In part 1 of ‘More Bank BAILOUTS (How the MAFIA looted your bank)’ we summarized the most blatant examples of collaboration between the mob, and the intelligence community. In part 2 we will quickly summarize the most blatant examples of collaboration between government agencies, financial institutions, the mob, and the intelligence community.
Orwellian terms like “War on Drugs” are meant to CONFUSE you
It’s not a War on Drugs. It’s a War on People.
Joseph McNamara, a former San Jose police chief from the Hoover Institute at Stanford University, published some really telling figures. In 1972, when Richard Nixon started the War on Drugs, the annual federal budget allocation was 110 million dollars a year for enforcement. In fiscal year 2000, 28 years later, the budget allocation was 17 billion dollars a year, and yet, in the year 2000, there were more drugs in this country, they were cheaper, and more potent than they were in 1972. That has to tell you that there’s some other agenda going on here.
Clark Clifford, who was a Wall Street banker and lawyer, wrote the National Security Act that created the CIA in 1947. He brought us BCCI. John Foster Dulles and Allen Dulles gave both law partners in the Wall Street law firm of Sullivan and Cromwell wrote the outline for the CIA, the design for the Agency, to Clark Clifford. In 1969 after Nixon came in, the Chairman of SEC [Securities and Exchange Commission] was William Casey – who was Ronald Reagan’s Director of Central Intelligence. And the Vice President in charge of enforcement for the New York Stock Exchange was Dave Dougherty, a retired CIA General Counsel. The CIA is Wall Street, and vice versa. When you understand that, and that money is the primary objective, everything else just falls into place.
The distinctions drawn between business, politics, and organized crime are at best artificial and in reality irrelevant. Rather than being dysfunctions, corporate crime, white-collar crime, organized crime, and political corruption are mainstays of American political-economic life.
The CIA and the MAFIA LOOTED The S&Ls
First National Bank of Maryland: For two years, 1983-1985, Associated Traders, a CIA proprietary company, used the First National Bank of Maryland to make payments for covert operations. Associated traders used its accounts at First National to supply $23 million in arms for covert operations in Afghanistan, Angola, Chad, and Nicaragua (Bainerman, 1992; 276-277; Covert Action 35, 1990).
The links between the First National Bank of Maryland and the CIA were exposed in a lawsuit filed in Federal District Court by Robert Maxwell, a high-ranking bank officer. Maxwell charged in that suit that he had been asked to commit crimes on behalf of the CIA. Specifically, he charged that he was asked to conceal Associated Traders’ business activities, which by law he was required to specify on all letters of credit. Maxwell alleged that he had been physically threatened and forced to leave his job after asking that his superiors supply him with a letter stating that the activities he was being asked to engage in were legal. In responding to Maxwell’s lawsuit, attorneys for the bank state. “A relationship between First National and the CIA and Associated Traders was classified information which could neither be confirmed nor denied (Bainerman, 1992: 276-277; Washington Business Journal, February 5, 1990).
Palmer National Bank: The Washington, D.C.-based Palmer National Bank was founded in 1983 on the basis of a $2.8 million loan from Herman K. Beebe to Harvey D. McLean, Jr. McLean was a Shreveport Louisiana businessman who owned Paris (Texas) Savings and Loan. Herman Beebe played a key role in the savings and loan scandal. Houston Post reporter Pete Brewton linked Beebe to a dozen failed S & L’s, and Stephen Pizzo, Mary Fricker, and Paul Muolo, in their investigations of the S & L fiasco, called Beebe’s banks “potentially the most powerful and corrupt banking network ever seen in the U.S.” Altogether, Herman Beebe controlled, directly or indirectly, at least 55 banks and 29 S & L’s in eight states. What is particularly interesting about Beebe’s participation in these banks and savings and loans is his unique background. Herman Beebe had served nine months in federal prison for bank fraud and had impeccable credentials as a financier for New Orleans-based organized crime figures, including Vincent and Carlos Marcello (Bainerman, 1992: 277-278; Brewton, 1993: 170- 179)
Harvey McLean’s partner in the Palmer National Bank was Stefan Halper. Halper had served as George Bush’s foreign policy director during the 1980 presidential primaries. During the general election campaign, Halper was in charge of a highly secretive operations center, consisting of Halper and several ex- CIA operatives who kept close tabs on Jimmy Carter’s foreign policy activities; particularly Carter’s attempt to free U.S. hostages in Iran. Halper was later linked both to the “Debategate” scandal, in which it is alleged that Carter’s briefing papers for his debates with Ronald Reagan were stolen, and with “The October Surprise,” in which it is alleged that representatives of the Reagan campaign tried to thwart U.S. efforts to free the Iranian hostages until after the presidential election. Halper also set up a legal defense fund for Oliver North.
During the Iran-Contra Affair, Palmer National was the bank of record for the National Endowment for the Preservation of Liberty, a front group run by Oliver North and Carl “Spitz” Channell, which was used to send money and weapons to the contras.
Indian Springs Bank: Another bank with clear connections to the CIA was the Indian Springs Bank of Kansas City, Kansas (Bainerman, 1992: 279-280; Brewton, 1993: 197-200). The fourth largest stockholder in Indian Springs was Iranian expatriate Farhad Azima, who was also the owner of an air charter company called Global International Air. The Indian Springs bank had made several unsecured loans to Global International Air, totaling $600,000 in violation of the bank’s $349,00 borrower limit. In 1983, Global International filed for bankruptcy, and Indian Springs followed suit in 1984. The president of Indiana Springs was killed in 1983 in a car fire that started in the vehicle’s back seat and was regarded by law enforcement officials as of suspicious origins.
Global International Air was part of Oliver North’s logistical network that shipped arms for the U.S. government on several occasions, including a shipment of 23 tons of TOW missiles to Iran by Race Aviation, another company owned by Azima. Pete Brewton, in his investigation of the Indian Springs bank collapse was told that FBI had not followed up on Indian Springs because the CIA informed them that Azima was “off limits” (Houston Post, February 8, 1990). Similarly the assistant U.S. Attorney handling the Indian Springs investigation was told to “back off from a key figure in the collapse because he had ties to the CIA.”
Azima did indeed have ties to the CIA. His relationship with the agency goes back to the late 1970s when he supplied air and logistical support to EATSCO (Egyptian American Transport and Services Corporation), a company owned by former CIA agents Thomas Clines, Theodore Shackley, and Richard Secord. EATSCO was prominently involved in the activities of former CIA agent Edwin Wilson, who shipped arms illegally to Libya. Azima was also closely tied to the Republican Party. He had contributed $81,000 to the Reagan campaign.
Global International also had other unsavory connections. In 1981, Global International made a payment to organized crime figure, Anthony Russo, a convicted felon with a record that included conspiracy, bribery, and prostitution charges. Russo was the lawyer of Kansas City organized crime figures, an employee of Indian Springs, and a member of the board of Global International. Russo later explained that the money had been used to escort Liberian dictator Samuel Doe on a “goodwill trip” to the U.S.
Southern Air Transport, another CIA proprietary company, maintained Global International’s planes based in Miami. According to Franck Van Geyso, an employee of Global International, pilots for Global International ferried arms into South and Central America and returned to Florida with drugs. Indian Springs also made a loan of $400,000 to Morris Shenker, owner of the Dunes Hotel in Las Vegas, former attorney for Jimmy Hoffa, and close associate of Nick Civella and other Kansas City organized crime figures. At the time the loan to Shenker was made, he, Civella, and other Kansas City mobsters were under indictment for skimming $280,000 from the Las Vegas Tropicana Casino.
Vision Banc Savings: In March 1986, Robert L. Corson purchased the Kleberg County Savings and Loan of Kingsville, Texas, for $6 million, and changed its name to Vision Banc Savings (Bainerman, 1992: 280-281; Brewton, 1993: 333-351). Harris County, Texas, judge Jon Lindsey vouched for Corson’s character in order to gain permission from state regulators for the bank purchase. Lindsey was the chairman of the Bush campaign in 1988 in Harris County and later received a $10,000 campaign contribution and a free trip to Las Vegas from Corson (Houston Post, February 11, 1990).
Corson was well known to federal law enforcement agents as a “known money launderer” and a “mule for the agency,” meaning that he moved large amounts of cash from country to country. When Corson purchased Vision Banc, it had assets in excess of $70 million. Within four months it was bankrupt. Vision Banc engaged in a number of questionable deals under Corson leadership, but none more so that its $20 million loan to Miami lawyer, Lawrence Freeman to finance a real estate deal (Houston Post, February 4, 1990). Freeman was a convicted money launderer who had cleaned dirty money for Jack Devoe’s Bahamas-to-Florida cocaine smuggling syndicate and for Santo Trafficante’s Florida- based organized crime syndicate. Freeman was a law partner of CIA-operative and Bay of Pigs paymaster, Paul Helliwell. Corson, in a separate Florida real estate venture costing $200 million, was indicted on a series of charges.
Hill Financial Savings: Vision Banc was not the only financial institution involved in Freeman’s Florida land deals. Hill Financial Savings of Red Hill, Pennsylvania, put in an additional $80 million (Brewton, 1993: 346-348). The Florida land deals were only one of a series of bad investments by Hill Financial that led to collapse. The failure of Hill Financial, alone, cost the U.S. treasury $1.9 billion.
Sunshine State Bank: The cast of characters surrounding the Sunshine State Bank of Miami also included spies, White House operatives, and organized criminals (Bainermann, 1992: 281; Brewton, 1993: 310- 312, 320-323). The owner of the Sunshine State Bank, Ray Corona, was convicted in 1987 of racketeering, conspiracy, and mail fraud. Corona purchased Sunshine in 1978 with $1.1 million in drug trafficking profits supplied by Jose Antonio “Tony” Fernandez, who was subsequently indicted on charges of smuggling 1.5 million pounds of marijuana into the U.S.
Among Corona’s customers and business associates were Leonard Pelullo, Steve Samos, and Guillermo Hernandez-Cartaya. Pelullo was a well-known associate of organized crime figures in Philadelphia, who had attempted to use S & L money to broker a major purchase of an Atlantic City Casino as a mob frontman. Pelullo was charged with fraud for his activities at American Savings in California. Steve Samos was a convicted drug trafficker who helped Corona to set up Sunshine State Bank as a drug money laundry. Samos also helped set up front companies that funneled money and weapons to the Contras. Guillermo Hernandez-Cartaya was a veteran CIA operative who had played a key role in the Bay of Pigs of invasion. He also had a long career as a money launderer in the Caribbean and in Texas on behalf of both the CIA and major drug trafficking syndicates.
Mario Renda, Lender to the Mob: Mario Renda was a Long Island money broker who brokered deposits to various savings and loans in return for their agreement to loan money to phony companies (Brewton, 1993: 45-47; 188-190; Pizzo et al. 1989: 466-471). Renda and his associates received finder’s fees of 2 to 6 percent on the loans, most of which went to individuals with strong organized crime connections and who subsequently defaulted on them. Renda brokered deals to 160 Savings and Loans throughout the country, 104 of which eventually failed. Renda was convicted of taking $16 million from an S & L and for tax fraud.
Renda also served CIA and National Security Council interests as a money broker helping arrange for the laundering of drug money through various savings and loans on behalf of the CIA. He then obtained loans from the same S & L’s, which were funneled to the Contras. An organized crime-related stockbroker, a drug pilot, and Renda were all convicted in the drug money laundering case.
Jeb Bush was a White House liaison to Miami Contras and right-wing anti-Castro Cuban-Americans. In the mid-1980s, he took contributions to the Miami Republican Party from Leonel Martinez who was arrested in 1989 and later convicted of bringing 300 kilos of cocaine into the U.S.
Jeb was also connected to the drug money laundering scandal of the CIA-linked, the Bank of Credit and Commerce International, in 1986-1987.
In the mid-1980s, Jeb worked for businessman, Miguel Recarey, Jr. whose mafia links went back 20 years. During the 1980s, Recarey is thought to have embezzled $100 million from Medicare through his Miami-based company, International Medical Centers, which also treated wounded Contras at its Florida hospital.
When the Bush administration bailed out Broward Federal S & L in 1988, for $285 million in bad loans, Jeb and partner Armando Cordina (leader of the right-wing Cuban American Foundation) didn’t have to repay their $4.1 million loan.
Jeb successfully lobbied Dad in 1990 for the release from jail of Orlando Bosch, who fired a bazooka at Polish freighter in the Miami harbor in 1968 and master-minded the explosion of a Cuban airliner killing 73 people over Barbados in 1976.
Full-Service Banking: All told at least twenty-two of the failed S & L’s can be tied to joint money laundering ventures by the CIA and organized crime figures (Glassman, 1990: 16-21; Farnham, 1990: 90-108; Weinberg, 1990: 33; Pizzo, et al., 1989: 466-471). If the savings and loan scandals of the 1980s reveal anything, they demonstrate what has often been stated as a maxim in organized crime research: that corruption linking government, business, and syndicates is the reality of the day-to-day organization of crime. Investigations of organized crime in the United States, Europe, and Asia have all uncovered organized crime networks operating with virtual immunity from law enforcement and prosecution. Chambliss’ study of organized crime in Seattle exposed a syndicate that involved participation by a former governor of the state, the county prosecutor, the police chief, the sheriff, at least 50 law enforcement officers, leading business people, including contractors, realtors, banks, and corporation executives, and, of course, a supporting cast of drug pushers, pimps, gamblers, and racketeers (Chambliss, 1978). The Chambliss study is not the exception but the rule. Other sociological inquires in Detroit, Texas, Pennsylvania, New Jersey, and New York have all revealed similar patterns (Albini, 1971; Block, 1984; Block and Chambliss, 1981; Block and Scarpitti, 1985; Jenkins and Potter, 1989; 1986; Potter and Jenkins, 1985; Potter, 1994). As Chambliss comments:
In the everyday language of the police, the press, and popular opinion, “organized crime” refers to a tightly knit group of people, usually alien and often Italian, that run a crime business structured along the lines of feudal relationships. This conception bears little relationship to the reality of organized crime today. Nonetheless, criminologists have discovered the existence of organizations whose activities focus on the smuggling of illegal commodities into and out of countries (cocaine out of Colombia and into the United States and guns and arms out of the United States and into the Middle East, for example); other organizations, sometimes employing some of the same people, are organized to provide services such as gambling, prostitution, illegal dumping of toxic wastes, arson, usury, and occasionally murder. These organizations typically cut across ethnic and cultural lines, are run like businesses, and consist of networks of people including police, politicians, and ordinary citizens investing in illegal enterprises for a high return on their money.
Catherine Austin Fitts, who was a Managing Director at Dillon Read before becoming Assistant Secretary of Housing under George Bush and who holds an MBA from Wharton makes things very simple. She points out that the four largest states for the importation of drugs are New York, Florida, Texas and California. She then points out that the top four money-laundering states in the U.S. (good for between 100 and 260 billion per year) are New York, Florida, Texas and California. No surprise there. Then she rips the breath from your lungs by pointing out that 80 per cent of all Presidential campaign funds come from – New York, Florida, Texas and California.
Civics test: Who were the governors of Texas and Florida?
Using testimony of law enforcement officers and U.S. Government records, Dominican drug gangs, who dominate the trade in the northeast United States – especially New York and Pennsylvania – have been making regular campaign donations. California drug sales are currently split between Democratically allied crime factions and entrenched hard-core Republican strongholds from the Reagan era. People who shudder at the thought of the Chinese buying into presidential politics would choke if they knew how much drug money was involved.
The Department of Justice estimates that $100 billion in drug funds are laundered in the U.S. each year. Other research, including research material from the Andean Commission of Jurists cited by author Dan Russell in his soon to be published book Drug War place the figure at around $250 billion per year. Catherine Austin Fitts places the figure at $250 to $300 billion. Given the fact that the UN estimated that in the early 1990s world retail volume in the illegal drugs was $440 billion, $250 billion seems about right. Fitts, using her Wall Street experience as an investment banker, is then quick to point out that the multiplier effect (x6) of $250 billion laundered would result in $1.5 trillion dollars per year in U.S. cash transactions resulting from the drug trade. How many jobs does $1.5 trillion represent? Why do President’s get re-elected? As Bill Clinton’s staff recognized in 1992, “It’s the economy -Stupid!”
During the Contra years, when the CIA and Bill Clinton were swimming in cocaine, and Arkansas became the only state in the Union to ever issue bearer bonds (laundry certificates), employment in Arkansas rose to an all time high because there was so much money floating around. So what if they don’t count all the dead bodies “It’s the economy – Stupid!”
The Pop: Corporations trading on Wall Street, including many implicated in money laundering schemes where products are sold with questionable bookkeeping throughout drug producing regions, all have stock values that are based upon annual net profits. Known as “price to earnings” or “The Pop” the multiplier effect in stock values is sometimes as much as a factor of thirty. Thus, for a firm like GE or Piper Aircraft to have an additional $10 million in net profits based upon the drug trade, the net increase in these companies’ stock value could be as much as $300,000,000. Did GE make a $10 million net profit on consumer products in Latin America last year? Easily. And since GE owns NBC is there a chance that accurate reporting on the drug trade and CIA’s involvement therein might hurt their stock?
Disney owns ABC and has a huge retail, resort and entertainment empire that benefits from the “drug multiplier.” Would ABC consider hurting its parent’s stock value? Ronald Reagan’s CIA Director, William Casey had been Chief Counsel to Cap Cities Broadcasting until 1981. His old law firm represented Cap Cities when it bought the ABC network in 1985. ABC’s Peter Jennings, by the way, had been doing a series of investigative reports on the CIA drug bank (and successor to the Nugan Hand bank) Bishop, Baldwin, Rewald, Dillingham and Wong when the buyout was initiated. Cap Cities (not surprisingly) secured SEC approval in record time and effectively and immediately silenced Peter Jennings who had previously refused to back down from Casey’s threats. Thereafter, ABC was referred to as “The CIA network.”
I have no doubt that the ABC “object lesson” was front and center for CNN founder Ted Turner and Time-Warner when Henry Kissinger, Colin Powell and (CIA vet) John Singlaub put the pressure on in the wake of April Oliver’s 1998 “dead bang accurate” Sarin gas stories connecting CIA to the killing of American defectors.
Every major media corporation in the country trades on Wall Street. There are no “independents” left and the American people are left with the increasing thought conflict of recognizing that they are being fed useless bullshit. I wonder how they would respond to real a news corporation if they saw or heard one.
Remember – Wall Street lawyer and banker Clark Clifford wrote The National Security Act of 1947, which created the CIA. Clark Clifford is the man who brought the CIA backed drug bank, BCCI, into the United States. Allen Dulles who virtually designed the CIA and served as its Director, and his brother John Foster who was Eisenhower’s Secretary of State, were Wall Street lawyers from the firm Sullivan and Cromwell. Dwight Eisenhower’s personal liaison with the CIA was none other than Nelson Rockefeller. William Casey was Chairman of the Securities and Exchange Commission under Richard Nixon. Former CIA Directors from William Raborn to William Webster to Robert Gates to James Woolsey to John Deutch all sit or have sat on the Boards of the largest, richest and most powerful companies in America.
As we near the millennium one thing is clear to anyone who sees the economic system clearly. The system is on the verge of implosion. Privately owned and operated prison companies trade on Wall Street. One of those, Wackenhut, is a virtual CIA proprietary. We have entered, at the end of the industrial age, a phase of growth where we must incarcerate an ever-expanding number of people to sustain the growth of all the companies profiting from law enforcement, crime, imprisonment and war. And the overheated stock market must grow or collapse. The reason this nation spends five dollars on prisons for every one dollar on higher education – even after seven straight years of falling crime rates – is because there is more profit in it in the current economic model. Hell, we have turned police departments into profit making entities through asset forfeiture. This is insane!
This economic model is patently no more sustainable than a snake eating its own tail can be considered nourishment. Organized crime has become the government and it seeks to make all citizens become subliminally guilty participants, fearing for their own livelihoods, believing that the system will collapse if someone really tackles the issues facing us – as surely as the iceberg faced the Titanic.
The system will collapse anyway – unless the economic model is turned upside down – unless a way is found or offered which will make it more profitable than all other ways – to do the right thing. The only thing that will sustain the current economic system, and its dependence on drug capital, is a police state. New enforcement programs involving HUD and the Department of Justice- along with their corresponding butchery of the Constitution – show an emerging police state already. The conduct of Congress and the White House and the CIA further demonstrate the arrogance, and the ever-increasing sloppiness of a system out of control.
The veneer, the illusion that we live under the rule of law cracks before our eyes, grows thinner and ever more difficult to sell with each passing minute. All at once the fears of the right of a New World Order and the fears of the left, of new concentration camps and genocide suddenly become one and the same thing. Dogma matters little to the oppressed. Pain tastes the same whether you call it Fascism or Communism.
In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again). In each of those cases, global investors, afraid that the country or its financial sector wouldn’t be able to pay off mountainous debt, suddenly stopped lending. And in each case, that fear became self-fulfilling, as banks that couldn’t roll over their debt did, in fact, become unable to pay. This is precisely what drove Lehman Brothers into bankruptcy on September 15, causing all sources of funding to the U.S. financial sector to dry up overnight. Just as in emerging-market crises, the weakness in the banking system has quickly rippled out into the rest of the economy, causing a severe economic contraction and hardship for millions of people.
But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.
Top investment bankers and government officials like to lay the blame for the current crisis on the lowering of U.S. interest rates after the dotcom bust or, even better—in a “buck stops somewhere else” sort of way—on the flow of savings out of China. Some on the right like to complain about Fannie Mae or Freddie Mac, or even about longer-standing efforts to promote broader homeownership. And, of course, it is axiomatic to everyone that the regulators responsible for “safety and soundness” were fast asleep at the wheel.
But these various policies—lightweight regulation, cheap money, the unwritten Chinese-American economic alliance, the promotion of homeownership—had something in common. Even though some are traditionally associated with Democrats and some with Republicans, they all benefited the financial sector. Policy changes that might have forestalled the crisis but would have limited the financial sector’s profits—such as Brooksley Born’s now-famous attempts to regulate credit-default swaps at the Commodity Futures Trading Commission, in 1998—were ignored or swept aside.
The financial industry has not always enjoyed such favored treatment. But for the past 25 years or so, finance has boomed, becoming ever more powerful. The boom began with the Reagan years, and it only gained strength with the deregulatory policies of the Clinton and George W. Bush administrations. Several other factors helped fuel the financial industry’s ascent. Paul Volcker’s monetary policy in the 1980s, and the increased volatility in interest rates that accompanied it, made bond trading much more lucrative. The invention of securitization, interest-rate swaps, and credit-default swaps greatly increased the volume of transactions that bankers could make money on. And an aging and increasingly wealthy population invested more and more money in securities, helped by the invention of the IRA and the 401(k) plan. Together, these developments vastly increased the profit opportunities in financial services.
Not surprisingly, Wall Street ran with these opportunities. From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.
The great wealth that the financial sector created and concentrated gave bankers enormous political weight—a weight not seen in the U.S. since the era of J.P. Morgan (the man). In that period, the banking panic of 1907 could be stopped only by coordination among private-sector bankers: no government entity was able to offer an effective response. But that first age of banking oligarchs came to an end with the passage of significant banking regulation in response to the Great Depression; the reemergence of an American financial oligarchy is quite recent.
The S&L connection, more recent in the unraveling, had its origins – in the wild inflationary spiral of the late 1970s. Congress attempted to compensate for losses in the savings and loan industry by passing the first thrift deregulation bill in 1980, designed to phase out interest rate controls on deposits. The price for attracting new depositors to the ailing S&Ls was that they were forced to pay more interest on deposits than they were receiving on old loans.
This poorly designed bill was followed in 1982 by the Garn-St. Germain Depository Institutions Act, which swept away most of the remaining regulatory and stabilizing criteria of the earlier laws. The new law changed the basic function of S&Ls from the stable home loan market to the much more profitable, but risky, commercial lending market.
The law contained the potential for almost unbounded fraud, and mobsters and swindlers moved in swiftly to take advantage of the coming bonanza. Billions of dollars have vanished. A House committee estimated that at least one-third of bank failures and over three quarters of S&L insolvencies were the result of misconduct and fraud.
Three collaborating investigative reporters (“Inside Job: The Looting of America’s Savings and Loans,” Pizzo, Fricker and Muolo, 1989) detected the strong suggestion of a CIA-connection to the S&L scandal. The S&L environment after deregulation offered the perfect setting for massive money laundering, so useful to the CIA-Mafia connection. Furthermore, some of the principal players in the collapse of dozens of S&Ls were known to be involved in CIA activities, and in some celebrated cases were actually shielded by the CIA from federal prosecution.
In February 1990, Pete Brewton of the Houston Post began a series of reports, based on 18 months of his own investigation, which revealed “at least 27 failed financial institutions – 25 S&Ls and two banks had links to CIA operatives or to organized crime figures with links to the CIA.” The Post, unavailed of subpoena power, based its reports on “information obtained from court documents, sworn testimony, law enforcement records and interviews with key government investigators and prosecutors.” Two of the principal sources were a former Justice Department prosecutor and a former FBI agent.
Paradigms of Republican vs. Democrat or Conservative vs. Progressive have been designed for obfuscation and entertainment.
Attracting capital: Making the world safe for the reinvestment of the profits of organized crime and the war machine. Without growing organized crime and military activities through government budgets and contracts, the economy would stop.
The Clinton Administration took the groundwork laid by Nixon, Reagan and Bush and embraced and blossomed the expansion and promotion of federal support for police enforcement and the War on Drugs with a passion that was hard to understand unless, and until, you realized that the American financial system was deeply dependent on attracting an estimated $500 billion-$1 trillion of annual money laundering. Globalizing corporations and deepening deficits and housing bubbles required attracting vast amounts of capital.
The Clinton Administration was to govern a doubling of the federal prison population.
The C.I.A. and Mafia use drug profits to control the FED and rob communities worldwide…
One of the dirty little secrets behind the housing bubble is the long-standing partnership of narcotics trafficking and mortgage fraud and the use of the two in combination to target and destroy communities with highly profitable economic warfare. This model is global. It is operating in counties throughout the world as well as in US communities.
The Federal Reserve engineered the housing bubble. Fannie Mae and Freddie Mac mortgage volumes in low- and moderate-income communities is the FEDs way to increase government mortgage guarantees- most of these mortgages would be pooled and sold as securities to investors. Which would create unserviceable debt loads in communities struggling with the falling incomes from globalization. Homeowners would default on mortgages while losses on mortgage-backed securities would drain retirement savings from 401(k)s and pension plans. Taxpayers would ultimately be hit with a large bill . . . but insiders would make a bundle.
The FEDs unstated goal is to achieve maximum return on the sale of its defaulted mortgage assets by using a widespread process of “privatization” in which assets are, in fact, being transferred out of governments worldwide at significantly below market value in a manner providing extraordinary windfall profits, capital gains and financial equity to private corporations and investors. In addition, government functions are being outsourced at prices way above what should have been market price or government costs — again stripping governmental and community resources in a manner that subsidizes private interests. The financial equity gained by private interests is often the result of financial, human, environmental and living equity stripped and stolen from communities — often without communities being able to understand what had happened or to clearly identify their loss. This is why I now refer to privatization as “piratization.”
Even efficiently and honestly executed privatization transactions such as the HUD loan sales policies which insist on open competition at the highest price are advantaging players who are the most successful at laundering money for the “black budget.”
The Federal Reserve and its long-standing partner, the US Treasury, engineered the housing bubble, including the fraudulent inducement of America as part of a financial coup d’état. Our bankruptcy was not an accident. It was engineered at the highest levels.
Drug money is an inherent part of the American economy
The CIA has dealt drugs for all 50 years of its existence–50 plus years, even before it was the CIA. And the point is that with 250 billion dollars a year in illegal drug money moved, laundered through the American economy, that money benefits Wall Street. That’s the point of having the prohibitive drug trade, which the CIA effectively manages for the benefit of Wall Street.
The Pentagon arms the Mexican government and the US Drug Enforcement Agency enforces the ‘military solution’, the biggest US banks receive, launder and transfer hundreds of billions of dollars to the drug lords’ accounts, who then buy modern arms, pay private armies of assassins and corrupt untold numbers of political and law enforcement officials on both sides of the border.
Drug profits, in the most basic sense, are secured through the ability of the cartels to launder and transfer billions of dollars through the US banking system. The scale and scope of the US banking-drug cartel alliance surpasses any other economic activity of the US private banking system.
According to US Justice Department records, one bank alone, Wachovia Bank (now owned by Wells Fargo), laundered $378.3 billion dollars between May 1, 2004 and May 31, 2007 (The Guardian, May 11, 2011). Every major bank in the US has served as an active financial partner of the murderous drug cartels.
The major US banks are the financial engines that allow the billion dollar drug empires to operate, the White House, the US Congress and the law enforcement agencies are the basic protectors of these banks.
The Federal Reserve creates an environment in which investors can borrow at 25 to 50 basis points and lend elsewhere at much higher rates, forcing money to flow from the United States into these other opportunities. And bubbles result — worldwide.
Laundering drug money is one of the most lucrative sources of profit for Wall Street; the banks charge hefty commissions on the transfer of drug profits, which they then lend to borrowing institutions at interest rates far above what they pay to drug trafficker depositors. Awash in sanitized drug profits, these US titans of the finance world can easily buy their own elected officials to perpetuate the system.
The purpose of the Agency being involved in the drug trade has been to generate illegal cash, fluid liquid capital, which gives those who can get their hands on it an unfair advantage in the marketplace.
In Part 3, we will show how the Mafia put Obama in the White House, caused the BP oil spill, skim off of Indian casinos, help move tons of herion from Afghanistan to America every year, and run a global child slave sex ring.
Sources:
From The Wilderness
Organized Crime and American Power (University of Toronto Press, 2001)
How Drug Profits saved Capitalism James Petras, Global Research
Dillon Read & the Aristocracy of Stock Profits (http://www.dunwalke.com)
Covert Action, Summer 1992.
http://coat.ncf.ca/our_magazine/links/issue43/articles/mone_laundering_for_contras.htm
www.infomanage.com/secrets/bios/bushes.html
campaignwatch.org/more1.htm
Mike Ruppert
1980s, USA: Money Laundering for Contras, the Mob and the CIA
By Gary W. Potter, Eastern Kentucky University.
The Quiet Coup by Simon Johnson
