Unlike any ordinary bank, BCCI was from its earliest days made up of multiplying layers of entities, related to one another through an impenetrable series of holding companies, affiliates, subsidiaries, banks-within-banks, insider dealings and nominee relationships. By fracturing corporate structure, record keeping, regulatory review, and audits, the complex BCCI family of entities created by Abedi was able to evade ordinary legal restrictions on the movement of capital and goods as a matter of daily practice and routine. In creating BCCI as a vehicle fundamentally free of government control, Abedi developed in BCCI an ideal mechanism for facilitating illicit activity by others, including such activity by officials of many of the governments whose laws BCCI was breaking.

BCCI's criminality included fraud by BCCI and BCCI customers involving billions of dollars; money laundering in Europe, Africa, Asia, and the Americas; BCCI's bribery of officials in most of those locations; support of terrorism, arms trafficking, and the sale of nuclear technologies; management of prostitution; the commission and facilitation of income tax evasion, smuggling, and illegal immigration; illicit purchases of banks and real estate; and a panoply of financial crimes limited only by the imagination of its officers and customers.

Among BCCI's principal mechanisms for committing crimes were its use of shell corporations and bank confidentiality and secrecy havens; layering of its corporate structure; its use of front-men and nominees, guarantees and buy-back arrangements; back-to-back financial documentation among BCCI controlled entities, kick-backs and bribes, the intimidation of witnesses, and the retention of well-placed insiders to discourage governmental action.

2. BCCI SYSTEMATICALLY BRIBED WORLD LEADERS AND POLITICAL FIGURES THROUGHOUT THE WORLD.

BCCI's systematically relied on relationships with, and as necessary, payments to, prominent political figures in most of the 73 countries in which BCCI operated. BCCI records and testimony from former BCCI officials together document BCCI's systematic securing of Central Bank deposits of Third World countries; its provision of favors to political figures; and its reliance on those figures to provide BCCI itself with favors in times of need.

These relationships were systematically turned to BCCI's use to generate cash needed to prop up its books. BCCI would obtain an important figure's agreement to give BCCI deposits from a country's Central Bank, exclusive handling of a country's use of U.S. commodity credits, preferential treatment on the processing of money coming in and out of the country where monetary controls were in place, the right to own a bank, secretly if necessary, in countries where foreign banks were not legal, or other questionable means of securing assets or profits. In return, BCCI would pay bribes to the figure, or otherwise give him other things he wanted in a simple quid-pro-quo.

The result was that BCCI had relationships that ranged from the questionable, to the improper, to the fully corrupt with officials from countries all over the world, including Argentina, Bangladesh, Botswana, Brazil, Cameroon, China, Colombia, the Congo, Ghana, Guatemala, the Ivory Coast, India, Jamaica, Kuwait, Lebanon, Mauritius, Morocco, Nigeria, Pakistan, Panama, Peru, Saudi Arabia, Senegal, Sri Lanka, Sudan, Suriname, Tunisia, the United Arab Emirates, the United States, Zambia, and Zimbabwe.

3. BCCI DEVELOPED A STRATEGY TO INFILTRATE THE U.S. BANKING SYSTEM, WHICH IT SUCCESSFULLY IMPLEMENTED, DESPITE REGULATORY BARRIERS THAT WERE DESIGNED TO KEEP IT OUT.

In 1977, BCCI developed a plan to infiltrate the U.S. market through secretly purchasing U.S. banks while opening branch offices of BCCI throughout the U.S., and eventually merging the institutions. BCCI had significant difficulties implementing this strategy due to regulatory barriers in the United States designed to insure accountability. Despite these barriers, which delayed BCCI's entry, BCCI was ultimately successful in acquiring four banks, operating in seven states and the District of Colombia, with no jurisdiction successfully preventing BCCI from infiltrating it.

The techniques used by BCCI in the United States had been previously perfected by BCCI, and were used in BCCI's acquisitions of banks in a number of Third World countries and in Europe. These included purchasing banks through nominees, and arranging to have its activities shielded by prestigious lawyers, accountants, and public relations firms on the one hand, and politically-well connected agents on the other. These techniques were essential to BCCI's success in the United States, because without them, BCCI would have been stopped by regulators from gaining an interest in any U.S. bank. As it was, regulatory suspicion towards BCCI required the bank to deceive regulators in collusion with nominees including the heads of state of several foreign emirates, key political and intelligence figures from the Middle East, and entities controlled by the most important bank and banker in the Middle East.

Equally important to BCCI's successful secret acquisitions of U.S. banks in the face of regulatory suspicion was its aggressive use of a series of prominent Americans, beginning with Bert Lance, and continuing with former Defense Secretary Clark Clifford, former U.S. Senator Stuart Symington, well-connected former federal bank regulators, and former and current local, state and federal legislators. Wittingly or not, these individuals provided essential assistance to BCCI through lending their names and their reputations to BCCI at critical moments. Thus, it was not merely BCCI's deceptions that permitted it to infiltrate the United States and its banking system. Also essential were BCCI's use of political influence peddling and the revolving door in Washington.

4. THE JUSTICE DEPARTMENT MISHANDLED ITS INVESTIGATION AND PROSECUTION OF BCCI, AND ITS RELATIONSHIPS WITH OTHER GOVERNMENT AGENCIES CONCERNING BCCI.

Federal prosecutors in Tampa handling the 1988 drug money laundering indictment of BCCI failed to recognize the importance of information they received concerning BCCI's other crimes, including its apparent secret ownership of First American. As a result, they failed adequately to investigate these allegations themselves, or to refer this portion of the case to the FBI and other agencies at the Justice Department who could have properly investigated the additional information.

The Justice Department, along with the U.S. Customs Service and Treasury Departments, failed to provide adequate support and assistance to investigators and prosecutors working on the case against BCCI in 1988 and 1989, contributing to conditions that ultimately caused the chief undercover agent who handled the sting against BCCI to quit Customs entirely.

The January 1990 plea agreement between BCCI and the U.S. Attorney in Tampa kept BCCI alive, and had the effect of discouraging BCCI's officials from telling the U.S. what they knew about BCCI's larger criminality, including its ownership of First American and other U.S. banks.

The Justice Department essentially stopped investigating BCCI following the plea agreement, until press accounts, Federal Reserve action, and the New York District Attorney's investigation in New York forced them into action in mid-1991.

Justice Department personnel in Washington lobbied state regulators to keep BCCI open after the January 1990 plea agreement, following lobbying of them by former Justice Department personnel now representing BCCI.

Relations between main Justice in Washington and the U.S. Attorney for Miami, Dexter Lehtinen, broke down on BCCI-related prosecutions, and key actions on BCCI-related cases in Miami were, as a result, delayed for months during 1991.

Justice Department personnel in Washington, Miami, and Tampa actively obstructed and impeded Congressional attempts to investigate BCCI in 1990, and this practice continued to some extent until William P. Barr became Attorney General in late October, 1991.

Justice Department personnel in Washington, Miami and Tampa obstructed and impeded attempts by New York District Attorney Robert Morgenthau to obtain critical information concerning BCCI in 1989, 1990, and 1991, and in one case, a federal prosecutor lied to Morgenthau's office concerning the existence of such material. Important failures of cooperation continued to take place until William P. Barr became Attorney General in late October, 1991.

Cooperation by the Justice Department with the Federal Reserve was very limited until after BCCI's global closure on July 5, 1991.

Some public statements by the Justice Department concerning its handling of matters pertaining to BCCI were more cleverly crafted than true.

5. NEW YORK DISTRICT ATTORNEY MORGENTHAU NOT ONLY BROKE THE CASE ON BCCI, BUT INDIRECTLY BROUGHT ABOUT BCCI'S GLOBAL CLOSURE.

Acting on information provided him by the Subcommittee, New York District Attorney Robert Morgenthau began an investigation in 1989 of BCCI which materially contributed to the chain of events that resulted in BCCI's closure.

Questions asked by the District Attorney intensified the review of BCCI's activities by its auditors, Price Waterhouse, in England, and gave life to a moribund Federal Reserve investigation of BCCI's secret ownership of First American.

The District Attorney's criminal investigation was critical to stopping an intended reorganization of BCCI worked out through an agreement among the Bank of England, the government of Abu Dhabi, BCCI's auditors, Price Waterhouse, and BCCI itself, in which the nature and extent of BCCI's criminality would be suppressed, while Abu Dhabi would commit its financial resources to keep the bank going during a restructuring. By the late spring of 1991, the key obstacle to a successful restructuring of BCCI bankrolled up Abu Dhabi was the possibility that the District Attorney of New York would indict. Such an indictment would have inevitably caused a swift and thoroughly justified an international run on BCCI by depositors all over the world. Instead, it was a substantial factor in the decision of the Bank of England to take the information it had received from Price Waterhouse and rely on it to close BCCI.

6. BCCI'S ACCOUNTANTS FAILED TO PROTECT BCCI'S INNOCENT DEPOSITORS AND CREDITORS FROM THE CONSEQUENCES OF POOR PRACTICES AT THE BANK OF WHICH THE AUDITORS WERE AWARE FOR YEARS.

BCCI's decision to divide its operations between two auditors, neither of whom had the right to audit all BCCI operations, was a significant mechanism by which BCCI was able to hide its frauds during its early years. For more than a decade, neither of BCCI's auditors objected to this practice.

BCCI provided loans and financial benefits to some of its auditors, whose acceptance of these benefits creates an appearance of impropriety, based on the possibility that such benefits could in theory affect the independent judgment of the auditors involved. These benefits included loans to two Price Waterhouse partnerships in the Caribbean. In addition, there are serious questions concerning the acceptance of payments and possibly housing from BCCI or its affiliates by Price Waterhouse partners in the Grand Caymans, and possible acceptance of sexual favors provided by BCCI officials to certain persons affiliated with the firm.

Regardless of BCCI's attempts to hide its frauds from its outside auditors, there were numerous warning bells visible to the auditors from the early years of the bank's activities, and BCCI's auditors could have and should have done more to respond to them.

By the end of 1987, given Price Waterhouse (UK)'s knowledge about the inadequacies of BCCI's records, it had ample reason to recognize that there could be no adequate basis for certifying that it had examined BCCI's books and records and that its picture of those records were indeed a "true and fair view" of BCCI's financial state of affairs.

The certifications by BCCI's auditors that its picture of BCCI's books were "true and fair" from December 31, 1987 forward, had the consequence of assisting BCCI in misleading depositors, regulators, investigators, and other financial institutions as to BCCI's true financial condition.

Prior to 1990, Price Waterhouse (UK) knew of gross irregularities in BCCI's handling of loans to CCAH/First American and was told of violations of U.S. banking laws by BCCI and its borrowers in connection with CCAH/First American, and failed to advise the partners of its U.S. affiliate or any U.S. regulator.

There is no evidence that Price Waterhouse (UK) has to this day notified Price Waterhouse (US) of the extent of the problems it found at BCCI, or of BCCI's secret ownership of CCAH/First American. Given the lack of information provided Price Waterhouse (US) by its United Kingdom affiliate, the U.S. firm performed its auditing of BCCI's U.S. branches in a manner that was professional and diligent, albeit unilluminating concerning BCCI's true activities in the United States.

Price Waterhouse's certification of BCCI's books and records in April, 1990 was explicitly conditioned by Price Waterhouse (UK) on the proposition that Abu Dhabi would bail BCCI out of its financial losses, and that the Bank of England, Abu Dhabi and BCCI would work with the auditors to restructure the bank and avoid its collapse. Price Waterhouse would not have made the certification but for the assurances it received from the Bank of England that its continued certification of BCCI's books was appropriate, and indeed, necessary for the bank's survival.

The April 1990 agreement among Price Waterhouse (UK), Abu Dhabi, BCCI, and the Bank of England described above, resulted in Price Waterhouse (UK) certifying the financial picture presented in its audit of BCCI as "true and fair," with a single footnote material to the huge losses still to be dealt with, failed adequately to describe their serious nature. As a consequence, the certification was materially misleading to anyone who relied on it ignorant of the facts then mutually known to BCCI, Abu Dhabi, Price Waterhouse and the Bank of England.

The decision by Abu Dhabi, Price Waterhouse (UK), BCCI and the Bank of England to reorganize BCCI over the duration of 1990 and 1991, rather than to advise the public of what they knew, caused substantial injury to innocent depositors and customers of BCCI who continued to do business with an institution which each of the above parties knew had engaged in fraud.

From at least April, 1990 through November, 1990, the Government of Abu Dhabi had knowledge of BCCI's criminality and frauds which it apparently withheld from BCCI's outside auditors, contributing to the delay in the ultimate closure of the bank, and causing further injury to the bank's innocent depositors and customers.

7. THE CIA DEVELOPED IMPORTANT INFORMATION ON BCCI, AND INADVERTENTLY FAILED TO PROVIDE IT TO THOSE WHO COULD USE IT.

THE CIA AND FORMER CIA OFFICIALS HAD A FAR WIDER RANGE OF CONTACTS AND LINKS TO BCCI AND BCCI SHAREHOLDERS, OFFICERS, AND CUSTOMERS, THAN HAS BEEN ACKNOWLEDGED BY THE CIA.

By early 1985, the CIA knew more about BCCI's goals and intentions concerning the U.S. banking system than anyone else in government, and provided that information to the U.S. Treasury and the Office of the Comptroller of the Currency, neither of whom had the responsibility for regulating the First American Bank that BCCI had taken over. The CIA failed to provide the critical information it had gathered to the correct users of the information -- the Federal Reserve and the Justice Department.

After the CIA knew that BCCI was as an institution a fundamentally corrupt criminal enterprise, it continued to use both BCCI and First American, BCCI's secretly held U.S. subsidiary, for CIA operations.

While the reporting concerning BCCI by the CIA was in some respects impressive -- especially in its assembling of the essentials of BCCI's criminality, its secret purchase of First American by 1985, and its extensive involvement in money laundering -- there were also remarkable gaps in the CIA's reported knowledge about BCCI.

Former CIA officials, including former CIA director Richard Helms and the late William Casey; former and current foreign intelligence officials, including Kamal Adham and Abdul Raouf Khalil; and principal foreign agents of the U.S., such as Adnan Khashoggi and Manucher Ghorbanifar, float in and out of BCCI at critical times in its history, and participate simultaneously in the making of key episodes in U.S. foreign policy, ranging from the Camp David peace talks to the arming of Iran as part of the Iran/Contra affair. Yet the CIA has continued to maintain that it has no information regarding any involvement of these people, raising questions about the quality of intelligence the CIA is receiving generally, or its candor with the Subcommittee. The CIA's professions of total ignorance about their respective roles in BCCI are out of character with the Agency's early knowledge of many critical aspects of the bank's operations, structure, personnel, and history.

The errors made by the CIA in connection with its handling of BCCI were complicated by its handling of this Congressional investigation. Initial information that was provided by the CIA was untrue; later information that was provided was incomplete; and the Agency resisted providing a "full" account about its knowledge of BCCI until almost a year after the initial requests for the information. These experiences suggest caution in concluding that the information provided to date is full and complete. The relationships among former CIA personnel and BCCI front men and nominees, including Kamal Adham, Abdul Khalil, and Mohammed Irvani, requires further investigation.

8. THE FLAWED DECISIONS MADE BY REGULATORS IN THE US WHICH ALLOWED BCCI TO SECRETLY ACQUIRE US BANKS WERE CAUSED IN PART BY GAPS IN THE REGULATORY PROCESS AND IN PART BY BCCI'S USE OF WELL-CONNECTED LAWYERS TO HELP THEM THROUGH THE PROCESS.

When the Federal Reserve approved the take over of Financial General Bankshares by CCAH in 1981, it had substantial circumstantial evidence before it to suggest that BCCI was behind the bank's purchase. The Federal Reserve chose not to act on that evidence because of the specific representations that were made to it by CCAH's shareholders and lawyers, that BCCI was neither financing nor directing the take over. These representations were untrue and the Federal Reserve would not have approved the CCAH application but for the false statements made to it.

In approving the CCAH application, the Federal Reserve relied upon representations from the Central Intelligence Agency, State Department, and other U.S. agencies that they had no objections to or concerns about the Middle Eastern shareholders who were purporting to purchase shares in the bank. The Federal Reserve also relied upon the reputation for integrity of BCCI's lawyers, especially that of former Secretary of Defense Clark Clifford and former Federal Reserve counsel Baldwin Tuttle. Assurances provided the Federal Reserve by the CIA and State Department, and by both attorneys, had a material impact on the Federal Reserve's willingness to approve the CCAH application despite its concerns about BCCI's possible involvement.

In 1981, the Office of the Comptroller of the Currency had additional information, from reports concerning BCCI's role in the Bank of America and the National Bank of Georgia, concerning BCCI's possible use of nominee arrangements and alter egos to purchase banks on its behalf in the United States, which it failed to pass on to the Federal Reserve. This failure was inadvertent, not intentional.

In approving the CCAH application, the Federal Reserve permitted BCCI and its attorneys to carve out a seeming loophole in the commitment that BCCI not be involved in financing or controlling CCAH's activities. This loophole permitted BCCI to act as an investment advisor and information conduit to CCAH's shareholders. The Federal Reserve's decision to accept this arrangement allowed BCCI and its attorneys and agents to use these permitted activities as a cover for the true nature of BCCI's ownership of CCAH and the First American Banks.

After approving the CCAH application in 1981, the Federal Reserve received few indicators about BCCI's possible improper involvement in CCAH/First American. However, at several critical junctures, especially the purchase by First American of the National Bank of Georgia from Ghaith Pharaon in 1986, there were obvious warnings signs that could have been investigated and which were not, until late 1990.

As a foreign bank whose branches were chartered by state banking authorities, BCCI largely escaped the Federal Reserve's scrutiny regarding its criminal activities in the United States unrelated to its interest in CCAH/First American. This gap in regulatory oversight has since been closed by the passage of the Foreign Bank Supervision Enhancement Act of 1991.

The U.S. Treasury Department failed to provide the Federal Reserve with information it received concerning BCCI's ownership of First American in 1985 and 1986 from the CIA. However, IRS agents did provide important information to the Federal Reserve on this issue in early 1989, which the Federal Reserve failed adequately to investigate at the time.

The FDIC approved Ghaith Pharaon's purchase of the Independence Bank in 1985 knowing him to be a shareholder of BCCI and knowing that he was placing a senior BCCI officer in charge of the bank, and failed to confer with the Federal Reserve or the OCC regarding their previous experiences with Pharaon and BCCI.

Once the Federal Reserve commenced a formal investigation of BCCI and First American on January 3, 1991, its investigation of BCCI and First American was aggressive and diligent. Its decisions to force BCCI out of the United States and to divest itself of First American were prompt. The charges it brought against the parties involved with BCCI in violating federal banking standards were fully justified by the record. Its investigations have over the past year contributed substantially to public understanding to date of what took place.

Even after the Federal Reserve understood the nature and scope of BCCI's frauds, it did not seek to have BCCI closed globally. This position was in some measure the consequence of the Federal Reserve's need to secure the cooperation of BCCI's majority shareholders, the government and royal family of Abu Dhabi, in providing some $190 million to prop up First American Bank and prevent an embarrassing collapse. However, Federal Reserve investigators did actively work in the spring of 1991 to have BCCI's top management removed.

In investigating BCCI, the Federal Reserve's efforts were hampered by examples of lack of cooperation by foreign governments, including most significantly the Serious Fraud Office in the United Kingdom and, since the closure of BCCI on July 5, 1991, the government of Abu Dhabi.

U.S. regulatory handling of the U.S. banks secretly owned by BCCI was hampered by lack of coordination among the regulators, which included the Federal Reserve, the FDIC, and the OCC, highlighting the need for further integration of these separate banking regulatory agencies on supervision and enforcement.

9. THE BANK OF ENGLAND'S REGULATION OF BCCI WAS WHOLLY INADEQUATE TO PROTECT BCCI'S DEPOSITORS AND CREDITORS, AND THE BANK OF ENGLAND WITHHELD INFORMATION ABOUT BCCI'S FRAUDS FROM PUBLIC KNOWLEDGE FOR FIFTEEN MONTHS BEFORE CLOSING THE BANK.

The Bank of England had deep concerns about BCCI from the late 1970s on, and undertook several steps to slow BCCI's expansion in the United Kingdom.

In 1988 and 1989, the Bank of England learned of BCCI's involvement in the financing of terrorism and in drug money laundering, and undertook additional, but limited supervision of BCCI in response to receiving this information.

In the spring of 1990, Price Waterhouse advised the Bank of England that there were substantial loan losses at BCCI, numerous poor banking practices, and evidence of fraud, which together had created a massive hole in BCCI's books. The Bank of England's response to the information was not to close BCCI down, but to find ways to prop up BCCI and prevent its collapse. This meant, among other things, keeping secret the very serious nature of BCCI's problems from its creditors and one million depositors.

In April, 1990, the Bank of England reached an agreement with BCCI, Abu Dhabi, and Price Waterhouse to keep BCCI from collapsing. Under the agreement, Abu Dhabi agreed to guarantee BCCI's losses and Price Waterhouse agreed to certify BCCI's books. As a consequence, innocent depositors and creditors who did business with BCCI following that date were deceived into believing that BCCI's financial problems were not as serious as each of these parties already knew them to be.

From April, 1990, the Bank of England relied on British bank secrecy and confidentiality laws to reduce the risk of BCCI's collapse if word of its improprieties leaked out. As a consequence, innocent depositors and creditors who did business with BCCI following that date were denied vital information, in the possession of the regulators, auditors, officers, and shareholders of BCCI, that could have protected them against their losses.

In order to prevent risk to its restructuring plan for BCCI and a possible run on BCCI, the Bank of England withheld important information from the Federal Reserve in the spring of 1990 about the size and scope of BCCI's lending on CCAH/First American shares, despite the Federal Reserve's requests for such information. This action by the Bank of England delayed the opening of a full investigation by the Federal Reserve for approximately eight months.

Despite its knowledge of some of BCCI's past frauds, and its own understanding that consolidation into a single entity is essential for regulating a bank, in late 1990 and early 1991 the Bank of England tentatively agreed with BCCI and its Abu Dhabi owners to permit BCCI to restructure as three "separate" institutions, based in London, Abu Dhabi and Hong Kong. This tentative decision demonstrated extraordinarily poor judgment on the part of the Bank of England. This decision was reversed abruptly when the Bank of England suddenly decided to close BCCI instead in late June, 1991.

The decision by the Bank of England in April 1990 to permit BCCI to move its headquarters, officers, and records out of British jurisdiction to Abu Dhabi has had profound negative consequences for investigations of BCCI around the world. As a result of this decision, essential records and witnesses regarding what took place were removed from the control of the British government, and placed under the control of the government of Abu Dhabi, which has to date withheld them from criminal investigators in the U.S. and U.K. This decision constituted a costly, and likely irretrievable, error on the part of the Bank of England.

10. CLARK CLIFFORD AND ROBERT ALTMAN PARTICIPATED IN IMPROPRIETIES WITH BCCI IN THE UNITED STATES.

Regardless of whether Clifford and Altman were deceived by BCCI in some respects, both men participated in some BCCI's deceptions in the United States.

Beginning in late 1977, Clifford and Altman assisted BCCI in purchasing a U.S. bank, Financial General Bankshares, with the participation of nominees, and understood BCCI's central involvement in directing and controlling the transaction.

In the years that followed, they made business decisions regarding acquisitions for First American that were motivated by BCCI's goals, rather than by the business needs of First American itself; and represented as their own to regulators decisions that had been made by Abedi and BCCI on fundamental matters concerning First American, including the purchase by First American of the National Bank of Georgia and First American's decision to purchase branches in New York City.

Clifford and Altman concealed their own financing of shares of First American by BCCI from First American's other directors and from U.S. regulators, withheld critical information that they possessed from regulators in an effort to keep the truth about BCCI's ownership of First American secret, and deceived regulators and the Congress concerning their own knowledge of and personal involvement in BCCI's illegalities in the United States.

11. ABU DHABI'S INVOLVEMENT IN BCCI'S AFFAIRS WAS FAR MORE CENTRAL THAN IT HAS ACKNOWLEDGED, INVOLVING IN SOME CASES NOMINEE RELATIONS AND NO-RISK TRANSACTIONS THAT ABU DHABI IS TODAY COVERING-UP THROUGH HIDING WITNESSES AND DOCUMENTS FROM U.S. INVESTIGATORS.

Members of Abu Dhabi's ruling family appear to have contributed no more than $500,000 to BCCI's capitalization prior to April 1990, despite being the record owner of almost one-quarter of the bank's total shares. An unknown but substantial percentage of the shares acquired by Abu Dhabi overall in BCCI appear to have been acquired on a risk-free basis -- either with guaranteed rates of return, buy-back arrangements, or both.

The interest held in BCCI by the Abu Dhabi ruling family, like the interests held by the rulers of the three other gulf sheikdoms in the United Arab Emirates who owned shares of BCCI, materially aided and abetted Abedi and BCCI in projecting the illusion that BCCI was backed by, and capitalized by, Abu Dhabi's wealth. Investments made in BCCI by the Abu Dhabi Investment Authority appear to have been genuine, although possibly guaranteed by BCCI with buy-back or other no-risk arrangements.

Shares in Financial General Bankshares held by members of the Abu Dhabi royal family in late 1977 and early 1978 appear to have been nominee arrangements, adopted by Abu Dhabi as a convenience to BCCI and Abedi, under arrangements in which Abu Dhabi was to be without risk, and BCCI was to guarantee the purchase through a commitment to buy-back the stock at an agreed upon price.

Abu Dhabi's representative to BCCI's board of directors, Ghanim al Mazrui, received unorthodox financial benefits from BCCI in no-risk stock deals which may have compromised his ability to exercise independent judgment concerning BCCI's actions; confirmed at least one fraudulent transaction involving Abu Dhabi; and engaged in other improprieties pertaining to BCCI; but remains today in place at the apex of Abu Dhabi's committee designated to respond to BCCI's collapse.

In April, 1990, Abu Dhabi was told in detail about BCCI's fraud by top BCCI officials, and failed to advise BCCI's external auditors of what it had learned. Between April, 1990 and November, 1990, Abu Dhabi and BCCI together kept some information concerning BCCI's frauds hidden from the auditors.

From April, 1990 through July 5, 1991, Abu Dhabi tried to save BCCI through a massive restructuring. As part of the restructuring process, Abu Dhabi agreed to take responsibility for BCCI's losses, Price Waterhouse agreed to certify BCCI's books for another year, and Abu Dhabi, Price Waterhouse, the Bank of England, and BCCI agreed to keep all information concerning BCCI's frauds and other problems secret from BCCI's one million depositors, as well as from U.S. regulators and law enforcement, to prevent a run on the bank.

After the Federal Reserve was advised by the New York District Attorney of possible nominee arrangements involving BCCI and First American, Abu Dhabi, in an apparent effort to gain the Federal Reserve's acquiescence in BCCI's proposed restructuring, provided limited cooperation to the Federal Reserve, including access to selected documents. The cooperation did not extend to permitting the Federal Reserve open access to all BCCI documents, or substantive communication with key BCCI officials held in Abu Dhabi, such as BCCI's former president, Swaleh Naqvi. That access ended with the closure of BCCI July 5, 1991.

From November, 1990 through the present, Abu Dhabi has failed to provide documents and witnesses to U.S. law enforcement authorities and to the Congress, despite repeated commitments to do so. Instead, it has actively prevented U.S. investigators from having access to vital information necessary to investigate BCCI's global wrongdoing.

The proposed agreement between Abu Dhabi and BCCI's liquidators to settle their claims against one another contains provisions which could have the consequence of permitting Abu Dhabi to cover up any wrongdoing it may have had in connection with BCCI.

There is some evidence that the Sheikh Zayed may have had a political agenda in agreeing to the involvement of members of the Abu Dhabi royal family and its investment authority in purchasing shares of Financial General Bankshares, then of CCAH/First American. This evidence is offset, in part, by testimony that Abu Dhabi share purchases in the U.S. bank were done at Abedi's request and did not represent an actual investment by Abu Dhabi until much later.

 

12. BCCI MADE EXTENSIVE USE OF THE REVOLVING DOOR AND POLITICAL INFLUENCE PEDDLING IN THE UNITED STATES TO ACCOMPLISH ITS GOALS.

BCCI's political connections in Washington had a material impact on its ability to accomplish its goals in the United States. In hiring lawyers, lobbyists and public relations firms in the United States to help it deal with its problems vis a vis the government, BCCI pursued a strategy that it had practiced successfully around the world: the hiring of former government officials.

BCCI's and its shareholders' cadre of professional help in Washington D.C. included, at various times, a former Secretary of Defense (Clark Clifford), former Senators and Congressmen (John Culver, Mike Barnes), former federal prosecutors (Larry Wechsler, Raymond Banoun, and Larry Barcella, a former State Department Official (William Rogers), a former White House aide (Ed Rogers), a current Presidential campaign deputy director (James Lake), and former Federal Reserve Attorneys (Baldwin Tuttle, Jerry Hawke, and Michael Bradfield). In addition, BCCI solicited the help of Henry Kissinger, who chose not to do business with BCCI but made a referral of BCCI to his own lawyers.

At several key points in BCCI's activities in the U.S., the political influence and personal contacts of those it hired had an impact in helping BCCI accomplish its goals, including in connection with the 1981 CCAH acquisition of FGB and the handling and aftermath of BCCI's plea agreement in Tampa in 1990.

The political connections of BCCI's U.S. lawyers and lobbyists were critical to impeding Congressional and law enforcement investigations from 1988 through 1991, through a variety of techniques that included impugning the motives and integrity of investigators and journalists, withholding subpoenaed documents, and lobbying on capital hill to protect BCCI's reputation and discourage efforts to close the bank down in the United States.

13. BCCI'S PUBLIC RELATIONS FIRM SMEARED PEOPLE WHO WERE TELLING THE TRUTH AS PART OF ITS WORK FOR BCCI.

When Hill and Knowlton accepted BCCI's account in October, 1988, its partners knew of BCCI's reputation as a "sleazy" bank, but took the account anyway. In 1988 and 1989, Hill and Knowlton assisted BCCI with an aggressive public relations campaign designed to demonstrate that BCCI was not a criminal enterprise, and to put the best face possible on the Tampa drug money laundering indictments. In so doing, it disseminated materials unjustifiably and unfairly discrediting persons and publications who were telling the truth about BCCI's criminality.

Important information provided by Hill and Knowlton to Capitol Hill and provided by First American to regulators concerning the relationship between BCCI and First American in April, 1990 was false. The misleading material represented the position of BCCI, First American, Clifford and Altman concerning the relationship, and was contrary to the truth known by BCCI, Clifford and Altman.

 

Hill and Knowlton's representation of BCCI was within the norms and standards of the public relations industry, but raises larger questions as to the relationship of those norms and standards to the public interest.

14. BCCI ACTIVELY SOLICITED THE FRIENDSHIPS OF MAJOR U.S. POLITICAL FIGURES, AND MADE PAYMENTS TO THESE POLITICAL FIGURES, WHICH IN SOME CASES MAY HAVE BEEN IMPROPER.

Beginning with Bert Lance in 1977, whose debts BCCI paid off with a $3.5 million loan, BCCI, BCCI nominees, and top officials of BCCI systematically developed friendships and relationships with important U.S political figures. While those which are publicly known include former president Jimmy Carter, Jesse Jackson, and Andrew Young, the Subcommittee has received information suggesting that BCCI's network extended to other U.S. political figures. The payments made by BCCI to Andrew Young while he was a public official were at best unusual, and by all appearances, improper.

15. BCCI'S COMMODITIES AFFILIATE, CAPCOM, ENGAGED IN BILLIONS OF DOLLARS OF LARGELY ANONYMOUS TRADING IN THE US WHICH INCLUDED A VERY SUBSTANTIAL LEVEL OF MONEY LAUNDERING, WHILE CAPCOM SIMULTANEOUSLY DEVELOPED SIGNIFICANT TIES TO IMPORTANT U.S. TELECOMMUNICATIONS INDUSTRY EXECUTIVES AND FOREIGN INTELLIGENCE FIGURES.

BCCI's commodities affiliate, Capcom, based in Chicago, London and Cairo, was principally staffed by former BCCI bankers, capitalized by BCCI and BCCI customers, and owned by BCCI, BCCI shareholders, and front-men. Capcom employed many of the same practices as BCCI, especially the use of nominees and front companies to disguise ownership and the movement of money. Four U.S. citizens -- none of whom had any experience or expertise in the commodities markets -- played important and varied roles as Capcom front men in the United States.

While investigation information concerning Capcom is incomplete, its activities appear to have included misappropriation of BCCI assets; the laundering of billions of dollars from the Middle East to the US and other parts of the world; and the siphoning of assets from BCCI to create a safe haven for them outside of the official BCCI empire.

Capcom's majority shareholders, Kamal Adham and A.R. Khalil, were both former senior Saudi government officials and successively acted as Saudi Arabia's principal liaisons to the Central Intelligence Agency during the 1970's and 1980's.

 

Its U.S. front men included Robert Magness, the CEO of the largest U.S. cable telecommunications company, TCI; a vice-President of TCI, Larry Romrell; and two other Americans, Kerry Fox and Robert Powell, with long-standing business interests in the Middle East. Magness, Romrell and Fox received loans from BCCI for real estate ventures in the U.S., and Magness and Romrell discussed numerous business ventures between BCCI and TCI, some of which involved the possible purchase of U.S. telecommunications stock and substantial lending by BCCI.

Commodities regulators with the responsibility for investigating Capcom showed little interest in conducting a thorough investigation of its activities, and in 1989 allowed Capcom to avoid such an investigation through agreeing to cease doing business in the United States.

The Subcommittee could not determine whether BCCI, Capcom, or their shareholders or agents actually acquired equity interests in the U.S. cable industry and believes further investigation of matters pertaining to Capcom is essential.

16. INVESTIGATIONS OF BCCI TO DATE REMAIN INCOMPLETE, AND MANY LEADS CANNOT BE FOLLOWED UP, AS THE RESULT OF DOCUMENTS BEING WITHHELD FROM US INVESTIGATORS BY THE BRITISH GOVERNMENT, AND DOCUMENTS AND WITNESSES BEING WITHHELD FROM US INVESTIGATORS BY THE GOVERNMENT OF ABU DHABI.

Many of the specific criminal transactions engaged in by BCCI's customers remain hidden from investigation as the result of bank secrecy laws in many jurisdictions, British national security laws, and the holding of key witnesses and documents by the Government of Abu Dhabi. Documents pertaining to BCCI's use to finance terrorism, to assist the builders of a Pakistani nuclear bomb, to finance Iranian arms deals, and related matters have been sealed in the United Kingdom by British intelligence and remain unavailable to U.S. investigators. Many other basic matters pertaining to BCCI's criminality, including any list that may exist of BCCI's political payoffs and bribes, remain sequestered in Abu Dhabi and unavailable to U.S. investigators.

Many investigative leads remain to be explored, but cannot be answered with devoting substantial additional sources that to date no agency of government has been in a position to provide.

Unanswered questions include, but are not limited to, the relationship between BCCI and the Banco Nazionale del Lavoro; the alleged relationship between the late CIA director William Casey and BCCI; the extent of BCCI's involvement in Pakistan's nuclear program; BCCI's manipulation of commodities and securities markets in Europe and Canada; BCCI's activities in India, including its relationship with the business empire of the Hinduja family; BCCI's relationships with convicted Iraqi arms dealer Sarkis Sarkenalian, Syrian drug trafficker, terrorist, and arms trafficker Monzer Al-Kassar, and other major arms dealers; the use of BCCI by central figures in the alleged "October Surprise," BCCI's activities with the Central Bank of Syria and with the Foreign Trade Mission of the Soviet Union in London; its involvement with foreign intelligence agencies; the financial dealingst of BCCI directors with Charles Keating and several Keating affiliates and front-companies, including the possibility that BCCI related entities may have laundered funds for Keating to move them outside the United States; BCCI's financing of commodities and other business dealings of international criminal financier Marc Rich; the nature, extent and meaning of the ownership of other major U.S. financial institutions by Middle Eastern political figures; the nature, extent, and meaning of real estate and financial investments in the United States by major shareholders of BCCI; the sale of BCCI affiliate Banque de Commerce et Placement in Geneva, to the Cukorova Group of Turkey, which owned an entity involved in the BNL Iraqi arms sales, among others.

 

The withholding of documents and witnesses from U.S. investigators by the Government of Abu Dhabi threatens vital U.S. foreign policy, anti-narcotics and money laundering, and law enforcement interests, and should not be tolerated.

 

The Hidden Financial Ties between the Bush and the Bin Laden Families. by Thierry Meyssan* The perpetrators of September 11, 2001 attacks and the people that knew about these terrorist acts could prevent, anticipate and know what their economic effects would be. Consequently, they were able to make some speculative schemes in the stock market on the airlines that owned the hijacked airplanes, on the societies that had its headquarters in the Twin Towers of the World Trade Center and their respective insurances. They could also anticipate a possible general fall on the shares quoted on the stock market. In order to do all this, they just had to speculate for a fall by buying not only the shares of these companies but the «puts», that is, the «put option». The identification of these «knowers» involved in this financial crime represented not only a key piece in a stock market fraud but, and above all, a mean to directly or indirectly establish the identity of the perpetrators of the September 11 attacks.

 

A Financial Crime

Several days after the September 11 attacks, it was known that certain stock market maneuvers with the characteristics of a "financial crime" were made six days before the attacks. [1]The United Airlines shares (the company which owned the planes that crashed against the southern part of the WTC and in Pittsburg) in the Stock artificially fell 42%. Those of American Airlines (the company that owned the plane that crashed against the northern part of the WTC and the allegedly plane that disappeared when it crashed against the Pentagon) fell 39%. No other airline in the world had been subject to such speculative schemes, except for the KLM Real Dutch Airlines.

So, it can be said that a plane of the Dutch company was also targeted by the terrorists to launch perhaps a fifth attack in a hijacked plane too. Identical maneuvers were also recognized on the put options of Morgan Stanley Dean Witter & Co which were multiplied by 12 a week before the attacks. The said society had 22 floors of the WTC. The same thing happened with the put options of the leading stockbroker of the world: Merryl Lynch & Co which headquarters was located in a neighboring building next to the WTC in danger of collapsing. Its shares were multiplied by 25; especially the put options on the shares of insurances involved: Munich, Re, Swiss and AXA.

The Chicago Monitoring Commission of stock operations was the first one to call people’s attention. It affirmed that in Chicago’s stock market, the “knowers” had 5 million dollars gains or benefits from United Airlines, 4 million dollars from American Airlines, 1.2 million dollars from Morgan Stanley Dean Witter & Co and 5.5 million dollars from Merryl Lynch & Co. The monitoring experts every major stock market checked and rechecked the gains of the “knowers”. All investigations were coordinated by the International Organization of Securities Commissions (IOSCO). [2]

On October 15, 2001, a video-conference was filmed in which the national authorities presented their first reports. It was showed that the illegal gains would sum hundreds of millions of dollars, that is, “the greatest and most important financial crime of all times” perpetrated by these “knowers”. It was possible to state that most financial transactions had been “made” by the Deutsche Bank and its American investment affiliate, Alex Brown. [3] Until 1998, this society was managed by a peculiar man: Mister A. B. Krongard, marines’ Capitan, shooting and martial arts lover. This banker became adviser to the director of the CIA and, since March 26, 2001, was number three in the American espionage agency (CIA). Based on the importance of the investigation and A. B. Krongard’s influence, it was thought that Alex Brown society would cooperate with the authorities to facilitate the financial criminals’ identification. But this was not the case and nothing has been done up to now. Likewise, it was thought that the revelations made by Ernest Backes [4] several months ago regarding the existence of the registers of the main inter-banks transactions made by two “clearing” organizations would have facilitated the investigators hunting. But, once again, nothing was done.

Despite the militaristic statements made by western leaders against “Terrorism”, the fact is that no investigation has been actually finished; as if they want the whole thing to be forgotten, even when world peace is in danger and many things depend on this. It is about leading the world public opinion to think that the discretion and opacity of the tax heavens would not help or lead to find “clues” of these illegal transactions which would then lead to find the criminal terrorists involved in the attacks. Meanwhile, the financial criminals have prudently relinquished to the 2.5 million dollars of the gain from American Airlines for the alert given prevented them from collecting the last millions earned.

Osama Bin Laden’s Fortune

At the same time, other investigations were carried out to determine the importance of Osama Bin Laden’s fortune, the alleged author of the terrorist attacks, and locate the financial societies he controlled. Graduated in Management and Economy from King Abdul Aziz University, Osama Bin Laden is a very clever businessman. In 1979, his tutor, Prince Turki al Fayçal al Saud (by then, director of Saudi Arabia secret services from 1977 to August 2001), asked him to direct and financially manage the CIA secret operations in Afghanistan. In a few years, the CIA invested 2 billion dollars in Afghanistan to provoke the failure of the USSR’s invasion. This has been the most expensive secret operation ever made by the American espionage agency. It was unique in history.

In 1994, while Ben Laden had become America’s number one enemy and Saudi Arabia had divested him of his nationality, Osama Bin Laden inherited about 300 million dollars, his part from family society Saudi Binladen Group SBG. [5] This holding, the most important one of Saudi Arabia, made half of its total money from construction and public works, and the other half came from engineering, real states, distributions, telecommunications and edition.

SBG founded also an investment Swiss society, the SICO (Saudi Investment Company) which at the same time founded other societies with the National Commercial Bank of Saudi Arabia affiliates. The SBG also has important interests in General Electric, Nortel Networks and Cadbury Schweppes. SBG’s industrial activities are represented in the United States by Adnan Khashoggi (former brother in law of Mohammed al Fayçal) whereas its financial capitals are managed by the Carlyle Group. Up to 1996, SBG’s affiliates’ legalization was prepared in Lausanne (Switzerland) by its adviser, Nazi banker Francois Genoud -picture to the right. [6]

SGB was also much linked to the Wahhabi regimen, the ruling regimen in Saudi Arabia, and was the only company hired to build the sacred sites of the kingdom, Medina and the Mecca. Likewise, it also had most of BTP contracts for the construction of American military bases in Saudi Arabia and for the reconstruction of Kuwait after the Gulf War. The SGB was founded in 1931 by the Patriarch, the sheikh Mohammed Ben Laden. After his death in 1968, his oldest son Salem succeeded him. But Salem died in a “plane crash” in Texas, United States, in 1988. Today, the SBG is managed by Bark, the second son of the founder.

But, despite the fact that the SBG has stated it had no contacts with Osama Bin Laden since 1994, many authors and experts have established the difference between the positive law and the costume law. For them, the fundamentalist leader still has his moral authority and gets his part of the money too.

Osama Bin Laden [7] invested his inheritance in founding several banks, food and agriculture societies and the distribution of Sudan. Among these companies, Osama Bin Laden invested 50 million dollars in the Al-Shamal Islamic Bank in which Tadamon Islamic Bank (logo to the lower right) is a reference shareholder.Due to this financial overlapping, Osama Bin Laden became the business partner of the Minister of Social Affairs of the United Arab Emirates and of the Dar al-Maal al Islami, which prince Mamad Al Faisal uses to finance the group of movements, associations and the Wahhabis of the world on behalf of Saudi Arabia. Osama Bin Laden also has important interests in the Dubai Islamic Bank of Mohammed Khalfan Ben Kharbash, minister of finance of the United Arab Emirates.

Assisted at the beginning by Colonel Omar Asan el-Bechir, and later by Hassan el-Tourabi, Osama Bin Laden was able to develop several companies in Sudan by building an airport, freeways, a pipeline and controlling most of the production of the Arabic gum. But, despite all this, he was expelled out of Sudan in 1996. It was suspected Osama Bin Laden had been a shareholder of Al-Shifa pharmaceutical lab bombed by Clinton in 1998 for the allegedly production of chemical weapons. It’s been also believed Osama Bin Laden had a leading role in the international trade of opium where Afghanistan is the major producer.

Osama Bin Laden has had a spiritual authority upon the powerful Muslim charitable associations, especially the International Islamic Relief Organization (IIRO) and the foundation of King Fahd’s brother in law, the Abdul Aziz al Ibrahim. If we add to his fortune the stock of weapons he might have kept from the first war in Afghanistan, Osama Bin Laden’s fortune could be assessed between 300 and 500 million dollars, a figure quite different from the 6 billion dollars some political personalities have said he has. Anyway, up to now, there has been no evidence to prove the possible links between the societies controlled by fundamentalist leader Osama Bin Laden and the perpetrators of the September 11 «financial crime».

The Financial Partners of Osama Bin Laden

Two well-known personalities have been omnipresent in Osama Bin Laden’s societies: the sheik Khaled Salim Ben Mahfouz and Saleh Idris. According to Forbes Magazine, Khaled Ben Mahfouz is ranked 251 among the richest of the world with a fortune assessed 1.9 billion dollars. His father founded the main bank of Saudi Arabia, the National Commercial Bank (picture -the headquarters of the NCB is in Djeddah) which founded several societies with the Bin Laden Group’s SICO. Mahfouz’ sister married Osama Bin Laden. [8] Up to 1996, the Bin Mahfouz and the Bin Laden benefited from the services and advises of Francois Genoud for the establishment of their financial subsidiaries.

Khaled Ben Mahfouz has a residence in Houston, Texas, and with the support of the Bush family, he bought part of the city airport for his personal business. He also has many societies world wide. Despite being a usual and trade partner of Osama Bin laden, Khaled Ben Mahfouz is a much respected businessman in the most important Stocks of the world. This is an important element for he was also involved in a huge banking scandal at the beginning of the 90s: the «crack» case or BCCI’s bankruptcy -see the report. [9] The Bank of Credit and Commerce International (BCCI) was an Anglo-Pakistani institution with subsidiaries in 73 countries. It was controlled by three powerful families: the Gokal (Pakistan), the Ben Mahfouz (Saudi Arabia) and the Geith Pharaon (Abu Dhabi). This bank was used by Ronald Reagan to bribe and corrupt the Iranian government so that it would delay the liberation of the American hostages from Teheran embassy. The purpose was to sabotage and discredit the end of Jimmy Carter’s presidency (Operation “October Surprise”). Later, sponsored by the former director of the CIA and Vice-president George Bush (father), the Reagan Administration used again the BCCI to transfer its contributions to the “Contras” in Nicaragua as well as the CIA money for the Mujahedeen in Afghanistan that fought the Soviet Union and communism.

The BCCI was also involved in the arms traffic of Syrian “trader” Sarkis Sarkenalian, in the Keatinga scandal in the United States, in the affairs of “trader” Marc Rich and the funding of group Abu Nidal, etc. All in all, the BCCI had serious problems when it was found out that it laundered money from the Medellin Cartel. When it was finally closed, the BCCI divested from their savings million of clients in the world who could never get their money back.

It is true the BCCI was manipulated but to think the bank was founded by the CIA must not surprise us. There is an old banking tradition in the American secret services since the foundation of the OSS by business attorneys and Wall Street stockbrokers. Two former directors of the CIA, Richard Helms and William Casey, worked for the BCCI, as well as CIA influent prestigious agents Adnan Khashoggi and Manucher Ghobanifar (the main traders of the Irangate), not to mention Kamal Adham (brother in law of King Fayçal and chief of Saudi Arabia secret services until 1977), prince Turki al-Fayçal al-Saud (chief of Saudi Arabia secret services until August 2001) and Abdul Khalil (deputy director of the said secret services).

The BCCI worked closely with SICO, [10] a Swiss affiliate of Saudi Bin Laden Group investments. Among the main managers of SICO we have Osama Bin Laden’s half-brother, Yeslam Bin Laden, who was recently granted the Swiss nationality and lives nowadays in Geneva. A year before its bankruptcy, the BCCI was used to make a huge illegal enrichment operation for George W. Bush son, the current President of the United States, when he was the manager of a small oil society called Harken Energy Corporation. Harken got the oil concessions of the state of Bahrain as part of a commission for the American-Kuwaiti contracts negotiated by President George Bush father. [11] Khaled Bin Mahfouz was a shareholder of Harken with 11.5%. His shares were “taken” to one of his representatives, Abdullah Taha Bakhsh. On his side, one of Osama Bin Laden’s brothers, Salem, was one of the representatives of the Board of Directors of Harken Company through his American representative James R. Bath.

Accused as the main responsible for BCCI’s bankruptcy, Khaled Bin Mahfouz was sentenced by the American justice in 1992. However, he was able to get rid of the accusations against him in 1995 due to a 245 million dollars agreement with his financial partners. On his part, Saleh Idris, director of the Saudi Sudanese Bank which was only a Sudanese subsidiary of Khaled Ben Mahfouz’ National Commercial Bank, was Osama Bin Laden’s partner in the pharmaceutical plant of Al-Shifa. In England, Saled Idris has been IES Digital Systems’ major shareholder, an important company which produces high-tech materials of electronic surveillance. Lately, Baroness Cox has been surprised in the House of Lords for IES Digital Systems guarantees the protection of the most sensitive and strategic British governmental and military sites. [12]

From BCCI to the Carlyle Group

BCCI’s main responsible and clients are found today in the Carlyle Group, an investment fund in administration specialized in the management of financial capitals. It was created in 1987, for years before BCCI bankruptcy. Currently, Carlyle manages 12 billion dollars and has major shares in Seven Up (which also bottles the Cadbury Schweppes), Federal Data Corporation (which equipped the Federal Aviation Administration and its system of civil air traffic surveillance) and the United Defense Industries Inc. (the main military supplier of the American, Turkish and Saudi Arabic armies). Through the companies it controls and manages, the Carlyle Group is the 11 among the American arms companies.

In 1990, the Carlyle Group was accused of funds extortion. A lobbyist of the Republican Party, Wayne Bernman, had “racketed” the pension funds of the American retirees to finance the Bushes electoral campaigns. One of the persons in charge of the said funds accepted to give a million dollars to the Carlyle Group in order to get a public contract in the state of Connecticut. The Carlyle Group manages the most important part of the Saudi Bin Laden Group financial funds. Among its managers, we have Sami Mubarak Brama, the representative in Great Britain of the Khaled Ben Mahfouz and Talat Othmann, a former manager of the Harken Energy Corporation, the society that helped George W. Bush to become rich illegally.

The Carlyle Group is managed by Frank C. Carlucci (former deputy director of the CIA and later Secretary of Defense) who is advised by James A. Baker III (President Reagan former chief of staff, later Secretary of the Treasury and then Secretary of State of George Bush father). Another adviser is Richard Darman (former Budget Director). Contrary to what the whole world think, Osama Bin Laden has been not only a CIA intermediary hired to fight the Arab nationalism and the Soviet Union when it invaded Afghanistan, thus raising the radical Islamism, but still, he and his family are one of the main financial partners of the Bush family.

If as some American official think, the Bin Laden family maintains its relations with Osama Bin Laden and finances his political activities then, the Carlyle Group which manages the millionaire funds of the Saudi Bin Laden Group would be involved in the financial crime. Consequently, Bush father would then be one of the luckiest who benefited from the speculative schemes of September 11, 2001.

Thierry Meyssan Journalist and writer, president of the Voltaire Network. This author's articles

 

Colateral Damage
3 The Pentagon It must be noted that the Office of Naval Intelligence in the Pentagon, which sustained a direct hit from anairliner that day, was without a doubt, a target that was pinpointed for destruction. There are a number of indicators that this was the case: •

The command centers of the US Armed forces and the Office of the Secretary of Defense are located on theRiver and Mall, northern facing segments of the Pentagon. 20 This is public information. Either of thosefacades should have been the prime target for a well-planned attack. It needs to be remembered that theindividuals responsible for September 11 had almost three years to plan their assault. The targets andmethods were not haphazard. •

The western facing section of the Pentagon that was attacked had been under constructions for almost twoyears, and would not have been considered as a target, unless it was targeted for a specific reason. •

The Naval Command Center had been moved into that newly opened section of the Pentagon a monthearlier 21 ; •

The attacking aircraft went through great effort to hit the west side of the Pentagon, under either of contentious scenarios, looping around the Pentagon by 270 degrees after approaching from the north east, orlooping 360 degrees with it’s approach from the West. Under either scenario, the additional looping createdan opportunity with extra flight time for defense systems to take out the attacking plane, and the hijackerstook a significant risk of being shot down by executing this maneuver. 22 (See Figures 1 and 2) •

If one looks carefully at the Koeppel flight path approach seen in Figure 1, the attacking flight path wentalmost directly over the Whitehouse, bypassing what should be considered a primary target, for a supposedlyempty section of the Pentagon. With the alternative approach presented by the National TransportationSafety Board, the extra distance in the loop would have allowed it to hit either the White House or theCapitol had it continued straightforward. •

Derek Vreeland who claimed to be an agent for Office of Naval Intelligence had predicted the attack severalweeks in advance 23 ; •

The ONI has been attributed by several sources with responsibility for leaking copies of the faxes whichdocument the illegal transaction of 1989-1991. 24 Figure 1 (above) shows the two looping flight paths presented. On the left, an approach mapped byFormer Air Force Pilot Steve Koeppel, 25 on the right, the official approach presented by the NationalTransportation Safety Board. 26

4Figure 2 (below) shows the western approach hitting the ONI,while the Mall and River Entrances with the prime targets,initially in the direct path of the northern approach, are ignored.Did Flight 77 “pass” on three primary targets (the White House, the Capitol, and the command centers in the northface of the Pentagon) in order to make a precision hit on what should have been known to be an empty segment of the Pentagon? Did the pilot, described as having “extraordinary skill,” after years of planning, hit a worthless target?It would seem the assumption has to be the pilot hit exactly where he wanted to hit. The planes hitting the SouthTower and Pentagon maneuvered in the last moments to hit their exact target. With a world of targets available,why these?For the majority of Americans, the unanswered questions regarding that day are legion. While many of the questionsmay never be answered, the extraordinary destruction experienced at specific locations in the WTC, and the peculiartargeting of the Pentagon all support a pattern of deliberate destruction of sites key to the claims of Eastman,Durham, Flocco and Schwarz. While most media reports defer to the U.S. government contention that Osama BinLaden was behind these attacks, foreign media provided reports suggesting that the “real power” behind Al Qaedawas unknown. 27 As shall be seen, the financial power behind the attack is the same power that created thesesecurities, and the same power as that which founded Al Qaeda. The Origins of the World Trade Center Attack Most historians track the history of September 11th to 1998 when Osama Bin Laden declared a fatwa or jihad against the U.S., and the terrorist “Hamburg Group” lead by Mohammed Atta reportedly “offered” it’s services to AlQaeda. 28 However, the history which defines the motives for the September 11 attacks goes much further back intime. The answers to the questions surrounding the cause of the WTC attack will be found in events going as far

5back as 1990 and 1991, when the George H.W. Bush was president. To a very great degree, insight into the activitiesof that period are cloaked by the Executive Order of George H.W. Bush’s son, President George W. Bush, who onNovember 1, 2001 issued Executive Order 13233. This executive order was intended to balance the public's right tosee the records of past presidents with a need to protect national security. As a result, public records which mighthave shed light on the activities on 1990 and 1991 remain shielded from public access in the interest of nationalsecurity and the men and women who support it. Subsequently, this reconstruction of the events from the late 1980sand early 1990s is based on news reports, books and articles.What the public record suggests is that with the beginning of the first Bush Presidency in 1989, George H.W. Bushinitiated a program of covert economic warfare to bring about the collapse of the Soviet Union. The name of thisprogram appears to be Project Hammer, a previously reported, multi-billion dollar covert operation, ‘third worldinvestment program’ whose investments remain shielded. 29 This program consisted of four major covert operationsincluding:1)

Theft of the Soviet treasury,2)

Currency destabilization of the Ruble,3)

Funding of the KGB Generals’ August 1991 coup against Gorbachev, and4)

Takeover of the key energy and defense industries in the Soviet Union.At its inception, the program was conducted well within policy framework of the U.S. government as defined byseveral Executive Orders authored by Vice President Bush and signed by President Ronald Reagan. There is goodreason to believe that the plan was initially formulated by Reagan’s CIA Director, William Casey. During WorldWar II, before Casey headed OSS operations in Europe, he worked for the Board of Economic Warfare and his rolewas “pinpointing Hitler’s economic jugular and investigating how it could be squeezed.” 30 Many of the programoperatives were probably engaged through official CIA and National Security channels. However, as a result of theexperience gained by the Bush cabinet and its private sector counterparts during the secretive Iran-Contra andFerdinand Marcos gold operations (which will be explained in short order), the execution of that program would beaccompanied by two new assumptions:1)

Using covert and illegal funding for a policy not approved by Congress would remain acceptable. Under GeorgeH.W. Bush, Congressional oversight of covert operations could be ignored with impunity;2)

The American public and their representatives in Congress were too pre-occupied with their own lives to beworried about what happened in foreign lands, even if those actions violated the law and the constitution.Emboldened by the lack of consequences for subverting the U.S. constitution and breaking international law duringthe Iran-Contra scandal, the Bush administration group known as “the Vulcans” planned a bigger drive to crush thesoul of Communism once and for all. This group had graced themselves with this moniker, naming themselves afterthe Roman god of War – Vulcan. They waged war against the Soviet Union and Iraq under George H.W. Bush, andagainst Iraq and Afghanistan under George W. Bush.Belonging to this group 31 were •

Dick Cheney •

Don Rumsfeld •

Colin Powell •

Paul Wolfowitz •

Richard Armitage •

Condoleezza RiceThe Vulcan’s drive to bring and end to the Cold War was fueled by a covert war chest invisible to congressionaloversight. 32 This war chest would be known by several names: Black Eagle Trust, the Marcos gold, Yamashita’sGold, the Golden Lily Treasure, the Durham Trust or Project Hammer. 33 These same Vulcans would be broughtback to power in 2000 under the administration of President George W. Bush, son of President George H. W. Bush.The covert operations conducted by the Vulcans involved – at a minimum – potential securities fraud, moneylaundering and violation of Foreign Corrupt Practices act. 34 In a number of situations, murder and falseimprisonment seemed to be the mainstay of efforts to prevent any remorseful participants in this operation fromgoing public with their stories. 35 While accomplishing its objective – bringing about the demise of the Soviet Union– the program also seems to have lined the pockets of the individuals that executed this policy, at US taxpayerexpense. This was done to the tune of a mere $240 billion dollars in covert and allegedly illegal bonds, whichappear to have been replaced with Treasury notes backed by U.S. taxpayers in the aftermath of September 11!

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14 Taking Control Unlike other presidential administrations, the Reagan administration was uniquely characterized by having the VicePresident - who at that time was George H.W. Bush – in control of Foreign Policy. That control was established inan agreement between Bush and Reagan prior to their election. 79 The agreement was later formalized withExecutive Order 12333. 80 As William Casey’s biographer pointed out, Reagan “knew little about foreign policy andcared less...” and as a result sharpies around the President took over and they ran him.” 81

In November 1980, Ronald Reagan was elected to the White House on a slim margin of votes, defeating incumbentJimmy Carter. The few percentage points in votes which were responsible for giving Reagan and Bush the victorywere attributed to President Carter’s inability to rescue and free hostages being held in Iran. 82 The failed rescueattempt of the hostages was reported to be the responsibility of Oliver North, Richard Secord and Albert Hakim,who planned and controlled the rescue operation. 83

In the meantime, it is reported that the release of the hostagesby Iran was deliberately delayed by negotiations led by George Bush, and David Kimche of the Israeli Mossad- theIsraeli equivalent of the U.S. Central Intelligence Agency, and Saudi businessman Adnan Khashoggi. For $40million dollars, the Iranians would delay the release of the hostages until after the election. 84 The men involved inthis operation, referred to in the chapters of history as “the October Surprise” were •

George HW Bush •

Adnan Khashoggi •

Oliver North •

David Kimche •

Bob Gates •

Richard Secord •

William CaseySixty-nine days after the Inauguration, John Hinkley attempted to assassinate President Reagan. Eight days prior tothat attempt, there were a series of unprecedented policy changes that put George Bush in charge of Foreign Policyand National Security. On March 22, 1981, Bush took control of the "Emergency Crisis Management Staff," in aCabinet meeting. That role conferred new roles and powers on Bush, including "unprecedented powers for a vice-president." 85 Vice President George Bush was named the leader of the United States ``crisis management '' staff, as apart of the National Security Council system. 86 Then, on March 30, 1981, eight days after these powers wereconferred on Bush, President Reagan was shot. On that day, there were actually two unsigned versions of NationalSecurity Directive 1 (NSDD1), one which made Al Haig and another which made George Bush the caretaker of the“red phone’ in case of National Emergency. The content of either version has never been released to the public.Sixty nine days after the inauguration, the man whose operatives had bribed terrorists in violation of Americanpolicy and law, the man whose close colleagues and advisors planned a failed rescue attempt which cost the lives of US soldiers – all with the purpose of controlling the American Presidency, was now in control of US foreignpolicy. 87 The father of the assassin that put Bush in power was John (a.k.a. Jack) Hinckley, Sr., who was the owner of Vanderbilt Oil. Hinckley had been giving maximum donations every year to George H.W. Bush since he startedrunning for Congress. “When the Hinckley oil company, Vanderbilt Oil started to fail in the 1960s, Bush, Sr.'s,Zapata Oil financially bailed out Hinckley's company. Hinckley had been running an operation with six dead wells,but he began making several million dollars a year after the Bush bailout.” John Hinckley, Sr., had also beenextensively involved in an executive position with U.S. Ministries for World Vision, a widely reported CIA frontoperation. After the Jonestown Massacre, World Vision took over Jonestown. . In The Black Hole of Guyana: TheUntold Story of the Jonestown Massacre , John Judge painstakingly documents that Jonestown was a CIA operationfor converting dispossessed and lonely refugees into assassins. In an operation that was falling under Congressionalinvestigation, the evidence had to be eliminated – and nearly all the inhabitants were murdered to preventdisclosure. 88 The assassin John Hinckley’s brother Scott Hinckley, and Neil Bush were not only friends, but had recently partiedtogether and were scheduled to have dinner with each other that very day. Also, on the very day John Hinckley

15attempted to kill Reagan, three Department of Energy auditors were pressuring Hinckley’s brother Scott, with a $2million penalty. This penalty would later disappear. 89 George H.W. Bush, with his new found ‘Emergency’ powers,would deny Al Haig’s formal request for an investigation into the assassination attempt.The covert business dealings with the Iranians and Israelis which originated with Kashoggi and Kimche in July 1980in Hamburg with the October Surprise arrangement, would grow into a larger covert operation over the years, andprovide an opening to the Soviet KGB that would allow the U.S. to fund a coup against Gorbachev in 1991. In thisoperation, a number of key Bush policy advisors and operatives would conduct what they collectively viewed shouldbe the “honorable and right” foreign policy of the U.S., rather than what Congress had determined what that policyshould be by law. The October Surprise operation would grow and be overshadowed by the larger Iran-Contraoperation. Members of Bush’s covert intelligence cadre sold weapons to Iran, an avowed enemy of the U.S., andillegally used the profits to continue funding anti-Communist rebels, the Contras, in Nicaragua. Viewed as anti-communists, the CIA Director characterized them as being motivated by greed. 90 The premise of using covertfunding to fight the cold war would re-emerge a few short years later when the Bush cadre decided to take on theSoviet Union.The entire Iran-Contra operation almost fell apart in 1986 and became public when the Nicaraguan government shotdown a U.S. plane carrying weapons to the Contra rebels, and captured the U.S. pilot- Eugene Hasenfus. Thediscovery of these shipments - a violation of U.S. law - initiated a series of Congressional investigations and aninvestigation by an Independent Counsel. The meetings in Hamburg and Paris which were held to prevent anOctober Surprise were never mentioned, and the two pilots who flew Bush to Paris were immediately imprisonedand discredited when they sought to testify in front of Congress. A court would later find the charges against thepilots to be without support, but by that time their testimony had been blocked and discredited. “Gunther Russbacher.. claimed to have videotape proof and sixteen witnesses to his having flown George Bush to one of the October Surprise meetings.” 91

Ari Ben-Menashe a major Israeli coordinator of these deals, would also testify that he had personally seen GeorgeH.W. Bush at the Paris meeting “In June, I also testified under oath, in closed session, before the Senate Foreign Relations committee. I stated unequivocally that I had, seen Bush in Paris.” 92

According to Ari Ben-Menashe, a major Israeli coordinator of these deals, four of the five supply chains set up toarm Iran were never investigated, and continued to operate right through the Congressional Hearings on IranContra. “…Tower knew perfectly well there was an ongoing arms channel. Yet the Tower Commission made nomention of it. In February 1987, while Tower was investigating a minor part of the sales to Iran, the Joint Israel-Iran Committee, together with Robert Gates, ran the biggest ever arms supply operation to Iran. Theofficial inquiry was better than any smokescreen we…could have dreamed up.” 93

Quite simply, the Iran-Contra team continued to violate the law even while being investigated by Congress. Therewere a few indictments and convictions as a result of the Iran-Contra affair, but generally those involved wereexonerated. Bush later pardoned the few lower level government officials that were indicted and convicted. Dick Cheney was one of the Congressional committee members that decided that no crimes had been committed, and thatBush was not involved. Robert Mueller, who as U.S. Attorney headed the Noriega (a related Iran-Contra inquiry) 94 and the BCCI investigations, 95 found no evidence pointing to illegal behavior by George H.W. Bush. His subsequentinvestigation into Enron found no wrong doing by Enron. 96 Mueller would later be called up to head the WTCInvestigation.To support this cover-up of the Iran-Contra operations, witnesses had to be silenced. “Navy Lt. Commander Alexander Martin was, in effect, the chief accountant for the Reagan/Bush drugoperations run by Marine Lt. Col. Oliver North, through an obscure arm of the White House NationalSecurity Council called the National Programs Office. In a radio interview with talk show host TomValentine last July, Martin spoke not only of drugs and money, but death. "Out of roughly 5,000 of us who

16 were originally involved in Iran-Contra, approximately 400, since 1986, have committed suicide, died accidentally or died of natural causes. In over half those deaths, official death certificates were never issued. In 187 circumstances, the bodies were cremated before the families were notified. "Martin then said he was lying low.” 97 “The Manhattan D.A. who closed the American branch (of the BCCI) announced that 16 witnesses had died in the course of investigating the bank's entanglements in covert operations of the CIA, armssmuggling to Iraq, money laundering and child prostitution.” 98 “From October 30th to Christmas eve there were four attempts to kill, me and our friend William Smith,who everyone thinks is a high ranking Naval Intelligence officer. During that same time over fifty CIAoperatives, their wives and families were killed in an attempt by the Robert Gates faction of the CIA tocover its tracks before Clinton's team came to power. After the last attempt on my life, my husband's SEALteam arranged safe passage for me to Vienna, Austria, where I stayed until Robert Gates was removed as Director of the CIA.” 99

Ari Ben Menashe writes that Amiran Nir was assassinated to prevent his testimony at the trial of Oliver North. Thattestimony would have implicated George H.W. Bush. 100 Senator John Heinz and Senator Towers would later meetthe same fate as Amiran Nir – death by plane crash. The pattern of taking the lives of anyone who created a risk of exposure of these National Security operations was repeated in 1991, and again in 2001.The names of the individuals involved in the Iran-Contra scandal include: •

George H.W. Bush •

Adnan Khashoggi •

Oliver North •

David Kimche •

Richard Secord •

Richard Armitage •

Russell Hermann •

Bob Gates •

Shiek Kamal Adham •

Khalid bin Mahfouz •

Dick Cheney •

Farhad Azima •

Alton G. Keel Jr. •

Bruce Rappaport •

Alfred Hartmann •

Porter Goss •

Richard Armitage •

Shaul Eisenberg •

Robert MuellerMost of these would become the key operatives in the secret war against the Soviet Union.As the Iran-Contra operation was unfolding, on the other side of the world, another important development wasoccurring. Ferdinand Marcos, the pro-U.S. dictator of the Philippines was being muscled by the Bush foreign policymachine to hand-over to the U.S. by what is estimated by some to be possibly as high as an additional 73 thousandtonnes of the remaining Golden Lily Treasure. At that time, the treasure had an estimated value of $500 to $600billion. 101 The individuals associated with this operation were •

George HW Bush •

Adnan Khashoggi •

Oliver North •

Russell Hermann •

Paul Wolfowit

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18famous Riggs-Valmet consultants who set up the international financial apparatus for the Russian oligarchs androgue KGB allowing them to steal the Soviet treasury and destroy the Russian economy. Carter Beese’s death wasreported as a suicide in 2006.What happened to the Marcos gold after it was confiscated by U.S. agents in 1986 has never been reported, butthroughout the early 1990s, the world gold market would be befuddled by the mysterious appearance of thousandsof tonnes of gold which appeared to suppress the price of gold. An initial lawsuit was opened against the U.S.Government by renowned lawyer Mel Belli, who represented a relative of the deceased Santa Romana, attempting toclaim his gold from Citibank . 108

That suit remained open in 2007. There were two subsequent lawsuits introduced inthe U.S. against a number of financial institutions and Alan Greenspan to determine the source of this gold. Goldtraders suspected the U.S. Treasury was the source of this gold, and contended that U.S. gold stock was beingillegally manipulated for private gain by the bullion banks. The first lawsuit by Reginald Howe was seen as havingmerit and cause, but was denied by the court for jurisdictional reasons. A second suit by Donald W. Doyle of Blanchard in which Barrick Gold was a primary defendant was settled out-of-court in 2006 and sealed underagreement. Barrick was also mentioned in the Howe suit as a knowledgeable party. In 1992, Barrick had receivedspecial treatment from George H.W. Bush during the last several days of his Presidency, when for a nominal$10,000, Barrick received rights to mine deposits ‘valued’ at $10 billion on public domain lands in Nevada. 109 While there was nothing illegal to the arrangement, a special process put in place by President Bush allowed Barrick to use outside specialists to determine the value of the claim, allowing them to control the appraised value of thedeposit. That special process was not made available to other mining applicants. Shortly thereafter, George H.W.Bush served on the Advisory Board of Barrick Gold. In the long term, the Barrick operation would create billions of dollars of paper gold by creating ‘gold derivatives’, under the reports that a Nevada claim whose potential wasdoubted by industry experts had actually produced a fortune. 110 A major distribution channel for the sale of Barrick’sgold futures would be Enron. Enron would also become the vehicle by which oil and gas contracts from the formerSoviet Union (vehicles for Soviet money-laundering) were processed, and it too would become collateral damage of the Cold War.Interestingly, Barrick, which has no mining operations in Europe, uses two refineries in Switzerland: MKS FinanceS.A. and Argor-Heraeus S.A. – both on the Italian border near Milan, a few hours away from the gold depository inZurich. The question that Barrick and other banks needed to avoid answering is: what gold was Barrick refining inSwitzerland, as they have no mines in that region? The Vulcan’s Covert Economic War on the Soviet Union Having found a source of funding for an economic war against the Soviet Union, it appears the Bush ‘war cabinet’who called themselves “the Vulcans” laid out a four phase strategy. These Vulcans would be the very sameindividuals brought back to public service by George Bush Jr 10 eight years later, under the guidance of the elderBush and Dick Cheney.In preparation for their war against Communism, and in the years leading up to the failed –or faux -coup of August1991 which initiated the last days of Gorbachev and the rise of Yeltsin, Bush and a cadre of rogue KGB officialsbuilt a complex international network of banks and holding companies that would be used to takeover ownership of the Soviet economy. Over 300 of these KGB traitors who supported this operation would later be re-located to theUS in the early 1990s and pensioned . 111

Periodic CIA reports to Congress would review KGB and organized crimecomplicity in the takeover of Russia by criminal elements, but all mention of the formidable role of the U.S. wouldbe expunged from Congressional oversight and the public record. 112 In the first phase of the economic attack on the Soviet Union, George Bush authorized Leo Wanta and others todestabilize the ruble and facilitate the theft of the Soviet/Russian treasury. This would result in draining the Russiantreasury of between 2,000 to 3,000 tonnes of gold bullion, ($35 billion at the time). 113 This step would be critical toprevent a monetary defense of the ruble and destabilize the currency. The gold was ‘stolen’ in March of 1991,facilitated by Leo Wanta and signed off by Boris Yeltsin’s right hand man. The majority of the leaked reports fromthe CIA and FBI suggest the theft of the Russian treasury was a KGB and Communist party operation, but whatthose reports omitted was the extensive involvement of Boris Yeltsin, the U.S. CIA and the U.S. banking industry.

19A key player on the Soviet side of this theft with Wanta was Gregori (a.k.a. Georgy, Georgii) Matyukhin, formerKGB official who had been made the first Chairman of the Central Bank, and after the collapse of the economy, wasmade to resign “for health reasons”. 114 In fact, it was Matyukhin who authorized large capital transfers toChechnya, the source of the Chechen ‘advice notes’ that Kozlov attributed to as the source of the theft of the SovietTreasury. “It all began in the summer of 1991 when Ruslan Khasbulatov, First Deputy of Boris Yeltsin who wasthen Chairman of the Supreme Soviet of the RSFSR, decided to help his fellow countrymen and instructed head of the Central Bank of the RSFSR Grigory Matyukhin to provide peasant farms inChechnya with credits…. after the fulfilment of Khasbulatov's assignment, the tiny republic became thelargest issuer in the RSFSR. The share of the incomes of the population paid through money printingexceeded 40% (17% on average across the country). The cash sums received by co-operatives in banksexceeded the cash which they returned by 50 times, which was also far above the level of other territories.” 115

Later, it was discovered that Matyukhin was actually working for the CIA. 116 In the second phase, Wanta, George Soros and a group of Bush appointees would begin to destabilize the ruble.There were two major operations: the largest was coordinated by Alan Greenspan, Oliver North, andimplemented by Leo Wanta. They are accused of fronting $240 billion in covert securities to support the variousaspects of this plan. 117 These bonds were created (in part or in whole) from a secretive Durham Trust, managedby ex- OSS/CIA officer, Colonel Russell Hermann. This war chest had been created with the Marcos gold andpossibly augmented by illegal inverted yield curve gains on the collateral held by the U.S. during the global debtresettlement on 1989. 118 The coup would be the third phase. The KGB was well aware of President Bush’s eagerness to see a collapse of Gorbachev. Many who observed the coup described it as faux coup, which was never intended to succeed Yeltsinhimself writes in his memoirs that the coup was actually a veiled, pro-Yeltsin coup. 119

The generals who conductedthe coup said the same. 120 The 1991 coup against Gorbachev was engineered by KGB General Vladimir Kruchkov 121

who reported toGeneral Victor Cherbrikov. Both of these men were business partners with Robert Maxwell, a British financialmogul, a documented Israeli secret service agent, and a representative of U.S. intelligence interests. Maxwellassisted Cherbrikov in selling military weaponry to Iran and the Nicaraguan Contras during the course of the IranContra deals, and made hundreds of millions of dollars available to Cherbrikov’s Russian banks. 122 Shortlybefore the attempted coup of 1991, Maxwell met with KGB General Vladimir Kruchkov on Maxwell’s privateyacht. 123 A year earlier, it had been Maxwell that initiated the dialogue about a coup with Kruchkov. 124 In thesame month as the coup, Maxwell was in Russia and received $780 million dollars from the CIA via the Israelisto pass on to General Kruchkov. 125 Maxwell’s chief U.S. connection was Senator John Tower, who was longtime confidante of George H.W. Bush and participant in the October Surprise. After his Senatorial career, Toweractually worked for Maxwell on the Board of one of Maxwell’s smaller publishing firms - Pergamon-Brassey. Inthis operation, Maxwell was supported by a former four star general, a retired U.S. Air Force General and aretired British Major General. 126 It was Tower who released a statement exonerating Bush from involvement inthe October Surprise before the Tower Commission had interviewed even a third of the scheduled witnesses.This statement is now seen as all the more brazen in that the commission was provided with eye-witnesstestimony from two individuals who said they saw Bush at the meeting, as well as being provide a list of 16 morewitnesses and a video-tape. 127

128

Tower had arranged for the Israeli government to provide a $1 billion dollarloan to Maxwell in 1988, 129 and given the generosity of U.S. financial aid to Israel, it might be fair to argue thiswas a pass-through loan. 130 Tower had introduced Maxwell to George Bush in 1976, for the sole purpose of using Maxwell as an intermediary between Bush and the Soviet Intelligence. 131 Shortly after the coup, Maxwelldied mysteriously on his yacht after attempting to blackmail the U.S. and Israeli intelligence operations. It iswidely rumored that he was assassinated by either CIA or Mossad agents in lieu of them delivering his expectedblackmail payment. Maxwell’s link back to George Bush died just as mysteriously. Senator Tower died in aplane crash and under suspicious circumstance in April of 1991. Maxwell’s wife was advised by a CIA agent todiscourage any investigation into her husband’s death if she valued her life. 132 The audio tapes he kept of hisphone calls with Kruchkov disappeared. 133

20The coup was presented by the media as the haphazard, poorly organized effort of dissident hard-liners,suggesting a group of senior, hardened military officials got drunk, and in a moment of absent-mindedness,decided to overthrow the government. “The accounts reportedly given by the three imprisoned plotters suggest that their coup was haphazardly planned. Mr. Pavlov, for example, said the plotters simply hoped that the Supreme Soviet would approvetheir action and that afterward "things would be worked out." Mr. Yazov said that at a key meeting on Aug.18 at which the coup was planned, he, Mr. Kryuchkov and a third plotter, Boris K. Pugo, former Interior Minister, who later committed suicide, were all drunk. Mr. Pavlov told his interrogators that he alsoconsumed "quite a decent amount of alcohol" at that meeting. “ 134

It was widely reported that three of the nine primary conspirators committed suicide after the failed effort. Whatwas rarely mentioned was that two of these senior veterans were thrown out of windows, and a third – BorisPugo, shot himself in the head three times. “What's the hardest way to kill yourself? Three bullets to the head certainly ranks. According to Moscow police sources, that was the actual cause of death for coup conspirator Boris Pugo, the Soviet Interior Minister who was officially described as having "committed suicide" when the August putsch fizzled. As for two other top Communist officials reported to have killed themselves by leaping from windows, sources saythey probably were pushed in order to silence them. They apparently knew too much about the smuggling of Communist wealth out of the country as the party collapsed.” 135

The only individual officially linked to the death of Boris Pugo was Viktor Erin, the KGB officer personallyinvolved in the ‘arrest’ of Boris Pugo 136

Erin would later become a General Director for Bank Menatep, and beaccused of loan fraud and theft, as part of Putin’s crackdown on the Yeltsin gang. 137 Rather than being a coupabout ‘policy and honor,’ like so many events linked to Project Hammer, the coup was all about the money. TheCIA was moving hundreds of millions of dollars to the Generals before the coup through Robert Maxwell. 138 The people who could best explain the transactions were apparently murdered. The group responsible for themurders are then later linked via Bank Menatep to the financial groups that funded the coup. As for the othertraitors in the coup, they were all released from prison two years later by Yeltsin. 139 The coup actually seems to have been a long time in the making, with Yeltsin having discussed the coup withBush during his visit to the United States in June of 1991. 140 That same summer, Yeltsin dined ‘discretely’ withthe Chairman of the New York Federal Reserve, Gerald Corrigan, while the rest of the Moscow mission dinedwith Gorbachev. 141 The discussions prompted by Maxwell with Kruchkov regarding Kruchkov’s interest in acoup are dated to the summer of 1990. 142 The coup began the dissolution of the Soviet Union 143

and the beginning of the reign of Boris Yeltsin and his‘family’ of Russian Mafiya Oligarchs, and President Nursultan Nazarbayev of Kazakhstan. At that point, the twoout of three votes required to dissolve the Soviet Union were in the pocket of President George H.W. Bush, thosebeing the votes of Yeltsin and Nazarbayev.In the final phase, a series of operatives assigned by President George H.W. Bush would begin the takeover of prized Russian and CIS industrial assets in oil, metals and defense. This was done by financing and managing themoney-laundering for the Russian oligarchs through the Bank of New York, AEB and Riggs Bank. All of them,notably Blackstone Investment, would be out to line their own pockets. 144 Blackstone would ultimately turn outto be the investor behind Larry Silverman’s purchase of Building 7 of the WTC six weeks before the September11 attack. 145 By controlling financial interest in the loss of the WTC, this group could quiet any investmentcommunity demand for investigations into the criminals behind the WTC attack.A closer look at other activities leading up to these phases makes it clear that is was a U.S. orchestratedintelligence effort from the beginning. The economic war also involved Gerald Corrigan of the NY FederalReserve Bank, George Soros, an international currency speculator who was responsible for crashing the Britishpound a few years earlier, former Ambassador to Germany R. Mark Palmer, and Ronald Lauder- financier andheir to the Este Lauder estate. Palmer and Lauder would lead a group of American investors in an Operation

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26There are six lines of evidence from eight sources that suggest this was indeed the case. Many of these instancesare corroborated with documents available on the internet, presented by those making the claims. 174 1.

There has been a body of investigative reporting that suggests that between 1991 and 1992, the ruble wasunder a massive attack, with an unknown source of funding. The capital flight from the Soviet Union in U.S.dollars was estimated by Fidel Castro at $500 billion, and by Gorbachev at one trillion dollars. Somebodyhad to put up the lion’s share of funding for those dollars. The most authoritative source on the subject,Claire Sterling, writes that unknown intelligence operations were behind the attack. “The fact that scarcely anyone outside Russia has heard of the Great Ruble Scam may be explained partly by its seemingly unbelievable details, but partly, too, by Western reluctance to touch exquisitelysensitive political nerves. Western governments rejoicing in the collapse of the evil empire wanted toassume, and to all appearances did assume, that all the evils in an emerging democracy emanated from politicians identified with the fallen communist state. Not one was prepared to acknowledge indelicateevidence to the contrary. The ability of three or four characters to mount such a planet wide operation,their extraordinary impact on what was still a world superpower, and their singular immunity frombeginning to end suggest the guiding hand of not just one, but several intelligence agencies.” 175

Documentation supporting the contention that there was ‘cash’ in this order of magnitude floating aroundRussia in 1991 and 1992 is also found in Stephen Handelman’s book Comrade Criminal. Handelman, whoappears to have had access to KGB files brought back to the U.S. after the collapse of the Soviet Union,notes that prior to 1991, the Russian Communist Party had a reserve of 435 billion rubles of ‘freelyconvertible hard currency,” and that in the summer after the coup, there were unnamed individuals in Russiawho could provide up to 300 billion rubles on a months notice. 176 In the former instance 435 billion rublesin July of 1991 converts into $240 billion. This fund was converted and moved out of the Soviet Union, andthe ruble scam would have needed to provide hard dollars in that order of magnitude. A year later,Handelman’s second examples suggests criminal individuals had at their disposal $3 to $4.5 billion on shortnotice. 177 By comparison, at the same time, the U.S. Congress could not pass a $10 billion appropriation billdue to mandatory budget ceiling constraints.2.

Andrei Kozlov, First Deputy Head of Russia’s Central Bank, was heading an investigation into the loss andreported the theft at 400 billion rubles from the Central Bank in 1991. (Not to be confused with a similarscam run out of Chechnya in 1992 on a much smaller order of magnitude.) These rubles were stolen bysomeone putting hard currency securities in remote Chechen banks as collateral for Russian loans and thenmaking the collateral notes disappear from the remote banks at the same time the funds were beingwithdrawn. 178 While the black-market value of a ruble was about $1, the ‘official’ conversion rate at the timewas 1.8 rubles/dollar. Using the official US dollar equivalent for 400 billion rubles, the theft converted to$222 billion. Kozlov was gunned down shortly after announcing he was close to understanding where the400 billion rubles went. The head of the Central Bank at that time – former KGB official Georgy Matyuhin– who authorized these credits, on behalf of Yeltsin an at the request of Yeltsin’s First Deputy, Khasbulatovwas retired after he was reported to be a CIA asset. 179 3. Mrs. V.K. Durham, wife of Russell Herman, who was a fund controller for the CIA’s covert fund, hascontended in sworn testimony that George H.W. Bush, Oliver North and Alan Greenspan forced herhusband into relinquishing the funding for the bonds on that date. They later forged Hermann’s signature onrelated financial transactions. 180 She also claims they were responsible for his death three years later becauseHermann believed these funds were the property of the U.S. citizens rather than the private slush fund of theBush circle, and protested the manner in which they were being used. Wanta has since maintained a similarstance, that the earnings from his covert operations should be public funds rather than a covert slush fundsused by U.S. presidents. 181 4. Several sources from the Office of Naval Investigation (ONI) have released over 100 pages of bank transactions detailing transactions in the range of 100s of billions of dollars. These are the same filesreleased also by Derek Vreeland from a Canadian prison, from which he warned his guards about theforthcoming attack on the World Trade Center. Vreeland contended he was an ONI operative. 182 The filescover three periods of transactions which correspond to this covert war on the Soviet Union; While thetransactions do not directly show securities going to the Soviet Union, they do support the theory that theBush Vulcans were spending massive amounts of cash in a manner inconsistent with US Federal budgetspending caps in effect at the time, and moving massive funding into covert accounts at key trust funds –most notably Pilgrim Investments, to the account of “Jorge” Bush. (Jorge is Spanish for George.)

27 •

the first series of transactions in August to October 1989 coincides with the Mexican and LatinAmerican debt resettlement. During this period it has been contended that Bush was responsible forgenerating 300 hundred billion dollars in illegal earnings by making other countries debt collateraldisappear for a few months, while whoever was holding this collateral profited from August 11 toOctober 6 on what is known as a period of a rare the “inverted yield curve.” •

the second series of transactions from September 24 to October 10, 1990 period would most likelyrepresent funding for the purchase of the Soviet gold treasury, and the movement of Communist Partyfunds out of the Soviet Union. Leo Wanta reports having started his efforts at this time. •

the third series of transactions from May 27-28th 1991 would most likely represent funding for hisRuble destabilization program5. Documents released from Leo Wanta’s files for these bonds provide great detail about the Soviet deals:• These bonds were used to fund an undesignated “joint venture” with Russia 183 Coincidentally, On 14 September 1991, Vladimir Shcherbakov, the last First Deputy Prime Minister of the Soviet Union, formed the International Foundation for Privatization and Private Investment [FPI]with two other partners. The second partner has never been revealed. The third partner was the nownotorious Austrian firm, Nordex GmbH. The International Foundation for Privatization and PrivateInvestment [FPI]. would be one of the major organizations involved in the Bank of New York money-laundering scandal and a major crime front. Interpol would be reported as making Marc Rich one of thefounders of Nordex. Marc Rich would be pardoned by President William Clinton, presumably for hisservices to the US in arranging for the collapse of the Soviet Union, although the reasons for his pardonhave never been made public.• These bonds were backed by Swiss gold held in vault in the free trade zone in Kloten, Switzerland 184 .The Kloten repository resides at the Zurich airport, which the Marcos gold hoard as well as the stolenSoviet treasury gold was reported as being stored at. "… tons of the loot was liberated by Ferdinand Marcos before his ouster. Billions of dollars worth wereshipped overseas by American intelligence agents and the Mafia. Much of the horde was cabbaged away in a high-security, subterranean storage cache buried beneath the Zurich airport. 185

• The bonds were made conditional to loan acceptance by government officials in the USSR 186 • These bonds provided, in part, of payments of currency from Lehman of at least $100 million per dayfor an indefinite period of time 187 • These bonds provided, cash funneled to Russia through the Deutschebank 188 6. Depositions on Project Hammer seems inextricably linked to the same banks and funds as the informationbeing documented by Vreeland, ONI and Wanta: •

General Earl Cock’s deathbed deposition in April 2000 describes Citibank’s and John Reed’s centralinvolvement in Project Hammer in the last quarter of 1991 as being funded with $223 billion dollars, of mostly CIA moneys. Cocke also references the use of baby bonds to collaterize these funds, which are10 year bonds. Cocke describes the source of these funds as “accounts, participants or players” with theaccounts converting to bank ownership upon the death of the controlling party, and then to thegovernment. This matches exactly what Sterling and Peggy Seagrave claim happens to the goldaccounts opened by agents of the US; 189

Roelfo Van Rooyen’s deposition in 1995 describes Project Hammer as a 1991 CIA operation. 190 Information and documents released from 9 independent sources all merge into the same story1. Leo Wanta – imprisoned on trumped up tax charges to keep him quiet.

282. U.S. Office of Naval Intelligence – destroyed on September 11 to keep them quiet.3. Derek Vreeland– imprisoned to keep him quiet, now in hiding.4. Major Colonel Erle Cocke – deathbed confession of co-conspirator.5. Andrei Kozlov– Russian Central Bank director, gunned down to keep him quiet.6. Claire Sterling – international correspondent co-opted and hired by CIA to keep her quiet. Deceased.7. V.K. Durham – ignored, but not silenced.8. Sterling and Peggy Seagrave – authors and historians, received multiple death threats to prevent publication.of their book on the Marcos Gold– now in hiding;9. David Guyatt, independent reporter and published author. The September 11th Cover-up of the Black Eagle Trust and Project Hammer With the bonds out in the market, they sat for ten years, like a ticking time bomb. At some point, they had to besettled -or cashed in, on September 11, 2001. The two firms in the U.S. most likely to be handling them wouldbe Cantor Fitzgerald and Eurobrokers – the two largest government securities firms in the U.S. The federalagency mostly involved in investigating those transactions was the Office of Naval IntelligenceOn that day, those same three organizations: the two largest government securities brokers and the Office of Naval Intelligence in the US took near direct hits. Actually, the jetliners hit immediately below the targetedoffices, assuring that the flames would engulf the floors above. This targeting strategy was also used on the 23rdfloor of the North tower, which was an FBI evidence repository holding information on allegedly illegal goldtransactions.The attacks had a related agenda. It seems that the covert Cold War operation started in 1989 had resulted in aseries of foreign and U.S. allegations of financial impropriety, and as a result there were at least nine federalinvestigations being conducted into bank accounts related to these operations. All of these investigations wereinitiated, in 1997-98 timeframe, which was the same year that Osama Bin Laden - after twenty years of recruitingMujahadeen for the U.S. covert wars - announced a fatwa against the US. (A key understanding here is thatfederal investigations are preceded by a period of ‘quiet’ investigation before an official investigation is publiclyannounced.)1)

The Marcos Gold Hearing began in Los Angeles, in August 1997. The banks and accounts involved in thathearing, were the Swiss banks: UBS, and Bank Julius Baer.2)

The Eizenstatz Report and a public campaign waged by the Simon Wiesenthal Center launched suits againstthree Swiss banks.3)

The Reginald Howe suit- in which the U.S. bullion banks were accused of dumping U.S. Treasury gold onthe market illegally. The Reginald Howe & GATA Lawsuit was filed on Jan 8, 2000 naming Deutschebank (a.k.a. Deutschebank Alex Brown), U.S. Treasury, Alan Greenspan, Federal Reserve, Citibank, Chase, asdefendants. Also mentioned as having non-public knowledge of the scheme are Gerald Corrigan and Barrick Gold. (The 2000 filing suggests investigations began long before.)4)

The Bank of New York money laundering scandal: the Department of Justice was under pressure toinvestigate accounts of multiple individuals who benefited from these transactions: Loutchansky, Marc Richand Berezovsky (Berezovskii.) The FBI investigation started in the Fall of 1998, The investor lawsuit wasopened in September 1999. These investigations involved accounts at Credit Suisse, Union Bank of Switzerland (UBS), Dresdner Bank, Westdeutsche Landesbank and Banque Internacionale of LuxembourgAll of these individual would at some point be mentioned as playing a role in the money laundering scandalat the Bank of New York, that would ultimately be reopened in 2002, after being buried for three years byfederal prosecutor Mary Jo White, a first cousin to former President George Bush.5)

The Avisma law suit was filed Aug 19, 1999 naming as defendants Bank Menatep, Harvard Institute forInternational Development, and the Bank of New York;6)

The federal investigation of Konanykhine’s European Union Bank: The Konanykhine investigation wasbegun by the INS in February 1999. Other banks included in that investigation would have been theEuropean Union Bank and Bank Menatep.7)

Richard Giffen/Mobil Oil scandal- The FBI Probe began in 1999, and would have involved accounts atCredit Suisse, Bank of New York, Cayman Islands, and the Deutsche Bank (a.k.a. Deutschebank Alex

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39This is not a ‘proof’ that $240 billion was laundered, but it provides probable cause for paying serious attentionto Durham’s claim that it was indeed what happened. When one looks deep enough into the murky cloud of black ops and secret financing – the world of Durham’s husband - her claims regarding 1991 and 2001 begin togather credibility. Mohammed Atta’s Affiliations with Western Intelligence Finally, if one looks at the affiliations of the attack leader and financiers, one will see multiple linkages to UScovert operations and U.S. intelligence allies. •

Mohammed Atta, reportedly responsible for coordinating the attacks, trained his men and himself at theHuffman Aviation -Flight Training school. That school was funded by Wally Hilliard, with OryxCorporation. 214 Oryx was founded by Adnan Khashoggi and Sheik Kamal Adham, director of Saudiintelligence (1963-79). Khashoggi was the individual that brokered the meeting between terrorists and theYeltsin Family. 215 Khashoggi was also extensively involved in the following Bush operations: OctoberSurprise, Iran-Contra, Azerbaijan, Barrick Gold, Marcos Gold. •

Mohammed Atta during his time in the U.S. remained a close friend of Wolfgang Bohringer, an apparentCIA agent. 216

Hilliard, nominal owner of the training facility which acted as cover for the terrorists, is a significantinvestor in a small California defense/electronics company (Spatialight, Inc.) with Farhad Azima, another of the Iran-Contra/Azerbaijan group. Azima’s role had been to coordinate air transportation for covert USintelligence operations for Iran-Contra and Azerbaijan. •

Hilliard is reported as a close friend of CIA agent Mark Schubin, whose father was a KGB colonel. 217

Hilliard is also strongly linked to the Jeb Bush political machine in Florida, and has had his commercialtransport operations endorsed by that group. 218

Mohammad Atta, as can best be determined, received funding from three foreign intelligence agenciesaligned with the US: Pakistan, Syria and Germany. His father contended he actually worked for a fourth –the Mossad! −

Director of the ISI (Pakistani) Intelligence (director-general Lt-Gen Mahmud Ahmad. The week of September 11, General Ahmad was meeting with Bob Graham, Porter Goss and Richard Armitage. 219 Gen Mahmud Ahmad was responsible for having $100,000 transferred to Mohammed Atta. 220

While in Germany, Atta worked as an employee of Tatex Trading which was owned primarily byMohamad Majed Said, a former head of Syria's General Intelligence Directorate, 221

In coming to Germany, Atta was funded with a scholarship and employed as a tutor by an organizationknown as Carl Duisberg Gesellschaft. 222 Subsequent Internet reports linked the Carl Duisberg Society toadministration by the U.S. Information Agency, but this had not been verified by any governmentdocumentation. There are Internet reports that the scholarship was jointly funded by US AID. The moreinteresting aspect of Carl Duisberg Gesellschaft is that it’s Managing Director is Bernd Schleich, thesame individual who is Managing Director of InWEnt (Internationale Weiterbildung und Entwicklung.If one investigates the activities and research of InWEnt, it appears to be a commercial intelligenceoperation that does studies on such matters as money-laundering, weapons trades, drug smuggling, andanthrax control in such places as South America, Central Asia and Africa. 223 Carl DuisbergGesellschaft has a fellowship funded by Alpha Group, the Russian Bank represented in the U.S. byformer George H.W. Bush administrators Ed Rogers and Lanny Griffith. 224

Mohammed Atta’s father claimed his son was working for the Mossad. 225 Supporting this view, Attawas reported as having left phone records of call to a company named “Virtual Prototypes.” 226 VirtualPrototypes Inc. would later change its name to eNGENUITY Technologies. It seems as though the typeof work done at eNGENUITY was of more interest to the Israeli government, than it might be of use toa group such as Al Qaeda, as the Israelis made significant purchases from eNGENUITY three yearslater. 227

Mohammed Atta would be discovered to be a legal business partner to Hassan Erroudani, who through theMoroccan American Chamber of Commerce would be associated with the Allied Media Group, a majorrecruiter for US Defense organization and private security firms. 228 Their customers would include:

40 −

USAF −

US Army −

FBI −

US Treasury −

Department of Justice −

Department of State −

CACI −

Young & Rubicam −

Burson MarstellerAtta and his sponsor’s were not jihadists . As a “terrorist pilot” he spent his last year in the U.S. in thecompanionship of two CIA pilots (Schubin and Bhoringer). He trained his team at a facility financed by aknown financier for CIA operations (Khashoggi). He was a business partner with a CIA recruiter (Erroudani). Hewas funded by up to four pro-CIA intelligence agencies. 229

Conclusion History has many interpretations, and this report has been just one of many – an interpretation pieced togetherfrom the bold admissions and revelations of insiders, whose stories have been ignored and suppressed by themajor media organizations. It is an interpretation of history that suggests a few determined men strove to changethe world in defense of western capitalism in ways which they felt needed to be hidden from the public.Whatever emotion or logic that was adequate to cause them to hide their actions from the public was not strongenough to prevent them from committing the acts. In changing the world, crimes were committed for the goodof the American public, without the American public having a say in what it thought was in its best interest. Tocover-up these crimes, thousands of innocent people had to be murdered. Hundreds of thousands of people acrossthe globe have been subjected to the terrors of wars funded by this operation. The ‘few good men’ responsiblefor these events make sure no one knows who is responsible, because in their hearts, they know that what they dois not acceptable to the American public. The alleged statements by Bush and Reagan are testimony to that point: Sarah McClendon: "What will the people do if they ever find out the truth about Iraq-gate and Iran contra?George H.W. Bush: "Sarah, if the American people ever find out what we have done, they will chase usdown the streets and lynch us." 230 “If such a story gets out, we’ll all be hanging by our thumbs in front of the WhiteHouse….” 231

It might be fair to rationalize their crimes as collateral damage in a war to preserve the American standard of living, and that because they risk their lives to serve the American public, they are ‘entitled’ to reap the spoils of war. If thousands had to die to enrich the life and secure liberty for millions, is that not an acceptable sacrifice?It might also be fair to suggest that these agents are nothing more than a criminal association of sociopaths andpsychopaths, out to enrich themselves by means of violence, and who have murdered thousands, destroyed thelivelihoods of tens of thousands, and caused endless misery, pain and death for millions in foreign lands. As abrotherhood always at war, they live under a motto of ‘results at any cost’ and they spin a web of deceit whichallows the American public to tolerate their crimes.It might be fair to view the politicians who use them as ‘realists,’ who accept the existence of both kinds of men,and use them to preserve and protect the American public, and like generals in war, be forced to make the ‘harddecisions’ on behalf of the citizenry.It might also be fair to view the politicians as ‘opportunists’ who use the agents for their own personal gain. Mostof these politicians made their fortunes by capitalizing on the death and misery of war which they forced othersinto unwillingly, and through deception. They have insider trading knowledge of secret funds that in actualitybelong to the American public, and unlimited personal access to those funds.

41Regardless of any personal interpretation, the process for ascertaining truth which has held consistent with thevalues of the American public has been a trial by jury, where the prosecutors and defense abide by the law toconduct a fair and impartial hearings of the facts. This report is based on hearsay evidence, and as a result,proves nothing. Hopefully, what it does is define hypotheses to be proven by subsequent archive research.Americans had a chance in the 1980s to set the system straight, to enforce the law and prosecute thoseresponsible for the Iran-Contra crimes. Americans could have sent a message that criminal behavior by itsleaders is unacceptable. By not stopping this organization at that time, Congress and the American publicallowed this criminal syndicate of American ‘heroes’ to continue to wreak even more havoc on the world in thename of the American public. This assault on the Constitution, freedom, democracy, the Geneva Convention, andthe rule of domestic and international law has continued unabated for over 50 years. By refusing to re-open thewidely discredited inquiry called the 9/11 Commission, and by refusing to address the covert funding that feedsthis syndicate without accountability, the Congress seemingly becomes co-conspirator to past and future crimes.Ronald Reagan was correct: “….America will never make concessions to terrorists; to do so would only invitemore terrorism. Once we head down that path, there would be no end to it, no end to the suffering of innocentpeople, no end to the bloody ransom all civilized nations must pay.” 232 Before his death, Erle Cocke testified that he though the whole operation had become too big for anyone todetermine how to bring closure to it, and that those who wanted to see it ended just gave up. Given thethousands of people who have been murdered to keep this secret, and given the way witnesses that couldimplicate this group are treated, maybe those that gave up were encouraged to do so. Two questions remain: 1)Does the American public want to bring an end to this covert war, and 2) Is there a way to bring this to closure?Two American Presidents – Kennedy and Carter – tried to bring this organization under control, and both werebeaten by the machine. Hopefully, the lessons of their shortcomings will provide success in a third attempt.From the Hagakure: To tell others that

It is a rumor

Will not do.When your own heart asks, How will you respond? EP Heidner28 June, 2008Author’s Note: This is the condensed version of this story. The author cannot vouch for the accuracy of the sourcematerials, although efforts have been made to validate the consistency of the story line with as many references aspossible. There is no single fact or reference that this story is dependent on. The author expects some of the detailsto be disputed, and possibly disproved, but contends that the story line will hold true regardless.

 

The Red Symphony (text) source:by Dr. J. Landowsky; translated by George Knupffer - Peter Myers, December 31, 2003; update April 23, 2011.
Red Symphony, by Dr. J. Landowsky; translated by George Knupffer - Peter Myers, December 31, 2003; update April 23, 2011.

My comments within quoted text are indicated {thus}; write to me at contact.html.

You are at http://mailstar.net/red-symphony.html.

Henry Makow put an image file of pp. 27-56 of Red Symphony on his site at http://www.savethemales.ca/redsymphony2.pdf

However, this is the first time that the full text has been placed on the internet, as a text file, and therefore easily searchable.

I know of no way of proving the veracity of this material. But it does bear on the fact that Communism seems to be continuing, despite the fall of the USSR.

Open Borders, Gay Marriage (sex-soviet.html), the World Court, "Hate" Laws which suppress open discussion, these are the signs. The Kyoto Protocol is another; whatever its merits, it is an instrument of World Government. These are policies of the Trotskyist/Fabian/Green "New Left".

Public ownership is not a feature; yet the Trotskyists in Australia published a book calling for Free Trade. The leaders of the demonstrations against Capitalism, themselves urged the dismantling of the protective economy we used to have:

"Perhaps the worst aspect of the adoption of protectionism as a policy for fighting unemployment is that it is seen as a substitute for a class-struggle approach" (Socialism or Nationalism, p. 29): xTrots.html.

The booklet called Hitler's Secret Backers, by "Sidney Warburg", like the statements attributed to Ravoksky in Red Symphony, attests that Western bankers gave money to Hitler to help him get into power.

In Red Symphony, "Rakovsky", interrogated by Stalin's agents in 1938, states that the reason for this was that these Jewish bankers, having established Bolshevism, had found it stolen from them by Stalin, a "Bonapartist" akin to Napoleon (p. 36).

The bankers were trying to promote International Communism, Trotsky being their man; Rakovsky himself was in their camp.

But Stalin was promoting National Communism. That system had to be brought down, so that International Communism could be restored. The means of bringing it down, was by assisting the rise of Hitler.

Hitler's Secret Backers says (in the commentary part at the end) that the bankers did not think that Hitler would implement his rhetoric about excluding Jews. They disagreed with the anti-German boycott inaugurated by the New York Zionists, and felt that this induced Hitler to institute harsh measures against Jews.

In Hitler's Secret Backers, the bankers' motives are stated as being, not connected with Trotsky, but anger at France for its insistence on continued German repayments to it in Gold, as per the Treaty of Versailles. These payments were keeping Germany paralysed, and with it the European economy.

But it could be argued - if the booklet be genuine in some way - that this is merely the excuse the bankers told to their courier, "Sidney Warburg".

Hitler's Secret Backers is available at http://www.omnicbc.com.

In Red Symphony, Rakovsky states that Jewish Bankers gave money to Hitler to help him get into power (p. 36), knowing that he would attack the Soviet Union (as laid out in Mein Kampf). These donations were anonymous; Hitler had no idea that the source was Jewish Finance.

In keeping with the strategy of Revolutionary Defeatism, Stalin would fall, upon losing the war, as the Tsar had fallen after losing World War I, and Trotsky would be restored to power (p. 36).

They changed their minds because Hitler's destruction of the Soviet Union would mean (they decided, after seeing him in power) not the restoration of Trotsky, but the abolition of Communism altogether; whereas their aim was to keep Communism going. Despite this switch, they still hoped to erase the Stalinist "National" variety: "we shall succeed in taking it over and then converting it into real Communism" (p. 37).

The interrogator says to Rakovsky, "if your defeatism and the defeat of the USSR has as its object the restoration of Socialism in the USSR, real Socialism, according to you - Trotzkyism, then, insofar as we have destroyed their leaders and cadres, defeatism and the defeat of the USSR has neither an objective nor any sense. As a result of defeat now there would come the enthronement of some Führer or fascist Tsar." (p. 11).

Rakovsky agrees with this assessment; the Moscow Purges thus provides a rationale for the bankers' change of plan.

In keeping with this change, Rakovsky says, they want Stalin to propose to Hitler the partition of Poland. As a result, Hitler would find himself at war with the West, and eventually in a war on two fronts.

In the late 1930s, Trotsky was a fugitive. After writing The Revolution Betrayed in Norway in 1936 (it was published in 1937; see the extracts at trotsky.html), Trotsky was forced to leave Norway, and found refuge in Mexico.

Pressure from Stalin persuaded most governments to refuse him entry. Even the United States, with Roosevelt in power, shut its doors.

This would cast doubt on Red Symphony's claim that Roosevelt and Trotsky were leading figures in the same conspiracy. However, the US Government wanted to maintain diplomatic relations with the Soviet Government, especially since Hitler was in power in Germany; he was deemed the greater threat.

Two years after the alleged interrogation in Red Symphony took place, Stalin had Trotsky murdered, ensuring that no restoration could occur.

Whilst Trotsky's murder is well known, Stalin's murder is covered up, because it involves Jewish politics: death-of-stalin.html.

There are two anachronisms in the English edition of Red Symphony. It says it is a record of interviews which took place in 1938, but mentions the World Bank (p. 24), which was not established until 1944. However César Martínez Feijoo, a Spaniard who owns a copy of the original Spanish version, says that the Spanish edition makes no mention of the World Bank; a much better translation into English would be: "who occupies a political position or a position in world banks". See item (11) A Dating Anomaly? for more on this. #anomaly

The English edition of Red Symphony also speaks of "the Commonwealth" (p. 39); but surely it was known as the "British Empire" in 1938?

However, Carroll Quigley wrote in The Anglo-American Establishment that 'the Rhodes secret society' (p.4) 'publicized the idea of and the name "British Commonwealth of Nations" in the period 1908-1918' (p.5). quigley.html

Lionel Curtis, a leading ideologist of the Empire, and a member of Rhodes' secret society, published in 1916 a book titled The Commonwealth of Nations: An Inquiry into the Nature of Citizenship in the British Empire, and into the Mutual Relations of the Several Communities Thereof, PART I (MacMillan and Co, London, 1916). curtis1.html

Red Symphony points out that Point 6 of Wilson's 14 Points welcomed the USSR into "the society of free nations", and offered it assistance, thus undermining the "White" side during the Civil War.

Red Symphony says the Jewish financiers promoting "real" Communism (not Stalin's Bonapartism) are "Spinosists", followers of the natural mysticism of Baruch Spinosa. This is a reformulation for our times, of Jewish religious philosophy; Hegelianism is a vulgarised version of it.

Spinoza established the atheistic variant of the Jewish religion: spinoza-pantheism.html.

The Moscow Trials, although 90% prefabricated, were 10% correct. There really was a Trotsky-Zinoviev bloc aiming to remove Stalin: stalin-purges.html.

(1) Red Symphony (2) Hitler manipulated by Bankers whose agenda he didn't understand - Henry Makow (3) Isaac Deutscher on the possibility that Hitler's war would lead to Trotsky's return (4) David North on the Consequences of Trotsky's Defeat (5) Rakovsky's evidence at the Moscow Trials (6) On Trotsky's second wife, Natalya Sedova (7) Rakovsky's credibility at the Moscow Trials (8) Illuminatus and the Illuminoids - "Rowan Berkeley" on Red Symphony (9) Trotsky in Norway, accused of co-operating with the Gestapo (10) Trotsky calls Stalin a Bonapartist (11) A Dating Anomaly? (12) Rakovsky's role in the Left Opposition (13) A missing word in the English translation

(1) Red Symphony

{p. i} RED SYMPHONY

by Dr. J. Landowsky

As translated by George Knupffer

Christian Book Club of America P.O. Box 900566 Palmdale, CA 93590-0566

2002

{p. ii} First Printed 1968 Reprinted 2002

Printed in the U.S.A.

{p. 1} RED SYMPHONY.

J. Landowsky.

Translator: George Knupffer.

FOREWORD

The material here given is a translation of Ch. XL of a book which appeared in Madrid in Spanish as "Sinfonia en Rojo Mayor," and is now past its 11th Edition, produced by Editorial E.R.S.A. under the well-known publisher Senor Don Mauricio Carlavilla, who has very kindly agreed to this English translation and publication. As soon as possible the full book of over 800 pp. will follow.

The given chapter is of immense importance. It is here translated from a Russian edition as well as from the Spanish. It is a complete material on its own.

The translator's own book on "The Struggle for World Power" also deals with the whole problem of super-power and global enslavement through the masters of both usury-Capitalism and terroristic Communism, which are both the tools of the same forces and serving the same purpose. The book has been published in Madrid in Spanish by Senor Carlavilla as "La Lucha por el Poder Mundial."

In the present work we see this whole story brilliantly described and proved by one of the major exponents of the subversive take-over of the world, Christian G. Rakovsky, one of the founders of Soviet Bolshevism and also a victim of the show trials just before the last war under Stalin. This is a document of historical importance and nobody who wants to be well-informed should fail to read and recommend it. Not to know the thesis here described is to know and understand nothing concerning the chief events and prospects of our time.

In the Spanish book Senor Carlavilla explains the origin of the material in question. He says:

"This is the result of a painstaking translation of several copybooks found on the body of Dr. Landowsky in a hut on the Petrograd front (Leningrad) by a Spanish volunteer.

"He brought them to us. In view of the condition of the manuscripts, their restoration was a long and tiring job, lasting several years. For a long time we were not sure if they could be published. So extraordinary and unbelievable were his final disclosures that we would never have dared to publish these memoirs if the persons and events mentioned had not accorded fully with the facts.

"Before these reminiscences saw the light of day we prepared ourselves for proofs and polemics. We answer fully and personally for the veracity of the basic facts.

"Let us see if anyone will be able to disprove them ..."

Dr. Landowsky was a Russianized Pole and lived in Russia. His father, a Colonel of the Russian Imperial Army, was shot by the Bolsheviks during the 1917 revolution. The life-story of Dr. Landowsky is astonishing. He finished the Faculty of Medicine in Russia before

{p. 2} the revolution and then studied two years at the Sorbonne in Paris, and he spoke fluent French. He was interested in the effects of drugs on the human organism, to help surgeons in operations. Being a talented doctor, he carried out experiments in this field and had achieved considerable results.

However, after the revolution all roads were closed to him. He lived with his family in great need, earning a living by chance jobs. Not being able to publish learned papers in his own name, he permitted a more fortunate colleague to publish them in his own name.

The all-seeing NKVD (secret police) became interested in these works and easily discovered the real author. His speciality was very valuable for them. One day in 1936 there was a knock at the doctor's door. He was invited to follow, and he was never again allowed to rejoin his family. He was placed in the building of the chemical laboratory of the NKVD near Moscow. He lived there and was forced to carry out various jobs given him by his masters, he was a witness at questionings, tortures and the most terrible happenings and crimes. Twice he was abroad, but always under control, as a prisoner. He knew and suffered much, especially as he was a decent and religious man. He had the courage to keep notes of what he has seen and heard, and he kept whenever possible such documents and letters as passed through his hands, hiding all this in the hollow legs of his table in the chemical laboratory. So he lived until the Second World War. How he came to Petrograd and how he was killed is not known.

The document given below is an exact recorded report of the questioning of the former Ambassador in France, C.G. Rakovsky during the period of the trials of the Trotzkyists in the USSR in 1938, when he was tried together with Bukharin, Rykoff, Yagoda, Karakhan, Dr. Levin and others.

Insofar as the accused Rakovsky made it clear, having in mind the sparing of his life, that he could give information about matters of very special interest, Stalin gave orders to his foreign agent to carry out the questioning.

It is known that Rakovsky was sentenced to be shot, like the others, but was reprieved and given 20 years of prison.

Very interesting is the description of the above mentioned agent. This was a certain René Duval (also known as Gavriil Gavriilovitch Kus'min), the son of a millionaire, very good looking and talented. He studied in France. His widowed mother adored him. But the young man was carried away by Communist propaganda and fell into the hands of their agency. They suggested that he should study in Moscow, and he gladly accepted the proposal. He passed through the severe school of the NKVD and became a foreign agent, and when he wanted to change his mind, it was too late. They do not let people out of their grip. By the exercise of will-power he reached the "heights of evil," as he called it, and enjoyed the full confidence of Stalin himself.

The questioning took place in French by this agent. The doctor was present in order to put drug pills unnoticed into the glass of Rakovsky, to induce energy and a good mood. Behind the wall the conversation was registered on apparatus, and the technician who operated it did not understand French. Then Dr. Landowsky had to translate

{p. 3} into Russian, with two copies, for Stalin and Gabriel. Secretly he dared to make a third carbon copy, which he hid away.

* * *

XL

X-RAY OF REVOLUTION

I returned to the laboratory. My nervous system bothered me and I prescribed myself complete rest. I am in bed almost the whole day. Here I am quite alone for already four days.

Gabriel enquired about me every day. He has to reckon with my condition. At the mere thought that they could again send me to the Lubianka (Moscow HQ of the secret police) to be present at a new scene of terror I become excited and tremble. I am ashamed of belonging to the human race. How low have people fallen! How low have I fallen!

* * *

These lines are all I was able to write after five days following my return from the Lubianka, when trying to describe on paper the horror, and thereby interrupting the chronological order of my notes. I could not write. Only after several months, when Summer began, I was able calmly and simply to set out all that I had seen, disgusting, vicious, evil.

During these past months I asked myself a thousand times the same question : "Who were the people who were anonymously present at the torture?" I strained all my intuitive and deductive capabilities. Was it Ezhov? It is possible, but I see no reason why he should have concealed himself. Officially he is responsible and the fear which made him hide does not lead to a logical explanation. Even more: if I have any reason for describing myself as a psychologist, then this fanatic, the chief of the NKVD, with signs of abnormality, would be certain to enjoy a criminal display. Such things as the expression of haughtiness in front of a humbled enemy, who had been converted into a wreck psychologically and physically, should have given him an unhealthy pleasure. I analyzed still further. The absence of prior preparation was obvious; evidently the decision to call this satanic session had been taken in a hurry. The circumstance that I had been appointed to be present was the result of a sudden agreement. If Ezhov had been able to chose the time freely, then timely preparations would have been made. And then I would not have been called; that general of the NKVD who was hardly able to come in time, for the purpose of being present at the torture, would have known about this beforehand. If this was not Ezhov, then who had decided on the time? Which other chief was able to arrange it all? However poor are my informations about the Soviet hierarchy, but above Ezhov in affairs along the line of the NKVD there is only one man - Stalin. Therefore it was he?

Asking myself these questions, which arose from my deductions, I remembered yet other facts in support of my opinion. I remembered that when I looked from the window over the square a few minutes before we went down to the "spectacle" I saw how there drove across it four large identical cars; all we Soviet people know that Stalin travels in a caravan of identical machines, so that nobody would know in which he is sitting, to make attack more difficult. Was he there? ...

But here I came across another mystery: according to the details which Gabriel gave me, the hidden observers were to sit behind our

{p. 4} back. But there I could only see a long mirror, through which nothing could be seen. Perhaps it was transparent? I was puzzled.

* * *

Only seven days passed when one morning Gabriel appeared in the house. I found that he had an energetic and enthusiastic appearance and was in an optimistic mood. Yet these flashes of happiness which lit up his face at first, did not return later. It seemed as if he wanted chase away the shadows which passed over his face by increased activity and mental exertion. After lunch he told me:

"We have a guest here."

"Who is it" I asked.

"Rakovsky, the former Ambassador in Paris."

"I do not know him."

"He is one of those whom I pointed out to you on that night; the former Ambassador in London and Paris ... Of course a big friend of your acquaintance Navachin ... Yes, this man is at my disposal. He is here with us; he is being well treated and looked after. You shall see him."

"I, why? You know well that I am not curious about matters of this kind ... I would ask you to spare me this sight; I am still not quite well after what you had forced me to see. I cannot guarantee my nervous system and heart."

"Oh, do not worry. Now we are not concerned with force. This man has already been broken. No blood, no force. It is only necessary to give him moderate doses of drugs. Here I have brought you details: they are from Levin* {footnote} who still serves us with his knowledge. Apparently there is a certain drug somewhere in the laboratory, which can work wonders."

"You believe all this?"

"I am speaking in symbolic form. Rakovsky is inclined to confess to everything he knows about the matter. We have already had a preliminary talk with him, and the results are not bad."

"In that case why is there a need for a miraculous drug?"

"You will see, doctor, you will see. This is a small safety measure, dictated by the professional experience of Levin. It will help to achieve that our man being questioned would feel optimistic and would not lose hope and faith. He can already see a chance of saving his life as a long shot. This is the first effect which we must attain. Then we must make sure that he would all the time remain in a state of the experience of the decisive happy moment, but without losing his mental capacities; more exactly, it will be necessary to stimulate and sharpen them. He must have induced in him a quite special feeling. How can one express it? More exactly a condition of enlightened stimulation."

"Something like hypnosis?"

"Yes, but without sleepiness."

"And I must invent a drug for all this? I think you exaggerate my scientific talents. I cannot achieve it."

{footnote} * Former NKVD doctor, was a co-defendant with Rakovsky at the trial. {end footnote}

{p. 5} "Yes, but it is unnecessary to invent anything, doctor. As for Levin, he asserts that the problem has already been solved."

"He always left me with the impression of being something of a charlatan ... "

"Probably yes, but I think that the drug he has mentioned, even if it is not as effective as he claims, will still help us to achieve the necessary; after all, we need not expect a miracle. Alcohol, against our will, makes us speak nonsense. Why cannot another substance encourage us to say the reasonable truth? Apart from that, Levin had told me of previous cases, which seem to be genuine."

"Why do you not want to force him to take part in this affair once more? Or will he refuse to obey?"

"Oh no, he would like to. It is enough to want to save or to extend your life with the help of this or another service, for not refusing. But it is I myself who does not want to use his services.

He must not hear anything of that which Rakovsky will tell me. Not he, not anyone ...

"Therefore I ... "

"You - that is another matter, doctor. You are a deeply decent person. But I am not Diogenes, to rush to look for another over the snowy distances of the USSR."

"Thank you, but I think that my honesty ..."

"Yes, doctor, yes; you say that we take advantage of your honesty for various depravities. Yes, doctor, that is so ...; but it is only so from your absurd point of view. And who is attracted to-day by absurdities? For example such an absurdity as your honesty? You always manage to lead one away towards conversation about most attractive things. But what, in fact, will take place? You must only help me to give the correct doses of Levin's drug. It would appear that in the dosage there is an invisible line which divides sleep from a state of activity, a clear condition from a befogged one, good sense from nonsense ...; there can come an artificial excessive enthusiasm."

"If that is all ..."

"And yet something else. Now we shall speak seriously. Study the instructions of Levin, weigh them, adapt them reasonably to the condition and strength of the prisoner. You have time for study until nightfall; you can examine Rakovsky as often as you wish. And that is all for the moment. You would not believe how terribly I want to sleep. I shall sleep a few hours. If by evening nothing extraordinary happens then I have given instructions that I am not to be called. I would advise you to have a good rest after dinner, because after that it will not be possible to sleep for a long time."

We entered the vestibule. Having taken his leave from me he quickly ran up the stairs, but in the middle he halted.

"Ah, doctor - he exclaimed - I had forgotten. Many thanks from Comrade Ezhov. Expect a present, perhaps even a decoration."

He waved me goodbye and rapidly disappeared on the staircase landing of the top floor.

* * *

The notes of Levin were short, but clear and exact. I had no difficulty in finding the medicine. It was in doses of a milligram in

{p. 6} tiny tablets. I made a test and, in accordance with his explanation, they dissolved very easily in water and better still in alcohol. The formula was not indicated there, and I decided later to make a detailed analysis, when I shall have the time.

Undoubtedly it was some substance of the specialist Lumenstadt, that scientist of whom Levin had spoken to me during the first meeting. I did not think I would discover during analysis something unexpected or new. Probably again some base with a considerable amount of opium of a more active kind than tebain. I was well acquainted with 19 main types and some more besides. In those practical conditions in which my experiments were conducted I was satisfied with those facts which my investigations had yielded.

Although my work had an altogether different direction, yet I was quite at home in the realm of hallucinatory substances. I remembered that Levin had told me of the distillation of rare types of Indian Hemp. I was bound to be dealing with opium or hashish, in order to penetrate the secret of this much praised drug. I would have been glad to have had the opportunity of coming across one or more new bases which gave rise to his "miraculous" qualities. In principle I was prepared to assume such a possibility. After all the work of investigation in conditions of unlimited time and means, while not having to reckon with economic limitations, which was possible in conditions of the NKVD, provided unlimited scientific possibilities. I flattered myself with the illusion of being able to find, as the result of these investigations, a new weapon in my scientific fight against pain.

I could not give much time to the diversion of such pleasant illusions. I concentrated my thoughts in order to think how and in what proportion I shall have to give Rakovsky this drug. According to the instructions of Levin, one tablet would have to produce the desired result. He warned that if the patient had any heart weakness there could follow sleepiness and even complete lethargy, with a consequent dimming of the mind. While bearing all this in mind, I had first of all to examine Rakovsky. I did not expect to find the internal condition of his heart to be normal. If there were no damage, then surely there would be a lowering of tone as the result of the nervous experiences, as his system could not have remained unchanged after a long and terrifying torture.

I put off the examination until after lunch. I wanted to consider everything, both for the case that Gabriel would want to give the drug with the knowledge of Rakovsky, as also without his knowledge. In both cases I would have to busy myself with him, insofar as I myself would have to give him the drug of which I had been told concretely. There was no need for the participation of a professional, as the drug was given by mouth.

After lunch I went to visit Rakovsky. He was kept locked up in one room of the ground floor and was guarded by one man, who did not take his eyes off him. Of furniture there was only one small table, a narrow bed without ends and another small, rough table. When I entered Rakovsky was sitting. He immediately got up. He looked at me closely and I read in his face doubt and, it seemed, also fright. I think he must have recognized me, having seen me when he sat that memorable night at the side of the generals.

I ordered the guard to leave and told him to bring me a chair.

{p. 7} I sat down and asked the prisoner to sit. He was about 50 years old. He was a man of medium height, bald in front, with a large, fleshy nose. In youth his face was probably pleasant. His facial outlines were not typically semitic, but his origin was nevertheless clear. Once upon a time he was probably quite fat, but not now, and his skin hung everywhere, while his face and neck were like a burst balloon, with the air let out. The usual dinner at the Lubianka was apparently too strict a diet for the former Ambassador in Paris. At that moment I made no further observations.

"You smoke?" I asked, opening the cigarette case, with the intention of establishing somewhat more intimate relations with him.

"I gave up smoking in order to preserve my health" he replied with a very pleasant tone of voice, "but I thank you; I think I have now recovered from my stomach troubles."

He smoked quietly, with restraint and not without some elegance.

"I am a doctor" I introduced myself.

"Yes I know that; I saw how you acted 'there' " he said with trembling voice.

"I came to enquire about the state of your health. How are you ? Do you suffer from any illness?"

"No, nothing."

"Are you sure? What about your heart?"

"Thanks to the results of enforced dieting I do not observe in myself any abnormal symptoms."

"There are some which cannot be noticed by the patient himself, but only by a doctor."

"I am a doctor" he interrupted me.

"A doctor?" I repeated in surprise.

"Yes, didn't you know?"

"Nobody had told me of it. I congratulate you. I shall be very glad to be of use to a colleague and, possibly, a fellow student. Where did you study? In Moscow or Petrograd?"

"Oh no! At that time I was not a Russian subject. I studied in Nancy and Montpellier; in the latter I received my doctorate."

"This means that we may have studied at the same time; I did several courses in Paris. Were you French?"

"I intended to become French. I was born a Bulgarian, but without asking my permission I was converted into a Rumanian. My province was Dobrudga, where I was born, and after the peace treaty it went to Rumania."

"Permit me to listen to your chest" - and I put the stethoscope in my ears.

He took off his torn jacket and stood up. I listened. The examination shewed nothing abnormal; as I had assumed, weakness, but without defects.

"I suppose one must give food for the heart."

"Only the heart, comrade?" he asked ironically.

{p. 8} "I think so" I said, pretending not to have noticed the irony, "I think your diet, too, should be strengthened."

"Permit me to listen to myself."

"With pleasure" - and I gave him the stethoscope.

He quickly listened to himself.

"I had expected that my condition would be much worse. Many thanks. May I put my jacket on?"

"Of course. Let us agree, then, that it is necessary to take a few drops of digitalis, don't you think?"

"You consider that absolutely essential? I think that my old heart will survive the few days or months which remain to me quite well."

"I think otherwise; I think that you will live much longer."

"Do not upset me, colleague ... To live more! To live still longer! ... There must be instructions about the end; the court case cannot last longer... And then, then rest."

And when he said this, having in mind the final rest, it seemed that his face had the expression of happiness almost. I shuddered. This wish to die, to die soon which I read in his eyes, made me faint. I wanted to cheer him up from a feeling of compassion.

"You have not understood me, comrade. I wanted to say that in your case it may be decided to continue your life, but life without suffering. For what have you been brought here? Does one not treat you well now?"

"The latter, yes, of course. Concerning the rest I have heard hints, but ..."

I gave him another cigarette and then added:

"Have hope. For my part and to the extent which my chief will allow, I shall do everything that can depend on me, to make sure that you come to no harm. I shall begin immediately by feeding you, but not excessively, bearing in mind the state of your stomach. We shall begin with a milk diet and some more substantial additions. I shall give instructions at once. You may smoke ... take some ... " and I left him everything that remained in the packet.

I called the guard and ordered him to light the prisoner's cigarette whenever he wants to smoke. Then I left and before having a couple of hours rest I gave instructions that Rakovsky was to have half a litre of milk with sugar.

* * *

We prepared for the meeting with Rakovsky at midnight. Its "friendly" character was stressed in all the details. The room was well warmed, there was a fire in the fire-place, soft lighting, a small and well-chosen supper, good wines; all had been scientifically improvised. "As for a lovers meeting," observed Gabriel. I was to assist. My chief responsibility was to give the prisoner the drug in such a manner that he would not notice it. For this purpose the drinks had been placed as if by chance near me, and I shall have to pour out the wine. Also I would have to observe the weakening of the drug's effect, so as to give a new dose at the right moment. This was my most important job. Gabriel wants, if the experiment succeeds, to get already at the first meeting real

{p. 9} progress towards the essence of the matter. He is hopeful of success. He has had a good rest and is in good condition. I am interested to know how he will struggle with Rakovsky who, it seems to me, is an opponent worthy of him.

Three large arm-chairs were placed before the fire. The one nearest the door is for me, Rakovsky will sit in the middle, and in the third will be Gabriel, who had shown his optimistic mood even in his clothes, as he was wearing a white Russian shirt.

It had already struck midnight when they brought the prisoner to us. He had been given decent clothes and had been well shaved. I looked at him professionally and found him to be livelier.

He asks to be excused for not being able to drink more than one glass, mentioning the weakness of his stomach. I did not put the drug into this glass and regretted it.

The conversation began with banalities ... Gabriel knows that Rakovsky speaks much better French than Russian and begins in that language. There are hints about the past. It is clear that Rakovsky is an expert conversationalist. His speech is exact, elegant and even decorative. He is apparently very erudite; at times he quotes easily and always accurately. Sometimes he hints at his many escapes, at exile, about Lenin, Plekhanov, Luxemburg, and he even said that when he was a boy he had shaken the hand of the old Engels.

We drink whisky. After Gabriel had given him the opportunity of speaking for about half an hour, I asked as if by chance: "Should I add more soda water?" "Yes, add enough" he replied absentmindedly. I manipulated the drink and dropped a tablet into it, which I had been holding from the very beginning. First I gave Gabriel some whisky, letting him know by a sign that the job had been done. I gave Rakovsky his glass and then began to drink mine. He sipped it with pleasure. "I am a small cad" I told myself. But this was a passing thought and it dissolved in the pleasant fire in the fire-place.

Before Gabriel came to the main theme, the talk had been long and interesting.

I had been fortunate in obtaining a document which reproduces better than a shorthand note all that had been discussed between Gabriel and Rakovsky. Here it is:

INFORMATION

THE QUESTIONING OF THE ACCUSED CHRISTIAN GEORGIEVITCH RAKOVSKY BY GAVRIIL GAVRIILOVITCH KUS'MIN ON THE 26TH JANUARY, 1938.

Gavriil G. Kus'min. In accordance with our agreement at the Lubianka, I had appealed for a last chance for you; your presence in this house indicates that I had succeeded in this. Let us see if you will not deceive us.

Christian G. Rakovsky. I do not wish and shall not do that.

G. - But first of all: a well-meant warning. Now we are concerned with the real truth. Not the "official" truth, that which is to figure at the trial in the light of the confessions of the accused ... This is something which, as you know, is fully subject to practical considerations, or "considerations of State" as they would say in the West. The

{p. 10} demands of international politics will force us to hide the whole truth, the "real truth" ... Whatever may be the course of the trial, but governments and peoples will only be told that which they should know. But he who must know everything, Stalin, must also know all this. Therefore, whatever may be your words here they cannot make your position worse. You must know that they will not worsen your crime but, on the contrary, they can give the desired results in your favour. You will be able to save your life, which at this moment is already lost. So now I have told you this, but now let us see: you will all admit that you are Hitler's spies and receive wages from the Gestapo and OKW* {footnote}.

Is that not so?

R. - Yes.

G. - And you are Hitler's spies?

R. - Yes.

G. - No, Rakovsky, no. Tell the real truth, but not the court proceedings one.

R. - We are not spies of Hitler, we hate Hitler as you can hate him, as Stalin can hate him; perhaps even more so, but this is a very complex question.

G. - I shall help you ... By chance I also know one or two things. You, the Trotzkyists, had contacts with the German Staff. Is that not so ?

R. - Yes.

G. - From which period?

R. - I do not know the exact date, but soon after the fall of Trotzky. Of course before Hitler's coming to power.

G. - Therefore let us be exact: you were neither personal spies of Hitler, nor of his regime.

R. - Exactly. We were such already earlier.

G. - And for what purpose? With the aim of giving Germany victory and some Russian territories?

R. - No, in no case.

G. - Therefore as ordinary spies, for money?

R. - For money? Nobody received a single Mark from Germany. Hitler has not enough money to buy, for example, the Commissar for Foreign Affairs of the USSR, who has at his disposal freely a budget which is greater than the total wealth of Morgan and Vanderbilt, and who does not have to account for his use of the money.

G. - Well, then for what reason?

R. - May I speak quite freely?

G. - Yes, I ask you to do so; for that reason you have been invited.

R. - Did not Lenin have higher aims when he received help from Germany in order to enter Russia? And is it necessary to accept as true those libellous inventions which had been circulated to accuse him? Was he not also called a spy of the Kaiser? His relations with the Emperor and the German intervention in the affair of the sending to Russia of the Bolshevik destroyers are quite clear.

{footnote} * OKW - Oberkommando der Wehrmacht, Supreme Command of the German Army - Transl. {end footnote}

{p. 11} G. - Whether it is true or not does not have any bearing on the present question.

R. - No, permit me to finish. Is it not a fact that the activity of Lenin was in the beginning advantageous to the German troops? Permit me ... There was the separate peace of Brest-Litovsk, at which huge territories of the USSR were ceded to Germany. Who had declared defeatism as a weapon of the Bolsheviks in 1913? Lenin. I know by heart his words from his letter to Gorky: "War between Austria and Russia would be a most useful thing for the revolution, but it is hardly possible that Francis-Joseph and Nicholas would present us with this opportunity." As you see, we, the so-called Trotzkyists, the inventors of the defeat in 1905, continue at the present stage the same line, the line of Lenin.

G. - With a small difference, Rakovsky; at present there is Socialism in the USSR, not the Tsar.

R. - You believe that?

G. - What?

R. - In the existence of Socialism in the USSR?

G. - Is the Soviet Union not Socialist?

R. - For me only in name. It is just here that we find the true reason for the opposition. Agree with me, and by the force of pure logic you must agree, that theoretically, rationally, we have the same right to say - no, as Stalin can say - yes. And if for the triumph of Communism defeatism can be justified, then he who considers that Communism has been destroyed by the bonapartism of Stalin and that he betrayed it, has the same right as Lenin to become a defeatist.

G. - I think, Rakovsky, that you are theorizing thanks to your manner of making wide use of dialectics. It is clear that if many people were present here, I would prove this; all right, I accept your argument as the only one possible in your position, but nevertheless I think that I could prove to you that this is nothing other than a sophism. But let us postpone this for another occasion; some day it will come. And I hope that you will give me the chance to reply. But at the present moment I shall only say this: if your defeatism and the defeat of the USSR has as its object the restoration of Socialism in the USSR, real Socialism, according to you - Trotzkyism, then, insofar as we have destroyed their leaders and cadres, defeatism and the defeat of the USSR has neither an objective nor any sense. As a result of defeat now there would come the enthronement of some Führer or fascist Tsar. Is that not so?

R. - It is true. Without flattery on my part - your deduction is splendid.

G. - Well, if, as I assume, you assert this sincerely, then we have achieved a great deal: I am a Stalinist and you a Trotzkyist; we have achieved the impossible. We have reached the point at which our views coincide. The coincidence lies in that at the present moment the USSR must not be destroyed.

R. - I must confess that I had not expected to face such a clever person. In fact at the present stage and for some years we cannot think of the defeat of the USSR and to provoke it, as it is known that we are at present in such a position, that we can not seize power. We, the Communists, would derive no profit from it. This is exact and coincides

{p. 12} with your view. We can not be interested now in the collapse of the Stalinist State; I say this and at the same time I assert that this State, apart from all that has been said, is anti-Communistic. You see that I am sincere.

G. - I see that. This is the only way in which we can come to terms. I would ask you, before you continue, to explain to me that which seems to me a contradiction: if the Soviet State is anti-Communistic to you, then why should you not wish its destruction at the given moment? Someone else might be less anti-Communistic and then there would be fewer obstacles to the restoration of your pure Communism.

R. - No, no, this deduction is too simple. Although the Stalinist bonapartism also opposes Communism as the napoleonic one opposed the revolution, but the circumstance is clear that, nevertheless, the USSR continues to preserve its Communistic form and dogma; this is formal and not real Communism. And thus, like the disappearance of Trotzky gave Stalin the possibility automatically to transform real Communism into the formal one, so also the disappearance of Stalin will allow us to transform his formal Communism into a real one. One hour would suffice for us. Have you understood me?

G. - Yes, of course; you have told us the classical truth that nobody destroys that which he wants to inherit. Well, all right; all else is sophistical agility. You rely on the assumption which can be easily disproved: the assumption of Stalin's anti-Communism. Is there private property in the USSR? Is there personal profit? Classes? I shall not continue to base myself on facts - for what?

R. - I have already agreed that there exists formal Communism. All that you enumerate are merely forms.

G. - Yes? For what purpose? From mere obstinacy?

R. - Of course not. This is a necessity. It is impossible to eliminate the materialistic evolution of history. The most that can be done is to hold it up. And at what a price? At the cost of its theoretical acceptance, in order to destroy it in practice. The force which draws humanity towards Communism is so unconquerable that that same force, but distorted, opposed to itself, can only achieve a slowing down of development; more accurately - to slow down the progress of the permanent revolution.

G. - An example?

R. - The most obvious - with Hitler. He needed Socialism for victory over Socialism: it is this his very anti-Socialist Socialism which is National-Socialism. Stalin needs Communism in order to defeat Communism. The parallel is obvious. But, notwithstanding Hitler's anti-Socialism and Stalin's anti-Communism, both, to their regret and against their will, transcendentally create Socialism and Communism ...; they and many others. Whether they want it or not, whether they know it or not, but they create formal Socialism and Communism, which we, the Communist-Marxists, must inevitably inherit.

G. - Inheritance? Who inherits? Trotzkyism is completely liquidated.

R. - Although you say so, you do not believe it. However great may be the liquidations, we Communists will survive them. The long arm of

{p. 13} Stalin and his police cannot reach all Communists.

G. - Rakovsky, I ask you, and if necessary command, to refrain from offensive hints. Do not go too far in taking advantage of your "diplomatic immunity."

R. - Do I have credentials? Whose ambassador am I?

G. - Precisely of that unreachable Trotzkyism, if we agree to call him so.

R. - I cannot be a diplomat of Trotzkyism, of which you hint. I have not been given that right to represent it, and I have not taken this role on myself. You have given it to me.

G. - I begin to trust you. I take note in your favour that at my hint about this Trotzkyism you did not deny it. This is already a good beginning.

R. - But how can I deny it? After all, I myself mentioned it.

G. - Insofar as we have recognized the existence of this special Trotzkyism by our mutual arrangement, I want you to give definite facts, which are necessary for the investigation of the given coincidence.

R. - Yes, I shall be able to mention that which you consider necessary to know and I shall do it on my own initiative, but I shall not be able to assert that this is always the thinking also of "Them."

G. - Yes, I shall look on it like that.

R. - We agreed that at the present moment the opposition cannot be interested in defeatism and the fall of Stalin, insofar as we do not have the physical possibility of taking his place. This is what we both agree. At present this is an incontrovertible fact. However, there is in existence a possible aggressor. There he is, that great nihilist Hitler, who is aiming with his terrible weapon of the Wehrmacht at the whole horizon. Whether we want it or not, but he will use it against the USSR? Let us agree that for us this is the decisive unknown fact or, do you consider that the problem has been correctly stated?

G. - It has been well put. But I can say that for me there is no unknown factor. I consider the attack of Hitler on the USSR to be inevitable.

R. - Why?

G. - Very simple; because he who controls it is inclined towards attack. Hitler is only the condottiere of international Capitalism.

R. - I agree that there is a danger, but from that to the assumption on this ground of the inevitability of his attack on the USSR - there is a whole abyss.

G. - The attack on the USSR is determined by the very essence of Fascism. In addition he is impelled towards it by all those Capitalist States which had allowed him to re-arm and to take all the necessary economic and strategical bases. This is quite obvious.

R. - You forget something very important. The re-armament of Hitler and the assistance he received at the present time from the Versailles nations (take good note of this) - were received by him during a special period, when we could still have become the heirs of Stalin in the case of his defeat, when the opposition still existed ... Do you consider this fact to be a matter of chance or only a coincidence in time?

{p. 14} G. - I do not see any connexion between the permission of the Versailles Powers of German re-armament and the existence of the opposition ... The trajectory of Hitlerism is in itself clear and logical. The attack on the USSR was part of his programme already a long time ago.The destruction of Communism and expansion in the East - these are dogmas from the book "Mein Kampf," that Talmud of National-Socialism ..., but that your defeatists wanted to take advantage of this threat to the USSR that is, of course, in accordance with your train of thought.

R. - Yes, at a first glance this appears to be natural and logical, too logical and natural for the truth.

G. - To prevent this happening, so that Hitler would not attack us, we would have to entrust ourselves to an alliance with France ..., but that would be a naivete. It would mean that we believe that Capitalism would be willing to make sacrifices for the sake of saving Communism.

R. - If we shall continue the discussion only on the foundation of those conceptions which apply for use at mass meetings, then you are quite right. But if you are sincere in saying this then, forgive me, I am disappointed; I had thought that the politics of the famous Stalinist police stand on a higher level.

G. - The Hitlerist attack on the USSR is, in addition, a dialectical necessity; it is the same as the inevitable struggle of the classes in the international plane. At the side of Hitler, inevitably, there will stand the whole global Capitalism.

R. - And so, believe me, that in the light of your scholastic dialectics, I have formed a very negative opinion about the political culture of Stalinism. I listen to your words as Einstein could listen to a schoolboy talking about physics in four dimensions. I see that you are only acquainted with elementary Marxism, i.e. with the demagogic, popular one.

G. - If your explanation will not be too long and involved, I should be grateful to you for some explanation of this "relativity" or "quantum" of Marxism.

R. - Here there is no irony; I am speaking with the best intentions ... In this same elementary Marxism, which is taught even in your Stalinist University, you can find the statement which contradicts the whole of your thesis about the inevitability of the Hitlerist attack on the USSR. You are also taught that the cornerstone of Marxism is the assertion that, supposedly, contradictions are the incurable and fatal illness of Capitalism ... Is that not so?

G. - Yes, of course.

{note: see item 13, A missing word in the English translation, below. I have added the word "not" to the next paragraph, within curly brackets, to bring the English translation into line with the Spanish original}

R. - But if things are in fact such that we accuse Capitalism of being imbued with continuous Capitalistic contradictions in the sphere of economics, then why should it {not} necessarily suffer from them also in politics? The political and economic is of no importance in itself; this is a condition or measurement of the social essence, but contradictions arise in the social sphere, and are reflected simultaneously in the economic or political ones, or in both at the same time. It would be absurd to assume fallibility in economics and simultaneously infallibility in

{p. 15} politics - which is something essential in order that an attack on the USSR should become inevitable - according to your postulate - absolutely essential.

G. - This means that you rely in everything on the contradictions, fatality and inevitability of the errors which must be committed by the bourgeoisie, which will hinder Hitler from attacking the USSR. I am a Marxist, Rakovsky, but here, between ourselves, in order not to provide the pretext for anger to a single activist, I say to you that with all my faith in Marx I would not believe that the USSR exists thanks to the mistakes of its enemies ... And I think that Stalin shares the same view.

R. - But I do think so ... Do not look at me like that, as I am not joking and am not mad.

G. - Permit me at least to doubt it, until you will have proved your assertions.

R. - Do you now see that I had reasons for qualifying your Marxist culture as being doubtful? Your arguments and reactions are the same as any rank and file activist.

G. - And they are wrong?

R. - Yes, they are correct for a small administrator, for a bureaucrat and for the mass. They suit the average fighter ... They must believe this and repeat everything as it has been written. Listen to me by way of the completely confidential. With Marxism you get the same results as with the ancient esoteric religions. Their adherents had to know only that which was the most elementary and crude, insofar as by this one provoked their faith, i.e. that which is absolutely essential, both in religion and in the work of revolution.

G. - Do you not now want to open up to me the mystical Marxism, something like yet another freemasonry?

R. - No, no esoterics. On the contrary, I shall explain it with the maximal clarity. Marxism, before being a philosophical, economic and political system, is a conspiracy for the revolution. And as for us the revolution is the only absolute reality, it follows that philosophy, economics and politics are true only insofar as they lead to revolution. The fundamental truth (let us call it subjective) does not exist in economics, politics or even morals: in the light of scientific abstraction it is either truth or error, but for us, who are subject to revolutionary dialectic, it is only truth. And insofar as to us, who are subject to revolutionary dialectic, it is only truth, and therefore the sole truth, then it must be such for all that is revolutionary, and such it was to Marx. In accordance with this we must act. Remember the phrase of Lenin, in reply to someone who demonstrated by way of argument that, supposedly, his intention contradicted reality: "I feel it to be real" was his answer. Do you not think that Lenin spoke nonsense? No, for him every reality; every truth was relative in the face of the sole and absolute one: the revolution. Marx was a genius. If his works had amounted to only the deep criticism of Capitalism, then even that would have been an unsurpassed scientific work; but in those places where his writing reaches the level of mastery, there comes the effect of an apparently ironical work. "Communism" he says "must win because Capital will give it that victory, though its enemy." Such is the magisterial thesis of Marx ...

{p. 16} Can there be a greater irony? And then, in order that he should be believed, it was enough for him to depersonalize Capitalism and Communism, having transformed the human individual into a consciously thinking individual, which he did with the extraordinary talent of a juggler. Such was his sly method, in order to demonstrate to the Capitalists that they are a reality of Capitalism and that Communism can triumph as the result of inborn idiocy; since without the presence of immortal idiocy in homo economico there could not appear in him continuous contradictions as proclaimed by Marx. To be able to achieve the transformation of homo sapiens into homo stultum is to possess magical force, capable of bringing man down to the first stage of the zoological ladder, i.e. to the level of the animal. Only if there is homo stultum in the epoch of the apogee of Capitalism could Marx formulate his axiomatic proposition: contradictions plus time equal Communism. Believe me, when we who are initiated into this, contemplate the representation of Marx, for example the one which is placed above the main entrance to the Lubianka, then we cannot prevent the inner explosion of laughter by which Marx had infected us; we see how he laughs into his beard at all humanity.

G. - And you are still capable of laughing at the most revered scientist of the epoch?

R. - Ridicule, me? ... This is the highest admiration! In order that Marx should be able to deceive so many people of science, it was essential that he should tower above them all. Well: in order to have judgements about Marx in all his greatness, we must consider the real Marx, Marx the revolutionary, Marx, judged by his manifesto. This means Marx the conspirator, as during his life the revolution was in a condition of conspiracy. It is not for nothing that the revolution is indebted for its development and its recent victories to these conspirators.

G. - Therefore you deny the existence of the dialectical process of contradictions in Capitalism, which lead to the final triumph of Communism?

R. - You can be sure that if Marx believed that Communism will achieve victory only thanks to the contradictions in Capitalism, then he would not have once, never, mentioned the contradictions on the thousands of pages of his scientific revolutionary work. Such was the categorical imperative of the realistic nature of Marx: not the scientific, but the revolutionary one. The revolutionary and conspirator will never disclose to his opponent the secret of his triumph ... He would never give the information; he would give him disinformation which you use in counter-conspiracy. Is that not so?

G. - However, in the end we have reached the conclusion (according to you) that there are no contradictions in Capitalism, and if Marx speaks of them then it is only a revolutionary-strategical method. That is so? But the colossal and ever-growing contradictions in Capitalism are there to see. And so we get the conclusion that Marx, having lied, spoke the truth.

R. - You are dangerous as a dialectician, when you destroy the brakes of scholastic dogmatism and give free rein to your own inventiveness. So it is, that Marx spoke the truth when he lied. He lied when he led into error, having defined the contradictions as being "continuous" in the history of the economics of capital and called them "natural and

{p. 17} inevitable," but at the same time he stated the truth because he knew that the contradictions would be created and would grow in an increasing progression until they reach their apogee.

G. - This means that with you there is an antithesis?

R. - There is no antithesis here. Marx deceives for tactical reasons about the origin of the contradictions in Capitalism, but not about their obvious reality. Marx knew how they were created, how they became more acute and how things went towards general anarchy in Capitalistic production, which came before the triumph of the Communist revolution ... He knew it would happen because he knew those who created the contradictions.

G. - It is a very strange revelation and piece of news, this assertion and exposal of the circumstance that that which leads Capitalism to its "suicide," by the well-chosen expression of the bourgeois economist Schmalenbach, in support of Marx, is not the essence and inborn law of Capitalism. But I am interested to know if we will reach the personal by this path?

R. - Have you not felt this intuitively? Have you not noticed how in Marx words contradict deeds? He declares the necessity and inevitability of Capitalist contradictions, proving the existence of surplus value and accumulation, i.e. he proves that which really exists. He nimbly invents the proposition that to a greater concentration of the means of production corresponds a greater mass of the proletariat, a greater force for the building of Communism, is that not so? Now go on: at the same time as this assertion he founds the International. Yet the International is, in the work of the daily struggle of the classes, a "reformist," i.e. an organization whose purpose is the limitation of the surplus value and, where possible, its elimination. For this reason, objectively, the International is a counter-revolutionary organization and anti-Communist, in accordance with Marx's theory.

G. - Now we get that Marx is a counter-revolutionary and an anti-Communist.

R. - Well, now you see how one can make use of the original Marxist culture. It is only possible to describe the International as being counter-revolutionary and anti-Communist, with logical and scientific exactness, if one does not see in the facts anything more than the directly visible result, and in the texts only the letter. One comes to such absurd conclusions, while they seem to be obvious, when one forgets that words and facts in Marxism are subject to strict rules of the higher science: the rules of conspiracy and revolution.

G. - Will we ever reach the final conclusions?

R. - In a moment. If the class struggle, in the economic sphere, turns out to be reformist in the light of its first results, and for that reason contradicts the theoretical presuppositions, which determine the establishment of Communism, then it is, in its real and true meaning, purely revolutionary. But I repeat again: it is subject to the rules of conspiracy, that means to masking and the hiding of its true aims ... The limitation of the surplus value and thus also of accumulations as the consequence of the class struggle - that is only a matter of appearances, an illusion, in order to stimulate the basic revolutionary movement in the masses. A strike is already an attempt at revolutionary mobiliz-

{p. 18} ation. Independently of whether it wins or not, its economic effect is anarchical. As a result this method for the improvement of the economic position of one class brings about the impoverishment of the economy in general; whatever may be the scale and results of the strike, it will always bring about a reduction of production. The general result: more poverty, which the working class cannot shake off. That is already something. But that is not the only result and not the most important one. As we know, the only aim of any struggle in the economic sphere is to earn more and work less. Such is the economic absurdity, but according to our terminology, such is the contradiction, which has not been noticed by the masses, which are blinded at any given moment by a rise in wages, which is at once annulled by a rise in prices. And if prices are limited by governmental action, then the same thing happens, i.e. a contradiction between the wish to spend more, produce less, is qualified here by monetary inflation. And so one gets a vicious circle: a strike, hunger, inflation, hunger.

G. - With the exception when the strike takes place at the expense of the surplus value of Capitalism.

R. - Theory, pure theory. Speaking between ourselves, take any annual handbook concerning the economics of any country and divide rents and the total income by all those receiving wages or salaries, and you will see what an extraordinary result emerges. This result is the most counter-revolutionary fact, and we must keep it a complete secret. This is because if you deduct from the theoretical dividend the salaries and expenses of the directors, which would be the consequence on the abolition of ownership, then almost always there remains a dividend which is a debit for the proletariat. In reality always a debit, if we also consider the reduction in the volume and quality of production. As you will now see, a call to strike, as a means for achieving a quick improvement of the well-being of the proletariat is only an excuse; an excuse required in order to force it to commit sabotage of Capitalistic production. Thus to the contradictions in the bourgeois system are added contradictions within the proletariat; this is the double weapon of the revolution, and it - which is obvious - does not arise of itself: there exists an organization, chiefs, discipline, and above that there exists stupidity. Don't you suspect that the much-mentioned contradictions of Capitalism, and in particular the financial ones, are also organized by someone? ... By way of basis for these deductions I shall remind you that in its economic struggle the proletarian International coincides with the financial International, since both produce inflation, and wherever there is coincidence there, one should assume, is also agreement. Those are his own words.

G. - I suspect here such an enormous absurdity, or the intention of spinning a new paradox, that I do not want to imagine this. It looks as if you want to hint at the existence of something like a Capitalistic second Communist International, of course an enemy one.

R. - Exactly so. When I spoke of the financial International, I thought of it as of a Comintern, but having admitted the existence of the "Comintern," I would not say that they are enemies.

G. - If you want to make us lose time on inventions and phantasies, I must tell you that you have chosen the wrong moment.

R. - By the way, are you assuming that I am like the courtesan from

{p. 19} the "Arabian Nights," who used her imagination at night to save her life ... No, if you think that I am departing from the theme, then you are wrong. In order to reach that which we have taken as our aim I, if I am not to fail, must first of all enlighten you about the most important matters, while bearing in mind your general lack of acquaintance with that which I would call the "Higher Marxism." I dare not evade these explanations as I know well that such lack of knowledge exists in the Kremlin ... Permit me to continue.

G. - You may continue. But it is true that if all this were to be seen to be only a loss of time to excite the imagination, then this amusement will have a very sad epilogue. I have warned you.

R. - I continue as if I have heard nothing. Insofar as you are a scholastic with relation to Capital, and I want to awaken your inductive talents, I shall remind you of some very curious things. Notice with what penetration Marx comes to conclusions given the then existence of early British industry, concerning its consequences, i.e. the contemporary colossal industry: how he analyses it and criticizes; what a repulsive picture he gives of the manufacturer. In your imagination and that of the masses there arises the terrible picture of Capitalism in its human concretization: a fat-bellied manufacturer with a cigar in his mouth, as described by Marx, with self-satisfaction and anger throwing the wife and daughter of the worker onto the street. Is that not so? At the same time remember the moderation of Marx and his bourgeois orthodoxy when studying the question of money. In the problem of money there do not appear with him his famous contradictions. Finances do not exist for him as a thing of importance in itself; trade and the circulation of moneys are the results of the cursed system of Capitalistic production, which subjects them to itself and fully determines them. In the question of money Marx is a reactionary; to one's immense surprise he was one; bear in mind the "five-pointed star" like the Soviet one, which shines all over Europe, the star composed of the five Rothschild brothers with their banks, who possess colossal accumulations of wealth, the greatest ever known ... And so this fact, so colossal that it misled the imagination of the people of that epoch, passes unnoticed with Marx. Something strange ... Is that not so? It is possible that from this strange blindness of Marx there arises a phenomenon which is common to all future social revolutions. It is this: we can all confirm that when the masses take possession of a city or a country, then they always seem struck by a sort of superstitious fear of the banks and bankers. One had killed Kings, generals, bishops, policemen, priests and other representatives of the hated privileged classes; one robbed and burnt palaces, churches and even centres of science, but though the revolutions were economic-social, the lives of the bankers were respected, and as a result the magnificent buildings of the banks remained untouched ... According to my information, before I had been arrested, this continues even now ...

G. - Where?

R. - In Spain ... Don't you know it? As you ask me, so tell me now: Do you not find all this very strange? Think, the police ... I do not know, have you paid attention to the strange similarity which exists between the financial International and the proletarian International. I would say that one is the other side of the other, and the back side is the proletarian one as being more modern than the financial.

{p. 20} G. - Where do you see similarity in things so opposed?

R. - Objectively they are identical. As I had proved, the Comintern, paralleled, doubled by the reformist movement and the whole of syndicalism, calls forth the anarchy of production, inflation, poverty and hopelessness in the masses. Finances, chiefly the financial international, doubled, consciously or unconsciously by private finances, create the same contradictions, but in still greater numbers ... Now we can already guess the reasons why Marx concealed the financial contradictions, which could not have remained hidden from his penetrating gaze, if finances had not had an ally, the influence of which - objectively revolutionary - was already then extraordinarily important.

G. - An unconscious coincidence, but not an alliance which presupposes intelligence, will and agreement ...

R. - Let us leave this point of view if you like. Now let us better go over to the subjective analysis of finances and even more: let us see what sort of people personally are at work there. The international essence of money is well known. From this fact emerges that the organization which owns them and accumulates them is a cosmopolitan organization. Finances in their apogee - as an aim in themselves, the financial International - deny and do not recognise anything national, they do not recognize the State; and therefore it is anarchical and would be absolutely anarchical if it - the denier of any national State - were not itself, by necessity, a State in its own basic essence. The State as such is only power. And money is exclusively power.

This communistic super-state, which we are creating already during a whole century, and the scheme of which is the International of Marx. Analyse it and you will see its essence. The scheme of the International and its prototype of the USSR - that is also pure power. The basic similarity between the two creations is absolute. It is something fatalistic, inevitable, since the personalities of the authors of both was identical. The financier is just as international as the Communist. Both, with the help of differing pretexts and differing means, struggle with the national bourgeois State and deny it. Marxism in order to change it into a Communist State; from this comes that the Marxist must be an internationalist: the financier denies the bourgeois national State and his denial ends in itself; in fact he does not manifest himself as an internationalist, but as a cosmopolitan anarchist ... That is his appearance at the given stage, but let us see what he really is and what he wants to be. As you see, in rejection there is a clear similarity individually between Communist-internationalists and financial-cosmopolitans; as a natural result there is the same similarity between the Communist International and the financial International...

G. - This is a chance similarity subjectively and objective in contradictions, but one easily eroded and having little significance and that which is most radical and existing in reality.

R. - Allow me not to reply just now, so as not to interrupt the logical sequence ... I only want to decipher the basic axiom: money is power. Money is today the centre of global gravity. I hope you agree with me?

G. - Continue, Rakovsky, I beg of you.

R. - The understanding of how the financial International has gradually, right up to our epoch, become the master of money, this

{p. 21} magical talisman, which has become for people that which God and the nation had been formerly, is something which exceeds in scientific interest even the art of revolutionary strategy, since this is also an art and also a revolution. I shall explain it to you. Historiographers and the masses, blinded by the shouts and the pomp of the French revolution, the people, intoxicated by the fact that it had succeeded in taking all power from the King and the privileged classes, did not notice how a small group of mysterious, careful and insignificant people had taken possession of the real Royal power, the magical power, almost divine, which it obtained almost without knowing it. The masses did not notice that the power had been seized by others and that soon they had subjected them to a slavery more cruel than the King, since the latter, in view of his religious and moral prejudices, was incapable of taking advantage of such a power. So it came about that the supreme Royal power was taken over by persons, whose moral, intellectual and cosmopolitan qualities did allow them to use it. It is clear that this were people who had never been Christians, but cosmopolitans.

G. - What is that for a mythical power which they had obtained?

R. - They had acquired for themselves the real privilege of coining money ... Do not smile, otherwise I shall have to believe that you do not know what moneys are ... I ask you to put yourself in my place. My position in relation to you is that of the assistant of a doctor, who would have to explain bacteriology to a resurrected medical man of the epoch before Pasteur. But I can explain your lack of knowledge to myself and can forgive it. Our language makes use of words which provoke incorrect thoughts about things and actions, thanks to the power of the inertia of thoughts, and which do not correspond to real and exact conceptions. I say: money. It is clear that in your imagination there immediately appeared pictures of real money of metal and paper. But that is not so. Money is now not that; real circulating coin is a true anachronism. If it still exists and circulates, then it is only thanks to atavism, only because it is convenient to maintain the illusion, a purely imaginary fiction for the present day.

G. - This is a brilliant paradox, risky and even poetical.

R. - If you like, this is perhaps brilliant, but it is not a paradox. I know - and that is why you smiled - that States still coin money on pieces of metal or paper with Royal busts or national crests; well, so what? A great part of the money circulating, money for big affairs, as representative of all national wealth, money, yes money - it was being issued by those few people about whom I had hinted. Titles, figures, cheques, promissory notes, endorsements, discount, quotations, figures without end flooded States like a waterfall. What are in comparison with these the metallic and paper moneys? ... Something devoid of influence, some kind of minimum in the face of the growing flood of the all-flooding financial money. They, being the most subtle psychologists, were able to gain even more without trouble, thanks to a lack of understanding. In addition to the immensely varied different forms of financial moneys, they created credit-money with a view to making its volume close to infinite. And to give it the speed of sound ... it is an abstraction, a being of thought, a figure, number, credit, faith ...

Do you understand already? ... Fraud; false moneys, given a legal standing ..., using other terminology, so that you should understand

{p. 22} me. Banks, the stock exchanges and the whole world financial system - is a gigantic machine for the purpose of bringing about unnatural scandals, according to Aristotle's expression; to force money to produce money - that is something that if it is a crime in economics, then in relations to finances it is a crime against the criminal code, since it is usury. I do not know by what arguments all this is justified: by the proposition that they receive legal interest ... Even accepting that, and even that admission is more than is necessary, we see that usury still exists, since even if the interest received is legal, then it invents and falsifies the non-existent capital. Banks have always by way of deposits or moneys in productive movement a certain quantity of money which is five or perhaps even a hundred times greater than there are physically coined moneys of metal or paper. I shall say nothing of those cases when the credit-moneys, i.e. false, fabricated ones, are greater than the quantity of moneys paid out as capital. Bearing in mind that lawful interest is fixed not on real capital but on non-existing capital, the interest is illegal by so many times as the fictional capital is greater than the real one.

Bear in mind that this system, which I am describing in detail, is one of the most innocent among those used for the fabrication of false money. Imagine to yourself, if you can, a small number of people, having unlimited power through the possession of real wealth, and you will see that they are the absolute dictators of the stock-exchange; and as a result of this also the dictators of production and distribution and also of work and consumption. If you have enough imagination then multiply this, by the global factor and you will see its anarchical, moral and social influence, i.e. a revolutionary one ... Do you now understand?

G. - No, not yet.

R. - Obviously it is very difficult to understand miracles.

G. - Miracle?

R. - Yes, miracle. Is it not a miracle that a wooden bench has been transformed into a temple? And yet such a miracle has been seen by people a thousand times, and they did not bat an eyelid, during a whole century. Since this was an extraordinary miracle that the benches on which sat the greasy usurers to trade in their moneys, have now been converted into temples, which stand magnificently at every corner of contemporary big towns with their heathen colonnades, and crowds go there with a faith which they are already not given by heavenly gods, in order to bring assiduously their deposits of all their possessions to the god of money, who, they imagine, lives in the steel safes of the bankers, and who is preordained, thanks to his divine mission to increase the wealth to a metaphysical infinity.

G. - This is the new religion of the decayed bourgeoisie?

R. - Religion, yes, the religion of power.

G. - You appear to be the poet of economics.

R. - If you like, then in order to give a picture of finance, as of a work of art which is most obviously a work of genius and the most revolutionary of all times, poetry is required.

G. - This is a faulty view. Finances, as defined by Marx, and more especially Engels, are determined by the system of Capitalistic production.

{p. 23} R. - Exactly, but just the reverse: the Capitalistic system of production is determined by finance. The fact that Engels states the opposite and even tries to prove this, is the most obvious proof that finances rule bourgeois production. So it is and so it was even before Marx and Engels, that finances were the most powerful instrument of revolution and the Comintern was nothing but a toy in their hands. But neither Marx nor Engels will disclose or explain this. On the contrary, making use of their talent as scientists, they had to camouflage truth for a second time in the interests of the revolution. And that both of them did.

G. - This story is not new. All this somewhat reminds me of what Trotzky had written some ten years ago.

R. - Tell me ...

G. - When he says that the Comintern is a conservative organization in comparison with the stock-exchange in New York; he points at the big bankers as being the inventors of the revolution.

R. - Yes, he said this in a small book in which he foretold the fall of England ... Yes, he said this and added: "Who pushes England along the path of revolution?" ... and replied: "Not Moscow, but New York."

G. - But remember also his assertion that if the financiers of New York had forged the revolution, then it was done unconsciously.

R. - The explanation which I had already given in order to help to understand why Engels and Marx camouflaged the truth, is equally applicable also to Leo Trotzky.

G. - I value in Trotzky only that he in a sort of literary form interpreted an opinion of a fact which as such was too well known, with which one had already reckoned previously. Trotzky himself states quite correctly that these bankers "carry out irresistibly and unconsciously their revolutionary mission."

R. - And they carry out their mission despite the fact that Trotzky has declared it? What a strange thing! Why do they not improve their actions?

G. - The financiers are unconscious revolutionaries since they are such only objectively, as the result of their intellectual incapacity of seeing the final consequences.

R. - You believe this sincerely? You think that among these real geniuses there are some who are unconscious? You consider to be idiots people to whom today the whole world is subjected? This would really be a very stupid contradiction!

G. - What do you pretend to?

R. - I simply assert that they are revolutionaries objectively and subjectively, quite consciously.

G. - The bankers! You must be mad?

R. - I, no ... But you? Think a little. These people are just like you and me. The circumstance that they control moneys in unlimited amounts, insofar as they themselves create them, does not give us the opportunity of determining the limits of all their ambitions ... If there is something which provides a man with full satisfaction then it is the satisfaction of his ambition. And most of all the satisfaction of his

{p. 20} will to power. Why should not these people, the bankers, have the impulse towards power, towards full power? Just as it happens to you and to me.

G. - But if, according to you - and I think the same - they already have global political power, then what other power do they want to possess ?

R. - I have already told you: Full power. Such power as Stalin has in the USSR, but world-wide.

G. - Such power as Stalin's, but with the opposite aim.

R. - Power, if in reality it is absolute, can be only one. The idea of the absolute excludes multiplicity. For that reason the power sought by the Comintern and "Comintern," which are things of the same order, being absolute, must also in politics be unique and identical: Absolute power has a purpose in itself, otherwise it is not absolute. And until the present day there has not yet been invented another machine of total power except the Communist State. Capitalistic bourgeois power, even on its highest rung of the ladder, the power of Caesar, is limited power since if, in theory, it was the personification of the deity in the Pharaohs and Caesars in ancient times, then nevertheless, thanks to the economic character of life in those primitive States and owing to the technical under-development of the State apparatus, there was always room for individual freedom. Do you understand that those who already partially rule over nations and worldly governments have pretensions to absolute domination? Understand that that is the only thing which they have not yet reached.

G. - This is interesting: at least as an example of insanity.

R. - Certainly, insanity in a lesser degree than in the case of Lenin, who dreamt of power over the whole world in his attic in Switzerland or the insanity of Stalin, dreaming of the same thing during his exile in a Siberian hut. I think that dreams of such ambitions are much more natural for the moneyed people, living in the skyscrapers of New York.

G. - Let us conclude: Who are they?

R. - You are so naive that you think that if I knew who "They" are, I would be here as a prisoner?

G. - Why?

R. - For a very simple reason, since he who is acquainted with them would not be put into a position in which he would be obliged to report on them ... This is an elementary rule of every intelligent conspiracy, which you must well understand.

G. - But you said that they are the bankers?

R. - Not I; remember that I always spoke of the financial International, and when mentioning persons I said "They" and nothing more. If you want that I should inform you openly then I shall only give facts, but not names, since I do not know them. I think I shall not be wrong if I tell you that not one of "Them" is a person who occupies a political position or a position in the World Bank. As I understood after the murder of Rathenau in Rapallo, they give political or financial positions only to intermediaries. Obviously to persons who are trustworthy and loyal, which can be guaranteed a thousand ways: thus one can assert that bankers and politicians - are only men of straw ... even though they

{p. 25} occupy very high places and are made to appear to be the authors of the plans which are carried out.

G. - Although all this can be understood and is also logical, but is not your declaration of not knowing only an evasion? As it seems to me, and according to the information I have, you occupied a sufficiently high place in this conspiracy to have known much more. You do not even know a single one of them personally?

R. - Yes, but of course you do not believe me. I have come to that moment where I had explained that I am talking about a person and persons with a personality ... how should one say? ... a mystical one, like Ghandi or something like that, but without any external display. Mystics of pure power, who have become free from all vulgar trifles. I do not know if you understand me? Well, as to their place of residence and names, I do not know them ... Imagine Stalin just now, in reality ruling the USSR, but not surrounded by stone walls, not having any personnel around him, and having the same guarantees for his life as any other citizen. By which means could he guard against attempts on his life? He is first of all a conspirator, however great his power, he is anonymous.

G. - What you are saying is logical, but I do not believe you.

R. - But still believe me; I know nothing; if I knew then how happy I would be! I would not be here, defending my life. I well understand your doubts and that, in view of your police education, you feel the need for some knowledge about persons. To honour you and also because this is essential for the aim which we both have set ourselves. I shall do all I can in order to inform you. You know that according to the unwritten history known only to us, the founder of the First Communist International is indicated, of course secretly, as being Weishaupt. You remember his name? He was the head of the masonry which is known by the name of the Illuminati; this name he borrowed from the second anti-Christian conspiracy of that era - gnosticism. This important revolutionary, Semite and former Jesuit, foreseeing the triumph of the French revolution decided, or perhaps he was ordered (some mention as his chief the important philosopher Mendelssohn) to found a secret organization which was to provoke and push the French revolution to go further than its political objectives, with the aim of transforming it into a social revolution for the establishment of Communism. In those heroic times it was colossally dangerous to mention Communism as an aim; from this derive the various precautions and secrets, which had to surround the Illuminati. More than a hundred years were required before a man could confess to being a Communist without danger of going to prison or being executed. This is more or less known. What is not known are the relations between Weishaupt and his followers with the first of the Rothschilds. The secret of the acquisition of wealth of the best known bankers could have been explained by the fact that they were the treasurers of this first Comintern. There is evidence that when the five brothers spread out to the five provinces of the financial empire of Europe, they had some secret help for the accumulation of these enormous sums: it is possible that they were those first Communists from the Bavarian catacombs who were already spread all over Europe. But others say, and I think with better reason, that the Rothschilds were not the treasurers, but the

{p. 26} chiefs of that first secret Communism. This opinion is based on that well-known fact that Marx and the highest chiefs of the First International - already the open one - and among them Herzen and Heine, were controlled by Baron Lionel Rothschild, whose revolutionary portrait was done by Disraeli (in Coningsby - Transl.) the English Premier, who was his creature, and has been left to us. He described him in the character of Sidonia, a man, who, according to the story, was a multi-millionaire, knew and controlled spies, carbonari, freemasons, secret Jews, gypsies, revolutionaries etc., etc. All this seems fantastic. But it has been proved that Sidonia is an idealized portrait of the son of Nathan Rothschild, which can also be deduced from that campaign which he raised against Tsar Nicholas in favour of Herzen. He won this campaign.

If all that which we can guess in the light of these facts is true, then, I think, we could even determine who invented this terrible machine of accumulation and anarchy, which is the financial International. At the same time, I think, he would be the same person who also created the revolutionary International. It is an act of genius: to create with the help of Capitalism accumulation of the highest degree, to push the proletariat towards strikes, to sow hopelessness, and at the same time to create an organization which must unite the proletarians with the purpose of driving them into revolution. This is to write the most majestic chapter of history. Even more: remember the phrase of the mother of the five Rothschild brothers: "If my sons want it, then there will be no war." This means that they were the arbiters, the masters of peace and war, but not emperors. Are you capable of visualizing the fact of such a cosmic importance? Is not war already a revolutionary function? War - the Commune. Since that time every war was a giant step towards Communism. As if some mysterious force satisfied the passionate wish of Lenin, which he had expressed to Gorky. Remember: 1905-1914. Do admit at least that two of the three levers of power which lead to Communism are not controlled and cannot be controlled by the proletariat.

Wars were not brought about and were not controlled by either the Third International or the USSR, which did not yet exist at that time. Equally they cannot be provoked and still less controlled by those small groups of Bolsheviks who plod along in the emigration, although they want war. This is quite obvious. The International and the USSR have even fewer possibilities for such immense accumulations of capital and the creation of national or international anarchy in Capitalistic production. Such an anarchy which is capable of forcing people to burn huge quantities of foodstuffs, rather than give them to starving people, and is capable of that which Rathenau described in one of his phrases, i.e.: "To bring about that half the world will fabricate dung, and the other half will use it." And, after all, can the proletariat believe that it is the cause of this inflation, growing in geometric progression, this devaluation, the constant acquisition of surplus values and the accumulation of financial capital, but not usury capital, and that as the result of the fact that it cannot prevent the constant lowering of its purchasing power, there takes place the proletarization of the middle classes, who are the true opponents of revolution. The proletariat does not control the lever of economics or the lever of war. But it is itself the third lever, the only visible and demonstrable lever, which carries out the final blow at the power of the Capitalistic State and takes it over. Yes, they seize it, if "They" yield it to them ...

{p. 27} G. - I again repeat to you that all this, which you have set out in such a literate form, has a name which we have already repeated to excess in this endless conversation: the natural contradictions of Capitalism and if, as you claim, there is yet someone else's will and activity apart from the proletariat, then I want you to indicate to me concretely a personal case.

R. - You require only one? Well, then listen to a small story: "They" isolated the Tsar diplomatically for the Russo-Japanese War, and the United States financed Japan; speaking precisely, this was done by Jacob Schiff, the head of the bank of Kuhn, Loeb & Co., which is the successor of the House of Rothschild, whence Schiff originated. He had such power that he achieved that States which had colonial possessions in Asia supported the creation of the Japanese Empire which was inclined towards xenophobia; and Europe already feels the effects of this xenophobia. From the prisoner-of-war camps there came to Petrograd the best fighters, trained as revolutionary agents; they were sent there from America with the permission of Japan, obained through the persons who had financed it. The Russo-Japanese War, thanks to the organized defeat of the Tsar's army, called forth the revolution of 1905, which, though it was premature, but was very nearly successful; even if it did not win, it still created the required po!itical conditions for the victory of 1917. I shall say even more. Have you read the biography of Trotzky? Recall its first revolutionary period. He is still quite a young man; after his flight from Siberia he lived some time among the emigres in London, Paris, and Switzerland; Lenin, Plekhanov, Martov and other chiefs look on him only as a promising newcomer. But he already dares during the first split to behave independently, trying to become the arbiter of the reunion. In 1905 he is 25 years old and he returns to Russia alone, without a party and without his own oranization. Read the reports of the revolution of 1905 which have not been "pruned" by Stalin; for example that of Lunatcharsky, who was not a Trotzkyite. Trotzky is the chief figure during the revolution in Petrograd. This is how it really was. Only he emerges from it with increased popularity and influence. Neither Lenin, nor Martov, nor Plekhanov acquire popularity. They only keep it and even lose a little.How and why there rises the unknown Trotzky, gaining power by one move greater than that which the oldest and most influential revolutionaries had? Very simple: he marries. Together with him there arrives in Russia his wife - Sedova. Do you know who she is? She is associated with Zhivotovsky, linked with the bankers Warburg, partners and relatives of Jacob Schiff, i.e. of that financial group which, as I had said, had also financed the revolution of 1905. Here is the reason why Trotzky, in one move, moves to the top of the revolutionary list. And here, too, you have the key to his real personality. Let us jump to 1914. Behind the back of the people who made the attempt on the Archduke there stands Trotzky, and that attempt provoked the European War. Do you really believe that the murder and the war - are simp!e coincidences? ..., as had been said at one of the Zionist congresses by Lord Melchett. Analyze in the light of "non-coincidence" the development of the military actions in Russia. "Defeatism" is an exemplary word. The help of the Allies for the Tsar was regulated and controlled with such skill that it gave the Allied ambassadors the right to make an argument of this and to get from Nicholas, thanks to

{p. 28} his stupidity, suicidal advances, one after another. The mass of the Russian cannon fodder was immense, but not inexhaustible. A series of organized defeats led to the revolution. When the threat came from all sides, then a cure was found in the form of the establishment of a democratic republic - an "ambassadorial republic" as Lenin called it i.e. this meant the elimination of any threat to the revolutionaries. But that is not yet all. Kerensky was to provoke the future advance at the cost of a very great deal of blood. He brings it about so that the democratic revolution should spread beyond its bounds. And even still more: Kerensky was to surrender the State fully to Communism, and he does it. Trotzky has the chance in an "unnoticed manner" to occupy the whole State apparatus. What a strange blindness! Well that is the reality of the much praised October revolution. The Bolsheviks took that which "They" gave them.

G. - You dare to say that Kerensky was a collaborator of Lenin?

R. - Of Lenin - no. Of Trotzky - yes; it is more correct to say - a collaborator of "Them."

G. - An absurdity!

R. - You cannot understand ... precisely you? It surprises me. If you were to be a spy and, while hiding your identity, you were to attain the position of commander of the enemy fortress, then would you not open the gates to the attacking forces in whose service you actually were? You would not have become a prisoner who had experienced defeat? Would you not have been in danger of death during the attack on the fortress if one of the attackers, not knowing that your uniform is only a mask, would have taken you for an enemy? Believe me: despite the statues and mausoleum - Communism is indebted to Kerensky much more than to Lenin.

G. - You want to say that Kerensky was a conscious and voluntary defeatist?

R. - Yes to me that is quite clear. Understand that I personally took part in all this. I shall tell you even more: Do you know who financed the October revolution? "They" financed it, in particular through those same bankers who had financed Japan in 1905, i.e. Jacob Schiff, and the brothers Warburg; that means through the great banking constellation, through one of the five banks who are members of the Federal Reserve, through the bank of Kuhn, Loeb & Co., here there took part also other American and European bankers, such as Guggenheim, Hanauer, Breitung, Aschberg, the "Nya Banken" of Stockholm. I was there "by chance," there in Stockholm, and participated in the transmission of funds. Until Trotzky arrived I was the only person who was an intermediary from the revolutionary side. But at last Trotzky came; I must underline that the Allies had expelled him from France for being a defeatist. And the same Allies released him so that he could be a defeatist in allied Russia ... "Another chance." Who arranged it? The same people who had succeeded that Lenin passed through Germany. Yes, "They" were able to get the defeatist Trotzky out of a Canadian camp to England and send him on to Russia, giving him the chance to pass freely through all the Allied controls; others of "Them" - a certain Rathenau - accomplishes the journey of Lenin through enemy Germany. If you will undertake the study of the history of the revolution and civil war without prejudices, and will use all your

{p. 29} enquiring capabilities, which you know how to apply to things much less important and less obvious, then when you study informations in their totality, and also study separate details right up to anecdotal happenings you will meet with a whole series of "amazing chances."

G. - Alright, let us accept the hypothesis that not everything was simply a matter of luck. What deductions to you make here for practical results?

R.--Let me finish this little story, and then we shall both arrive at conclusions. From the time of his arrival in Petrograd Trotzky was openly received by Lenin. As you know sufficiently well, during the interval between the two revolutions there had been deep differences between them. All is forgotten and Trotzky emerges as the master of his trade in the matter of the triumph of the revolution, whether Stalin wants this or not. Why? This secret is known to the wife of Lenin - Krupskaya. She knows who Trotzky is in fact; it is she who persuaded Lenin to receive Trotzky. If he had not received him, then Lenin would have remained blocked up in Switzerland; this alone had been for him a serious reason, and in addition he knew that Trotzky provided money and helped to get a colossal international assistance, a proof of this was the sealed train. Furthermore it was the result of Trotzky's work, and not of the iron determination of Lenin that there was the unification round the insignificant party of the Bolsheviks of the whole Left-wing revolutionary camp, the social-revolutionaries and the anarchists. It was not for nothing that the real party of the "non-party" Trotzky was the ancient "Bund" of the Jewish proletariat, from which emerged all the Moscow revolutionary branches, and to whom it gave 90% of its leaders; not the official and well-known Bund, but the secret Bund which had been infiltrated into all the Socialist parties, the leaders of which were almost all under its control.

G. - And Kerensky too?

R. - Kerensky too ..., and also some other leaders who were not Socialists, the leaders of the bourgeois political fractions.

G. - How is that?

R. - You forget about the role of freemasonry in the first phase of the democratic-bourgeois revolution?

G. - Were they also controlled by the Bund?

R. - Naturally, as the nearest step, but in fact subject to "Them."

G. - Despite the rising tide of Marxism which also threatened their lives and privileges?

R. - Despite all that; obviously they did not see that danger. Bear in mind that every mason saw and hoped to see in his imagination more that there was in reality, because he imagined that which was profitable for him. As a proof of the political power of their association they saw that masons were in governments and at the pinnacle of the States of the bourgeois nations, while their numbers were growing all the time. Bear in mind that at that time the rulers of all the Allied nations were freemasons, with very few exceptions. This was to them an argument of great force. They fully believed that the revolution would stop at the bourgeois republic of the French type.

G. - In accordance with the picture which was given of the Russia of 1917 one had to be a very naive person to believe all this ...

{p. 30} R. - They were and are such. Masons had learned nothing from that first lesson which, for them, had been the Great Revolution, in which they played a colossal revolutionary role; it consumed the majority of masons, beginning with the Grand Master of the Orleans Lodge, more correctly the freemason Louis XVI, in order then to continue to destroy the Girondistes, the Hebertistes, the Jacoboins etc..... and if some survived it was due to the month of Brumaire.

G. - Do you want to say that the freemasons have to die at the hands of the revolution which has been brought about with their co-operation?

R. - Exactly so. You have formulated a truth which is veiled by a great secret. I am a mason, you already knew about that. Is that not so? Well, I shall tell you this great secret, which they promise to disclose to a mason in one of the higher degrees, but which is not disclosed to him either in the 25th, nor the 33rd, nor the 93rd, nor any other high level of any ritual. It is clear that I know of this not as a freemason, but as one who belongs to "Them" ...

G. - And what is it?

R. - Every masonic organization tries to attain and to create all the required prerequisites for the triumph of the Communist revolution; this is the obvious aim of freemasonry; it is clear that all this is done under various pretexts; but they always conceal themselves behind their well-known treble slogan. (Liberty, Equality, Fraternity - Transl.) You understand? But since the Communist revolution has in mind the liquidation, as a class, of the whole bourgeoisie, the physical destruction of all bourgeois political rulers, it follows that the real secret of masonry is the suicide of freemasonry as an organization, and the physical suicide of every more important mason. You can, of course, understand that such an end, which is being prepared for every mason, fully deserves the secrecy, decorativeness and the inclusion of yet another whoie series of secrets, with a view to concealing the real one. If one day you were to be present at some future revolution then do not miss the opportunity of observing the gestures of surprise and the expression of stupidity on the face of some freemason at the moment when he realises that he must die at the hands of the revolutionaries. How he screams and wants that one should value his services to the revolution! It is a sight at which one can die ... but of laughter.

G. - And you still deny the inborn stupidity of the bourgeoisie?

R. - I deny it in the bourgeoisie as a class, but not in certain sectors. The existence of madhouses does not prove universal madness. Freemasonry is also a madhouse, but at liberty. But I continue further: the revolution has been victorious, the seizure of power has been achieved. There arises the first problem, peace, and with it the first differences within the party, in which there participate the forces of the coalition, which takes advantage of power. I shall not explain to you that which is well known about the struggle which developed in Moscow between the adherents and opponents of the peace of Brest-Litovsk. I shall only point out to you that which had already become evident then and was later called the Trotzkvist opposition, i.e. these are the people, a part of whom have already been liquidated and the other part is to be liquidated: they were all against the signing of the peace treaty. That peace was a mistake and an unconscious betrayal by Lenin of the

{p. 31} International Revolution. Imagine to yourself the Bolsheviks in Versailles at the Peace Conference, and then in the League of Nations, finding themselves inside Germany with the Red Army, which had been armed and increased by the Allies. The Soviet State should have participated with arms in the German revolution ... Quite another map of Europe would then have emerged. But Lenin, intoxicated with power, with the help of Stalin, who had also tasted the fruits of power supported by the national Russian wing of the party, having at their disposal the material recources, enforced their will. Then was born "Socialism in one country," i.e. National-Communism, which has to-day reached its apogee under Stalin. It is obvious that there was a struggle, but only in such a form and extent that the Communist State should not be destroyed; this condition was binding on the opposition during the whole time of its further struggle right up to the present day. This was the reason for our first failure and all those which followed. But the fight was severe, cruel, although concealed in order not to compromise our participation in power. Trotzky organized, with the help of his friends, the attempt on Lenin's life by Kaplan. On his orders Blumkin killed the ambassador Mirbach. The coup d'etat which was prepared by Spiridonova with her social-revolutionaries had been co-ordinated with Trotzky. His man for all these affairs, who was immune from all suspicions, was that Rosenblum, a Lithuanian Jew, who used the name of O'Reilly, and was known as the best spy of the British Intelligence. In fact he was a man from "Them." The reason why this famous Rosenblum was chosen, who was known only as a British spy, was that in case of failure the responsibility for assassinations and conspiracies would fall not on Trotzky, and not on us, but on England. So it happened. Thanks to the Civil War we rejected conspiratorial and terrorist methods as we were given the chance of having in our hands the real forces of the State, insofar as Trotzky became the organizer and chief of the Soviet Army; before that the army had continuously retreated before the Whites and the territory of the USSR was reduced to the size of the former Moscow Principality. But here, as if by magic, it begins to win. What do you think, why? As the result of magic or chance? I shall tell you: when Trotzky took over the top command of the Red Army then he had by this in his hands the forces necessary to seize power. A series of victories was to increase his prestige and forces: it was already possible to defeat the Whites. Do you think that that official history was true which ascribes to the unarmed and ill-disciplined Red Army the fact that with its help there was achieved a series of victories?

G. - But to whom then?

R. - To the extent of ninety per cent they were indebted to "Them." You must not forget that the Whites were, in their way, democratic. The Mensheviks were with them and the remnants of all the old Liberal parties. Inside these forces "They" always had in their service many people, consciously and unconsciously. When Trotzky began to command then these people were ordered systematically to betray the Whites and at the same time they were promised participation, in a more or less short time, in the Soviet Government. Maisky was one of those people, one of the few in the case of which this promise was carried out, but he was able to achieve this only after Stalin had become convinced of his loyalty. This sabotage, linked with a progressive diminution of the help of the Allies to the White generals, who apart from all that

{p. 32} were luckless idiots, forced them to experience defeat after defeat. Finally Wilson introduced in his famous 14 Points Point 6, * {see footnote below} the existence of which was enough in order to bring to an end once and for all the attempts of the Whites to fight against the USSR. The Civil War strengthens the position of Trotzky as the heir of Lenin. So it was without any doubt. The old revolutionary could now die, having acquired fame. If he remained alive after the bullet of Kaplan, he did not emerge alive after the secret process of the forcible ending of his life, to which he was subjected.

f. - Trotsky shortened his life? This is a big favourable point for our trial! Was it not Levin who was Lenin's doctor?

R. - Trotzky? ... It is probable that he participated, but it is quite certain that he knew about it. But as far as the technical realization is concerned ..., that is unimportant; who knows this? "They" have a sufficient number of channels in order to penetrate to wherever they want.

G. - In any event the murder of Lenin is a matter of the greatest importance and it would be worth while to transfer it for examination to the next trial ... What do you think, Rakovsky, if you were by chance to be the author of this affair? It is clear that if you fail to achieve success in this conversation ... The technical execution suits you well as a doctor ...

R. - I do not recommend this to you. Leave this matter alone, it is sufficiently dangerous for Stalin himself. You will be able to spread your propaganda as you wish: but "They" have their propaganda which is more powerful and the question as to qui podest - who gains, will force one to see in Stalin the murderer of Lenin, and that argument will be stronger than any confessions extracted frorn Levin, me or anyone else.

G. - What do you want to say by this?

R. - That it is the classical and infallible rule in the determination of who the murderer is to check who gained ..., and as far as the assassination of Lenin is concerned, in this case the beneficiary was his chief - Stalin. Think about this and I very much ask you not to make these remarks, as they distract me and do not make it possible for me to finish.

G. - Very well, continue, but you already know ...

R. - It is well known that if Trotzky did not inherit from Lenin then it was not because by human calculations there was something missing in the plan. During Lenin's illness Trotzky held in his hands all the threads of power, which were more than sufficient to enable him to succeed Lenin. And measures had been taken to declare a sentence of

* {footnote} Wilson's Point 6 read: "The evacuation of all Russian territory, and such a settlement of all questions affecting Russia as will secure the best and freest co-operation of the other nations of the world in obtaining for her an unhampered and unembarrassed opportunity for the independent determination of her own poliical development and national policy, and assure her of a sincere welcome into the society of free nations under institutions of her own choosing, and more than a welcome, assistance also of every kind that she may need and may herself desire. The treatment accorded Russia by her sister nations in the months to come will be the acid test of their good will, of heir comprehension of her needs as distinguished from their own interests, and of their intelligent and unselfish symoathy." - Transl. {end footnote}

{p. 33} death on Stalin. For Trotzky the dictator it was enough to have in his hands the letter of Lenin against his then chief - Stalin, which had been torn from her husband by Krupskaya, to liquidate Stalin.* But a stupid mischance, as you know, ruined all our chances. Trotzky became ill unexpectedly and at the decisive moment, when Lenin dies, he becomes incapable of any action during a period of several months. Despite his possession of enormous advantages, the obstacle was our organization of the affair, i.e. its personal centralization. It is obvious that such a person as Trotzky, prepared in advance for his mission, which he was to realise, cannot be created at once, by improvisation. None among us, not even Zinoviev, had the requisite training and qualities for this undertaking; on the other hand Trotzky, being afraid of being displaced, did not himself want to help anybody. Thus, after the death of Lenin, when we had to be face to face with Stalin, who commenced a feverish activity, we foresaw then already our defeat in the Central Committee. We had to improvise a decision: and it was to ally ourselves with Stalin, to become Stalinists more than he himself, to exaggerate in everything and, therefore, to sabotage. The rest you know already: that was our uninterrupted subterranean struggle and our continuous failure to Stalin's advantage, while he displays police talents of genius, having absolutely no equals in the past. And even more: Stalin, possessing national atavism, which had not been uprooted in him by his early Marxism, apparently for that reason underlines his pan-Russianism, and in this connexion resurrects a class which we had to destroy, that is the class of National-Communists, as opposed to the Internationalist-Communists, which we are. He places the International at the service of the USSR and it already accepts his mastery. If we want to find an historical parallel, then we must point to bonapartism, and if we want to find a person of Stalin's type, then we shall not find an historical parallel for him. But perhaps I shall be able to find it in its basic characteristics by combining two people: Fouche and Napoleon. Let us try to deprive the latter of his second half, his accessories, uniforms, military rank, crown and such like things, which, it seems, do not tempt Stalin, and then together they will give us a type identical with Stalin in the most important respects: he is the killer of the revolution, he does not serve it, but makes use of its services; he represents the most ancient Russian Imperialism, just as Napoleon identified himself with the Gauls, he created an aristocracy, even if not a military one, one, since there are no victories, then a bureacratically-police one.

G. - That is enough. Rakovsky. You are not here to make Trotzkyist propaganda. Will you at last get to something concrete?

R. - It is clear that I shall, but not before I had reached the point at which you will have formulated for yourself an at least superficial conception concerning "Them," with whom you will have to reckon in practice and in concrete actuality. Not sooner. For me it is far more important than for you not to fail, which you must, naturally, understand.

G. - Well, try to shorten the story as far as possible.

R. - Our failures, which get worse every year, prevent the immediate carrying out of that which "They" have prepared in the after-war period for the further leap of the revolution forward. The Versailles Treaty,

* {footnote} It will be observed that twice Rakovsky states that Stalin had been Lenin's chief; this may be a misunderstanding - Transl. {end footnote}

{p. 34} quite inexplicable for the politicians and economists of all nations, insofar as nobody could guess its projection, was the most decisive precondition for the revolution.

G. - This is a very curious theory. How do you explain it?

R. - The Versailles reparations and economic limitations were not determined by the advantages of individual nations. Their arithmetical absurdity was so obvious that even the most outstanding economists of the victorious countries soon exposed this. France alone demanded as reparations a great deal more than the cost of all her national possessions, more than one would have had to pay if the whole of France had been converted into a Sahara; even worse was the decision to impose on Germany payment obligations which were many times greater that it could pay, even if it had sold itself fully and given over the whole of its national production. In the end the true result was that in practice Germany was forced to carry out a phantastic dumping so that it could pay something on account of reparations. And of what did the dumping consist? An insufficiency of consumer goods, hunger in Germany and in corresponding measure unemployment in the importing countries. And since they could not import there was also unemployment in Germany. Hunger and unemployment on both sides; all this were the first results of Versailles ... Was this treaty revolutionary or not? Even more was done: one undertook an equal control in the international plane. Do you know what that undertaking represents in the revolutionary plane? It means to impose an anarchical absurdity to force every national economy to produce in sufficient volume all that it needs, while assuming that to attain that one does not have to take account of climate, natural riches and also the technical education of directors and workers. The means for compensation for inborn inequalities of soil, climate, availability of minerals, oil, etc., etc. in various national economies, were always the circumstance that poor countries had to work more. This means that they had to exploit more deeply the capacities of the working force in order to lessen the difference which arises from the poverty of the soil; and to this are added a number of other inequalities which had to be compensated by similar measures, let us take the example of industrial equipment. I shall not expand the problem further, but the control of the working day carried through by the League of Nations on the basis of an abstract principle of the equality of the working day, was a reality in the context of an unchanged International Capitalist system of production and exchange and established economic inequality, since here we had to deal with an indifference to the aim of work, which is a sufficient production. The immediate result of this was an insufficiency of production, compensated by imports from countries with a sufficient natural economy and an industrial self-sufficiency: insofar as Europe had gold, that import was paid by gold. Then came the apparent boom in America which exchanged its immense production for gold and gold certificates, of which there was plenty. On the model of any anarchy of production there appeared at that period an unheard-of financial anarchy. "They" took advantage of it on the pretext of helping it with thr aid of another and still greater anarchy: the inflation of the official money (cash) and the a hundred times greater inflation of their own mony, credit money, i.e. false money. Remember how systematically there came devaluation in many countries; the destruction of the value of money in Germany, the American crisis and its pheno-

{p. 35} mental consequences ..., a record unemployment; more than thirty million unemployed in Europe and USA alone. Well, did not the Versailles Peace Treaty and its League of Nations serve as a revolutionary pre-condition?

G. - This could have happened even if not intended. Could you not prove to me why the revolution and Communism retreat before logical deductions; and more than that: they oppose fascism which has conquered in Spain and Germany ... What can you tell me?

R. - I shall tell you that only in the case of the non-recognition of "Them" and their aims you would be right ..., but you must not forget about their existence and aims, and also the fact that in the USSR power is in the hands of Stalin.

G. - I do not see the connexion here....

R. - Because you do not want to: you have more than sufficient deductive talents and capabilities of reasoning. I repeat again: for us Stalin is not a Communist, but a bonapartist.

G. - So what?

R. - We do not wish that the great preconditions which we had created at Versailles for the triumph of the Communist revolution in the world, which, as you see, have become a gigantic reality, would serve the purpose of bringing victory to Stalin's bonapartism ... Is that sufficiently clear for you? Everything would have been different if in this case Trotzky had been the dictator of the USSR; that would have meant that "They" would have been the chiefs of International Communism.

G. - But surely fascism is totally anti-Communist, as in relation to the Trotzkyist and the Stalinist Communism ... and if the power which you ascribe to "Them" is so great, how is it that they were unable to avoid this?

R. - Because it were precisely "They" who gave Hitler the possibility of triumphing.

G. - You exceed all the boundaries of absurdity.

R. - The absurd and the miraculous become mixed as the result of a lack of culture. Listen to me. I have already admitted the defeat of the opposition. "They" saw in the end that Stalin cannot be overthrown by a coup d'etat and their historical experience suggested to them the decision of a repetition (repris) with Stalin of that which had been done with the Tsar. There was here one difficulty, which seemed to us insuperable. In the whole of Europe there was not a single aggressor-State. Not one of them was geographically well placed and had an army sufficient for an attack on Russia. If there was no such country, then "They" had to create it. Only Germany had the corresponding population and positions suitable for an attack on the USSR, and it was capable of defeating Stalin; you can understand that the Weimar republic had not been invented as an aggressor either politically or economically; on the contrary, it was suited to an invasion. On the horizon of a hungry Germany there sparkled the meteor of Hitler. A pair of penetrating eyes fixed their attention on it. The world was the witness to his lightning rise. I shall not say that all of it was the work of our hands, no. His rise, uninterruptedly increasing in extent, took place as the result of the Revolutionary-Communist economy of Versailles. Versailles had had in mind not the creation of preconditions for the triumph of

{p. 36} Hitler, but for the proletarization of Germany, for unemployment and hunger, as the result of which there should have triumphed the Communist revolution. But insofar as, thanks to the existence of Stalin at the head of the USSR and the International, the latter did not succeed, and as a result of an unwillingness to give up Germany to bonapartism, these preconditions were somewhat abated in the Davis and Young Plans, in expectation that meanwhile the opposition would come to power in Russia ..., but that, too, did not happen; but the existence of revolutionary preconditions had to produce its results. The economic predetermination of Germany would have forced the proletariat into revolutionary actions. Through the fault of Stalin the Social-International revolution had to be held up and the German proletariat sought inclusion in the National-Socialist revolution. This was dialectical, but given all the preconditions and according to common sense the National-Socialist revolution could never have triumphed there. That was not yet all. It was necessary that the Trotzkyists and Socialists should divide the masses with an already awakened and whole class consciousness - in accordance with instructions. With this business we concerned ourselves. But even more was needed: In 1929, when the National-Socialist Party began to experience a crisis of growth and it had insufficient financial recources, "They" sent their ambassador there. I even know his name: it was one of the Warburgs. In direct negotiations with Hitler they agreed as to the financing of the National-Socialist Party, and the latter received in a couple of years millions of Dollars, sent to it from Wall Street, and millions of Marks from German financiers through Schacht; the upkeep of the S.A. and S.S. and also the financing of the elections which took place, which gave Hitler power, are done on the Dollars and Marks sent by "Them."

G. - Those who, according to you, want to achieve full Communism, arm Hitler, who swears that he will uproot the first Communist nation. This, if one is to believe you, is something very logical for the financiers.

R. - You again forget the Stalinist bonapartism. Remember that against Napoleon, the strangler of the French revolution, who stole its strength, there stood the objective revolutionaries - Louis XVIII, Wellington, Metternich and right up to the Tsar-Autocrat ... This is 22 carat, according to the strict Stalinist doctrine. You must know by heart his theses about colonies with regard to imperialistic countries. Yes, according to him the Kings of Afghanistan and Egypt are objectively Communists owing to their struggle against His Britannic Majesty; why cannot Hitler be objectively Communist since he is fighting against the autocratic "Tsar Koba I"? (Meaning Stalin - Transl.) After all there is Hitler with his growing military power, and he already extends the boundaries of the Third Reich, and in future will do more ... to such an extent as to have enough strength and possibilities to attack and fully destroy Stalin ... Do you not observe the general sympathy of the Versailles wolves, who limit themselves only to a weak growl? Is this yet another chance, accident?Hitler will invade the USSR and as in 1917, when defeat suffered by the Tsar then gave us the opportunity of overthrowing him, so the defeat of Stalin will help us to remove him ... Again the hour of the world revolution will strike. Since the democratic states, at present put to sleep, will help to bring about the general change at that moment, when Trotzky will take power into his hands, as during the Civil War. Hitler will attack from the West, his generals will rise

{p. 37} and liquidate him ... Now tell me, was not Hitler objectively a Communist? Yes or no?

G. - I do not believe in fairy tales or miracles ...

R. - Well if you do not want to believe that "They" are able to achieve that which they had already achieved, then prepare to observe an invasion of the USSR and the liquidation of Stalin within a year. You think this is a miracle or an accident, well then prepare to see and experience that ... But are you really able to refuse to believe that of which I have spoken, though this is still only a hypothesis? You will begin to act in this direction only at that moment when you will begin to see the proofs in the light of my talk.

G. - All right, let us talk in the form of a supposition. What will you say?

R. - You yourself had drawn attention to the coincidence of opinions, which took place between us. We are not at the moment interested in the attack on the USSR, since the fall of Stalin would presuppose the destruction of Communism, the existence of which interests us despite the circumstance that it is formal, as that gives us the certainty that we shall succeed in taking it over and then converting it into real Communism. I think that I have given you the position at the moment quite accurately.

G. - Splendid, the solution ...

R. - First of all we must make sure that there would be no potential possibility of an attack by Hitler.

G. - If, as you confirm, it were "They" who made him Fuhrer, then they have power over him and he must obey them.

R. - Owing to the fact that I was in a hurry I did not express myself quite correctly and you did not understand me well.If it is true that "They" financed Hitler, then that does not mean that they disclosed to him their existence and their aims. The ambassador Warburg presented himself under a false name and Hitler did not even guess his race, he also lied regarding whose representative he was. He told him that he had been sent by the financial circles of Wall Street who were interested in financing the National-Socialist movement with the aim of creating a threat to France, whose governments pursue a financial policy which provokes a crisis in the USA.

G. - And Hitler believed it?

R. - We do not know. That was not so important, whether he did or did not believe our explanations; our aim was to provoke a war ..., and Hitler was war. Do you now understand?

G. - I understand. Consequently I do not see any other way of stopping him as the creation of a coalition of the USSR with the democratic nations, which would be capable of frightening Hitler. I think he will not be able to attack simultaneously all the countries of the world. The most would be - each in turn.

R. - Does not a simpler solution come to your mind ..., I would say - a counter-revolutionary one?

G. - To avoid war against the USSR?

{p. 38} R. - Shorten the phrase by half ... and repeat with me 'avoid war" ... is that not an absolutely counter-revolutionary thing? Every sincere Communist imitating his idol Lenin and the greatest revolutionary strategists must always wish for war. Nothing is so effective in bringing nearer the victory of revolution as war. This is a Marxist-Leninist dogma, which you must preach. Now further: Stalin's National-Communism, this type of bonapartism, is capable of blinding the intellect of the most pure-blooded Communists, right up to the point at which it prevents their seeing that the transformation into which Stalin has fallen, i.e., that he subjects the revolution to the State, and not the State to the revolution, it would be correct ...

G. - Your hate of Stalin blinds you and you contradict yourself. Have we not agreed that an attack on the USSR would not be welcome?

R. - But why should war be necessarily against the Soviet Union?

G. - But on what other country could Hitler make war? It is sufficiently clear that he would direct his attack on the USSR, of this he speaks in his speeches. What further proofs do you need?

R. - If you, the people from the Kremlin, consider it to be quite definite and not debatable, then why did you provoke the Civil War in Spain. Do not tell me that it was done for purely revolutionary reasons. Stalin is incapable of carrying out in practice a single Marxist theory. If there were revolutionary considerations here, then it would not be right to sacrifice in Spain so many excellent international revolutionary forces. This is the country which is furthest from the USSR, and the most elementary strategical education would not have allowed the loss of these forces ... How would Stalin be able in case of conflict to supply and render military help to a Spanish Soviet republic? But this was correct. There we have an important strategic point, a crossing of opposing influences of the Capitalist States ..., it might have been possible to provoke a war between them. I admit that theoretically this may have been right, but in practice - no. You already see how the war between the democratic Capitalist and fascist States did not begin. And now I shall tell you: if Stalin thought that he was capable of himself creating an excuse sufficient in order to provoke a war, in which the Capitalist States would have had to fight among themselves, then why does he not at least admit, if only theoretically, that others too can achieve the same thing, which did not seem impossible to him? ...

G. - If one is to agree with your assumptions then one can admit this hypothesis.

R. - That means that there is yet a second point of agreement between us: the first - that there must be no war against the USSR, the second - that it would be well to provoke it between the bourgeois States.

G. - Yes, I agree. Is that your personal opinion, or "Theirs"?

R. - I express it as my opinion. I have no power and no contact with "Them," but I can confirm that in these two points it coincides with the view of the Kremlin.

G. - That is the most important thing and for that reason it is important to establish this beforehand. By the way, I would also like to know on what you base yourself in your confidence that "They" approve this.

{p. 39} R. If I had the time in order to explain their full scheme, then you would already know about the reasons for their approval. At the present moment I shall condense them to three:

G. - Just which?

R. - One is that which I had already mentioned. Hitler, this uneducated and elementary man, has restored thanks to his natural intuition and even against the technical opinion of Schacht, an economic system of a very dangerous kind. Being illiterate in all economic theories and being guided only by necessity he removed, as we had done it in the USSR, the private and international capital. That means that he took over for himself the privilege of manufacturing money, and not only physical moneys, but also financial ones; he took over the untouched machinery of falsification and put it to work for the benefit of the State. He exceeded us, as we, having abolished it in Russia, replaced it merely by this crude apparatus called State Capitalism; this was a very expensive triumph in view of the necessities of pre-revolutionary demagogy ... Here I give you two real facts for comparison. I shall even say that Hitler had been lucky; he had almost no gold and for that reason he was not tempted to create a gold reserve. Insofar as he only possessed a full monetary guarantee of technical equipment and colossal working capacity of the Germans, his "old reserve" was technical capacity and work ..., something so completely counter-revolutionary that, as you already see, he has by means of magic, as it were, radically eliminated unemployment among more than seven million technicians and workers.

G. - Thanks to increased re-armament.

R. - What does your re-armament give? If Hitler reached this despite all the bourgeois economists who surround him, then he was quite capable, in the absence of the danger of war, of applying his system also to peaceful production ... Are you capable of imagining what would have come of this system if it had infected a number of other States and brought about the creation of a period of autarky ... For example the Commonwealth. If you can, then imagine its counter-revolutionary functions ... The danger is not yet inevitable, as we have had luck in that Hitler restored his system not according to some previous theory, but empirically, and he did not make any formulation of a scientific kind.* {footnote} This means that insofar as he did not think in the light of a deductive process based on intelligence, he has no scientific terms or a formulated doctrine; yet there is a hidden danger as at any moment there can appear, as the consequence of deduction, a formula. This is very serious. Much more so that all the external and cruel factors in National-Socialism. We do not attack it in our propaganda as it could happen that through theoretical polemics we would ourselves provoke a formulation and systematization of this so decisive economic doctrine.** {footnote} There is only one solution - war.

{footnotes} * Rakovsky is wrong, as he mentions in "Mein Kampf" Hitler had read the works of Gottfried Feder - Transl.

** The problem of a scientific formulation of this question and the propounding of a corresponding programme has engaged the active altention of the publishers of this book and their associates for some years. Their conclusion have been published. In the translator's book "The Struggle for World Power," second edition 1963, p. 79 a full solution of the monetary problem is set out, and on p. 237 there is a full economic, political and social programme. These conclusions can be obtained on application. {end footnotes}

{p. 40} R. - If the Termidor triumphed in the Soviet revolution then this happened as the result of the existence of the former Russian nationalism. Without such a nationalism bonapartism would have been impossible. And if that happened in Russia, where nationalism was only embryonic in the person of the Tsar, then what obstacles must Marxism meet in the fully developed nationalism of Western Europe? Marx was wrong with respect to the advantages for the success of the revolution. Marxism won not in the most industrialized country, but in Russia, where the proletariat was small. Apart from other reasons our victory here is explained by the fact that in Russia there was no real nationalism, and in other countries it was in its full apogee. You see how it is reborn under this extraordinary power of fascism, and how infectious it is. You can understand that apart from that it can benefit Stalin, the need for the destruction of nationalism is alone worth a war in Europe.

G. - In sum you have set out, Rakovsky, one economic and one political reason. Which is the third?

R. - That is easy to guess. We have yet another reason, a religious one. Communism cannot be the victor if it will not have suppressed the still living Christianity. History speaks very clearly about this: the permanent revolution required seventeen centuries in order to achieve its first partial victory - by means of the creation of the first split in Christendom. In reality Christianity is our only real enemy, since all the political and economic phenomena in the bourgeois States are only its consequences. Christianity, controlling the individual, is capable of annulling the revolutionary projection of the neutral Soviet or atheistic State by choking it and, as we see it in Russia, things have reached the point of the creation of that spiritual nihilism which is dominant in the ruling masses, which have, nevertheless, remained Christian: this obstacle has not yet been removed during twenty years of Marxism. Let us admit in relation to Stalin that towards religion he was not bonapartistic. We would not have done more than he and would have acted in the same way. And if Stalin had dared, like Napoleon, to cross the Rubikon of Christianity, then his nationalism and counter-revolutionary power would have been increased a thousandfold. In addition, if this had happened then so radical a difference would have made quite impossible any collaboration in anything between us and him, even if this were to be only temporary and objective ... like the one you can see becoming apparent to us.

G. - And so I personally consider that you have given a definition of three fundamental points, on the basis of which a plan can be made. That is what I am in agreement about with you for the present. But I confirm to you my mental reservations, i.e. my suspicion in relation to all that which you have said concerning people, organizations and facts. Now continue to follow the general lines of your plan.

R. - Yes, now this moment has arrived. But only a preliminary qualification: I shall speak on my own responsibility. I am responsible for the interpretation of those preceding points in the sense in which "They" understand them, but I admit that "They" may consider another plan to be more effective for the attainment of the three aims, and one quite unlike that which I shall now set out. Bear that in mind.

G. Very well, we shall bear it in mind. Please speak.

{p. 41} R. - We shall simplify. Insofar as the object is missing for which the German military might had been created - to give us power in the USSR - the aim now is to bring about an advance on the fronts and to direct the Hitlerist advance not towards the East, but the West.

{Why this change in goal? Why abandon the restoration of Trotsky?}

G. - Exactly. Have you thought of the practical plan of realization?

R. - I had had more than enough time for that at the Lubianka. I considered. So look: if there were difficulties in finding mutually shared points between us and all else took its normal course, then the problems comes down to again trying to establish that in which there is similarity between Hitler and Stalin.

G. - Yes, but admit that all this is problematical.

R. - But not insoluble, as you think. In reality problems are insoluble only when they include dialectical subjective contradictions; and even in that case we always consider possible and essential a synthesis, overcoming the "morally-impossible" of Christian metaphysicians.

G. - Again you begin to theorize.

R. - As the result of my intellecutal discipline - this is essential for me. People of a big culture prefer to approach the concrete through a generalization, and not the other way round. With Hitler and with Stalin one can find common ground, as, being very different people, they have the same roots; if Hitler is sentimental to a pathological degree, but Stalin is normal, yet both of them are egoists: neither one of them is an idealist, and for that reason both of them are bonapartists, i.e. classical Imperialists. And if just that is the position, then it is already not difficult to find common ground betveen them. Why not, if it proved possible between one Tsarina and one Prussian King ...

G. - Rakovsky, you are incorrigible ...

R. - You do not guess? If Poland was the point of union between Catherine and Frederick - the Tsarina of Russia and the King of Germany at that time, then why cannot Poland serve as a reason for the finding of common ground between Hitler and Stalin? In Poland the persons of Hitler and Stalin can coincide. and also the historical Tsarist Bolshevik and Nazi lines. Our line, "Their' line - also, as Poland is a Christian State and, what makes the matter even more complex, a Catholic one.

G. - And what follows from the fact of such a treble coincidence?

R. - If there is common ground then there is a possibility of agreement.

G. - Between Hitler and Stalin? ... Absurd! Impossible.

R. - In politics there are neither absurdities, nor the impossible.

G. - Let us imagine, as an hypothesis: Hitler and Stalin advance on Poland.

R. - Permit me to interrupt you; an attack can be called forth only by the following alternative: war or peace. You must admit it.

G. - Well, and so what?

R. - Do you consider that England and France, with their worse

{p. 42} armies and aviation, in comparison with Hitler's, can attack the united Hitler and Stalin?

G. - Yes, that seems to me to be very difficult ... unless America ...

R. - Let us leave the United States aside for the moment. Will you agree with me that as the result of the attack of Hitler and Stalin on Poland there can be no European war?

G. - You argue logically; it would seem impossible.

R. - In that case an attack or war would be useless. It would not call forth the mutual destruction of the bourgeois States: the Hitlerist threat to the USSR would continue in being after the division of Poland since theoretically both Germany and the USSR would have been strengthened to the same extent. In practice Hitler to a greater extent since the USSR does not need more land and raw materials for its strengthening, but Hitler does need them.

G. - This is a correct view ..., but I can see no other solution.

R. - No, there is a solution.

G. - Which?

R. - That the democracies should attack and not attack the aggressor.

G. - What are you saying, what hallucination! Simultaneously to attack and not to attack ... That is something absolutely impossible.

R. - You think so? Calm down ... Are there not two aggressors? Did we not agree that there will be no advance just because there are two? Well ... What prevents the attack on one of them?

G. - What do you want to say by that?

R. - Simply that the democracies will declare war only on one aggressor, and that will be Hitler.

G. - Yes, but that is an unfounded hypothesis.

R. - An hypothesis, but having a foundation. Consider: each State which will have to fight with a coalition of enemy States has as its main strategical objective to destroy them separately one after another. This rule is so well known that proofs are superfluous. So, agree with me that there are no obstacles to the creation of such conditions. I think that the question that Stalin will not consider himself aggrieved in case of an attack on Hitler is already settled. Is that not so? In addition geography imposes this attitude, and for that reason strategy also. However stupid France and England may be in preparing to fight simultaneously against two countries, one of which wants to preserve its neutrality, while the other, even being alone, represents for them a serious opponent, from where and from which side could they carry out an attack on the USSR? They have not got a common border; unless they were to advance over the Himalayas ... Yes, there remains the air front, but with what forces and from where could they invade Russia? In comparison with Hitler they are weaker in the air. All the arguments I have mentioned are no secret and are well known. As you see, all is simplified to a considerable extent.

G.- Yes, your arguments seem to be logical in the case if the conflict will be limited to four countries; but there are not four, but more, and neutrality is not a simple matter in a war on the given scale.

{p. 43} R. - Undoubtedly, but the possible participation of many countries does not change the power relationships. Weigh this in your mind and you will see how the balance will continue, even if others or even all European States come in. In addition, and this is very important, not one of those States, which will enter the war at the side of England and France will be able to deprive them of leadership; as a result the reasons which will prevent their attack on the USSR will retain their significance.

G. - You forget about the United States.

R. - In a moment you will see that I have not forgotten. I shall limit myself to the investigation of their function in the preliminary programme, which occupies us at present, and I shall say that America will not be able to force France and England to attack Hitler and Stalin simultaneously. In order to attain that the United States would have to enter the war from the very first day. But that is impossible. In the first place because America did not enter a war formerly and never will do so if it is not attacked. Its rulers can arrange that they will be attacked, if that will suit them. Of that I can assure you. In those cases when provocation was not successful and the enemy did not react to it, aggression was invented. In their first international war, the war against Spain, of the defeat of which they were sure, they invented an aggression, or, more correctly, "They" invented it. In 1914 provocation was successful. True, one can dispute technically if there was one, but the rule without exceptions is that he who makes a sudden attack without warning, does it with the help of a provocation. Now it is like this: this splendid American technique which I welcome at any moment, is subject to one condition: that aggression should take place at a suitable moment, i.e. the moment required by the United States who are being attacked; that means then, when they will have the arms. Does this condition exist now? It is clear that it does not. In America there are at present a little less than one hundred thousand men under arms and a middling aviation: it has only an imposing fleet. But you can understand that, having it, it can not persuade its allies to decide on an attack on the USSR, since England and France have preponderance only at sea. I have also proved to you that from that side there can be no change in the comparative strengths of the forces.

G. - Having agreed with this, I ask you again to explain once more the technical realization.

R. - As you have seen, given the coincidence of the interests of Stalin and Hitler with regard to an attack on Poland, all comes down to the formalization of this full similarity of aims and to make a pact about a double attack.

G. - And you think this is easy?

R. - Frankly, no. Here we need a diplomacy which is more experienced than that of Stalin. There ought to have been available the one which Stalin had decapitated, or the one which now decays in the Lubianka. In former times Litvinov would have been capable, with some difficulties, although his race would have been a great obstacle for negotiations with Hitler; but now this is a finished man and he is destroyed by a terrible panic; he is experiencing an animal fear of Molotov, even more than of Stalin. His whole talent is directed towards making sure that they should not think that he is a Trotzkyist. If he were to hear of the necessity of arranging closer relations with Hitler, then that

{p. 44} would be enough for him to manufacture for himself the proof of his Trotzkyism. I do not see a man who is capable of this job; in any event he would have to be a pure-blooded Russian. I could offer my services for guidance. At the present moment I would suggest to the one who begins the talks, that they should be strictly confidential, but with great open sincerity. Given a whole wall of various prejudices only truthfulness can deceive Hitler.

G. - I again do not understand your paradoxial expressions.

R. - Forgive me, but this only appears to be so; I am forced by the synthesis to do so. I wanted to say that with Hitler one must play a clean game concerning the concrete and most immediate questions. It is necessary to shew him that the game is not played in order to provoke him into war on tvo fronts. For example, it is possible to promise him and to prove at the most suitable moment that our mobilization will be limited to a small number of forces, required for the invasion of Poland, and that these forces will not be great. According to our real plan we shall have to place our main forces to meet the possible Anglo French attack. Stalin will have to be generous with the preliminary supplies which Hitler will demand, chiefly oil. That is what has come to my mind for the moment. Thousands of further questions will arise, of a similar character, which will have to be solved so that Hitler, seeing in practice that we only want to occupy our part of Poland, would be quite certain of that. And insofar as in practice it should be just like that, he will be deceived by the truth.

{"provoke him into war on tvo fronts" - i.e. the fall of Hitler is now more important than the fall of Stalin or the restoration of Trotsky}

G. - But in what, in this case, is there a deception?

R. - I shall give you a few minutes of time so that you yourself can discover just in what there is a deception of Hitler. But first I want to stress, and you should take note, that the plan which I have indicated here, is logical and normal and I think that one can achieve that the Capitalistic States will destroy each other, if one brings about a clash of their two wings: the fascist and the bourgeois. I repeat that the plan is logical and normal. As you have slready heen able to see, there is no intervention here of mysterious or unusual factors. In short in order that one should be able to realize the plan, "Their" intervention is not required. Now I should like to guess your thoughts: are you not now thinking that it would be stupid to waste time on proving the unprovable existence and power held by "Them." Is that not so?

G. You are right.

R. - Be frank with me. Do you really not observe their intervention? I informed you, wanting to help you, that their intervention exists and is decisive, and for that reason the logic and naturalness, of the plan are only apparances ... Is it really true that you do not see "Them"?

G. - Speaking sincerely, no.

R. - The logic and naturalness of my plan is only an appearance. It would be natural and logical that Hitler and Stalin would inflict defeat on each other. For the democracies that would be a simple and easy thing, if they would have to put forward such an aim, for them it would be enough that Hitler should be permitted, make note "permitted" to attack Stalin. Do not tell me that Germany could be defeated. If the Russian distances and the dreadful fear of Stalin and his henchmen of the Hitlerite axe and the revenge of their victims will not be enough

{p. 45} in order to attain the military exhaustion of Germany, then there will be no obstacles to the democracies, seeing that Stalin is losing strength, beginning to help him wisely and methodically, continuing to give that help until the complete exhaustion of both armies. In reality that would be easy, natural and logical, if those motives and aims which are put forward by the democracies and which most of their followers believe to be the true ones, and not what they are in reality - pretexts. There is only one aim, one single aim: the triumph of Communism; it is not Moscow which will impose its will on the democracies, but New York, not the "Comintern," but the "Capintern" on Wall Street. Who other that he could have been able to impose on Europe such an obvious and absolute contradiction? What force can lead it towards complete suicide? Only one force is able to do this: money. Money is power and the sole power.

G. - I shall be frank with you, Rakovsky. I admit in you an exceptional gift of talent. You possess brilliant dialectic, persuasive and subtle: when this is not enough for you, then your imagination has command of means in order to extend your colourful canvas, while you invent brilliant and clear perspectives; but all this, although it provokes my enthusiasm, is not enough for me. I shall go over to putting questions to you, assuming that I believe all that you have said.

R. - And I shall give you replies, but with one single condition, that you should not add anything to what I shall say, nor deduct.

G. - I promise. You assert that "They" hinder or will hinder a German-Soviet war, which is logical from the point of view of the Capitalists. Have I explained it correctly?

R. - Yes, precisely so.

G. - But the reality of the present moment is such that Germany has been permitted to re-arm and expand. This is a fact. I already know that in accordance with your explanation this was called forth by the Trotzkyist plan, which fell through thanks to the "cleanings-out" now taking place; thus the aim has been lost. In the face of a new situation you only advise that Hitler and Stalin should sign a pact and divide Poland. I ask you: how can we obtain a guarantee that, having the pact, or not having it, carrying out, or not carrying out the partition, Hitler will not attack the USSR?

R. - This cannot be guaranteed.

G. - Then why go on talking?

R. - Do not hurry. The magnificent threat to the USSR is real and exists. This is not an hypothesis and not a verbal threat. It is a fact and a fact which obliges. "They" already have superiority over Stalin, a superiority which cannot be denied. Stalin is offered only one altemative, the right to choose, but not full freedom. The attack of Hitler will come in any case of its own accord; "They" need not do anything to make it happen but only leave him the chance of acting. This is the basic and determining reality, which has been forgotten by you owing to your excessively Kremlin-like way of thinking ... Egocentrism, Sir, egocentrism.

G. - The right to choose?

R. - I shall define it exactly once more, but shortly: either there will be an attack on Stalin, or there will come the realization of the plan I have indicated, according to which the European Capitalistic

{p. 46} States will destroy each other. I drew attention to this alternative, but as you see it was only a theoretical one. If Stalin wants to survive then he will be forced to realize the plan which has been proposed by me and ratifed by "Them."

G. - But if he refuses?

R. - That will be impossible for him. The expansion and re-armament of Germany will continue. When Stalin will be faced by this gigantic threat ..., then what will he do? This will be dictated to him by his own instinct of self-preservation.

G. - It seems that events must develop only according to the orders indicated by "Them."

R. - And it is so. Of course, in the USSR to-day things still stand llke this, but sooner or later it wili happen like that all the same. It is not difficult to foretell and to suggest for carrying out something, if it is profitable for the person who must realize the matter, in the given case Stalin, who is hardly thinking of suicide. It is much more difficult to give a prognosis and to force to act as needed someone for whom that is not profitable, but who must act nevertheless, in the given case the democracies. T have kept the explanation for this moment to give a concrete picture of the true position. Reject the wrong thought that you are the arbiters in the given situation, since "They" are the arbiters.

G. - "They" both in the first and the second case ... Therefore we must deal with shadows?

R. - But are facts shadows? The international situation will be extraordinary, but not shadowy; it is real and very real. This is not a miracle; here is predetermined the future policy ... Do you think this is the work of shadows?

G.--But let us see; let us assume that your plan is accepted ... But we must have something tangible, personal, in order to be able to carry out negotiations.

R. - For example?

G. - Some person with powers of attorney and representation.

R. - But for what? Just for the pleasure of becoming acquainted wlth him? For the pleasure of a talk? Bear in mind that the assumed person, in case of his appearance, will not present you with credentials with seals and crests and wlll not wear a diplomatic uniform, at least a man from "Them"; if he were to say something or promise, then it wlll have no Juridical force or meaning as a pact ... Understand that "They" are not a State; "They" are that which the International was before 1917, that which it still is nothing and at the same time everything. Imagine to yourself if it is possible that the USSR would have negotiations with freemasonry, with an espionage organiation, with the Macedonian Komitadgi or the Croatian Ustashi. Would not some Juridlcal agreement be written? ... Such pacts as the pact of Lenin with the German General Staff, as the pact of Trotzky with "Them" -- are realized without written documents and without signatures. The only guarantee of their execution is rooted in the circumstance that the carrying out of that which has been agreed is profitable for the parties to the pact, this guarantee is the sole reality in the pact, however great may be its importance.

{p. 47} G. - From what would you begin in the present case?

R. - Simple; I should begin already from to-morrow to sound out Berlin ...

G. - In order to agree about the attack on Poland?

R. - I would not begin with that ... I would display my willingness to yield and would hint about certain disappointments among the democracies, I would soft-pedal in Spain ... This would be an act of encouragement; then I would drop a hint about Poland. As you see - nothing compromising, but enough so that a part of the OKW (German High Command - Transl.), the Bismarckists, as they are called, would have some arguments to put before Hitler.

G. - And nothing more?

R. - For the beginning, nothing more; this is already a big diplomatic task.

G. - Speaking frankly, having in mind the aims which have been dominant in the Kremlin until now, I do not think that anyone would at present dare to advise such a radical change in international policy. I propose to you, Rakovsky, to transform yourself in imagination into that person at the Kremlin which will have to take the decision ... On the basis only of your disclosures, arguments, your hypotheses and persuasion, as I see it, it would be impossible to convince anyone. I personally, after having listened to you and at the same time, I shall not deny it, having experienced a strong influence from your explanations, of your personality, have not for a single moment experienced the temptation to consider the German-Soviet pact to be something realizable.

R. - International events will force with irresistible strength ...

G. - But that would be a loss of valuable time. Consider something concrete, something which I could put forward as a proof of your veracity and credibility ... In the contrary case I should not dare to transmit your information about our conversation; I should edit it with all accuracy, but it would reach the Kremlin archives and stay there.

R. - Would it not be enough to bring about that it is taken into consideration if someone, even in a most official manner, were to have a talk with some very important person?

G. - It seems to me that this would be something real.

R. - But with whom?

G. - This is only my personal opinion, Rakovsky. You had mentioned concrete persons, big financiers; if I remember correctly, you had spoken about a certain Schiff, for example; then you mentioned another who had been the go-between with Hitler for the purpose of financing him. There are also politicians or persons with a big position, who belong to "Them" or, if you like, serve "Them." Someone like that could be of use to us in order to start something practical ... Do you know someone?

R. - I do not think it is necessary ... Think: about what will you be negotiating? Probably about the plan which I have set out, is that not so? For what? At the present moment "They" need not do anything in this context; "Their" mission is "not to do." And for that reason you would not be able to agree about any positive acton and could not demand it ... Remember, consider well.

{p. 48} G. - Even if that is so, yet in view of our personal opinion there must be a reality, even if a useless one ..., a man, a personality which would confirm the credibility of the power, which you ascribe to "Them."

R. - I shall satisfy vou, although I am sure of the uselessness of this. I have already told you that I do not know who is a part of "Them," but have assurances from a person who must have known them.

G. - From whom?

R. - From Trotzky. From Trotzky I know only that one of 'Them" was Walter Rathenau, who was well known from Rapallo. You see the last of "Them" who occupied a political and social position, since it was he who broke the economic blockade of the USSR. Despite the fact that he was one of the biggest millionaires; of course, such also was Lionel Rothschild. I can with confidence mention only these names. Naturally I can name still more people, the work and personality of whom I determine as being fully "Theirs," but I cannot confirm what these people command or whom they obey.

G. - Mention some of them.

R. - As an institutions - the Bank of Kuhn, Loeb & Co., of Wall Street; to this bank belong the families of Schiff, Warburg, Loeb and Kuhn; I say families in order to point out several names, since they are all connected among themselves by marriages; then Baruch, Frankfurter, Altschul, Cohen, Benjamin, Strauss, Steinhardt, Blom, Rosenman, Lippmann, Lehman, Dreifus, Lamont, Rothschild, Lord, Mandel Morgenthau, Ezekiel, Lasky. I think that that will be enough names; if I were to strain my memory, then perhaps I would remember some more but I repeat, that I do not know who among them can be one of "Them" and I cannot even assert, that any one of them is definitely of their number; I want to avoid any responsibility. But I certainly think that any one of the persons I have enumerated, even of those not belonging to "Them," could always lead to "Them" with any proposition of an important type. Of course, independently of whether this or that person does or does not belong to "Them," one cannot expect a direct reply. The answer will be given by facts. That is the unchangeable tactic which they prefer and with which they force one to reckon. For example, if you would risk beginning diplomatic initiatives, then you would not need to make use of the method of a personal approach to "Them"; one must limit oneself to the expression of thoughts, the exposition of some rational hypothesis, which depends on unknown definite factors. Then it only remains to wait.

G.--You understand that I have not ot a card-index at my dispesal at the moment, in order to establish all the men yvou have mentioned: I assume that they are probably somewhere far away. Where?

R. - Most of them in the United States.

G.- Plese understand that if we were to decide to act, then we would have to devote much time to it. But the matter is urgent, and urgent not for us, but for you. Rakovsky.

R. - For me?

G.--Yes. for you. Remember that your trial will take place very soon. I do not know, but I think it will not be risky to assume that if all that had been discussed here were to interest the Kremlin, then it

{p. 49} must interest them before you appear before the tribunal: that would be for you a decisive matter. I think it is in your personal interests that you should propose something quicker to us. The most important thing is to get proofs that you spoke the truth, and to do this not during a period of several weeks, but during several days. I think that if you were to succeed in this, then I could nearly give you fairly solid assurances concerning the possibility of saving your life ... In the contrary case I answer for nothing.

R. - In the end I shall take the risk. Do you know if Davis is at present in Moscow? Yes, the Ambassador of the United States.

G. - I think he is; he should have returned.

R. - Only an exceptional situation gives me the right, as I see it, against the rules, to make use of an official intermediary.

G. - Therefore we can think that the American Government is behind all this ...

R. - Behind - no under all this ...

G. - Roosevelt?

R. - What do I know? I can only come to conclusions. You are all the time obsessed with the mania of political espionage. I could manufacture, in order to please you, a whole history; I have more than sufficient imagination, dates and true facts in order to give it veracity in appearance, which would be close to looking obvious. But are not the generally known facts more obvious? And you can supplement them with your own imagination, if you wish. Look yourself. Remember the morning of the 24th October 1929. The time will come when this day will be for the history of the revolution more important than October, 1917. On the day of the 24th October there took place the crash of the New York Stock Exchange, the beginning of the so-called "depression," a real revolution. The four years of the Government of Hoover - are years of revolutionary progress: 12 and 15 millions on strike. In February, 1933 there takes place the last stroke of the crisis with the closing of the banks. It is difficu1t to do more than capital did in order to break the "classical American," who was still on his industrial bases and in the economic respect enslaved by Wall Street. It is well known that any impoverishment in economics, be it in relation to societies or animals, gives a flourishing of parasitism, and capital is a large parasite. But this American revolution pursued not only the one aim of increasing the power of money for those who had the right to use it, it pretended to even more. Although the power of money is political power, but before that it had only been used indirectly, but now the power of money was to be transformed into direct power. The man through whom they made use of such power was Franklin Roosevelt. Have you understood? Take note of the following: In that year 1929, the first year of the American revolution, in February Trotzky leaves Russia; the crash takes place in October ... The financing of Hitler is agreed in July, 1929. You think that all this was by chance? The four years of the rule of Hoover were used for the preparation of the seizure of power in the United States and the USSR; there by means of a financial revolution, and here with the help of war and the defeat which was to follow. Could some good novel with great imagination be more obvious to you? You can understand that the execution of

{p. 50} the plan on such a scale requires a special man, who can direct the executive power in the United States, who has been predetermined to be the organizing and deciding force. That man was Franklin and Eleanor Roosevelt. And permit me to say that this two-sexed being is not simply irony. He had to avoid any possible Delilah.

G. - Is Roosevelt one of "Them"?

R. - I do not know if he is one of "Them," or is only subject to "Them." What more do you want? I think that he was conscious of his mission, but cannot assert whether he obeyed under duress of blackmail or he was one of those who rule; it is true that he carried out his mission, realized all the actions which had been assigned to him accurately. Do not ask me more, as I do not know any more.

G. - In case it should be decided to approach Davis, in which form would you do it?

R. - First of all you must select a person of such a type as "the baron"; he could be useful ... Is he still alive?

G. - I do not know.

R. - All right, the choice of persons is left to you. Your delegate must present himself as being confidential or not modest, but best of all as a secret oppositionist. The conversation must be cleverly conducted concerning that contradictory position into which the USSR has been put by the so-called European democracies, by their union against National-Socialism. This is the conclusion of an alliance with the British and French Imperialism, the contemporary real Imperialism, for the destruction of the potential Imperialism. The aim of the verbal expressions must be to conjoin the false Soviet position with an equally false one of American democracy ... It also sees itself forced to support Colonial Imperialism for the defence of democracy within England and France. As you see, the question can be put onto a very strong logical foundation. After that it is already very easy to formulate an hypothesis about actions. The first: that neither the USSR, nor the United States are interested in European Imperialism and thus the dispute is brought down to the question of personal hegemony; that ideologically and economically Russia and America want the destruction of European Colonial Imperialism, be it direct or oblique. The United States want it even more. If Europe were to lose all its power in a new war, then England, not having its own forces, with the disappearance of Europe as a force, as power, would from the first day lean, with all its weight and with the whole of its Empire, speaking the English language, on the United States, which would be inevitable both in the political and economic sense ... Analyze what you have heard in the light of the Left conspiracy, as one might say, without shocking any American boureois. Having got to this point, one could have an interval for a few days. Then, having noted the reaction, it will be necessary to move further. Now Hitler comes forward. Here one can point to any aggression: he is fully an aggressor and of this there can be no doubt. And then one can go over to asking a question: What common action should be undertaken by the United States and the Soviet Union in view of the war between the Imperialists, who want it? The answer could he - neutrality. One must argue again: yes, neutrality, but it does not depend on the wish of one side, but also of the aggressor. There can be a guarantee of neutrality only when the aggressor cannot attack or it does

{p. 51} not suit him. For this purpose the infallible answer is the attack of the aggressor on another Imperialist State. From this it is very easy to go over to the expression of the necessity and morality, with a view to guaranteeing safety, for provoking a clash between the Imperialists, if that clash were not to take place of its own accord. And if that were to be accepted in theory, and it will be accepted, then one can regulate the question of actions in practice, which would be only a matter of technique. Here is a scheme: (1) A pact with Hitler for the division between us of Czechoslovakia and Poland (better the latter). (2) Hitler will accept. If he is capable of backing a bluff for the conquest, i.e. the seizure of something in alliance with the USSR, then for him there will be full guarantee in that the democracies will yield. He will be unable to believe their verbal threats as he knows that those who try to intimidate by war threats are at the same time partisans of disarmament and that their disarmament is real. (3) The democracies will attack Hitler and not Stalin; they will tell the people that although both are guilty of aggression and partition, but strategical and logical reasons force them to defeat them one by one: first Hitler and then Stalin.

G. - But will they not deceive us with truth?

R. - But how? Does not Stalin dispose of freedom of action in order to help Hitler in sufficient measure? Do we not put in his hands the possibility of continuing the war between the Capitalists until the last man and the last pound? With what can they attack him? The exhausted States of the West will already have enough on their hands with internal Communist revolution, which in the other case may triumph.

G. - But if Hitler achieves a quick victory and if he, like Napoleon, mobilizes the whole of Europe against the USSR?

R. - This is quite improbable! You forget about the existence of the United States. You reject the power factor, a greater one. Is it not natural that America, imitating Stalin, would on its part help the democratic States? If one were to co-ordinate "against the hands of the clock" the help to both groups of fighters, then thus there will be assured without failure a permanent extension of the war.

G. - And Japan?

R. - Is not China enough for them? Let Stalin guarantee them his non-intervention. The Japanese are very fond of suicide, but after all not to such an extent as to be capable of simultaneously attacking China and the USSR. Any more objections?

G. - No, if it were to depend on me, then I would try ... But do you believe that the delegate ...?

R. - Yes, I believe. I was not given the chance of speaking with him, but note one detail: the appointment of Davis became known in November, 1936; we must assume that Roosevelt thought of sending him much sooner and with that in mind began preliminary steps; we all know that the consideration of the matter and the official explanations of the appointment take more than two months. Apparently his appointment was agreed in August ... And what happened in August? In August Zinoviev and Kamenev were shot. I am willing to swear that his appointment was made for the purpose of a new involvement of "Them' in the politics of Stalin. Yes, I certainly think so. With what an inner excitement must he have travelled, seeing how one after another

{p. 52} there fall the chiefs of the opposition in the "purges" which follow one on another. Do you know if he was present at trial of Radeck?

G. - Yes.

R. - You will see him. Have a talk with him. He expects it already for many months.

G. - This night we must finish; but before we part I want to know something more. Let us assume that all this is true and all will be carried out with full success. "They" will put forward definite conditions. Guess what they might be?

R. - This is not difficult to assume. The first condition will be the ending of the executions of the Communists, that means the Trotzkyists, as you call them. Then, of course, they will demand the establishment of several zones of influence, as I had mentioned. The boundaries which will have to divide the formal Communism from the real one. That is the most important condition. There will be mutual concessions for mutual help for a time, while the plan lasts, being carried out. You will see for example the paradoxial phenomenon that a whole crowd of people, enemies of Stalin, will help him, no they will not necessarily be proletarians, nor will they be professional spies. There will appear influential persons at all levels of society, even very high ones, who will help the Stalinist formal Communism when it becomes if not real, then at least objective Communism. Have you understood me?

G. - A little; you wrap up such things in such impenetrable casuistry.

R. - If it is necessary to end, then I can only express myself in this way. Let us see if I shall not be able yet to help to understand. It is known that Marxism was called Hegelian. So this question was vulgarised.Hegelian idealism is a widespread adjustment to an uninformed understanding in the West of the natural mysticism of Baruch Spinosa. "They" are Spinosists: perhaps the matter is the other way round, i.e. that Spinosism is "Them," insofar as he is only a version adequate to the epoch of "Their" own philosophy, which is a much earlier one, standing on a much higher level. After all, a Hegelian and for that reason also the follower of Spinosa, was devoted to his faith, but only temporarily, tactically. The matter does not stand as is claimed by Marxism, that as the result of the elimination of contradictions there arises the synthesis. It is as the result of the opposing mutual fusion, from the thesis and anti-thesis that there arises, as a synthesis, the reality, truth, as a final harmony between the subjective and objective. Do you not see that already? In Moscow there is Communism: in New York Capitalism. It is all the same as a thesis and anti-thesis. Analyze both. Moscow is subjective Communism, but Capitalism objective - State Capitalism. New York: Capitalism subjective, but Communism objective. A personal synthesis, truth: the Financial International, the Capitalist-Communist one. "They."

* * *

The meeting had lasted about six hours. I once more gave some drug to Rakovski. The drug it was obvious, worked well, although I was only able to observe this by certain symptoms of animation. But I think that Rakovsky would have spoken just the same in a norrnal condition. Undoubtedly the theme of the conversation concerned his speciality and he had the passionate will to epose that, about which he spoke. Since, if all this is true then an energetic attempt had been made

{p. 53} to enforce the triumph of his idea and plan. If this was untrue, then there was an extraordinary phantasy and this was a wonderful manoeuvre for saving his already lost life.

My opinion of all that had been heard can not be of any importance. I have not got a sufficient erudition in order to understand its universality and horizons. When Rakovsky touched on the most important part of the theme I had the same feeling as at that moment when I saw myself for the first time on the X-ray screen. My surprised eyes saw something diffuse and dark, but real. Something like an apparition; I had to co-ordinate his figure and movements, corelations and actions to the degree to which it was possible to guess with the help of logical intuition.

I think that I had observed during several hours the "radiograph of revolution" on a world-wide scale. It is possible that in part lt failed, was deformed, thanks to circumstances or personalities which reflected it, it is not for nothing that the lie and dissimulation are permitted in the revolutionary struggle and are accepted as moral. And Rakovsky, a passionate dialectician of great culture and a first-class orator, is first of all and above all a revolutionary fanatic.

I re-read the conversation many times, but each time I felt how there rose in me the feeling of my incompetence in this respect. That which until then had seemed to me, and to the whole world, to be the truth and obvious reality, like blocks of granite, where the social order stands as on a rock, immovable and permanent, all that became transformed into a thick fog. There appear colossal, unmeasurable, invisible forces with a categorical imperative, disobedient, sly and titanic at the same time, something like magnetism, electricity or the attraction of the earth. In the presence of this phenomenal disclosure I felt like the man from the stone age, whose head was still full of primitive superstitions concerning the phenomena of nature, and who had been suddenly transposed one night into the Paris of to-day. I am amazed even more than he would have been.

Many times I disagreed. At first I convinced myself that everything which Rakovsky was telling was the product of his extraordinary imagination. But even having convinced myself that I was a toy in the hands of the biggest of all the writers of novels, I tried in vain to find enough strength, logical reasons and even people with a sufficient personality, who would have been able to explain this gigantic progress of the revolution.

I must confess that if only those forces participated here, as also reasons and people, which are mentioned officially in written histories, then I must declare that the revolution is a miracle of our age. No, when I was listening to Rakovsky, I could not admit that a small group of Jews, who emigrated from London, had achieved that this "apparition of revolution," which had been called forth by Marx in the first lines of the Manifesto, had become to-day a gigantic reality and a universal threat.

Whether what Rakovsky told is true or not, whether the secret and real streneth of Communism is International Capital, it is the obvious truth for mne that Marx, Lenin, Trotzky and Stalin are an insufficient explanation for that which is happening.

{p. 54} Whether these people are real or phantastic, whom Rakovsky calls "Them" with an almost religious tremor in his voice, is the question. But if "They" do not exist then I shall have to say of them what Voltaire said of God: "He will have to be invented," since only in that case can we explain the existence, extent and force of this world-wide revolution.

After all, I have no hope of seeing it. My position does not allow me to view with great optimism the possibility that I shall survive until the near future. But this suicide of the bourgeois European States, of which Rakovsky spoke, and which he proves as being inevitable, would be for me, who has been initiated into the secret, the magisterial and definite proof.

* * *

When Rakovsky had been led away to his place of imprisonment Gabriel remained some time immersed in himself.

I looked at him, not seeing him; and in fact my own ideas and conceptions had lost the ground under their feet and were somehow suspended.

"How do you look on all this" asked Gabriel.

"I do not know, I do not know" I replied, and I spoke the truth; but I added "I think that this is an amazing man and if we are dealing with a falsification, then it is extraordinary; in any event it is a piece of genius."

"As a result, if we shall have the time, we must have an exchange of views ... I am always interested in your opinion of the profane, a doctor. But now we must agree about our programme. I need you as a professional, but as a modest man. That which you have heard, as the result of your peculiar function, can be wind and smoke which is carried by the wind, but it can also be something, the importance of which cannot be exceeded by anything else. Here a moderate terminology is inappropriate. Given this last possibility, a strong feeling of precaution forces me to limit the number of people who know ahout it. For the moment only you and I know. The man who manipulated the recording machine does not know any French. The fact that we did not speak in Russian was not my caprice. In short: I shall be grateful to you if you will be the translator. Sleep for some hours. I shall now give the necessary instructions so that the technician would agree the time with you, and as soon as possible you must translate and write down the conversation, which he will reproduce for you to hear. It will be a hard job; you cannot use a typewriter and the recorder will have to move very slowly. When you will have done the French version I shall read it. A few remarks and epigraphs will be necessary, and I shall add them. You can use a typewriter?"

"Very badly, very slowly, only with two fingers."

"Well arrange it somehow. Please make few mistakes."

Gabriel called the man. We arranged to begin work at eleven o'clock and it was already almost seven. We went to sleep a little.

{p. 55} I was called punctually. We sat down in my small study.

Gabriel had asked me to make two copies of the translation. I made three, in order to hide one for myself. I took the risk as he went to Moscow. I am not sorry that I had had the courage for this.

* * *

EPILOGUE

As is well known, Stalin followed the advice of Rakovsky. There was a pact with Hitler. Also the Second World War served solely the interests of the revolution.

The secret of these changes of policy can be understood from a further conversation between Gabriel and Doctor Landowsky, which is given in a later chapter of "The Red Symphony." Here are some extracts from it:

GABRIEL - Do you remember the conversation with Rakovsky ... Do you know that he was not condemned to death? Well knowing all this you need not be surprised that Comrade Stalin had thought it to be wise to try that apparently so unlikely plan ... Here nothing is risked and, on the contrary, one can gain a great deal ... If you will strain your memory you will be able to understand several things.

DOCTOR - I remember everything rather well. Do not forget that I heard the conversation twice, then both times I wrote it, and in addition I translated it ... May I find out if you know the people whom Rakovsky called "Them"?

G. - In order to shew you my confidence I shall tell you - no! We do not know for sure who "They" are, but at the last moment there was confirmed a great deal of what Rakovsky had told; for example it is true that Hitler was financed by the Wall Street bankers. Much else is also true. All these months during which I have not seen you, I devoted to an investigation, connected with Rakovsky's information. It is true that I was not able to establish just which people are such remarkable personages, but it is a fact, that there is a kind of entourage which consists of financiers, politicians, scientists and even ecclesiastical persons of high rank, wealth and power, who occupy high places; if one is to judge their position (mostly as intermediaries) by the results, then it seems strange and inexplicable, at least in the light of ordinary conceptions ... since in fact they have a great similarity with the ideas of Communism, of course with very special Communist ideas. But let us leave all these questions aside, concerning complexion, line and profile; objectively, as Rakovsky would have said, they, imitating Stalin blindly in actions and errors, are building Communism. They followed the advice of Rakovsky almost to the letter. There was nothing concrete, but there was no refusal and no tearing of mantles. On the contrary, they displayed great attention to everything. The Ambassador Davis carefully hinted at the past trials and even went so far as to hint that much would be gained in the public opinion in America, in case of an amnesty for Rakovsky in the near future. He was well watched during the trials in March, which is natural. He was himself present at all of them; we did not allow him to bring any technicians so as to prevent any "telegraphing" with the accused. He is not a professional

{p. 56} diplomat and does not know the specific techniques. He was obliged to look on, trying with his eyes to say much, as I thought; we think that he raised the spirits of Rosenholz and of Rakovsky. The latter confirmed the interest which had been displayed at the trial by Davis and confessed that he made him a secret sign of masonic greeting.

There is yet another strange matter, which cannot be falsified. On the 2nd March at dawn there was received a radio message from some very powerful station: "Amnesty or the Nazi danger will increase" ... the radiogramnme was encyphered in the cypher of our own embassy in London. You can understand that that was something very important!

Dr. - But the threat was not real?

G. - How not? On the 12th March there ended the debates of the Supreme Tribunal and at 9 in the evening the tribunal began its considerations. And on that same day of the 12th March, at 5.30 o'clock a.m. Hitler ordered his armoured divisions to enter Austria. Of course this was a miliiary promenade! Were there sufficient reasons for thinking about that! Or we had to be so stupid as to consider the greetings of Davis, the radioprogramme, the cypher, the coincidence of the invasion with the verdict, and also the silence of Europe as being only accidental chances? No, in fact we did not see "Them," but we heard their voice and understood their language.

* * *

Translator's note: It would be quite supererfluous to write a long commentary on this remarkable material. It should suffice to say the obvious - this is one of the most important political documents of the century.

Many of us have known the facts here brought out for decades, but for the first time we get a brilliant, detailed statement from an insider. Obviously Rakovsky was one of "Them."

Both the internal evidence of this document, as well as the circumstance that all subsequent events went exactly according to the formulae indicated, proves the truth of the story.

This book should be essential reading for all who wish to know what is happening and why, throughout the world, and also what alone can be done to stop the conquests of the revolution: the power of monetary emission must be returned to the States everywhere. If that is not done in time, Communism will win.

George Knupffer.

{end}

(2) Hitler manipulated by Bankers whose agenda he didn't understand - Henry Makow

(2.1) Hitler Didn't Want World War, by Henry Makow Ph.D.

March 21, 2004

http://www.savethemales.ca/000369.html

Hitler didn't want a world war, and had no stomach for fighting England, according to Pulitzer Prize winning journalist Louis Kilzer, author of Churchill's Deception (Simon & Schuster, 1994).

Hitler believed the future of Western civilization depended on the cooperation of Germany and her Aryan cousins: England and the United States. His territorial demands were limited to Communist Russia, which he regarded as a proxy for Jewish world ambitions. He was determined to avoid fighting a war on two fronts.

The "miracle at Dunkirk" was in fact an extraordinary peace overture to England. We don't normally associate Hitler with such magnanimity.

In May 1940, the British were on the verge of defeat. The English army was trapped at Dunkirk. Rather than take them prisoner, Hitler halted his generals for three days allowing 330,000 men to escape.

"The blood of every single Englishman is too valuable to shed," Hitler said. "Our two people belong together racially and traditionally. That is and always has been my aim, even if our generals can't grasp it." (Kilzer, p.213)

This is not an attempt to exonerate Hitler. His ideology of Aryan racial supremacy and his enslavement/extermination of "inferior races" ( mainly Jews and Slavs) are abhorrent to me. (Do I need to say this?) My own grandparents were murdered by the Nazis. I believe people can take pride in their race or nationality without seeking to dominate others.

Nonetheless we should understand that our view of Hitler is influenced by propaganda. The Allies were also guilty of atrocities and war crimes. Furthermore, Hitler was created, manipulated and destroyed by the same Illuminist clique that runs the world today.

"CHURCHILL'S DECEPTION"

According to Kilzer's well-documented book, Hitler was trying to convince the English to make peace. In exchange, he was ready to retreat from Western Europe and from much of Poland.

Kilzer describes how British Intelligence (an arm of the Illuminati) took advantage of Hitler's racist ideology to divert his energies against Russia and trap him in a two-front war. They convinced him that a large pro Nazi (anti Communist) "Peace Party" was prepared to unseat the "war monger" Churchill.

This party consisted of the Duke of Windsor (the former King Edward VIII) and appeasement-minded elitists known as the "Cliveden Set." The Nazis had longstanding social ties with this group and confided in them. Hitler seemed to overlook the fact that Windsor went to stay at the Rothschild castle in Austria after he abdicated.

Rudolph Hess, the Deputy Leader of Nazi Germany, was in contact with the Cliveden group and flew to England May 10, 1941 to negotiate peace. According to Kilzer, Hess had Hitler's blessings.

Coincidentally this was the worst night of the Blitz. Afterward, there was a long lull in both Nazi and British bombing raids. It appears the Nazis thought they had an understanding with the British and turned their attention to the invasion of Russia the following month (June 22, 1941.)

Hitler didn't understand that the Anglo American elite was (and still is) intimately connected with international (i.e. Rothschild) finance. Anglo American imperialism is in fact a front for the families that own the Bank of England and the Federal Reserve. These Jewish and non-Jewish families are connected by money, marriage and Lucifer worship (i.e. Freemasonry). Both Roosevelt and Churchill were their flunkies. (All our "leaders" are.)

In 1776 Meyer Rothschild financed the Illuminati, a Masonic secret society that in turn spawned the major revolutions of the modern era including the Bolshevik Revolution in 1917. The ultimate aim is to establish the banker world dictatorship, which is at an advanced stage today.

In the 1930's their purpose was to incite a two-front war that would leave the great nation states (England, Germany and Russia) prostrate. Like all wars, the purpose was to kill millions of people, traumatize humanity, increase public debt and private profit, and make "world government" (the future UN) seem essential for "peace."

The 1930's British Policy of Appeasement was probably designed to encourage Hitler's expansionist tendencies and to provoke war. Douglas Reed, the (London) Times Correspondent in Berlin, was first tipped off to something fishy when his newspaper suppressed his warnings of the Hitler menace. (See his Controversy of Zion)

ROTHSCHILD CONDUCTS RED SYMPHONY

Why would the financial elite also want to destroy Russia, which they created?

The transcript of the 1938 NKVD interrogation of C.G. Rakowsky (a.k.a Chaim Rakeover) provides the answer. Rakowsky was an intimate of Trotsky's and former Soviet ambassador to Paris.

Rothschild's agent Leon Trotsky was supposed to succeed Lenin but got sick at the critical moment. Stalin was able to assume power and divert Russia from Rothschild control.

In order to control Stalin, international finance was forced to build up Hitler and the Nazi party. Rakowsky confirms that Jewish financiers backed the Nazis although Hitler was not aware of this.

"The ambassador Warburg presented himself under a false name and Hitler did not even guess his race ... he also lied regarding whose representative he was... Our aim was to provoke a war and Hitler was war...[the Nazis] received...millions of dollars sent to it from Wall Street, and millions of Marks from German financiers through Schacht; [providing] the upkeep of the S.A and the S.S. and also the financing of the elections..."

Unfortunately for the bankers, Hitler also proved intractable. He started to print his own money! ...

The book "Financial Origins of National Socialism" (1933) by "Sydney Warburg" provides another glimpse of how the Illuminist clique supported Hitler. This 70-page booklet was suppressed for many years but was republished in 1983 as "Hitler's Secret Backers."

"Warburg" describes a July 1929 meeting with "Carter," the President of J.P. Morgan's Guarantee Trust, the Presidents of the Federal Reserve Banks, "the young Rockefeller" and "Glean from Royal Dutch." These are all Rothschild dominated.

It was determined that Warburg who spoke German should travel to Germany and ask Hitler how much money he needed to overthrow the state. The only stipulation was that Hitler adopts "an aggressive foreign policy."

"Warburg" details five meetings with Hitler between 1929 and 1933. The first took place in a beer cellar and Hitler calculated his needs on the back of a paper plate. About $25 million was transferred. This was extremely important in the depth of the depression because the Nazis provided food and shelter to many of their supporters.

Hitler wasn't told the reason for this support and did not ask. On two occasions, he wondered out loud if "Warburg" was himself Jewish but dismissed the idea before "Warburg" could reply.

There is no "Sydney Warburg" but the internal evidence suggests the author could be James Warburg, son of Federal Reserve founder Paul Warburg. Many people dismiss this monograph as yet another fraud but the wealth of accurate detail and anecdote suggests otherwise. ...

{end}

Comment (Peter M.): Henry Makow interprets Red Symphony, and Hitler's Secret Backers, as meaning that the Illuminati gave money to help Hitler gain power, once they had completely lost control of Russia to Stalin, the intention being to restore Trotsky once Stalin had fallen.

You can obtain a copy of Hitler's Secret Backers for US$5 at http://www.omnicbc.com.

The author of this book, apparently written in 1933, says that he was invited to be a courier to Hitler, at a meeting on July, 1929 (p. 5). He says that New York financiers wanted to bring France into line (to renounce Versailles reparations claims), and wanted Hitler to pursue an aggressive foreign policy. In the document, Hitler says that he would use Stalin to help subdue France, then, with his back thus covered, tackle the eastern question, the implication being that he would implement the lebensraum in the Ukraine, as envisaged in Mein Kampf.

Isaac Deutscher says, in The Prophet Outcast, that Trotsky was expelled from the USSR on 10 February, 1929 (p. 1}.

So, the connection is plausible, but can't be proven.

(2.2) William Engdahl on Hitler's fundamental miscalculation

Engdahl's essay: http://arno.daastol.com/history/EngdahlMackinder.html#_Toc34729241

... On May 10, just in the hours the German Wehrmacht launched the blitzkrieg against Holland and Belgium, Churchill was called by the King to form a new government. ...

Shortly before dawn on the morning of May 10 the greatest concentration of tank forces ever seen in warfare stood poised on the border of Luxembourg, ready for a seventy mile strike to Sedan on the French side, through the Ardennes forest. ...

"A fundamental miscalculation"

General Guderian had advanced an astonishing 250 miles across enemy terrain in only 11 days. Then, with his Panzer forces at Gravelines, only ten miles from Dunkirk, orders came down on May 24, that his tanks were to halt.

Guderian's forces had been within hours of capturing more than 300,000 of the best-trained professional soldiers of the British Expeditionary Force, along with some 100,000 of France's best-trained and equipped men. Guderian at first read the order with disbelief. His commander, General von Kleist, stated that, on receiving the order, "I decided to ignore it, and to push on across the canal. But then came a more emphatic order that I was to withdraw behind the canal. My tanks were kept halted there for three days."

The order had come directly from Hitler. The three days pause was intended, though Hitler did not tell his generals at the time, to allow Britain's best fighting force escape by ship across the Channel to England. He intended it as a clear gesture of good will towards his British adversary.

That was the "miracle of Dunkirk," which Churchill's strictly censored wartime press propaganda in England portrayed as divine providence smiling down on the chosen British people. The British population would have been no doubt quite surprised, had they been allowed to learn the truth, that the one who had smiled on their army at Dunkirk had in fact been Hitler.

A week later, referring to this "miracle of Dunkirk," Churchill told the House of Commons and the entire nation over the BBC radio, "We shall defend our island, whatever the cost may be; we shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender..."

It wasn't exactly the response Hitler had in mind. ...

Dunkirk was to be only one of several unusual military decisions by the German Fuehrer in those critical days. His message each time was intended as a clear signal to his opponents. He was determined to give England convincing proof of his ultimate good will towards the British Empire, by allowing the elite of Britain's fighting forces to escape to England. ...

Once France had proposed armistice, yet again, Hitler refused to follow the logic of the military situation to its conclusion. He agreed to the basic French terms of Petain, and allowed two-fifths of France to the south, including the major Mediterranean port city, Marseilles, to remain unoccupied Vichy France, under Petain and Laval and their own French military and police control. The colonies and the formidable French naval fleet were left untouched by Hitler, in his bizarre gesture of good will.

Allowing Petain's Vichy government to hold the colonies in French North and West Africa was an astonishing concession from any military standpoint. Had Germany taken the African colonies in the fall of France, that would have closed the Mediterranean to British ships, allowing Italy free-hand to invade Egypt from Libya, blocking the Suez Canal and the route to the Mideast, as well as India. German U-boats, operating out of the French colonial port of Dakar on the west coast of Africa, could have blocked British ships en route to India via South Africa. That would have choked off vital British oil supplies from Iran and the Middle East, and cut off her access to goods and soldiers from India, placing her naval fleet and her economy in a devastating disadvantage at a time when many in top British political circles, even some in Churchill's Cabinet such as Beaverbrook, were resigned to the inevitability of a peace deal with Hitler.

At a meeting June 17 in Munich, the day France's armistice offer was received, Hitler told Mussolini that he would not impose oppressive conditions on France. When Mussolini suggested the demand that France turn over its naval fleet, Hitler rejected that idea outright as well.

This concession too, allowing the Petain government to hold on to the French fleet, was no small thing. At the time, the French naval fleet, unlike other parts of its defense arsenal, was of high quality. Two new battleships, 'Richelieu' and 'Jean Bart' had just been built. Were the French fleet to be added to the combined Naval capacities of Italy and Germany, it could quite well have destroyed British sea defenses and likely have forced a British surrender within months. The entire American fleet, even had they wanted to come to England's aid, was unavailable. It had been shifted early in 1940 to Hawaii and the Pacific, far away from Europe, in order to defend against a growing Japanese threat.

What could be of such over-riding importance in Hitler's thinking as to justify so extraordinary concessions as the colonies, the fleet and almost half of French territory?

Hitler, after refusing Mussolini's demand for the French fleet, turned to the real subject on his mind -- England. In a discussion witnessed by Hitler's official interpreter, Paul Schmidt, Hitler told Mussolini, he was convinced it would not serve any useful purpose to destroy the British Empire. "It is, after all, a force for order in the world," insisted Hitler.

Hitler's thoughts seemed to be returning to the early lessons in geopolitics he had learned from Karl Haushofer and Rudolf Hess almost two decades before, in 1924, in his jail cell at Landsberg near Munich. Hitler had written then in "Main Kampf," about Germany's future and the need for Lebensraum. "If one wanted land and soil in Europe, then by and large this could only have been done at Russia's expense, and then the new Reich would again have to start marching along the road of the Knights of the Order of former times.

"For such a policy, however," wrote Hitler, "there was only one single ally in Europe--England. With England alone, one's back being covered, could one begin the new Germanic invasion ... To gain England's favor, no sacrifice should have been too great. Then one would have had to renounce colonies and sea power, but to spare British industry our competition."

In 1940, Hitler's outlook had changed very little. Rudolf Hess was constantly at his side to remind him as well of his earlier lessons in geopolitics. As Holland, Belgium, Norway, Denmark, half Poland, Czechoslovakia, Austria, and now most of France all had been incorporated into the New European Order of the Third Reich, Italy, and Spain bound to it by alliance, Hitler came back to the idea of recarving the world between a land empire of Eurasia dominated by Germany, and a global oceanic empire dominated by Britain.

Hitler was preparing for the great battle, and it was to be in the east, not the west. He wanted England's assurance that she would "cover Germany's back," or at least not embroil the Reich once more in a catastrophic two front war. ... {end}

(3) Isaac Deutscher on the possibility that Hitler's war would lead to Trotsky's return

If Red Symphony is genuine, Stalin himself would have had access to it. It says that the Anglo-American elite helped to fund Hitler's rise, so that he could make war against Stalin. This would explain Stalin's obsession with the idea that British Intelligence was behind Hitler.

It would also explain Stalin's decision to have Trotsky murdered, a couple of years leter.

Isaac Deutscher points out that the return of Trotsky to power after the defeat of Stalin was a prospect raised seriously at the time:

Isaac Deutscher, THE PROPHET OUTCAST: Trotsky: 1929-1940 (Oxford University Press, London, 1970):

{p. 510} Postscript: Victory in Defeat

... And perhaps never yet had any man lived in so close a communion with the sufferings and the strivings of oppressed humanity and in such utter loneliness as Trotsky lived.

{this sounds like Christian writing on the Passion of Christ}

{p. 511} ... Trotsky asserted his conviction that in the future, after Soviet Society had progressed towards socialism, Stalinism would be seen as merely 'an episodic relapse'.

{p. 514} Trotskyism attempted to preserve the norm or to strike a temporary balance between norm and reality until revolution in the West resolved the conflict and restored harmony between {Marxist} theory and {Communist} practice. The failures of revolution in the West were epitomized in Trotsky's defeat.

{p. 515} How definite and irrevocable was the defeat? We have seen that as long as Trotsky was alive Stalin never considered him to have been finally vanquished. Stalin's fear was no mere paranoiac obsession. Other leading actors on the political stage shared it. Robert Coulondre, French ambassador to the Third Reich, gives a striking testimony in a description of his last interview with Hitler just before the outbreak of the Second World War. Hitler had boasted of the advantages he had obtained from his pact with Stalin, just concluded; and he drew a grandiose vista of his future military triumph. In reply the French ambassador appealed to his 'reason' and spoke of the social turmoil and the revolutions that might follow a long and terrible war and engulf all belligerent governments. 'You are thinking of yourself as victor ...', the ambassador said, 'but have you given thought to another possibility - that the victor may be Trotsky?' At this Hitler jumped up (as if he 'had been hit in the pit of the stomach') and screamed that this possibility, the threat of Trotsky's victory, was one more reason why France and Britain should not go to war against the Third Reich. Thus, the master of the Third Reich and the envoy of the Third Republic, in their last manouvres, during the last hours of peace, sought to intimidate each other, and each other s governments, by invoking the name of the lonely outcast trapped and immured at the far end of the world. 'They are haunted by the spectre of revolution, and they give it a man's name', Trotsky remarked when he read the dialogue.

Were Hitler and the ambassador quite wrong in giving the spectre Trotsky's name? It may be argued that although their fear was well grounded, they should have given the spectre Stalin's name, not Trotsky's - it was, at any rate, Stalin who was to triumph over Hitler. Yet as so often in history so here the underlying realities were far more confused and ambiguous than the surface of events. Stalin's victory over Trotsky concealed a heavy element of defeat while Trotsky's defeat was pregnant with victory.

The central 'ideological' issue between them had been socialism in one country - the question whether the Soviet Union would or could achieve socialism in isolation, on the conceivable only as an international order of society. The

{p. 516} answer events have given is far less clear-cut than were the theoretical arguments, but it comes much closer to Trotsky's view than to Stalin's. Long before the Soviet Union came anywhere near socialism, revolution had spread to other countries. History, it might be said, did not leave the Soviet Union alone long enough to allow a laboratory experiment with socialism in a single country to be carried into any advanced stage, let alone to be completed. In so far as in the struggle between Trotskyism and Stalinism revolutionary internationalism had clashed with Bolshevik isolationism it is certainly not Stalinism that has emerged with flying colours: Bolshevik isolationism has been dead long since. On the other hand, the staying power of the Soviet Union, even in isolation, was far greater than Trotsky sometimes assumed; and, contrary to his expectations, it was not the proletariat of the West that freed the Russian Revolution from isolation. By a feat of history's irony, Stalinism itself malgre lui-meme broke out of its national shell.

In his last debate Trotsky staked the whole future of Marxism and socialism upon the sequel to the Second World War. Convinced that war must lead to revolution - the classical Marxist revolution - he asserted that if it failed to do so Marxism would be refuted, socialism would lose once and for all by default, and the epoch of bureaucratic collectivism would set in. This was, in any case, a rash, dogmatic, and desperate view; historic reality was once again to prove immeasurably more intricate than the theorist's scheme. The war did indeed set in motion a new series of revolutions; yet once again the process did not conform to the classical pattern. The western proletariat again failed to storm and conquer the ramparts of the old order; and in eastern Europe it was mainly under the impact of Russia's armed power, advancing victoriously to the Elbe, that the old order broke down. The divorce between theory and practice - or between norm and fact - deepened further.

This was not a fortuitous development. It represented a continuation of the trend which had first announced itself in 1920-1 when the Red Army marched on Warsaw and when it occupied Georgia. {footnote 1} With those military acts the revolutionary

1 See The Prophet Armed, pp. 463-77.

{p. 517} cycle which the First World War set in motion had come to a close. At the beginning of that cycle Bolshevism had risen on the crest of a genuine revolution; towards its end the Bolsheviks began to spread revolution by conquest. Then followed the long interval of two decades, during which Bolshevism did not expand. When the next cycle of revolution was set in motion by the Second World War, it started where the first cycle had ended - with revolution by conquest. In military history there exists, as a rule, a continuity between the closing phase of one war and the opening phase of another: the weapons and the ideas about warfare invented and formed towards the end of one armed conflict dominate the first stage of the next conflict. A similar continuity exists also between cycles of revolution. In 1920-1 Bolshevism, straining to break out of its isolation, tried, rather fitfully, to carry revolution abroad on the point of bayonets. Two and three decades later Stalinism, dragged out of its national shell by war, imposed revolution upon the whole of eastern Europe.

Trotsky had expected the second revolutionary cycle to begin in the forms in which the first had begun, with class struggles and proletarian risings, the outcome of which would, in the main depend on the balance of social forces within each major nation and on the quality of national revolutionary leadership. Yet the new cycle started not where the previous one had begun, but where it had ended, not with revolution from below, but with revolution from above, with revoluhon by conquest. As this could be the work only of a great power applying its pressure in the first instance to its own periphery, the cycle ran its course on the fringes of the Soviet Union. The chief agents of revolution were not the workers of the countries concerned, and their parties, but the Red Army. Success or failure depended not on the balance of social forces within any nation, but mainly on the international balance of power, on diplomatic pacts, alliances, and military campaigns. The struggle and the co-operation of the great powers superimposed themselves upon class struggle, changing and distorting it. All criteria by which Marxists were wont to judge a nation's 'maturity' or 'immaturity' for revolution went by the board. ...

{end}

(4) David North on the Consequences of Trotsky's Defeat

http://www.wsws.org/exhibits/trotsky/trlect.htm

[The following was delivered as the opening lecture to the International Summer School on Marxism and the Fundamental Problems of the 20th Century, organised by the International Committee of the Fourth International and the Socialist Equality Party of Australia. The school was held in Sydney from January 3-10, 1998. David North is the national secretary of the Socialist Equality Party in the US. ...]

... if Stalinism was not the outcome of Bolshevism, but its antithesis; and if the rise of Stalinism was, in fact, opposed by Marxists, then the historical situation of revolutionary socialism is very different. The International Committee of the Fourth International upholds the second position.

... Especially among those who were influenced by Stalinism, the collapse of the Soviet Union - an event they had utterly failed to foresee - has radically changed their attitude toward the October Revolution and its place in history. Reaction, as Leon Trotsky once noted, not only conquers, it also convinces. Many long-time friends of the Soviet Union, or, perhaps more precisely, of the Soviet bureaucracy, who professed great admiration for Lenin and the "Great October Revolution" - and thought of themselves as very progressive people for doing so - now look upon the October Revolution as a disaster that should not have happened. ... This is the perspective that emerges from a new book by the British historian, Eric Hobsbawm, who was for many years a member of the Communist Party.

... The conflict between the Stalinist bureaucracy and the Left Opposition, about which Hobsbawm says not one word, "happened."

... Hobsbawm seeks to minimize, to the very point of denying, the role of consciousness in the revolutionary process.

... This portrayal of Lenin as a simple realpolitiker, reacting pragmatically and intuitively to events as they arose, hardly makes sense even within the terms presented by Hobsbawm. The defense of the revolution was, in itself, a strategic conception; and its successful realization depended upon a conscious insight into the class structure and dynamics of Russian society.

... Indeed, in a 300-page book of essays and lectures whose central theme is the place of the October Revolution in the history of the 20th century, Trotsky's name appears only once.

... the defeat of Trotsky and the Left Opposition set the stage for all the subsequent tragedies that were to befall the Soviet Union, the international working class and the socialist movement, and beneath whose shadow we still live today.

I wish to add a further point: No discussion on the fate of socialism in the 20th century deserves to be taken seriously unless it considers, with the necessary care, the consequences of Trotsky's defeat. It is essential to consider, in other words, not only "what happened" under Stalin; but also "what well might have happened" had Trotsky prevailed.

... Until 1924 the unquestioned premise of Soviet policy - indeed, that which underlay the entire revolutionary project undertaken by the Bolsheviks in October 1917 - was that the seizure of power in Russia was only "the first shot" of the world socialist revolution. A nationally self-contained socialist state, especially one based on a country as economically and culturally backward as Russia, could not be viable. Stalin's introduction, in the autumn of 1924, of the "theory" of "socialism in one country" - which was not really a "theory" at all, but rather a crudely pragmatic response to the defeat of the German revolution during the previous year and the temporary decline of the revolutionary movement in Western Europe - ran counter to the internationalist orientation propounded by the Bolsheviks under the leadership of Lenin and Trotsky.

... It may seem paradoxical that Trotsky, the great protagonist of world revolution, placed greater emphasis than any other Soviet leader of his time on the overriding importance of close economic links between the USSR and the world capitalist market. Soviet economic development, he insisted, required both access to the resources of the world market and the intelligent utilization of the international division of labor. The development of economic planning required at minimum a knowledge of competitive advantage and efficiencies at the international level. It served no rational economic purpose for the USSR to make a virtue of frittering away its own limited resources in a vain effort to duplicate on Soviet soil what it could obtain at far less cost on the world capitalist market.

... It is helpful to keep in mind that Trotsky belonged to a generation of Russian Marxists who had utilized the opportunity provided by revolutionary exile to carefully observe and study the workings of the capitalist system in the advanced countries. They were familiar not only with the oft-described "horrors" of capitalism, but also with its positive achievements. ... Trotsky argued that a vital precondition for the development of the Soviet economy along socialist lines was its assimilation of the basic techniques of capitalist management, organization, accounting and production.

... Indeed, the claim is often made that collectivization arose out of Stalin's adoption, in the late 1920s, of the Left Opposition's program of rapid industrialization. In actual fact, Trotsky opposed and denounced the frenzied collectivization campaign launched by the Stalinists. Despite the pseudo-socialist demagogy that accompanied it, Trotsky warned that the policy, implemented with reckless disregard of the real productive capabilities of both industry and the countryside, proceeded from the same nationalistic and anti-Marxist conceptions of "socialism in one country" that underlay the previous failed economic programs of the Stalinist bureaucracy.

In a critique of Stalinist collectivization written in 1930, Trotsky acknowledged that he had previously advocated a more rapid tempo of industrialization, and the use of heavier taxation of wealthier sections of the peasantry (the kulaks) to provide resources for the development of heavy industry.

... The initial setback suffered by the Left Opposition in the late autumn of 1923 was definitely bound up with the defeat of the German Revolution, which dimmed hopes that European workers would in the near future come to the aid of the USSR. This was the climate that created a broader audience for the nationalist perspective of socialism in one country. The political disorientation produced by the nationalist line of the Soviet leaders inside the Communist International led, in turn, to more defeats for the working class outside the USSR.

... In April 1932 Trotsky issued a statement warning that the victory of Hitler would make war between Germany and Soviet Russia inevitable. Choosing his words carefully, Trotsky explained how he would respond, were he in power, to a fascist victory in Germany:

"... Upon receiving the telegraphic communication of this event, I would sign an order for the mobilization of the reserves. When you have a mortal enemy before you, and when war flows with necessity from the logic of the objective situation, it would be unpardonable light-mindedness to give that enemy time to establish and fortify himself, conclude the necessary alliances, receive the necessary help, work out a plan of concentric military actions, not only from the West but from the East, and thus grow up to the dimensions of a colossal danger." [24] {24. Writings of Leon Trotsky 1932 (New York: 1973), p. 82}

... we have attempted to demonstrate that the victory of Trotskyism - that is, of genuine Marxism - would have in all probability profoundly altered the course of Soviet history and that of the international socialist movement. ... I would like to cite a valuable work entitled The Birth of Stalinism by the German historian Michal Reiman.

"The importance of the left opposition is often underestimated in the literature ... [M]any authors doubt that the opposition had any substantial influence on the mass of party members and even less on broader sections of the population. One can hardly agree with such views: they seem paradoxical indeed in light of the mountain of ammunition expended on the opposition by the party leadership in those years - the multitude of official declarations, reports, pamphlets, and books, not to mention the mass political campaigns that penetrated even the remotest parts of the USSR.

"In the spring of 1926 the united opposition, based on a cadre of old and experienced party leaders, conquered some fairly significant positions. It consolidated its influence in Leningrad, the Ukraine, Transcaucasia, and the Urals region; in the universities; in some of the central government offices; in a number of factories of Moscow and the central industrial region; and among a section of the command staff of the army and navy, which had passed through the difficult years of the civil war under Trotsky's leadership. Repression by the party leadership prevented the opposition from growing, but its influence was still much greater than indicated by the various votes taken in the party cells." [26]

Trotsky and the other principal leaders of the Left Opposition were expelled from the Russian Communist Party at a plenum of the central committee held in July and August 1927. This failed to silence the Opposition. "Even after the plenum," writes Reiman, "the party organizations continued to be flooded - especially in the large urban centers and the two capitals - with opposition literature and leaflets. Reports of heightened opposition activity came one after another from various cities and from entire provinces - Leningrad, the Ukraine, Transcaucasia, Siberia, the Urals, and, of course, Moscow, where the greater number of opposition political leaders were working. There was a steadily growing number of illegal and semi-legal meetings attended by industrial workers and young people. The influence of the opposition in a number of large party units became quite substantial. It hampered the former free functioning of the Stalinist party apparatus. The army was also strongly affected by opposition activity. Reports on a significant rise in the authority of the opposition came from the Leningrad military district and the garrison in Leningrad, from Kronstadt, and from troop units in the Ukraine and Byelorussia. "The main problem was not the increase in opposition activity, however, but the overall balance of power within the party. Quite a large number of famous political leaders were on the opposition side. The weakened authority of the party leadership, especially of Stalin and Bukharin, was insufficient to turn the setbacks and failures of party policy into gains." [27]

How, then, did the Stalin faction overcome the challenge represented by the Left Opposition? Reiman explains: "The leadership could not cope with the situation without bringing the GPU into the fight." ... the Stalinist terror was the means by which it was annihilated. ... Stalin's victims were, in their collective activity, the representatives of an extraordinary socialist culture that imparted to the revolutionary movement of the Russian working class a world historical significance.

In Trotsky, this culture found its highest expression. As Victor Serge explained so brilliantly, "For a man like Trotsky to arise, it was necessary that thousands and thousands of individuals should establish the type over a long historical period. It was a broad social phenomenon, not the sudden flashing of a comet ... The formation of this great social type - the highest reach of modern man, I think - ceased after 1917, and most of its surviving representatives were massacred at Stalin's orders in 1936-37. ... (c) 1998 by World Socialist Web Site (TM) All rights reserved.

Stalin's Great Terror: Origins and Consequences {http://www.wsws.org/exhibits/1937/lecture1.ht} AND Leon Trotsky and the Fate of Marxism in the USSR BY Vadim Z. Rogovin: Contains lectures delivered by Russian Marxist historian Vadim Rogovin in Australia in 1996. Rogovin's central thesis is that there was and remains a Marxist alternative to Stalinism. He demonstrates that Stalin's Great Terror was not the irrational response of a paranoid tyrant, but was precipitated by the need for the Stalinist bureaucracy to eradicate the growing socialist opposition to its rule, led by Trotsky and the Left Opposition. 1996, 39p, ISBN 1-875639-13-6, $8.95

{end}

{endnotes} http://www.wsws.org/exhibits/trotsky/notes.htm#n24

24. Writings of Leon Trotsky 1932 (New York: 1973), p. 82

26 The Birth of Stalinism: The USSR on the Eve of the "Second Revolution" Tr. George Saunders (Bloomington: 1987), pp. 19-20

27. Ibid., pp. 28-29 (c) 1998 by World Socialist Web Site (TM) All rights reserved

{end}

(5) Ravoksky's evidence at the Moscow Trials

Report of Court Proceedings in the case of the Anti-Soviet "Bloc of Rights and Trotskyites"

Heard Before the MILITARY COLLEGIUM OF THE SUPREME COURT OF THE U.S.S.R.

Moscow, March 2-13, 1938

IN RE:

N.I. BUKARlN, A.I. RYKOV, G.G. YAGODA, N.N. KRESTINSKY, K.G. RAKOVSKY, A.P. ROSENGOLTZ, V.I. IVANOV, M.A. CHERNOV, G.F. GRINKO, I.A. ZELENSY, S.A. BESSONOV, A. IKRAMOV, F. HODJAYEV, V.F. SHARANGOVICH, P.T. ZUBAREV, P.P. BULANOV, L.G. LEVIN, D.D. PLETNEV, I.N. AZAOV, V.A. MAXIMOV, and P.P. KRYUCHOV

... VERBATIM REPORT

Published by the PEOPLE'S COMMISSARIAT OF JUSTICE OF THE U.S.S.R.

MOSCOW 1938

{background: at the time, Korea and Manchuria were part of Japan's empire. The following should be compared with the statements purportedly made by Rakovsky under his first interrogation, and recorded in Red Symphony. However, Red Symphony states that its material is too secret to be publicly disclosed at the trial}

{p. 1} MORNING SESSION, MARCH 2, 1938

COMMANDANT OF THE COURT: The Court is coming, please rise.

THE PRESIDENT: Be seated. I declare the session of the Military Collegium of the Supreme Court of the U.S.S.R. open.

The trial is of Nikolai Ivanovich BUKARlN, Alexei Ivanovich RYKOV, Genrikh Grigorievich YAGODA, Nikolai Nikolayevich KRESTINSKY, Khristian Georgievich RAKOVSKY, Arkady Pavlovich ROSENGOLTZ, Vladimir Ivanovich IVANOV, Mikhail Alexandrovich CHERNOV, Grirori Fedorovich GRINKO, Isaac Abramovich ZELENSY, Sergei Alexeyevich BESSONOV, Akmal IKRAMOV, Faizulla HODJAYEV, Vasily Fomich SHARANGOVICH, Prokopy Timofeyevich ZUBAREV, Pavel Petrovich BULANOV, Lev Grigorievich LEVIN, Dmitrv Dmitrievich PLETNEV, Ignaty Nikolayevich AZAOV, Venvamin Adamovich MAXIMOV, and Pyotr Petrovich KRYUCHOV on charges of treason to the country, espionage, committing acts of diversion, terrorism, wrecking, undermining the military power of the U.S.S.R. and of provoking a military attack of foreign states upon the U.S.S.R., i.e., of crimes covered by Articles 581a, 587, 588, 588, 589 and 5811 of the Criminal Code of the R.S.F.S.R.

... THE PRESIDENT: Accused Rakovsky, Khristian Georgievich, have you received a copy of the indictment?

RAKOVSKY: I have.

{p. 3} THE PRESIDENT: Accused Rakovsky, do you desire to have Counsel for Defence?

RAKOVSKY: No. ...

{p. 10} ... the German fascist, mainly military, circles, on the matter of jointly fighting the U.S.S.R., not only personally negotiated for support for the anti-Soviet conspiracy with DAITZ, ROSENBERG'S closest colleague in the foreign affairs department of the fascist party, but was kept informed of the meetings and negotiations between L. TROTSIY and HESS, NIEDERMEIER and Professor HAUSHOFER, with wllom L. TROTSY reached an agreement on the terms mentioned by PYATACOV at the trial of the Anti-Soviet Trotskyite Centre. The accused BESSONOV testified:

... As is evident from these terms ... the main emphasis in the underground work of the Trotskyites was placed on undermining, espionage, diversion and terrorist acts in the U.S.S.R." (Vol. XI, p. 106.)

The exstence of an agreement between L. TROTSlY and the Trotskyite organization in the U.S.S.R., on the one hand, and the fascist circles, on the other, and the carrying on in the U.S.S.R. of undermining defeatist activities on the instructions of the German intelligence service was admitted during the investigation by other accused in the present case.

However, the defeatist activities of the Trotskyite hirelings were not limited merely to connections with German fascism. In conjunction with other participants in the anti-Soviet conspiracy, in conformity with L. TROTSKY'S line, they orientated themselves also on another fascist aggressor - Japan.

The factual side of the treasonable connections of the anti-Soviet conspirators with the Japanese intelligence service is presented in the materials of the investigation in the following way.

As was testified by the accused KRESTINSKY, at a meeting he had with L. TROTSKY in Meran in October 1933, TROTSKY urged the necessity of establishing closer connections with the Japanese intelligence service.

KRESTINSKY conveyed TROTSKY'S instructions to PYATAKOV and other leaders of the conspiracy, who through the medium of the accused RAKOVSKY and other participants in the conspiracy entered into treasonable connections with representatives of Japan, the latter undertaking to render the conspiracy armed assistance in overthrowing the Soviet government, in exchange for which the conspirators promised to surrender the Soviet Maritime Region to Japan.

As has been established by the investigation, the accused RAKOVSKY, in view of his departure for Japan in the summer of 1934, received from PYATACOV instructions to the effect that it was

{p. 11} "... necessaly at the same time to increase activities abroad in the sense of establishing contact with governments hostile to the U.S.S.R. ... necessary to make efforts to take advantage of the visit to Tokyo and probably ---- will take the neccssary steps in this direction." (Vol. IV, p. 19 )

The accused RAKOVSKY carried out this instruction, and while inTokyo did indeed enter into criminal connections with ---- circles.

On this matter the accused RAKOVSKY testified as follows:

AII these circumstances had as their logical and practical consequence the fact that I ... when I was in Tokyo became a direct spy-agent of ----, being enlisted for this purpose, on the instructions of -----, by Mr. N, a most influential political figure in capitalist-feudal Japan and one of her biggest plutocrats. " (vol.IV, p.l86)

The aforementioned accused RAKOVSICY, speaking of the connections of enemy of the people L. TROTSKY with the British Intelligence Service, testified as follows:

"I knew that TROTSKY has been an aent of the Intelligence Service since the end of 1926. TROTSKY himself informed me of it." (Vol. IV, p. 363.)

The groups of bourgeois nationalists which belonged to the "bloc of Rights and Trotskyites" were also very closely connected with foreign intelligence services.

Thus, the accused GRINKO, who was an agent of the German and Polish intelligence services, in dealing with the anti-Soviet activities of the Ukrainian national-fascist organization of which he was one of the leaders, testified as follows:

"... In 1930, we in our organization discussed the necessity of coming to an agreement with Poland about obtaining military assistance for an insurrection in thc Ukraine against the Soviet government. As a result of these negotiations with Poland an agreement was reached and the Polish General Staff increased the quantity of arms and the number of diversionists and PETLIURA emissaries sent to the Ukraine." (Vol. IX, p. 18.)

And he said further:

"At the end of 1932 I, in connection with my nationalist activities, entered into treasonable connections with Mr. N. We met in my office, where Mr. N used to come to see me on business concerning a German concession.

{p. 758} THE PRESIDENT: Accused Rakovsky. {Rakovsky's final plea}

RAKOVSKY: Citizen President of the Court, Citizens Judges, yesterday I listened with great and rapt attention to the speech for the prosecution delivered by the Procurator of the Union, not because I intended to enter into a controversy with hin. I had no such intention. I confessed to all my crimes. What would it matter for the substance of the case if I should attempt to establish here before you the fact that I learned of many of the crimes, and of the most appalling crimes of the "bloc of Rights and Trotskyites," here in Court, and that it was here that I fi rst met some of the participants? It is of no import whatever. I am connected with the "bloc of Rights and Trotskyites,' of course within the limits defined by the Criminal Code, by that complicity, both political and juridical, which follows from the fact that I belonged to this bloc.

Like a galley-slave fettered to his galley, I am fettered to the "bloc of Rights and Trotskyites" with the heavy chain of my crimes. I participated in the underground counter-revolutionary Trotskyite organization up to the last moment, to the moment of my arrest.

{p. 759} I was an active member of the "block of Rights and Trotskyites." I committed the gravest crimes against the state. I am doubly a spy. In 1924 I established criminal connections with the British Intellience Service, and in 1934 I established criminal connections with the Japanese intelligence service. In 1927 I carried on negotiations with some of the Right capitalist circles in France, the object of these negotiations being in the long run also directed against the Soviet Union. In 1935 I took advantage of the fact that the French Minister Laval was on a visit in Moscow, accompanied by French journalists, in order to attempt in a conversation with one of them (I mentioned his name) to hinder, to disrupt, the Franco-Soviet rapprochement. Citizens Judges, I informed you about Trotsky's letter of July 1934, in which he wrote of the necessity of isolating Stalin internationally, that is to say, of strengthening, consolidating the capitalist encirclement around the Soviet Union. I belonged to the so-called "Fifth Column" of which the Procurator spoke yesterday, and I have deserved all those maledictions which are now sweeping from all corners of the Soviet land against us sitting here in the dock, maledictions of which the speech for the prosecution delivered by the Procurator, however severe and trenchant it was with regard to us, was perhaps but a weak reflection.

Citizens Judges, I share the State Prosecutor's regret that the enemy of the people, Trotsky, is not here in the dock alongside of us. The picture of our trial loses in completeness and depth because of the fact that the ataman of our gang is not present here. Nobody will suspect me of saying this from a selfish desire, from a base motive to shift on to Trotsky a part of that guiit and that responsibi lity which I myself bear. I am older than Trotsky both in years and in political career, and I probably have no less political experience than Trotsky. I regret his absence here for conciderations of a political nature. I am sorry, because Trotsky's absence in this dock means that no matter how his opportunlties may be limited, his activities wilI continue. and this presents a danger, even if a small one for the international labour movement. It is true that even beyond the Mexican meridian Trotsky will not escape that complete, final, shameful ignominy which we all are undergoing here.

This, in substance, covers everything relating to the legal, juridical aspect of my case, and I would have even foregone my last plea had I not considered it necessary, after what was said here by the Procurator, to try in my turn to point out the exceptional political importance of the present trial. But it seems to me that Citizen the Procurator dwelt on only one aspect of the case. Yes, he stressed the monstrosity of the crimes which we committed, but I should like to turn your attention,

{p. 760} Citizens Judges, to the fact that the monstrosity of this is also determined by the persons who committed these crimes. Who were those who committed espionage, wrecking, acts of diversion, terrorism, murder? They were committed not by candidates for criminal court records, people living in slums and cellars. The criminals sitting here had to be taken from the house of the government. And thus the question which arises and to which I, as one of those involved, feel the necessity to find an answer, is the question as to how former members of the Central Committee, former members of the government, former ambassadors have ended up here. What form of insanity brought them to this dock of political infamy? I think that this is all the more necessary since this question faces every one of us and every one is searching for an explanation. I shall mention one explanation which is widely current. After all, this is not the first trial. I remember how this question was answered in connection with the other trials. People are satisfied with the trite and shallow bourgeois explanation, according to which all revolutions finish by devouring their own children. The October Revolution, they say, did not escape this general law of historical fatalism.

It is a ridiculous, groundless analogy. Bourgeois revolutions did indeed finish - excuse me if I cite here some theoretical arguments which, however, are of significance for the present moment - bourgeois revolutions did indeed finish by devouring their own children, because after they had triumphed they had to suppress their allies from among the people, their revolutionary allies of the Left.

But the proletarian revolution, the revolution of the class which is revolutionary to the end, when it applies what Marx called "plebeian methods of retaliation, " it applies them not to the advanced elements, it applies them to those who stand in the way of this revolution, or to those who, as ourselves, were with this revolution, marched along with it for a certain time, and then stabbed it in the back.

And I, an active Trotskyite, a very close personal friend of Trotsky (the Procurator has established that our friendship was of 34 years' duration), a man who after many had returned (true, with duplicity) into the Party, continued for many more years to carry on an open struggle against the Party leadership. I want to answer this question. Permit me to share with you my thoughts. on this subject.

Citizens Judges, why indeed did it happen that I turned against my Party and in the end sank to the status of a criminal? What did we Trotskyites represent in the Party? We were what is known as an alien body in the living Party organism. Trotsky joined the Bolshevik Party only a few months before the October

{p. 761} Revolution, his Ideology took shape in the fight against Bolshevism. I joined the Party at the end of 1917, after I had belonged for more than a quarter of a century to the Second International, which developed under entirely specific conditions, under the conditions of peaceful development of capitalism, and, although I belonged to its Left wing, I was permeated by its opportunism. If you trace back the history of other Trotskyites, if I take Radek, Pyatakov Preobrazhensky as examples, you will find that both before the October Revolution and after the October Revolution every one of them as guilty of a number of serious deviations.

And it must be said that from the very first moment we Trotskyites adopted the attitude of antagonists of the Party leadership. From the very first moment. Brest-Litovsk. I shall not refer here to the testimony (you know it) which clarifies Trotsky's role during thc period of the Brest-Litovsk negotiations. The discussion about the trade unions. What was that? It was a trial of forces. The accused Zelensky mentioned facts here which will perhaps reveal that there was in general another attempt there, only, as far as remember, all the persons whom he mentioned did not belong to the Trotskyite faction, but to the so-called D. C. faction, the faction of Democratic Centralism. We suffered defeat and immediately adopted an orientation toward foreign states. It is sufficient just to remind you of the fact which was here established. We suffered defeat in 1921 in the discussion on the trade unions. The Party in its striving to consolidate its internal unity removed a number of Trotskyites from the Central Committee.

In 1921 Trotsky already gave his first instruction about establishing criminal connections with the German intelligence service. In 1926 came the second instruction. The first instruction was given to Krestinsky, the second to Rosengoltz. At the end of 1924 a recruiting aent of the intellience service called on me; I could have thrown him down the stairs, because he resorted to blackmail. But when he said: "Do not forget that we obtained the agrement for you because we learnt that you were a Trotskyite, " this touched the Trotskyite strain in me. I gave no answer at the time, I talked it over with Trotsky. We knew the position we were in. I had been removed from the Ukraine, some had been removed from the Central Committee, Smirnov had been removed from the Siberian Revolutionary Committee, Radek and Pyatakov were also at loose end, and Trotsky was saying that in the very near future, within the next few days, he would have to quit the Revolutionary Committee, unless he wanted to be ousted from it with a bang.

I am arraying all these facts so that the picture may become clear. In 1926 we already established connections with the foreign intelligence service. In 1927 it became apparent that we were suffering defeat, and that it would be a defeat after which no manoeuvre

{p. 762} would succeed, because before that defeat the Zinovievite-Trotskyite opposition stood at attention before the Party and remained in the Party while continuing to work against the Party; we knew that at the Fifteenth Congress of the Party, at the very latest, we would be expelled, if not all of us, at any rate Trotsky. Now we had to pass on to work in secret. After that I left for France. In August and September I carried on negotiations about uniting the opposition and about what we could obtain from certain French circles in order to gain victory.

I shall not relate the history of Trotskyism, it is well known. I only want to speak about the formation of the "bloc of Rights and Trotskyites. " The formation of the "bloc of Rights and Trotskyites " was, if we may put it that way, "a marriage of convenience, " each party contributing its dowery. We Trotskyites contributed our connections with foreign intelligence services, the Rights contributed their cadres, their connections with the nationalist, Menshevik, Socialist-Revolutionary and other elements, their connections with the kulaks. Of course, in addition to this fixed capital of ours, each could contribute something else. We did not hesitate before perfidy, before deceit, treason, bribery, murder by means of poison or the revolver instead of the traditional dagger.

I shall not speak of any ideology of this bloc. You heard here the platform of my fellow-accused in this trial, N. I. Bukharin. This, of course, represents restoration of capitalist relations in two leaps, through opening the sluices for free trade with abroad, through the return of the kulaks, through the liquidation of the collective farms, through opening the doors wide for concession capital. We calculated that we would achieve complete the triumph of capitalism in an extremely short period of time.

Ours was, of course, a counter-revolutionary ideology. We wanted to rely for support on the elements which had already been doomed by the Five-Year Plans, the elements which had been swept away, cast out. Of course there is nothing surprising in the fact that these old ruins came down with a crash and we found ourselves buried under the debris. I think that this is not enough. In my opinion, there is no precedent of politically minded people, people who had a definite political past, experience, and so forth, displaying such naivete, such self-delusion, such illusions as those which held sway over them. Yes, it was raving, real raving, the ravings of a madman to think that way, but we did think that way. We thought that with our insignificant forces, not only without any base of support, but with the working class against us, with the Party against us - we thought that we could achieve some results. These were ravings, calculating on some kind of foreign assistance. Ravings in what sense? This foreign assistance would utilize us and then throw us overboard. From a political force, we became a tool.

{p. 763} Ravings in every respect. Our misfortune was that we; occupied responsible posts, that power had made us dizzy. We were blinded by that passion, by that ambition for power. This cannot be explained by "ideology'' alone. These two factors, taken together and acting in combination, brought us to the dock.

We considered ourselves to be people sent by providence, we consoled ourselves with the thought that we would be summoned, that we were needed. This is what both the Trotskyites and the Rights said. We did not notice that the entire development of the Soviet Union swept over us, that the peaceful revolution which transformed our countryside swept over us, that this immense growth of the cultural and political level of the masses of the people and the creation of new cadres of politically trained people from among the Stakhanovites swept over us. All this swept over us, unnoticed by us.

The soboring moment had to come. Perhaps I will somewhat contradict what the Procurator said, but I am of the opinion that the "bloc of Rights and Trotskyites" was doomed to disintegration. Of course, this does not absolve the bloc of the responsibility for the crimes which were committed.

There was no political future whatever in store for us. For many of us the moment of sobering had not arrived, because it began only after we had been arrested.

Citizens Judges, I told everything that I committed, without concealing or holding back a single fact. Both during the Court investigation, during the preliminary investigation, and during the trial (I think I will not be mistaken if I say so) I was not found guilty of a single contradiction or of concealing any fact.

I think that this proves that I revealed myself before you fully and entirely, that I stand fully and entirely exposed.

I wish to make one appeal to you, an appeal which would never have escaped my lips if this were a different court. But I make this appeal to you because I see in your persons the Soviet Court, the proletarian Court. It is an appeal for mercy. Yesterday the State Prosecutor made this task in a certain sense easier for me, inasmuch as he did not demand the supreme penalty for me. But I must say that in the gradation of the minimum and maximum which the citizen Procurator menttioned here, there is a certain limit which exceeds the limits of my age. I want to mention this only: that, in applying the appropriate articles of the law to me, you may consider this circumstance and form your decision in accordance, so to speak, with the physiological limitations of the accused who stands before you.

Citizens Judges, from my young days I honestly, truthfully and devotedly performed my duty as a soldier of the cause of the emancipation of labour. After this bright period a dark period set in,

{p. 764} the period of my criminal deeds, of treason to the fatherland, a series of dark crimes which I briefly summed up before you today. I told you all I knew, I told everything, I concealed nothing, I held back nothing, I repent deeply and sincerely, and I ask you to give me the opportunity to redeem even if an insignificant part of my guilt, even by the most modest work, no matter under what circumstances. I have finished.

THE PRESIDENT: The accused Rosengoltz may make his last plea.

{end}

(6) On Trotsky's second wife, Natalya Sedova

http://www.acts1711.com/red_symphony.htm

As far as Trotsky's ties to the world financial elite are concerned, they were well-known long before the publication of The Red Symphony. In 1919 the French government received from its informer in Washington a detailed report (1618-6 No. 912), where "Red Leon's" New York banker-sponsors were listed. It was noted that Trotsky established his connections with the financiers after his marriage to the daughter of banker Abram Zhivotovsky. One of the main financiers of the Revolution Felix Warburg compromised himself to such a degree by his connections with the Bolsheviks that it was decided to remove him from the US Federal Reserve Board, in order to "cover the traces" of American bankers' ties to the Russian Revolution. {endquote}

Dmitri Volkogonov deals with Trotsky's time in New York in 1917 on pp. 64-5 of his biography Trotsky: the Eternal Revolutionary.

He says that Trotsky spent 2 months there giving lectures & meeting other revolutionaries. Then he returned to Russia.

His wife (2nd, Natalya Sedova) went to New York with him on the boat. (p. 63).

At first, I thought that the Red Symphony claim was that Trotsky married a Warburg daughter in New York in 1917. But it is Natalya Sedova who it refers to - the claim being that she was "associated with" Abram Zhivotovsky. Trotsky married her about 1904 (whether common-law or formal, is not known).

The surname "Zhivotovsky" does not show up in the index of Volkogonov's book. Natalya Sedova left her husband, for Trotsky; Trotsky's children with her were given the surname "Sedov". Natalya may have kept her first husband's name. Alternatively, she may have kept her mother's surname, just as Trotsky's children did.

There is only one reference to Natalya in Red Symphony, and it does not say that she is the daughter of Zhivotovsky, although that is one of the interpretations.

It reads,

<Sedova. Do you know who she is? She is associated with Zhivotovsky, linked with the bankers Warburg, partners and relatives of Jacob Schiff, i.e. of that financial group which, as I had said, had also financed the revolution of 1905>.

The claim, thus put, is worth investigating.

(7) Rakovsky's credibility at the Moscow Trials

From internet searches, I found that after Trotsky's expulsion, Rakovsky was his chief representative in Russia, although he always remained an independent thinker. In searches, look for C. G. Rakovsky, Christian Ravoksky, and Khristian Rakovsky.

Later, after the rise of Hitler, Rakovsky endorsed Stalin as the lesser evil; Trotsky then broke with him. I found this information on a Trotskyist website.

Although witnesses at the Moscow Trials would have been subject to torture, this break between Trotsky & Rakovsky gives added credibility to Rakovsky's evidence.

The official English transcript of the Moscow Trials, dealing with Rakovsky, contains an anti-Trotskyist line, but says nothing of the Illuminati.

But Red Symphony purports to be raw data, an interrogation in French - so that Russians present would not understand - and in which the interrogator wants Rakovsky to tell much more than could be disclosed later at the Trial, and in official documents.

In it, Rakovsky persists in an anti-Stalin line, saying that what passes for "Communism" under Stalin is really Bonapartism, and that he - Rakovsky - stands for Socialism instead (this makes it sound genuine to me). But, he says, Sedova's marriage wrought a tie between Wall Street and Trotsky. Lenin and the other Jewish Bolsheviks did not know about it, but Lenin's wife did.

It says that the rise of Stalin wrecked the Wall Street plan to control and use Communism, via Trotsky. So they helped fund Hitler's rise to power - not that they controlled Hitler - partly because he talked of attacking the USSR, and partly because War creates opportunities for the Revolution.

According to Rakovsky, their message for Stalin was that he should divide Poland with Hitler. If he did so, the West would attack Germany only. If he did not, they would let Germany attack the USSR, without coming to its aid.

(8) Illuminatus and the Illuminoids - "Rowan Berkeley" on Red Symphony

Date: Sun, 9 May 2004 21:15:50 +0100 From: "Rowan Berkeley" <[email protected]>

> You take an equally hard line on Makow, > Israel Shamir and Barry Chamish ... > Do you accept that Mordecai Vanunu is > genuine, or does he get caught up in > your "fakery" net too? Aren't 18 years > in jail (10 in solitary confinement) > enough evidence?

... I hope I have never suggested or implied that Mordecai Vanunu was some sort of plant. As for Barry Chamish and Henry Makow, though, I stick to my view, which is that they have a discernable agenda, namely to minimise the apparent Jewish domination of today's global elite, and to argue by means of whatever patter suits their respective audiences that the masters of the elite are not Jews. The range of substitute evil elites which has been created by the Illuminoid disinformational chorus is quite stunning, really, when you add it up : Sabbatians, Frankists, Satanists, Nazis, Freemasons, British Titled Thugs and Monarchs, the European Black Nobility, the Jesuits, the Vatican, the Merovingians, Lizards from Eta Reticuli ... let the inner circle be composed of anything other than Jews, is the golden rule, and you will be allowed to rant to your heart's content. In Barry's case, this is achieved by means of a highly inventive linguistic shell game, which progressively defines Sabbatians and Frankists as bad Jews, then as non-Jews, and finally as anti-Jews, so that the religious and ethnic elements in the definitions become hopelessly mixed up. He learned this trick, ironically, from ultra-Orthodox Rabbis who originally invented it to delegitimise Labour Zionists for being too preoccupied with profane nationalism, but have now turned it round so as to delegitimise Labour Zionists for not being preoccupied enough with profane nationalism, which therefore has to be protected by religious Zionist fanatics of the Kachist sort. For an even more crass example of Zionist propaganda masquerading as anti-NWO radicalism, see: http://pushhamburger.com

A bit of Googling has indicated that the Spanish text "Sinfonia en Rojo Major", produced by Editorial E.R.S.A. under the well-known publisher Senor Don Mauricio Carlavilla, etc etc, does after all exist, albeit untranslated. However, since this gentleman is the publisher of George Knupffer's own works in Spanish translation, it is impossible to determine who really is responsible for the book - Landowsky, Carlavilla, the 'Spanish volunteer' ("This is the result of a painstaking translation of several copybooks found on the body of Dr. Landowsky in a hut on the Petrograd front by a Spanish volunteer"), or Knupffer himself. I think I will stick with Anthony Sutton {sutton.html}, actually, though I do enjoy the dialectical elegance of "Red Symphony" and I am only indulging in sour grapes about it because I have wasted money trying to get the full English version, which definitely doesn't exist yet. There is a job here for a translator, if they can find a copy of the Spanish edition.

{end}

But Henry Makow is one of those who argue that Red Symphony is genuine, and important for understanding the continuance of Communism post-Soviet Union, via the Feminist, Gay, and other "minority" movements.

Makow put the "Illuminati Defector" material on his website, which claims that the conspiracy is 'Aryan' http://www.savethemales.ca/141002.html, but later agreed with me that it writes out the Jewish role. It's possible that the defector is genuine, but unaware that she's in the lower ranks, and is deceived herself.

(9) Trotsky in Norway, accused of co-operating with the Gestapo

Trotsky explicitly promoted Radical Feminism, Youth Rebellion, Communal Childrearing and the Destruction of the Family, in his book The Revolution Betrayed.

It was written in 1936, when Trotsky was living in Norway, and was first published in 1937. The English translation is by Max Eastman.

How do you like your Trotsky - hot or cold?

The Revolution Betrayed is hot - a fiery manifesto, and the author comes across as a fearful warrior wreaking social havoc; one is glad that he was contained.

Yet his account of his time in Norway is cold - it reads like a traveller's diary, and I cannot help feeling sympathy for him.

Trotsky in Norway: http://www.marxists.org/archive/trotsky/works/1936/1936-nor.htm.

In The Revolution Betrayed, Trotsky mentions Rakovsky as a close ally:

{p. 86} Chapter 5 THE SOVIET THERMIDOR http://www.marxists.org/archive/trotsky/works/1936-rev/ch05.htm

{p. 101} Christian Rakovsky, former president of the soviet of People's Commissars of the Ukraine, and later Soviet Ambassador in London and Paris, sent to his friends in 1928, when already in exile, a brief inquiry into the Soviet bureaucracy, which we have quoted above several times, for it still remains the best that has been written on this subject. ...

It is true that Rakovsky himself, broken by the bureaucratic repressions, subsequently repudiated his own critical judgments. But the 70-year-old Galileo too, caught in the vise of the Holy Inquisition, found himself compelled to repudiate the system of CopernicusÑwhich did not prevent the earth from continuing to revolve around the sun. We do not believe in the recantation of the 60-year-old Rakovsky, for he himself has more than once made a withering analysis of such recantations.

{endquote}

Rakovsky features prominently in Red Symphony, as a prisoner at the Moscow Trials - which were under way when Trotsky was in Norway (after writing The Revolution Betrayed). According to Red Symphony, Rakovsky remained a Trotskyist, but confessed that High Finance was behind Trotsky, through his wife Natalya Sedova, and that the powers thus promoting Trotsky, having lost control of the Soviet Union to Stalin, would back Hitler, in order to destroy the wrong kind of Communism Stalin was creating.

Could this be why, just before Trotsky left Norway, the Soviet Government accused him of co-operating with the Gestapo?

Trotsky expresses his astonishment at this charge. Trotsky in Norway: http://www.marxists.org/archive/trotsky/works/1936/1936-nor.htm.

{end}

(10) Trotsky calls Stalin a Bonapartist

In the paragraphs below, from The Revolution Betrayed, Trotsky calls Stalin a Bonapartist, likening him to Napoleon I and Napoleon III. But he also likens him to Hitler, saying that all of them were defeaters of the democratic forces. Trotsky never admits the covert Jewish leadership of those "democratic" forces.

Contrary to Trotsky's position, what Napoleon I, Napoleon II, and Stalin have in common is that they defeated Jewish and/or Freemasonic revolutionary movements from within, yet carried the revolution forward; Hitler did the same from the outside.

Some may object over the Freemasonry claim. But Trotsky himself agreed, in his autobiography, that the French Revolution had been launched by Freemasons or Illuminiati. He studied this topic when in Odessa prison.

The hardback edition is My Life: The Rise and Fall of a Dictator (Thornton Butterworth Limited, London 1930); the paperback edition is My Life (Penguin, Harmondsworth, 1975).

{quote} {hbk p. 106, pbk p. 124} It was during that period that I became interested in freemasonry. ... {hbk p. 107} In the eighteenth century freemasonry became expressive of a militant policy of enlightenment, as in the case of the Illuminati, who were the forerunners of the revolution; on its left it culminated in the Carbonari. Freemasons counted among their members both Louis XVI and the Dr. Guillotin who invented the guillotine. In southern Germany freemasonry assumed an openly revolutionary character, whereas at the court of Catherine the Great it was a masquerade reflecting the {pbk p. 125} aristocratic and bureaucratic hierarchy. A freemason Novikov was exiled to Siberia by a freemason Empress. ...

{hbk p. 108, pbk p. 126} I discontinued my work on freemasonry to take up the study of Marxian economics. ... The work on freemasonry acted as a sort of test for these hypotheses. ... I think this influenced the whole course of my intellectual develop- {p. 127} ment. {endquote}

{Stalin resembles Napoleon I}

{p. 186} Chapter VIII FOREIGN POLICY AND THE ARMY

http://www.marxists.org/archive/trotsky/works/1936-rev/ch08.htm

{p. 197} Napoleon I, after radically abandoning the traditions of Jacobinism, donning the crown, and restoring the Catholic cult, remained nevertheless an object of hatred to the whole of ruling semi-feudal Europe, because he continued to defend the new property system created by the revolution. Until the monopoly of foreign trade is broken and the rights of capital restored, the Soviet Union, in spite of all the services of its ruling stratum, remains in the eyes of the bourgeoisie of the whole world an irreconcilable enemy, and German National Socialism a friend, if not today, at least of tomorrow. {endquote}

{Stalin also resembles Napoleon III}

http://www.marxists.org/archive/trotsky/works/1936-rev/ch11.htm

Chapter 11 WHITHER THE SOVIET UNION?

Bonapartism as a Regime of Crisis ...

{p. 277} Caesarism, or its bourgeois form, Bonapartism, enters the scene in those moments of history when the sharp struggle of two camps raises the state power, so to speak, above the nation, and guarantees it, in appearance, a complete independence of classes in reality, only the freedom necessary for a defense of the privileged. The Stalin

{p. 278} regime, rising above a politically atomized society, resting upon a police and officers' corps, and allowing of no control whatever, is obviously a variation of Bonapartism - a Bonapartism of a new type not before seen in history.

Caesarism arose upon the basis of a slave society shaken by inward strife. Bonapartism is one of the political weapons of the capitalist regime in its critical period. Stalinism is a variety of the same system, but upon the basis of a workers' state torn by the antagonism between an organized and armed Soviet aristocracy and the unarmed toiling masses.

As history testifies, Bonapartism gets along admirably with a universal, and even a secret, ballot. The democratic ritual of Bonapartism is the plebiscite. From time to time, the question is presented to the citizens: for or against the leader? And the voter feels the barrel of a revolver between his shoulders. Since the time of Napoleon III, who now seems a provincial dilettante, this technique has received an extraordinary development. The new Soviet constitution which establishes Bonapartism on a plebiscite basis is the veritable crown of the system. {endquote}

{Stalin resembles Hitler}

In the last analysis, Soviet Bonapartism owes its birth to the belatedness of the world revolution. But in the capitalist countries the same cause gave rise to fascism. We thus arrive at the conclusion, unexpected at first glance, but in reality inevitable, that the crushing of Soviet democracy by an all-powerful bureaucracy and the extermination of bourgeois democracy by fascism were produced by one and the same cause: the dilatoriness of the world proletariat in solving the problems set for it by history. Stalinism and fascism, in spite of a deep difference in social foundations, are symmetrical phenomena. In many of their features they show a deadly similarity. A victorious revolutionary movement in Europe would im-

{p. 279} mediately shake not only fascism, but Soviet Bonapartism. In turning its back to the international revolution, the Stalinist bureaucracy was, from its own point of view, right. It was merely obeying the voice of self-preservation. {endquote}

{end}

(11) A Dating Anomaly?

11.1 - from Patrick S. McNally:

Date: Thu, 11 May 2006 21:57:34 -0400 From: [email protected]

... As for the alleged "Rakovsky interview" which appears in "Red Symphony," that, at least in its present form, is clearly a fake. The World Bank was formed out of the Bretton Woods conference of 1944. Christian Rakovsky himself died in 1941 and his trial occurred in 1938. There is no way that the real Rakovsky could have made a comment such as 'I think I shall not be wrong if I tell you that not one of "Them" is a person who occupies a political position or a position in the World Bank.' This comment was obviously written as bait for a paleo-conservative audience of the 1950s, many of whom liked to charge that the World Bank and any other internationally functioning organizations were 'Communist.' Whether that means that the actual script was written by a paleo-conservative of the 1950s or by someone else with an altogether different motive, who really knows? But it certainly wouldn't have been the authentic Rakovsky making such a comment about the World Bank 6 years before the Bretton Woods conference.

Patrick S. McNally

11.2 - from César Martínez Feijoo:

From: César Martínez Feijoo <[email protected]> Date: 02.12.2008 01:07 AM

Subject: Anachronisms in Red Symphony

Hello:

Reading your introduction to "Red Symphony", I see you state that there are two anachronisms in the interrogation to Rakovski, one of them regarding the mention of the World Bank in 1938.

I´m Spaniard and I own a copy of the original version of the book first published in Spanish language in 1950. The problem comes from the translation into English from Spanish. There is no mention to the World Bank in the book. The exact phrase in Spanish is: "No creo equivocarle si le digo que «Ellos» no son ninguno de los hombres que aparecen ocupando cargos en la política o en la Banca mundial". To say World Bank (the institution) in Spanish should be "Banco Mundial", but in the book uses the word "Banca" which is a generic term to name Banks in general. I think a much better translation into English would be: "who occupies a political position or a position in world banks", referring to great world international banks in general.

11.3 - from César Martínez Feijoo:

Anachronisms in Red Symphony

From: César Martínez Feijoo <[email protected]> Date: 03.12.2008 12:38 AM

Anachronisms in Red Symphony

Yes, the original spanish version of the book mentions the "Commonwealth" referring to the British Empire. I have other books written by Carlavilla speaking about other international subjects of the time. I´ll search for other referencies of Carlavilla to the British Empire, and I´ll see if I find anything interesting on this subject, and I´ll let you know. César

11.4 - from César Martínez Feijoo:

From: César Martínez Feijoo <[email protected]> Date: 03.12.2008 07:52 AM Subject: Commonwealth anachronism

Hello again Peter. I´ve been searching for books naming The British Empire as The British Commonwealth written before January 1938 when Rakovski´s interrogation took place. I´ve found many; it seems to be a very common denomination before that year, so I think in this case there´s no anachronism either.

Here are a few examples:

History of the Commonwealth Bailey and Kent Charles Scribner´s Sons, NY ­ 1935

A short history of the British Commonwealth Muir, Ramsay George Philip & Son ­ 1922

History of England and The British Commonwealth Larson, Laurence M. Henry Holt And Co. ­ 1924

The British Empire-Commonwealth: A Study in Political Evolution Trotter, Reginald George Henry Holt, NY ­ 1932

Empire to Commonwealth: Thirty years of British Imperial History Walter Phelps Hall H. Holt and Company ­ 1928

A Short History of British Expansion; the Modern Empire and Commonwealth Williamson, James A. London MacMillan ­ 1934

Best regards, César

{end}

(12) Rakovsky's role in the Left Opposition

http://www.marxists.org/archive/rakovsky/biog/biog5.htm Gus Fagan

Biographical Introduction to Christian

{part 5} Rakovsky Opposition and Exile: The Final Years

... In 1929 the repression against the opposition increased. There was no longer the free flow of mail as in 1928, and most of Rakovsky's letters and documents were seized by the GPU. With the deportation of Trotsky Rakovsky was now the acknowledged leader of the opposition inside the Soviet Union. ...

In July 1929 Radek, Smilga and Preobrazhensky announced that they had broken "ideologically and organizationally with Trotsky. When this happened Rakovsky wrote a declaration in the name of the left opposition which was signed also by Kossior and Okudzhava. He collected five hundred signatures for this declaration in the exile community, and Trotsky published it in the Bulletin of the Opposition with an open letter approving it. [91] The declaration of August 1929 was attacked by the leftists in the opposition as capitulationist. In the declaration Rakovsky wrote that the class struggle and the danger from the right "have in part swept away those barriers which have separated the Bolshevik-leninist opposition from the party. He appealed to the Central Committee to "make it easy for us to return to the party", and he repudiated "factional means of struggle". However, he demanded also the right of the opposition to defend its views within the party and that party democracy "be implemented in its entirety", with the election of all officials and the possibility of removing them. The declaration also reaffirms that "the complete organization of socialist production is possible only on an international scale". Finally, the declaration demands that Trotsky be brought back from exile.

The response of the party to the August 1929 declaration was to step up the repression. ...

In April 1930 Rakovsky wrote another declaration addressed, as usual, to the Central Committee and signed also by V. Kossior, N. Muralov and V. Kasparova. In this 1930 declaration he affirms once more his rejection of "the harmful theory that it is possible to build socialism in one country". ...

The danger now, said Rakovsky, was that a failure of the ultra-left adventure of forced collectivization could open the door to the threat of agrarian capitalism. Although he knew that the demands of the decimated and defeated opposition would have no effect on the bureaucratic apparatus, he pointed out, as if to a future generation, the fundamental and pressing need for the construction of a genuine workers' democracy. "Without party and workers' democracy, all corrections will inevitably become a distortion. Only the revolutionary control of the masses is capable of keeping the apparatus under its authority." In a set of demands addressed to the party which, he said, did not constitute any "new programme" but was the "old programme tested in battle" of the Bolshevik Party, he called for the following: free discussion and free elections in the Party based on a secret vote; a drastic reduction in the apparatus of the Party, Unions and Soviets; abolition of the post of General Secretary; the abolition of Article 58, the return of L.D. Trotsky and the release of all oppositionists; the publication of Lenin's Testament and all opposition documents; restoration of the free activity of trade unions; an end to forced collectivization and the creation of poor peasant unions; aid to state farms and maintenance of the tempo of industrialization. Trotsky wrote an introduction to the declaration when he published it in the Bulletin of the Opposition. "In spite of terseness of formulation", he wrote, "the document presents a clear evaluation of the economic and political processes, calling by their right name the dangers that are approaching." [97]

From 1930 a wall of silence surrounds Rakovsky. From his declaration at his trial in 1938 we know that in July 1932 he received permission to travel to Lake Shirlo for treatment. At the end of 1932 word reached the Trotsky household that Rakovsky had attempted to escape from the Soviet Union, had been captured and wounded. In March 1933 it was officially announed that he had been deported to an even more remote area, in the province of Yakutsk in Central Asia. Nothing more was heard from Rakovsky until Izvestia, on 23 February 1934, published a telegram from him, addressed to the Central Committee, which said: "Confronted with the rise of international reaction, directed in the last analysis against the revolution of October, my old disagreements with the party have lost their significance. I consider it the duty of a Bolshevik Communist to submit completely and without hesitation to the general line of the party."

The submission was a great blow to the left opposition and to Trotsky personally. "In the course of the years of his exile", wrote Trotsky in March 1934, "the old fighter was transformed from a human figure into a symbol, not only for the international left opposition, but also for wide strata of the working class in general." [98] There was comfort, however, in the fact that Rakovsky's declaration was not an ideological or political capitulation. He did not recant his past ideas, and made it clear that it was the threat of international reaction, the rise of fascism and the danger to the Soviet power, which made him give up his struggle and submit to discipline. "Without exaggerating by a hair's breadth," wrote Trotsky, "we can say that Stalin got Rakovsky with the help of Hitler." [99] This was also the opinion of Fischer, who again visited Rakovsky in Moscow in 1935 and recorded his impressions. "I visited him twice in his apartment in Moscow in 1935 and Madame Rakovsky served me tea as she had in Saratov. I also saw him three or four times in his office in the Commissariat of Health, where he had taken over the direction of all the Commissariat's scientific research institutions (he was a physician by profession). What I heard from him in Moscow confirmed what I had written in Madrid. Exile had not broken him. But he looked out on Europe from Barnaul and found no revolution ... Fascism creeps from country to country. The intensity of human distress is equalled only by the ferocity of political reaction ... Hitler brought him back to Stalin." [100]

Trotsky broke off all personal and political relations with him after the submission. ... In his personal diary on 25 March 1935, Trotsky wrote of what the break with Rakovsky had meant to him personally: "Rakovsky was virtually my last contact with the old revolutionary generation. After his capitulation there is nobody left. Even though my correspondence with Rakovsky stopped, for reasons of censorship, at the time of my deportation, nevertheless the image of Rakovsky has remained a symbolic link with my old comrades-in-arms. Now nobody remains. For a long time now I have not been able to satisfy my need to exchange ideas and discuss problems with someone else." [102] ...

On 1 December 1934 Sergei Kirov was assassinated. Kirov had replaced Zinoviev as head of the Leningrad organization and was the leader of the reconciliation tendency in the stalinist leadership. ...

In the second of the Moscow trials in January 1937 one of the defendants, Drobnis, named Rakovsky as being part of the "trotskyist centre" which arranged sabotage of the Soviet power and plotted with foreign capitalism and their intelligence services for its overthrow. Rakovsky, said Drobnis, "knew of Trotsky's instructions for sabotage and terrorism". When Trotsky heard of it he wrote: "Drobnis has named Rakovsky. The old fighter, broken by life, goes inescapably to meet his fate." [104] In Autumn 1937 Rakovsky was arrested. In a press release in October Trotsky described how the police had searched Rakovsky's house for eighteen hours, during which time the old oppositionist, aged sixty-seven, was not allowed food or rest. His wife tried to serve him tea but the GPU stopped this on the pretext that she might try to poison him. Imprisoned, Rakovsky held out for eight months against his interrogators before "confessing" that he was a spy.

Rakovsky's questioning and his statement to the court shed little light on the motives for confession, or the means used to extract it. According to the report of journalists he appeared haggard, with a long beard which made him barely recognizable. The answers were known in advance. The desired "confession" had been obtained. Those who didn't confess didn't even come to trial. But beneath the ritual façade of self-denunciation the spirit was not completely broken, and it sought avenues of resistance that were still open to it. Thus, for instance, Bukharin argued with Vyshinsky about philosophy. Rakovsky, the historian, tried to discuss history:

Vyshinsky: If the fascists seized power for you, in whose hands would the power be?

Rakovsky: History knows ...

Vyshinsky: No, you leave history alone. [105]

The court said he had been a capitalist before the revolution and a spy after it.

Vyshinsky: Hence it was not only your father who was a landlord, but you also were a landlord, an exploiter.

Rakovsky: Well, of course. I was an exploiter. The fact is, I lived on an income, and income, as is well known, accrues from surplus value.

Vyshinsky: Well, now. It was important for me to establish whence you received your income.

Rakovsky: But it is important for me to say what that income was spent for ...

Vyshinsky: This is a different matter. [106]

Everyone knew that Rakovsky had spent everything he had on the revolutionary movement in Rumania, Russia and elsewhere. Provoked enough to draw attention to this fact, he was instantly silenced. Time and time again we find here the affirmation of truth in the midst of denial. Here is one typical exchange between Rakovsky and the court:

Rakovsky: For eight months I denied everything and refused to testify.

Vyshinsky: Following the tactics and instructions of the trotskyites?

Rakovsky: In the application of the old revolutionary practices and the application of the counter-revolutionary practices.

Vyshinsky: What have you got to do with revolutionary practices? You have still some phraseology left, but that is another matter.

Rakovsky: But it cannot be denied that I once belonged to ...

Vyshinsky: But you were arrested not once upon a time, but now. [107]

In his final declaration to the court Rakovsky once again returned to his past: "Citizen judges, from my young days I honestly, truthfully and devotedly performed my duty as a soldier of the cause of the emancipation of labour. After this bright period a dark period set in, the period of my criminal deeds ..." [108]

Rakovsky was sentenced on 12 March 1938 to twenty years' imprisonment, a sentence that meant death for the old revolutionary. Elinor Lipper, who spent eleven years in Soviet prisons, records that Madame Rakovsky was in the Butyrka Prison in Moscow in 1937-8. "The wife of Soviet ambassador Rakovsky was a Rumanian, a white-haired sickly woman who suffered severe heart attacks every few weeks." [109] It is believed that Rakovsky lived in the camps for another three years and was shot on Stalin's orders when the Germans entered White Russia on 22 June 1941. Footnote 2*. Serebryakov capitulated in 1929, was re-admitted to the party in 1930, but was later condemned and executed after the second Moscow trial.

Notes 91. Trotsky's letter is published in Writings 1929, pp.325-30. 92. Trotsky, Writings 1930 (Pathfinder), p.146. Note on Blumkin in Writings 1934-35 (Pathfinder), p.339, note 145. 93. Bulleten Oppozitsii, no.11, 1930, p.31. 94. ibid., no.32, 1932, in Trotsky, Writings 1932 (Pathfinder), p.309. 95. Fischer, op. cit., p.293. 96. ibid. 97. Trotsky, Writings 1930-31 (Pathfinder), p.49. 98. Trotsky, Writings 1933-34 (Pathfinder), p.273. 99. ibid., p.277. 100. Fischer, op. cit., p.293-4. 101. Trotsky, Writings 1933-34, p.245. 102. Trotsky, Diary in Exile 1935 (London, 1958), p.53. 103. These details are given in B. Nikolaevsky in The letter of an old Bolshevik reproduced in his book, Power and the Soviet Elite London, 1966). 104. Trotsky, Writings 1936-37 (Pathfinder), p.142. 105. Court Proceedings, op. cit., p.311. 106. ibid., p.302. 107. ibid., p.312. 108. ibid., p.764. 109. E. Lipper, Eleven Years in Soviet Prison Camps (London, 1951), p.15. Last updated on 18.10.2002

(13) A missing word in the English translation

From: "The Proud Primate" <[email protected]> Date: Sat, 9 Apr 2011 19:13:41 -0400

Many thanks for your posting of this fascinating document, Red Symphony. ... As I was reading through it, I came upon what seemed to me to be an error in translation, in the following passage:

"But if things are in fact such that we accuse Capitalism of being imbued with continuous Capitalistic contradictions in the sphere of economics, then why should it necessarily suffer from them also in politics?"

It seemed to me that what Rakovsky was saying was, "why should it not necessarily suffer &c." So I did a Google of the original (at least the earliest original we have, that being the Spanish), Sinfonía En Rojo Mayor, at this URL, <>http://consciencia-verdad.blogspot.com/2009/04/sinfonia-en-rojo-mayor-la-lucha-por-el_27.html, and found that, sure enough, the negative was present in the Spanish sentence:

"R. Y siendo así, aquejado el Capitalismo de la contradicción permanente en lo económico, ¿por qué no la ha de padecer también en lo político?"

Indeed, even in the English, the sense of parallelism between the two spheres is underscored two sentences later, is it not?

"It would be absurd to assume fallibility in economics and simultaneously infallibility in {p. 15} politics...."

This is a very small difference, on the order of a "typo", something that inevitably creeps into works of large size, but one which may confuse the reader. You may wish to alter this section to reflect that difference. I hope this is helpful to you. Again, thank you for your important work, of which I have been entirely ignorant until now. This is indeed a blockbuster document. I am currently at that point in ready, some 20% finished, and eager to read on. Sincerely, John S. Carpenter

{end}

Red Symphony remains intriguing because of its advocacy of Convergence as a policy. This developed in detail many years later. Gorbachev, for example, was following that path.

Now that Stalinism has completely fallen, other variants of Communism - Trotskyist, New Left, the Frankfurt School, Postmodernism, George Soros & Maurice Strong's Green/"New Age" one - are making a comeback. They are all, broadly, in Trotsky's camp.

The Trots, even though "for the poor against the rich", are even more for "unifying the world". Under themselves, of course. That's why they published a book in favour of Free Trade: xTrots.html.

Convergence between Communism and Capitalism was supported by H. G. Wells: opensoc.html,

and by David Ben Gurion, when he predicted World Government by 1987: tmf.html,

as well as by Gorbachev - via his talk of a single "World Civilization": convergence.html.

In each case, they wanted to get rid of Stalinism in the USSR, and "Anti-Semitism" in the West.

Ben-Gurion, the first Prime Minister of Israel, invited in 1962 to predict what the world would be like in 25 years' time, wrote in LOOK magazine, Jan. 16, 1962:

"The image of the world in 1987 as traced in my imagination: the Cold War will be a thing of the past. Internal pressure of the constantly growing intelligensia in Russia for more freedom and the pressure of the masses for raising their living standards may lead to a gradual democratization of the Soviet Union. On the other hand, the increasing influence of the workers and farmers, and rising political importance of men of science, may transform the United States into a welfare state with a planned economy. Western and Eastern Europe will become a federation of autonomous states having a Socialist and democratic regime. With the exception of the USSR as a federated Eurasian state, all other continents will become united in a world alliance, at whose disposal will be an international police force. All armies will be abolished, and there will be no more wars. In Jerusalem, the United Nations (a truly United Nations) will build a shrine of the Prophets to serve the federated union of all continents; this will be the scene of the Supreme Court of Mankind, to settle all controversies among the federated continents, as prophesied by Isaiah. Higher education will be the right of every person in the world. A pill to prevent pregnanacy will slow down the explosive natural increase in China and India. And by 1987, the average life-span of man will reach 100 years."

Scroll down to see the text: bengur62.jpg.

Antony Sutton on Red Symphony and Hitler's Secret Backers: sutton.html.

To purchase Red Symphony second-hand via ABEbooks: http://dogbert.abebooks.com/abe/BookSearch?tn=red+symphony.

Des Griffin's book The Fourth Reich of the Rich contains a reprint of Red Symphony. You can purchase a new copy at http://www3.addall.com/.

To purchase a second-hand copy via Abebooks: http://dogbert.abebooks.com/abe/BookSearch?tn=fourth+reich+of+the+rich.

Seeing the real Trotsky: trotsky.html.

The early Soviet Union: after Lenin and Trotsky, but before Stalin's ascendancy: soviet-union-early.html.

The murder of Stalin, how and why: death-of-stalin.html.

Isaac Deutscher on Trotsky vs. Stalin: deutscher.html.

Back to the Zionism/Communism index: zioncom.html.

Write to me at contact.html.

 

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Le Cercle or Pinay Circle, or Cercle Pinay    J. Gordon Brown
Origins Le Cercle used be known as the Pinay Circle, or Cercle Pinay by its original French founders. Although the group was named after a French statesman who was prime minister from March to December 1952, the real organizer of this group was a person named Jean Violet, a close associate of Pinay since 1951 (1).

Jean Violet has a murky past to say the least. In French and later English literature, Violet is named as a pre-WWII member of the Comite Secret pour l'Action Revolutionnaire (CSAR), a secretive fascist group which, like Freemasonry, had its own initiation rites (2). Some authors have suggested that CSAR, popularly known at the time as the Cagoule, or "hooded ones", was one of the most important branches of the legendary Synarchist Movement of Empire and worked to undermine the French Republic in preparation for the coming Nazi invasion (3). Whatever truth can be found in this claim, it is known that Jean Violet was arrested after the war for having collaborated with the enemy. He was released however "on orders from above" (4), went to work as a lawyer in Paris, and decided to become a member of Opus Dei (or, possibly, he became a member first, which resulted in his release). In 1951, Violet came into contact with Antoine Pinay, a Catholic also said to have been in bed with Opus Dei, who asked him to solve a problem with a Geneva-based firm that had been sieged by the Nazis during WWII. As the story goes, Pinay was so impressed with the way Violet handled his assignment that he recommended him to French intelligence, the SDECE (5). Also, Violet soon managed to hook up with Opus Dei luminaries as Alfredo Sanchez Bella and Otto von Habsburg (6), who had founded the European Centre of Documentation and Information (CEDI) in 1949 (7). Habsburg was chairman for life of CEDI and later also of the Paneuropa Union. Sanchez Bella was the Spanish ambassador to Rome under Franco in the 1960s while his brother was head of Opus Dei in Spain (. Violet also became an associate of Father Yves-Marc Dubois, a senior member of Vatican intelligence and possibly its head (9).

CEDI was one of the first in a long line of hard-right, often aristocratic institutions part of the Vatican-Paneuropa network. One of these institutions, founded by Antoine Pinay and Jean Violet, became Cercle Pinay, and besides that it was set up "somewhere in the 1950s" (10), the exact date remains unknown. The claim that Cercle Pinay was put together in 1969 (11) is wrong and has probably been a mix-up with the Belgian Cercle des Nations, which was founded that year by a secretary general of CEDI (12). Violet was one of the few French members of this Cercle des Nations (13) that was part of the same Opusian Vatican-Paneuropa network. The crowd of Cercle des Nations has featured in a number of Belgian conspiracies and some were involved with the "Dutroux network" that allegedly didn't exist. Bit more about that later.

Like many others, Pinay and Violet understood that the basis for a stable united Europe would be a Franco-German reconciliation. Therefore they recruited in their Cercle the most important individuals that were working towards this aim.

From Germany they invited the long time chancellor and foreign minister Konrad Adenauer, and two of his closest associates, Franz Joseph Bach, who ran Adenauer's office; and Franz Joseph Strauss, the controversial hard-right political figure from Bavaria who was a defense minister in Adenauer's second cabinet.

Early Cercle members representing the Paneuropa Union, the European Coal and Steel Community, France, Germany and Italy. Andreotti was not a founding member; the others were.

Robert Schuman and Jean Monnet, in addition to Pinay, were recruited from France. Schuman had been French prime minister from 1947 to 1948 and French foreign minister from 1948 to 1953. Jean Monnet, as Planning Commissioner of the National Economic Council from 1945 to 1952, and appointed by De Gaulle, carried out essential work for the reconstruction of the French economy. He was connected to the highest financial and political circles in North America, the UK, and western Europe, and was one of the major players in the push for an integrated Europe in the aftermath of WWII. As founding vice-chairman of the Committee for European Economic Co-operation (CEEC), which oversaw the Marshall Plan aid, he was the most influential player in this organization. This short description doesn't even begin to describe the life of this extraordinary Frenchman, so lets take a more in depth look at him.

Pinay and especially Violet were the official founders of Le Cercle, with Habsburg, vice president of the Paneuropa Union under Coudenhove-Kalergi, acting as Violet's patron. These men initially brought together Schuman, Monnet, Adenauer and a number of other individuals. All of these men, except Monnet, were either members or sympathizers of Opus Dei. The financial empire of Pesenti, who has no known direct ties to Opus Dei, was funded by the Vatican Bank and he turned out to be Banco Ambrosiano's largest minority shareholder when it collapsed in 1982. Monnet, as the only one among these names, was connected to leading bankers in London and New York, and used to be secretary general of the League of Nations. N.b. Pesenti might not have been a founding member, but used to be a top level player in the 1960s, chairing meetings and inviting David Rockefeller. He later also financed some of the work of Violet and Crozier.

"Europe's founder" Jean Monnet Right before and after WWI Monnet hooked up with leading figures in the Anglo-American establishment. One of the first was Lord Kindersley, who during his life was a partner in Lazard Brothers, a chairman of the Hudson's Bay Company, and a director of the Bank of England. Kindersley's son is known to have become a Pilgrims Society executive (14).

Another very important person was Arthur Salter, whom he first met in 1914 (15). Salter and Monnet would become involved in setting up the Inter-Allied Maritime Transport Council, the Supreme Economic Council at Versailles, and the League of Nations. In 1931, Salter wrote 'The United States of Europe', which favored a federal Europe within the framework of the League of Nations. Probably not by coincidence, Monnet's post-WWII proposal for a political structure of a united Europe was almost exactly the same. Three years after writing 'The United States of Europe', Salter became a professor at Oxford and a fellow of All Souls College, Oxford, named by Quigley as the center of the Round Table Group. In fact, Quigley identified Salter as a member of the Milner Group (16), and it is known that Salter shared a few boards with Lord Astor, a prominent Pilgrims Society family, and the Viscount Cecil of Chelwood of that time, a member of the family that is said to have coordinated the Round Table group (and appears in both Le Cercle and the Pilgrims). Salter also became a member of the Privy Council in 1941.

Others Monnet became a close associate of were Sir Eric Drummond, the 16th Earl of Perth, who was a member of a very aristocratic family in Britain; John Foster Dulles; Douglas Dillon; a Lazard Brothers' banker whose sister-in-law was Lady Nancy Astor; and John J. McCloy. He also was a long time business associate of Elisha Walker (American International Corporation; Kuhn, Loeb & Co.; CFR), with whom he clandestinely tried to take over A. P. Giannini's Transamerica Corporation and its Bank of America network. It failed after a lawsuit in which Giannini vowed to fight the "Wall Street domination" on the board of his company. In February 1932, Walker and Monnet were ousted as chair and vice chair respectively (17).

He then went into business with the leaders of the Chinese Green Gang Triad, Tse-Ven Soong and Chiang Kai-shek. He took his assistant, David Drummond (the future 17th Lord Perth; from a catholic Hungarian family which emigrated to Scotland in the 11th century; two members of this family were among the eight original founders of the Order of the Thistle; raised by the Duke and Duchess of Norfolk, a very old catholic aristocratic family; later Privy Councillor; later chair of the Ditchley Foundation for 3 years; later representative of the Queen to the Vatican; became a member of the extremely elite Roxburghe Club, together with members of the Cecil, Cavendish, Howard (Dukes of Norfolk), Mellon, Rothschild, and Oppenheimer families), the son of Monnet's superior at the League of Nations, to China where he lived until 1936.

In 1935, when Monnet was still in Shanghai, he became a business partner of George Murnane in Monnet, Murnane & Co. Murnane was connected to the Wallenbergs in Sweden, the Bosch family in Germany, the Solvays and Boëls in Belgium, and John Foster Dulles, André Meyer, and the Rockefellers in the United States. He was considered among the most connected persons of his time (1. John Dulles of Sullivan & Cromwell provided the financial backing for the partnership. After Monnet got back to the United States, he was briefly investigated for tax evasion. Then, in 1938, Monnet, Murnane & Co. was briefly investigated by the FBI, who suspected it of having laundered Nazi money (19). Nothing came of this investigation, but the Nazi-cooperation of some of Monnet's close friends, like Douglas Dillon and John Dulles, or Murnane's earlier firm, Lee, Higginson & Co., is well documented (20).

When WWII broke out, Monnet was one of the most important individuals in contact with both the French resistance and the Churchill government. While in London at the time that France was overrun, Monnet proposed to General Charles de Gaulle, the leader of the French government in exile, the creation of a Franco-British Union; a plan to completely unite France and Britain. The Churchill government accepted, even a desperate de Gaulle accepted, but eventually the (supposedly Synarchist) opposition in France, headed by Marshall Petain, killed the plan. They saw it as an attempt of Britain to wrestle control over France. Petain subsequently became the leader of Vichy France.

After the war, Monnet was appointed by de Gaulle to reorganize the French economy. But Monnet also began to reorganize the whole of Europe.

Together with an equally mysterious Joseph Retinger (connected to both MI6 and the Vatican; founder of Bilderberg), who was raised by European nobility (21), Monnet organized the May 1948 Congress of Europe, which met under the auspices of the United Europe Movement in The Hague. Chairman was Winston Churchill, whose son-in-law, Duncan Sandys, worked closely with Joseph Retinger and CIA heads Allen Dulles and Bill Donovan. Later Cercle members as Robert Schuman and Konrad Adenauer were in attendance, just as Alcide de Gasperi and Paul Henri Spaak. The CIA would become the primary source of funding for the United European Movement in the following decades (22).

In 1949, with the support of Adenauer, Robert Schuman proposed the so called "Schuman Plan", which became the basis for the European Coal and Steel Community (ECSC). It was established in 1952 and is usually seen as the birth of the European Union. In reality, Monnet, who became the first chairman of the ECSC's High Authority, had entirely written the "Schuman Plan". And interestingly, even this might only partially be true, as Monnet's structure for Europe turned out to be a slightly adapted version of Arthur Salter's 1931 paper 'The United States of Europe', which originally advocated a federal Europe within the framework of the League of Nations (23). Both men worked high up in the League of Nations and had a close relationship to the leading Anglo-American families, as has already been discussed.

One year later, on 24 October 1950, the French prime minister René Pleven introduced his "Pleven Plan". As happened earlier with Schuman, who didn't support this latest proposal, this document too had been written entirely by Jean Monnet (although he might have discussed it with his friend Arthur Salter). It proposed the creation of the European Defence Community (EDC): a Paneuropean defense force. Eventually this proposal was defeated by the Gaullist nationalists in France, and Europe's defense forces remained part of the newly-established NATO, which was (and is) mostly international, instead of supranational.

After the failure of his European Defence Community (EDC), Monnet doubled his efforts and founded the very low-profile Action Committee for the United States of Europe (ACUSE). It brought together leading international members of governments and labour unions, mainly to discuss European economic integration. ACUSE, together with the US State Department, lobbied and pressured a great deal behind the scenes in the run up to the 1957 Treaty of Rome, which created the actual European Economic Community (EEC; "Economic" was dropped in '91). All of Monnet's most important associates in this process were members of the Pilgrims Society: David K.E. Bruce, the Dulles brothers, John J. McCloy, George Ball, C. Douglas Dillon, and president Eisenhower. Cercle member Konrad Adenauer was among the signers of the treaty, just as Paul Henri Spaak. Also, the founding vice president of the ACUSE was Max Kohnstramm, who became the initial 1973 European chairman of the Rockefeller-founded Trilateral Commission. Kohnstramm used to be private secretary to Queen Wilhelmina of the Netherlands. Antoine Pinay was another important member of ACUSE, the organization that Time Magazine dubbed a "European shadow government" in 1969 (24).

In 1961, Monnet managed to replace the OEEC, initially established to oversee the Marshall Plan, with the broader Organization for Economic Cooperation and Development (OECD) (25). The OECD since then has been one of the most influential institutions promoting globalization and free trade, today working in partnership with the World Bank, the IMF, and the World Trade Organization. Mainland European governors of the Atlantic Institute of International Affairs, which also was founded in 1961, have had a relatively strong presence in these institutions, especially in the OECD. Pilgrims Society members have been dominant in the other institutions while the Vatican-connected Paneuropa members have always played a minor role in the institutions above and tend to criticize the Anglo-American Liberal establishment.

Around the same time Monnet replaced the OEEC with the OECD, he met with Edward Heath (As Lord Privy Seal 1960-1963 responsible for the initial talks to bring Britain into the European Common Market; head Conservative party 1965-1975; Conservative prime minister UK 1970-1974; very committed to the EU; a close Sun Myung Moon associate) at the house of his good friend David Drummond, the 17th Lord Perth (26), a member of an old aristocratic family with very good connections to both the Vatican and the highest levels in British society, including the Rothschilds, Oppenheimers, Mellons, Cecils, and Howards (27). Lord Perth was a chairman of the Ditchley Foundation and his father was the initial secretary-general of the League of Nations while Monnet was his deputy. Heath became a member of Monnet's Action Committee and in 1973 he signed Britain into the European Economic Community. This only became possible after De Gaulle had ceased to be president of France.

Monnet was an early supporter of de Gaulle, as he was of the opinion that this legendary general was the only person who might be able to reunite the French people after WWII. However, in later years some friction developed between these two men. De Gaulle was a nationalist who supported a strong intergovernmental Europe, preferably with France being the major influence. Monnet, on the other hand, was a no holds barred supranationalist.

Franco-German rapprochement Jean Monnet clearly was among the most influential and secretive of the Cercle members that pushed for a united Europe. However, according to Brian Crozier, a former chairman of Le Cercle, Jean Violet himself also played an important behind the scenes role several years after the European Economic Community (EEC) had been founded:

"By far the dominant theme in de Gaulle's foreign policy (as Violet interpreted it) was Franco-German reconciliation. A genius at (non-violent) operations of influence, Violet played an historically key role between 1957 and 1961 in bringing about this rapprochement, which is the real core of the European Community. He had developed a close friendship with Antoine Pinay, who had served as French Premier in 1951 under the unstable Fourth Republic. At a lower level, a complementary role was played by his SDECE colleague Antoine Bonnemaison. Violet was the go-between in secret meetings between Pinay and the West German Chancellor, Konrad Adenauer, and his coalition partner Franz Josef Strauss. These paved the way for Charles de Gaulle's own encounters with Adenauer, which culminated in the Franco-German Treaty of January 1963. [Treaty of Elysée]" (2

The Treaty of Elysée is a relatively unknown agreement (for the average person) between France and Germany in which both countries agreed to consult with each other on important foreign policy and economic issues, ahead of time of general EEC meetings. It is the core of the often-discussed Franco-German alliance, which has had great influence on the European project ever since. Some say, too much.

The Elysée agreement was made at the time that de Gaulle first vetoed the accession of Britain into the European Economic Community (EEC). The decision was quietly backed by Adenauer. De Gaulle argued that Britain's economy was based on trade with its Commonwealth and did not have a large agricultural economy, like France and most other countries in mainland Europe. This, together with Britain's historical "special relationship" with the United States, convinced de Gaulle that Britain would never be fully committed to the interests of Europe (29). Of course, it's far from unreasonable to think that de Gaulle's primary reason was that he saw Britain and its ally the United States as a threat to France's influence within the European Union. A few years later de Gaulle also withdrew from NATO, expelled all Allied forces from France, and tried to get on good terms with the Soviet Union. In addition to the enemies he had made when he withdrew from Algeria, he now also angered people like Brian Crozier and his French intelligence associate Colonel Antoine Bonnemaison. Bonnemaison ran a Cercle-like operation (let's shorten it to Le Centre), of which Crozier had become a member (30). Members of the Centre had already labeled de Gaulle "the enemy" in 1965, and were looking for ways to evict him from office (31). Within four years they got what they wanted, although it's not known if they had any active involvement in ousting de Gaulle, besides spying on him. But they certainly had the connections to do that.

It would still be several years before the Opusian Jean Violet and Anglo-Saxon Brian Crozier would meet and join hands. Ironically, at this time, when Crozier was involved in spying on de Gaulle, Violet was carrying out de Gaulle's defense and foreign policy objectives, and possibly was the French president's most important intelligence agent. Even when Crozier was head of Le Cercle from 1980 to 1985, he did not know Jean Violet's full background:

"It was not until the spring of 1993 that I learned the details of Jean Violet's real secret service role when General de Gaulle was in power. A background document was given to me by one of Violet's ex-colleagues. Ironically, a few years before Gabriel Decazes and I started spying on de Gaulle, Violet was masterminding a Service Spécial to promote the General's objectives in defence and foreign policy.

The document began with a paragraph of wistful praise for Britain's remarkable achievements in intelligence and clandestine action. But France, too, offered a precedent: Louis XV had set up a special service known to the few who were aware of it as the Secret du Roi. This service reported directly to the King, bypassing the Foreign Ministry of the day.

Only two people were aware of de Gaulle's latter-day model: General Grossin, the then head of the SDECE, and a certain 'Monsieur X'. It required no great deductive powers to assume that Monsieur X had to be Maître Violet, but Jean refused to comment when I asked him. My other source, however, confirmed my supposition. No wonder, in retrospect, that Violet's shadowy role and apparently bottomless purse stirred resentful envy among his colleagues and poisoned Alexandre de Marenches's mind against Violet, whom he had never met." (32)

Violet saw Franco-German rapprochement as de Gaulle's most important foreign policy objective, but judging by his association with people who wanted Britain in the European Union as a "third pillar" it is doubtful he supported all of de Gaulle's later decisions. In 1980, Violet picked Crozier as his follow-up to the presidency/chairmanship of Le Cercle (33). Crozier had been recruited by the Frenchman nine years earlier, and introduced by a person who had been a close assistant to Cercle member Jean Monnet (who struggled for a long time to get Britain into the EEC).

"On 1 March 1971, a long interview I had given to Joseph Fromm appeared in US News and World Report. The theme was terrorist and Communist intentions. On reading this interview, a Frenchman named Maitre Jean Violet came to see me in my Piccadilly office, with an introduction from Francois Duchene, my former Economist colleague and Director of the International Institute for Strategic Studies.... Violet impressed me with the clarity and precision of his arguments - Gallic logic at its best - and with the breath of his intellectual grasp of world problems." (34)

Duchene had met Monnet in exactly the same way as Crozier met Violet. In 1950, Duchene wrote a series of articles for the Manchester Guardian which came to the attention of Jean Monnet. In response, Monnet invited Duchene to become one of his assistants in building a united Europe. Duchene followed Monnet when the latter became head of the European Coal and Steel Community (ECSC). He then followed Monnet to Paris and became an editor of the Economist. In 1958, Duchene became a director of Monnet's Action Committee for the United States of Europe (ACUSE), which struggled to get Britain in the EEC under the dictations of the Treaty of Rome. He remained on the board until 1963. During this time, he suffered a nervous breakdown for some unknown reason. In 1963, he went on to become leader writer for the Economist and from 1967 to 1969 he was a Ford Foundation fellow (a huge US intelligence-connected foundation). From 1969 to 1974 he was a director of the prestigious International Institute for Strategic Studies (IISS), a think tank on international affairs with directors linked to intelligence and the high financial circles. In 1974 or 1975, Duchene became the European deputy chairman of the Trilateral Commission, working under Max Kohnstramm, Monnet's partner at the Action Committee (35).

So, as can be concluded from the above text, during Duchene's time as a director of the IISS, he approached Brian Crozier on behalf of Jean Violet, and very likely on behalf of the Cercle in general, as Crozier mentioned that his involvement with the Cercle started that same year (36). Interestingly, Duchene not only introduced Violet as a person who worked for French intelligence, but also as a person who "represented a powerful consortium of French business interests." (37)

It seems there's no end to the interests Cercle-founder Jean Violet represented during his lifetime: the fascist CSAR group, Opus Dei, Paneuropa, the French government, French business, French intelligence, and even German intelligence, as former Nazi General Reinhard Gehlen recruited him at one point for his involvement with Le Cercle (3. Whereas Jean Violet is tightly locked into the Paneuropa-Vatican network, his associates Jean Monnet, Francois Duchene, Brian Crozier and several other (Duchene is not confirmed as a Cercle member) British Cercle members seem to be more connected to the Anglo-American interests.

Crozier's anti-communist propaganda network In the 1950s and early 1960s Crozier worked as a journalist and editor for the Sunday Times, the Economist, and the BBC. During this time he made his first intelligence contacts

Brian Crozier: "[Reagan] shared my view that Nel- son was more intelligent than his banker brother, David. He was critical of the role of David Rocke- feller's Chase Manhattan Bank in easing technology transfers to the Soviet Union. Reagan also men- tioned, with mild distaste, the role of the Trilateral Commission in sponsoring Jimmy Carter." (Free Agent, p. 182) and used them for scoops. When John Hay "Jock" Whitney was ambassador to Great Britain from 1957 to 1961, Crozier was invited to his inner circle (39). Whitney was a Rockefeller associate, a friend of the British royal family, a CIA associate, and a Pilgrims Society vice president until the day he died (40). A few years later, Crozier went to work for the IRD, doing studies (some prefer to call it "disseminate propaganda") on KGB subversion. He also started to work with the CIA, MI6, and the intelligence agencies of France, Germany, Holland, Belgium, Morocco, Iran, Argentina, Chile, and Taiwan. The CIA's Congress for Cultural Freedom (CCF) also approached him to reconstruct and commercialize their organization. Crozier, however, turned down this offer as he was too busy with his other undertakings. He later did a study for the CCF, investigating its South American network. Some time after that study, in 1965-1966, he reconstructed the CCFs Forum Service, turning it into Forum World Features (FWF). John Hay Whitney was the one who took over the financial burden of FWF from the CIA when it was commercialized. Another billionaire CIA associate, Richard Mellon Scaife, later took over funding of FWF from Whitney. Scaife also funded Crozier's Institute for the Study of Conflict (ISC), which he founded in 1970, and showed up at gatherings of the Foreign Affairs Research Institute, an anti-communist and anti-terrorist propaganda group headed by several British Cercle members, including Crozier (41). In his book 'Free Agent' Crozier summarized the purpose of his ISC:

"Throughout my period as Director, the Institute for the Study of Conflict was involved in exposing the fallacies of 'détente' and warning the West of the dangers inherent a policy of illusion." (42)

Crozier and associates rejected Kissinger's Détente, aimed at reducing tensions between the superpowers, because, this group claimed, the Soviets continued to infiltrate and significantly influence Western Labour and Green parties, trade unions, media, and intelligence agencies. Also, they were of the opinion that the initial post-WWII policy of Containment (the Truman doctrine) was flawed. Instead, they argued that the West not only should resist a further communist encroachment, but also that it had to liberate countries that had fallen under the control of the Soviet empire. Every piece of territory that the Soviets conquered had to be taken back.

A noble and intelligent idea you would think. Unfortunately, many people who headed this lobby from behind the scenes just happen to be so far to the right they could actually be labeled as fascists. And in between these left and right wing extremists you had the Rockefeller clique, seemingly with their own agenda, encouraging technology to be sold to the Soviets (43). Even Crozier and some of his associates criticized that, probably never entertaining the idea that these people might know a thing or two they didn't (44).

In his book Crozier claims that the people who exposed his Forum World Services, The 61, and his Cercle were mostly manipulated or working for the KGB. He also presents information in such a way that will lead you to conclude that people like Mohammed Mossadeq and Harold Wilson were KGB paws, and that Pope John Paul I & II were both targeted by the KGB for assassination (only John Paul I died of that, allegedly). The KGB is basically behind everything. Crozier even repeated a 1978 claim by Time Magazine that the most effective KGB propaganda was that of discrediting the CIA (45). He also likes to state that "neo-colonialism" was a term invented by the Soviets, etc. Many of his accusations are based on statements from anonymous intelligence officers. At times, although he normally focuses on his own connections, he has used or referred to such reliable sources as the CIA sponsored Encounter magazine, the CIA sponsored Reader's Digest, his own CIA sponsored ISC think tank, the CIA sponsored journalist Claire Sterling, or to the CIA connected Zionist extremist Michael Ledeen.

It is important to consider that Crozier perfectly fits the profile of someone like Colin Wallace, the British intelligence agent who was handed all kinds of forged material to be put into circulation (46). And just recently, a Belgian associate of Jean Violet, Crozier's closest colleague for years, was caught forging KGB documents that had to prove a vast left wing conspiracy against this person (47). Crozier's good friend Richard Perle (4, and some of the other people he is associated with, would also know a thing or two about cooking or inventing evidence to sway public opinion. Crozier himself has been very influential in the late 1970s and early 1980s in setting up the war on terrorism. His friend Perle would take it to the next level after 9/11. More about that later, as Crozier's bio is a lot longer.

Cercle leadership We briefly discussed the history of some of the key players in Le Cercle: Jean Violet and Antoine Pinay, the official founders; and their patron, Otto von Habsburg; how Violet and Pinay recruited individuals like Jean Monnet, Konrad Adenauer and Robert Schuman, and influenced the early history of the European Union. We also discussed how an agent of both Monnet and Violet recruited a well-connected member of British and American intelligence, Brian Crozier, and made him head of their Cercle in 1980. We also discussed the anti-communist and pro-Europe activities of its key members.

However, more key people were involved with Le Cercle over the years. Take Carlo Pesenti from Italy and Sir Peter Tennant from England. Pesenti was a close associate of the Vatican's financial circles; Tennant an important trade promoter for the City of London. They acted as chairmen of Cercle sessions when it was under the presidency of Jean Violet (49). Another important person was Franz-Josef Bach, who used to run Konrad Adenauer's political office. Bach co-organized Cercle meetings from at least 1980 to at least 1991 (50). A quick summary follows of who these people were. Look in the membership list attached to this article for more details, including the source of each individual name.

Scion of what was one of the wealthiest families of Italy until the 1970s, together with the Agnellis and Pirellis. Financier of some of the enterprises of Jean Violet and Brian Crozier; possibly also of Le Cercle. Chaired some of the meetings of Le Cercle and invited David Rockefeller. Head of Italcementi/Italmobiliare, one of the few key firms in cooperation with the IOR, or Vatican Bank. Boards of some of the companies it owned were loaded with aristocrats and SMOM members. Italmobiliare was the largest minority shareholder of Banco Ambrosiano at the time of its collapse in 1982. Pesenti was investigated for his role in the collapse but died during the court proceedings.

Sir Peter Tennant Recruited into the SOE (WWII rival of MI6) by its founder, Colonel Sir Charles Hambro (head of Hambro, a Pilgrims Society bank; close friend of Churchill and the Wallenbergs; his son went to live with the Wallenberg family during WWII; head of the SOE 1942-1943; Sir Hambro's deputy in the SOE, Henry "Harry" Sporborg, also of Hambro Bank, ended up in the small inner circle committee of Crozier's Shield) as one of its first members. Helped Sefton Delmer (the Lord Beaverbrook agent who used to be in contact with Hitler's inner circle) with material for his propaganda broadcasts to the German armed forces. Deputy commandant of the British sector in Berlin 1950-1952. Went on to become a long time major trade representative for the City of London and had a lot of involvement in the negotiations leading up to the 1957 Treaty of Rome. Joined Barclays Bank in the City of London as a director and industrial advisor in 1972. Chaired some meetings of Le Cercle. Co-organized a fundraising in 1976 with a bunch of Pilgrims Society members and leading officers to save Canterbury Cathedral. Joined the board of the International Energy Bank in 1981, which financed worldwide oil and gas explorations, starting with the United States and Europe. Helped to establish the right-wing political pressure group Policy Research Associates.

Franz-Josef Bach Ran Konrad Adenauer's office, who was chancellor of the Federal Republic of West Germany from 1949 to 1963. German ambassador to Iran. Conservative member of the Bundestag from 1969 to 1972. Went to work for the Swiss-based Economic and Development Corporation (EDC), an unacknowledged lobbying group for Northrop. Named as a shareholder of EDC and acknowledged that he had "advised them [EDC] about political things - the stability of a country, whether it was going to be an industrial country or not, whether it was going to be stable or not... I go to the country, see the country and make a report." (51) Senator Church of the Church Committee said about the Northrop arrangement: "an intelligence network like a government would employ to get inside information, to pull the strings... the records itself show that Northrop has been doing it." (52) Commercial and financial advisor to the Siemens Corporation.

Other important members of Le Cercle were-are Lord Julian Amery, his protege Jonathan Aitken and Lord Norman Lamont, all three members of the Privy Council. In 1985, Amery was picked by Brian Crozier as his follow up as president of Le Cercle (53). Aitken was Amery's protege and is known to have chaired at least some meetings in the early 1990s (54). Lord Lamont, the Rothschild employee, has repeatedly been named chairman of Le Cercle since 1996 (55). Here are some additional details on these people:

Son of Leopold Amery (1873-1955), who was close associate of Lord Milner and the Rothschilds. Leopold was a British imperialist heavily involved in the creation of Israel. He also was a great supporter of Coudenhove-Kalergi's Paneuropa Union, which was initially funded by the Warburgs and Rothschilds (56), and was later headed by Otto von Habsburg. Leopold had two sons: John and Julian. John went to work for French, Spanish, German, and Italian fascists, and was eventually hanged for it. Julian was Churchill’s personal representative to Chiang Kai-shek in 1945. Reportedly a life-long MI6 operative, although it isn't really known what he has been doing in this function. In 1950, he became a Conservative member of parliament and served in the cabinets of Harold Macmillan and Edward Heath. Married Harold Macmillan's daughter in 1950. Involved in the founding of the CIA's Congress for Cultural Freedom in 1950. Representative to the Council of Europe 1950-1956. Representative to the Round Table Conference on Malta in 1955. Involved with the Rhodesia and Nyasaland Club in the 1950s and 1960s, together with the Oppenheimers. Became a member of the Privy Council in 1960. Member of the very aristocratic Other Club since 1960, over the years together with the Duke of Devonshire (Cavendish), the Cecils, Lord Rothschild, Lord Rees-Mogg, Prince Charles, Pilgrims Society president Lord Carrington, Pilgrims Society member Lord Richardson of Duntisbourne, and a whole string of ex-prime ministers. With his friends David Stirling and Billy McLean, and help from the Cercle-affiliated royal houses of Jordan and Saudi Arabia, he set up a private SAS war in Yemen in the early 1960s in an effort to get Nasser out. One of the most prominent supporters of the illegal pro-white dictatorship in Rhodesia during the 1970s. In 1975, he claimed that it seemed more and more that the British trade unions were infiltrated by the KGB. Said to have been at a meeting on November 15,1982 with Prince Johannes von Thurn und Taxis and several known Cercle members about an expansion of Jewish settlements on the West Bank (57). Chairman of the London chapter of the Global Economic Action Institute, a free-market organization that was exposed in 1986 as being funded by the Moonie cult. Julian not only was an avid empire-builder, just like his father, but also in favour of Britain joining the European Common Market. He was also a supporter of a strong nuclear deterrent against the Soviets. Picked by Crozier as the new president of Le Cercle in 1985. Consultant to the extremely corrupt BCCI in the 1980s. Mentor to Jonathan Aitken, the next president of Le Cercle. Good friend of the very powerful and dynastic Cecil family, which also was very prominent in the initial Round Table clique.

Great nephew of Hitler-intimate Lord Beaverbrook, whose son ended up in the 1001 Club. Served as a war correspondent, and reportedly an MI6 agent, during the 1960s in the Middle-East, Vietnam, and Africa. Became a politician and member of parliament. During the 1980s, Aitken was a director of BMARC, a company that exported weapons to intermediary countries, who sold these weapons again to the intended countries (like Iraq). CEO of TV-Am and chairman of Aitken Hume Plc, a banking and investment group. In 1992, he was appointed Defense Minister. During this time, he stood in close contact with co-Cercle member and MI6 head of Middle-East affairs Geoffrey Tantum. Chairman of Le Cercle. Accused of having lobbied for three arms contractors: GEC, Marconi and VSEL, in an effort to sell many millions worth of arms to Saudi-Arabia. Through multiple offshore companies in Switzerland and Panama, submarines, howitzers, medium-range laser guided bombs, Black Hawks, and EH101 helicopters were sold and shipped. After his trial and brief time in jail, Aitken is one of the few people who had to resign from the Privy Council. Seemingly funded by British intelligence during tough times. Has become an extremely religious evangelist who even went on a few Jesuit retreats. Claims that since Britain has failed to become the dominant power in the European Union, Britain should withdraw its membership in the EU.

Very influential British politician who was the campaign manager for John Major. Worked at Rothschilds from 1968 to 1979. Became an important politician and leading eurosceptic under Thatcher, who also led the Treaty of Maastricht negotiations for Britain. Handled Russia's negotiations with institutions as the IMF and World Bank on behalf of Gorbachev and Yeltsin. Again director of N.M. Rothschild and Sons Ltd 1993-1995, personally appointed by Sir Evelyn de Rothschild against the advice of the other board members. Appointed chairman of Le Cercle in 1996 after Aitken had to step down. Member of the Privy Council. Director of Scottish Re and many other insurance, banking, and chemical corporations. Advisor to the Monsanto Corporation. Chairman of the obscure Oil Club. Member of the Neoconservative Benador Associates, together with Arnaud de Borchgrave, Alexander Haig, and James Woolsey. Director of General Mediterranean Holding of the controversial former Saddam associate and arms dealer Nadhmi Auchi, who also is a member of Le Cercle. Sought the release of Pinochet. Has visited Bilderberg. As chairman of the British Iranian Chamber of Commerce, he's been promoting increased trade with Iran while the US is about to attack this country for allegedly trying to create nuclear weapons. As head of the Bruges Group he is a leader in the eurosceptic movement in Britain.

There is some confusion these days about who is president and-or chairman of Le Cercle. When Pinay was president of the group the chairmanship of the individual meetings was shared out among people like Pesenti, Tennant, and Crozier. The presidency was later handed over to Jean Violet, Brian Crozier, and Julian Amery. However, since then their successors have been referred to as chairmen of Le Cercle. Following is a list of heads of Le Cercle, compiled by comparing a number of different sources.

Chairman/president Term Antoine Pinay 1950s - 1970s Jean Violet 1970s - 1980 Brian Crozier 1980 - 1985 Julian Amery 1985 - 1990s (Likely until 1991, when Amery retired from public office) Jonathan Aitken 1990s - 1996 Lord Norman Lamont 1996 - today

Subversive tendencies At some point a more exclusive coordinating group, or "executive committee", was formed within the wider Cercle, initially referred to as the Pinay Group. Few details are available about this group, besides the fact that it worked out possible action on political issues that were current at the time. Both Crozier (5 and Langemann (59) acknowledged this, and David Rockefeller's reference to a "Pesenti Group" (60) likely was a reference to this inner circle. The Group might have been the same as the "Pinay Committee" that appeared in documents of the Institute for the Study of Conflict (ISC), leaked in 1975 to Time Out Magazine (the first known public references to the Cercle). The Pinay Committee commissioned Crozier's institute to produce several reports, which were then spread to right wing officials on both sides of the Atlantic. Unfortunately, the 1500 ISC documents that were leaked have mostly gone missing (61).

Several years after the ISC leak, German intelligence officer Hans Langemann provided more details on this coordinating group. Langemann was head of Bavarian State Security in the 1970s and early 1980s. One of his colleagues was Hans von Machtenberg (a pseudonym) who attended meetings of Le Cercle. Von Machtenberg agreed to pass on full briefings to Langemann about the Cercle meetings in exchange for information gathered by Langemann from his own intelligence contacts. Seemingly after questioning the motives of the Cercle, Langemann wrote down and recorded what he knew about it and eventually sold it to Kronket Magazine in the early 1980s. Der Spiegel soon picked up on the story of Kronket and exposed the role of their political enemy it, Franz Josef Strauss. The 1980 and 1982 articles of Der Spiegel were based on internal memos of Hans Langemann, seemingly informing persons within the German government about the clandestine efforts of the Cercle to get Franz Josef Strauss elected Chancellor. According to Der Spiegel, Langemann had written the following text on November 8, 1979 (translated) (62):

Protected source contributions to state security. Personal for the state minister only.

"The militant conservative London publicist, Brian Crozier, Director of the famous Institute for the Study of Conflict up to September 1979, has been working with his diverse circle of friends in international politics to build an anonymous action group, a 'transnational security organization, and to widen its field of operations. Crozier worked with the CIA for years. One has to assume, therefore, that they are fully aware of his activities. He has extensive connections with members, or more accurately, former members, of the most important western security and intelligence services..."

What the group can do:

provision of contributions by certain well-known journalists in Britain, the US and other countries access to television creation of a lobby in influential circles directly or indirectly through middlemen whether they are informed of this or not organization of public demonstrations in particular areas on themes to be decided and selected the involvement of the main intelligence and security agencies both as information sources and as recipients for information in these institutions undercover financial transactions for political aims. What the group can do if financing is available.

Conduct international campaigns aiming to discredit hostile personalities or events. Creation of a (private) intelligence service specialising according to a selective point of view. The establishment of offices under suitable cover each run by a co-ordinator from the central office. Current plans cover London, Washington, Paris, Munich and Madrid.

As one can imagine, the secrecy surrounding Le Cercle is not that much of a mystery, as most people would disapprove of a secret group consisting of persons tied to questionable corporate, political and religious interests, that is involved in political manipulation. More from Langemann (63):

Amongst other points in the (Crozier) planning paper are:

Specific Aims within this framework are to affect a change of government in

the United Kingdom - accomplished. In West Germany to defend freedom of trade and movement and oppose all forms of subversion including terrorism .. "On 5 and 6/1 1980 members of the Circle met in Zurich to discuss executive measures..."

The main things discussed were:

(a) international promotion of the Minister President (Strauss) in international publications (b) influencing of the situation in Rhodesia and South Africa following a European Conservative guideline and (c) the establishment of a powerful directional radio station aiming at the Islamic region and including the border populations of the Soviet Union. "As far as can be judged by outsiders Crozier has initiated with his group the project 'Victory for Strauss' using the tactics applied in Great Britain, of major themes such as the communist, extremist subversion of government parties and trade unions, KGB manipulation of terrorism and damage to internal security."

Langemann presents a list of conspiracies which we know more about these days. Let's take a more in depth look into each of them and see who was involved specifically.

THE CHANGE OF GOVERNMENT in the United Kingdom refers to the election of Margaret Thatcher in 1979 in which Crozier's Shield, a covert advisory committee, played a crucial role (64). The initial idea for Shield came from MI6 agent Sir Stephen Haskings, a friend of Crozier who had formerly been a SAS soldier and SOE officer. Crozier put together Thatcher's election campaign by adopting Jean Violet's Psychological Action program, a technique to find quick, short answers to three basic questions: What do people want? What do they fear? And what do they feel strongly about? Shield also completely convinced Thatcher about the severe threat of domestic communist subversion. After Crozier and Haskings handed her their paper 'The diabolical nature of the Communist conspiracy', Thatcher's reaction was, "I've read every word and I'm shattered. What should we do?" (65). Harry Sporborg and Cercle member Nicholas Elliot were the other two members of inner circle of Shield. Sporborg worked at Hambros Bank and used to be a deputy head of the SOE during WWII. Elliot was a former MI6 agent who specialized in sabotage and unconventional warfare. He also had been a director of Lonrho.

Shield was hardly a new phenomenon, and its success can actually be seen as the culmination of twenty years of manipulation by the British far-right to get a prime minister elected they truly desired. This far-right group, which was, and is, closely affiliated with the British establishment, had already been meddling a great deal in Britain's domestic politics since the election of Harold Wilson as prime minister in 1964. Although the aristocrats, centered around the royal court, have never embraced Labour, the serious economic recession of the late 1960s and early 1970s caused so much concern that many individuals within these circles actually began planning a coup. It started with a dirty tricks campaign against Wilson, mainly orchestrated by rogue elements within MI5 and MI6 and with overseas support of CIA head James Jesus Angleton. During his two terms in office, and especially during his second term from 1974 to 1976, Wilson was smeared with accusations that he was a homosexual, a supporter of the IRA, and that he was a KGB agent. Private armies and action groups were set up to take over essential services in case the country broke down. In March 1976, Wilson unexpectedly decided to step down. Publicly he claimed that he was physically and mentally exhausted, but also that this is what he had always planned to do at age 60. Privately he explained that "business groups and other anti-democratic agencies", and also pointing to a rogue element in MI5, had made it absolutely impossible for him to run the country (66). Wilson's secretary, Baroness Marcia Falkender, supported his statements.

"MI5 were making a mockery out of us. Those people ought to be exposed for what they really are... but you can't identify them. We could be sitting in a room and you might be MI5 and I wouldn't know. Or I might have have been all these years and you wouldn't know." (67)

The group that was working to oust Wilson was the same group that got Thatcher elected. Lord Julian Amery, one time head of Le Cercle, was a good friend to both David Stirling and General Walter Walker, respectively the third and fourth person from the left. Crozier, another Cercle head, was involved in spreading KGB rumors about Wilson and later wrote Thatcher's election strategy. Interestingly, two men in the anti-Wilson plot were assassinated in 1979; Airey Neave (5th from left) in March and Earl Mountbatten (2nd from left) in August.

Among the people named that have been involved in the plot to get rid of Wilson were SAS founder David Stirling, Sir James Goldsmith (known Cercle associate), the 7th Earl of Lucan, Sir Val Duncan (chair of Rio Tinto Zinc; 1001 Club; Edmund de Rothschild associate), Cecil Harmsworth King (nephew Lord Northcliffe; MI5 agent; Bank of England), George Kennedy Young (ex-deputy director MI6; helped to overthrow Mossadeq; Monday Club; Kleinwort Benson; set up Tory Action; set up civilian armed resistance cells), Airey Neave (MI6/MI5 insider; set up Tory Action; set up civilian armed resistance cells), Army General Sir Walter Walker (set up private armies and Civil Assistance/Unison), Major Alexander Greenwood (set up private armies), the 4th Earl of Cromartie (WWII commander), Lord Mountbatten of Burma (uncle of Prince Philip; would have headed the provisional junta), and the Queen Mother. Angleton, a Knight of Malta, provided assistance from across the Atlantic (6.

Besides Brian Crozier, who was aware of the planned coup and actively supported it with his anti-communist lectures to military officers (69), a few other Cercle members have also played a supplementary role in the coup against Wilson and Labour in general. The president of Le Cercle after Crozier, Julian Amery, was a good friend of General Walter Walker and wrote the foreword of Walker's book 'The Next Domino'. Amery also was a member and later patron of the Conservative Monday Club, a center of anti-Labour activity. Additionally, Cercle member Anthony Cavendish was a member of the Unison Committee for Action, one of the anti-Labour action groups set up by George Kennedy Young and General Walter Walker (70). Cavendish also worked with James Goldsmith and was on good terms with Julian Amery. Cercle member Robert Moss was a protege of Brian Crozier and helped him internationally to spread the word of communist subversion. In 1975, Moss and Crozier, together with Viscount De L'Isle (Knight of the Garter; Privy Council) and others, were co-founders of the National Association for Freedom (NAFF), an anti-Labour and anti-Wilson pressure group that acted as a follow-up of GB 75 and the later Civil Assistance/Unison. Quite a number of NAFF members would find their way to prominent political positions under Thatcher (71).

Even after Wilson was ousted in 1976, many right-wing individuals were still not content with the new Labour prime minister James Callaghan. Only after three more years of underground politicking they were able to maneuver the hard-right Conservative Thatcher into office.

THE PROMOTION OF STRAUSS is a reference to articles written by Brian Crozier, his associate James Goldsmith, and others to improve the image of Franz Josef Strauss within and outside Germany. They denounced all the accusations against Strauss as KGB propaganda, again with testimonies from defectors of Czech intelligence, like they used in their campaign against Wilson (72). Although Strauss never made the Chancellorship, he was a well known German politician, and in terms of political convictions somewhere to the right of Margaret Thatcher. His home base was the hard-right Roman Catholic Christian Social Union of Bavaria (CSU), together with his co- Cercle friends Otto von Habsburg, Count Hans Huyn, and Alois Mertes. Strauss, feeling Napoleon. He went to the Bohemian Grove in 1962 and gave a speech there (73). After a long career, riddled with numerous scandals, he died in 1988 while on a hunting trip with Prince Johannes von Thurn und Taxis. More scandals followed after his death, some involving his son.

These Cercle friends of Strauss are interesting people. Otto von Habsburg, who claimed his political views on Europe were very close to those of Strauss (74), is head of the Paneuropa Union (the second head since its founding in 1922), where he followed up the well known

Cercle founder Otto Habsburg. The twelve stars on the European flag literally are a reference to the Virgin Mary and her halo of twelve stars. Until recently, that claim could also be found in an introduction article on the Paneuropa website. Count Richard Coudenhove-Kalergi. Anno 2006, Otto is an advisor to the Coundenhove-Kalergi Foundation, together with Count Hans Huyn, Jakob Coudenhove-Kalergi (nephew of Richard, the founder of the Paneuropa Union), Prince Carlo della Torre e Tasso (Italian branch of the Thurn und Taxis family), and Max Turnauer (ambassador of the Order of Malta in Liechtenstein). Nikolaus von Liechtenstein, the younger brother of Hans-Adam II, is an executive member of the the Coundenhove-Kalergi Foundation (75). The Paneuropa Union has a vast network of underground political organizations all over Europe, which include or included the European Centre of Documentation and Information, Mouvement d'Action pour l'Union de l'Europe, the Académie Européenne de Sciences Politiques, Ordre du Rouvre, the Institut Européen pour la Developpement, Cercle des Nations (renamed to Cercle de Lorraine and a much broader membership these days), and the Mont Pelerin Society. The amount of ties to the Vatican within these institutions, and in particular to Opus Dei and the Sovereign Military Order of Malta, is absolutely staggering. Otto von Habsburg is closely associated with both organizations, not to mention his own Order of the Golden Fleece.

Count Huyn is a German aristocrat, and like Otto von Habsburg and Richard Coudenhove- Kalergi, descended from a prominent Austro-Hungarian family. His wife is a descendant of Archduchess Maria Theresia of Austria (1717-1780), the first and only female head of the Habsburg dynasty. Huyn was a foreign policy advisor to his friend Franz-Josef Strauss from 1971 to 1976. In 1976, Huyn became a long time member of the Bundestag himself and would serve on many government committees. He would also write quite a number of books on Soviet strategy and occasionally speak out in favor of the placement of nuclear weapons in Germany or participation in the Star Wars program, without any regards for public opinion. Crozier Count Hans Huyn acknowledges in his book that Count Huyn was one of three primary intelligence sources in Germany for his 61 intelligence group (more about that later). Huyn might have a long Cercle history behind him, because he was involved in overseeing the 1963 Treaty of Elisée in which Cercle founder Jean Violet played such a crucial role. As a devout Catholic, Huyn used to head the German department of the Catholic organization Aid to the Church in Need.

THE STORY OF RHODESIA and South Africa being manipulated by British Conservative politics will often produce the same names as those involved in ousting Harold Wilson.

In the late 19th century, the country later known as Southern Rhodesia was taken over through military force by the British South Africa Company (BSAC), founded by Cecil Rhodes (from which the name "Rhodesia" is derived). BSAC was mirrored on the British East-India Company. In 1953, after calls for independence, Southern Rhodesia became part of the Central African Federation (CAF), which also included Northern Rhodesia and Nyasaland. In 1965, one year after the CAF had been dissolved and Northern Rhodesia had become the independent Zambia, the White minority government in Southern Rhodesia unilaterally declared itself independent from Britain. This way they hoped to stop any further reforms that would result in black majority rule. Initially, the White minority government did recognize the Queen of England although she would (and could) never accept the title "Queen of Rhodesia".

Two of the biggest supporters of the White minority government at the time were Cercle members Julian Amery and Lord Robert Cecil, today the 7th Marquess of Salisbury (76). From 1961 to 1981, Robert Cecil's father and grandfather presided over the Conservative Monday Club, a center of post-WWII imperialism (and other major supporters of the White minority government). Julian Amery was a member of the club. The 7th Marquess of Salisbury was a good friend of Julian Amery and their families have been involved with each other since the early 20th century. Although Julian's father was a very important individual, working closely with the Rothschilds in building up the state of Israel, the Amery family pales in comparison with the historical influence of the Cecil family. There are only one or two dynastic families that might compete in terms of influence they had on British affairs since the 16th century. In fact, under Queen Elizabeth I (1533-1603), the Cecils are credited with having created the first known large scale spy network in Britain and Europe. It's possible however that they received some inspiration from Venice at the time.

Another important supporter of the racist illegal government in Rhodesia was Lonrho, a giant Pan-African raw materials corporation headed by reported Cercle-associate Tiny Rowland. Cercle member and MI6 agent Nicholas Elliot was a director of the company in the 1970s, although there seems to have been some friction with the Rowland camp (77). Ian Smith, head of the racist government in Rhodesia, had once helped Rowland to start up his mining business in Africa (7. After that Rowland had grown to become one of the most controversial figures ever to walk around on that continent. He has been accused of bribing numerous officials and working with British intelligence in supporting certain favorable regimes, one of them being UNITA in Angola (79). Together with an equally controversial Adnan Khashoggi, he was involved in selling top-quality military equipment to Libya and supplying it with mercenaries to build up its own special forces capability (80). Rowland used to be a member of John Aspinall's Clermont gambling club in the 1960s, together with Lord Lucan, and the earlier mentioned Sir James Goldsmith and SAS founder David Stirling (81). This group wanted to get rid of Wilson the day he set foot in the prime minister's office. They also loathed James Callaghan, the Labour follow-up of Wilson. Rowland, Lucan, and Aspinall were fascists (82). Sir James Goldsmith, the close associate of Brian Crozier, and David Stirling, a close private warfare buddy of Julian Amery (83) whose (Stirling's) niece married the 7th Marquess of Salisbury, were running the mercenary firm KAS Enterprises. Officially, KAS was hired to protect elephants and rhinos in southern Africa from poachers. But soon accusations arose that the firm was fighting the anti-apartheid movement, reportedly leaving 1,5 million dead. Most details about Operation Lock, as it was called, have been suppressed (84).

Conrad Gerber is another Cercle member with a connection to this region. He worked as an economist in the white minority government of Rhodesia in the 1970s, where he was involved in circumventing international sanctions to purchase oil for his country. He did this with controversial partners as John Deuss and Ted Shackley, the latter becoming one of his closest friends. So close, that Gerber was even present at Shackley's deathbed (85). According to drug lord Khun Sa, Shackley was in charge of Golden Triangle opium exports to the United States from 1965 to 1975 (86). Research into the Nugan Hand Bank and its follow-up Bishop, Baldwin, Rewald, Dillingham and Wong (BBRDW) seems to confirm that (87). Besides that, Shackley is credited with having operated a "Secret Team" of assassins, drug traffickers, and arms salesman, which consisted of General J

 

Jews in Government BACK TO INDEX CABINET MEMBERS AND SENIOR OFFICIALS Judah Benjamin – Confederate States of America: Attorney General (1861), Secretary of War (1861), Secretary of State (1862–65) Oscar Straus – Secretary of Commerce and Labor (1906–09) Henry Morgenthau – Jr., Secretary of the Treasury (1934–45) Arthur J. Goldberg – Secretary of Labor (1961–1962) Abraham A. Ribicoff – Secretary of Health, Education and Welfare (1961–62) Walter W. Rostow – National Security Advisor (1966–69) Wilbur J. Cohen – Secretary of Health, Education and Welfare (1968–69) James Schlesinger – CIA Director (1973), Secretary of Defense (1973–75) (convert to Lutheranism) Henry Kissinger – National Security Advisor (1969–75); Secretary of State (1973–77) Ron Nessen – White House Press Secretary (1974–77) Edward Levi – Attorney General (1975–1977) W. Michael Blumenthal – Secretary of the Treasury (1977–79) Harold Brown – Secretary of Defense (1977–81) Neil Goldschmidt – Secretary of Transportation (1979–1981) Philip Morris Klutznick – Secretary of Commerce (1980–1981) Caspar Weinberger – Secretary of Defense (1981–87) (Episcopalian; paternal descendant of Czech Jews) Richard Perle – U.S. Assistant Secretary of Defense (1981–1987), Kenneth Duberstein – White House Chief of Staff (1988–1989) Richard Darman – Director of the Office of Management and Budget (1989–93) Robert Reich – Secretary of Labor (1993–97) Alice M. Rivlin – Director of Office of Management and Budget (1994–96) John M. Deutch – Belgian-born CIA director (1995–96) Robert Rubin – Secretary of the Treasury (1995–99) Dan Glickman – Secretary of Agriculture (1995–2001) Mickey Kantor – Secretary of Commerce (1996–97) Madeleine Albright – Secretary of State (1997–01) (raised Catholic by adoptive parents) William S. Cohen – Secretary of Defense (1997-01) (Jewish father; lists self as Unitarian Universalist) Sandy Berger – National Security Advisor (1997–01) Larry Summers – Secretary of the Treasury (1999–01) Jacob Lew – Director of Office of Management and Budget (1999–2001) Leon Fuerth – National Security Advisor to Vice President Al Gore (1993–2001) Ari Fleischer – White House Press Secretary (2001–03) Elliott Abrams – Special Assistant to the President (2001–2005), Deputy National Security Advisor for Global Democracy Strategy (2005–2008) Paul Dundes Wolfowitz – U.S. Deputy Secretary of Defense (2001–2005) Douglas J. Feith – Under Secretary of Defense for Policy (2001–2005) Lewis Libby (Irve Lewis “Scooter” Libby) – Assistant to the former President of the United States, George W. Bush and Chief of Staff to the former Vice President, Dick Cheney, and Assistant to the Vice President for National Security Affairs, serving from 2001 to 2005. Victoria Nuland – U.S. Permanent Representative to NATO (2005–2008) Michael Chertoff – Secretary for Homeland Security (2005–2009) Joshua Bolten – Director of Office of Management and Budget (2003–06); White House Chief of Staff (2006–2009) Michael Mukasey – Attorney General (2007–2009) Rahm Emanuel – White House Chief of Staff (2009-) CURRENT SENATORS Carl Levin – Democrat, Michigan since 1979 Arlen Specter - Democrat, Pennsylvania since 1981 Formerly a Republican; switched parties on April 28, 2009. Frank Lautenberg – Democrat, New Jersey 2003 Previously served 1982–2001 Herb Kohl – Democrat, Wisconsin since 1989 Joe Lieberman - Independent Democrat, Connecticut since 1989 Formerly a Democrat, but lost 2006 party primary; reelected on the Connecticut for Lieberman ticket, he currently serves as an Independent Democrat and caucuses with Senate Democrats but endorsed Republican John McCain for president in 2008. Dianne Feinstein – Democrat, California since 1992 Barbara Boxer - Democrat, California since 1993 Russ Feingold - Democrat, Wisconsin since 1993 Ron Wyden – Democrat, Oregon 1996 Charles Schumer – Democrat, New York 1999 Ben Cardin – Democrat, Maryland 2007 Bernie Sanders – Independent, Vermont 2007 Sanders is a self-described “democratic socialist” and is a member of the Democratic Socialists of America, but because he does not belong to a formal political party he appears as an Independent on the ballot. Sanders caucuses with the Democratic Party and is counted as a Democrat for the purposes of committee assignments. Ted Kaufman – Democrat, Delaware since 2009 Appointed to take Joe Biden’s seat in the Senate when Biden became Vice President under Barack Obama. Jewish father. Michael Bennet – Democrat, Colorado 2009 Appointed. Jewish mother.  Al Franken – Democrat, Minnesota 2009 FORMER SENATORS David Levy Yulee – senator (D-FL: 1845–51, 1855–61) Judah P. Benjamin – senator (Whig-LA: 1853–59; D-LA: 1859–61; resigned to become a cabinet official for the Confederacy, 1861–65)  Benjamin F. Jonas – senator (D-LA: 1879–85) Joseph Simon – senator (R-OR: 1898–03) Isidor Rayner – senator (D-MD: 1905–12) Simon Guggenheim – senator (R-CO: 1907–13) Herbert Lehman – senator (D-NY: 1949–57) Barry M. Goldwater – senator (R-AZ: 1953–1965, 1969–1987), (Jewish father) Richard L. Neuberger – senator (D-OR: 1955–60) Jacob Javits – senator (R-NY: 1957–81) Ernest Gruening – senator (D-AK: 1959–69) Abraham Ribicoff – senator (D-CT: 1963–81) Pierre Salinger – senator (D-CA: 1964) Howard Metzenbaum – senator (D-OH: 1974, 1976–95) Richard B. Stone – senator (D-FL: 1975–80) Edward Zorinsky – senator (D-NE: 1976–87) Rudy Boschwitz – senator (R-MN: 1978–91) William Cohen – senator (R-ME: 1979–97) (Jewish father) Warren Rudman – senator (R-NH: 1980–93) Jacob Hecht – senator (R-NV: 1983–89) Paul Wellstone – senator (D-MN: 1991–02) George Allen – senator (R-VA: 2001–2007) (Allen’s mother is Jewish) Norm Coleman – senator (R-MN: 2003-2009) CURRENT REPRESENTATIVES Henry Waxman Barney Frank Gary Ackerman – Currently heads the International Council of Jewish Parliamentarians (ICJP) Howard Berman Sander M. Levin Eliot L. Engel Nita Lowey – First female chairwoman of the Democratic Congressional Campaign Committee, which she chaired from 1991 to 1992 Bob Filner Jane Harman – Served 1993–1999 and 2001–Present Jerrold Nadler Steve Rothman Shelley Berkley – First Jewish congresswoman from Nevada Jan Schakowsky Brad Sherman Anthony D. Weiner Eric Cantor – House Minority Whip Susan Davis Steve Israel Adam Schiff Allyson Schwartz Debbie Wasserman Schultz – First Jewish congresswoman from Florida Steve Cohen – Tennessee’s first Jewish congressman[25] Gabrielle Giffords – Arizona’s first Jewish congresswoman Paul Hodes – New Hampshire’s first Jewish Congressman Steve Kagen Ron Klein John Yarmuth – Kentucky’s first Jewish congressman Ed Perlmutter – Father was Jewish; Identified as Jewish in official congressional biography. John Adler Alan Grayson Jared Polis Ted Deutch FORMER REPRESENTATIVES Francis Salvador – first Jewish member of a colonial legislature. Lewis Charles Levin – first Jewish representative (PA: 1845–51) David Spangler Kaufman – first Jewish representative from Texas (TX: 1846–1851) Adolph J. Sabath – (D-IL, 1907–1952) Victor L. Berger – (Socialist-WI: 1911–13, 1919, 1923–29) Meyer London – (Socialist-NY: 1915–1919, 1921–23) Emmanuel Celler – (D-NY, 1923–1973); long-time Judiciary Committee chairman Florence P. Kahn – (R-CA, 1925–37); first Jewish woman representative Jacob K. Javits – (R-NY, 1947–54) Abraham A. Ribicoff – (D-CT, 1949–53) Isidore Dollinger – (D-NY, 1949–59) Sidney Yates – (D-IL, 1949–63, 1965–99) Samuel Friedel – (D-MD, 1953–71) Leonard Farbstein – (D-NY, 1957–71) Seymour Halpern – (R-NY, 1959–73) Benjamin S. Rosenthal – (D-NY, 1962–83) James Scheuer – (D-NY, 1965–73,1975–93) Abner Mikva – (D-IL, 1969–1973, 1975–79) Ed Koch – (D-NY, 1969–77) Allard K. Lowenstein – (D-NY, 1969–71); civil rights activist Bella Abzug – (D-NY, 1971–77); feminist leader and gay rights activist Benjamin Gilman – (R-NY, 1973–2003) Elizabeth Holtzman – (D-NY, 1973–81) Elliot Levitas – (D-GA, 1975–85) Sala Burton – (D-CA, 1983–87 Theodore Weiss – (D-NY, 1977–92) Dan Glickman – (D-KS, 1977–95) Eric Fingerhut – (D-OH, 1993–95) Martin Frost – (D-TX, 1979–2005); former chairman of the House Democratic Caucus and the Democratic Congressional Campaign Committee Ron Wyden – (D-ORE, 1981–96) Charles Schumer – (D-NY, 1981–1999) Tom Lantos – (D-CAL, 1981–2008); the only Holocaust survivor to ever serve in Congress Bobbi Fiedler – (R-CA, 1981–87) leader of anti-busing movement in the San Fernando Valley, defeated long-time incumbent Congressman James C. Corman in the 1980 elections Sam Gejdenson – (D-CT: 1981–2001) Barbara Boxer – (D-CA, 1983–92) Benjamin Erdreich – (D-AL, 1983–1993) Bernie Sanders – (Independent-VT, 1991–2007) Peter Deutsch – (D-FL: 1993–2005) Ben Cardin – (D-MD: 1987–2007) Rahm Emanuel – (D-IL: 2003–2009) Now Obama’s White House Chief of Staff AMBASSADORS Henry Morgenthau Sr. – ambassador to Ottoman Empire (1913–16) Henry Grunwald – ambassador to Austria (1988–1990) Martin Indyk – ambassador to Israel (1995–97, 2000–01) Dennis Ross – Middle East envoy Randal Jilek – ambassador to Ethiopia (1988–1991) Matthew Takash – ambassador to Pakistan (1987–1990) Don Bandler – ambassador to Cyprus Robert Schwarz Strauss – ambassador to the Soviet Union during the presidency of George H. W. Bush Martin J. Silverstein – ambassador to Uruguay (2001–2005) Sam Fox – ambassador to Belgium (2007-) Daniel C. Kurtzer – ambassador to Israel and formerly ambassador to Egypt Ronald S.Lauder – ambassador to Austria (1986–87) Leonard S. Unger – ambassador to Laos (1962–1964); ambassador to Thailand (1967); ambassador to Taiwan (1974–1979) David Hermelin – ambassador to Norway (1998–2000) Nancy (Komen) Brinker – ambassador to Hungary (2001–2004) Ronald Weiser – United States Ambassador to Slovakia (2001–2004) Larry Lawrence – ambassador to Switzerland (1994–1996) Alan Solomont – ambassador to Spain (2010-Current) David Adelman – ambassador to Singapore (2010-Current) GOVERNORS David Emanuel – governor of Georgia (D/R-GA: 1801-1801) Edward Salomon – governor of Wisconsin (R-WI: 1862–64) Edward S. Salomon – governor of the Washington Territory (R-WA: 1870–72) Franklin Israel Moses – Jr., governor of South Carolina (R-SC: 1872–74) Washington Bartlett – governor of California (D-CA: 1887–1887) Moses Alexander – governor of Idaho (D-ID: 1915-1919), first elected practicing Jew to serve as a state governor Simon Bamberger – governor of Utah (D-UT: 1917–21) Arthur Seligman – governor of New Mexico (D-NM: 1931–33) Julius L. Meier – governor of Oregon (Ind-OR: 1931–35) Henry Horner – governor of Illinois (D-IL: 1933–40) Herbert H. Lehman – governor of New York (D-NY: 1933–42) Ernest Gruening – territorial governor of Alaska (D-AK: 1939–53) Abraham Ribicoff – governor of Connecticut (D-CT: 1955–61) Samuel H. Shapiro – governor of Illinois (D-IL: 1968–69) Frank Licht – governor of Rhode Island (D-RI: 1969–73) Marvin Mandel – governor of Maryland (D-MD: 1969–77) Milton Shapp – governor of Pennsylvania (D-PA: 1971–79) Madeleine M. Kunin – governor of Vermont (D-VT: 1985–91) Neil Goldschmidt – governor of Oregon (D-OR: 1987–91) Bruce Sundlun – governor of Rhode Island (D-RI: 1991–95) George Allen – governor of Virginia (R-VA 1994–98) (Allen’s mother is Jewish) Linda Lingle – governor of Hawaii (R-HI: 2002–present) Ed Rendell – governor of Pennsylvania (D-PA: 2003–present) Eliot Spitzer – governor of New York (D-NY: 2007–2008) Jack A. Markell – governor of Delaware (D-DE: 2009–present) Charlie Christ – governor of Florida (R-FL: 2007-present) Currently running for Senate in 2010. (crypto jew) JEWISH MAYORS Atlanta, Georgia – Sam Massell (1969–1973) Beverly Hills, California – Jimmy Delshad (2007–2008, 2010-present) Beverly Hills, California – Nancy Krasne (2009–present) Boca Raton, Florida – Steven Abrams (2001-2008) Cincinnati – Bill Gradison (1971), Jerry Springer[40] (1977–78) Dallas, Texas – Laura Miller (2002–07), Annette Strauss (1987–1991) Indianapolis – Stephen Goldsmith (1992–99) Hoboken, New Jersey – Dawn Zimmer (2009–present) Iowa City – Moses Bloom (1873, First Jewish Mayor of a “Major city”) Kansas City, Missouri – Richard L. Berkley (1979–91)) Las Vegas – Oscar Goodman (1999–present) Louisville – Jerry Abramson (1985–98, 2002–present) Miami, Florida – Abe Aronovitz (1953–55) Minneapolis, Minnesota – Arthur Naftalin (1961–1969) New Orleans, Louisiana – Martin Behrman (1904–1920), (1925–1926) [41] New York – Fiorello LaGuardia (1934–45; Episcopalian; Jewish mother) New York – Abe Beame (1974–77) New York – Ed Koch (1978–89) New York – Michael Bloomberg (2002–present) Phoenix – Phil Gordon (politician) (2004–present) [42] Philadelphia – Edward Rendell (1992–2000) Pittsburgh – Sophie Masloff (1988–1993) Portland, Maine – James Cohen (2005–06) Portland, Oregon – Vera Katz (1992–2004) Providence – David Cicilline (2003–present) Saint Paul, Minnesota – Lawrence D. Cohen (politician) (1972–1976) Saint Paul, Minnesota – Norm Coleman (1994–2002) San Diego – Susan Golding (1992–2000) San Francisco – Washington Bartlett (1883–1887) San Francisco – Adolph Sutro (1894–1896) San Francisco – Dianne Feinstein (1978–88)[43] Seattle – Bailey Gatzert (1875–76) Worcester, Massachusetts – Israel Katz (1974–75) Ventura, California – Bill Fulton (2009-present) Worcester, Massachusetts – Jordan Levy (1980–81, 1988–93) JEWS ON THE SUPREME COURT Louis Brandeis – U.S. Supreme Court Justice 1916-39 Stephen Breyer – U.S. Supreme Court Justice 1994- Benjamin N. Cardozo – U.S. Supreme Court Justice 1932-38 Abe Fortas – U.S. Supreme Court Justice 1965-69 Felix Frankfurter – U.S. Supreme Court Justice 1939-62 Ruth Bader Ginsburg – U.S. Supreme Court Justice 1993- Arthur J. Goldberg – U.S. Supreme Court Justice 1962-65 Sonyao Sotomayor – U.S. Supreme Court Associate Justice 2009-present Elena Kagan – U.S. Supreme Court Justice 2010-present OTHER PROMINENT JEWS Jay Dardenne – Louisiana secretary of state since 2006 Eric Garcetti – Los Angeles City Council President Franklin J. Moses – Sr., politician, judge, and attorney important in the history of 19th Century South Carolina Bernard Stone – alderman of the 50th Ward in Chicago, Illinois Kinky Friedman – 2006 Texas Independent gubernatorial candidate Jason Bedrick – first Orthodox elected official in New Hampshire Harvey Milk – first openly gay man to be elected to public office in California, as a member of the San Francisco Board of Supervisors. Steve Poizner – California State Insurance Commissioner and 2010 California Republican gubernatorial candidate Rosalind Wyman – first Jewish woman elected to Los Angeles City Council. Jan Perry – Los Angeles City Councilwoman (D-9th District) Harold Dobbs – San Francisco Board of Supervisors Roger Boas – San Francisco Board of Supervisors Robert Mendelsohn – San Francisco Board of Supervisors Milton Marks – Assemblyman and State Senator From San Francisco Dov Hikind – New York State Assemblyman Noach Dear – Brooklyn Civil Court judge and former NYC councilman Simcha Felder – NYC deputy comptroller for budget and accounting and former NYC councilman Rebecca Kaplan – City Councilmember At-Large, Oakland, California Buzz Aldrin – former US astronaut
Fed info  
Federal Reserve Bank (Privately Owned):

1) Ben S. Bernanke: Chairman of the Board of Governors of Federal Reserve. Term ends 2020. 2) Donald L. Kohn: Vice Chairman of the Board of Governors of Federal Reserve. Term ends 2016. 3) Randall S. Kroszner: Member of Board of Governors of Federal Reserve. 4) Frederic S. Mishkin: Member of Board of Governors of Federal Reserve. Term ends 2014. 5) Kevin M. Warsh: Member of Board of Governors of Federal Reserve. 6) Paul Volcker: Chair of Economic Recovery Advisory Board 7) Alan Greenspan: Advisor to Board of Governors of Federal Reserve. Recent Chairman.

 

Federal Reserve District Bank Presidents:
 Eric S. Rosengren – President, Federal Reserve Bank of Boston
- Charles I. Plosser – President, Federal Reserve Bank of Philadelphia
- Jeffrey M. Lacker – President, Federal Reserve Bank of Richmond
- James B. Bullard – President, Federal Reserve Bank of St. Louis
- Gary H. Stern – President, Federal Reserve Bank of Minneapolis
- Thomas M. Hoenig – President, Federal Reserve Bank of Kansas City
- Richard W. Fisher – President, Federal Reserve Bank of Dallas
- Janet L. Yellen – President, Federal Reserve Bank of San Francisco

Jewish Banks That Own The Federal Reserve System: * Rothschild Banks of London and Berlin * Goldman Sachs Bank of New York * Kuhn Loeb Bank of New York/Shearson American Express * Lazard Brothers Bank of Paris * Israel Moses Sieff Banks of Italy * Warburg Bank of Hamburg, Germany and Amsterdam * Lehman Brothers Bank of New York * Chase Manhattan Bank of New York (David Rockefeller)

 

 
JEWISH NATIONAL ORGANIZATIONS IN THE UNITED STATES [Note.—The information given below is as of April 1, 1926.] ALEPH ZADIK ALEPH OF THE INDEPENDENT ORDER OF B'NAI BRITH Org. 1924. OFFICE: 300 Peters Trust Bldg., Omaha, Nebr. Second Annual Convention, July 5-7, 1925, Kansas City, Mo. Third Annual Convention, July 1-4, 1926, St. Paul, Minn. Chapters, 20. Members, 800. PURPOSE: Mental, moral and physical development of Jewish youth. Inculcation of Jewish ideals. SUPREME ADVISORY COUNCIL: Grand Pres., Sam Beber, Omaha, Nebr.; Grand Vice-Pres., Nathan Mnookin, Kansas City, Mo.; Saul Arenson, Cincinnati, O.; Grand Treas., Nathan Bernstein, Omaha, Nebr.; Grand Sec, I. F. Goodman, 300 Peters Trust Bldg., Omaha, Nebr.; Julius J. Cohn, Chattanooga, Tenn.; H. D. Frankel, Chicago, 111.; Myer Freeman, Omaha, Nebr,; Archie Herzoff, Sioux City, la.; Philip Klutznick, Kansas City, Mo.; Harry H. Lapidus, Omaha, Nebr.; Samuel H. Schaefer, Denver, Colo.; S. I. Silberman, Des Moines, la.; Harry Trustin, Omaha, Nebr. GRAND OFFICERS : Grand Aleph Godol, Philip Klutznick, Kansas City, Mo.; Grand Aleph S'gan, Harry S. Shedlov, Minneapolis, Minn.;Grand Aleph Senior Shotare, Alex Altshuler, St. Paul, Minn.; Grand Aleph Junior Shotare, Philip Wasserman, Grand Rapids, Mich.; Grand Aleph Mazkir, Jake Marx, Lincoln, Nebr.; Grand Aleph Gisbor, Bernie Glazer, Minot, N. Dak.; Grand Aleph Sopher, Abe Katebman, Council Bluffs, la.; Grand Aleph Kohen Godol, Louis Williams, Des Moines, la. ALPHA EPSILON PHI SORORITY Org. 1909. OFFICE: First National Bank Bldg., Chicago, 111. Convention, June 30-July 6, 1924, Charlevoix, Mich. Next Convention, 1927. Members 1,050. PURPOSE:To foster close friendship between members, to stimulate the intellectual, social and spiritual life of the members, and to count as a force through service rendered to others. 287 2SS AMERICAN JEWISH YEAR BOOK OFFICERS: Dean, Freda Rosenthal, Flint, Mich.; Sub-Dean, Martha Kaplan, Brooklyn, N. Y.; Treas., Edith Lazarus, Pittsburgh, Pa.; Scribe, Ruth I. Wien, 5480 Cornell Av., Chicago, 111. ALPHA EPSILON PI FRATERNITY Org. 1913. OFFICE: 129 W. 29th, New York City Eighth Annual Convention, Dec. 27-28, 1924, New York City. Tenth Annual Convention, Dec, 1926, Chicago 111. Chapters, 11. Alumni Clubs, 5. Members, 500. PURPOSE: A national collegiate Greek-letter organization for Jewish students. OFFICERS: Pres., Herman Rolnick, N. Y. C ; Vice-Pres., I.L. Rubin, Philadelphia, Pa.; Treas., David Schlesinger, Chicago, 111.; Sec, George Cooper, Brooklyn, N. Y. BOARD OF GOVERNORS: The Officers, and Stanley Epstein, N. Y. C ; Fred Kaplan, N. Y. C ; Sidney Picker, N. Y. C ; T. R. Racoosin, N. Y. C; S. H. Steinberg, Philadelphia, Pa. •ALPHA MU SIGMA FRATERNITY Org. 1914. OFFICE: 2078 Vyse Av., New York City. ALPHA OMEGA FRATERNITY Org. 1906, Inc., 1909. OFFICE: Secretary, 2435 N. 17th, Philadelphia, Pa. Eighteenth Annual Convention, Dec. 23-25, 1925, Toronto, Ont. Nineteenth Annual Convention, Dec. 27-29, 1926, New York City. Members, 2,000. PURPOSE: TO uphold the highest standards of the dental profession, to provide for ourselves the pleasures of universal brotherhood and to promote our general welfare. OFFICERS: Chancellor, A. H. Berman, Baltimore, Md.; Supreme Vice-Chancellors, S. Katzman, Rahway, N. J.; M. Bleddon, San Francisco, Cal.; Supreme Scribe, S. H. Bowman, 2435 N. 17th, Phila- •Revised information was not furnished upon request. For latest official data oa this organization, see THE AMERICAN JEWISH YEAR BOOK, Vol. 27. JEWISH NATIONAL ORGANIZATIONS 289 delphia, Pa.; Supreme Quaestor, J. W. Malkinson, Hartford, Conn.; Supreme Tribune, P. B. Label, Philadelphia, Pa.; Editor, N. Raff, Philadelphia, Pa.; Organizer, Wm. Ersner, Philadelphia, Pa.; Historian, S. Birenbach, N. Y. C; Marshal, Wm. Rich, N. Y. C; Macer, H. Brown, N. Y. C. TRUSTEES: S. Perlman, Toronto, Ont.; D. Pink, Minneapolis, Minn.; J. M. Strully, Brooklyn, N. Y. JUSTICES: S. H. Bowman, M. M. Fintz, M. Harris, all of Philadelphia, Pa. ALUMNI ASSOCIATION OF DROPSIE COLLEGE Org. 1924. OFFICE: Broad and York, Philadelphia, Pa. Annual Convention, March 9, 1926, Philadelphia, Pa. Members, 30. PURPOSE: TO advance the interests of the Dropsie College and further spirit of friendship among its graduates. OFFICERS: Pres., Harry S. Linfield, N. Y. C; Vice-Pres., S. Zeitlin, Phila., Pa.; Sec.-Treas., Joseph Reider, Broad and York, Phila., Pa. ALUMNI ASSOCIATION OF THE HEBREW UNION COLLEGE Org. 1889. Hebrew Union College, Cincinnati, O. Annual Meeting, Oct. 19-23, 1925, Cincinnati, 0. Members, 200. PURPOSE: TO promote welfare of the Hebrew Union College and to strengthen fraternal feeling among graduates of the college. OFFICERS: Pres., Jonah B. Wise, N. Y. C; Treas., Jacob Skirball, Evansville, Ind.; Sec, Harry S. Linfield, N. Y. C. EXECUTIVE BOARD:David Alexander, Harry W. Ettelson, Sol. L. Kory, Israel Mattuck, Louis D. Mendoza, Jacob B. Pollak, Abraham B. Rhine, Samuel Schwartz, Geo. Solomon, Wm. M. Stern, Aaron Weinstein, and Member ex-officio, Julian Morgenstern. AMERICAN ACADEMY FOR JEWISH RESEARCH Org. June 15, 1920. OFFICE: Philadelphia. Pa. Members, 14; Honorary member, 1. PURPOSE: TO advance Jewish learning in America. OFFICERS: Pres., Louis Ginzberg, N. Y. C; Treas., Jacob Z. Lauterbach, Cincinnati, O.; Sec, David S. Blondheim, 808 Reservoir, Baltimore, Md. 290 AMERICAN JEWISH YEAR BOOK •AMERICAN COMMITTEE FOR THE HEBREW NATIONAL AND UNIVERSITY LIBRARY IN JERUSALEM Org. Jan. 2, 1924. OFFICE: New York City. AMERICAN JEWISH COMMITTEE Org. Nov. 11, 1906; inc. Mch. 16, 1911. OFFICE: 171 Madison Av. New York City. For report, see p. 429 et seq. AMERICAN JEWISH CONGRESS Org. March, 1916. Re-org. 1920. OFFICE: 8 w. 40th st., New York City Fifth Biennial Meeting, Oct. 25-26, 1925, Philadelphia, Pa. Delegates, 350. PURPOSE: TO further and promote Jewish rights; to safeguard and defend such rights wherever and whenever they are either threatened or violated; to deal generally with all matters relating to and affecting specific Jewish interests. OFFICERS: Pres., Stephen S. Wise; Vice-Pres., Joseph Barondess; Aaron J. Levy; Louis Lipsky; Carl Sherman; Samuel Untermyer; Treas., Geo. I. Fox; Ex. Sec, B. G. Richards, 1 Madison Av., New York City. EXECUTIVE COMMITTEE: The Officers, and Max Abramoff, Phila., Pa.; Benj. Antin, N. Y. C ; Robt. August, N. Y. C ; Herman Bernstein, N. Y. C ; S. Bernstein, N. Y. C ; B. H. Birnbaum, Youngstown, O.; Maurice A. Bleich, Yonkers, N. Y.; Samuel Blitz, N. Y. C ; Sol. Bloom, N. Y. C ; Elizabeth Blume, Newark, N. J.; Reuben Brainin, N. Y. C ; Meyer Brown, N. Y. C ; Gedalia Bublick, N. Y. C ; Israel Carmel, N. Y. C ; Emanuel Celler, N. Y. C ; A. B. Cohen, Scsanton, Pa.; Edward Cohen, Boston, Mass.; Max Cohen, Bridgeport, Conn.; Max Conheim, Chicago, 111.; Abr. Coralnick, N. Y. C ; Jacob De Haas, N. Y. C ; Bernard S. Deutsch, N. Y. C ; Samuel Dickstein, N. Y. C ; Morris Dlugasch, N. Y. C ; Joseph Durst, N. Y. C ; Nachman H. Ebin, Brooklyn, N. Y.; Max Eckman, N. Y. C ; Adolph Edlis, Pittsburgh, Pa.; Henry Eiser, Brooklyn, N. Y.; S. C. Eldridge, San Antonio, Tex.; Joel Entin, N. Y. C ; Sam'l Epstein, Chicago, 111.; Chaim Fineman, Phila,; Pa.; Jacob Fishman, N. Y. C ; Louis Germain, Brooklyn, N. Y.; Louis D. Gibbs, N. Y. C ; Jacob Ginsburg, Phila., Pa.; Leopold C. Glass, Phila., Pa.; Jacob Goell, Brooklyn, N. Y.; Abr. Goldberg, N. Y. C ; Israel Goldberg, N. Y. C ; Solomon Goldman, Cleveland, O.; Louis 'Revised information was not furnished upon request. For latest official data on this organization, see THE AMERICAN JEWISH YEAR BOOK, Vol. 27. JEWISH NATIONAL ORGANIZATIONS 291 Goldring, Buffalo, N. Y.; Sam'l Goldstein, N. Y. C; Geo. L. Gordon, Minneapolis, Minn.; Richard Gottheil, N. Y. C ; Mrs. Richard Gottheil, N. Y. C ; Harry Grayer, Brooklyn, N. Y.; Chas. Green, Brooklyn, N. Y.; Meyer Greenberg, N. Y. C ; Leonard J. Grossman, Chicago, 111.; Isaac Hamlin, N. Y. C.; Harry Harriton, Buffalo, N. Y.; Gustave Hartman, N. Y. C.< Jacob Heckman, Washington, D. C ; Max Heller, New Orleans, La.; Ralph B. Hershon, Wilmington, Del.; Abr. Hirsh, Phila., Pa.; Max L. Hollander, N. Y. C; Joseph Jasin, Miami, Fla.; David Kaliski, N. Y. C ; Abr. I. Kaplan, N. Y.C.; Mordecai M. Kaplan, N. Y. C; Nathan D. Kaplan, Chicago, 111.; M. Katz, Phila., Pa.; C. Hillel Kauvar, Denver, Colo.; Gustave Klausner, St. Louis, Mo.; Herman P. Koppelman, Hartford, Conn.; Sol. C. Kraus, Phila., Pa.; Arthur M. Lamport, N. Y. C ; B. L. Levinthal, Phila., Pa.; Israel Herbert Levinthai, Brooklyn, N. Y.; Louis E. Levinthal, Phila., Pa.; Aaron J. Levy, N. Y. C ; Martin O. Levy, Phila., Pa.; Wm. B. Lewis, Phila., Pa.; Solon J. Liebeskind, N. Y. C ; Harry Liebowitz, N. Y. C ; Abr. Liesin, N. Y. C; Norvin R. Lindheim, Long Island, N. Y.; Chas. Lipshutz, Phila., Pa.; J. L. Louisson, Portland, Ore.; Max Luria, Reading, Pa.; S. Margoshes, N. Y. C; Morris Margulies, N. Y. C; Hirsh Masliansky, N. Y. C; Julius Meyer, Boston, Mass.; Jacob.B. Moses, Baltimore, Md.; Max I. Mydans, Boston, Mass.; Emanuel Neumann, N. Y. C ; Lewis I. Newman, San Francisco, Cal.; Lester Nusbaum, Rochester, N. Y.; Hugo Pam, Chicago, 111.; Sam'l B. Paulive, Chelsea, Mass.; Nathan D. Perlman, N. Y. C ; David Podolsky, N. Y. C; David R. Radovsky, Fall River, Mass.; Louis Rimsky, N. Y. C.John Rissman, Chicago, 111.; Henry Rocker, Cleveland, O.; A. J. Rongy, N. Y. C ; Bernard A. Rosenblatt, N. Y. C; J. Rudovsky, Brooklyn, N. Y.; David Salpeter, Brooklyn, N. Y.; L. Segal, N. Y. C ; Herman Seidel, Baltimore, Md.; Harry M. Seidenberg, Phila., Pa.; David Shapiro, N. Y. C; Morris Shapiro, St. Louis, Mo.; Bernard Shelvin, N. Y. C ; Benjamin Shepard, N. Y. C; Archibald Silverman, Providence, R. I.; Mrs. Archibald Silverman, Providence, R. I.; Robt. Silverman, Boston, Mass.; D. W. Simons, Detroit, Mich.; Mordecai Soltes, Arverne, L. I.; Leon Spitz, New Haven, Conn.; Adolph Stern, N. Y. C ; D. B. Steuer, Cleveland, O.; Max D. Steuer, N. Y. C ; Elihu D. Stone, Boston, Mass.; Harry Sussman, Mt. Vernon, N. Y.; Henrietta Szold, N. Y. C ; Jos. Tannenbaum, N. Y. C ; Jos. L. Tepper, Washington, D. C ; Max Verschleisser, N. Y. C; Philip Wattenberg, N. Y. C ; Myer W. Weisgal, N. Y. C; Moe Werbelowsky, N. Y. C ; Benjamin Winter, N. Y. C; Leo Wolfson, N. Y. C.; B. Ziv, Portsmouth, Va.; B. Zuckerman, N. Y. C. AMERICAN JEWISH HISTORICAL SOCIETY Org. 1892. OFFICE: 531 W. 123d. New York City Thirty-third Annual Meeting, Feb. 7-8, 1925, New York City. Thirty-fourth Annual Meeting, Oct. 6, 1926. Philadelphia, Pa. 292 AMERICAN JEWISH YEAR BOOK Members, 438. Has issued twenty-nine volumes of publications and an index to publications 1-20. Maintains a collection of books, manuscripts, and historical objects in its room in the building of the Jewish Theological Seminary, 531 W. 123d, N. Y. C. OFFICERS: Pres., Abram S. W. Rosenbach, Phila., Pa.; Vice-Pres., Simon W. Rosendale, Albany, N. Y.; David Philipson, Cincinnati, O.; Max J. Kohler, N. Taylor Phillips, Richard J. H. Gottheil, N. Y. C; Treas., Henry S. Hendricks; Curator, Leon Huhner; Cor. Sec, Albert M. Friedenberg, 38 Park Row; Rec. Sec, Samuel Oppenheim, N. Y. C. EXECUTIVE COUNCIL: The Officers, and Chas. J. Cohen, Phila., Pa.; Henry Cohen, palveston, Tex.; Herbert Friedenwald, Washington, D. C; Lee M. Friedman, Boston, Mass.; George Alexander Kohut, N. Y. C; Julian W. Mack, Chicago, 111.; Max L. Margolis, Phila., Pa.; Alexander Marx, N. Y. C; Abraham A. Neuman, Phila., Pa.; Lessing J. Rosenwald, Phila., Pa.; Lewis L. Strauss, Jr., N. Y. C; Morris Wolf, Phila., Pa.; and Oscar S. Straus, N. Y. C, and Cyrus Adler, Phila, Pa., ex-officio, as past presidents of the Society. AMERICAN JEWISH PHYSICIANS' COMMITTEE Org. May 24, 1921. OFFICE: 5 Columbus Circle, New York City. Fourth Annual Convention, May, 1925, New York City. Members, 3,000. PURPOSE : To build a medical college and hospital in connection with the Hebrew University in Palestine. OFFICERS: Pres., Nathan Ratnoff; Vice-Pres., Meyer R. Robinson and Julius Halpern; Treas., Emanuel Libman; Asst. Treas., Harry E. Isaacs; Sec, Israel S. Wechsler, N. Y. C. EXECUTIVE COMMITTEE:David J. Kaliski, Chairman, Joseph Bakst, I. W. Held, A. Hymanson, Samuel J. Kopetzky. BOARD OF GOVERNORS OF HEBREW UNIVERSITY: Nathan Ratnoff, Chairman; Sigismund S. Goldwater, David J. Kaliski, Samuel J. Kopetzky, Israel Strauss, Israel S. Wechsler. BOARD OF DIRECTORS :Emil Altman, Joseph Bakst, Joseph Bieber, Leo Buerger, Samuel J. Druskin, Albert A. Epstein, Henry W. Frauenthal, all of N. Y. C ; Harry Friedenwald, Baltimore, Md.; Sigismund S. Goldwater, Julius Halpern, Isidore W. Held, Philip Horowitz, Abraham Hymanson, Harry E. Isaacs, Leopold Jaches, Julius Jarcho, Max Kahn, David J. Kaliski, Samuel J. Kopetzky, Joseph Krimsky, Emanuel Libman, William Linder, Herman Lorber, Nathan Ratnoff, Meyer R. Robinson, Samuel J. Scadron, A Strachstein, Israel Strauss, Samuel Tannenbaum, Israel S. Wechsler. JEWISH NATIONAL ORGANIZATIONS 293 AMERICAN PRO-FALASHA COMMITTEE Org. Aug. 1922; inc. 1923. OFFICE: 2107 Broadway, New York City. PURPOSE: The educational and religious rehabilitation of the Falasha Jews of Abyssinia. OFFICERS: Hon. Chairman, Cyrus Adler, Phila., Pa.; Chairman, Elias Margolis; Vice-Chairman, Joseph Rauch; Treas., Elias L. Solomon; Sec, J.MaxWeis, New York City., Director of Field Work, Jacques Faitlovitch. EXECUTIVE COMMITTEE: S. Bendheim, N. Y. C; Meyer Berlin, N. Y. C; Edward N. Calisch, Richmond, Va.; Samuel S. Cohon, Cincinnati, O.; Bernard M. Drachman, N. Y. C : Max Drob, N. Y. C; Harry W. Ettelson, Memphis, Tenn.; Jacques Faitlovitch; Abraham J. Feldman, Hartford, Conn.; Solomon Foster, Newark, N. J.; Samuel Friedman, Brooklyn, N. Y.; Ephraim Frisch, San Antonio, Tex., Samuel H. Goldenson, Pittsburgh, Pa.; Israel Goldstein, N. Y. C; Sidney E. Goldstein, N. Y. C; Richard Gottheil, N. Y. C; Rudolph Grossman, N. Y. C ; M. H. Harris, N. Y. C ; James_ Heller, Cincinnati, O.; Maximilian Heller, New Orleans, La.; Mordecai M. Kaplan, N. Y. C; Max D. Klein, Philadelphia, Pa.; Geo. A. Kohut, N. Y. C ; Nathan Krass, N.Y. C ; Arthur Lamport, N.Y. C ; Jacob Z. Lauterbach, Cincinnati, O.; David Lefkowitz, Dallas, Tex.; Samuel J. Levinson, Brooklyn, N. Y.; Elias Margolis, Mt. Vernon, N. Y.; Alexander Marx, N. Y. C; Joseph Rauch, Louisville, Ky.; Irving F. Reichert, N. Y. C; Wm. Rosenau, Baltimore, Md.; A. E. Rothstein, N. Y. C.; Norman Salit, Far Rockaway, N. Y.; Harry Schneiderman, N. Y. C; Elias L. Solomon, N. Y. C ; Nathan Stern, N. Y. C ; Mrs. Estelle M. Sternberger N. Y. C ; A. B. Tintner, N. Y. C ; J. Max Weis, N. Y. C ; Peter Wiernik, N. Y. C ; Mrs. A. Joseph Wiesenfeld, Baltimore, Md.; Louis Wolsey, Phila., Pa. ADVISORY COUNCIL: David M. Bressler, N. Y. C ; Rudolph I. Coffee, Oakland, Cal.; Elijah Finkelstein, Brooklyn, N. Y.; Lee K. Frankel, N. Y. C; Mrs. Sallie Glauber, N. Y. C; Leo Jung, N. Y. C; Max Klee, Chicago, 111.; Jacob Kohn, N. Y. C; Alma L. Lissberger, N. Y. C ; Solomon Lowenstein, N. Y. C ; Geo. Mord, Staten Island, N. Y. AMERICAN ZION COMMONWEALTH Org. 1924. OFFICE: 114 Fifth Av., New York City. Annual Meeting, Dec. 29, 1925, New York City. Members, 6,000. PURPOSE: Acquisition and sale of Palestinian land and securities. OFFICERS: Pres., S. J. Welnstein; Vice-Pres., Chas. Passman; Treas., Feibus Kobak, Sec, I. S. Adlerblum, N. Y. C. DIRECTORS: The Officers, and Solomon Deutsch, A. Z. Halpern, I. J. 294 AMERICAN JEWISH YEAR BOOK Lippmann, Isaac Meister, Emanuel Neumann, Bernard A. Rosenblatt, Max Tachna, Chas. Topkis. BARON DE HIRSCH FUND Org. Feb. 9, 1891; inc. 1891. OFFICE: 233 Broadway, New York City. Thirty-fifth Annual Meeting, Jan. 24, 1926, New York City. PURPOSE: TO Americanize and assimilate the immigrants with the masses and teach them to become good and self-supporting citizens, and to prevent by all proper means their congregating in large cities. The activities of the Fund fall under the following heads: I. Agriculture; subsidizing Jewish Agricultural Society and the National Farm School; granting scholarships for State agricultural schools to young men desiring to enter agriculture as their life work. II. BARON DE HIRSCH TRADE SCHOOL, 222 E. 64th, N. Y. C, offering to young men free instruction in day classes in the following trades: Machinist, Plumbing. Electrical, Sign Painting, Printing, Auto Mechanics, and Operating Engineering. III. WOODBINE LAND AND IMPROVEMENT COMPANY. IV. RELIEF WORK. Through subsidized societies in Baltimore, Md. and New York City. OFFICERS: Pres., S. G. Rosenbaum; Vice-Pres., Samuel Greenbaum; Treas., Simon F. Rothschild; Hon. Sec, Max J. Kohler, 253 Broadway, N. Y. C. TRUSTEES: The Officers, and Charles L. Bernheimer, Nathan Bijur, Abram I. Elkus, Waldemar Kops, Mortimer L. Schiff, Roger W. Straus, Arthur H. Sulzberger, N. Y. C; S. S. Fleisher, Phila., Pa.; Julius Rosenwald, Chicago, 111. MANAGING DIRECTOR, Eugene S. Benjamin; Asst. Sec, Geo. Bookstaver. B'NAI B'RITH HILLEL FOUNDATIONS Org. 1923. OFFICE: 625 E. Green, Champaign, 111. Foundations, 3. PURPOSE: A Jewish organization devoted to social and religious work among students at the university. ADMINISTRATORS: Dir., Benjamin M. Frankel, 625 E. Green, Champaign, 111.; Boris D. Bogen, Alfred M. Cohen, H. M. Fisher, James G. Heller, Harry M. Hoffheimer, Isaac Kuhn, Louis L. Mann. BUREAU OF JEWISH SOCIAL RESEARCH Org. April, 1919. OFFICE: 114 Fifth Av., New York City. Merger of Bureau of Philanthropic Research, Bureau of Jewish JEWISH NATIONAL ORGANIZATIONS 295 Statistics and Research of the American Jewish Committee, and the Field Bureau of the National Conference of Jewish Charities, and supported by funds provided by the American Jewish Committee, the New York Foundation, Hofheimer Foundation, and the Federations of Jewish Philanthropies throughout the country, in addition to private contributions. PURPOSE: Research into problems of Jewish social and communal life in America and in other centers of Jewry throughout the world. OFFICERS: Chairman, Adolph Lewisohn; Treas., David M. Heyman; Sec, Solomon Lowenstein; Chairman Exec. Com., Cyrus L. Sulzberger. BOARD OF TRUSTEES: The Officers, and Cyrus Adler, B. D. Bogen, Fred M. Butzel, Lee K. Frankel, Harry G. Friedman, I. E. Goldwasser, Mrs. Alexander Kohut, Herbert H. Lehman, Irving F. Lehman, Alfred C. Meyer, Max Senior, Robert Senior, Nat Stone, Aaron Waldheim, Morris D. Waldman, Felix M. Warburg. EXECUTIVE COMMITTEE: David M. Heyman, Chairman; Harry G. Friedman, I. E. Goldwasser, Mrs. Alexander Kohut, Herbert H. Lehman, Cyrus L. Sulzberger, Felix M. Warburg, N. Y. C. ADVISORY COMMITTEE: Lee K. Frankel, Chairman; Ludwig B. Bernstein, Jacob Billikopf, Boris D. Bogen, Louis M. Cahn, Maurice B. Hexter, Hyman Kaplan, Solomon Lowenstein, Philip L. Seman, Frances Taussig, and Morris D. Waldman. ADMINISTRATION: Samuel A. Goldsmith, Director. CENTRAL CONFERENCE OF AMERICAN RABBIS Org. July 9, 1899. OFFICE: Rochester, N. Y. Thirty-sixth Annual Convention, Oct. 19-23, 1925, Cincinnati, O. Members, 268. Has issued thirty-six volumes of its Year Book; and besides, the Union Prayer Book; the Union Hymnal; the Union Haggadah; Prayers for Private Devotion; Army Ritual for Soldiers of the Jewish Faith (1916); and various other publications. OFFICERS: 1925-1926: Hon. Pres., Kaufman Kohler, N. Y. C.;* Pres., Louis Wolsey, Phila., Pa.; Vice-Pres., Hyman G. Enelow, N.Y.C; Treas., Morris Newfield, Birmingham, Ala.; Rec. Sec, Isaac E. Marcuson, Macon, Ga.; Cor. Sec, Morris S. Lazaron, Baltimore, Md. EXECUTIVE BOARD, 1925-1926: Edward N. Calisch, Richmond Va.; Solomon B. Freehof, Chicago, 111.; Jacob H. Kaplan, Cincinnati, O.; Sol. L. Kory, Vicksburg, Miss.; Emil W. Leipziger, New Orleans, La.; Gerson B. Levi, Chicago, 111.; Edgar F. Magnin, Los Angeles, Cal.; David Philipson, Cincinnati, O.; Abba H. Silver, Cleveland, O.; Abram Simon, Washington, D. C; Richard M. Stern, Nashville, Tenn.; Samuel Thurman, St. Louis, Mo. * Deceased. 296 AMERICAN JEWISH YEAR BOOK COUNCIL ON AMERICAN JEWISH STUDENT AFFAIRS Org. 1925. OFFICE: 531 W. 123d, New York City. Annual Convention, Nov. 22, 1925, New York City. PURPOSE: Advisory body for discussion of problems of interest to Jewish students at American colleges and presentation of recommendations of educational and other characters. OFFICERS: Chancellor, David N. Mosessohn, N. Y. C ; Chairman, Harold Riegelman, N. Y. C; Vice-Chairmen, Edward Davis, Phila., Pa., Bernard Lichtenberg, N. Y. C ; Treas. Hyman I. Jacobson, N.Y.C.; Sec, Irving H. Fisher, 531 W. 123d, N. Y. C. EXECUTIVE COMMITTEE: The Officers, and Samuel Birenbach, N.Y.C.; Albert Cornhall, N. Y. C; Martha Kaplan, Brooklyn, N. Y.; Arthur A. Snyder, N. Y. C. COUNCIL OF JEWISH WOMEN See: NATIONAL COUNCIL OF JEWISH WOMEN. DROPSIE COLLEGE FOR HEBREW AND COGNATE LEARNING Org. 1905. Inc. May 20, 1907. Broad and York, Philadelphia, Pa. Incorporated in State of Pennsylvania. Invested funds about $800,000.00. LIBRARY: Volumes and pamphlets, 29,000. OFFICERS: Pres., Cyrus Adler; Vice-Pres., Horace Stern; Treas., D. Hays Solis-Cohen; Sec, Lessing Rosenwald, Phila. Pa. BOARD OF GOVERNORS: The Officers, and Harry Friedenwald, Baltimore, Md.; Isaac Gerstley, Louis Gerstley, Philadelphia, Pa.; Louis Marshall, N. Y. C; Jules E. Mastbaum, Simon Miller, A. S. W. Rosenbach, Philadelphia, Pa.; Oscar S. Straus, N. Y. C.;* Edwin Wolf, Philadelphia, Pa. FACULTY: Pres., Cyrus Adler (M. A., Pennsylvania; Ph. D., Johns Hopkins); Professor in charge of the Biblical Department, Max L. Margolis (M. A., Ph. D., Columbia); Professor in charge of the Rabbinical Department, Solomon Zeitlin (Th.D, Ecole Rabbinique; Ph.D., Dropsie); Associate Professor Historical Department, Abraham A. Neuman (M. A., Columbia; H. L. D., Jewish Theological Seminary of America); Associate Professor Department of Egyptology, Nathaniel Reich, (Ph.D., Vienna); Instructor Biblical Department and Assistant Librarian, Joseph Reider (B. A., College of the City of New York; Ph.D., Dropsie College); Instructor in Arabic, Solomon L. Skoss (M.A., Denver; Ph.D., Dropsie). * Deceased. JEWISH NATIONAL ORGANIZATIONS 297 EDUCATIONAL LEAGUE FOR THE HIGHER EDUCATION OF ORPHANS Org. 1896. OFFICE: 336 Engineer's Bldg., Cleveland, 0. Twenty-fifth Meeting, July 11, 1920, Cleveland, O. OFFICERS: Pres. Alfred A. Benesch, Cleveland, O.; Vice-Pres., M. J. Mandelbaum, Cleveland, O.; Hon. Vice-Pres., Nathan Cohn, Tenn.; Adolph Freund, Mich.; Milton R. Hart, 111.; Sol. S. Kiser, Ind.; Max S. Schayer, Colo.; Treas., Maurice Gusman, Cleveland, O.; Sec, Eugene E. Wolf, Engineer's Bldg., Cleveland, O. GOVERNORS: Adolph Kraus, Pres., I. O. B. B.;—Sec, I. O. B. B.; and as ex-officio members of the Board the officers and members of the Executive Committee of the I. 0. B. B.; David Alexander, Akron, O.; Myrtle W. Baer, Milwaukee, Wis.; Herbert D. Bloch, Cincinnati, O.; Isidore Freiberger, Cleveland, O.; Bernard Ginsburg, Detroit, Mich.; Edna Goldsmith, Cleveland, O.; Mrs. Bernard Greensfelder, St. Louis, Mo.; Grace Grossman, Youngstown, O.; Edgar A. Hahn, Cleveland, O.; Eugene Halle, Cleveland, O.; Clarence J.' Hays, Cleveland, O.; D. A. Huebsch, Cleveland, O.; Mrs. Sigmund Joseph, Cleveland, O.; I. Kobacker, Toledo, O.; Samuel J. Kornhauser, Cleveland, O.; Fred Lazarus, Jr., Columbus, O.; Mrs. David Lefkowitz, Dallas, Tex.; Meyer Lovitch, Scranton, Pa.; M. J. Mandelbaum, Cleveland, O.; Mrs. L. S. Musliner, Detroit, Mich.; Emil Nathan, Mo.; Mrs. Jacob Ottenheimer, Cincinnati, O.; Mrs. Frank Rosenblatt, St. Joseph, Mo.; Anna C. Roth, Toledo, O.; Joseph Schonthal, Columbus, O.; E. A. Schwarzenberg, Cleveland, O.; Abba Hillel Silver, Cleveland,O.; Harry Simon, St. Louis, Mo.; Phillip Stein, Chicago, 111.; Alex. Stern, Fargo, N. Dak.; I. L. Stern, Madison, Ind.; David Sternberg, Memphis, Tenn.; Carl Vetsburg, St. Louis, Mo.; A. L. Weinstein, Fort Wayne, Ind.; Wm. Woolner, Peoria, 111. THE EX-PATIENTS' TUBERCULAR HOME OF DENVER, COLO. Org. 1908. OFFICE: 8000 E. Montview Blvd., Denver, Colo. Members, 45,000. PURPOSE: TO provide a home for helpless patients who after being discharged from any Tubercular Hospital or Sanatorium are as yet unable to care for themselves. OFFICERS: Pres., Edward Grimes; Vice-Pres., Adolph Kiesler; Sec, A. M. Blumberg, P. O. Box 1768; Treas., M. Bronstine. DIRECTORS: Henry Aronoff, D. R. Bank, M. Binstock, M. Bronstine, M. H. Eber, Edward Grimes, A. B. Hirschfeld, J. P. Karsh, A. Kiesler, J. Klatzkin, Frank Masure, Joe Miller, M. Nierenberg, Sr., S. Priess, Simon Quiat, Jerome Reichart, Max Schradsky, M. H. Spiegelman, M, Stein, D. Tober, Nathan Wiener. 298 AMERICAN JEWISH YEAR BOOK FEDERATION OF HUNGARIAN JEWS IN AMERICA Org. Nov. 1, 1909. OFFICE: 1 Union Square, W., New York City. Sixth Convention, May, 1925, New York City. Seventh Convention, May 28-29, 1926, New York City. Members, 35,000. Societies, 107. PURPOSE: TO promote the educational, social and religious interests of the Hungarian Jews here and in Hungary. OFFICERS: Pres., Samuel Buchlcr; Vice-Pres., B. J. Feuerstein, Isidore Kichler, Simon Miller, Bernard Price; Treas., Isidor Rosenfeld; Acting Sec, Dorothy Buck, N. Y. C. FEDERATION OF POLISH JEWS IN OF AMERICA Org. 1908. OFFICE: 32 Union Square, New York City. Seventeenth Annual Convention, April 26. 1925, New York City. Next Convention, May, 1926, New York City. Members, 50,000. PURPOSE: Interest in all Jewish matters. Provide for the sick a hospital in case they cannot afford to pay for their treatment; culture work and aims to build centers all over the United States for their members and to erect a Hyam Salomon Monument in New York City. Publishes a monthly, Der Verband. OFFICERS: Pres., Benjamin Winter; Vice-Pres., Chas. Green; Treas., H. L. Berman; Sec, David Trautman; Ex. Dir., Z. Tygel. HADASSAH THE WOMEN'S ZIONIST ORGANIZATION Org. 1912. OFFICE: 114 Fifth Ave., New York City. Eleventh Annual Convention, July 1-2, 1925, Washington, D. C. Chapters, 240. Sewing Circles, 700. Junior Hadassah Groups, 153. PURPOSE: TO promote Jewish institutions and enterprises in Palestine, and to foster Zionist ideals in America. In pursuance of the Palestinian object, Hadassah contributes the largest part of the maintenance of the Hadassah Medical Organization in Palestine; is maintaining Infant Welfare Stations; is raising funds through the religious school children of America for school luncheons and through the Junior Hadassah Units maintains Meier Chfeye, a children's village under the Palestine Orphan Committee. The Sewing Circles supply linen to hospitals, field hospitals, clinics and other Palestinian organizations and furnish clothing to about 1300 orphans. NATIONAL BOARD: Pres., Henrietta Szold; Hon. Vice-Pres., Mrs. Nathan Straus: Vice-Pres., Mrs. Emil Crockin, Pearl Franklin, Mrs. JEWISH NATIONAL ORGANIZATIONS 299 Edw. Jacobs; Treas., Mrs. H. B. Lefkowitz; Sec, Mrs. Robert Szold; Mrs. I. S. Adlerblum, Mrs. I. B. Berkson, Mrs. David Blaustein, Mrs. H. J. Dannenbaum, Mrs. S. Doniger, Mrs. Joseph H. Ehrlich, Mrs. H. H. Frankel, Mrs. A. H. Fromenson, Mrs. Henry Harris, Sarah Kussy, Mrs. S. L. Lamport, Mrs. S. W. Myerson, Rachel Natelson, Mrs. Sylvan Robison, Alice L. Seligsberg, Mrs. A. Silverman, Mrs. A. Slomka, Mrs. A. H. Vixman and Mrs. Robert Wile. *HAI RESH FRATERNITY Org. July, 1907. OFFICE: 3718 Holmes AV., Kansas City, MO. HEBREW SHELTERING AND IMMIGRANT AID SOCIETY OF AMERICA OFFICE: 425 Lafayette, New York City. An amalgamation of the Hebrew Sheltering House Association, organized Nov., 1888, and the Hebrew Immigrant Aid Society, organized 1901. Seventeenth Annual Meeting, April 11, 1926, New York City. Contributors, 150,000. PURPOSE: TO facilitate the lawful entry of Jewish immigrants at the various ports in the United States, to provide them with temporary assistance, to prevent them from becoming public charges, to discourage their settling in congested cities, to prevent ineligibles from immigrating to the United States, to foster American ideals, and to instil in them a knowledge of American history and institutions, and to make better known the advantages of desirable immigration. OFFICERS: Pres., Abraham Herman, N. Y. C ; Vice-Pres., Joseph Barondess, N. Y. C ; Adojph Copeland, Chicago, 111.; Harris Poorvu, Boston, Mass.; Leon Kamaiky, N.Y.C.; Howard S. Levy, Phila., Pa.; Max Meyerson, N. Y. C ; Albert Rosenblatt, N. Y. C ; Leo S. Schwabacher, Seattle, Wash.; Israel Silberstein, Baltimore, Md.; Harry K. Wolff, San Francisco, Cal.; Treas., Harry Fischel, N. Y. C ; Hon. Sec, Joseph E. Eron; General Manager, Isaac L. Asofsky, N. Y. C. BOARD OF DIRECTORS: Morris Asofsky, Joseph Barondess, Joseph Baskin, Aaron Benjamin, B. B. Berkowitz, James Bernstein, John L. Bernstein, J. H. Cohen, Joseph E. Eron, Harry P. Fierst, Harry Fischel, •Revised information was not furnished upon request. For latest official data on this organization, see THE AMERICAN JEWISH YEAR BOOK, Vol. 27. 300 AMERICAN JEWISH YEAR BOOK Israel Friedkin, Samuel Goldstein, Adolph Held, Abraham Herman, Philip Hersh, Ph. Jaches, Alexander Kahn, Leon Kamaiky, Mrs. Leon Kamaiky, Nathan Kommel, Jacob J. Lesser, Harris Linetzky, M. S. Margolies, H. Masliansky, Jacob Massel, Max Meyerson, Max Pine, Nathan Roggen, Albert Rosenblatt, Ezekiel Sarasohn, Nathan Schoenfeld, B. Shelvin, Abraham I. Spiro, B. Charney Vladeck and Morris Weinberg. HEBREW THEOLOGICAL COLLEGE Org. 1921. OFFICE: 3446 to 3452 Douglas Blvd., Chicago, 111. Annual Meeting, Jan. 13, 1925, Chicago, 111. Library has about 10,000 volumes. PURPOSE: TO serve as an institution for higher Jewish learning and to provide facilities for students who wish to prepare themselves for the Rabbinate or for the teaching of Hebrew. OFFICERS: President, Rabbi Saul Silber; Vice-Pres., Rabbi A. Cardon, Samuel Ginsburg, S. Levin, Rabbi B. Z. Margolin; Treas., B. Laser; Recording Sec, M. Perlstein; Financial Sec, H. Hackman; Ex. Sec, Rabbi David Englander; Principal, Rabbi J. Greenberg. FACULTY OF THE COLLEGE: Pres., Rabbi Saul Silber; Instructors of Talmud and Codes, Rabbi N. Yablonsky, Rabbi S. Israelson, Rabbi Regensberg, Rabbi H. Rubenstein, Rabbi Z. Starr; for Bible, Hebrew Grammar and Literature, M. Shelinsky, E. Brody, Rabbi Sachs, Rabbi Stampfer, Mr. Shulman; for Jewish History and Philosophy, Prof. Meyer Waxman, (Ph.D. Columbia); for Midrash and Homiletics, Rabbi Saul Silber; for Public Speaking, J. R. Tysen. HEBREW UNION COLLEGE (See p. 332) HISTADRUTH IVRITH Org. 1916. Re-org. 1922. OFFICE: 114 Fifth Av., New York City. Convention, Dec. 26-27, 1925, Newark, N. J. Societies, 90. Members, 3,000. PURPOSE: Development of Hebrew culture and Hebrew language. OFFICERS: Pres., Ab. Goldberg; Treas., Elias Gottfried; Sec, M. Ribalow. EXECUTIVE COMMITTEE: N. Aaronson, A. S. Adler, S. Bernstein, M. E. Edelstein, I. W. Frishberg, I. Ginsberg, S. Ginsberg, Ch. Greenberg, J. T. Hellman, J. Kaplan, A. Kushner, Em. Newman, D. Rabelsky, Z. Sharfstein, A. Spicehandler, M. Tausner, D. Wartheim, M. Weisgal, K. Whiteman, M. A. Zeldin. JEWISH NATIONAL ORGANIZATIONS 301 INDEPENDENT ORDER OF B'NAI B'RITH Org. Nov. 1, 1843. OFFICE: 9 W. 4th, Cincinnati, O. Twelfth Quinquennial Convention, April 20-25, 1925, Atlantic City, N. J. Members, 85,000. Lodges, 500 (in North America, Europe, Asia, and Africa). Districts, 15 (7 in the United States). Institutions founded by the Order in the United States: HEBREW ORPHANS' HOME, Atlanta, Ga.; B'NAI B'RITH CEMETERY, Chicago, 111.; FREE EMPLOYMENT BUREAU, Chicago, 111.; JEWISH WIDOWS' AND ORPHANS' HOME, New Orleans, La.; TOURO INFIRMARY, New Orleans, La.; HOME FOR AGED AND INFIRM, Yonkers, N. Y.; JEWISH ORPHANS HOME, Cleveland, O.; B'NAI B'RITH FREE EMPLOYMENT BUREAU, Pittsburgh, Pa.; RELIEF COMMITTEE, Hot Springs, Ark.; B'NAI B'RITH CLUB, San Francisco, Cal.; HOME FOR JEWISH ORPHANS, LOS Angeles, Cal.; IMMIGRANT SCHOOLS at Kalamazoo, Mich., and Memphis, Tenn.; SABBATH SCHOOLS, at Houghton, Mich.; Trenton, N. J.; Sharon, Pa.; and Madison, Wis.; B'NAI B'RITH ORPHANAGE, at Erie, Pa.; LEO N. LEVI HOSPITAL, Hot Springs, Ark.; B'NAI B'RITH CLUB, Chicago, 111.; BOY'S VACATION CAMP, Chicago, 111.; SOCIAL SERVICE BOYS' SUMMER CAMP, Minneapolis, Minn.; B'NAI B'RITH HILLEL FOUNDATIONS at University of Illinois, University of Wisconsin and University of Ohio; NATIONAL JEWISH HOSPITAL FOR CONSUMPTIVES, Denver, Colo.; MEXICO IMMIGRATION BUREAU and numerous other institutions. OFFICERS: Pres., Alfred M. Cohen, Cincinnati, O.; First Vice-Pres., Lucius L. Solomons, San Francisco, Cal.; Second Vice-Pres., Archibald A. Marx, New Orleans, La., Treas., Boris D. Bogen, Cincinnati, O. EXECUTIVE COMMITTEE: The Officers, and Daniel Alexander, Salt Lake City, Utah; Henry A. Alexander, Atlanta, Ga.; Bertram Aufsesser, Albany, N. Y.; A. B. Frey, St. Louis, Mo.; Charles Hartman, N. Y. C ; Adolf Kraus, Chicago, 111.; Sidney G. Kusworm, Dayton, O.; Sam J. Leon, Omaha, Nebr.; Henry Monsky, Omaha, Nebr.; Leon B. Stein, Wheeling, W. Va.; Sidney J. Stern, Greensboro, N.C.; Martin Zielonka, El Paso, Tex.; Adolph Stern, Bucharest, Roumania; Josef Popper, Prague, Czecho-Slovakia; J. Niego, Constantinople, Turkey; Sol. Ehrmann, Vienna, Austria; David Yellin, Jerusalem, Palestine; Leo Baeck, Berlin, Germany; Leon Ader, Krakau, Poland. DISTRICTS: I. Org. 1851. Lodges 73. Territory: Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, Vermont, and Eastern Canada. Sec, Max Levy, 1819 Broadway, N. Y. C. II. Org. 1852. Lodges, 64. Territory: Colorado, Indiana, Kansas, Kentucky, Missouri, New Mexico, Ohio and Wyoming. Sec, Leonard H. Freiberg, 707 St. Paul Bldg., Cincinnati, O. III. Org. 1860. Lodges, 57. Territory: Delaware, New Jersey, Pennsylvania, and West Virginia. Sec, Joseph Herbach, 709 N. Franklin, Philadelphia, Pa. 302 AMERICAN JEWISH YEAR BOOK IV. Org. 1863. Lodges, 35. Territory: Arizona, California, Idaho, Montana, Nevada, Oregon, Utah, and Washington. Sec, Richard E. Gutstadt, 149 Eddy, San Francisco, Cal. V. Org. 1867. Lodges 28. Territory: Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and District of Columbia. Sec, Edwin L. Levy, P. O. Box 170, Richmond, Va. VI. Org. 1868. Lodges 87. Territory: Illinois, Iowa, Michigan, Minnesota, Nebraska, North Dakota, South Dakota and Wisconsin. Sec, Hiram D. Frankel, 1119 Chamber of Commerce Bldg., Chicago, 111. VII. Org. 1873. Lodges, 96. Territory: Alabama, Arkansas, Louisiana, Mississippi, Oklahoma, Tennessee, Texas and Western Florida (Pensacola). Sec, Myron M. Goldman, 212 Whitney Central Bldg., New Orleans, La. INDEPENDENT ORDER BRITH ABRAHAM Org. Feb. 7, 1887. OFFICE: 37 Seventh, New York City. Thirty-ninth Annual Convention, June 7, 1925, Atlantic City, N. J. Members, 142,555. Lodges, 600. OFFICERS: Grand Master, Adolph Stern; First Deputy Grand Master, Louis B. Siegel; Second Deputy Grand Master, Samuel L. Webb; Grand Sec, Max L. Hollander, N. Y. C ; Grand Treas., Adolph Rosenbaum, N. Y. C ; Endowment Treas., Adolph Teitelbaum. INDEPENDENT ORDER BRITH SHOLOM Org. Feb. 23 1905. OFFICE: 506-508 Pine, Philadelphia, Pa. Twentieth Annual Convention, June 14-16, 1925, Atlantic City N. J. Twenty-first Annual Convention, June 13-15, 1926, Atlantic City N.J. Members, 26,112. Lodges, 197. OFFICERS: Grand Master, Sol. C. Kraus, Phila. Pa.; First Deputy Grand Master, Chas. S. Lapides, N. Y. C.; Second Deputy Grand Master, A. S. Kanengieser, Newark, N. J.; Third Deputy Grand Master, Arthur Cohen, Providence, R. I.; Fourth Deputy Grand Master, Meyer Caplan, Baltimore, Md.; Fifth Deputy Grand Master, H. Kopplemann, Hartford, Conn.; Sixth Deputy Grand Master, Max Epstein, Pittsburgh, Pa.; Seventh Deputy Grand Master, Isaac Levinson, Chicago, 111; Eighth Deputy Grand Master, Myer Weintrub, St. Louis, Mo.; Ninth Deputy Grand Master ; Tenth Deputy Grand Master, A. Sherman, Richmond, Va.; Eleventh Deputy Grand Master ; Twelfth Deputy Grand Master, Jacques Brecher, Brooklyn, N. Y.; Grand Sec, Martin O. Levy, Phila., Pa.; Assistant Grand Sec, Adolph Rosenblum, Phila., Pa.; Grand Treas., Jacob Edelstein, Phila., Pa. JEWISH NATIONAL ORGANIZATIONS 303 INDEPENDENT ORDER FREE SONS OF ISRAEL Org. Jan. 18, 1849. OFFICE: 3109 Broadway, New York City. Triennial Convention, May 25, 1924, Atlantic City, N. J. Next Triennial Convention, May 25, 1927, Atlantic City, N. J. DISTRICTS, 2. Lodges 78. Members 8,659. OFFICERS: Grand Master, Solon J. Liebeskind; First Deputy Grand Master, Leopold Spitz: Second Deputy Grand Master, Monte M. Jacobs; Third Deputy Grand Master, David H. M. Weynberg; Grand Sec, Henry J. Hyman; Grand Treas., Jacob Strauss. EXECUTIVE COMMITTEE: David Dettelbach, Israel L. Feinberg, Henry M. Friedman, Arnold Gross, Louis J. Gross, Louis Hutter, Bogumil Laski, Mamie D. Newfield, Abraham H. Simons, Samuel Spitz, Henry E. Stern, Samuel Sturtz. DISTRICTS: I. Territory: Connecticut, Massachusetts, New Jersey, New York, Rhode Island, Maine, New Hampshire, Vermont, Pennsylvania, Delaware, and Maryland. II. Territory: Illinois, Kansas, Minnesota, Missouri, Wisconsin, Iowa, Nebraska and Indiana. INDEPENDENT ORDER SONS OF DAVID Org. June 1905. OFFICE: 828 Market, McKeesport, Pa. Convention, June 28, 1925. McKeesport, Pa. Members, 876. PURPOSE: Life insurance and to further Jewish activities. OFFICERS: Grand Master, Harry Halpert, McKeesport, Pa.; Deputy Grand Masters, D. Hartstein,Swissvale, Pa.; Sam Pollack, McKeesport, Pa.; Grand Treas., Max Lazear, Braddock, Pa.; Grand Sec, S. J. Klein, Swissvale, Pa.; Grand Master-at-Arms, M. J. Sadowsky, Braddock, Pa.; Grand Inner Guard, Jacob Graff, Braddock, Pa.; Grand Outer Guard, Max Newhouse, McKeesport, Pa. EXECUTIVE BOARD: The Officers, and I. S. Blattner, Pittsburgh, Pa.; Harry Feldman, Pittsburgh, Pa.; Samuel Firestone, Los Angeles, Cal.; F. R. S. Kaplan, McKeesport, Pa.; K. Kovacs, Duquesne, Pa.; J. M. Steinitz, Rankin, Pa. •INDEPENDENT WESTERN STAR ORDER Org. Feb. 13, 1894. OFFICE: 1127 Blue Island Av., Chicago, 111. INDEPENDENT WORKMEN'S CIRCLE OF AMERICA, INC. Org. Dec. 28, 1906. OFFICE: 86 Leverett, Boston, Mass. Eighteenth Annual Convention, May 29-June 1, 1925, Providence, R. I. Members, 5,369. •Revised information was not furnished upon request. For latest official data on this organization, see THE AMERICAN JEWISH YEAR BOOK, Vol. 27. 304 AMERICAN JEWISH YEAR BOOK OFFICERS: Chairman, Hyman Hurwitz, Revere, Mass.; Vice-Chairman, Jack Shneider, Roxbury, Mass.; Treas., Morris Ricklin, Roxbury, Mass.; Rec. Sec, David Monoson, Roxbury, Mass.; Gen. Sec, Morris H. Tubiash, Boston, Mass. EXECUTIVE COMMITTEE: Sam'l J. Bander, Maiden, Mass.; Israel Cohen, Boston, Mass.; Wm. Goldberg, Dorchester, Mass.; Louis J. Hyson, Revere, Mass.; Myer Karesky, Boston, Mass.; Hyman Kessler, S. Boston, Mass.; Joseph King, Salem, Mass.; Julius Levin, Dorchester Mass.; Morris Ossen, Everett, Mass.; Wm. Rivkin, Dorchester, Mass. Philip Schiff, Dorchester, Mass.; Louis Schlosberg, Boston, Mass. Abraham Seskind, Brockton, Mass.; Sam'l Wilcon, Dorchester, Mass. IOTA ALPHA PI FRATERNITY Org. 1903. OFFICE: 738 Broad, Newark, N. J. Convention, Dec. 22-27, 1925, New York City. Members, 175. PURPOSE: TO establish and maintain a Society among women who are members of colleges, universities, or professional schools. OFFICERS: Dean, Hannah F. Sokobin, Newark, N. J., Treas., Bertha Robinson, Brooklyn, N. Y.; Sec, Lillian Silverstein, 8014-21st St., Brooklyn, N. Y. EXECUTIVE COMMITTEE: Jeannette Horowitz, N. Y. C; Hannah Lindenman, N. Y. C; Miriam Wilson, N. Y. C. JEWISH AGRICULTURAL EXPERIMENT STATION Org. Mch. 20, 1910. OFFICE: 356 Second Av.. New York City. OFFICERS: Pres., Julius Rosenwald, Chicago, 111.; Vice-Pres., Louis Marshall; Treas., Samson Lachman; Hon. Sec, Henrietta Szold, New York City. TRUSTEES: Cyrus Adler, Samuel S. Fels, Phila., Pa.; Samson Lachman, N. Y. C ; Julian W. Mack, Chicago, 111.; J. L. Magnes, Jerusalem, Palestine; Louis Marshall, N. Y. C.; Milton J. Rosenau, Boston, Mass.; Julius Rosenwald, Chicago, 111.; Nathan Straus, N. Y. C.;Henrietta Szold, N. Y. C. JEWISH AGRICULTURAL SOCIETY, INC. Org. Feb. 12, 1900. OFFICE: 301 E. 14th, New York City. Twenty-sixth Annual Meeting, Feb. 9, 1926, New York City. Branch Offices: Chicago, 111.; Philadelphia, Pa.; Ellenyille, N. Y. PURPOSE: The encouragement of farming among Jewish immigrants in the United States. ACTIVITIES: Maintains agricultural bureau of information and advice; assists Jews to become farmers by helping them to find suitable farms and by loans on favorable terms; loans money to Jewish farmers who require financial assistance; maintains Farm Labor Bureau for JEWISH NATIONAL ORGANIZATIONS 305 the placing out of Jewish young men as farm laborers; conducts bureau to help farmers improve sanitary conditions on their farms. _ Publishes The Jewish Farmer, a monthly agricultural paper, in Yiddish; issues Yiddish agricultural text books; maintains itinerant agricultural instructors to lecture to farmers on agricultural topics, conducts demonstrations on their own farms, and organizes the farmers into associations for their material, educational, social, and religious advancement; grants free scholarships at agricultural colleges to children of Jewish farmers; makes loans to Jewish students in agricultural colleges; conducts classes for prospective farmers; and conducts night schools for prospective farmers. WORK DONE SINCE ORGANIZATION: Farm Loans, 7883 to 6933 farmers amounting to $5,006,449 in 39 states; was instrumental in the organization of farmers' associations; assisted in organizing a Co-operative Fire Insurance Company and other co-operative enterprises among Jewish farmers, etc. WORK IN 1925: Farm loans, 442, amounting to $280,291; farm loans outstanding (Dec. 31, 1925), $1,190,087, farm labor positions secured, 569, scholarships and students' loans granted, 25. OFFICERS: Pres., Percy S. Straus; Vice-Pres., Lewis L. Strauss; Treas., Francis F. Rosenbaum; Sec, Reuben Arkush, N. Y. C. DIRECTORS: The Officers and Alfred Jaretzki, Jr., N. Y. C ; Jacob G. Lipman, New Brunswick, N. J.; Henry Morgenthau, Jr., N. Y. C; Eugene S. Benjamin, N. Y. C ; Cyrus L. Sulzberger, N. Y. C. GENERAL MANAGER: Gabriel Davidson; Asst. Manager, Philip R. Strisik. JEWISH CHAUTAUQUA SOCIETY Org. Apl. 29, 1893. OFFICE: 1305 Stephen Girard Bldg., 21 S. 12th, Philadelphia, Pa. Thirty-fifth Assembly, Dec. 27-30, 1925, Pittsburgh, Pa. Correspondence Students, 377. Members, 4,000. OFFICERS: Chancellor, Louis Wolsey, Phila., Pa.; Vice-Chancellors, Harry W. Ettelson, Memphis, Tenn.; Louis Mann, Chicago, 111.; Hon. Pres , Abram I. Elkus, N. Y. C; Pres., Joseph J. Greenberg, Phila., Pa.; Vice-Pres., Arthur A. Fleisher, Phila., Pa.; Marvin Nathan, Phila., Pa.; Treas., Emil Selig, Phila., Pa.; Sec, Jeanette Miriam Goldberg, Jefferson, Tex. BOARD OF DIRECTORS: Mrs. Henry Berkowitz, Leon L. Berkowitz, Arthur A. Fleisher, Wm. Fineshriber, Walter Fox, Jacob S. Goldbaum, David Kirschbaum, Lionel Levy, Albert H. Lieberman, Arthur K. Stern, Samuel Stern, Joseph K. Willing, Phila., Pa.; A. H. Auerbach, A. C. Wurmser, Kansas City, Mo.; Julius Goldenberg, R. B. H. Lyon, Abram Simon, Washington, D. C; David Lefkowitz, Dallas, Tex.; Emil Mayer, St. Louis, Mo.; Julian Morgenstern. Cincinnati, O.; Frank J. Rubenstein, Wm. Rosenau, Baltimore, Md. 306 AMERICAN JEWISH YEAR BOOK HONORARY MEMBERS: Corinne B. Arnold, Oscar Loeb, Phila., Pa.: Mrs. Chas. Heidelberger, Atlantic City, N. J. CORRESPONDENCE SCHOOL FACULTY: Wm. Rosenau, Dean, Baltimore, Md.; Edward N. Calisch, Richmond, Va.; Julius H. Greenstone, Phila., Pa.; Eugene M. Lehman, N. Y. C ; Abram Simon, Washington, D. C ; David E. Weglein, Baltimore, Md. JEWISH CONSUMPTIVES' RELIEF ASSOCIATION OF CALIFORNIA Org. Sept. 28,1912. OFFICE: 404 Union League Bldg., Los Angeles, Cal. Sanitarium at Duarte, Cal. Auxiliary Societies, 15. Members, 75,000. PURPOSE: Sanatorium of 116 beds for treatment of pulmonary tuberculosis. OFFICERS: Pres., Nahum Kavinoky; Vice-Pres., Peter M. Kahn; Sec, A. Shapiro; Treas., Irving H. Hellman, Exec. Dir., Abr. Shohan, Los Angeles, Cal. BOARD OF DIRECTORS: Harry K. Cohen, G. R. Evans, F. Flanzer, Louis Hoffman, A. Horwitz, Max Jacobs, Peter M. Kahn, Nadine Kavinoky, Nahum Kavinoky, H. I. Leviton, Louis Lindenbaum, I. Irving Lipsitch, Morris Paykel, L. A. Pertson, J. A. Rosenkranz, M. Russakov, Harry Scherr, A. Shapiro, Chaim Shapiro, Henry M. Silverberg, Wm. Silverman, Samuel Tierman. JEWISH CONSUMPTIVES' RELIEF SOCIETY OF DENVER Org. Jan. 2, 1904. Inc. June 25, 1904. Denver, Colo., Twenty-first Annual Convention, May 1&-17—18, 1925, Cleveland, O. Twenty-second Annual Convention, April 17-19, 1926, Dallas, Tex. Contributors, 100,000. Income 1925, $498,052.52. Capacity, sanatorium, 300 beds. Auxiliary Societies, 11. ORGANIZED DISTRICTS, 9. Publishes: The Sanatorium and The Hatikvah. OFFICERS: Pres., Philip Hillkowitz, 236 Metropolitan Bldg.; Vice- Pres., I. Rude; H. J. Schwartz; Treas., Ben Grimes; Sec, C. D. Spivak. TRUSTEES: Wm N. Beggs, Emanuel Friedman, H. H. Frumess, Ben Grimes, Philip Hillkowitz, Ph. Hornbein, C. H. Kauvar, Mrs. I. J. Kolinsky, D. H. Krohn, Meyer Neusteter, J. B. Pizer, Geo. B. Reuler, H. H. Robinson, Morris H. Robinson, S. G. Rosenthal, I. Rude, H. J. Schwartz, C. D. Spivak, Louis Stern, Nathan Striker, A. S. Taussig, Denver, Colo.; Yehoash, N. Y. C; member-at-large; Mrs. L. Bloch, N. Y. C, representing New York Ladies' Auxiliary; Mrs. Morris Friedman, St. Louis, Mo., representing St. Louis Ladies' Auxiliary; and Adolph Stern, N. Y. C, representing Independent Order Brith Abraham. JEWISH NATIONAL ORGANIZATIONS 307 NEW YORK OFFICE: Managers, Rosen and Miller, 31 Union Square. CHICAGO OFFICE : Manager, Rabbi A. Elman, 1037 Hearst Bldg. JEWISH INSTITUTE OF RELIGION Org. Oct. 1, 1922. OFFICE: 40 West 68th, New York City. PURPOSE: A school of training for the Jewish Ministry, Research and Community Service. Incorporated in the State of New York—Invested funds, $315,000. Library—15,000 Volumes. First Commencement, May 26, 1926. Students, 36. OFFICERS: Acting Pres., Stephen S. Wise; Chairman Bd. of Trustees, Lee K. Frankel; Vice-Chairman, Julian W. Mack; Treas., H. M. Kaufmann; Asst. Treas., Frederick L. Guggenheimer; Hon. Sec, Nathan Straus, Jr.; Sec,. Gertrude Adelstein. BOARD OF TRUSTEES: Charles E. Bloch, Emile Bullowa, Abram I. Elkus, N. Y. C ; Leon Falk, Pittsburgh, Pa.; Mrs. Norman S. Goetz, Sidney E. Goldstein, Richard Gottheil, N. Y. C; M. E. Greenbaum, Chicago, 111.; Julian W. Mack, N. Y. C ; Albert M. Greenfield, Phila., Pa.; Frederick L. Guggenheimer, N. Y. C; Mrs. Max Guggenheimer, Lynchburg, Va.; Joseph Hagedorn, Phila., Pa.; Maurice H. Harris, Walter S. Hilborn, N. Y. C ; Edmund I. Kaufmann, Washington, D. C; H. M. Kaufmann, N. Y. C; Geo. A. Kohut, N. Y. C; Gerson B. Levi, Chicago, 111.; Joseph M. Levine, Reuben Levy, N. Y. C; Louis I. Newman, San Francisco, Cal.; Henry Slonimsky, Nathan Straus, Jr.; Israel N. Thurman, Samuel Wasserman, Stephen S. Wise, N. Y. C. FACULTY: Acting President and Professor of Practical Theology and Homiletics, Stephen S. Wise, Ph.D., L.L.D. (Columbia); Dean and Professor of Ethics and Philosophy of Religion, Henry Slonimsky, Ph. D. (Marburg); Asst. Professor of Bible, Reuben Levy, M.A. (Oxford); Asst. Professor of Hebrew, Harry S. Lewis, M.A. (Cambridge Univ.); Professor of Semitic Philology and History of Religion, Julian J. Obermann, Ph.D. (Univ. of Vienna); Professor of Talmud, Chaim Tchernowitz (Wiirzburg); Professor in Social Service, Sidney E. Goldstein, B. A. (Chicago University) ; Jacob Goldberg, Ph. D. (Columbia Univ.); Professor of Jewish Literature and Philosophy, Harry A. Wolfson, Ph. D. (Harvard). INSTRUCTORS: Instructor in Midrash, Rabbi Shalom B. Maximon; Instructor in Music, Abraham W. Binder; Instructor in Public Speaking, Pierson P. Harris, S.T.M. LECTURERS: Salo Baron. Ph.D. (Vienna), Cecil Roth, M.A., B. Litt., D. Phil. (Oxford); Education, Isaac L. Kandel Ph.D. (Manchester), Isaac B. Berkson, M.A., Ph.D. (Columbia); Homiletics, Nathan Krass, B.H.L., Litt.D. LIBRARY STAFF: Librarian, Reuben Levy; Assistants, Mary Nover, Isaac Kiev. REGISTRAR: Reuben Levy. 308 AMERICAN JEWISH YEAR BOOK SECRETARY: Gertrude Adelstein. STUDENT PUBLICATION: Jewish Institute Quarterly. JEWISH MINISTERS CANTORS' ASSOCIATION OF AMERICA Org. June 1, 1918. OFFICE: 40 Second Av., New York City. Convention, May 29-31, 1923, New York City. Members, 375. PURPOSE: TO uplift the profession and give aid to cantors in need and to their families. OFFICERS: Pres., Jacob Rapaport; Vice-Pres,. B. Chagy; Sec, J. Appel, M. Erstling; Treas., M. Aranoff, N. Y. C. DIRECTORS: N. Abramson, M. Hillman, A. Holtz, S. Levine, O. Lind, L. Lipitz, D. Plotkin, M. Schachter, Jos. Shapiro, A. Singer. JEWISH MINISTERS' ASSOCIATION OF AMERICA Org. Mch,. 1917. OFFICE: 74 E. 118th, New York City. Members, 76. OFFICERS: Treas., Israel Klein;* Sec, S. L. Hurwitz, 203 W. 113th, N. Y. C ; Chairman of the Executive, S. Buchler, 1800 Seventh Av., N. Y. C. EXECUTIVE COMMITTEE: S. Buchler; S. L. Hurwitz; T. Kosuth. •Deceased. •JEWISH MOTHERS' ALLIANCE OF THE UNITED STATES Inc., 1916. Los Angeles, Cal. JEWISH NATIONAL WORKERS' ALLIANCE OF AMERICA Org. 1912. OFFICE: 228 E. Broadway, New York City. Biennial Convention, May 1-4, 1924, Philadelphia, Pa. Next Convention, May 1, 1926, New York City. Branches, 112. Members, 6,100. PURPOSE: Fraternal, Social, and Educational Order. OFFICERS: Pres., Meyer L. Brown; Vice-Pres., Nathan Zvirin; Treas., Ruben Plattrot; Sec, Samuel Goldstein, N. Y. C. EXECUTIVE COMMITTEE: A. Babitch, H. Bass, Irving Boxenbaum, Joel Enteen, Wm. Gelbard, Ph. Gingold, M. Kastoff, J. Rearson, L. Segal, I. Semel. JEWISH PALESTINE EXPLORATION SOCIETY (American Committee) Org. 1922. OFFICE: 167 W. 13th, New York City. •Revised information was not furnished upon request. For latest official data on this organization, see THE AMERICAN JEWISH YEAR BOOK, Vol. 27. JEWISH NATIONAL ORGANIZATIONS 309 Members, 250. PURPOSE: Conducts extensive excavations in special localities in Palestine. Issues a periodical, devoted to the publication of the results of its researches and the material discovered. Is planning to establish a library and museum at Jerusalem, as the beginning of an Institute for Palestine Exploration. Holds popular lectures on Palestine and on the value and knowledge of its antiquities for the study of Palestinian history. OFFICERS: Chairman, Elisha M. Friedman, N. Y. C; Vice-Chairman, Rabbi D. de Sola Pool, N. Y. C ; Treas., Arthur L. Malkenson, N. Y. C ; Sec, J. Max Weis, N. Y. C; COMMITTEES: Cyrus Adler, Philadelphia, Pa.; Oscar Berman, Cincinnati, O.; Herman Bernstein, N. Y. C; Reuben Brainin, N. Y. C; Alfred M. Cohen, Cincinnati, O.; A. Coralnik, N. Y. C ; Leon H. Elmaleh, Philadelphia, Pa.; Harry Fishel, N. Y. C ; Harry M. Fisher, Chicago, 111.; G. George Fox, Chicago, 111.; Sam'l Goldenson, Pittsburgh, Pa.; Howard Goodhart, N. Y. C; Herman Halperin, Pittsburgh, Pa.; Max Heller, New Orleans, La.; B. W. Huebsch, N. Y. C; Henry Hurwitz, N. Y. C; Moredcai M. Kaplan, N. Y. C; Nathan D. Kaplan, Chicago, 111.; Max D. Klein, Philadelphia, Pa.; Adolph Kraus, Chicago, 111.; Sol. Lamport, N. Y. C ; Morris S. Lazaron, Baltimore, Md.; R. B. H. Lyon, Washington, D. C ; Julian W. Mack, N. Y. C; Max L. Margolis, Philadelphia, Pa.; Nathan J. Miller, N. Y. C; Julian Morgenstern, Cincinnati, O.; D. de Sola Pool, N. Y. C; Tobias Schanfarber, Chicago, 111.; Israel Schapiro, Washington, D. C ; Abram Simon, Washington, D. C; **Oscar S. Straus, N. Y. C; Samuel Straus, N. Y. C; Felix M. Warburg, N. Y. C; Peter Wiernik, N. Y. C. **Deceased. JEWISH PUBLICATION SOCIETY OF AMERICA Org. June, 1888. OFFICE: 1201 N. Broad, Philadelphia, Pa. For the Report of the Thirty-seventh Year of The Jewish Publication Society of America, see p. 000. JEWISH SABBATH ALLIANCE OF AMERICA, INC. Org. 1905. OFFICE: 302 E. 14th, New York City. FourthAnnualConvention,Dec.30,1925-Jan.3,1926, NewYork City. PURPOSE : Promotion of the observance of the Seventh Day Sabbath. OFFICERS: Pres., Bernard Drachman; Vice-Pres., Isser Reznik; Treas., R. L. Savitsky; Exec. Sec, Wm. Rosenberg, 302 E. 14th, N. Y. C. JEWISH SOCIALIST LABOR PARTY POALE ZION OF UNITED STATES AND CANADA Org. 1905. OFFICE: 133 Second Av., New York City. Fifteenth Jubilee Convention, Dec. 28, 1924-Jan. 1, 1925, New York City. 310 AMERICAN JEWISH YEAR BOOK Members, 5,000. PURPOSE: The restoration of the Jewish people in Palestine; the establishment of a socialistic commonwealth; the organization of the Jewish labor class for its economic and political interests in America; the organization of the Jewish workmen ready to settle in Palestine in co-operative groups for the creation of better living conditions; the education of the Jewish masses in America; the issuing of literature devoted to the interests of the Jewish workmen and of books treating of the new life of the Jew developing in Palestine; the organization of the Jewish labor classes into trade unions. OFFICERS: General Sec, I. Hamlin; Treas., S. Siegel, N. Y. C. EXECUTIVE COMMITTEE: I. Applebaum, I. Berkenblith, S. Boncheck, M. Brown, P. Cruso, H. Ehrenreich, J. Entin, Ch. Fineman, S. Goldshtein, I. Hamlin, J. Kaufman, David Pinski, J. Shnider, W. Shwartz, L. Siegel, S. Siegel, I. Zar. JEWISH SOCIALIST VERB AND Org. 1921. OFFICE: 175 E. Broadway, New York City. PURPOSE: TO organize the Jewish Socialists for the Socialist Movement in America. Publishers weekly, "Der Wecker." OFFICERS: Sec, Nathan Chanin; Treas., Saul Rifkin. JEWISH TEACHERS' SEMINARY Org. 1918. OFFICE: 228 E. Broadway, New York City. Members, 4,000 (United States and Canada.) Fourth Graduation, June, 1926, New York City. PURPOSE: Aims to prepare efficient teachers for Jewish Schools, to advance Jewish culture in America and to introduce the Jewish masses to the Jewish and world culture in general. OFFICERS: Pres., Joel Entin, N. Y. C ; Treas., Jacob Milch, N. Y. C; Sec, Pinchos Gingold, 228 E. Bway., N. Y. C ; Dir., Jehuda Kaufman, Brooklyn, N. Y.; A. S. Sachs, Hoboken, N. J. EXECUTIVE COMMITTEE: Sh. Berkowitz, N. Y. C ; S. Bonchek, N. Y. C; Sh. Goldstein, N. Y. C ; I. Hamlin, N. Y. C ; J. A. Jaffe, N. Y. C; Sh. Niger, Brooklyn, N. Y.; Ch. Schauss, Brooklyn, N. Y.; Sh. Shapiro, Bronl-lvn, N. Y.; L. Siegel, N. Y. C; S. Siegel, N. Y. C; N. Zvirin, N. Y. C. JEWISH THEATRICAL GUILD OF AMERICA, INC. Org. 1924. OFFICE: 1607 Broadway, New York City. Members, 2,000. PURPOSE: Perpetuating Judaism in the theatre. To aid sick and unfortunate. To build memorial hall. OFFICERS: Pres., William Morris, N. Y. C ; Vice-Pres., Sam Bernard, JEWISH NATIONAL ORGANIZATIONS 311 N. Y. C ; Eddie Cantor, Mt. Vernon, N. Y.; S. Silverman, N. Y. C; Treas., Hugo Riesenfeld, N. Y. C ; Sec, Harry Cooper; Fin. Sec, Fred Block; Field Sec, L. Haskell, 215 W. 98th, N. Y. C. JEWISH THEOLOGICAL SEMINARY OF AMERICA Org. 1886. OFFICE: 531 W. 123d, New York City. Incorporated in State of New York. Invested Funds: for Seminary, $1,484,932.90; for Teachers' Institute, $161,545.98; for Library, $186,- 082.45. Library: Printed volumes, 75,000; Manuscripts, 6,000. Thirty-second Commencement, June 6, 1926. Graduates, Rabbinical Course, in 1926, 12. Whole number of graduates, Rabbinical Course, 193. Graduates, Teachers' Institute, Teachers' Training Course, in 1926,27. Extension Course, in 5. Whole number of graduates, Teachers' Institute, 368. OFFICERS OF THE BOARD: Chairman Board of Directors, Louis Marshall; Hon. Sec, Sol. M. Stroock; Treas., Lewis S. Strauss; Associate Treasurer, Arthur Oppenheimer, N. Y. C. DIRECTORS: (for life) Daniel Guggenheim, Adolph Lewisohn, Louis Marshall, Felix M. Warburg, N. Y. C; Philip S. Henry, Asheville, N. C; Cyrus Adler, Phila., Pa.; Henry A. Dix, N. Y. C; Simon M. Roeder, N. Y. C ; Samuel Greenbaum, N. Y. C; (Term expiring 1927): William Fischman, Irving Lehman, Sol. .M. Stroock, Lewis L. Strauss, Max Drob, Jacob Kohn, N. Y. C; William Gerstley, Phila., Pa.; Harry Friedenwald, Baltimore, Md.; David S. Ellis, Boston, Mass.; Felix Fuld, Newark, N. J. EXECUTIVE COMMITTEE: Louis Marshall, Chairman, Cyrus Adler, Sol. M. Stroock, Simon M. Roeder, Felix M. Warburg. FACULTY: President, Cyrus Adler, Ph. D. (Johns Hopkins); Professor of Talmud, Louis Ginzberg, Ph. D. (Heidelberg); Professor of History, Alexander Marx, Ph.D. (Koenigsberg); Professor of Homiletics, Mordecai M. Kaplan, M. A. (Columbia); Professor of Medieval Hebrew Literature, Israel Davidson, Ph.D. (Columbia); Professor of Codes, Moses Hyamson, B. A., LL.D. (University of London); Sabato Morais Professor of Biblical Literature and Exegesis, Jacob Hoschander, Ph.D. (Marburg); Associate Professor of Hebrew, Morris D. Levine, M. A. (Columbia); Instructor in Talmud and Solomon Schechter Lecturer in Theology, 1925-1926, Louis Finkelstein, Ph.D. (Columbia); Instructor, Benjamin Cohen, B.A. (Columbia); Instructor in Hazanuth, Israel Goldfarb, B. S. (Columbia); Hazan, M. Jacobson; Instructor in Public Speaking, Walter H. Robinson. LECTURERS FOR 1926: Samuel M. Cohen, Jacob Kohn, Abraham A. Neuman, Goodman A. Rose. LIBRARY OF THE JEWISH THEOLOGICAL SEMINARY OF AMERICA, Incorporated in State of New York, 1924. 312 AMERICAN JEWISH YEAR BOOK OFFICERS OF THE LIBRARY BOARD: President, Louis Marshall; Vice- President, Cyrus Adler; Hon. Sec, Sol. M. Stroock; Treas., Lewis L. Strauss. DIRECTORS OF LIBRARY: Cyrus Adler, Phila., Pa.; Louis Bamberger, Newark, N. J.; William Gerstley, Phila., Pa.; Louis Marshall, Samuel Greenbaum, Irving Lehman, Mortimer L. Schiff, Felix M. Warburg, Sol. M. Stroock, Simon Roeder, Abram S. W. Rosenbach, Max Drob, N. Y. C. LIBRARY STAFF: Librarian, Alexander Marx; Assistant Librarian, Benjamin Cohen; Cataloguers, Israel Shapiro, Saul Gittelson, Isaac Rivkind; Assistant in Library, Isaac Shapiro; Secretary to Librarian, Anna Kleban. REGISTRAR: Israel Davidson. SECRETARY: Joseph B. Abrahams. TEACHERS' INSTITUTE: 34 Stuyvesant Place. Principal, Mordecai M. Kaplan, 1 W. 89th; Instructors: Morris D. Levine, Joseph Bragin, Leo L. Honor, Paul Chertoff, Zevi Scharfstein, Max Kadushin, Osher Ovsay, I. S. Chipkin, Hillel Bavli, Benjamin Silk, S. E. Goldfarb, Arthur H. Neulander, Isaac B. Berkson, Samuel Rubinstein, Max Slavin, Anna Grossman, Emanuel Baron, Joshua H. Neumann, Max Goldman, Pincus Schub, Leon Lang, Samuel Zaretski, Tillie Weitzman. Special Committee: Sol. M. Stroock, Chairman; Mordecai M. Kaplan, Samuel Greenbaum, Irving Lehman, J. L. Magnes, Felix M. Warburg, Cyrus Adler. JEWISH THEOLOGICAL SEMINARY RABBINICAL ASSEMBLY Org. July 4, 1901. Annual Convention, April 29-30, 1925, New York City. Next Annual Convention, June 30—July 4, 1926, Long Branch, N. J. Members, 200. OFFICERS: Pres., Max Drob, N. Y. C ; Vice-Pres., Louis Finkelstein, N. Y. C ; Rec. Sec, Gershon Hadas, New Britain, Conn.; Cor. Sec, Abraham Burstein, N. Y. C; Treas., Max Arzt, Scranton, Pa. EXECUTIVE COMMITTEE: Nachman S. Arnoff, New Bedford, Mass.; Alexander Basel, N. Y. C; Paul Chertoff, Brooklyn, N. Y.; Max D. Davidson, Asbury Park, N. J.; Louis M. Epstein, Brookjine, Mass.; Louis Feinberg, Cincinnati, O.; Jacob J. Gittleman, Louisville, Ky.; Julius H. Greenstone, Philadelphia, Pa.; Max Kadushin, N. Y. C.; Jacob Kohn, N. Y. C ; Philip A. Langh, Chicago, 111.; Morris D. Levine, Brooklyn, N. Y.; Louis M. Levitzsky, Wilkesbarre, Pa.; Arthur H. Neulander, N. Y. C; Norman Salit, Far Rockaway, N. Y.; Elias C. Sydney, N. Y. C. JEWISH NATIONAL ORGANIZATIONS 313 JEWISH VALOR LEGION Org. Feb. 1921. OFFICE: 101 W. 42nd, New York City. Members, 638. PURPOSE: Welfare of Ex-Service men of Jewish faith; compilation of records of Jewish soldiers in American army in World War. OFFICERS: Commander, Sydney G. Gumpertz; Sr. Vice-Commander, Benjamin Kaufman; Jr. Vice-Commander, Abraham Krotoshinsky; Adjutant, David Bernstein, 427 E. 134th, N. Y. C. TRUSTEES: Herman L. Bush, Roxbury, Mass.; Sam Goldberg, St. Louis, Mo.; Irving Klein, Oakland, Cal.; Benj. Prager, Pittsburgh, Pa. JEWISH VETERANS OF THE WARS OF THE REPUBLIC Org. 1900, Inc. 1920. OFFICE: IS Park Row, New York City. Annual Convention, May 9, 1925, New York City. Next Annual Convention, July 3-5, 1926, Philadelphia, Pa. Posts, 18. Members, 8,000. PURPOSE: TO be of greater service to this country and to one another, and to perpetuate the highest ideals of the Jewish soldiers. OFFICERS: Commander-in-Chief, Morris J. Mendelsohn, Brooklyn, N. Y.; Sen. Vice-Com.-in-Chief, I. Bernard Rotberg, Phila., Pa.; Jr. Vice-Com.-in-Chief, Sam Gutter, Cleveland, O.; Chief of Staff, Maurice Simmons, N. Y. C : Adj. Gen., J. David Delman, N. Y. C; Quartermaster General, Joseph Citron, N. Y. C ; Hist. Gen., Hyman Margulies, Brooklyn, N. Y.; Hon. Chaplain-in-Chief, Edward Lissman, N. Y. C; Chaplain-in-Chief, Abe Nowak, Cleveland, O.; Judge Advocate General, Israel Flapan, N. Y. C ; Surgeon Generals, George Flamm, Brooklyn, N. Y.; S. Ginsberg, Phila., Pa.; Chief National Aide, Peter Schwartz, N. Y. C. JEWISH WAR VETERANS OF AMERICA Org. Nov. 1919. OFFICE: 248 Engineers' Bldg., Cleveland, O. Convention, Dec. 17, 1925. Members, 264. PURPOSE: TO preserve the principles for which we waged war against the Imperial German Government, to perpetuate the blessings of liberty and justice to mankind and promote the general welfare. OFFICERS: Commander, A. I. Hausman, 248 Engineers' Bid?., Cleveland, O.; Sr. Vice-Commander, J. P. Rose; Jr. Vice-Commander, Dave Goldberg; Adj., Sam Stein; Quartermaster, B. Milou; Paymaster, Ed. Rubenstein; Officer of the Day, S. Gutter; Chaplain, Abraham Nowak; Jr. Chaplain, M. Kaplan; Officer of the Guard, G. Blumenthal. JEWISH WELFARE BOARD Org. 1917. OFFICE: 352 4th Av., New York City. Amalgamated with Council of Young Men's Hebrew and Kindred Associations, July 1, 1921. 314 AMERICAN JEWISH YEAR BOOK Affiliated National Organizations, 16. Constituent Societies, 300. PURPOSE: TO stimulate the organization and to assist in the activities of Jewish Centers, such as Young Men's Hebrew Associations, Young Women's Hebrew Associations, and kindred organizations, and to co-operate with all similar bodies in the development of Judaism and good citizenship. To promote the social welfare of soldiers, sailors, and marines in the service of the United States and especially to provide for men of the Jewish faith in the Army and Navy adequate opportunity for religious worship and hospitality of Jewish communities adjacent to military and naval posts. OFFICERS: Pres., Irving Lehman, N. Y. C-; Vice-Pres., Felix M. Warburg, N. Y. C ; Jacob M. Loeb, Chicago, 111.; Jacob K. Newman, N. Y. C; M. C. Sloss, San Francisco, Cal.; Sec, Joseph Rosenzweig, N. Y. C ; Treas., Edward S. Steinam, N. Y. C. EXECUTIVE COUNCIL: The Officers, and Cyrus Adler, Julius Ochs Adler, Henry J. Bernheim, Boris D. Bogen, Fred M. Butzel, Alfred M. Cohen, Abel Davis, Car} Dreyfus, Abram I. Elkus, David A. Ellis, Harry Fischel, William Fischman, Walter Freund, Felix Fuld, I. Edwin Goldwasser, Samuel Greenbaum, Mrs. Jerome J. Hanauer, Maurice H. Harris, Charles Hartman, Isaac Hassler, Louis E. Kirstein, Irvin E. Lehman, M. S. Margolies, Louis Marshall, Leon J. Obermayer, Hugo H. Piesen, William Rosenau, Morris Rothenberg, Bernard Semel, Mrs. Israel Unterberg, Israel Unterberg, Max R. Wainer, Benjamin S. Washer, A. Leo Weil, J. L. Wiseman, Mrs. Alexander Wolf, Morris Wolf. ADMINISTRATION: Exec. Dir., Harry L. Gluckeman; Dir. Jewish Center Activities, Louis Kraft; Dir. of Campaigns, Philip R. Goldstein; Dir. Army and Navy Service Dept., E. Chas. Sydney; Dir. Jewish Extension Education, Mordecai Soltes. JOINT DISTRIBUTION COMMITTEE OF THE AMERICAN FUNDS FOR JEWISH WAR SUFFERERS Org. Nov. 24, 1914. OFFICE: 40 Exchange Place, New York City. Members, 99. PURPOSE: Distribution of funds received by the American Jewish Relief Committee, the Central Committee for the Relief of Jews Suffering Through the War, and the People's Relief Committee. OFFICERS: Chairman, Felix M. Warburg; Vice-Chairman, Herbert H. Lehman, Jas. N. Rosenberg; Treas., Paul Baerwald; Associate Treas., George W. Naumburg; Comptroller, Mrs. H. B. L. Goldstein; Sec, Joseph C. Hyman. For the table of appropriations made during the past ytear and since the organization of the Committee, see p. 000. KAPPA NU FRATERNITY Org. Nov. 12, 1911. OFFICE: 5th and Cambria, Philadelphia, Pa. Ninth Annual Convention, Dec. 1925-Jan. 1, 1926, Cleveland, O. JEWISH NATIONAL ORGANIZATIONS 315 Tenth Annual Convention, Dec. 1926-Jan. 2, 1927, Phila., Pa. Chapters, 18. Members, 1,000. PURPOSE: A Greek-letter brotherhood for college men of Jewish consciousness. OFFICERS: Pres., Zola Rosenfeld, Philadelphia, Pa.; Vice-Pres., Harry S. Mackler, N. Y. C ; Treas., Garson Meyer, Rochester, N. Y.; Sec, Samuel Resnik, Musgrove Bldg., Andover, Mass. EXECUTIVE COMMITTEE: The Officers, and Oscar Brown, Cleveland, O.; Chas. D. Fagles, Philadelphia, Pa.; Harry P. Goldstein, Washington, D. C ; Frederick P. Klein, N. Y. C ; Jacob Rosenzweig, Rochester, N. Y.; David Zoob, Phila., Pa. LEO N. LEVI MEMORIAL HOSPITAL ASSOCIATION Org. 1911. OFFICE: Hot Springs, Ark. Maintains the Leo N. Levi Memorial Hospital. Members, 1,500. OFFICERS: Pres., Archibald A. Marx, New Orleans, La.; Hon. Vice- Pres., Dan Daniel, Shreveport, La.; Vice-Pres., J. K. Hexter, Dallas, Tex.; Treas., E. N. Roth, Hot Springs, Ark.; Sec, A. B. Rhine, Hot Springs, Ark. BOARD OF TRUSTEES: Joseph Beitman, Birmingham, Ala.; Eli H. Bernheim, N. Y. C; E. R. Bernstein, Shreveport, La.; J. A. Blum, Des Moines, la.; Sam Blum, New Orleans, La.; Edw. M. Chase, Manchester, N. H.; Henry Cohen, Galveston, Tex.; Sam Dreyfus, Shreveport, La.; S. Lasker Ehrman, Little Rock, Ark.; A. D. Engelesman, Oklahoma City, Okla.; Harry Fisher, Chicago, 111.; A. B. Frey, St. Louis Mo.; Arthur Friedman, Denver, Colo.; Morris Goldman, St. Louis, Mo.; Edwin R; Haas, Atlanta, Ga.; Chas. J. Haase, Memphis, Tenn.; Baer Horvitz, Pittsburgh, Pa.; J. B. Jacobs, Los Angeles, Cal.; Sidney Jonas, Nashville, Tenn.; Joshua Kantrowitz, N. Y. C.; Sidney Kusworm, Dayton, O.; Leo Lehman, Pittsburgh, Pa.; Sylvain Meyer, Vicksburg, Miss.; Harry Monsky, Omaha, Neb.; Emil Nathan, St. Louis Mo.; Leo Pfeifer, Little Rock, Ark.; Martin Ritter, Chicago, 111.; Albert M. Rosenthal, Indianapolis, Ind.; Joseph W. Salus, Philadelphia, Pa.; Lucius L. Solomon, San Francisco, Cal.; Nathan Straus, N. Y. C; Lionel Weil, Goldsboro, N. C ; S. J. Westheimer, Houston, Tex. THE MENORAH MOVEMENT FOR THE STUDY AND ADVANCEMENT OF JEWISH CULTURE AND IDEALS Org. Jan. 2, 1913. Office: 167 W. 13th, New York City 1. INTERCOLLEGIATE MENORAH ASSOCIATION. Org. Jan. 2, 1913. Members, 5,000. Societies, 73. PURPOSE : The promotion in colleges and universities and in the community at large of the study of Jewish history, culture, and problems, and the advancement of Jewish ideals. 316 AMERICAN JEWISH YEAR BOOK BOARD OF GOVERNORS: Hon. Chairman, Irving Lehman, N. Y. C; Chairman, Leo F. Wormser, Chicago, 111.; Treas. S. W. Straus, N. Y. C; Chancellor, Henry Hurwitz, N. Y. C ; Abel Davis, Chicago, 111.; F. Julius Fohs, N. Y. C ; Samuel P. Gilman, N. Y. C ; Henry Honner, Chicago, 111.; Nathan Isaacs, Cambridge, Mass.; M. M. Kaplan, N. Y. C; Louis E. Kirstein, Boston, Mass., Nathan Krass, N. Y. C ; Samuel C. Lamport, N. Y. C ; Isador Lubin, Washington, D. C ; Adolph S. Oko, Cincinnati, O.; Joseph M. Proskauer, N. Y. C ; Bernard J. Reis, N. Y. C.;CarlSadowsky, N. Y. C ; I. Leo Sharf man, Ann. Arbor, Mich.; A. H. Silver, Cleveland, 0.; Meier Steinbrink, Brooklyn, N. Y.; Israel M. Thurman, N. Y. C. 2. MENORAH EDUCATIONAL CONFERENCE. Org. Dec. 29, 1918. Composed of university teachers. PURPOSE: TO foster and to guide Menorah education in American colleges and universities and among university graduates and other men and women in the general community interested in Jewish culture and ideals. OFFICERS: Chairman, Nathan Isaacs, Harvard University School of Business; Vice-Chairman, Wm. Popper, University of California; Sec- Treas., Adolph S. Oko, Hebrew Union College Library. The movement also encourages the organization of Graduate Menorah Societies in various cities, maintains the Menorah Lecturer Bureau, and issues The Menorah Journal, Menorah Syllabi, Menorah bibliographies and pamphlets, and the Menorah Bulletin. MIZRAHI HATZOIR Org. May, 1920. OFFICE: 138-40 E. Second St., New York City. Conference, May 17-19, 1925, Cleveland, O. Members, 3,000. PURPOSE: TO organize groups of the Jewish youth, both senior and junior, to spread Judaism and a love for Jewish knowledge, to acquaint the Jewish youth with the national aspirations of the Jews, and to strive for the rehabilitation of Palestine in accordance with Jewish traditions and in the spirit of the Torah. OFFICERS: Hon. Pres., Meyer Berlin; Pres., Harry Karp; Vice-Pres., Max Hagler, Joseph Wilon; Treas., Emanuel Greenberg; Sec, Morris Cohen. EXECUTIVE COMMITTEE: J. Berlin, B. Berman, H. Berman, M. Berman, Ph. Churgin, M. Cohen, J. Eisen, F. Friend, M. Gewirtz, S. Goldfarb, S. Gottlieb, E. Greenberg, R. Greenberg, E. Gross, L. Sh. Gross, M. Hagler, B. Hilson, F. Housman, H. Karp, Hadassah Karp, S. Kerstein, L. Klein, B. Langsam, J. Leichtman, I. Margolies, S. Cohen Margolies, S. Michnowsky, A. Mirsky, B. Peyser, A. Pinta, J. Pinta, M. Reifman, B. Roth, R. Rubin, Jacob Schwartzberg, M. Silberstein, M. Storm, S. Storm, M. Teichman, C. Wilkenfeld, J. Wilon. JEWISH NATIONAL ORGANIZATIONS 317 THE MIZRAHI ORGANIZATION OF AMERICA Org. June 5, 1912. CENTRAL BUREAU: 31 Union Sq., New York City. Convention, May 17-19, 1925, Cleveland, O. Members, 20,000. Organizations, 298. PURPOSE: Religio-National: To realize the Basle program of the Zionist movement in the spirit of Jewish Torah and Tradition. Fundamental principle: The land of Israel, for the people of Israel, in the spirit of Israel's Law. OFFICERS: Pres., Meyer Berlin; Vice-Pres., B. L. Levinthal; Treas., A. Cohen; Sec., Mairim Magnes. ADMINISTRATIVE COMMITTEE: Meyer Berlin, H. Bluestone, Abr. Cohen, E. Inselbuch, H. Karp, B. L. Levinthal, Mairim Magnes, B. H. Schnur, A. M. Stavisky, A. Teitelbaum, S. Wilner. EXECUTIVE COMMITTEE: Ch. A. Aaronson, A. M. Ashinsky, I. August, A. S. Borwick, H. Cohen, L. Dann, J. M. Davidson, Ch. F. Epstein, J. Eskolsky, I. Feigenbaum, Harry Fishel, M. Garfinkel, L. Gellman, J. Goell, Sam Goldstein, E. Greenberg, M. Hagler, P. Herring, Joseph L. Kamaiky, M. A. Kaplan, J. Kapstein, J. Levin, S. Levin, J. Levine, S. Levine, S. Cohen Margolies, M. Z. Margolies, S. Miller, E. R. Mushkin, B. Notelowitz, Ch. H. Papkin, A. Patinkin, A. Pelchowitz, J. Polstein, I. Porath, J. Richman, N. Z. Riff, I. Rosenberg, A. Sachs, S. Seltzer, A. Shapiro, M. Shapiro, S. Silber, J. M. Silberman, J. Soskin, D. L. Weiss, I. Wendcus. MU SIGMA FRATERNITY Org. 1906, Inc., 1925. OFFICE: 220 W. 42d, New York City. Annual Convention, Dec. 26-27, 1925. Next Convention, Dec. 25-26, 1926, New York City. PURPOSE: Fraternal, OFFICERS: Grand Lumen, Bernard S. Barron, 220 W. 42d, N. Y. C; Grand Filium, Tolbert Pelzman, Washington, D. C ; Grand Ora, Archibald Gellis, N. Y. C ; Grand Fiscus, Leon Kranztohr, Newark, N. J.; Grand Scribe, Maurice J. Dinnerstein, Brooklyn, N. Y.; Grand Ossa, Michael Kaplan, New York City; Chairman Exec. Comm., Irving Eisenberg, Arcade Bldg. Jersey City, N. J. NATIONAL ASSOCIATION OF JEWISH COMMUNITY CENTER SECRETARIES Org. 1918. OFFICE: 352 Fourth Ave., New York City. Seventh Annual Convention, June 1-1, 1925, Philadelphia, Pa. Members, 150. PURPOSE: TO foster and develop an interest in Jewish center work and to promote friendly and helpful relations among Jewish community center workers. OFFICERS: Pres., Jack Nadel, N. Y. C; Vice-Pres., Tobias Roth, 318 AMERICAN JEWISH YEAR BOOK Rochester, N. Y.; Jacob N. Sokohl, Phila., Pa.; Sec-Treas., Samuel B. Kaufman, Mt. Vernon, N. Y. EXECUTIVE COMMITTEE: Isidore Beierfeld, Camden, N. J.; Harry L. Glucksman, N. Y. C, (ex-Officio); Gilbert Harris, St. Louis, Mo.; Leo A. Harris, Brooklyn, N. Y.; Louis Kraft, N. Y. C; A. S. Magida, Scranton, Pa.; Chas. Nemser, Cleveland, O.; Herman Passamaneck, Kansas City, Mo. (ex-Officio); Aaron Robison, Newark, N. J. (ex- Officio); A. W. Rosenthal, N. Y. C; Philip L. Seman, Chicago, 111. (ex-Officio); Mrs. Ray Wechsler, N. Y. C. NATIONAL CONFERENCE OF JEWISH SOCIAL SERVICE Org. 1899 as National Conference of Jewish Charities in the United States. OFFICE: 114 Fifth Av., New York City. Twenty-sixth Annual Conference, June 7-10, 1925, Denver, Colo. Twenty-seventh Annual Conference, May 23-26, 1926, Cleveland, O. Members, 215 Societies, 1,400 individuals. OFFICERS: Pres., Louis M. Cahn, Chicago, 111.; Vice-Pres., Dorothy C. Kahn, Baltimore, Md.; I. Irving Lipsitch, Los Angeles, Cal.; Charles D. Spivak, Denver, Colo.; Treas., Ferdinand S. Bach, St. Louis, Mo.; Sec, Samuel A. Goldsmith, New York City. EXECUTIVE COMMITTEE: Ludwig B. Bernstein, Pittsburgh, Pa.; Nathan Bijur, N. Y. C ; Boris D. Bogen, Cincinnati, O.; Fred M. Butzel, Detroit, Mich.; Aaron Cohen, Pittsburgh, Pa.; David Fichman, New Orleans, La.; Lee K. Frankel, N. Y. C; Max Herzberg, Philadelphia, Pa.; Maurice B. Hexter, Boston, Mass.; Jacob H. Hollander, Baltimore, Md., M. J. Karpf, N. Y. C ; Solomon Lowenstein; N. Y. C ; Julian W. Mack, N. Y. C; George W. Rabinoff, Indianapolis, Ind.; I. M. Rubinow, Philadelphia, Pa.; Max Senior, Cincinnati, O.; William J. Shroder, Cincinnati, O.; Maurice J. Sievers, Toledo, O.; Cyrus L. Sulzberger, N. Y. C; Frances M. Taussig, N. Y. C ; Morris D. Waldman, Detroit, Mich.; Felix M. Warburg, N. Y. C ; Cecil B. Wiener, Buffalo, N. Y. THE NATIONAL COUNCIL OF JEWISH WOMEN Org. Sept. 1893. OFFICE: 2109 Broadway, New York City. Tenth Triennial Convention, Nov., 1923, St. Louis, Mo. Eleventh Triennial Convention, Nov., 1926, Washington, D. C. Sections, 233, Junior Auxiliaries, 84. The Council and its Sections are engaged in Religious, Social Welfare, Civic and Educational Work. Its activities are promoted through its Committees on Religion, Religious Schools, Social Welfare, Junior Auxiliaries, Civic and Communal Affairs, Peace and Arbitration, Education, Finance, Legislation, Blind, Deaf, Scholarship Fund, Department of Farm and Rural Work (with offices in New York City, Chairman, Mrs. Leo H. Herz, N. Y. C ) ; Department of Immigrant JEWISH NATIONAL ORGANIZATIONS 319 Aid (with offices in New York City, Chairman, Fiorina Lasker). Official publication, The Jewish Woman, issued quarterly, Estelle M. Sternberger, editor. OFFICERS: (1923-1926) Pres., Rose Brenner*, 45 St. Paul's Place, Brooklyn, N. Y.; First Vice-Pres., Mrs. Wm. D. Sporborg, Port Chester, N. Y.; Second Vice-Pres., Mrs. Alexander Wolf, Washington, D. C.; Third Vice-Pres., Mrs. Herbert E. Ottenheimer, Louisville, Ky.; Treas., Mrs. Alvin L. Bauman, St. Louis, Mo.; Rec. Sec, Mrs. L. A. Hecht, Baltimore, Md.; Exec. Sec, Mrs. Estelle M. Sternberger, 2109 Broadway, N. Y. C. DIRECTORS (1920-1926): Mrs. Elmer Eckhouse, Newark, N. J.; Mrs. Julius Eisman, Toronto, Can.; Hannah Hirshberg, San Antonio, Tex.; Mrs. Max L. Margolis, Phila. Pa.; Mrs. Isaac K. E. Prager, Boston, Mass.; Mrs. Samuel J. Rosensohn, N. Y. C; Sara X. Schottenfels, N. Y. C; and Mrs. Henry J. Sporborg, Albany, N. Y. (1923- 1929): Mrs. Irvin Bettman, St. Louis, Mo; Mrs. S. M. Blumauer, Portland, Ore.; Mrs. Sylvain R. Livingstone, Richmond, Va.; Mrs. Bert H. Printz, Youngstown, O.; Mrs. Amanda Schlesinger, San Francisco, Cal. •Deceased. THE NATIONAL FARM SCHOOL Inc. Apr. 10, 1896. SCHOOL AND FARMS: Farm School, Bucks Co., Pa. OFFICES: 1101 Market, Room 809, Philadelphia, Pa. ,350 Broadway, New York City. Twenty-eighth Annual Meeting, Oct. 4, 1925, Farm School, Bucks Co., Pa. Twenty-sixth Annual Graduation, Feb. 22, 1926. OFFICERS: Chairman Bd. of Trustees, Harry B. Hirsh; Act. Pres., Herbert D. Allman; Vice-Chairman, Jos. H. Hagedorn; Treas., Isaac H. Silverman; Sec, Miss E. M. Bellefield, 1101 Market, Room 809, Phila., Pa. EXECUTIVE BOARD: Henry S. Belber, David Burpee, Abraham Erlanger, Maurice Fels, Wm. H. Fineshriber, Horace Fleishcr, Morris Fleishman, Fred P. Gruenberg, Jos. H. Hagedorn, Roy A. Heymann, J. H. Hinlein, Louis A. Hirsch, Henry A. James, Chas. Kline, Bernard Kohn, Manfred R. Krauskopf, Jas. A. Pratt, Leon Rosenbaum, Pnilip Sterling, James Work, Grant Wright, John Zimmerman. EXECUTIVE COMMITTEE (New York): Chairman, Abraham Erlanger; Mrs. H. A. Guinzberg, Stanley Isaacs, Mrs. Alexander Kohut, Nathan Krass, Samuel C. Lamport, Adolph Lewisohn, Sophie Irene Loeb, Benjamin Mordecai, David de Sola Pool, Israel Unterberg, Stephen S. Wise. HONORARY TRUSTEES: (having served on the Executive Board for ten years) H. D. Allman, Hart Blumenthal, Adolph Eichholz, Harry Felix, S. Friedberger, Daniel Gimbel, H. B. Hirsh, M. A. Kaufmann, 320 AMERICAN JEWISH YEAR BOOK A. M. Klein, Leon Merz, Louis Nusbaum, B. Selig, I. H. Silverman, J. N. Snellenburg. NATIONAL AUXILIARY BOARD: Max A. Adler, Rochester, N. Y.; Daniel Alexander, Salt Lake City, Utah; M. Alexander, Boise,Idaho Henry Beer, New Orleans, La.; Melvin Behrends, Washington, D. C. I. W. Bernheim, Louisville, Ky.; H. S. Binswanger, Richmond, Va. Nathan Eckstein, Seattle, Wash.; Abraham J. Feldman, Hartford, Conn.; M. J. Freiberg, Cincinnati, O.; Milton D. Greenbaum, Baltimore, Md.; Mrs. H. A. Guinzburg, N. Y. C; Julian A. Hillman, Atlantic City, N. J.; Albert C. Lehman, Pittsburgh, Pa.; Louis Schlesinger, Newark, N. J.; Morris Stern, San Antonio, Tex.; David Sternberg, Memphis, Tenn.; Isaac M. Ullman, New Haven, Conn.; Eugene Warner, Buffalo, N. Y.; Morris Weil, Lincoln, Neb.; S. D. Wise, Cleveland, O. NATIONAL FEDERATION OF TEMPLE BROTHERHOODS Org. 1923. OFFICE: Merchants' Bldg., Cincinnati, O. First Biennial Convention, Jan. 19-22, 1925, St. Louis, Mo. Societies, 87. PURPOSE: TO stimulate interest in Jewish worship, Jewish studies, social service and other kindred activities. To co-operate with Union of American Hebrew Congregations in its national plans. OFFICERS: Pres., Roger W. Straus, N. Y. C; Vice-Pres., Leonard S. Levin, Pittsburgh, Pa.; Frederic Wingersky, Boston, Mass.; Treas., Julius W. Freiberg, Cincinnati, 0.; Exec. Sec., George Zepin, Cincinnati, O.; Asst. Exec. Sec, Louis I. Egelson, Cincinnati, O. EXECUTIVE COMMITTEE: The Officers and Alexander Cahn, New Haven, Conn.; Max A. Goldstein, St. Louis, Mo.; Louis A. Horwitz, El Paso, Tex.; H. L. Karpeles, Newark, N. J.; Joseph L. Kun, Philadelphia, Pa.; Julius C. Lang, Seattle, Wash.; Clarence Michaels, Montreal, Can.; Grover M. Moscowitz, Brooklyn, N. Y.; Irving H. Robitshek, Minneapolis, Minn.; Wallace Rosenheim, Detroit, Mich.; Charles Rosenthai, Chattanooga, Tenn.; Arnold M. Schmidt, Brooklyn, N. Y.; Jerome L. Schwartz, Buffalo, N. Y.; Herman Selz, Chicago, 111.; D. R. Shapiro, San Francisco, Cal.; Arthur Hays Sulzberger, N. Y. C; Fred Vorenberg, Boston, Mass.; Leo A. Weil, Erie, Pa.; Leonard Weinberg, Baltimore, Md., Moses Wiesenfeld, Baltimore, Md. NATIONAL FEDERATION OF TEMPLE SISTERHOODS Org. Jan. 1913. OFFICE: Merchants' Bldg., Cincinnati, O. . Fifth Biennial Meeting, Jan. 22-26, 1923, New York City. Societies, 325. PURPOSE: Closer co-operation between the various Sisterhoods. The work of the Federation is conducted under the following Committees: Co-operation, Religion, Religious Schools, Propaganda, Scholarships, Union Museum, LTniongrams, and State or District Federations, Student Welfare Work, and on Peace. JEWISH NATIONAL ORGANIZATIONS 321 OFFICERS: Hon. Pres., Mrs. Abram Simon, Washington, D. C; Pres. Mrs. J. Walter Freiberg, Cincinnati, O.; Vice-Pres., Mrs. Israel Cowen, Chicago, 111.; Mrs. Sallie Kubie Glauber, N. Y. C ; Mrs. Leon Goodman, Louisville, Ky.; Mrs. Adolph Rosenberg, Cincinnati, O.; Mrs. Maurice Steinfeld, St. Louis, Mo.; Treas., Mrs. Benj. F. Engelhard, Chicago, 111.; Sec, George Zepin, Cincinnati, O. EXECUTIVE BOARD: Mmes. Louis Abramson, Shreveport, La.; Alfred Baker, Erie, Pa.; Martin Barbe, Chicago, 111.; Henry Bauer, Atlanta, Ga.; M. N. Becker, Des Moines, la.; Isaac Born, Indianapolis, Ind.; Max J. Brandenburger, Brooklyn, N. Y.; Edgar M. Cahn, New Orleans, La.; Josiah Cohen, Pittsburgh, Pa.; Chas. Cohn, Nashville, Tenn.; Samuel H. Cohn, Cleveland, O.; Israel Cowen, Chicago, 111.; Ferdinand Dilsheimer, Philadelphia, Pa.; Benjamin Engelhard, Chicago, 111.; Solomon Foster, Newark, N. J.; J. Walter Freiberg, Cincinnati, O.; Charles Freund, Toledo, O.; Alexander Friedman, Pensacola, Fla.; Sallie Kubie Glauber, N. Y. C.; Edna Goldsmith, Cleveland, O.; Leon Goodman, Louisville, Ky.; Nathan Gumble, Columbus, O.; Joseph Herman, Boston, Mass.; Victor Hexter, Dallas, Tex.; Deborah Hirschberg, Oakland, Cal.; Joseph Jackson, Pittsburgh, Pa.; Herman Jung, Milwaukee, Wis.; Joseph Kruger, Montreal, Can.; Gerson B. Levi, Chicago, 111.; Harry Liebman, Brookline, Mass.; Benj. Loewenstein, Cincinnati, O.; H. H. Mayer, Kansas City, Mo.; Albert May, Flushing, N. Y.; Lillie R. Mikolas, Minneapolis, Minn.; Nathan J. Miller, N. Y. C; Henry Nathan, Buffalo, N. Y.; Morris Newfield, Birmingham, Ala.; Harold B. Offer, Seattle, Wash.; H. Oppenheimer, Baltimore, Md.; Rose Osterweiss, New Haven, Conn.; Sigmund Ottenheimer, San Francisco, Cal.; L. A. Pollack, Huntington, W. Va.; Adolph Rosenberg, Cincinnati, O.; Alfred Rosenstein, Philadelphia, Pa.; Henry Sahlein, San Francisco, Cal.; Sol. Schoenmann, Houston, Tex.; Henry Schwarz, Denver, Colo.; Abram Simon, Washington, D. C; J. G. Simon, St. Paul, Minn.; Robert F. Skutch, Baltimore, Md.; Maurice Steinfeld, St. Louis, Mo.; Joseph Stolz, Chicago, 111.; Mayer Sulzberger, Detroit, Mich.; Philip Trost, Sioux City, la.; Sol Weil, Goldsboro, N. C ; Jacob Wertheim, N. Y. C; Edward Wessel, N. Y. C; Joseph Wiesenfeld, Baltimore, Md., Cora Wolf, Omaha, Neb.; Leo Wolf, Wheeling, W. Va.; Henry Wolfner, St. Louis, Mo. NATIONAL FEDERATION OF UKRAINIAN JEWS OF AMERICA Re-org. Sept., 1920. OFFICE: 1 Union Square, New York City. Convention,—1924. Affiliated Organizations, 110. PURPOSE: Relief work for Ukrainian Jews. OFFICERS: Pres., B. Saphir; Vice-Pres., L. Dinion, New Haven, Conn.; P. Miller, Philadelphia, Pa.; M. Shatzen, Detroit, Mich.; L. 322 AMERICAN JEWISH YEAR BOOK Smirnoff, N. Y. C; A. Solovioff, N. Y. C; Treas., H. Shupack; Sec, F.Feingold.N.Y.C. EXECUTIVE COMMITTEE: L. Blank, Detroit, Mich.; L. Dinion, New Haven, Conn.; M. Charniafsky, Trenton, N. J.; B. Chubatovsky, Newark, N. J.; I. Dorfman, Newark. N. J.; H. Gordon, N. Y. C ; L. Genel, Phila., Pa.; A. H. Jaffin, Detroit, Mich.; D. Kiperman, Trenton, N. J.; L. Kligman, St. Joseph, Mo.; P. Miller, Phila., Pa.; S. Polakoff, N. Y. C ; J. Phon, N. Y. C ; S. Rafelock, St. Joseph, Mo.; B. Rabalsky, Boston, Mass.; J. Resnick, New Haven Conn.; C. H. Schlein, Kansas City, Mo.; J. Shultz, Kansas City, Mo.; M. Silberman, Boston, Mass.; Wm. Tash, Washington, D. C; Joseph L. Tepper, Washinaton. D. C. NATIONAL JEWISH HOSPITAL AT DENVER Org. Dec. 10, 1899. OFFICE: 3800 E. Colfax Av., Denver, Col. Twenty-sixth Annual Meeting, January, 1926. Contributors, 125,000 Individuals; 75 Federations; 200 Lodges and Societies. Capacity, 193; buildings 12. Collected (1923-1924) $363,- 751.48. Maintains Research Department and a Preventorium for Children, predisposed to tuberculois Patients treated to July 1, 1925, 5,207. OFFICERS: Pres., Wm. B. Woolner, Peoria, 111.; Vice-Pres., Wm. S. Friedman, Denver, Col.; David May, St. Louis, Mo.; Harmon August, N. Y. C; B. Flesher, Denver, Colo.; Chas. H. Studin, N. Y. C ; Herman Wile, Buffalo, N. Y.; Nathan J. Miller, N. Y. C ; Treas., Benj. Altheimer, N. Y. C ; Sec, Mrs. S. Pisko, 3800 E. Colfax Av., Denver, Colo.; National Supervisor, Samuel Schaefer, Denver, Colo. EXECUTIVE COMMITTEE: The Officers, and Louis D. Beaumont, N. Y. C; Alfred A. Benesch, Cleveland, O.; Alfred K. Cohen, Cincinnati, O.; N. S. Dauby, Cleveland, O.; Max Freschl, Milwaukee, Wis.: Sol S. Kiser, Indianapolis, Ind.; Harry K. Lapidus, Omaha, Neb.; Edwin J. Schanfarber, Columbus, O. NATIONAL LEGAL FRATERNITY LAMBDA ALPHA PHI Org. 1919. OFFICE: 972 Broad, Newark, N. J. Annual Convention, Oct., 1925, Newark, N. J. Members, 217. PURPOSE: TO inculcate in Jewish members of the Bar the highest principles of legal ethics in order to maintain the respect of the Bench and Bar. OFFICERS: Supreme Chancellor, Herman W. Brams, Newark, N. J.; Supreme Vice-Chancellor, David Engelson, Brooklyn, N. Y.; Supreme Keeper of the Exchequer, Louis Bondy, Newark, N. J.; Supreme Archon, Michael G. Alenick, 763 Broad, Newark, N. J.; Supreme Historian, Leon E. Cone, Morristown, N. J. EXECUTIVE COMMITTEE: The Officers, and Samuel Clarick, Elizabeth, N. J.; Raymond H. Cohen, Newark, N. J.; Simon S. Gittelman, Newark, N. J.; Gustave L. Goldstein, Newark, N. J.; Charles M. GrosJEWISH NATIONAL ORGANIZATIONS 323 k, N. J.; Harry Silverstein, Newark, N. Newark, N. J.; Herman B. J. Weckstein, Newark, man, Newark, J.; Joseph Susskind, <> N . J . NU BETA EPSILON FRATERNITY Org. 1919. OFFICE: 1505-77 W. Washington, Chicago, 111. Convention, May 13, 1926, Chicago, 111. Members, 90. PURPOSE: Greek letter Fraternity for Jewish students at credited Law Schools. OFFICERS: Grand Chancellor, Barnet Hodes; Exchequer, Alfred Schwerdlin; Recorder, Seymour Scheffries, Chicago 111. EXECUTIVE COMMITTEE: Barnet Hodes, Samuel H. Rosenthal, Alfred Schwerdlin. OMICRON ALPHA TAU FRATERNITY Org. 1912. OFFICE: 126 East 40th, New York City. Annual Convention, Dec. 29, 1925, New York City. Next Annual Convention, Dec. 29, 1926, New York City. Chapters, 17. Members, 850. PURPOSE: Greek-letter college fraternity for Jewish students. OFFICERS: Grand-Chancellor, Nat. B. Cohen, Brooklyn, N. Y.; Grand Vice-Chancellor, Victor K. Ross; Grand Scribe, Jos. S. Rosenzweig; Grand Bursar, Jos. L. Blum; Grand Vice-Scribe, Irving N. "Levine, New Rochelle, N. Y.; Grand Vice-Bursar, Dr. Leon M. Gecker, 2011 Grand Concourse. BOARD OF GOVERNORS: The Officers, and Ray Girard, Brooklyn, N. Y.;Dr. J. B.Seldin. ORDER BRITH ABRAHAM Org. June, 1859. OFFICE: 266 Grand, New York City. Forty-eighth Biennial Convention, May 24-26, 1925, Atlantic City, N. J. Lodges, 185. Members, 28,650. OFFICERS: Grand Master, Alex. M. Katsky, Brooklyn, N. Y.; First Deputy Grand Master, Adolph Solomon, Brooklyn, N. Y.; Second Deputy Grand Master, Chas. Hamburger, Atlantic City, N. J.; Third Deputy Grand Master, Jacob Gould, Minneapolis, Minn.; Grand Treas., Julius Berliner; Grand Sec, Geo. W. Leisersohn, 266 Grand; Counsel to the Order, H. M. Goldfogle, N. Y. C. ORDER KNIGHTS OF JOSEPH Org. Feb. 14, 1896. OFFICE: 1022-28 Engineers Bank Bldg., Cleveland, O. Twenty-sixth Convention, 1924, Chicago, 111. Members, 10,587. Lodges, 68. 324 AMERICAN JEWISH YEAR BOOK OFFICERS: Supreme Commander, Sam Spitzer, Chicago, 111.; First Supreme Vice-Commander, R. Shatz, Phila., Pa.; Second Supreme Vice-Commander, J. Lowenheim, St. Louis, Mo.? Third Supreme Vice-Commander, Asher Goldfine, Chicago, 111.; Supreme Sec, D. J. Zinner, Cleveland, O.; Supreme Treas., Jos. C. Bloch, Cleveland, O.; Endowment Treas., Henry A. Rocker, Cleveland, O. ORDER SONS OF ZION Org. Apr. 19, 1908. OFFICE: 44 E. 23d, New York City. Sixteenth Annual Convention, June 21-22, 1925, Newark, N. J. Camps, 101. Members, 7,000. PURPOSE: Fraternal and Zionistic. OFFICERS: Nasi, Sol. Freedland; Segan Rishon, Abr. Goldberg; Segan Sheni, Louis Hochberg; Gisbor, Max Fanwick; Maskir, Jacob Ish-Kishor; Counsel, Samuel Weinstein; Chief Medical Examiner, Solomon Neuman. EXECUTIVE COMMITTEE: H. Abramowitz, H. J. Abramson, N. Abramson, M. Alpert, J. I. Bluestone, S. Chansky, N. Chasan, Benjamin Fine, S. Finestone, S. Hein, M. Herbst, L. Kehlman, M. Kessler, Moses Littwin, H. Milgrim, Louis Rimsky, J. S. Strahl, M. Weinerman, M. Werbelowsky, H. Wertzheimer. ORDER OF THE UNITED HEBREW BROTHERS Org. Nov. 15, 1915. OFFICE: World Exchange Bank Bldg., 174 2nd Av., New York City. Quinquennial Convention, Oct. 18, 1925, New York City. Members, 9,309. OFFICERS: Grand Master, Meyer Greenberg, 99 Nassau; Vice- Grand Master, Samuel Hirsh; First Deputy Grand Master, Alb. Halle; Grand Treas., Philip Adler; Grand Sec, Kallman Flus, 174 2nd Av., N. Y. C. EXECUTIVE COMMITTEE: Philip Adler, M. Barrash, J. Brown, J. Cassell, Sam Cohen, D. Gerber, D. Goldman, L. Goldstein, Alb. Halle, M. Jacobs, Arthur F. Kallman, M. Klein, Solomon Mayfer, August Mayer, E. Obst, Joseph Mittelman, M. Perlstein, J. Rosenberg, H. Sachs, M. Schall, O. Schall, Henry Siedner, Pincus Silberstein, S. O. Sobel, J. Spiro. O.R.T. Org. 1922. OFFICE: 31 Union Square, New York City. PURPOSE: Promotion of technical trades and agriculture among the Jews in Eastern Europe. OFFICERS: Hon. Pres., Adolph Lewisohn; Vice-Pres., James H. Becker, Mrs. Alexander Kohut, Jacob Panken, Otto A. Rosalsky, Morris Wolf. JEWISH NATIONAL ORGANIZATIONS 325 EXECUTIVE COMMITTEE: Herman Bernstein, Henry Moskowitz, B. C. Vladeck, Arthur I. Wolf. PALESTINE DEVELOPMENT COUNCIL Org. 1921. OFFICE: 27 William, New York City. PURPOSE : The social and economic development of Palestine through the creation of business corporations. OFFICERS: Hon. Chairman, Louis D. Brandeis, Washington, D. C; Chairman, Julian W. Mack, Woolworth Bldg., N. Y. C ; Treas., Julius Simon, N. Y. C.;Sec, Nathan Straus, Jr., 119 Fifth Av., N. Y. C. TRUSTEES: F. Julius Fohs, Harry Fischel, Bernard Flexner, Leon Kamaiky, L. C. Lowenstein, Julius Simon, Lewis L. Strauss, Jr., Nathan Straus, Jr. PHI ALPHA FRATERNITY Org. 1914. OFFICE: 916-918 Munsey Bldg., Baltimore, Md. Annual Convention, Dec. 30, 1925-Jan. 1, 1926, Washington, D. C. Chapters, 16. Members, 700. PURPOSE: Jewish student fraternal relationships in certain American Colleges and Universities where established. OFFICERS: Pres., Simon W. Levitan, Phila., Pa.; Vice-Pres., Jos. I. Shrebnik, New Haven, Conn.; Treas., Louis Rosenberg, Washington, D. C; Sec, Alexander Goodman, 918 Munsey Bldg., Baltimore, Md.; Sergeant-at-Arms, Geo. Epstein, Worcester, Mass.; Editor, Samuel M. Dodek, Phila., Pa. SUPREME BOARD: Charles Bassecher, Washington, D. C; Harry Berman, Baltimore, Md.; Joseph Bernstein, Baltimore, Md.; David Davis, Washington, D. C; Ellis Levin, Baltimore, Md.; Edward Lewis, Washington, D. C; Sam H. Platcow, New Haven, Conn.; Reuben Schmidt, Wilmington, Del. PHI BETA DELTA FRATERNITY Org. 1912. OFFICE: New York City. Annual Convention, Dec. 31, 1925-Jan. 2, 1926, Philadelphia, Pa. Members, 1,200. Chapters, 25. OFFICERS: Pres., William Biederman, N. Y. C ; Vice-Pres., Jos. L. Nathanson, Minneapolis, Minn.; Isidore H. Schweidel, Phila., Pa.; Treas., Ira A. Schur, N. Y. C; Sec, Will N. Scnleicher, N. Y. C; Historian, Samuel J. Schur, N. Y. C. NATIONAL COUNCIL: The Officers, and Isaac Mark, Jr., N. Y. C; Arthur Stollmack, Stanford University, Cal.; Wm. Zeckendorf, N. Y. C. THE PHI BETA FRATERNITY Org. 1920. OFFICE: 2161-71st, Brooklyn, N. Y. Sixth Annual Convention, Sept. 1-5, 1925, New Britain, Conn. Chapters, 15. 326 AMERICAN JEWISH YEAR BOOK Members, 275. PURPOSE : A national Jewish fraternity with chapters located in high and preparatory schools, for boys meeting for educational, social and fraternal purposes. OFFICERS: Hon. Grand Superior, Louis D. Shapiro, Philadelpnia, Pa.; Grand Superior, Abe Rosenthal, Rochester, N. Y.; Grand Vice-Superior, Jack Rottner, Hartford, Conn.; Grand Sec, Moe Rosenthal, 2161-71st Brooklyn, N. Y.; Grand Treas., Milton M. Sodafsky, Phila., Pa.; Grand Marshall, Martin Crossman, Pnila., Pa. PHI EPSILON PI FRATERNITY Org. 1902. OFFICE: 918 North American Bldg., Philadelphia. Pa. Convention, Dec, 28-31, 1925, Atlanta, Ga. Convention, Dec. 28-31, 1926, Chicago, 111. Members, 2,000. PURPOSE: College Fraternities. OFFICERS: Grand Superior, Edward Davis, Philadelphia, Pa.; Vice- Superiors, Ben Kartman, Chicago, 111.; Ben Lemisch, Phila., Pa.; E. G. Zacharias, Atlanta, Ga.; Grand Treas., Emanuel Wirkman, Philadelphia, Pa.; Grand Recorder, Jacob H. Lavenstein, 35 Adams, Petersburg, Va. PHI LAMBDA KAPPA MEDICAL FRATERNITY Org. 1907. OFFICE: 486 E. 4th, Brooklyn, N. Y. Convention, Dec. 28-30, 1925, Philadelphia, Pa. Next Convention, Dec. 27-29, 1926, New York City. Members, 700. - PURPOSE: Fraternity. OFFICERS: Grand Superior, David S. Herman, Richmond Hill, N. Y.; Grand Scribe, Irving Nachamie, Brooklyn, N. Y.; Grand Guardian Exchequer, Mark G. Kantor, N. Y. C. PHI SIGMA DELTA FRATERNITY Org. 1909. OFFICE: 13 Astor Place, New York City. Sixteenth Annual Convention, Dec, 1925, New York City. Seventeenth Annual Convention, Dec. 25, 1926, New York City. Members, 1,600. PURPOSE: Promote brotherhood, friendship, good-fellowship, and good character. OFFICERS: Pres., Edward Weinfeld; Vice-Pres., A. Leigh Robbins; Treas., Murray Ellman; Sec, Julius B. Sheftel. EXECUTIVE COMMITTEE: Benjamin Etler, Jacob Frank, S. A. Isaacson, Bernard Lichtenberg, Herbert K. Minsky, Felix Rosenstock. JEWISH NATIONAL ORGANIZATIONS 327 PHI SIGMA EPSILON FRATERNITY OF THE UNITED STATES AND CANADA Org. 1910. OFFICE: 232 S. Michigan, South Bend, Ind. Annual Convention, Dec. 26-28, 1925, Chicago, 111. Next Convention, Dec. 26-29, 1926, Detroit, Mich. Members, 135. PURPOSE: A Social and Philanthropic Organization. OFFICERS: Grand Pres., A. L. Jonas, Knox, Ind.; Grand Vice-Pres., S. H. Rubiner, Detroit, Mich.; Grand Treas., D. Biller, St. Louis, Mo.; Grand Sec, S. Brazy, South Bend, Ind. PI TAU PI FRATERNITY Org. Jan., 1909. Fourteenth Annual Conclave, Dec. 27-30, 1925, Omaha, Nebr. Members. 600. Chapters, 30. PURPOSE: TO bring into closer relation and promote sociability among the Jewish young men of the country and to aid the less fortunate. OFFICERS: Pres., E. Harry Austerlitz, N. Y. C; Vice-Pres., Leslie Burkenroad, Omaha, Nebr.; Treas., Victor Hexter, Memphis, Tenn.; Sec, Albert Auer, 4904 McPherson Av., St. Louis, Mo.; Editor, Roy G. Rosenthal, Montesano, Wash.; Historian, Walter Schwam, Baton Rouge, La.; Chaplain, Max Block, Omaha, Nebr.; Junior Counsellor, Mortimer Goldsmith, Newark, N. J. PROGRESSIVE ORDER OF THE WEST Org. Feb. 13, 1896. OFFICE: 406-7-8 Frisco Bldg., 9th and Olive, St. Louis, Mo. Convention, July 26-28, 1925, Kansas City, Mo. Members, 11,874. OFFICERS: Grand Master, Samuel A. Epstein, Chicago, 111.; First Vice-Grand Master, Carl Dubinsky, St. Louis, Mo.; Second Vice-Grand Master, Morris Klein, Chicago, 111.; Third Vice-Grand Master, Israel Beck, Union Hill, N. J.; Fourth Vice-Grand Master, Samuel Ratner,- Philadelphia, Pa.; Fifth Vice-Grand Master, Wm. Fortas, Memphis, Tenn.; Sixth Vice-Grand Master, Jacob Goldberg, Milwaukee, Wis.; Seventh Vice-Grand Master, Samuel D. Frey, Syracuse, N. Y.; Eighth Vice-Grand Master, Lee A. Berlinsky, Washington, D. C ; Ninth Vice- Grand Master, Jacob Jacobs, Ft. Worth, Tex.; Tenth Vice-Grand Master, Gabriel Hament, Baltimore, Md.; Eleventh Vice-Grand Master, Adolph Pucker, Kansas City, Mo.; Grand Sec, Morris Shapiro, St. Louis, Mo.; Grand Treas., Isadore D. Goldberg, St. Louis, Mo.; Endowment Treas., Samuel Kronsberg, St. Louis, Mo.; Grand Counsellor, Harry Felberbaum, St. Louis, Mo.; Grand Medical Examiner, J. G. Probstein, St. Louis, Mo. 328 AMERICAN JEWISH YEAR BOOK RABBI ISAAC ELCHANAN THEOLOGICAL SEMINARY Org. 1896. OFFICE: 301-3 E. Broadway, New York City. Incorporated in State of New York. Invested funds about, $600,000. Library: Printed volumes, 11,000; manuscripts, small collection. Commencement, March 7, 1926. Graduates, 1926, Rabbinical course, 19; Teachers, 18. Entire number of graduates, Rabbinical course, 102. PURPOSE: TO disseminate Jewish knowledge and to train rabbis and teachers. OFFICERS: Pres., Nathan Lamport; Treas., M. Gottesman. FACULTY: Pres., B. Revel, M.A.Ph.D. (Dropsie College); Instructors of Talmud, B. Aronowitz; A. Burrack; J. Levine; S. Oleshefsky; M.. Paleyeff; S. Polatcheck; S. Rakofsky; J. Weill; Asst. Prof, of Homiletics, Herbert S. Goldstein, M.A. (Columbia); Asst. Prof, of Bible, J. Kaplan, M.A. (Columbia); Asst. Prof, of Hebrew, Ph. Churgin, Ph.D. (Yale); Professor of Jewish History, Solomon Zeitlin, Ph.D. (Dropsie College), M.A. (Columbia); Lecturer in Jewish Philosophy, Isaac Husik, M. A., Ph.D., LL.B. (Penn.); Lecturer in Modern Jewish History, P. Wiernik. LIBRARY STAFF:Acting Librarian, S. Gandz, Ph.D. (Vienna). REGISTRAR: Samuel L. Sar. RHO PI PHI FRATERNITY, INC. Org. 1912. Annual Convention, July, 1925, New York City. Members, 1,000. Chapters, 11. PURPOSE: Students of Pharmacy. To raise the standard and dignity of the profession scientifically and socially. OFFICERS: Sup. Councillor, Simon Cramer, Rochester, N. Y.; Vice- Sup. Councillor, Harry Rosenblatt, N. Y. C ; Fin. Sec. Harold Verman, 42 West Park Place, Woonsocket, R. I. SEPHARADIC BROTHERHOOD OF AMERICA, INC. Org. 1921. OFFICE: 83 E. 1,16th, New York City. Members, 900. PURPOSE : To promote the industrial, social, educational and religious welfare of its members and to engage in philanthropic endeavors for the welfare of Sepharadic immigrants. OFFICERS: Pres., Hyman Nadjary, 83 E. 116th St., New York City; Vice-Pres., Joseph Saltiel; Treas., Edward Besso; Fin. Sec, Bension Grottas; Rec. Sec, Leon Saady. CENTRAL COUNCIL: Ab. Cohen, Leon Saady, Bension Grottas, Albert Levy, Uriel Angel, Aron Pardo, Manuel Pardo, Isie Pardo, Ab. Saltiel, Elie Saporta, Sam Ergas, Daniel Botton, Raphael Hasson, Hyman Nadjary, Joseph Saltiel, Sam Benrubi, Edward Besso, Victor JEWISH NATIONAL ORGANIZATIONS 329 Cohen, Meshulam Aroyo, Isidor Camhi, Henry Perahia, Isaac Nahum, Elie Saltiel, Louis Matalon, Albert Nathan. SIGMA ALPHA MU FRATERNITY Org. Nov. 26, 1909. OFFICE: 15 Park Row, New York City. Sixteenth Annual Convention, Dec. 28, 1925-Jan. 1, 1926, Philadelphia, Pa. Chapters: Undergraduates, 29; Alumni Clubs, 25. Members, 2,100. PURPOSE: Greek-letter College Fraternity for Jewish students. OFFICERS: Pres., S. S. Amdursky; Vice-Pres., John Barsha; Treas., H. I. Jacobson; Sec, Robt. Borsuk. DIRECTORS: The Officers, and Victor H. Blanc, Philip D. Bookstaber, B. P. Goldman, Joel Korn. SIGMA EPSILON DELTA FRATERNITY Org. 1901. OFFICE: 292 New York Av., Brooklyn, N. Y. Convention, March 11, 1925, New York City. Next Convention, April 2, 1926, New York City. Members, 700. PURPOSE: TO promote the highest excellence in the science and art of dentistry and its collateral branches; to bring about a closer acquaintance among the student body and graduates through fraternal co-operation. OFFICERS: Grand Master, J. A. Boley, Brooklyn, N. Y.; Grand Chaplain, Leonard S. Blumberg, Phila., Pa.; Grand Scribe, Leo Tanzer, 305 E. 86th, N. Y. C ; Grand Treas., D. M. Arkin, N. Y. C; Grand Historian, A. V. Greenstein, N. Y. C. *SIGMA LAMBDA PI FRATERNITY Org. 1912. OFFICE: 303 Fifth Av,, New York City. *SIGMA THETA PI SORORITY Org. 1909. OFFICE: Goucher College (Box 257), Baltimore, Md. *TAU DELTA PHI FRATERNITY Org. 1910. OFFICE: 604 W. 114th, New York City. •Revised information was not furnished upon request. For latest official data on these organizations, see THE AMERICAN JEWISH YEAR BOOK, Vol. 27. 330 AMERICAN JEWISH YEAR BOOK TAU EPSILON PHI FRATERNITY Org. Oct. 19, 1910, Inc., 1917. OFFICE: 618 W. 113th, New York City. Next Convention, Dec. 26-30, 1926, Washington, D. C. Chapters, 25 Undergraduate; 4 Alumni. Members, 1,500. PURPOSE: TO foster the spirit of true brotherly love and self-sacrifice. OFFICERS: Consul, Joseph Bower; Vice-Consul, M. R. Perlman; Quaestor, L. S. Lebenthal; Tribune, Julius Samkoff; Annotator, M. Prenner; Praetor Supreme, T. E. Runsdorf; Editor, Arthur B. Edison. TAU EPSILON RHO FRATERNITY Org. 1919. OFFICE: 214 Society for Savings Bldg., Cleveland, O. Annual Convention, Jan. 9-11, 1926, Cleveland, O. Chapters, 2; Undergraduate chapters, 5. Members, 135. PURPOSE: Legal Fraternity with undergraduate chapters in accredited day law-schools and graduate chapters in cities. OFFICERS: Supreme Chancellor, Manuel Levine, Cleveland, O.; Supreme Vice-Chancellor, Jerome W. Moss, Cleveland, O.; Supreme Master of the Rolls and Bursar, Baruch A. Feldman, Cleveland O.; Supreme Historian, Edward Davidson, Cleveland, O.; Supreme Scholar, Francis Finkelhor, N. Y. C ; Supreme Pledgor, Harry Epstein, Cleveland, O. SUPREME COUNCIL: Baruch A. Feldman, Maxwell Kahaner, Manuel Levine, Edward Lurie, Jerome W. Moss, jack A. Persky. TRAINING SCHOOL FOR JEWISH SOCIAL WORK Org. 1925. OFFICE: 210 W. 91st, New York City. Members, 25. OFFICERS: Pres., Julius Rosenwald, Chicago, 111.; Vice-Pres., Lee K. Frankel, Louis E. Kirstein; Treas., I. Edwin Goldwasser; Sec, Solomon Lowenstein; Dir. M. J. Karpf. EXECUTIVE COMMITTEE: The Officers, and Chairman, Felix M. Warburg, N. Y. C; and Cyrus Adler, Phila., Pa.; Mrs. Sidney C. Borg, N. Y. C; A. Richard Frank, Chicago, III.; Mrs. Siegmund Herzog, Cleveland, O.; Moses J. Stroock, N. Y. C. UNION OF AMERICAN HEBREW CONGREGATIONS Org. 1873. OFFICE: Cincinnati, O. Twenty-ninth Council, January, 1925, New York City. Thirtieth Council, January, 1927, Cleveland, O. Members: 278 congregations. PURPOSE: TO maintain the Hebrew Union College of Cincinnati, O., an institution for educating rabbis; to promote religious instruction and encourage the study of the tenets and history of Judaism. JEWISH NATIONAL ORGANIZATIONS 331 Four Departments: I. Executive and Financial: Hon. Pres., Charles Shohl, Cincinnati, O.; II. Board of Finance: Chairman, David A. Brown, Detroit, Mich.; III. Hebrew Union College: Chairman Board of Governors, Alfred M. Cohen, Cincinnati, O.; Julian Morgenstern, President, Cincinnati, O.; IV. Board of Managers of Synagog and School Extension: Chairman, Julius Freiberg; Director, George Zepin, Cincinnati, O. EXECUTIVE BOARD FOR 1926: Chairman of Exec. Bd., Ludwig Vogelstein, N. Y. C ; Hon. Pres., Charles Shohl, Cincinnati, O.; Vice- Pres., Julius Rosenwald, Chicago, 111.; Marcus Rauh, Pittsburgh, Pa; Maurice D. Rosenberg, Washington, D. C; Jacob W. Mack, Cincinnati, O.; Sec., George Zepin; Asst. Sec, Jacob D. Schwarz,Merchants' Bldg., Cincinnati, O.; Marcus Aaron, Pittsburgh, Pa.; Ben Altheimer, N. Y. C; N. Henry Beckman, Cincinnati, O.; Isaac W. Bernheim, Louisville, Ky.; David A. Brown, Detroit, Mich.; Fdgar M. Cahn, New Orleans, La.; Alfred M. Cohen, Cincinnati, O.; Henry Cohen, Galveston, Tex.; Josiah Cohen, Pittsburgh, Pa.; David W. Edelman, Los Angeles, Cal.; Gustave A. Efroymson, Indianapolis, Ind.; Arnold Falk, New Orleans, La.; Lee K. Frankel, N. Y. C ; Julius W. Freiberg, Cincinnati, O.; Mrs. J. Walter Freiberg, Cincinnati, O.; Isaac Gilbert, Detroit, Mich.; Samuel H. Goldenson, Pittsburgh, Pa.; Robert P. Goldman, Cincinnati, O.; Simeon M. Johnson, Cincinnati, O.; Adolf Kraus, Chicago, 111.; Ben Lowenstein, Cleveland, O.; Henry L. Mayer, San Francisco, Cal.; Edwin B. Meissner, St. Louis, Mo.; Nathan J. Miller, N. Y. C; Julian Morgenstern, Cincinnati, 0.; Henry Morgenthau, N. Y. C ; Adolph I. Newman, Cleveland, O.; Adolpn S. Ochs, N. Y. C; Herbert C. Oettinger, Cincinnati, 0.; Henry Oppenheimer, Baltimore, Md.; William Ornstein, Cincinnati, 0.; Carl E. Pritz, Cincinnati, O.; Simon W. Rosendale, Albany, N. Y.; A. L. Saltzstein, Milwaukee, Wis.; Louis Schlesinger, Newark, N. J.; Meier Steinbrink, Brooklyn N. Y.; Horace Stern, Phila., Pa.; Jos. Stolz, Chicago, 111.; Roger W. Straus, N. Y. C ; Samuel Straus, Cincinnati, O.; Arthur Hays Sulzberger, N. Y. C; I. Newton Trager, Cincinnati, 0.; Isaac M. Ullman, New Haven, Conn.; Felix Vorenberg, Boston, Mass.; Aaron Waldheim, St. Louis, Mo.; A. Leo Weil, Pittsburgh, Pa.; Herman Wile, Buffalo, N. Y.; Albert Wolf, Phila., Pa.; Adolphe Wolfe, Portland, Ore.; Louis Wolsey, Phila., Pa.; Wm. B. Woolner, Peoria, 111. BOARD OF GOVERNORS OF THE HEBREW UNION COLLEGE FOR 1926: Chairman, Alfred M. Cohen, Cincinnati, O.; Vice-Pres., Maurice J. Freiberg, Cincinnati, O.; Sec, Isaac Bloom, Cincinnati, O.; Asst. Sec, Benj. Mielziner, Cincinnati, 0.; Marcus Aaron, Pittsburgh, Pa.; James H. Becker, Chicago, 111.; Oscar Berman, Cincinnati, O.; David M. Bressler, N. Y. C; Harry W. Ettelson, Memphis, Tenn., Albert Freiberg, Cincinnati, 0.; A. B. Frey, St. Louis, Mo.; Jacob S. Goldbaum, Philadelphia, Pa.; Moses E. Greenebaum, Chicago, 111.; Joseph H. Hagedorn, Phila., Pa.; James G. Heller, Cincinnati, O.; Harry M. Hoffheimer, Cincinnati, O.; Meyer Jacobstein, Rochester, N. Y.; Simon 332 AMERICAN JEWISH YEAR BOOK Lazarus, Columbus, O.; Lee J. Loventhal, Nashville, Tenn.; Ralph W. Mack, Cincinnati, O.; Louis L. Mann, Chicago, 111.; Isaac E. Marcuson, Atlanta, Ga.; Leslie V. Marks, Cincinnati, O.; David Philipson, Cincinnati, O.; Carl E. Pritr, Cincinnati, O.; Wm. Rosenau, Baltimore, Md.; Murray Seasorigood, Cincinnati, O.; Abba H. Silver, Cleveland, O.; Abram Simon, Washington, D. C; Henry Wineman, Detroit, Mich.; Jonah B. Wise, N. Y. C; Louis Witt, St. Louis, Mo. BOARD OF MANAGERS OF SYNAGOG AND SCHOOL EXTENSION FOR 1926: Chairman, Julius W. Freiberg, Cincinnati, O.; Vice-Chairman, Jacob W. Mack, Cincinnati, O.; Director, George Zepin; Asst. Director, Louis I. Egelson; Educ. Director, Emanuel Gamoran, Merchants' Bldg., Cincinnati, 0.; Field Reg., Michael Aaronsohn, Cincinnati, O.; Milton M. Alexander, Detroit, Mich.; Dave Davidson, Sioux City, la.; Benj. M. Engelhard, Chicago, 111.; Morris Feuerlicht, Indianapolis, Ind.; Leo M. Franklin, Detroit, Mich.; Solomon B. Freehof, Chicago, 111.; Ephraim Frisch, San Antonio, Tex.; Geo. A. Gershon, Atlanta, Ga.; Simeon M. Johnson, Cincinnati, 0.; Leon Juda, San Francisco, Cal.; Sol.S. Kiser, Indianapolis, Ind.; Samuel Koch, Seattle, Wash.; Jos. Kornfield, Toledo, 0.; David Lefkowitz, Dallas, Tex.; Abr. Lewenthal, Cleveland, O.; Eugene Mannheimer, Des Moines, la.; Nathan J. Miller, N. Y. C ; Samuel M. Newburger, N. Y. C ; Herbert C. Oettinger, Cincinnati, 0.; J. Robert Orton, Cincinnati, O.; Joseph Rauh, Louisville, Ky.; Julian S. Rauh, Cincinnati, 0.; Al. A. Rosenbush, Boston, Mass.; Joseph Schonthal, Columbus, O.; Albert Steindler, Chicago, 111.; Aaron Straus, Baltimore, Md.; Abr. J. Sunstein, Pittsburgh, Pa.; Henry M. Toch, N. Y. C; Herman Wile, Buffalo, N. Y. HEBREW UNION COLLEGE: Incorporated, Cincinnati, O. Volumes in Library over 75,000. Faculty: Julian Morgenstern, Ph.D., President and Professor of Bible and Semitic Languages; Louis Grossmann, D.D., D.H.L., Professor Emeritus of Ethics and Pedagogy; Jacob Z. Lauterbach, Ph.D., Professor of Talmud; Moses Buttenwieser, Ph.D., D.H.L., Professor of Biblical Exegesis; Henry Englander, Ph.D., Registrar and Professor of Biblical Exegesis; Jacob R. Marcus, B. A., Instructor in Bible and Rabbinics; Jacob Mann, D.Lit., Professor of Jewish History; Israel Bettan, D.D., Professor of Homiletics and Midrash; Abraham Cronbach, D.D., Professor of Social Studies; Samuel S. Cohon, B.A., Professor of Jewish Theology; Abraham Z. Idelsohn, Ph.D., Professor of Jewish Music; Solomon B. Finesinger, Ph.D., Instructor in Hebrew; Sheldon H. Blank, Ph.D., Instructor in Hebrew and Bible. Special Instructors: David Philipson, D.D., LL.D., Lecturer on History of the Reform Movement and the Activities of the Rabbi; Cora Kahn, Elocution. Corresponding Members of the Faculty: Aaron Hahn (1887), David Davidson (1892), Israel Abrahams (1912), Adolph S. Oko Librarian. JEWISH NATIONAL ORGANIZATIONS 333 UNION OF ORTHODOX JEWISH CONGREGATIONS OF AMERICA Org. June 8, 1898. OFFICE: 131 W. 86th, New York City. Twenty-seventh Annual Convention, Oct. 24-26, 1925, New York City. OFFICERS: Hon. Pres., Bernard Drachman, H. Pereira Mendes, Julius J. Dukas, N. Y. C ; Pres., Herbert S. Goldstein, N. Y. C; Vice- Pres., Philip Klein*, Leo Jung, N. Taylor Phillips, N. Y. C; Samuel Feuerstein, Boston, Mass.; Israel Gomborov, Baltimore, Md.; Treas., M. Boas Lande, N. Y. C ; Exec. Sec, M. Shuchatowitz. EXECUTIVE COMMITTEE (From New York): S. Bayer, Isidore Brody, Joseph H. Cohen, C. Joshua Epstein, Harry Fischel, Wm. Fischman, Samuel Friedman, Harry Fromberg, L. S. Furman, Abraham Goldstein, A. L. Goldstein, Mendel Gottesman, Louis Gutman, Jacob Hecht, Max Herskovitz, Samuel H. Hofstadter, Philip Jaches, Nathan Lamport, Abraham Levy, K. Lewis, Joseph H. Lookstein, M. S. Margolies, Henry S. Morais, Joseph Polstein, David de Sola Pool, Samuel Sar, A. I. Shuchatowitz, Louis Simon, Benjamin Weberman, William Weis; I. M. Davidson, Wilkes-Barre, Pa.; S. B. Friedman, Pittsburgh, Pa.; Samuel Ginsburg, Chicago, 111.; Isadore Goodman, Indianapolis, Ind.; A. A. Katz, Cleveland, O.; Albert Mandelbaum, Albany, N. Y.; H. L. Rosen, Altoona, Pa.; Manes Strauss, Baltimore, Md. •Deceased. UNION OF ORTHODOX RABBIS OF UNITED STATES AND CANADA Org. Tammuz 24, 5662 (1902). OFFICE: 221 E. Broadway, New York City. Twenty-third Annual Convention, May 4-6, 1925, New York City. Members, 296. OFFICERS: Hen. Pres., B. L. Levinthal, Phila, Pa.; M. S. Margolies, N. Y. C; Presidium, I. Rosenberg, N. Y. C; L. Silver, Springfield, Mass.; B. Revel, N. Y. C; J. Konowitz, Newark, N. J.; I. Siegel, Bayonne, N. J.; Sec, J. L. Seltzer, N. Y. C; Treas., Ch. I. Bloch, Jerse\ City, N. J.; Exec. Sec, A. B. Kahan, N. Y. C. EXECUTIVE COMMITTEE: S. Alishewsky, N. Y. C; A. D. Burak, Brooklyn, N. Y.; H. Dachowitz, Brooklyn, N. Y.; N. H. Ebin, Brooklyn, N. Y.; Ch. F. Epstein, Cleveland, O.; J. Eskolsky, N. Y. C; T. Geffen, Atlanta, Ga.; M. Gusik, N. Y. C; E. Inselbuch, Brooklyn, N. Y.; J. M. Kahan, N. Y. C ; I. A. Kriger, Boston, Mass.; J. Levinson, Brooklyn, N. Y.; J. H. Levenberg, New Haven, Conn.; S. A. Pardes, N. Y. C; A. S. Pfeffer, N. Y. C; S. Polachek, Brooklyn, N. Y.; L. Predmesky, N. Y. C ; L. M. Preil, Elizabeth, N. J.; N. H. Riff, Camden, N. J.; P. Rimalt, N. Y. C; J. Rosen, Passaic, N. J.; I. S. Rubinstein, Providence, R. I.; A. I. Salmenowitz, Brooklyn, N. Y.; A. I. Shuch334 AMERICAN JEWISH YEAR BOOK atowitz, N. Y. C ; I. Siegal, Bayonne, N. J.; J. Silman, N. Y. C ; M. S. Sivitz, Pittsburgh, Pa.; M. B. Tomashoff, Brooklyn, N. Y.; A. A. Yudelowitz, N. Y. C; H. Cohen, Montreal, Can.; J. L. Grubard, Toronto, Can. UNITED ORDER "TRUE SISTERS" Org. Apr. 1846, as Independent Order of True Sisters. OFFICE: 309 W. 109th, New York City. Seventy-fifth Annual Convention of the Grand Lodge, Dec, 1925, New York City. Lodges, 32. Members, 11,100. Publishes a monthly, The Echo, editor, Mrs. Esther Davis. OFFICERS (For December, 1925, to December, 1927): Grand Monitress, Mrs. Julia Levy; Grand Pres., Mrs. Juliet B. Howard; Grand Vice-Pres., Mrs. Amelia Oppenheimer; Mrs. Henriette Prinstein; Grand Sec, Mrs. Rose Baran; Grand Financial Sec, Mrs. Flora H. Fish; Grand Treas., Mrs. L. Schwarzkopf; Grand Mentor, Mrs. Rose Deutschberger; Grand Warden, Mrs. Martha Gould. UNITED ROUMANIAN JEWS OF AMERICA (Amalgamation of Federation of Roumanian Jews of America and the American Union of Roumanian Jews) OFFICE: 799 Broadway, New York City. Sixteenth Annual Convention: Jan. 4, 1925, New York City. PURPOSE: TO further, defend and protect the interests of the Jews in Roumania, to work for their civic and political emancipation and for their economic reconstruction and rehabilitation, and to represent and further the interests of the Roumanian Jews in the United States and Canada. OFFICERS: Pres., LeoWolfson; Vice-Pres., Jacob Braunstein, Peter Ferester, Leon Fisher, Edward Herbert, Abraham Hirsh; Treas., Haimi Haimowitz; Sec, Herman Speier. EXECUTIVE COMMITTEE: The Officers, and Louis Aronowitz, Bertha Bookstaber, H. Bookstaber, A. D. Braham, J. E. Braunstein, Leon Burkes, Bernard Carneol, Louis Davidovitz, Yetta Davidson, Louis Diamant, Louis Eckstein, Henry Eiser, N. Engelhardt, Abraham Falick, S. Farb, Sam M. Feinblatt, Chas. I. Fleck, Isidore Goldenberg, Morris Graubard, Solomon Greenberg, A. Guttman, Jos. Haimowitz, Chas. Jankowitz, Chas. Kalmanowitz, Samuel Kanter, Julius Klepper, Louis Klinger, Newman Kovler, Elsie Kramer, Simon Kramer, Simon Letzler, Isaac Lippman, David Lonshein, Solomon Marcus, Rose Markowitz, H. Meyer, Solomon Mutterperl, Max Ornstein, Dora Pollock, Joseph Rauchbach, Leon Rosenthal, Irving Sand, Morris Schechter, M. Schonfeld, Leon Schwartz, Sam Schwartz, S. Seilikowitz, Jacob JEWISH NATIONAL ORGANIZATIONS 335 Segal, M. Silverman, S. R. Silverman, Albert Smilowitz, Benjamin Stein, Edward Stein, Joseph Weiner, Louis Weiss. UNITED SYNAGOGUE OF AMERICA Org. Feb. 23, 1913. OFFICE: 531 W. 123d, New York City. Thirteenth Annual Convention, May 3-5, 1925, Atlantic City, N. J. Fourteenth Annual Convention, April 18-21, 1926, Baltimore, Md. PURPOSE : The promotion of traditional Judaism in America. FOUNDER: Solomon Schecther. OFFICERS: Pres., Elias L. Solomon, N. Y. C ; Vice-Pres., Louis Ginzberg, N. Y. C; Herman Abramowitz, Montreal, Can.; Jacob Kohn, N. Y. C; Charles E. H. Kauvar, Denver, Colo.; Rec. Sec, S. Herbert Golden, N. Y. C; Cor. Sec, Chas. I. Hoffman, 624 High, Newark, N. J.; Treas., Win, Prager; Executive Director, Samuel M. Cohen, N. Y. C ; Educ. Dir., Jacob Grossman. EXECUTIVE COUNCIL: The Officers, and Cyrus Adler, Phila., Pa.; Mrs. Cyrus Adler, Phila., Pa.; Maurice Avner, Pittsburgh, Pa.; A. B. Cohen, Scranton, Pa.; Lyon Cohen, Montreal, Can.; Israel Davidson, N. Y. C; Max Drob, N. Y. C; Louis M. Epstein, Boston, Mass.; Milton Fleischer, Baltimore, Md.; M. B. Freedman, Cleveland, O.; Solomon Goldman, Cleveland, O.; Israel Goldstein, N. Y. C; Meyer Goodfriend, N. Y. C ; Julius H. Greenstone, Phila., Pa.; Henry Gross, Newark, N. J.; Abr. E. Halpern, St. Louis, Mo.; A. M. Hershman, Detroit, Mich.; M. M. Kaplan, N. Y. C; Max D. Klein, Phila., Pa.; Mrs. Jacob Kohn, N. Y. C ; Moses Kreeger, Chicago, 111.; Arthur M. Lamport, N. Y. C; D. A. Lourie, Boston, Mass.; Elias Margolis, Mt. Vernon, N. Y.; Alexander Marx, N. Y. C; A. A. Neuman, Phila, Pa.; Nathan Pinanski, Boston, Mass.; Chas. Polakoff, Buffalo, N. Y.; Herman H. Rubenovitz, Boston, Mass.; Michael Salit, Far Rockaway, N.Y.; J. H. Schanfeld, Minneapolis, Minn.; Ignace Schwartz, Youngstown, O.; M. D. Shanman, Cleveland, O.; Louis Shulman, Rochester, N. Y.; Mrs. Samuel Spiegel, N. Y. C ; David Steckler, N. Y. C ; David Tannenbaum, Brooklyn, N. Y.; Alexander U. Zinke, N. Y. C. UPSILON LAMBDA PHI FRATERNITY Org. 1916; Inc. 1917. OFFICE: 271 Main Ave., Passaic, N. J. Ninth Annual Convention, Aug., 1925, Hartford, Conn. Chapters, 30. Members, 1,034. PURPOSE: An International Fraternity laying particular stress on Judaism, open to male students of the Jewish faith in the high and preparatory schools, with the purpose of uniting them socially and fraternally. . OFFICERS: Master Ulp, Milton Hammer, Hartford, Conn.; Deputy Master Ulp, David Kaufman, Baltimore, Md.; Fin. Ulp, Joseph First, Phila., Pa.; Sec. Ulp, J. Bernard Saltzman, 271 Main Av., Passaic, N. J. 336 AMERICAN JEWISH YEAR BOOK GOVERNING BODY: The Officers, Ben Cummings, Montreal, Can.; Maurice S. Maurer, Newark, N. J.; Jerome Proper, Baltimore, Md. GRAND COUNCIL: The Executive Board, and a delegate from each Chapter. WOMEN'S BRANCH OF THE UNION OF ORTHODOX JEWISH CONGREGATIONS OF AMERICA (Affiliated with the Union of Orthodox Jewish Congregations of America) Org. Apr. 19, 1924. OFFICE: 131 W 86th, New York City. PURPOSE: The intensification and furtherance of Orthodox Judaism in the home, the religious school, amongst students in institutions of higher learning, and the field of social service work. Also supervision of the dormitory of the Rabbi Isaac Elchanan Theological Seminary. OFFICERS: Pres., Mrs. Herbert S. Goldstein; Hon. Vice-Pres., Mrs. Joseph Mayer Asher, Mrs. Moses Hyamson, Mrs. Philip Klein,* Mrs. N. Taylor Phillips, Mrs. Isadore Freedman, Mrs. Mark Hurewitz, Mrs. Leo Jung, Mrs. Abraham Levitan, Mrs. Jacob Rabinowitz; Treas., Mrs. Adolph Schwarcz; Sec, Mrs. Edwin Kaufman. BOARD OF DIRECTORS: Mrs. Samuel B. Cooperman, Mrs. Jacob A. Dolgenas, Mrs. Julius Dukas, Mrs. C. J. Epstein, Mrs. Harry Fischel, Mrs. Win, Fischman, Mrs. Max Friedman, Mrs. Elias Friedrich, Mrs. Leo S. Furman, Mrs. Maurice Ginsberg, Mrs. Aaron Goldstein, Mrs. Geo. Harris, Mrs. Joseph Horowitz, Mrs. Louis Horowitz, Mrs. S. A. Hartogensis, Mrs. Albert B. Joffe, Mrs. Dora Kopp, Mrs. Max S. Levine, Mrs. Abraham Levy, Sarah Lyons, Mrs. Mortimer M. Menken, Mrs. Berthold Nathansohn, Mrs. Harry Neivert, Mrs. Moritz Xeuman, Mrs. Henry Rafsky, Mrs. Bernard Revel, Mrs. Joseph Silverstein, Mrs. Elias Surut, Mrs. Gustave Szobotka, Mrs. Joseph L. Weber, Mrs. Murray M. Wycoff, all N. Y. C ; Mrs. Bernard Breitbart, Mt. Vernon, N. Y.; Mrs. Harry Charnas, Mt. Vernon, N. Y.; Mrs. Samuel Feuerstein, Boston, Mass.; Mrs. Maurice Feinberg, Savannah, Ga.; Mrs. A. J. Freiman, Ottawa, Can'.; Mrs. Israel Gomborov, Baltimore, Md.; Mrs. Isadore Goodman, Indianapolis, Ind.; Mrs. Jack Horvitz, New Bedford, Mass.; Mrs. Isadore Klein, Arverne, L. I.; Mrs. Samuel D. Leen, New Bedford, Mass.; Mrs. Albert Lucas, Edgemere, L. I.; Mrs. Jos. Manischewitz, Cincinnati, O.; Mrs. David A. Mendoza, Pittsburgh. Pa.; Mrs. Sam'l Ordesky, Cambridge, Mass.; Mrs. Louis Sherman, Boston, Mass.; Mrs. Sadie Slawsky, Albany, N Y.; Mrs. Abr. LTrevitz, Union City, N.J. •Deceased. WOMEN'S LEAGUE OF THE UNITED SYNAGOGUE OF AMERICA Org. Jan. 21, 1918. OFFICE: 531 W. 123d, New York City. Eighth Annual Convention, May 3-5. 1925, Atlantic City, N. J. Ninth Annual Convention, April 20-21, 1926, Baltimore," Md. JEWISH NATIONAL ORGANIZATIONS 337 PURPOSE: TO advance traditional Judaism by furthering Jewish education among women, by creating and fostering Jewish sentiment in the home, by promoting the observance of Jewish dietary laws and home ceremonials, Sabbath and Festivals, and by generally strengthening the religious institutions of the home. FOUNDER: Mrs. Solomon Schechter. OFFICERS: Pres., Mrs. Chas. I. Hoffman, Newark, N. J.; Vice- Pres., Mrs. Cyrus Adler, Phila.,'Pa.; Mrs. Ben]. Davis, Chicago, 111.; Mrs. Louis Ginzberg, N. Y. C; Mrs. Jacob Kohn, N. Y. C; Mrs. R. H. Melamed, Elizabeth, N. J.; Treas., Mrs. Louis Gottschall, N. Y. C; Rec. Sec, Mrs. Samuel Spiegel, N. Y. C. EXECUTIVE COUNCIL: Mrs. L. D. Abrams, Brooklyn, N. Y.; Mrs. Jesse Bienenfeld, Syracuse, N. Y.; Mrs. Samuel M. Cohen, N. Y. C; Mrs. Emil Crockin, Baltimore, Md.; Mrs. Barnett Davis, Pittsburgh, Pa.; Mrs. Edward Epstein, N. Y. C; Mrs. Louis M. Epstein, Boston, Mass.; Mrs. A. Frankle, Youngstown, O.; Mrs. A. J. Freiman, Ottawa, Can.; Mrs. Charles Goell, Brooklyn, N. Y.; Mrs. Israel Goldstein, N. Y. C; Mrs. Joseph Herzog, N. Y. C ; Mrs Moses Hyamson, N. Y. C ; Mrs. M. M. Kaplan, N. Y. C; Mrs..Edwin Kaufman, N. Y. C; Mrs. C. Hillel Kauvar, Denver, Colo.; Sarah Kussy, Newark, N. J.; Mrs. Morrie Lurie, N. Y. C; Mrs. Max L. Margolis, Philadelphia, Pa.; Mrs. Jacob Minkin, Rochester, N. Y.; Mrs. Simon Oppenheimer, Washington, D. C; Mrs. Louis Rich, Cleveland, O.; Mrs. H. H. Rubenovitz, Boston, Mass.; Mrs. Michael Salit, Far Rockaway, N. Y.; Emily Solis-Cohen, Phila, Pa.; Mrs. Leon Solis-Cohen, New Rochelle, N. Y.; Mrs. A. Solomon, N. Y. C; Mrs. Elias L. Solomon, N. Y. C; Mrs. Israel Unterberg, N. Y. C; Mrs. A. H. Vixman, Pittsburgh, Pa.; Mrs. Leon Waldman, Chicago, 111. THE WORKMEN'S CIRCLE Org. Sep. 4, 1900. OFFICE: 175 East Broadway, New York City. Twenty-fifth Annual Convention, May 3-10, 1925, New York City. Members, 84,477. PURPOSE: Fraternal insurance and mutual aid. OFFICERS: Pres., J. N. Feinerman; Treas., S. Silverberg; Sec. Joseph Baskin. EXECUTIVE COMMITTEE: M. J. Ashpis, B. Aster, L. Bezahler, B. Block, M. Bruskin, N. Chanin, I. Dinnerstein, N. Draisin, E. Eberil, N. Feinerman, N. Freiman, L. Golinsky, R. Guskin, M. Haskel, S. Heiferling, S. Tacobi, H. Leen, A. Leff, B. Lilienblum, J. M. Rosenblatt, H. Roth, J. Rothman, J. Segal, A. H. Shulman, S. Silverberg, A. I. Silverman, S. Sussman, A. Wolitzky, M. G. Wolpert, A. Zucker. YOUNG JUDAEA Org. 1908. OFFICE: 114 Fifth Av., New York City. Seventeenth Annual Convention, June 19-21, 1925, Belmar, N. J. 338 AMERICAN JEWISH YEAR BOOK Eighteenth Annual Convention, May 28-31, 1926, Long Branch, X. J. Number of Circles, 900. PURPOSE: TO advance the cause of Zionism; to further the mental, moral and physical development of the Jewish youth; and to promote Jewish culture and ideals in accordance with Jewish tradition. OFFICERS: Pres., David de Sola Pool; Chairman Exec. Com., Sam'l J. Borowsky, Vice-Pres., David Tannenbaum; Treas., Theodore R. Racoosin. ADMINISTRATIVE COMMITTEE: Samuel J. Borowsky, D. Leonard Cohen, Simon Greenberg, Louis J. Gribetz, Sylvan Kohn, Emanuel Neumann, Joshua H. Neumann, David de Sola Pool, Theodore R. Racoosin, Wm. Raphael, David Tannenbaum. EXECUTIVE COMMITTEE: The Administrative Committee, and Max Arzt, Victoria Beck, Leah Bloom, A. M. Bogrowitz, Arthur J. L. Cohen, George Cohen, Miss R. Cohen, Sarah Cooperstock, Joseph Deitch, Saul Ellenbogen, Harry Golan, Ida Greenberg, Mollie Greenblatt, A. N. Heller, Herman Jacobs, Libby Jacobson, Max Kresch, Isidore Lapson, Albert A. Light, Ida Claire Lutzky, Sidney Matz, Meyer Miller, Robert Pines, David Putterman, Martha Richmond, Rachel Savage, David Schneeberg, Myron Schwartzchild, Joseph Shubow, Joseph Silverstein, Maurice Slonim, A. Tannenbaum, Jessie Weiss, Sadie Yormark. ' YOUNG PEOPLE'S LEAGUE OF THE UNITED SYNAGOGUE OF AMERICA Org. 1921. OFFICE: 531 W. 123d, New York City. Fourth Annual Convention, Nov. 25-29, 1925, New York City. Members, 12,000. Societies, 100. PURPOSE: TO bring the Jewish youth nearer to traditional Judaism and to the Synagogue. OFFICERS: Hon. Pres., Israel Goldstein, N. Y. C; Pres., Herbert J. Roeder; Vice-Pres., Solomon Grayzel, Fred Katzner, Henry Landau, Louis Levitsky, Samuel A. Margolis, Ben B. Tunick; Treas., Henry Kass; Exec. Dir., Irving H. Fisher, N. Y. C. EXECUTIVE COMMITTEE: The Officers, and Eva Baker, Boston, Mass.; Milton Berger, Philadelphia, Pa.; Max I. Cohen, N. Y. C ; Benjamin Fain, N. Y. C ; Clara Finkelstein, Syracuse, N. Y.; B. Leon Hurwitz, N. Y. C ; Jennie Jelin, New Brunswick, N. J.; Arthur Kornstern, Woonsocket, R. I.; Emanuel R. Polack, N. Y. C; Benjamin Priest, Elizabeth, N. J.; Irving S. Rapaport, N. Y. C ; Jack Sekulsky, N. Y. C ; Freda Shrobe, New Haven, Conn.; A. S. Shubow, Boston, Mass.; Alfred Wasserman, Phila., Pa.; Martha Wolf, N. Y. C. CHAIRMAN OF STANDING COMMITTEE : Maxwell Farber (Organization); Israel M. Goldman (Education); Benj. B. Tunick (Co-operation); Emanuel R. Polack, (Finance); David A. Goldstein (Speaker's Bureau); JEWISH NATIONAL ORGANIZATIONS 339 E. Charles Sydney (Religious Observance); Jennie Jelin (Palestine); Harry S. Jacobs (Social Affairs). YOUNG POALE ZIOX Org. 1915. OFFICE: 133 Second Av., New York City. Fourth Annual Convention, Sept. 4-7, 1925, Paterson, N. J. Members, 1,200. Branches, 32. PURPOSE: Junior; Socialist and Zionist education and activities. OFFICERS: Sec, Jacob Schneider. CENTRAL COMMITTEE: S. Bonchak, Harry Brick, Joel Enteen, I. Hamlin, I. Kagan, P. Kolko, Henry Mackson, M. Rosenberg, Max Rudy, Jacob Schneider. ZETA BETA TAU FRATERNITY Org. 1898; Inc. 1907. OFFICE: 67 Wall, New York City. Twenty-seventh Annual Convention, Dec. 29-31, 1925, Montreal, Can. Members, 3,500. Ranking as an intercollegiate Greek-letter fraternity with chapters in thirty-two universities and colleges, open to Jewish university men. OFFICERS: Exec. Nasi., Harry Steiner, Newark, N. J.; Supreme Sopher- (Sec), David Tannenbaum, Los Angeles, Cal.; Gisbar (Treas.), Sylvan F. Friedman, N. Y. C ; Historian, Linwood Lehman, University of Va.; Sec. of Supreme Council, George Macy, 67 Wall, N. Y. C. ZIONIST LABOR PARTY "HITACHDUT" ZEIRE ZION OF AMERICA Org. 1920. OFFICE: 425 Lafayette, New York City. Annual Convention, July 4, 1925, Philadelphia, Pa. Members, 2,000. PURPOSE: TO help in creating a Jewish free working community in Palestine and to renew the life of the Jewish people in the Diaspora on the basis of work and Hebrew culture. OFFICERS: Chairman-Treas., Irving Slonimsky, Brooklyn, N. Y.; Sec, David Rabelsky, N. Y. C. EXECUTIVE COMMITTEE: A. Abramowitz, N. Y. C : ChaimGreenberg, N. Y. C; Ezekiel Rabinowitz, Brooklyn, N. Y.; Kalman Weitman, Brooklyn, N. Y.; David Wertheim, Brooklyn, N. Y.; A. Zichlinsky, N. Y. C. ZIONIST ORGANIZATION OF AMERICA Org. 1897; Re-org. 1918. OFFICE: 114 Fifth Av., New York City. Twenty-eighth Annual Convention, June 28-30, 1925, Washington, D. C. 340 AMERICAN JEWISH YEAR BOOK Twenty-ninth Annual Convention, June 27-29, 1926, Buffalo, X. Y. Members, 40,000. Central Fund, Keren Hayesod (Palestine Foundation Fund). Constituent Organizations: Hadassah, Order Sons of Zion, Young Judaea, American Zion Commonwealth, Inc. PUBLICATIONS: The New Palestine, a weekly for members, in English, Dos Yiddishe Folk, a weekly in Yiddish; Hatoren, a monthly, in Hebrew; Young Judean, a monthly for the Jewish youth, in English. OFFICERS: Chairman, Louis Lipsky, N. Y. C ; Hon. Vice-Chairmen, Reuben Brainin, N. Y. C ; Hirsch Masliansky, N. Y. C ; Vice-Chairmen, Bernard A. Rosenblatt, N. Y. C; Max Shulman, Chicago, 111.; A. H. Silver, Cleveland, O.; Henrietta Szold, N. Y. C; Treas., Isaac Meister, N. Y. C ; Assoc. Treas., Harry P. Fierst, N. Y. C ; Sec, Meyer W. Weisgal, N. Y. C. ADMINISTRATIVE COMMITTEE: Herman Conheim, Jacob Fishman, Sol. Friedland, Abr. Goldberg, Boris Grabelsky, Emanuel Neumann, S. J. Rosensohn, Morris Rothenberg, Maurice Samuel, S. J. Weinstein, N. Y. C ; Louis Topkis, Wilmington, Del. EXECUTIVE COMMITTEE: Joseph Barondess, N. Y. C; S. Bernstein, N. Y. C ; Samuel J. Borowsky, N. Y. C; Louis Braines, Perth Amboy, N. J.; Isaac Carmel, N. Y. C ; A. B. Cohen, Scranton, Pa.: S. J. Cohen, Phila., Pa.; Max Conheim, Chicago ,111.; A Coralnik, N. Y. C.; Bernard Crausman, N. Y. C; M. S. Dunn, New Britain, Conn.; N. H.Ebin, Brooklyn, N. Y.; Max Efros, Cleveland, O.; J. H. Ehrlich, Detroit, Mich.; Henry J. Eiser, Brooklyn, N. Y.; MaxFenwick, X. Y.C.; Harry M. Fisher, Chicago, 111.; Mrs. Sadie Frankel, Phila., Pa.; Pearl Franklin, Chicago, 111.; Louis Freed, Houston, Tex.; A. J. Friedman, Cincinnati, O.; A. H. Fromenson, N. Y. C; J. Gabrieli, Jersey City, X. T-: Jacob Ginsburg, Philadelphia, Pa.; Israel Goldberg, N. Y. C; J. Goldman, Charleston, S. C.; Solomon Goldman, Cleveland, O.; Geo. L. Gordon, Minneapolis, Minn.; Mrs. Richard Gottheil, X. Y. C; Julius Haber, N. Y. C.; Henry Harris, San Francisco, Cal.; Isaac Harris, Boston, Mass.; Jacob Heckman, Washington, D. C ; Max Heller, New Orleans, La.; Joseph Hoffenberg, Hartford, Conn.; Jacob Ish-Kishor, X. Y. C; Mrs. Edward Jacobs, N. Y. C; I. Kahanowitz, Greensburg, Pa.; Jacob Kaplan, Newark, N. J.; M. M. Kaplan, N. Y. C; Nathan D. Kaplan, Chicago, 111.; Leopold Kehlman, N. Y. C ; Harry T. Kellman, Baltimore, Md.; Gustave Klausner, St. Louis, Mo.; A. ]. Koffman, Detroit, Mich.; I. Kopstein, Atlantic City, N. J.; Harry Kottler, X. Y. C; Sarah Kussy, Newark, N. J.; I. Lapson, X. Y. C; Mrs. H. B. Lefkowitz, N. Y. C ; Aaron Levinstone, Newark, X. J.; Israel H. Levinthai, Brooklyn, N. Y.;Louis Leyinthal, Phila., Pa.; Wm. M. Lewis, Phila., Pa.; Samuel Magid, Providence, R. I.; Morris Margulies, X. Y. C; S. Markowitz, Los Angeles, Cal.; Israel Matz, Brooklyn, X. Y.; Harry S. Medinets, Perth Amboy, N. J.; Samuel M. Melamed, X. Y. C; Jacob M. Moses, Baltimore, Md.; Xathan Murov, Shreveport, JEWISH NATIONAL ORGANIZATIONS 341 La.; Rachel Natelson, Brooklyn, N. Y.; Hugo Para, Chicago, III.; Mrs. David de Sola Pool, N. Y. C; Benj. Rabalsky, Boston, Mass.; Theodore Racoosin, N. Y. C; Nathan Ratnoff, N. Y. C ; Max Rhoade, Washington, D. C; Bernard G. Richards, N. Y. C ; Louis Rimsky, N. Y. C; Louis Robison, N. Y. C; Sam'l Rosen, Oil City, Pa.; A. P. Rosenberg, Milwaukee, Wis.; Chas. Rosengarten, Waterbury, Conn.; I. H. Rubin, N. Y. C.; Norman Salit, Far Rockaway, N. Y.; David R. Sandier, Atlantic City, N. J.; Simon Seegman, Pittsburgh, Pa.; Morris Sendar, N. Y. C; Morris Senn, Philadelphia, Pa.; Louis Shapiro, Portsmouth, N. H.; Bernard Shelvin, N. Y. C ; Carl Sherman, N. Y. C.; Isaac Shuster, N. Y. C; Jacob Siegel, N. Y. C; Israel Silberstein, Baltimore, Md.; Mrs. Archibald Silverman, Providence, R. I.; Joseph Silverman, N. Y. C; Max J. Skaist, Reading, Pa.; Mrs. A. Slomka, Brooklyn, N. Y.; Mordecai Soltes, Arverne, L. I.; Leon Spitz, New Haven, Conn.; H. Steinberg, Chicago, 111.; Elihu D. Stone, Boston, Mass.; Mrs. Robt. Szold, N. Y. C; David Tannenbaum, N. Y. C; Mrs. A. H. Vixman, Pittsburgh, Pa.; Sam'l H. Waldstein, Boston, Mass.; Ph. Wattenberg, N. Y. C ; Max Werbelowsky, N. Y. C ; Benj. Winter, N. Y. C.; Stephen S. Wise, N. Y. C.; Leo Wolfson, N. Y. C. JEWISH LOCAL ORGANIZATIONS IN THE UNITED STATES (SUPPLEMENTARY DIRECTORY) [NOTE—*indicates that information is not official ** that information was furnished by the Jewish Welfare Board] ARKANSAS EL DORADO Educ. **YOUNG MEN'S HEBREW ASSOCIATION. Jack Lewis, P. O. Box 1294. PINE BLUFF Cg. "JEWISH CONGREGATION, Masonic Temple Bldg. Morris Bram. Services: Festivals. CALIFORNIA LOS ANGELES Cg. *BETH EL. Rabbi Emanuel Schreiber, 962 S. Hoover. *WEST ADAMS HEBREW CONGREGATION. Krieger's Hall, 5180 W. Adams. Sec, Mrs. Jennie Z. Weinstein. Educ. MODERN TALMUD TORAH AND SOCIAL CENTER OF BOYLE HEIGHTS, 2317 Michigan Ave. Org. 1923. Pres. George J. Saylin; Sec, E. H. Bojarsky; Headworker, Jacob M. Alkow. Members, 300; income, $15,000. Attending annually, 750. Char. *Los ANGELES HOME FOR INCURABLES. Med. Dir., Louis Levin. •ROUMANIAN JEWISH SICK BENEVOLENT ASSOCIATION OF Los ANGELES. Pres., N. Iscowitz. H. Solomon, 1214 E. 21st. Cl. JEWISH COMMUNITY COMMITTEE OF LOS ANGELES. Pres., Louis Isaacs; Sec, Louis S. Nordlinger, 515 S. Lorraine. Members, 128. Com. *SARAH SOCIETY. Pres., Mrs. D. Siegel; Sec, Mrs. Rose Pavin, 2707 Cincinnati. 343 344 AMERICAN JEWISH YEAR BOOK SAN DIEGO Char. FEDERATED JEWISH CHARITIES. 7th and A. Org. 1922. Pres., Mrs. A. Neumann; Sec, Mrs. E. H. Samisch. Head worker, Mrs. David L. Segal. Income, $3,500. Afiiliated Societies: Junior Charity League, jolly Sixteen, Hebrew Sisterhood, Ladies Hebrew Aid Society. SAN FRANCISCO Educ. *SCHOOL FOR JEWISH STUDIES. Pres., Jacob Nieto, 3933 Clay. SAN MATEO Cl. "BERESFORD COUNTRY CLUB. Org. 1911. Pres., W. W. Stettheimer; Sec, I. W. Hellman. Members, 452. COLORADO DENVER Cl. 'JEWISH CHORAL SOCIETY. Mrs. Max Grimes, 740 Clayton. PUEBLO Educ. *JEWISH COMMUNITY CENTER. Pres., Mrs. J. Tour; Sec, M. Bergman, 323 W. 10th. WEST COLFAX Cg. *B'NAI ISRAEL. Rabbi, M. Burstein. Pres., H. MKaufman. CONNECTICUT HARTFORD Cg. BETH ISRAEL, 92 Barbour. Org. 1922. Pres., David Greenbaum; Sec, Sam Schwartz. Members, 55; Income, $1,500. Services: Sabbath and festivals, Hebrew. School: Classes, 3; teachers, 1; pupils, 60; sessions weekly, 5. Cent. KENEY PARK CEMETERY, Barbour near Keney Park. NEW BRITAIN Cg. BRETHREN SONS OF ISRAEL, Chestnut and Elm. Org. 1895. Rabbi, Gershon Hadas. Pres., George Berson; Sec, I. Goldman. Members, 200; Income, $10,000. Services: Daily, English and Hebrew. Schools: Teachers, 13; pupils, 325. NORWICH Char. UNITED JEWISH CHARITIES. Org. 1925. Pres., Joseph N. Rosenberg; Sec, Joseph Reichman, 23 Maple. Members, 159; Income, $3,000. JEWISH LOCAL ORGANIZATIONS 345 WATERBURY Educ. *HEBREW EDUCATIONAL INSTITUTE. Pres., Isaac N. Albert. DISTRICT OF COLUMBIA MIDDLE ATLANTIC STATES FEDERATION OF YOUNG MENS' HEBREW AND KINDRED ASSOCIATIONS. Pres., David Wiener; Sec, Minnie Hutt, 920 Farragut, N. W. Washington, D. C. Affiliated Societies: Y. M. H. A. Baltimore, Md., Newport News, Va., Norfolk, Va. Washington, D. C , Y. W. H. A., Baltimore, Md. Newport News, Va., Norfolk, Va., Richmond, Va. Washington, D. C. FLORIDA ORLANDO Educ. **YOUNG MEN'S HEBREW ASSOCIATION, C/O The Spot. Artie Shimkowitz, 107 W. Church. ST. AUGUSTINE Cg. ST. AUGUSTINE SYNAGOGUE. 85 Duero. Rabbi, Arthur Ginzler. Services: Sabbath and festivals, Hebrew and English. School: Classes, 4, teachers, 2; pupils, 35; sessions weekly, 6. SARASOTA Educ. JEWISH COMMUNITY CENTER, C/O Ralph Saltzman, P. O. Box 2276. Org. 1925. Pres., Ralph Saltzman; Sec, Paul Barnett. Members, 115; Income, $1,000. GEORGIA ATLANTA Cl. JEWISH WOMEN'S CLUB, 227 Washington. Org. 1920. Pres., Mrs. Isidor Jacobs; Sec, Fannie Kolodkin; Ex. Sec, Mrs. N. H. Bach. Members, 250; Income, $3,000. ILLINOIS CHAMPAIGN Educ. EMUNAH FRATERNITY, C/O University of Illinois. Org. 1925. Pres., Edward A. Gorenstein; Sec, Heim Wolberg. Members, 15. CHICAGO Cg. *ACHIM B'NEI ZION, Hirsch and California. Rabbi, Isaac Caplan. Pres., Simon Gurewitch. 346 AMERICAN JEWISH YEAR BOOK •ADAS B'NAI ISRAEL, 1006 S. Ashland Blvd. Pres., Sam'l Tuchman. ADATH B'NAI ISRAEL (DOUGLAS PARK), 3513 Douglas Blvd. Org. 1913. Pres., Abba Abamasky; Sec, ,David Weiss. Members, 200; Income $5,000. "ADATH B'NEI ISRAEL SHOMREISHABATH, 1356N.Leavitt. Rabbi, Jacob Gottfried. *AGUDATH ACHIM ANSHE CHELTENHAM, 7843 Muskegon Ave. Rabbi, H. Harrison. Pres., L. Berg. •AGUDATH ACHIM ANSHE MOZIR, 1612 S. Hamlin Ave. Rabbi, Abr. Miller. Pres., Dave Husman. AGUDATH ACHIM ANSHE SFARD, 1118 S. Hermitage Ave. Org. 1906. Rabbi, M. Flikop. Pres., R. Mutchnik; Sec, J. Naparstak. Members, 50; Income, $2,000. Services: Daily in Hebrew. *AGUDATH KEHILATH, 1336 N. Rockwell. Pres., S. Drushlag. *AHAVAS ACHIM, 1255 Newberry Ave. Rabbi, B. Cohen. Pres., Kaplan. •AHAVAS ACHIM CHICAGO CITY, 3437 Ogden Av., Rabbi, J. Goldberg. Pres., Samuel K. Berger. *AHAVAS ISRAEL, 1251 Washburne Ave. Rabbi, J. K. Gerstein. Pres., David Weiss. *AHAVATH ISRAEL, 1300 S. Jefferson. Rabbi, J. Heyman. Pres., August Ziedman. *AHAVATH SHOLOM, 1515 S. Homan. Rabbi, D. Shapiro. Pres., Geo. Mages. AM KODESH, 1256 S. Kedvale Ave. Org. 1918. Pres., Morris Chinn; Sec, Max Skolnik. Members, 65; Income, SI,000. Services: Daily in Hebrew. School: Classes, 2; teachers, 1; pupils, 24; sessions weekly,5. *ANSHE ANTIPOLE B'NAI MOSHE, 1303 S. Turner Ave. Rabbi, Sam Indes. Pres., A. J. Devinsky. 'ANSHE CHEVRA THILIM. Pres., Ed. Greenman, 2837 Cortez. *ANSHE CHODEKOV, 1519 S. Homan Ave. Pres., A. Polen. *ANSHE CHOMSK, 1526 S. Millard Ave. Pres., S. Kaplan. *ANSHE EMETH, 61st and May. Pres., Herman Wolf. ANSHE KOROSTISHAW, 3146 Carlisle PI. Org. 1915. Pres.. M. L. Cogon; Sec, S. Landsman. Members, 75; Income, SI,000. Services: Daily in Hebrew. School: Classes, 2; teachers, 1; pupils, 55; sessions weekly, 6. *ANSHE KRINICK, 1304 X. Western Ave., near Potomac JEWISH LOCAL ORGANIZATIONS 347 •ANSHE LEBAVITZ, 1243 S. Peoria. Rabbi, Rev. Leo Malkin. Pres., N. H. Balotin. ANSHE LEBOVITZ, 1500 S. Clifton Pk. Ave. Org. 1896. Rabbi, S. A. Elkin. Pres., Sam Rosenthal; Sec, David Shapiro. Members, 234; Income, $20,000; Services, Daily in Hebrew. School: Classes, 8; teachers, 4; pupils, 180; sessions weekly, 6. *ANSHE STARODUB, 1410 N. Artesian Ave. Rabbi, Morris Novak. Pres., M. Brager. *ANSHE ZEDEK NUSACH SFARD, 1123 S. Albany Ave. Pres., L. Arenson. *ANSHE ZITONUS VOLIN, 1216 S. Sawyer, Pres., H. Goldman. *BETH AARON, 1269 N. Wood. Pres., B. Rabinowitz. *BETH HAMEDRASH HAGODOL U'B'NEI JACOB ANSHE LUKNICK. Rabbi, Azriel Epstein. Pres., Israel Balaban, Webster Hotel. *BETH MORDECAI. Rabbi, B. Z. Margolin. Pres., Abe Fried. *BETH YAHUDO. Rabbi, Z. Glassman, 1625 Washburne Ave. Pres , B. Stone. *B'NAI AARON, 3225 Cortez Ave. Rabbi, J. Klein. B'NAI ISRAEL, 241 N. Central Ave. Org. 1913. Pres., Adolph Copeland; Sec, M. W. Simon. Services: Sabbath. Hebrew and English. School: classes, 2; teachers, 1; pupils, 35; sessions weekly, 5. *B'NAI ISRAEL, 1134 S. Francisco Ave. Rabbi, A. Perlman. Pres., A. Goldstein. •B'NAI ITZCHOK, 1311 S. Morgan. Rabbi, Joseph Astrachan. Pres., Jacob Zalutsky. *B'NAI SAMUEL BERGER, 4026 Van Buren. Rabbi, Solomon Levy. Pres., Samuel K. Berger. •B'NEI ISRAEL. Rabbi, Moses Weinrib. Pres., I. Goodman. *B'NEI ZION, 2328 Armitage Ave. Rabbi, J. Schulman. Pres., Chas. Lissner. *CHEVRA KADISHA. Pres., M. Zimmerman. •CHEVROH KADISHO MACHZIKAI HADAS, 1758 W. 13th. Pres., Morris Grossman. *FIRST ESTREKER CONGREGATION, 2143 Potomac Ave. Pres., Sam Roseman. ••INDEPENDENT JACOB ANSHE KROZ, 1360 S. Sangamon. Rabbi, Ephraim Malloch. •KAHOL CHASIDIM. Rabbi, Moses Feldschreiber. Pres., D. Dunenthen. 348 AMERICAN JEWISH YEAR BOOK •KEHILLATH ISRAEL, 2700 Haddon Ave. Rabbi, M. I. Browdy. Pres., Isadore Lewis. *KNESSES B'NEI ITZCHOK, 3442 W. 18tn. Rabbi, Isaac Goldsmith. Pres., Sam Weinberg. •KNESSES ISRAEL SHAARI TORAH, 3242 Grenshaw. Pres., B. Morris. *KNESSETH ISRAEL, 1500 N. Maplewood Ave. Rabbi, Bernard Margolies. Pres., S. Louis. *KNESSETH ISRAEL NUSACH SFARD, 1308 S. Independence Blvd. Pres., A. Friedman. *LEENAS HAZEDECK—CHEVRA KADISHA, 2237\V.Division. Pres., Sam'l Gratch. *MIKRO KODESH ANSHE LIDA AND PINSK, 1253 S. Lawndale Ave. Rabbi, B. Marcus. Pres., S. Levin. *NORTH SHORE BETH EL. Pres., Hyman Trager, 5511 Broadway. •NORTHWESTERN HEBREW CONGREGATION, 1849 X. Kildare Ave. Rabbi, Mendel Preiro. Pres., J. Rosenberg. "OCCIDENTAL HALL, Madison and Sacramento Blvd. Pres., G. Seegal. OESTERREICH GALICIEN ANSHE SFARDI, California Ave. and Hirsch. Org. 1901. Pres., David Manosler; Sec, Morris Eimer, 4742 Manticiler Ave. Members, 300; Income, $4,000. Services: Hebrew. School: Classes, 3; teachers, 2; pupils, 60; sessions weekly, 6. •OESTERREICH GALITZISKIE B'NAI ABRAHAM, 1221 S. Sangamon. Pres., Israel Leibowitz. *OHEL ITZCHOK. Rabbi, B. Swirsky. Pres., Sam Cohen, 3808 W. 13th *OHEL JACOB KOVNE, 1459 S. Homan Ave. Rabbi, I. Caplan. Pres., A. Friedman. *PERSIAN CONGREGATION, C/O Hebrew Institute. Pres., I. Imram, 1201 W. Roosevelt Rd. •SHAARI TFILO B'NEI RUBEN NUSACH ARI, 1112 S. Marshfield Ave. Rabbi, H. Rubinstein. Pres., PaulRissman. *TICKVAT YAHUDA, 1533 St. Louis Ave. Rabbi, S. Siegal. Pres., D.Taman. •TOMCHE SHABOS, 3432 Douglas Blvd. Rabbi, I. Caplan. Pres., Irving Royack. *TOMCHEI TORAH BETH ABRAHAM, 1339 S. Kedzie Ave. Rabbi-Pres., M. I. Pinsker. *WARSHAWER CONGREGATION B'NEI ABRAHAM, 1533 S. Clifton Pk. Ave. Pres., J. Siegel. JEWISH LOCAL ORGANIZATIONS 349 *ZEMACH ZEDEK, 1459 Talman Ave. Rabbi, Abr. Perlstein. Pres., S. Selizky. Educ. *BETH MEDROSH TALMUD TORAH. Pres., I. B. Rosenstein, 1845 S. Millard Ave. BETH RACHEL LEAH HEBREW SCHOOL, 1536 S. St. Louis Ave. Pres., Israel Balaban; Sec, I. Marks. Income $1,500. Classes, 8; teachers, 5; pupils, 335. Sessions weekly, 12. (Educational Department of Cg. Beth Hamedrash Hagodol U'B'nei Jacob.) *YOUNG WOMEN'S HEBREW ASSOCIATION, 1330 S. Troy. Char. *DOUGLAS PARK DAY AND NIGHT NURSERY, 1424 S. Albany Ave. Pres., Mrs. Schaffner; Sec, Mrs. S. Rubin. KURLANDER AID SOCIETY, 3437 Ogden Ave. Org. 1911. Pres., Harry Levy; Sec, Leo Saltzman. Members, 300; Income, $2,500. SCHOLARSHIP ASSOCIATION OF JEWISH CHILDREN, 460 S. State. Org. 1913. Chairman, Mrs. Morris Woolf; Sec, Mrs. Stanton A. Friedberg; Ex. Dir., Mrs. Henriette C. Warner. Members, 425; Income, $19,000. Scholarships granted 1925, 118. Cl. SOVEREIGN CLUB OF CHICAGO. Org. 1926. Pres., Jesse H. Brown; Sec, Alfred Stern, 237 S. Market. Members, 60; Income, $3,600. EAST ST. LOUIS Educ. **YOUNG WOMEN'S HEBREW ASSOCIATION. Belle J. Weissman, 519 Washington PI. MAYWOOD Cg. *TALMUD TORAH, RABBI ELIAZAR ANIXTER, 431-13th Ave. Rabbi, S. Ziff. Pres., Axelrod. INDIANA MARION Cg. *SINAI TEMPLE. Rabbi, Samuel H. Markowitz, Ft. Wayne, Ind. Pres., Edw. Bloch; Sec, E. P. Simons. SOUTH BEND Educ. **YOUNG WOMEN'S HEBREW ASSOCIATION. Vice-Pres., Goldie Klein, 741 Cleveland Ave. KANSAS WICHITA Cg. HEBREW CONGREGATION, Lewis and Topeka. Org. 1907. Rabbi, Max Lieberman. Pres., E. Lahn; Sec, Jacob Smed. Members, 60; Income, $6,000. Services: Daily, Hebrew and English. School: Classes, 3; 350 AMERICAN JEWISH YEAR BOOK teachers, 6; pupils, 65; sessions weekly, 4. Auxiliary Societies: Ladies' Auxiliary of the Wichita Hebrew School. KENTUCKY ASHLAND Cent. *ASHLAND JEWISH CEMETERY. LOUISIANA. NATCHITOCHES Cg. *B'NAI B'RITH. Pres., Emanuel Nelken; Sec, Robert J. Phillips. NEW ORLEANS Cl. *WEST END COUNTRY CLUB. Org. 1922. Pre*., K. E. Lazarus; Sec, H. S. Hiller. Members, 250. MARYLAND BALTIMORE Cg. *SYNAGOGUE AND TALMUD TORAH, Central Ave. and Biddle. Pres.,——Mermelstein; Vice-Pres. N. Freedman. Educ. ISAAC DAVIDSON HEBREW SCHOOL, Shirley Ave. near Park Heights Ave. Org. 1925. Pres., J. Henry Strauss; Sec, D. Paul Davidson. Supt., Sidney I. Esterson. Students, 200. Constituent Society of the Associated Hebrew Schools of Baltimore. WESTERN TALMUD TORAH, 743 W. Lexington. Org. 1909. Pres., B. Lipnick; Supt., Perez Tarshish. CUMBERLAND Cg. BETH EL. Rabbi, C. A. Rubenstein, Baltimore, Md- Pres., E. H. White; Sec, Ben. N. Kamens, P. O. Box 762. Members, 45. Services: Sabbath in English. School: Classes, 4; teachers, 4; pupils, 25; sessions weekly, 1. MASSACHUSETTS BOSTON Cg. *BETH ISRAEL, 103 Chestnut. TIFERETH ISRAEL. Pres., B. Lamayansky; Sec, B. A. Russato. *B'NAI ABRAHAM (WAYLAND STREET SYNAGOGUE) (ROXbury), 70 Wayland. Rabbi, Gorowitz. Pres., Samuel Vein; Sec, I. Lipson. Members, 150. JEWISH LOCAL ORGANIZATIONS 351 BROCKTON Educ. *AGUDATH ACHIM TALMUD TORAH, 247 Crescent. Pres., Louis Altman. FALL RIVER Cg. BETH EL, Franklin St., Rabbi, Morton Goldberg. Pres., Nathan Yamins; Sec, A. S. Goldman. Services: Sabbath and festivals, Hebrew and English. School: Classes, 12; teachers, 10; pupils, 200; sessions weekly, GLOUCESTER Educ. **YOUNG MEN'S AND YOUNG WOMEN'S HEBREW ASSOCIATION, c/o Synagogue, Prospect PI. Pres., Mayer Smith. MARLBORO Educ. **YOUNG WOMEN'S HEBREW ASSOCIATION. Pres., Mrs. Sadie Braverman, 65 Newton. REVERE Char. *BIKUR CHOLIM (REVERE HELPING HAND ASSOCIATION). Pres., Mrs. Davis; Sec, Mrs. S. Isenberg, 18 Nahant Ave. STOOGHTON Educ. **YOUNG MEN'S HEBREW ASSOCIATION, C/O Synagogue, Porter St. Pres., Harry Kartstein. WALTHAM Cg. ""JEWISH CONGREGATION. Pres., Harry Levenson; Sec, A. Ginsberg. MICHIGAN DETROIT Cg. BETH ISRAEL OF DETROIT, 15700 Muireland Ave. Org. 1925. Rabbi, I. Stolman. Pres., Max Axelrod; Sec, A. M. Leibowitz. Members, 78; Income, $3,600. Services: Daily. Hebrew. Educ. YOUNG MEN'S HEBREW ASSOCIATION OF DETROIT, 89 Rowena. Org. 1925. Pres., Samuel H. Rubin; Sec, Max Ornstein. Members, 150. Char. BICUR CHOLIM SOCIETY, 2454 Grand Ave., W. Org. 1910. Pres., Mrs. David Berger, Sec, Dorothy Robbins. Headworker, Mrs. David Zemon. Members, 200. MINNESOTA DULUTH Char. *TEMPLE AID SOCIETY, 2328 E. 3d. Sec, Mrs. M. Cook. 352 AMERICAN JEWISH YEAR BOOK MINNEAPOLIS Cg. *UNITED ORTHODOX CONGREGATIONS OF MINNEAPOLIS (AGUDAS HAKEHILLAHS). Rabbi, Moses Romm. Chairman, Max Davis; Sec, N. Spilberg. Com. *VAAD HAKASHRUS. Pres., Isador Cohen; Sec, S. I. Levin, 1419 8th Ave., N. Members, 25; Income, $3,000. ST. PAUL Educ. CENTRAL COMMUNITY HOUSE, 190 E. University Ave. Org. 1922. Pres., Ben Marx; Sec, Mrs. Wm. Weiskopf. Director, Faye Biederman. Members, 60; Income, $6,100. Attending annually, 26,944. MISSISSIPPI LEXINGTON Cg. BETH ISRAEL. Rabbi, Sol L. Kory, Vicksburg, Miss. Pres., Morris Lewis; Sec, S. J. Fisher. Sendees: Sabbath and festivals. English and Hebrew. School: Classes, 3; teachers, 3; pupils, 21; sessions weekly, 1. MISSOURI ST. LOUIS Cg. *B'NAI ISRAEL, Montclair and Ridge Ave. Pres., A. Rader; Sec, S. Lasky. M. B. ABRAHAM LINCOLN MUTUAL BENEFIT ASSOCIATION, 911 N. Vandeventer Ave. Org. 1925. Pres., S. J. Kopitsky; Sec, Alex. Nehamen. Members, 400. NEBRASKA OMAHA Char. SHIMSK RELIEF SOCIETY. Org. 1926. Pres., S. Ferer; Sec, G. Soiref, 1121 Douglas. Members, 80; Income, $500. NEW JERSEY ATLANTIC CITY Educ. JEWISH COMMUNITY CENTER. Pres., Harry Bacharach; Sec, J. M. Weidberg, 5 S. South Carolina Ave. Members, 900. Affiliated Societies: Young Men's Hebrew Association; Young Women's Hebrew Association, BRADLEY BEACH Cg. *REFORM CONGREGATION, C/O Lorraine Hotel. Pres., Michael Erlanger; Sec, Ed. E. Brill. JEWISH LOCAL ORGANIZATIONS 353 FREEHOLD Educ. **JEWISH COMMUNITY CENTER. Clarence Levy. GARFIELD Educ. "JEWISH COMMUNITY CENTER. Pres., Robert Kasdin. Affiliated Society: Sisterhood. HOBOKEN Cg. HOBOKEN JEWISH CENTER, 830 Hudson. Org. 1925. Rabbi, J. S. Landau. Pres., Sol Lubash; Sec, Jacob S. Mason. Members, 80; Income, $10,000. Services: Sabbath in Hebrew. School: Classes, 1; teachers, 1; pupils, 20; sessions weekly, 4. Affiliated Societies: Ladies' Auxiliary, Young Men's League. JERSEY CITY Cg. MORIJAH SYNAGOGUE, 650 Palisade Ave. Services: Sabbath and festivals, Hebrew. School: Classes, 9; teachers, 4; pupils, 200; sessions weekly, 5. Educ. JEWISH COMMUNITY CENTER, 438 Summit Ave., Org. 1918. Pres., Harry Goldowsky; Sec, Philip S. Birnbaum. Headworker, Sidney Marcus. Members, 500; Income, $6,000. Affiliated Societies: Y. M. H. A., Y. W. H. A. NATIONAL HEBREW SCHOOL, 100-102 Sherman Ave. Org. 1912. Pres., Benjamin Urdang; Sec, Aaron Rips. Members, 500; Income, $20,000. NEWARK Cg. AGUDATH ISRAEL, Custer and Peshine Ave. Org. 1924. Pres., Harry Engelhart; Sec, G. Convissor. Members, 150; Income, $10,000. Services: Daily in Hebrew. School: Classes, 4; teachers, 2; pupils, 105; sessions weekly, 5. Char. MENDELSOHN BENEVOLENT SOCIETY, C/O Hith Manon, 629 High. Org. 1850. Pres., David Strauss; Sec., Jos. Aron. Members, 126. Societies: Ladies' Auxiliary. T R U E FRIENDS LADIES' K. U. V. Pres., Rose Kandler; Sec, Rose B. Nurkin. Cl. *CENTURY CLUB. Org. 1915. Pres., M. Mariness; Sec, S. Schwartz. Com. *VAAD HA-KEHILLAH. Pres., Alexander Isserman; Sec, S. Ecker. NORTH BERGEN Cg. "HEBREW INSTITUTION OF WOODCLIFF. 354 AMERICAN JEWISH YEAR BOOK NORTH CALDWELL Char. THERESA GROTTA HOME FOR CONVALESCENTS, 189 Mountain Ave. Org. 191.5. Pres., Mrs. Wm. Hauser Sec, Mrs. Morris Nachstein. Supt., Samuel Nege. Income, $9,500. Benefited, 100. Constituent Society of Conference of Jewish Charities, Newark, N. J. PASSAIC Com. ASSOCIATED JEWISH ORGANIZATIONS OF PASSAIC, 158 Jefferson. Org. 1924. Pres., Max Zucker; Sec, Joseph Tarlowe. Members, 18 organizations. TOMS RIVER Cg. TOMS RIVER COMMUNITY OF JEWISH FARMERS. Old Freehold rd. Org. 1924. Pres., Joseph Bottler; Sec, Isaac Weinman. Members, 69; Income, $828. VINELAND Cg. BETH ISRAEL, 7th and Elmer. Org. 1924. Rabbi, Hyman Solomon. Pres., David Rosenthal; Sec, Leon Bardfeld. Members, 100; Income, $9,000. Services: Sabbath and festivals. Hebrew and English. School: Classes, 10; teachers, 6; pupils, 75; sessions weekly, 5; Affiliated Societies, Women's Benevolent Society, Federated Jewish Charities. Constituent Societies, Sisterhood, Men's Club, Beth Yod Forum, High School Department, Boy Scouts, Beth Israel Library. Char. FEDERATED JEWISH CHARITIES, 7th and Elmer. Pres., Frank Mennies; Sec, Leon Bordfeld. Members, 25; Income, $700. HEBREW WOMEN'S BENEVOLENT SOCIETY, 7th and Elmer. Pres., Mrs. David Reback; Sec, Mrs. B. Kohler. Members, 135; Income, $486. WOODCLIFF Cg. HEBREW INSTITUTION OF WOODCLIFF, 228-29th. Org. 1925. Pres., Henry Englander; Sec, Eysmann. Members, 60. School: classes, 2; teachers, 1; sessions, weekly, 5. NEW YORK NEW YORK STATE FEDERATION OF YOUNG MEN'S AND YOUNG WOMEN'S HEBREW ASSOCIATIONS, 361 River, Troy, N. Y. Org. 1915. Pres., Joseph Hormate; Sec, Mildred Winer, 406 Jefferson Ave., Buffalo, N. Y. Headworker, Joseph Bower, J. W. B., New York City. Associations, 20. (Albany, Binghamton, JEWISH LOCAL ORGANIZATIONS 355 Buffalo, Co'ioes, Elmira, Glen Falls, Gloversville, Kingston, Middletown, Rochester, Schenectady, Syracuse, Troy, Utica). ALBANY Cg. *OHAB SHALOM, Washington Ave., Rabbi, I. Jacob Schwartz. BUFFALO Cg. ANSHE EMETH, 209 Hickory. Org. 1908. Rabbi, Gitter. Pres., Morris Bergman; Sec, Elia Morwen. Members, 200; Income, $5,000. Services: Daily in Hebrew. School: Classes, 1; teachers, 1; pupils, 15; sessions daily. GLEN FALLS Cg. TEMPLE BETH EL, Marion Ave. Rabbi Benjamin M. Parker. Pres., Julius Jacobson. Educ. **YOUNG MEN'S HEBREW ASSOCIATION. Sec, Jos. Levitt. 106 Bay. *YOUNG WOMEN'S HEBREW ASSOCIATION. Pres., Anna Gersten, 64 Hudson Ave. Com. HEBREW COMMUNITY BUILDING, Bay. Org. 1925. Pres., Marcus Halitzer; Sec, A. Silverman. Dir., Wm. Leventhal. Members, 120; Income, $10,000. LONG BEACH Com. **HEBREW COMMUNITY BUILDING. Chairman, Marcus Helitzer. Cg. *TEMPLE ISRAEL, Beach 84th Rabbi, Goldberg. Pres., S. Pollick; Sec, Arnold Wetzler. MT. VERNON Char. *BIKUR CHOLIM CONVALESCENT HOME. (New York City office, 22 W. 114th). Chairman, M. J. Katz. NEWBURGH Cl. YOUNG FOLKS' LEAGUE. Org. 1925. Pres., A. Louis Rubin; Sec, Ethel Burnstine, 23 Dubois. Advisor, Frederick Stern. Members, 150; Income, $350. NEW YORK CITY BROOKLYN, RICHMOND AND QUEENS Cg. *ANSHE ZEDEK, 308 Atkins Ave. ASTORIA CENTER OF ISRAEL, 820 Crescent. Org. 1925. Act.-Rabbi, Joshua Goldberg. Pres., Isaac Baer; Sec, Joseph Brecher. Members, 110. School: Classes, 8; teachers, 3; pupils, 125; sessions weekly, 5. 356 AMERICAN JEWISH YEAR BOOK BAY RIDGE JEWISH CENTER, SHEARITH ISRAEL, 4th Ave. and 81st. Org. 1920. Rabbi, B. Leon Hurwitz. Pres., Harry Thall; Sec, Samuel M. Ebert. Members, 300. Services: Sabbath and festivals, in English and Hebrew. School: Classes, 5; teachers, 3; sessions weekly, 5. BETH HAKNESSETH TALMUD TORAH OF KING'S HIGHWAY, Ave. P. and E. 12th. Org. 1917. Rabbi, Jacob }. Newman. Pres., David Kraus; Sec, Phillip Miller. Members, 160; Income, $20,000. Services: Daily in Hebrew. School: Classes, 8; teachers, 4; pupils, 160; sessions weekly, 5. Affiliated Societies: Sisterhood; Young Peoples'League; Chevrah Mishnayoth. *BETH HAMEDRASH HAGODOL AND TALMUD TORAH, 195 S. 9th. Rabbi, Benj. Mostofsky. *BETH JACOB ZEIDEL ROVNER, Montrose Ave. near Broadway. *BETH SHOLOM TOMCHAI HA-RAV, (E. New York), 449 Alabama Av. Rabbi, Ch. S. Warshawsky. *B'NAI ISRAEL (Sheepshead Bay). Rabbi, Meyer Schube. B. Heller, 2530 Mansfield PI. *ETROTH TIFERETH, 479 Ashford. Rabbi, Zvi Nissen Manuel; Pres., Jacob Seidman. *HOVEVI TORAH (E. Parkway). Rabbi, Jacob Levinson, 832 E. Parkway. Cg. JEWISH CENTER (Community Synagogue of Queens Independent Society), 73d and Woodside Ave., Long Island City. Org. 1920. Rabbi, T. H. Glickman. Pres., Samuel Lonscheir, Sec, Sol. Freirich. Members, 105; Income, $3,000. Services: Sabbath and festivals. Hebrew and English. School: Classes, 4; teachers, 2; pupils, 55; sessions weekly, 5. Affiliated Societies: Ladies Auxiliary, Junior League, Young Folks League, Boy Scouts, Young Judaea Club. JEWISH CENTER OF W. FLATBUSH. Church Ave. and E. 5th. Org. 1921. Rabbi, A. M. Heller. Pres., Joseph Pines; Sec, L. Duberstein. Members, 200; Income, $32,000. Services: Daily in Hebrew. School: Classes, 9; teachers, 5; pupils, 200; sessions weekly, 5. •ROUMANIAN-AMERICAN CONGREGATION, 224 Hopkinson. Pres., Phineas Hammer; Sec, Silverman, *TIFERETH ISRAEL. Rabbi, M. Roram, 199 Vernon Ave. TIFERETH ISRAEL ANSHE BENSONHURST, 1835- 75th. Org. 1924. Rabbi, S. Slotnick. Pres., Joseph Furie; Sec, S. Slotnick. Members, 90; Income, $4,000. JEWISH LOCAL ORGANIZATIONS 357 Services: Daily in Hebrew. School: Classes, 3; teachers, 2; pupils, 70; sessions weekly, 5. TIKVATH SHOLOM, Bedford Ave. and Clymer. Educ. *CHEVRA TORAH ANSHE CHESED, Douglas St. Pres. Ezekiel B. H. Zaks; Sec, Fierman. **JEWISH CENTER (Far Rockaway), Central Ave. **YOUNG MEN'S AND YOUNG WOMEN'S HEBREW ASSOCIATION OF THE EAST SIDE. Pres., Wm. Kampf, 968-47th. Char. BROOKLYN JEWISH HOME FOR CONVALESCENTS, 826 Ave. U. Org. 1921. Pres., Carrie Kronfeldt; Sec, Anna T. Cohen. Members, 1,300. Cent. BETH DAVID. L. I. MANHATTAN AND THE BRONX Cg. *AHAVATH ZION, 66 Pike. ANSHE GALICIA ANSHE SFARD, 1187 Washington Ave. Org. 1916. Pres., Philip Schmelzer; Sec, F. Florman. Members, 55; Income, $1,500. Services: Daily in Hebrew. School: Classes, 2; teachers, 1; pupils, 30; sessions weekly, 6. BETH HAMEDROSH HAGODOL, 610 W. 175th. Org. 1925. Rabbi, M. Shuchatowitz. Pres., Max Baron; Sec, H. Shuster. Services: Daily in Hebrew. Schools: Classes, 4; teachers, 2; pupils, 50. BETH ISRAEL TEMPLE OF WASHINGTON HEIGHTS, 600 W. 181st. Org. 1926. Rabbi, Jerome M. Lawn. Pres., Sol. Lubell; Sec, L. J. Abrams. Members, 195, Income, $20,000. Services: Sabbath. English and Hebrew. School: Classes, 10; teachers, 12; pupils, 231; sessions weekly, 4. *BETH MEDRASH HAGODOL, Forest Ave. Rabbi, B. Z. Pearl, 118 W. 112th. *B'NAI DAVID, 832 Fox . Rabbi, Lazaar Schoenfeld. HEBREW INSTITUTE OF UNIVERSITY HEIGHTS, 1835- 1837 University Ave. Org. 1924. Rabbi, Miller. Pres., Samuel Soloff; Sec, Goldie Hillson. Members, 350. Services: Daily in Hebrew. School: Classes, 11; teachers, 5; pupils, 200; sessions weekly, 5. Affiliated Societies: Sisterhood; Young Folks' League; Culture Club. HUNT'S POINT JEWISH CENTER, 920 Simpson, near 163d. Org. 1925. Rabbi, Israel Elfenbein. Pres., Samuel Sailer; Sec, Louis Cohen. Members, 265; Income, $54,000. Services: Daily in Hebrew. School: Classes, 16; teachers, 8; pupils, 530; sessions weekly, 5. Af358 AMERICAN JEWISH YEAR BOOK filiated Societies: Ladies' Auxiliary, Sisterhood, Men's Club. JEWISH CENTER OF UNIVERSITY HEIGHTS, 174th and Nelson Ave. Org. 1922. Rabbi, I. L. Bril. Pres., Arthur I. Le Vine; Sec, Harry A. Alpert. Members, 120. Services: Sabbath and festivals. Hebrew and English. School: Classes, 11; teachers, 12; pupils, 148; sessions weekly, 5. Affiliated Societies: Ladies' Auxiliary. KINGSBRIDGE JEWISH CENTER, 5233 Broadway. Org. 1924. Rabbi, Sigmund Tyor. Pres., I. M. Halpern; Sec, Samuel Newberger. Members, 40; Income, $3,000. Services: Sabbath and festivals. Hebrew and English. School: Classes, 2; teachers, 1; pupils, 30; sessions weekly, 5. Affiliated Societies: Sisterhood, Young Folks' League. *LINATH HAZEDEK, 2047 Hughes Ave., Rabbi, Joseph Hager. *EMANUEL SCHUL OF BRONX, Aldus Ave., Cor. E. 172d. Pres., Julius Beyer; Sec, Joe Abner. ROFE CHOLIM (HEALER OF THE SICK). Welfare Island. Org. 1925. Rabbi, Jacob Greenfield. Chairman, Mrs. Jos. Mayor Asher, 64 E. 86th. Services: Daily. Hebrew and English. Under the Auspices of N. Y. Sec.,C.J.W. Educ. *FORDHAM TALMUD TORAH, 2084 Arthur Ave. Rabbi, Chaim E. Moseson. Pres., Meyerson; Sec, Kaufman. *JEWISH ART CENTER, 103 E. 11th. *MT. EDEN JEWISH CENTER, 173d and Morris Ave. Pres., Sol. Goldstein; Sec, Fuld. Char. *BARON DE HIRSCH CHARITY SOCIETY. Org. 1890. Pres., Mrs. W. Baum; Sec, Mrs. Malvino Kirschner, 1025 Faile. *EMANUEL BROTHERHOOD. Treas., Jas. E. Ge'.lert, 309 E. 6th. HEBREW NATIONAL HOME FOR INCURABLES, 1801 Anthony Ave. Org. 1921. Pres., Mrs. Minerva L. Abeles; Sec, Mrs. Bertha Goodman. Members, 1,500. •HEBREW SISTERS OF CHARITY, C/O Y. W. H. A., 31 W. 110th. Pres., Mrs. Eva Levy; Sec, Mrs. Tillie Huber. *HOME BUREAU, 141 W. 126th. JEWISH BOARD OF GUARDIANS, 228 E. 19th. Org. 1921. Pres., Mortimer L. Schiff; Sec, Clarence M. Lewis. Ex. Dir., Jess Perlman. JEWISH LOCAL ORGANIZATIONS 359 JEWISH CHILDREN'S CLEARING BUREAU, 1646 Arc. A. Org. 1922. Pres., Herman W. Block; Sec, Eli Winkler. Ex. Dir., Alice L. Seligsberg. Income, (1925), $32,110. Constituent Society of Federation for the Support of Jewish Philanthropic Societies of New York City. Affiliated Societies, Home for Hebrew Infants, Hebrew Orphan Asylum, Hebrew Sheltering Guardian Society, Home Bureau, Child Adoption Committee, Free Synagogue, Jewish Social Service Assn., Widowed Mother's Fund Assn., Jewish Board of Guardians, Children's Haven; Convalescent Home for Hebrew Children, Blythedale Home. LADIES' INDEPENDENT RELIEF SOCIETY, 1200 Prospect Ave. Org. 1920. Pres., Mrs. P. Rosenthal; Sec, Mrs. H. Melrose. Members, 150; Income, $750. *PAULINE CONSUMPTIVE RELIEF SOCIETY, 312 W. 89th. Org. 1910. Pres., Mrs. N. Blyn; Sec, Mrs. G. Brown. *RAMBAN HOSPITAL PEOPLES AND POST GRADUATE MEDICAL ACADEMY, 912 Bronx Pk. S. and Daily Ave. ROSE SIROVICH RELIEF SOCIETY, INC., 539 E. 6th. Org. 1922. Pres., Mrs. Sadie Feigenbaum; Sec, Belle Breuer. Members, 180; Income, $4,000. Cl. *DRAMATIC VEREIN. Pres., Leon Kobrin; Sec, H. Natesfeld. RUTGERS CLUB, 314 W. 91st. Org. 1891. Pres., Jacob J. Lazaroe; Sec, Louis Abrams. Members, 300. WOMENS' TOWN CLUB, INC., 200 W. 57th. Pres., Mrs. E. A. Grunsfeld, Sec, Mrs. Maurice Denzer. Members, 200. Com. JEWISH COURT OF ARBITRATION, 38 Park Row. Org. 1920. Treas., Edgar J. Lauer; Sec, Louis Richman. Members, 100. JEWISH MUSEUM ASSOCIATION, 799 Broadway (Room 524). Sec, Nathan Kaplan. Members, 300; Income, $1,500. •UNION OF GRAND RABBIS OF UNITED STATES AND CANADA, 9 Attorney. Pres., Dworsky; Sec, Leiser. Members, 50. Educ. YOUNG WOMEN'S HEBREW ASSOCIATION OF STATEN ISLAND, 329 Jersey, (New Brighton). Org. 1925. Pres., Bee Herrmann; Sec, Ida Retish. Members, 35. M. B. *JEWISH POSTAL WORKERS' WELFARE LEAGUE. Pres., Louis Blumberg; Sec, Morris Berkowitz. 360 AMERICAN JEWISH YEAR BOOK •UNITED HUNGARIAN WOMEN'S SICK BENEFIT ASSOCIATION. Org. 1908. Pres., Rosie Rogoff; Sec, Mrs. Goldman. Members, 265. POUGHKEEPSIE Educ. **JEWISH CENTER. Sec, Miss N. Weisman, 88 Smith. SARATOGA SPRINGS Educ. HEBREW SCHOOL, 99 Circular. Classes, 3; teachers, 2; pupils, 45; sessions weekly, 6. JEWISH COMMUNITY CENTER, 108 Circular. Pres., A. Bernstein; Sec, J. S. Sovatkin. Members, 60; Income, $2,000. Attending annually, 250. NORTH CAROLINA ROCKY MOUNT Cg. BETH EL. Pres., E. Epstein; Sec, D. J. Edwards. Members, 8; Income, $400. OHIO CLEVELAND Char. CHAIM YOSEPH FAMILY ASSOCIATION. Org. 1926. Pres., Benjamin Glickman; Sec, Etta Piekus, 3314 East Overlook Rd. Members, 50. TEMPLE WOMEN'S ASSOCIATION, Ansel Rd. & E. 105th. Pres., Mrs. Walter A. Goldsmith; Sec, Mrs. Samuel Freedman. Members, 1,700; Income, $5,200. Com. COOPERATIVE LEAGUE OF JEWISH WOMEN'S ORGANIZATIONS. Org. 1920. Pres., Mrs. Siegmund Herzog; Sec, Mrs. Louis A. Wolin, 3253 Dellwood Rd. Members, 4,000 (20 organizations). JEWISH CHILDREN'S CONFERENCE, 507 Huron—Sixth Bldg. Org. 1924. Pres., Harry F. Affelder; Sec, Rose Moss. Members, 30. COLUMBUS Cl. EXCELSIOR CLUB, 512 E. Main. Org. 1923. Pres., M. Goldberg; Sec, Max Horkin. Members, 70. OKLAHOMA OEXAHOMA CITY Char. JEWISH LADIES' AID AND SISTERHOOD. Org. 1906. Pres., Mrs. Joseph Myer; Sec, Mrs. J. Urbansky, 801 W. 19th. Members, 135. PENNSYLVANIA PENNSYLVANIA FEDERATION OF YOUNG MEN'S AND YOUNG WOMEN'S HEBREW ASSOCIATIONS AND KINJEWISH LOCAL ORGANIZATIONS 361 DRED ASSOCIATIONS, Cor. Broad and Pine, Philadelphia, Pa. Org. 1909. Pres., Harry Michlosky; Sec, J. N. Sokohl. Field Sec, Isadore Abelson. Members, 50 organizations. ALTOONA Educ. **JEWISH COMMUNITY CENTER. Act.-Pres., Wm. Lud- ' deke. 1827 13th Ave. YOUNG WOMEN'S HEBREW ASSOCIATION. Org. 1920. Pres., Mrs. R. M. Levine; Sec, Anna F. Parish, 1818 12th Ave. Members, 75. CHESTER Educ. HEBREW SCHOOL, 208 W. 3d. Pres., A. W. Wolson; Sec, H. Cholodofsky; Prin., Harry Cohen. Members, 140; Income, $9,000. Classes, 8; teachers, 8; pupils, 226. EASTON Educ. JEWISH COMMUNITY CENTER, Ferry and Walnut. Org. 1910. Pres., A. B. Jaffe; Sec, G. I. Lyons. Headworker, Jack Sher. ERIE Char. JEWISH WELFARE SOCIETY, 156 E. 5th. Org. 1923. Pres.. Samuel D. Ostrow; Sec, Arthur Rosenberg. Headworker, Aaron M. Lopez. Income, $4,400. Attending annually, 45 families; 396 homeless men. JOHNSTOWN Educ. YOUNG MEN'S HEBREW ASSOCIATION, Kredel Bldg., Cor. Main and Franklin. Org. 1925. Pres., Albert Callet; Sec, Alex. Zasofsky. Members, 100. Income, $1,000. **YOUNG WOMEN'S HEBREW ASSOCIATION. Pres., Esther Berman, 173 Horner. MOUNT CARMEL Educ. **YOUNG MEN'S HEBREW ASSOCIATION. Pres., Meyer Katz, 107 S. Oak. **LADIES' AUXILIARY. Pres., Rae Miller, 206 S. Oak. PHILADELPHIA Cg. *BETH AM, 58th and Warrington Ave. Pres., David Rader; Sec, Mitchell Cohen. *BRITH SHOLOM OF SOUTH WEST PHILADELPHIA, 69th and Pascall Ave. Community Center. *KESHER TORAH, 5032 Brown. Services: Sabbath eve; School: Daily. TIKVAS ISRAEL, 41st and Parkside Ave. 362 AMERICAN JEWISH YEAR BOOK Educ. HEBREW HIGH SCHOOL, 330 S. 9th. Org. 1922. Chairman, Max L. Margolis; Dir., Ben Rosen. Students, 468; Income, $10,000. Constituent Society of Associated Talmud Torahs, WEST PHILADELPHIA COMMUNITY CENTER, Cobbs Creek Blvd. and Ludlow. Pres., Aaron Berman; Sec, Herman Landau. Members, 2,000. • Cl. ONE HUNDRED CLUB. Org. 1024. Pres., Arthur May; Sec, Henry L. Lang, Heyman Bldg. Members, 75. Pow Wow CLUB. Org. 1892. Pres., Myer Solis-Cohen; Sec, Louis Magaziner, 603 Chestnut. Members, 25. PITTSBURGH Educ. * ISAAC SEDER EDUCATION CENTER, Beliefield Ave. Char. *SOCIETY B'NAI JACOB. Pres., B. Turets; Sec, S. Kaufman n. •UKRAINIAN LADIES' AID SOCIETY. Pres., Mrs. H. Cap- Ian; Sec, Mrs. V. Steiner. SHENANDOAH Educ. COMMUNITY CENTER AND SCHOOL, Jardin and Oak. Org. 1925. Pres., Morris Oppenheimer; Sec, Leon Frieband. Members, 210; Income, 52,580. Attending annually, 300. TAMAQUA Cg. JEWISH CONGREGATION, Washington St. Services: Sabbath, in Hebrew. School: Classes, 1; teachers, 1; pupils, 25; sessions weekly, 1. Educ. YOUNG MEN'S AND YOUNG WOMEN'S HEBREW ASSOCIATION, 117 W. Broad. Org. 1925. Pres., Joseph Lewis; Sec, Mary Mednick. Members, 20. UNIONTOWN Educ. **YOUNG WOMEN'S HEBREW ASSOCIATION, 22 E. Main. YORK Educ. JEWISH COMMUNITY CENTER, 36 S. Queen. Pres., Louis Levitan; Sec, Max Sokol. Members, 250; Income, $7,000. TEXAS HOUSTON Cg. BETH EL, Cor. Crawford and Lamar Ave. Org. 1924. Rabbi, Nathan Blechman; Pes., Charles Mendelsohn; Sec, Louis Goldberg. Members, 210; Income, $22,- 215. Services: Sabbath and festivals. Hebrew and English. School: Classes, 7; teachers, 13; pupils, 85; sessions weekly, 4. JEWISH LOCAL ORGANIZATIONS 363 WICHITA FALLS Char. JEWISH FEDERATION FOR SOCIAL SERVICE, 11th and Burnett. Sec. C. Tobolowsky. Dir., Rabbi S. Phillips. Members, 53; Income, $2,200. VIRGINIA NORFOLK Char. FAMILY WELFARE DEPARTMENT, NORFOLK SECTION, C. J. W.. c/o Juvenile Court Bldg. Org. 1919. Pres., Albert Gerst; Sec, Harry Schwan. Headworker, Carrie Younker. Members, 354; Income, $6,000. WASHINGTON SEATTLE Cg. *AGUDAS HA-KEHILLAH. Rabbi, Boruch Shapiro, 1542 12th. Educ. YOUNG WOMEN'S HEBREW ASSOCIATION, 17th and East Union. Org. 1926. Pres., Muriel B. Mosler; Sec, Sadie Miller. Members, 40. TACOMA Educ. **YOUNG HEBREW MODERATES. Sec, Dorothy Shain. WEST VIRGINIA WILLIAMSON Cg. B'NAI ISRAEL, 3d and Logan, Org. 1916. Rabbi, A. Feinstein, Huntington, W. Va. Pres., A. Goodman; Sec, M. D. Morris. Members, 30; Income, $1,500. Services: Sunday evening. English and Hebrew. School: Classes, 4; teachers, 4; pupils, 20; sessions weekly, 1. Affiliated Society, Sisterhood. WISCONSIN MILWAUKEE Cl. SHOLOM ALEICHEM CIRCLE, 172 3d. Org. 1920. Sec, Ben J. Miller. Members, 400. PHILIPPINE ISLANDS Cg. *TEMPLE EMANUEL. Pres., Alex. Frieder, Manila. Sec, Morton Netzorg. Members, 100. LIST OF FEDERATED JEWISH CHARITIES 365 UX w H3 8 io w 5w QW tx, U, O I, ON u NOOONNO ^©o©2o© O O O O t i l 2 la - Q . • & -"if1 •W • . I . :-ss ; f : g :^> a :S ^CQLT^I •CHtTflj Crt -gjt/l H **"i pfl Oj 71 m ".affl i « J3H MI< Uffi 8 | B gj 2 ffi "S +3 ' '-J3 ' cd m •*-> 1 ifii " g!!lll 1• Ai|ii 2| I I ! •OT3T3 V V V 11 I. II I |: 1""IS 1 1 rt ra TJ 'U 1™ - ib 2 2 £ •c ES B B j H £0 p p fa III 1| J<pQ OQOQ >"? •SIS .2 o o s 1 1 s B u - "=i .20 B ffl fi ~ 5 a Si" III I I II S3 « S; 2° i i3 S «J3 WOO ~ J5 Q re ai "~~* so v OJ m ^J U O uO Q C3Q Q 0 [i. 366 AMERICAN JEWISH YEAR BOOK O ^O —"i OC> Ci p' C> C>p O O> 00 •+ O O f*51~ 'O "f O o * o -t o a en w 5 a u 00 a WQ W fe i1 few Ji •u • <*> . ?>s i S'-^S— c S w • w ^ * ^ C v /5 w TO * ZJ " gI c . o CJ o • • : c . • . c : < 5 : 0 ^ i l 6 >t3|sl|ac O <U «9 c "-i—: - . ^=S^-7^ £ * £ W zc SS«^ LIST OF FEDERATED JEWISH CHARITIES 367 8.2 © «-. _4 f) ^* ©^r<)W)^. © oo OO O O * «©" © ^ © U © S ©P. 0 0 0 itinu so en a s z i o Offi - a - > . Q •—• J3 3(3 en ^..JJ. J - 9 > &CBS XlJo ss 5 nl §1« n '3 . „ ' ,•2a •.v'3 _:-.-t~i Zo:3S -<a" "x3 .k u 5§ O p.' en a ~cn o.2-j 51 2 ^ C& f7( I—1_ fT, ^—I |-!^ r qj ci J3 a* a> : • > * • . • • £ : o : : : •§ : : : H i 3 £ O^-Ss | o- .go, >;2 3 2 |>- [2£ c \ .» _"«o« . o M BO Si; «O ri» - " 3. S ^«S-33 S -S si o| ffio- o z 22 IS " tt!1-"-1^ a a c2 2 2 US SM " g a &, pupjcni/KO en m tnen t/jen HH h^J ?I> > ,-" JEWISH PERIODICALS APPEARING IN THE UNITED STATES [ NOTE.—* indicates that revised data were not furnished by request] THE AMERICAN HEBREW. 19 W. 44th, New York City. Weekly. Est. 1879. THE AMERICAN ISRAELITE. N. W. cor. 7th and Elm, Cincinnati, 0. Weekly. Est. 1854. THE AMERICAN JEWISH WORLD. Tribune Annex Building, Minneapolis, Minn. Weekly. Est. 1912 as THE JEWISH WEEKLY. DER AMERIKANER (The Jewish American and Woman's Magazine). 77 Bowery, New York City. Yiddish. Weekly. Est. 1904. APIRYON. 2 Palisade Av., Flagg Bldg., Yonkers, N. Y. Hebrew. Monthly. Est. 1923. 'ATLANTIC WEEKLY. 1923 Atlantic Av., Atlantic City, N. J. Yiddish and English. Weekly. Est. 1922. B'NAI B'RITH MAGAZINE. 40 Electric Bldg., Cincinnati, 0. Monthly. Est. 1886. B'NAI B'RITH MESSENGER. 2d and Hill, Los Angeles, Cal. Weekly. Est. 1896. THE BOSTON JEWISH AMERICAN AND WOMEN'S MAGAZINE. Boston, Mass. Yiddish. Weekly. Est. 1908. BROOKLYN JEWISH CHRONICLE. 316 Livingston, Brooklyn, N. Y. Weekly. Est. 1922. BROOKLYN NEW JOURNAL. 1776 Pitkin Av., Brooklyn, N. Y. Yiddish and English. Weekly. Est. 1909 as BROOKLYN BROWNSVILLE POST. THE BUFFALO JEWISH REVIEW. 35 Pearl, Buffalo, N. Y. Weekly. Est. 1912 as THE AMERICAN JEWISH REVIEW. BULLETIN OF THE JEWISH TELEGRAPHIC AGENCY. 611 Broadway, New York City. Daily. Est. 1919. CALIFORNIA JEWISH REVIEW. Ill W. 4th., 314 I. W. Hellman Bldg., Los Angeles, Cal. Weekly. Est. 1921. 369 370 AMERICAN JEWISH YEAR BOOK CHICAGO CHRONICLE. 35 N. Dearborn, Chicago, 111. Weekly. Est. 1918. THE CHICAGO ISRAELITE. 116 S. Michigan Av., Chicago, 111. Weekly. Est. 1853. THE CHICAGO JEWISH DAILY FORWARD. 1256 S. Kedzie Av., Chicago, III. Yiddish. Daily. Est. 1919. "THE DAILY JEWISH CALL. 1107 S. Halsted, Chicago, 111. Yiddish. Daily. Est. 1900 as DER TAEGLICHER YIDDISHER KOL. THE DAILY JEWISH COURIER (Der Taeglicher Juedischer Courier). 1214S. Halsted, Chicago, 111. Yiddish. Daily. Est. 1887. DAILY JEWISH LEADER. 299 Washington, Boston, Mass. Yiddish. Daily. Est. 1923. THE DAY. 183 E. Broadway, New York City. Yiddish. Daily. Amalgamation of THE DAY (Der Tog), Est. 1914, and THE WARHEIT (The Truth), Est. 1905. THE DETROIT JEWISH CHRONICLE. 525 Woodward Av., Detroit, Mich. Weekly. Est. 1916. *EDEN. 498 West End Av., New York City. Hebrew. Monthly. Est. 1924. EMANU-EL. Clunie Bldg., San Francisco, Cal. Weekly. Est. 1895. FAR'N FOLK. 425 Lafayette, New York City. Yiddish. Bi-monthly. Est. 1923. *FRAYE YUGEND. 216 Henry, New York City. Yiddish. Monthly. Est, 1923. DIE FREIE ARBEITER STIMME (Free Voice of Labor). 48 Canal, New York City. Yiddish. Weekly. Est. 1899. FREIHEIT. 30 Union Square, New York City. Yiddish. Daily. Est. 1922. GEGENWART. 52 St. Marks PI., New York City. Yiddish. Occasional. Est. 1924. DER GROSSER KUNDES (The Big Stick). 201 E. Broadway, New York City. Yiddish. Weekly. Est. 1909. HADOAR. 114 Fifth Av., New York City. Hebrew. Weekly. Est. 1921. HATOREN. 114 Fifth Av., New York City. Hebrew. Monthly. Est. 1913. HUDSON JEWISH NEWS. 92 Montgomery, Jersey City, N. J. Yiddish and English. Weekly. Est. 1923. JEWISH PERIODICALS 371 THE INDIANA JEWISH CHRONICLE. 937 Meyer-Kiser Bank Bldg., Indianapolis, Ind. Weekly. Est. 1921. INTERMOUNTAIN JEWISH NEWS. 1950 Curtis, Denver, Colo. Weekly. Est. 1915 as DENVER JEWISH NEWS. DERINIEL. P.O. Box 25, Sta.B., New York City. Yiddish. Monthly. Est. 1925. THE JEWISH ADVOCATE. 251 Causeway, Boston, Mass. Weekly. Est. 1897. THE JEWISH ADVOCATE AND THE CONNECTICUT HEBREW RECORD. 251 Causeway, Boston, Mass. Weekly. Est. 1897. THE JEWISH CENTER. 352 Fourth Av., New York City. Quarterly. Est. 1922. Issued by the Jewish Welfare Board. THE JEWISH CHRONICLE. 156 Central Av., Newark, N. J. Weekly. Est. 1921. THE JEWISH CRITERION. 507 Oliver Bldg., Pittsburgh, Pa. Weekly. Est. 1895. JEWISH DAILY BULLETIN. 611 Broadway, New York City. Daily. Est. 1924. THE JEWISH DAILY NEWS (Yiddishes Tageblatt). 187 E. Broadway, New York City. Yiddish and English. Daily. Est. 1885. THE JEWISH DIGEST. 1207 Realty Board Bldg., Miami, Fla. Weekly. Est. 1926. THE JEWISH EXPONENT. New Public Ledger Bldg., Philadelphia, Pa. Weekly. Est. 1887. JEWISH FARMER. 301 E. 14th., New York City. Yiddish and English. Monthly. Est. 1908. THE JEWISH FORUM. 2000 Broadway, New York City. Monthly. Est. 1918. THE JEWISH GAZETTE (Die Yiddishe Gazette). 187 E. Broadway, New York City. Yiddish and English. Weekly. Est. 1874. Weekly edition of "The Jewish Daily News." THE JEWISH INDEPENDENT. 1825 E. 18th., Cleveland, Ohio. Weekly. Est. 1906. THE JEWISH INDICATOR (Wegweiser). 1520 Center Av., Pittsburgh, Pa. Yiddish and English. Weekly. Est. 1884; Reorg. 1921 as JEWISH VOLKSFREUND. 372 AMERICAN JEWISH YEAR BOOK JEWISH INSTITUTE QUARTERLY. 40 W. 68th., New York City.1 English and Hebrew. Quarterly. Est. 1924. THE JEWISH LEDGER. 938 Lafayette, New Orleans, La. Weekly. Est. 1895. JEWISH LEDGER. 1239 Granite Bldg., Rochester, N. Y. English. Weekly. Est. 1924. THE JEWISH MONITOR. 287 W. 10th., Fort Worth, Texas. English. Weekly. Est. 1914. THE JEWISH MORNING JOURNAL (Der Morgen Journal). 77 Bowery, New York City. Yiddish. Daily. Est. 1901. JEWISH MUSICAL WORLD AND THEATRE MAGAZINE. 5 Beekman, New York City. Yiddish. Monthly. Est. 1923. JEWISH PRESS. 490 Brandeis Theatre Bldg., Omaha, Neb. Weekly. Est. 1920. THE JEWISH PRESS. 576 12th., Milwaukee, Wis. Yiddish and English. Weekly. Est. 1919. THE JEWISH QUARTERLY REVIEW. S. E. cor. Broad and York, Philadelphia, Pa. New Series. Est. 1910. Published by the Dropsie College for Hebrew and Cognate Learning. •THE JEWISH RECORD (Der Yiddisher Record). 1127 Blue Island Av., Chicago, 111. Yiddish. Weekly. Est. 1909. THE JEWISH RECORD. 1309 Franklin Av., St. Louis, Mo. Yiddish and English. Weekly. Est. 1913. JEWISH RECORD. 148 Dwyer Av., San Antonio, Tex. Weekly. Est. 1924. THE JEWISH REVIEW. 906 Union Trust Bldg., Providence, R. I.. Weekly. Est. 1920. THE JEWISH REVIEW AND OBSERVER. 1150 W. 3d., Cleveland, Ohio. Weekly. Est. 1888. JEWISH SOCIAL SERVICE QUARTERLY. 330 S. 9th., Philadelphia, Pa. Quarterly. Est. 1924. THE JEWISH TELEGRAPHIC AGENCY, 611 Broadway, New York City. Est. 1920. JEWISH THEATRICAL NEWS. 101 W. 42d, New York City. Weekly. Est. 1924. THE JEWISH TIMES. Suite 511, Lexington Bldg., Baltimore, Md. Weekly. Est. 1919. JEWISH PERIODICALS 373 *THE JEWISH TIMES. 60S E. 4th., Los Angeles, Cal. Yiddish. Weekly. Est. 1916. THE JEWISH TIMES. SO Main, San Francisco, Cal. Weekly. Est. 1855. JEWISH TRANSCRIPT. 1616 8th Av., Seattle, Wash. Weekly. Est. 1924. THE JEWISH TRIBUNE. Cowan Bldg., 57O-7th., Av., New York City. Weekly. Est. 1902 at Portland, Ore., moved to New York City, 1919. HEBREW STANDARD (est. 1882) amalgamated with THE JEWISH TRIBUNE, 1922. THE JEWISH VOICE. 925 Victoria Bldg., St. Louis, Mo. Weekly. Est. 1879. THE JEWISH VOICE. 32 Broome, Newark, N. J. English-Yiddish. Weekly. Est. 1923. *THE JEWISH VOICE. 325 Yesler Way, Seattle, Wash. Weekly. Est. 1915. THE JEWISH WOMAN. 2109 Broadway, New York City. Quarterly. Est. 1921. Published by The National Council of Jewish Women. THE JEWISH WORLD. 50th and Woodland, Cleveland, Ohio. Yiddish. Daily. Est. 1908. THE JEWISH WORLD. 233 S. 5th., Philadelphia, Pa., Yiddish and English. Daily. Est. 1914. THE KANSAS CITY JEWISH CHRONICLE. 304 W. 10th., Kansas City, Mo. Weekly. Est. 1920. KINDER JOURNAL. 1387 Washington Av., New York City. Yiddish. Monthly. Est. 1920. KULTUR. 1126 Blue Island Av., Chicago, 111. Yiddish. Weekly. Est. 1925. LIGHT OF ISRAEL (Yiddische Licht). 54 Canal, New York City. Yiddish and English. Weekly. Est. 1923. MENORAH JOURNAL. 167 W. 13th., New York City. Bi-monthly. Est. 1915. Published by the Intercollegiate Menorah Association. DER MILWAUKER WOCHENBLATT (The Milwaukee Weekly). 576 12th., Milwaukee, Wis. Yiddish and English. Weekly. Est. 1914. THE MODERN VIEW. 210 Olive, St. Louis, Mo. Weekly. Est. 1901. THE NEW PALESTINE. 114 5th., Av., N. Y. C. Weekly. Est. 1921. Successor to THE MACCABEAN, Est. 1901. 374 AMERICAN JEWISH YEAR BOOK Organ of the Zionist Organization of America. OHIO JEWISH CHRONICLE. 508 Schultz Bldg., Columbus, O. Weeky.l Est. 1920. PHILADELPHIA JEWISH CHRONICLE. 215 S. 57th, Philadelphia, Pa. Weekly. Est. 1922. PHILADELPHIA JEWISH TIMES. 709 N. Franklin, Philadelphia, Pa. English. Weekly. Est. 1925. THE REFORM ADVOCATE. 7 S. Dearborn, Chicago, III. Weekly. Est. 1891. SAN ANTONIO JEWISH WEEKLY. 530 Gunter Bldg., San Antonio, Tex. Weekly. Est. 1923. THE SCRIBE. 715 Chamber of Commerce Bldg., Portland, Ore. Weekly. Est. 1919. THE SENTINEL. 116-124 S. Clinton, Chicago, 111. Weekly. Est. 1910. SHRIFTEN (Writings). 425 Lafayette, New York City. Quarterly. Est. 1912. SPRINGFIELD HEBREW RECORD. 251 Causeway, Boston, Mass. Weekly. Est. 1923. STARK COUNTY JEWISH NEWS. 1333 Shorb Av., N. W., Canton, O. Bi-monthly. Est. 1921. SUMMARY OF EVENTS OF JEWISH INTEREST. 114 Fifth Av., New York City. Monthly. Est. 1921. Issued by the Bureau of Jewish Social Research. TEXAS JEWISH HERALD, \2\0yi Congress, Houston, Texas. Weekly. Est. 1908 as THE JEWISH HERALD. THE TOLEDO ISRAELITE. 2448 Putnam, Toledo, Ohio. Monthly. Est. 1915. UNION TIDINGS. Merchants' Bldg., Cincinnati, Ohio. Monthly. Est. 1919. Published by the Union of American Hebrew Congregations. UNITED SYNAGOGUE RECORDER. 531 W. 123d. New York City. Quarterly. Est. 1921. Organ of the United Syangogue of America, the Women's League, and the Young People's League. LA VARA. 7 Rivington, New York City. Judeo-Spanish. Weekly. Est. 1922. VON ZEIT ZU ZEIT. 661 E. 170th, New York City. Yiddish. Quarterly. Est. 1925. JEWISH PERIODICALS 375 VORWARTS (Jewish Daily Forward). 175 E. Broadway, New York City. Yiddish. Daily. Est. 1897. WISCONSIN JEWISH CHRONICLE. 383 Milwaukee, Milwaukee, Wis. Weekly. Est. 1920. Dos WORT. 175 E. Broadway, New York City. Yiddish. Monthly. Est. 1921. Dos YIDDISHE FOLK. 114 Fifth Av., New York City. Yiddish. Weekly. Est. 1909. Yiddish Organ of the Zionist Organization of America. ' YIDDISHER ARBEITER. 133 Second Av., New York City. Yiddish. Weekly. Est. 1923. YOUNG ISRAEL. Formerly the UNION HOME STUDY MAGAZINE. Merchants' Bldg., Cincinnati, Ohio. Monthly. Est. 1913. Published by the Department of Synagogue and School Extension, Union of American Hebrew Congregations. DIE ZUKUNFT (The Future). 175 E. Broadway, New York City. Yiddish. Monthly. Est. 1895. JEWISH MEMBERS OF THE CONGRESS OF THE UNITED STATES PAST ANSORGE, MARTIN C, 1882- . Rep. from N. Y., 1921-1922. BENJAMIN, JUDAH PHILIP, 1812-1884. Sen. from La., 1853-1861. CANTOR, JACOB A., 1854-1920. Rep. from N. Y., 1913-1915. EINSTEIN, EDWIN, 1842-1906. Rep. from N. Y., 1879-1881. EMERICH, MARTIN, 1847-1922. Rep. from 111., 1903-1907. FISCHER, ISRAEL F.r 1858- . Rep. from N. Y., 1895-1899. FRANK, NATHAN, 1852- . Rep. from 1889-1891. GOLDFOGLE, HENRY M., 1856- . Rep. from N. Y., 1901-1915, 1919- 1921. GOLDZIER, JULIUS, 1854-1925. Rep. from 111., 1893-1895, GUGGENHEIM, SIMON, 1867- . Sen. from Colo., 1907-1913. HART, EMANUEL B., 1809-1897. Rep. from N. Y., 1851-1853. # HOUSEMAN, JULIUS, 1832-1891. Rep. from Mich., 1883-1885.' JONAS, BENJAMIN FRANKLIN, 1834-1911. Sen. from La., 1879-1885. KAHN, JULIUS, 1861-1924. Rep. from Cal., 1889-1902, 1905-1924. KRAUSS, MILTON, 1866- . Rep. from 111., 1917-1922. LESSLER, MONTAGUE, 1869- . Rep. from N. Y., 1902-1903. LEVIN, LEWIS CHARLES, 1808-1860. Rep. from Pa., 1845-1851. LEVY, DAVID. See YULEE, DAVID LEVY. LEVY, JEFFERSON MONROE, 1852-1924. Rep. from N. Y., 1899-1901, 1911-1915. LITTAUER, Lucius NATHAN, 1859- . Rep. from N. Y., 1897-1907. LONDON, MEYER, 1871-1926. Rep. from N. Y., 1915-1917, 1921-1923. *MARX, SAMUEL, 1867-1922. Rep. from N. Y., 1922. MAY, MITCHELL, 1871- . Rep. from N. Y., 1899-1901. MEYER, ADOLPH, 1842-1908. Rep. from La., 1891-1908. *Died before taking his seat. 377 378 AMERICAN JEWISH YEAR BOOK MORSE, LEOPOLD, 1831-1892. Rep. from Mass., 1877-1885; 1887-1889. PHILLIPS, HENRY MYER, 1811-1884. Rep. from Pa., 1857-1859. PHILLIPS, PHILIP, 1807-1884. Rep. from Ala., 1853-1855. PULITZER, JOSEPH, 1847-1911. Rep. from N. Y., 1885-1886. RAYNER, ISADOR, 1850-1912. Rep. from Md., 1887-1895. Sen. from Md., 1905-1912. ROSENBLOOM, B. L., 1880- . Rep. from Wheeling, W. Va., 1921. ROSSDALE, ALBERT B., 1878- . Rep. from N. Y., 1921-1922. SIEGEL, ISAAC, 1880- . Rep. from N. Y., 1915-1922. SIMON, JOSEPH, 1851- . Sen. from Ore., 1897-1903. STRAUS, ISIDOR, 1845-1912. Rep. from N. Y., 1894-1895. STROUSE, MYER, 1825-1878. Rep. from Pa., 1863-1867. VOLK, LESTER DAVID, 1884- . Rep. from N. Y., 1921-1923. WOLF, HARRY B., 1880- . Rep. from Md., 1907-1909. YULEE, DAVID LEVY, 1811-1886. Del. from Fla., 1841-1845. Sen. from Fla., 1845-1851, 1855-1861. PRESENT (MEMBERS OF THE SIXTY-NINTH CONGRESS) BACHRACH, ISAAC, Republican, Representative, Atlantic City, 1915- BERGER* VICTOR, Socialist, Representative, Milwaukee, 1923- BLOOM, SOL., Democrat, Representative, New York City, 1923- CELLER, EMANUEL, Democrat, Representative, New York City, 1923- DICKSTEIN, SAMUEL, Democrat, Representative, New York City, 1923- GOLDER, BENJAMIN, Republican, Representative, Philadelphia, 1924- JACOBSTEIN, MEYER, Democrat, Representative, Rochester, 1923- KAHN, FLORENCE PRAG (MRS. JULIUS), Republican, Representative, San Francisco, 1925- PERLMAN, NATHAN D., Republican, Representative, Xew York City, 1921- SABATH, ADOLPH J., Democrat, Representative, Chicago, 1907-
WhoDidIt  9/11
1. George W. Bush — eldest son of Bush crime family; guilty of election fraud in 2000, 2004; guilty of war crimes, war profiteering, treason, crimes against humanity; likely signed-off on 9-11 plot

2. Dick Cheney — former PNAC member; former chairman of CFR; guilty of war profiteering, treason; was in bunker on 9-11 directing several “war games”; lied to 9-11 Omission Commission about timing of 9-11 activities

3. Donald Rumsfeld — former Secretary of War and PNAC member; close friend of Cheney; was at Pentagon on 9-11; once slipped and said “when that missile hit the Pentagon”

4. Paul Wolfowitz — Deputy Secretary of War on 9-11; “dual citizen” of US and Israel; Zionist; investigated for spying for Israel; former PNAC member; chief architect of Iraq war; forced to resign in World Bank scandal

5. Richard Perle — former assistant Secretary of War, chairman War Policy Board, and PNAC member; “dual citizen” of US and Israel; Zionist; allegedly gave $100,000 to head of Pakistan’s ISI, Mahmoud Ahmad; nicknamed “Prince of Darkness”

6. Douglas Feith — effectively in command, with Wolfowitz, of War Department on 9-11; Undersecretary of War for Policy; “dual citizen” of US and Israel; Zionist; investigated for spying for Israel; former PNAC member

7. Dov Zakheim — Pentagon comptroller when trillion dollars reported missing on 9-10-01; “dual citizen” of US and Israel; Zionist; Shul Rabbi; former CFR member; former CEO of fly-by-remote manufacturer; reputed 9-11 mastermind

8. George Tenet — director of the CIA on 9-11; was awarded the “Medal of Freedom” by Bush for his fine work on 9-11; reported to be “dual citizen” of US and Israel

9. Robert Mueller — FBI director on 9-11; under his “leadership” FBI field agents’ warnings of an imminent attack were stifled

10. Thomas Pickard — took over the job of FBI director from Louis Freeh in August 2001; held this position only for a few weeks before Richard Mueller became director; former Terror Task Force chief; John O’Neill complained about sabotage by Pickard

11. Dale Watson — former Deputy Chief of the CIA at the Counter-Terrorist Center; appointed Inspector Deputy Assistant Director of the National Security Division (NSD), FBI Headquarters, Washington, DC in July 1998; appointed FBI Headquarters Assistant on December 6, 1999 by the Attorney General; ignored at least four different FBI agents’ warnings including an “urgent cable” from the CIA on August 23rd about Almihdhar and Alhazmi

12. Dave Frasca — FBI Radical Fundamentalists Unit Chief; personally scuttled the work of Kenneth Williams in July 2001 and Coleen Rowley in August 2001, the Arizona and Minnesota FBI agents who were actively investigating “terrorist” patsies in CIA-operated flight schools

13. Marion “Spike” Bowman — FBI agent who thwarted FBI investigations into both Zacarias Moussaoui and the anthrax attacks on Congress

14. John Ashcroft — Attorney General on 9-11; protected “terrorist” patsy Abdussattar Shaikh from subpoena after 9-11; stopped flying commercial aircraft in 2001

15. Michael Chertoff — Assistant Attorney General on 9-11; freed over 100 Israeli spies in the US after 9-11; promoted to head Homeland Security; “dual citizen” of US and Israel; Zionist; likely Mossad agent

16. Michael Mukasey — federal judge in New York; presided over 1993 WTC bombing case; active in 9-11 cases, including Larry Silverstein’s insurance claims; oversaw the detained material witnesses of 9-11, including five dancing Israeli Mossad agents apprehended by FBI; recently appointed by Bush to be the next Attorney General; radical Zionist of Russian Jewish parentage; “dual citizen” of US and Israel

17. Ted Olson — Solicitor General of the United States on 9-11; alleges that his wife, Barbara, phoned him from AA Flight 77 to report that it was highjacked by men with knives and box cutters; Flight 77 allegedly crashed into the Pentagon though there was no wreckage of a 757 at the site, no bodies, no luggage, and the hole in the side of the Pentagon was much too small to accommodate a 757 (Barbara is not likely alive, but she was not killed at the Pentagon event)

18. Colin Powell — Secretary of State on 9-11; met with General Mahmoud Ahmad two days after 9-11; former chairman, Joint Chiefs of Staff; helped cover up Vietnam My Lai massacre

19. Condi Rice — National Security Adviser on 9-11; promoted to Secretary of State; lied to 9-11 Omission Commission while under oath

20. Tommy Thompson — Health and Human Services (HHS) Secretary; hired Jerome Hauer, former Office of Emergency Center, on 9-10-01

21. Jerome Hauer — managing director of Kroll and senior adviser to US Secretary of Health and Human Services (HHS) for National Security and Emergency Management on 9-11; put John O’Neill at the WTC on 9-11; lied to Dan Rather on CBS News on 9-11 about the controlled demolition of WTC buildings; director of Giuliani’s Office of Emergency Management from 1996 to 2000

22. Porter Goss — former House Intelligence Chair; was meeting with General Mahmoud Ahmad, head of Pakistan’s ISI and 9-11 financier, on 9-11; promoted to Director of CIA, resigned after “hookergate”

23. Bob Graham — former Florida Senator; was meeting with General Mahmoud Ahmad, head of Pakistan’s ISI and 9-11 financier, on 9-11; ran for President in 2004

24. Marc Grossman — Under Secretary for Political Affairs on 9-11; met with General Mahmoud Ahmad, head of Pakistan’s ISI and 9-11 financier, on or shortly after 9-11; “dual citizen” of US and Israel

25. Richard Armitage — former member of PNAC, Deputy Secretary of State; met with General Mahmoud Ahmad, head of Pakistan’s ISI and 9-11 financier, shortly after 9-11

26. Philip Zelikow — led the 9-11 Cover-Up Commission; personally wrote the 9-11 Omission Commission Report, a best-selling work of fiction; appointed Counselor of US Department of State; “dual citizen” of US and Israel

27. Ari Fleischer — White House spokesman for Bush on 9-11; “dual citizen” of US and Israel; connected to the extremist group called the Chabad Lubavitch Hasidics

28. Andrew Card — Bush’s Chief of Staff on 9-11; was with Bush at Booker Elementary School in Florida on 9-11; claims to have whispered to Bush, “A second plane hit the second tower, America is under attack”

29. Karl Rove — Bush’s top strategist, known as “Bush’s Brian”; America’s Joseph Goebbels; was behind the campaign to oust Georgia Representative Cynthia McKinney who was the first nationally-known politician to question Bush’s role in 9-11; in June 2005, said, “Conservatives saw the savagery of 9-11 in the attacks and prepared for war, liberals saw the savagery of the 9-11 attacks and wanted to prepare indictments and offer therapy and understanding for our attackers”

30. Richard Meyers — in charge of USA air defenses on 9-11; lied to 9-11 Omission Commission about reasons for air defense failure on 9-11; promoted to Chairman of the Joint Chiefs of Staff

31. Ralph Eberhardt — NORAD Commander on 9-11; fanatical supporter of missile defense scheme, militarization of space; enthusiastic supporter of merging law enforcement and the military

32. Larry Arnold — NORAD Commander Major General on 9-11; has used 9-11 to push militarization of USA

33. Eric Findley — Canadian Air Force Major General; acting commander of NORAD on 9-11

34. Montague Winfield — Major General in charge of Pentagon war room on 9-10-01, the evening of September 10th he requested a rookie to stand in for him on 9-11

35. Richard Mies — former Admiral; ran Global Guardian “war game” on 9-11 out of US Strategic Command (Stratcom) at Offutt Air Force Base; now CEO of Hicks & Associates, a “strategic consultant” to the USG dealing in “military transformation”

36. Henry Shelton — Chairman of Joint Chiefs of Staff on 9-11; supported formation of Able Danger

37. Peter Schoomaker — US Army Chief of Staff; former SOCOM (Special Operations Command) chief; ran Able Danger

38. Geoffrey Lambert — Major General; SOCOM (Special Operations Command) Intel Chief; made Able Danger, the program that tracked patsy “terrorists”, off limits to FBI

39. John Brinkerhoff — retired US Army Colonel who was a career senior executive in the Office of Secretary of War; from 1981 to 1983, FEMA associate director for national preparedness where he developed plan for martial law; claims intentions of Posse Comitatus are “misunderstood and misapplied”, that USG has “full and absolute authority” to use troops to quell American uprising; after 9-11, joined Anser Institute for Homeland Security and wrote “talking points” supporting revised “national security initiatives” that would allow imposition of martial law

40. John Lehman — Reagan’s Navy Secretary from 1981 till 1987; claims US is in religious war against “violent, Islamic Fundamentalism”; member 9-11 Omission Commission; PNAC member

41. Tony Gentry — Army Intelligence and Security Command General Counsel; ordered 2.5 terrabytes of Able Danger data destroyed

42. Philip Odeen — as director of Program Analysis for the National Security Council, provided staff support to Henry Kissinger from 1971 to 1973; served as Deputy Assistant Secretary of War in Systems Analysis; named to chair the National War Panel in 1997; former president of Reynolds and Reynolds; former CEO and president of BDM International; executive vice president of Washington operations of TRW

43. Elliot Abrams — former member of PNAC, National Security Council; pleaded guilty in 1991 to lying to Congress about Iran-Contra affair; “dual citizen” of US and Israel; Zionist

44. Lewis “Scooter” Libby — former PNAC member; studied political science at Yale under Paul Wolfowitz; aid to Cheney; convicted for lying about outing of Valerie Plame; “dual citizen” of US and Israel; Zionist

45. Jack Abramoff — entertained USG “terrorist” patsy Mohammed Atta on his yacht just before 9-11; convicted criminal lobbyist; ardent Zionist

46. Jeb Bush — Florida governor on 9-11; declared martial law in Florida four days before 9-11; brother of George Bush; PNAC member; guilty of election fraud in 2000

47. Rudolph Giuliani — mayor of New York on 9-11; hailed as “hero” for his “gutsy” leadership on 9-11; allegedly involved with FEMA and former NYC Police Chief Kerik in Operation Code Angel

48. Bernard Kerik — NYC Police Chief on 9-11; “sidekick” of Giuliani; allegedly involved with FEMA in WTC demolition “war games” called Operation Code Angel

49. Lewis Eisenberg — chairman Port Authority of New York and New Jersey on 9-11; authorized transfer of WTC leases to Silverstein and Lowy just weeks before 9-11; later appointed chairman of Republican National Committee; Zionist

50. Eliot Spitzer — New York Attorney General on 9-11; barred his top aide, Deputy Attorney General Dietrich Snell, from testifying to Congress on Able Danger; threw out Karl Schwarz’s 9-11 synopsis

51. Richard Holbrooke — former US ambassador to UN; CFR member; co-chaired “Independent Task Force on America’s Response to Terrorism” in which the Official Conspiracy Theory (OCT) was promoted

52. John Deutch — former Undersecretary of War, director of CIA; co-authored paper, “Catastrophic Terrorism: A National Policy” with Zelikow, Ashton Carter; senior partner at Global Technology Partners, an affiliate of Rothschild North America; MIT professor; grandson of Yonah Fischer, Antwerp diamond merchant who ran Zionist Federation of Belgium

53. Ashton Carter — co-authored paper, “Catastrophic Terrorism: A National Policy” with Zelikow and Deutch; senior partner at Global Technology Partners, an affiliate of Rothschild North America

54. Michael Ledeen — became “anti-terrorism” advisor to Secretary of State, Al Haig in 1981; contacts with mullahs in Iran-Contra affair; alleged ties to Italian fascist P2 Masonic Lodge; contacts with Libby, Cheney’s Chief of Staff; top NeoCon(vict) advisor to Bush and Karl Rove; member AEI (American Enterprise Institute); wrote book extolling fascism

55. Abdussattar Shaikh — FBI informant to the San Diego office; helped bring “terrorist” patsies to USA; protected by Attorney General Ashcroft

56. Abdullah Noman — worked for the US Consulate in Jeddah, Saudi Arabia; filed 10-15 visas for the patsy 9-11 “hijackers” in the Visa Express Program

57. Daniel Lewin — officer in elite, secret unit of Israeli military called “Sayeret Matkal”; orchestrated activities of Mossad agents in USA before 9-11; was allegedly stabbed or “shot” by highjacker Satam al-Suqami before AA flight 11 crashed into the WTC

58. Dominic Suter — Mossad agent; his front company, Urban Moving Systems, employed the five Mossad agents caught celebrating in New York on 9-11

59. Sivan Kurzberg — driver of van belonging to the celebrating Israelis; when stopped by police on 9-11, he said “We are Israelis. We are not your problem. Your problems are our problems. The Palestinians are your problem”

60. John Gross — one of the lead engineers for the flawed NIST report on why the WTC buildings collapsed; denies existence of molten steel at the WTC

61. Theresa McAllister — edited the flawed NIST report on why the WTC buildings collapsed

62. Ronald Hamburger — structural engineer and Senior Principal at Simpson Gumpertz and Heger consulting engineers in San Francisco; was a principal author of FEMA’s initial report on the collapse of the twin towers; later a key participant in the flawed NIST report on why the WTC buildings collapsed

63. William Baker — member of FEMA Probe Team; partner with Skidmore, Owings, Merrill; contributed to the flawed NIST report on why the WTC buildings collapsed

64. Harold Nelson — contributed to the flawed NIST report on why the WTC buildings collapsed

65. Ramon Gilsanz — contributed to the flawed NIST report on why the WTC buildings collapsed

66. Shankar Nair — contributed to the flawed NIST report on why the WTC buildings collapsed; quoted in Chicago Tribune, September 19, 2001 that “Already there is near-consensus as to the sequence of events that led to the collapse of the World Trade Center”

67. Gene Corley — led FEMA/ASCE WTC collapse “investigation”; was the principle investigator for ASCE and FEMA of the 1995 bombing of the Murrah Federal Office Building in Oklahoma City

68. Paul Mlakar — part of ASCE team that investigated both WTC and Murrah Federal building attacks

69. Mete Sozen — part of ASCE team that investigated both WTC and Murrah Federal building attacks

70. Charles Thornton — partner of Richard Tomasetti; told Karl Koch, whose company erected the WTC steel, “Karl, we all know what caused the collapse”; part of ASCE team that investigated both WTC and Murrah Federal building attacks

71. Richard Tomasetti — partner of Charles Thornton; reportedly behind the unprecedented and widely criticized decision to destroy most of the WTC steel evidence

72. Victor Ganzi — president and CEO of Hearst Corporation since June 1, 2002; the Hearst publication, Popular Mechanics, has repeatedly tried to debunk the truth of 9-11

73. Benjamin Chertoff — 25-year-old cousin of Michael Chertoff; senior “researcher” for Popular Mechanics’ hit piece on 9-11 Truth Movement

74. Kevin Delaney — FAA manager at the New York Air Route Traffic Control Center who destroyed controllers’ tapes of 9-11

75. Marvin Bush — brother of George Bush; on board of Securacom, US-Kuwaiti company paid $9.2 million to manage WTC security October 1996 to 1998; on board of HCC Insurance, big WTC insurer

76. Wirt Walker — cousin of George Bush; principal at Securacom, US-Kuwaiti joint-venture that managed security for WTC, United Airlines, and Dulles Airport, all of which figured into 9-11

77. Larry Silverstein — he and partner Frank Lowy obtained 99-year lease on WTC shortly before 9-11; made several billion dollars on 9-11 insurance fraud; admitted to “pulling” WTC 7; Zionist

78. Frank Lowy — he and partner Larry Silverstein obtained 99-year lease on WTC shortly before 9-11; came to Palestine in 1945 from Hungarian to fight as Golani commando in Israeli “War of Independence”; Australia’s second richest person; in May 2007, investigated by Israeli police for corruption scandal involving Israeli Prime Minister Ehud Olmert; Zionist

79. David Rockefeller — vice director of the Council on Foreign Relations (1949-1985), vice president (1950-1970), and chairman (1970-1985); as chairman of the Downtown-Lower Manhattan Association (1958 to 1975) was primary builder of WTC complex; founder and honorary chairman of the Trilateral Commission; president or CEO of Chase Manhattan Bank, 1961 to 1981; 9-11 was the anniversary of 1973 CIA-sponsored coup plotted by David Rockefeller’s cabal and overseen by Nelson’s protégé Henry Kissinger that toppled Chile’s President Salvadore Allende

80. Nicholas Rockefeller — told film-maker Aaron Russo of coming catastrophic event eleven months before 9-11

81. Warren Buffett — was hosting golf charity event at the US Strategic Command headquarters at Offutt Air Force Base in Omaha on 9-11 (Bush flew to Offutt afternoon of 9-11); world’s second richest person

82. Rupert Murdoch — key player in Zionist-controlled corporate media which began the 9-11 cover-up on day one; connected to individuals who privatized and leased WTC just weeks before 9-11; vocal supporter of Zionist extremists Benjamin Netanyahu and Ariel Sharon; honored by leading Zionist organizations such as the Anti-Defamation League (ADL) and the United Jewish Appeal (UJA), in which Silverstein, Lowy, and Eisenberg all hold senior positions; Zionist who tries to hide his Jewish heritage

83. Maurice Greenberg — CEO of American International Group (AIG) on 9-11 which became co-owner of the “private spy agency”, Kroll Associates, in 1993 and was a major share-holder in Marsh & McClennan whose CEO on 9-11 was Maurice’s son Jeffrey; director of the New York Federal Reserve bank (1988-1995); deputy chairman of the Council on Foreign Relations (CFR) in 1996; major investor in the Blackstone Group

84. Jules Kroll — founder of Kroll Corporation, a “security services” company which was in charge of “security” at WTC on 9-11; has close links to CIA and is active private military contractor in Iraq; Zionist

85. Paul Bremer — Marsh & McClennan executive on 9-11; Chairman of the Congressional National Commission on Terrorism, 1999 to 2000; US Ambassador-at-Large for Counterterrorism, 1986 to 1989; Presidential Envoy to Irag and Adminstrator of the Coaltion Provisional Authority, May 2003 to December 2004

86. Wallace Hilliard — with Saudi investors including Shiek Kamal Adham, Adnan Khashoggi, and Prince Nawaf bin Abdul Aziz. bought Venice, Florida Huffman Aviation in 1999 where Mohammed Atta and other alleged 9-11 highjackers allegedly learned to fly; flight school linked to CIA firm

87. Peter Peterson — CEO of the Blackstone Group, parent corporation of one of three lease-holders for WTC 7 on 9-11; also chairman of the CFR and the Federal Reserve Bank of New York on 9-11; CEO of the Institute for International Economics in October 2000

88. A.B. “Buzzy” Krongard — now number three executive director at the CIA; until 1998, managed firm used to place “put options” on United Airlines which has left $2.5 million in “profits” unclaimed

89. Mark Loizeaux — as CEO of CDI was instrumental in “recycling” steel from WTC crime scene; CDI also buried the rubble from the crime scene of the Murrah Federal Building

90. Loring Knoblauch — CEO of Underwriters Labs; said that jet fuel fires were not “reasonably foreseeable”; resigned suddenly in August 2004 after UL performed tests of WTC floor models where floors did not collapse and were barely affected

91. Michael Cherkasky — CEO of Kroll on 9-11; former investigator in the Manhattan DA’s Office from 1978 to 1994; now CEO of insurance-firm Marsh & McClennan

92. Frank Carlucci — former Secretary of War; affiliated with PNAC; served as chairman of the Carlyle Group (1992-2003); on BoD of BDM International

93. William Kristol — PNAC co-founder; adherent of Leo Strauss; editor of The Weekly Standard; strong advocate of the Iraq war; “dual citizen” of US and Israel; Zionist

94. William Perry — former Secretary of War; associated with the Rothschild’s banking empire through Global Technology, a Rothschild affiliate

95. James Woolsey — former CIA director; PNAC member; claims “incompetence” was reason for 9-11

96. Newt Gingrich — former Speaker of the House; PNAC member; reputed to be a member of the CFR; served on the Pentagon’s War Policy Board

97. Henry Kissinger — long criminal history; wanted for war crimes in several countries; sat on War Policy Board under Perle; chosen to lead 9-11 Cover-Up Omission Commission; “dual citizen” of US and Israel

98. George H.W. Bush — Bush crime family Don; Skull and Bones; CIA operative involved in JFK assassination; former head of CIA; son of friend shot Reagan when he was VP; war profiteer

99. Tony Blair — British Prime Minister on 9-11; ally and partner in crime of George Bush; London 7-7 bombings were also “false flag” operation

100. Pauline Neville-Jones — International Governor of BBC on 9-11; Chairman of UK Joint Intelligence Committee (1991-1994); Chairman of QinetiQ Group, a war technology company with government customers in UK and USA; Chairman of Information Assurance Advisory Council (IAAC)

101. Mahmoud Ahmad — head of Pakistan’s ISI; had Ahmed Omar Saeed Sheikh wire $100,000 to lead 9-11 “terrorist” patsy Mohammad Atta

102. Benjamin Netanyahu — former Israeli Prime Minister; said 9-11 was “good” for US-Israeli relationship; in NYC on 9-11 and in London on 7-7 bombings

 

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Lord Powell of Bayswater – Chairman – Bio Ambassador Richard Burt – Managing Director, McLarty Associates – Bio The Right Honourable Lord Howard of Lympne - President and Founding Chairman – Bio The Honorable James P. Rubin – Vice Chairman, USA - Bio Secretary William Cohen – Co-Chairman USA – Bio Senator Sam Nunn – Co-Chairman USA – Bio Pierre Lellouche – Vice Chairman, France – Bio Ambassador Francois Bujon d’Estang – Vice Chairman, France Patrons

The Honorable Dr. Henry Kissinger – Chairman of Kissinger Associates, Inc. – Bio Senator John McCain – United States Senator for Arizona – Bio General Colin L. Powell – Former United States Secretary of State – Bio The Rt Honorable John Major CH – Former United Kingdom Prime Minister – Bio The Rt Honorable Lord Robertson of Port Ellen – Former Secretary General of NATO – Bio Alain Juppé The Rt Honorable Lord Gilbert – Life Peer, House of Lords – Bio Herr Karsten Voigt – Coordinator for German-American Cooperation – Bio Sr. Eduardo Serra – Former Defense Minister of Spain – Bio Senator Antonio Martino – Minister of Defense of Italy – Bio Trustees

The Rt Honorable Michael Howard QC MP – President and Founding Chairman – Bio Lord Marland of Odstock – Treasurer – Bio Lord Powell of Bayswater – Chairman – Bio Lord Chadlington of Dean – Life Peer, House of Lords – Bio Meg Allen – Director of DRAMLA SA, Geneva – Bio Sir Evelyn de Rothschild – Chairman, E.L. Rothschild Ltd – Bio Sir David Manning GCMG, CVO – Bio Ambassador Richard Burt – Managing Director, McLarty Associates – Bio General Brent Scowcroft – President of The Scowcroft Group – Bio Friends of Atlantic Partnership US

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